[Title 24 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2018 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 24
Housing and Urban Development
________________________
Parts 700 to 1699
Revised as of April 1, 2018
Containing a codification of documents of general
applicability and future effect
As of April 1, 2018
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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Table of Contents
Page
Explanation................................................. v
Title 24:
SUBTITLE B--Regulations Relating to Housing and Urban
Development (Continued)
Chapter VII--Office of the Secretary, Department of
Housing and Urban Development (Housing Assistance
Programs and Public and Indian Housing Programs) 5
Chapter 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) 37
Chapter IX--Office of Assistant Secretary for Public
and Indian Housing, Department of Housing and Urban
Development 239
Finding Aids:
Table of CFR Titles and Chapters........................ 791
Alphabetical List of Agencies Appearing in the CFR...... 811
List of CFR Sections Affected........................... 821
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 24 CFR 700.100
refers to title 24, part
700, section 100.
----------------------------
[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
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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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collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
April 1, 2018.
[[Page ix]]
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, 2018.
For this volume, Susannah C. Hurley 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 700 to 1699)
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SUBTITLE B--Regulations Relating to Housing and Urban Development
(Continued)
Part
chapter vii--Office of the Secretary, Department of Housing
and Urban Development (Housing Assistance Programs and
Public and Indian Housing Programs)....................... 700
chapter 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)............ 811
chapter ix--Office of Assistant Secretary for Public and
Indian Housing, Department of Housing and Urban
Development............................................... 901
[[Page 3]]
Subtitle B--Regulations Relating to Housing and Urban Development
(Continued)
[[Page 5]]
CHAPTER VII--OFFICE OF THE SECRETARY, DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (HOUSING ASSISTANCE PROGRAMS AND PUBLIC AND INDIAN HOUSING
PROGRAMS)
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Editorial Note: Nomenclature changes to chapter VII appear at 59 FR
14090, Mar. 25, 1994.
Part Page
700 Congregate Housing Services Program......... 7
701-760
[Reserved]
761 Drug Elimination Programs................... 17
762-790
[Reserved]
791 Allocations of housing assistance funds..... 30
792 Public housing agency Section 8 fraud
recoveries.............................. 34
793-799
[Reserved]
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PART 700_CONGREGATE HOUSING SERVICES PROGRAM--Table of Contents
Sec.
700.100 Purpose.
700.105 Definitions.
700.110 Announcement of fund availability, application process and
selection.
700.115 Program costs.
700.120 Eligible supportive services.
700.125 Eligibility for services.
700.130 Service coordinator.
700.135 Professional assessment committee.
700.140 Participatory agreement.
700.145 Cost distribution.
700.150 Program participant fees.
700.155 Grant agreement and administration.
700.160 Eligibility and priority for 1978 Act recipients.
700.165 Evaluation of Congregate Housing Services Programs.
700.170 Reserve for supplemental adjustment.
700.175 Other Federal requirements.
Authority: 42 U.S.C. 3535(d) and 8011.
Source: 61 FR 42943, 42949, Aug. 19, 1996, unless otherwise noted.
Sec. 700.100 Purpose.
The requirements of this part augment the requirements of section
802 of the National Affordable Housing Act of 1990 (approved November
28, 1990, Public Law 101-625) (42 U.S.C. 8011), (hereinafter, section
802), as amended by the Housing and Community Development Act of 1992
(Public Law 102-550, approved October 28, 1992), which authorizes the
Congregate Housing Services Program (hereinafter, CHSP or Program).
Sec. 700.105 Definitions.
In addition to the definitions in section 802(k), the following
definitions apply to CHSP:
Activity of Daily Living (ADL) means an activity regularly necessary
for personal care.
(1) The minimum requirements of ADLs include:
(i) Eating (may need assistance with cooking, preparing or serving
food, but must be able to feed self);
(ii) Dressing (must be able to dress self, but may need occasional
assistance);
(iii) Bathing (may need assistance in getting in and out of the
shower or tub, but must be able to wash self);
(iv) Grooming (may need assistance in washing hair, but must be able
to take care of personal appearance);
(v) Getting in and out of bed and chairs, walking, going outdoors,
using the toilet; and
(vi) Household management activities (may need assistance in doing
housework, grocery shopping or laundry, or getting to and from one
location to another for activities such as going to the doctor and
shopping, but must be mobile. The mobility requirement does not exclude
persons in wheelchairs or those requiring mobility devices.)
(2) Each of the Activities of Daily Living noted in paragraph (1) of
this definition includes a requirement that a person must be able to
perform at a specified minimal level (e.g., to satisfy the eating ADL,
the person must be able to feed himself or herself). The determination
of whether a person meets this minimal level of performance must include
consideration of those services that will be performed by a person's
spouse, relatives or other attendants to be provided by the individual.
For example, if a person requires assistance with cooking, preparing or
serving food plus assistance in feeding himself or herself, the
individual would meet the minimal performance level and thus satisfy the
eating ADL, if a spouse, relative or attendant provides assistance with
feeding the person. Should such assistance become unavailable at any
time, the owner is not obligated at any time to provide individualized
services beyond those offered to the resident population in general. The
Activities of Daily Living analysis is relevant only with regard to
determination of a person's eligibility to receive supportive services
paid for by CHSP and is not a determination of eligibility for
occupancy;
Adjusted income means adjusted income as defined in 24 CFR parts 813
or 913.
Applicant means a State, Indian tribe, unit of general local
government, public housing authority (PHA), Indian housing authority
(IHA) or local nonprofit housing sponsor. A State, Indian tribe, or unit
of general local government may apply on behalf of a local
[[Page 8]]
nonprofit housing sponsor or a for-profit owner of eligible housing for
the elderly.
Area agency on aging means the single agency designated by the State
Agency on Aging to administer the program described in Title III of the
Older Americans Act of 1965 (45 CFR chapter 13).
Assistant Secretary means the HUD Assistant Secretary for Housing-
Federal Housing Commissioner or the HUD Assistant Secretary for Public
and Indian Housing.
Case management means implementing the processes of: establishing
linkages with appropriate agencies and service providers in the general
community in order to tailor the needed services to the program
participant; linking program participants to providers of services that
the participant needs; making decisions about the way resources are
allocated to an individual on the basis of needs; developing and
monitoring of case plans in coordination with a formal assessment of
services needed; and educating participants on issues, including, but
not limited to, supportive service availability, application procedures
and client rights.
Eligible housing for the elderly means any eligible project
including any building within a mixed-use project that was designated
for occupancy by elderly persons, or persons with disabilities at its
inception or, although not so designated, for which the eligible owner
or grantee gives preference in tenant selection (with HUD approval) for
all units in the eligible project (or for a building within an eligible
mixed-use project) to eligible elderly persons, persons with
disabilities, or temporarily disabled individuals. For purposes of this
part, this term does not include projects assisted under the Low-Rent
Housing Homeownership Opportunity program (Turnkey III (24 CFR part 905,
subpart G)).
Eligible owner means an owner of an eligible housing project.
Excess residual receipts mean residual receipts of more than $500
per unit in the project which are available and not committed to other
uses at the time of application to HUD for CHSP. Such receipts may be
used as matching funds and may be spent down to a minimum of $500/unit.
For-profit owner of eligible housing for the elderly means an owner
of an eligible housing project in which some part of the project's
earnings lawfully inure to the benefit of any private shareholder or
individual.
Grantee or Grant recipient means the recipient of funding under
CHSP. Grantees under this Program may be states, units of general local
government, Indian tribes, PHAs, IHAs, and local nonprofit housing
sponsors.
Local nonprofit housing sponsor means an owner or borrower of
eligible housing for the elderly; no part of the net earnings of the
owning organization shall lawfully inure to the benefit of any
shareholder or individual.
Nonprofit includes a public housing agency as that term is defined
in section 3(b)(6) of the United States Housing Act of 1937.
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 shall be considered to have a disability if such person
is determined under regulations issued by the Secretary to have a
physical, mental, or emotional impairment which:
(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 person's ability could be
improved by more suitable housing conditions.
(2) A person shall also be considered to have a disability if the
person has a developmental disability as defined in section 102(5) of
the Developmental Disabilities Assistance and Bill of Rights Act (42
U.S.C. 6001-7). Notwithstanding the preceding provisions of this
paragraph, the terms ``person with disabilities'' or ``temporarily
disabled'' include two or more persons with disabilities living
together, one or more such persons living with another person who is
determined (under regulations prescribed by the Secretary of HUD) to be
essential to their care or well-being, and the surviving member or
members of any household where at least one or more persons was an adult
with a disability who was living, in a
[[Page 9]]
unit assisted under this section, with the deceased member of the
household at the time of his or her death.
Program participant (participant) means any project resident as
defined in section 802(e)(1) who is formally accepted into CHSP,
receives CHSP services, and resides in the eligible housing project
served by CHSP grant.
Qualifying supportive services means those services described in
section 802(k)(16). Under this Program, ``health-related services'' mean
non-medical supervision, wellness programs, preventive health screening,
monitoring of medication consistent with state law, and non-medical
components of adult day care. The Secretary concerned may also approve
other requested supportive services essential for achieving and
maintaining independent living.
Rural Housing Service (RHS) means a credit agency for rural housing
and rural development in the U.S. Department of Agriculture (USDA).
Secretary concerned means (1) The Secretary of Housing and Urban
Development, with respect to eligible federally assisted housing
administered by HUD; and
(2) The Secretary of Agriculture with reference to programs
administered by the Administrator of the Rural Housing Service.
Service coordinator means CHSP staff person responsible for
coordinating Program services as described in section 700.130.
Service provider means a person or organization licensed or
otherwise approved in writing by a State or local agency (e.g.,
Department of Health, Department of Human Services or Welfare) to
provide supportive services.
State agency means the State or an agency or instrumentality of the
State.
State agency on aging means the single agency designated by the
Governor to administer the program described in Title III of the Older
Americans Act of 1965 (See 45 CFR part 13).
Sec. 700.110 Announcement of fund availability, application process
and selection.
(a) Notice of funding availability. A Notice of Funding Availability
(NOFA) will be published periodically in the Federal Register by the
Secretary concerned containing the amounts of funds available,
allocation or distribution of funds available among eligible applicant
groups, where to obtain and submit applications, the deadline for
submissions, and further explanation of the selection criteria, review
and selection process. The Secretary concerned will designate the
maximum allowable size for grants.
(b) Selection criteria are set forth in section 802(h)(1) and shall
include additional criteria specified by the Secretary concerned.
Sec. 700.115 Program costs.
(a) Allowable costs. (1) Allowable costs for direct provision of
supportive services includes the provision of supportive services and
others approved by the Secretary concerned for:
(i) Direct hiring of staff, including a service coordinator;
(ii) Supportive service contracts with third parties;
(iii) Equipment and supplies (including food) necessary to provide
services;
(iv) Operational costs of a transportation service (e.g., mileage,
insurance, gasoline and maintenance, driver wages, taxi or bus
vouchers);
(v) Purchase or leasing of vehicles;
(vi) Direct and indirect administrative expenses for administrative
costs such as annual fiscal review and audit, telephones, postage,
travel, professional education, furniture and equipment, and costs
associated with self evaluation or assessment (not to exceed one percent
of the total budget for the activities approved); and
(vii) States, Indian tribes and units of general local government
with more than one project included in the grant may receive up to 1% of
the total cost of the grant for monitoring the projects.
(2) Allowable costs shall be reasonable, necessary and recognized as
expenditures in compliance with 2 CFR part 200, subpart E .
(b) Nonallowable costs. (1) CHSP funds may not be used to cover
expenses related to any grantee program, service, or activity existing
at the time of application to CHSP.
(2) Examples of nonallowable costs under the program are:
[[Page 10]]
(i) Capital funding (such as purchase of buildings, related
facilities or land and certain major kitchen items such as stoves,
refrigerators, freezers, dishwashers, trash compactors or sinks);
(ii) Administrative costs that represent a non-proportional share of
costs charged to the Congregate Housing Services Program for rent or
lease, utilities, staff time;
(iii) Cost of supportive services other than those approved by the
Secretary concerned;
(iv) Modernization, renovation or new construction of a building or
facility, including kitchens;
(v) Any costs related to the development of the application and plan
of operations before the effective date of CHSP grant award;
(vi) Emergency medical services and ongoing and regular care from
doctors and nurses, including but not limited to administering
medication, purchase of medical supplies, equipment and medications,
overnight nursing services, and other institutional forms of service,
care or support;
(vii) Occupational therapy and vocational rehabilitation services;
or
(viii) Other items defined as unallowable costs elsewhere in this
part, in CHSP grant agreement, and 2 CFR part 200, subpart E.
(c) Administrative cost limitation. Grantees are subject to the
limitation in section 802(j)(4).
[61 FR 42943, 42949, Aug. 19, 1996, as amended at 80 FR 75940, Dec. 7,
2015]
Sec. 700.120 Eligible supportive services.
(a) Supportive services or funding for such services may be provided
by state, local, public or private providers and CHSP funds. A CHSP
under this section shall provide meal and other qualifying services for
program participants (and other residents and nonresidents, as described
in Sec. 700.125(a)) that are coordinated on site.
(b) Qualifying supportive services are those listed in section
802(k)(16) and in section 700.105.
(c) Meal services shall meet the following guidelines:
(1) Type of service. At least one meal a day must be served in a
group setting for some or all of the participants; if more than one meal
a day is provided, a combination of a group setting and carry-out meals
may be utilized.
(2) Hot meals. At least one meal a day must be hot. A hot meal for
the purpose of this program is one in which the principal food item is
hot at the time of serving.
(3) Special menus. Grantees shall provide special menus as necessary
for meeting the dietary needs arising from the health requirements of
conditions such as diabetes and hypertension. Grantees should attempt to
meet the dietary needs of varying religious and ethnic backgrounds.
(4) Meal service standards. Grantees shall plan for and provide
meals which are wholesome, nutritious, and each of which meets a minimum
of one-third of the minimum daily dietary allowances as established by
the Food and Nutrition Board of the National Academy of Sciences-
National Research Council (or State or local standards, if these
standards are higher). Grantees must have an annual certification,
prepared and signed by a registered dietitian, which states that each
meal provided under CHSP meets the minimum daily dietary allowances.
(5) Food stamps and agricultural commodities. In providing meal
services grantees must apply for and use food stamps and agricultural
commodities as set forth in section 802(d)(2)(A).
(6) Preference for nutrition providers: In contracting for or
otherwise providing for meal services grantees must follow the
requirements of section 802(d)(2)(B). These requirements do not preclude
a grantee or owner from directly preparing and providing meals under its
own auspices.
Sec. 700.125 Eligibility for services.
(a) Participants, other residents, and nonresidents. Such
individuals are eligible either to participate in CHSP or to receive
CHSP services, if they qualify under section 802(e)(1), (4) and (5).
Under this paragraph, temporarily disabled persons are also eligible.
(b) Economic need. In providing services under CHSP, grantees shall
give priority to very low income individuals, and shall consider their
service needs in selecting program participants.
[[Page 11]]
Sec. 700.130 Service coordinator.
(a) Each grantee must have at least one service coordinator who
shall perform the responsibilities listed in section 802(d)(4).
(b) The service coordinator shall comply with the qualifications and
standards required by the Secretary concerned. The service coordinator
shall be trained in the subject areas set forth in section 802(d)(4),
and in any other areas required by the Secretary concerned.
(c) The service coordinator may be employed directly by the grantee,
or employed under a contract with a case management agency on a fee-for-
service basis, and may serve less than full-time. The service
coordinator or the case management agency providing service coordination
shall not provide supportive services under a CHSP grant or have a
financial interest in a service provider agency which intends to provide
services to the grantee for CHSP.
(d) The service coordinator shall:
(1) Provide general case management and referral services to all
potential participants in CHSP. This involves intake screening, upon
referral from the grantee of potential program participants, and
preliminary assessment of frailty or disability, using a commonly
accepted assessment tool. The service coordinator then will refer to the
professional assessment committee (PAC) those individuals who appear
eligible for CHSP;
(2) Establish professional relationships with all agencies and
service providers in the community, and develop a directory of providers
for use by program staff and program participants;
(3) Refer proposed participants to service providers in the
community, or those of the grantee;
(4) Serve as staff to the PAC;
(5) Complete, for the PAC, all paperwork necessary for the
assessment, referral, case monitoring and reassessment processes;
(6) Implement any case plan developed by the PAC and agreed to by
the program participant;
(7) Maintain necessary case files on each program participant,
containing such information and kept in such form as HUD and RHS shall
require;
(8) Provide the necessary case files to PAC members upon request, in
connection with PAC duties;
(9) Monitor the ongoing provision of services from community
agencies and keep the PAC and the agency providing the supportive
service informed of the progress of the participant;
(10) Educate grant recipient's program participants on such issues
as benefits application procedures (e.g. SSI, food stamps, Medicaid),
service availability, and program participant options and
responsibilities;
(11) Establish volunteer support programs with service organizations
in the community;
(12) Assist the grant recipient in building informal support
networks with neighbors, friends and family; and
(13) Educate other project management staff on issues related to
``aging-in-place'' and services coordination, to help them to work with
and assist other persons receiving housing assistance through the
grantee.
(e) The service coordinator shall tailor each participant's case
plan to the individual's particular needs. The service coordinator shall
work with community agencies, the grantee and third party service
providers to ensure that the services are provided on a regular,
ongoing, and satisfactory basis, in accordance with the case plan
approved by the PAC and the participant.
(f) Service coordinators shall not serve as members of the PAC.
Sec. 700.135 Professional assessment committee.
(a) General. (1) A professional assessment committee (PAC), as
described in this section, shall recommend services appropriate to the
functional abilities and needs of each eligible project resident. The
PAC shall be either a voluntary committee appointed by the project
management or an agency in the community which provides assessment
services and conforms to section 802(e)(3)(A) and (B). PAC members are
subject to the conflict of interest provisions in section 700.175(b).
(2) The PAC shall utilize procedures that ensure that the process of
determining eligibility of individuals for congregate services affords
individuals fair treatment, due process, and a right
[[Page 12]]
of appeal of the determination of eligibility, and shall ensure the
confidentiality of personal and medical records.
(3) The dollar value of PAC members' time spent on regular
assessments after initial approval of program participants may be
counted as match. If a community agency discharges the duties of the
PAC, staff time is counted as its imputed value, and if the members are
volunteers, their time is counted as volunteer time, according to
sections 700.145(c)(2) (ii) and (iv).
(b) Duties of the PAC. The PAC is required to:
(1) Perform a formal assessment of each potential elderly program
participant to determine if the individual is frail. To qualify as
frail, the PAC must determine if the elderly person is deficient in at
least three ADLs, as defined in section 700.105. This assessment shall
be based upon the screening done by the service coordinator, and shall
include a review of the adequacy of the informal support network (i.e.,
family and friends available to the potential participant to assist in
meeting the ADL needs of that individual), and may include a more in-
depth medical evaluation, if necessary;
(2) Determine if non-elderly disabled individuals qualify under the
definition of person with disabilities under section 700.105. If they do
qualify, this is the acceptance criterion for them for CHSP. Persons
with disabilities do not require an assessment by the PAC;
(3) Perform a regular assessment and updating of the case plan of
all participants;
(4) Obtain and retain information in participant files, containing
such information and maintained in such form, as HUD or RHS shall
require;
(5) Replace any members of the PAC within 30 days after a member
resigns. A PAC shall not do formal assessments if its membership drops
below three, or if the qualified medical professional leaves the PAC and
has not been replaced.
(6) Notify the grantee or eligible owner and the program
participants of any proposed modifications to PAC procedures, and
provide these parties with a process and reasonable time period in which
to review and comment, before adoption of a modification;
(7) Provide assurance of nondiscrimination in selection of CHSP
participants, with respect to race, religion, color, sex, national
origin, familial status or type of disability;
(8) Provide complete confidentiality of information related to any
individual examined, in accordance with the Privacy Act of 1974;
(9) Provide all formal information and reports in writing.
(c) Prohibitions relating to the PAC. (1) At least one PAC member
shall not have any direct or indirect relationship to the grantee.
(2) No PAC member may be affiliated with organizations providing
services under the grant.
(3) Individuals or staff of third party organizations that act as
PAC members may not be paid with CHSP grant funds.
(d) Eligibility and admissions. (1) Before selecting potential
program participants, each grantee (with PAC assistance) shall develop a
CHSP application form. The information in the individual's application
is crucial to the PAC's ability to determine the need for further
physical or psychological evaluation.
(2) The PAC, upon completion of a potential program participant's
initial assessment, must make a recommendation to the service
coordinator for that individual's acceptance or denial into CHSP.
(3) Once a program participant is accepted into CHSP, the PAC must
provide a supportive services case plan for each participant. In
developing this plan, the PAC must take into consideration the
participant's needs and wants. The case plan must provide the minimum
supportive services necessary to maintain independence.
(e) Transition-out procedures. The grantee or PAC must develop
procedures for providing for an individual's transition out of CHSP to
another setting. Transition out is based upon the degree of supportive
services needed by an individual to continue to live independently. If a
program participant leaves the program, but wishes to retain supportive
services, he or she may do so, as long as he or she continues to live in
an eligible project, pays the full
[[Page 13]]
cost of services provided, and management agrees (section 802(e)(4) and
(5)). A participant can be moved out of CHSP if he or she:
(1) Gains physical and mental health and is able to function without
supportive services, even if only for a short time (in which case
readmission, based upon reassessment to determine the degree of frailty
or the disability, is acceptable);
(2) Requires a higher level of care than that which can be provided
under CHSP; or
(3) Fails to pay services fees.
(f) Procedural rights of participants. (1) The PAC must provide an
informal process that recognizes the right to due process of individuals
receiving assistance. This process, at a minimum, must consist of:
(i) Serving the participant with a written notice containing a clear
statement of the reasons for termination;
(ii) A review of the decision, in which the participant is given the
opportunity to present written or oral objections before a person other
than the person (or a subordinate of that person) who made or approved
the termination decision; and
(iii) Prompt written notification of the final decision to the
participant.
(2) Procedures must ensure that any potential or current program
participant, at the time of initial or regular assessment, has the
option of refusing offered services and requesting other supportive
services as part of the case planning process.
(3) In situations where an individual requests additional services,
not initially recommended by the PAC, the PAC must make a determination
of whether the request is legitimately a needs-based service that can be
covered under CHSP subsidy. Individuals can pay for services other than
those recommended by the PAC as long as the additional services do not
interfere with the efficient operation of the program.
Sec. 700.140 Participatory agreement.
(a) Before actual acceptance into CHSP, potential participants must
work with the PAC and the service coordinator in developing supportive
services case plans. A participant has the option of accepting any of
the services under the case plan.
(b) Once the plan is approved by the PAC and the program
participant, the participant must sign a participatory agreement
governing the utilization of the plan's supportive services and the
payment of supportive services fees. The grantee annually must
renegotiate the agreement with the participant.
Sec. 700.145 Cost distribution.
(a) General. (1) Grantees, the Secretary concerned, and participants
shall all contribute to the cost of providing supportive services
according to section 802(i)(A)(i). Grantees must contribute at least 50
percent of program cost, participants must contribute fees that in total
are at least 10 percent of program cost, and the Secretary concerned
will provide funds in an amount not to exceed 40 percent.
(2) Section 802(i)(1)(B)(ii) creates a cost-sharing provision
between grantee and the Secretary concerned if total participant fees
collected over a year are less than 10 percent of total program cost.
This provision is subject to availability of appropriated grant funds.
If funds are not available, the grantee must assume the funding
shortfall.
(b) Prohibition on substitution of funds and maintenance of existing
supportive services. Grantees shall maintain existing funding for and
provision of supportive services prior to the application date, as set
forth in section 802(i)(1)(D). The grantee shall ensure that the
activities provided to the project under a CHSP grant will be in
addition to, and not in substitution for, these previously existing
services. The value of these services do not qualify as matching funds.
Such services must be maintained either for the time the participant
remains in CHSP, or for the duration of CHSP grant. The grantee shall
certify compliance with this paragraph to the Secretary concerned.
(c) Eligible matching funds. (1) All sources of matching funds must
be directly related to the types of supportive services prescribed by
the PAC or used for administration of CHSP.
(2) Matching funds may include:
[[Page 14]]
(i) Cash (which may include funds from Federal, State and local
governments, third party contributions, available payments authorized
under Medicaid for specific individuals in CHSP, Community Development
Block Grants or Community Services Block Grants, Older American Act
programs or excess residual funds with the approval of the Secretary
concerned),
(ii) The imputed dollar value of other agency or third party-
provided direct services or staff who will work with or provide services
to program participants; these services must be justified in the
application to assure that they are the new or expanded services of CHSP
necessary to keep the program participants independent. If services are
provided by the state, Indian tribe, unit of general local government,
or local nonprofit housing sponsor, IHA, PHA, or for-profit or not-for-
profit owner, any salary paid to staff from governmental sources to
carry out the program of the grantee and any funds paid to residents
employed by the Program (other than from amounts under a contract under
section 700.155) is allowable match.
(iii) In-kind items (these are limited to 10 percent of the 50
percent matching amount), such as the current market value of donated
common or office space, utility costs, furniture, material, supplies,
equipment and food used in direct provision of services. The applicant
must provide an explanation for the estimated donated value of any item
listed.
(iv) The value of services performed by volunteers to CHSP, at the
rate of $5.00 an hour.
(d) Limitation. (1) The following are not eligible for use as
matching funds:
(i) PHA operating funds;
(ii) CHSP funds;
(iii) Section 8 funds other than excess residual receipts;
(iv) Funds under section 14 of the U.S. Housing Act of 1937, unless
used for service coordination or case management; and
(v) Comprehensive grant funds unless used for service coordination
or case management;
(2) Local government contributions are limited by section
802(i)(1)(E).
(e) Annual review of match. The Secretary concerned will review the
infusion of matching funds annually, as part of the program or budget
review. If there are insufficient matching funds available to meet
program requirements at any point after grant start-up, or at any time
during the term of the grant (i.e., if matching funds from sources other
than program participant fees drop below 50 percent of total supportive
services cost), the Secretary concerned may decrease the federal grant
share of supportive services funds accordingly.
Sec. 700.150 Program participant fees.
(a) Eligible program participants. The grantee shall establish fees
consistent with section 700.145(a). Each program participant shall pay
CHSP fees as stated in paragraphs (d) and (e) of this section, up to a
maximum of 20 percent of the program participant's adjusted income.
Consistent with section 802(d)(7)(A), the Secretary concerned shall
provide for the waiver of fees for individuals who are without
sufficient income to provide for any payment.
(b) Fees shall include: (1) Cash contributions of the program
participant;
(2) Food Stamps; and
(3) Contributions or donations to other eligible programs acceptable
as matching funds under section 700.145(c).
(c) Older Americans Act programs. No fee may be charged for any
meals or supportive services under CHSP if that service is funded under
an Older Americans Act Program.
(d) Meals fees: (1) For full meal services, the fees for residents
receiving more than one meal per day, seven days per week, shall be
reasonable and shall equal between 10 and 20 percent of the adjusted
income of the project resident, or the cost of providing the services,
whichever is less.
(2) The fees for residents receiving meal services less frequently
than as described in paragraph (d)(1) of this section shall be in an
amount equal to 10 percent of the adjusted income of the project
resident, or the cost of providing the services, whichever is less.
(e) Other service fees. The grantee may also establish fees for
other supportive services so that the total fees collected
[[Page 15]]
from all participants for meals and other services is at least 10
percent of the total cost of CHSP. However, no program participants may
be required to pay more than 20 percent of their adjusted incomes for
any combination of services.
(f) Other residents and nonresidents. Fees shall be established for
residents of eligible housing projects (other than eligible project
residents) and for nonresidents who receive meals and other services
from CHSP under section 700.125(a). These fees shall be in an amount
equal to the cost of providing the services.
Sec. 700.155 Grant agreement and administration.
(a) General. HUD will enter into grant agreements with grantees, to
provide congregate services for program participants in eligible housing
projects, in order to meet the purposes of CHSP.
(b) Term of grant agreement and reservation of amount. A grant will
be for a term of five years and the Secretary concerned shall reserve a
sum equal to the total approved grant amount for each grantee. Grants
will be renewable at the expiration of a term, subject to the
availability of funds and conformance with the regulations in this part,
except as otherwise provided in section 700.160.
(c) Monitoring of project sites by governmental units. States,
Indian tribes, and units of general local government with a grant
covering multiple projects shall monitor, review, and evaluate Program
performance at each project site for compliance with CHSP regulations
and procedures, in such manner as prescribed by HUD or RHS.
(d) Reports. Each grantee shall submit program and fiscal reports
and program budgets to the Secretary concerned in such form and at such
times, as the Secretary concerned requires.
(e) Enforcement. The Secretary concerned will enforce the
obligations of the grantee under the agreement through such action as
may be necessary, including terminating grants, recapturing grant funds,
and imposing sanctions.
(1) These actions may be taken for:
(i) A grantee's non-compliance with the grant agreement or HUD or
RHS regulations;
(ii) Failure of the grantee to provide supportive services within 12
months of execution of the grant agreement.
(2) Sanctions include but are not limited to the following:
(i) Temporary withholding of reimbursements or extensions or
renewals under the grant agreement, pending correction of deficiencies
by the grantee;
(ii) Setting conditions in the contract;
(iii) Termination of the grant;
(iv) Substitution of grantee; and
(v) Any other action deemed necessary by the Secretary concerned.
(f) Renewal of grants. Subject to the availability of funding,
satisfactory performance, and compliance with the regulations in this
part:
(1) Grantees funded initially under this part shall be eligible to
receive continued, non-competitive renewals after the initial five-year
term of the grant.
(2) Grantees will receive priority funding and grants will be
renewed within time periods prescribed by the Secretary concerned.
(g) Use of Grant Funds. If during any year, grantees use less than
the annual amount of CHSP funds provided to them for that year, the
excess amount can be carried forward for use in later years.
Sec. 700.160 Eligibility and priority for 1978 Act recipients.
Grantees funded initially under 42 U.S.C. 8001 shall be eligible to
receive continued, non-competitive funding subject to its availability.
These grantees will be eligible to receive priority funding under this
part if they comply with the regulations in this part and with the
requirements of any NOFA issued in a particular fiscal year.
Sec. 700.165 Evaluation of Congregate Housing Services Programs.
(a) Grantees shall submit annually to the Secretary concerned, a
report evaluating the impact and effectiveness of CHSPs at the grant
sites, in such form as the Secretary concerned shall require.
[[Page 16]]
(b) The Secretaries concerned shall further review and evaluate the
performance of CHSPs at these sites and shall evaluate the Program as a
whole.
(c) Each grantee shall submit a certification with its application,
agreeing to cooperate with and to provide requested data to the entity
responsible for the Program's evaluation, if requested to do so by the
Secretary concerned.
Sec. 700.170 Reserve for supplemental adjustment.
The Secretary concerned may reserve funds subject to section 802(o).
Requests to utilize supplemental funds by the grantee shall be
transmitted to the Secretary concerned in such form as may be required.
Sec. 700.175 Other Federal requirements.
In addition to the Federal Requirements set forth in 24 CFR part 5,
the following requirements apply to grant recipient organizations in
this program:
(a) Uniform administrative requirements, cost principles, and audit
requirements for Federal awards. The policies, guidelines, and
requirements in 2 CFR part 200, including the audit requirements
described in subpart F, apply to the acceptance and use of assistance
under this program.
(b) Conflict of interest. In addition to the conflict of interest
requirements in 2 CFR 200.112 (for all recipients and subrecipients);
200.317 (for recipients and subrecipients that are States); and
200.318(c) and 200.319(a)(5) (for recipients and subrecipients that are
not States), no person who is an employee, agent, consultant, officer,
or elected or appointed official of the applicant, and who exercises or
has exercised any function or responsibilities with respect to
activities assisted with CHSP grant funds, or who is in a position to
participate in a decision-making process or gain inside information with
regard to such activities, may obtain a personal or financial interest
or benefit from the activity, or have an interest in any contract,
subcontract, or agreement with respect thereto, or any proceeds
thereunder, either for himself or herself or for those with whom he or
she has family or business ties during his or her tenure, or for one
year thereafter. CHSP employees may receive reasonable salary and
benefits.
(c) Disclosures required by Reform Act. Section 102(c) of the HUD
Reform Act of 1989 (42 U.S.C. 3545(c)) requires disclosure concerning
other government assistance to be made available with respect to the
Program and parties with a pecuniary interest in CHSP and submission of
a report on expected sources and uses of funds to be made available for
CHSP. Each applicant shall include information required by 24 CFR part
12 on form HUD-2880 ``Applicant/Recipient Disclosure/Update Report,'' as
required by the Federal Register Notice published on January 16, 1992,
at 57 FR 1942.
(d) Nondiscrimination and equal opportunity. (1) The fair housing
poster regulations (24 CFR part 110) and advertising guidelines (24 CFR
part 109);
(2) The Affirmative Fair Housing Marketing Program requirements of
24 CFR part 200, subpart M, and the implementing regulations at 24 CFR
part 108; and
(3) Racial and ethnic collection requirements--Recipients must
maintain current data on the race, ethnicity and gender of program
applicants and beneficiaries in accordance with section 562 of the
Housing and Community Development Act of 1987 and section 808(e)(6) of
the Fair Housing Act.
(e) Environmental requirements. Support services, including the
operating and administrative expenses described in section 700.115(a),
are categorically excluded from the requirements of the National
Environmental Policy Act (NEPA) of 1969. These actions, however, are not
excluded from individual compliance requirements of other environmental
statutes, Executive Orders, and agency regulations where appropriate.
When the responsible official determines that any action under this part
may have an environmental effect because of extraordinary circumstances,
the requirements of NEPA shall apply.
[61 FR 42943, 42949, Aug. 19, 1996, as amended at 80 FR 75940, Dec. 7,
2015]
PARTS 701 760 [RESERVED]
[[Page 17]]
PART 761_DRUG ELIMINATION PROGRAMS--Table of Contents
Subpart A_General
Sec.
761.1 Purpose and scope.
761.5 Public housing; encouragement of resident participation.
761.10 Definitions.
Subpart B_Grant Funding
761.13 Amount of funding.
761.15 Qualifying for funding.
761.17 Eligible and ineligible activities for funding.
Subpart C_Application and Selection
761.20 Selection requirements.
761.21 Plan requirement.
761.23 Grantee performance requirements.
761.25 Resident comments on grant application.
Subpart D_Grant Administration
761.30 Grant administration.
761.35 Periodic grantee reports.
761.40 Other Federal requirements.
Authority: 42 U.S.C. 3535(d) and 11901 et seq.
Editorial Note: Nomenclature changes to part 761 appear at 64 FR
49917, Sept. 14, 1999.
Source: 61 FR 13987, Mar. 28, 1996, unless otherwise noted.
Subpart A_General
Sec. 761.1 Purpose and scope.
This part 761 contains the regulatory requirements for the Assisted
Housing Drug Elimination Program (AHDEP) and the Public Housing Drug
Elimination Program (PHDEP). The purposes of these programs are to:
(a) Eliminate drug-related and violent crime and problems associated
with it in and around the premises of Federally assisted low-income
housing, and public and Indian housing developments;
(b) Encourage owners of Federally assisted low-income housing,
public housing agencies and Indian housing authorities (collectively
referred to as HAs), and resident management corporations to develop a
plan that includes initiatives that can be sustained over a period of
several years for addressing drug-related and violent crime and problems
associated with it in and around the premises of housing proposed for
funding under this part; and
(c) Make available Federal grants to help owners of Federally
assisted low-income housing, HAs, and RMCs carry out their plans.
[61 FR 13987, Mar. 28, 1996, as amended at 64 FR 49917, Sept. 14, 1999]
Sec. 761.5 Public housing; encouragement of resident participation.
For the purposes of the Public Housing Drug Elimination Program, the
elimination of drug-related and violent crime within public housing
developments requires the active involvement and commitment of public
housing residents and their organizations. To enhance the ability of
PHAs to combat drug-related and violent crime within their developments,
Resident Councils (RCs), Resident Management Corporations (RMCs), and
Resident Organizations (ROs) will be permitted to undertake management
functions specified in this part, notwithstanding the otherwise
applicable requirements of part 964 of this title.
[64 FR 49917, Sept. 14, 1999]
Sec. 761.10 Definitions.
The definitions Department, HUD, and Public Housing Agency (PHA) are
defined in part 5 of this title.
Controlled substance shall have the meaning provided in section 102
of the Controlled Substance Act (21 U.S.C. 802).
Drug intervention means a process to identify assisted housing or
public housing resident drug users, to assist them in modifying their
behavior, and/or to refer them to drug treatment to reduce or eliminate
drug abuse.
Drug prevention means a process to provide goods and services
designed to alter factors, including activities, environmental
influences, risks, and expectations, that lead to drug abuse.
Drug-related and violent crime shall have the meaning provided in 42
U.S.C. 11905(2).
Drug treatment means a program for the residents of an applicant's
development that strives to end drug abuse and to eliminate its negative
effects
[[Page 18]]
through rehabilitation and relapse prevention.
Federally assisted low-income housing, or assisted housing, shall
have the meaning provided in 42 U.S.C. 11905(4). However, sections
221(d)(3) and 221(d)(4) market rate projects with tenant-based
assistance contracts and section 8 projects with tenant-based assistance
are not considered federally assisted low-income housing and are not
eligible for funding under this part 761.
Governmental jurisdiction means the unit of general local
government, State, or area of operation of an Indian tribe in which the
housing development administered by the applicant is located.
In and around means within, or adjacent to, the physical boundaries
of a housing development.
Indian tribe means any tribe, band, pueblo, group, community, or
nation of Indians, or Alaska Natives.
Local law enforcement agency means a police department, sheriff's
office, or other entity of the governmental jurisdiction that has law
enforcement responsibilities for the community at large, including the
housing developments owned or administered by the applicant. In Indian
jurisdictions, this includes tribal prosecutors that assume law
enforcement functions analogous to a police department or the Bureau of
Indian Affairs (BIA). More than one law enforcement agency may have
these responsibilities for the jurisdiction that includes the
applicant's developments.
Problems associated with drug-related and violent crime means the
negative physical, social, educational, and economic impact of drug-
related and violent crime on assisted housing residents or public and
Indian housing residents, and the deterioration of the assisted housing
or public and Indian housing environment because of drug-related and
violent crime.
Program income means gross income received by a grantee and directly
generated from the use of program funds. When program income is
generated by an activity only partially assisted with program funds, the
income shall be prorated to reflect the percentage of program funds
used.
Recipient of assistance under the Native American Housing Assistance
and Self-Determination Act of 1996 (NAHASDA recipient) shall have the
same meaning as recipient provided in section 4 of the Native American
Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et
seq.).
Resident council (RC), for purposes of the Public Housing Program,
means an incorporated or unincorporated nonprofit organization or
association that meets each of the following requirements:
(1) It must be representative of the residents it purports to
represent;
(2) It may represent residents in more than one development or in
all of the developments of a HA, but it must fairly represent residents
from each development that it represents;
(3) It must adopt written procedures providing for the election of
specific officers on a regular basis (but at least once every three
years); and
(4) It must have a democratically elected governing board. The
voting membership of the board must consist of residents of the
development or developments that the resident organization or resident
council represents.
Resident Management Corporation (RMC), for purposes of the Public
Housing Program, means the entity that proposes to enter into, or that
enters into, a management contract with a PHA under part 964 of this
title in accordance with the requirements of that part.
State means any of the several States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency or instrumentality of a
State exclusive of local governments. The term does not include any
public or Indian housing agency under the United States Housing Act of
1937 (42 U.S.C. 1437 note).
Unit of general local government means any city, county, town,
municipality, township, parish, village, local public authority
(including any public or Indian housing agency under the United States
Housing Act of 1937) or other general purpose political subdivision of a
State.
[61 FR 13987, Mar. 28, 1996, as amended at 64 FR 49918, Sept. 14, 1999]
[[Page 19]]
Subpart B_Grant Funding
Sec. 761.13 Amount of funding.
(a) PHDEP formula funding--(1) Funding share formula--(i) Per unit
amount. Subject to the availability of funding, the amount of funding
made available each FFY to an applicant that qualifies for funding in
accordance with Sec. 761.15(a) is based upon the applicant's share of
the total number of units of all applicants that qualify for funding,
with a maximum award of $35 million and a minimum award of $25,000,
except that qualified applicants with less than 50 units will not
receive more than $500 per unit.
(ii) Calculation of number of units. For purposes of determining the
number of units counted for purposes of the PHDEP formula, HUD shall
count as one unit each existing rental and Section 23 bond-financed unit
under the ACC. Units that are added to a PHA's inventory will be added
to the overall unit count so long as the units are under ACC amendment
and have reached DOFA by the date HUD establishes for the Federal Fiscal
Year in which the PHDEP formula is being run (hereafter called the
``reporting date''). Any such increase in units shall result in an
adjustment upwards in the number of units under the PHDEP formula. New
units reaching DOFA after this date will be counted for PHDEP formula
purposes as of the following Federal Fiscal Year. Federalized units that
are eligible for operating subsidy will be counted for PHDEP formula
purposes based on the unit count reflected on the PHA's most recently
approved Operating Budget (Form HUD-52564) and/or subsidy calculation
(Form HUD-52723), or successor form submitted for that program. Units
approved for demolition/disposition continue to be counted for PHDEP
formula funding purposes until actual demolition/disposition of the
unit.
(2) Consortium funding. The amount of funding made available to a
consortium will be the total of the amounts that each individual member
would otherwise qualify to receive under the PHDEP funding formula in
accordance with paragraph (a)(1) of this section.
(3) Adjustments to funding. The amount of funding made available
each FFY to an applicant in accordance with paragraphs (a)(1) and (a)(2)
of this section may be adjusted as follows:
(i) An applicant must submit a PHDEP plan that meets the
requirements of Sec. 761.21, as required by Sec. 761.15(a)(5), each FFY
year to receive that FFY's funding. An applicant that does not submit a
PHDEP plan for a FFY as required will not receive that FFY's funding.
(ii) Ineligible activities, described at Sec. 761.17(b), are not
eligible for funding. Activities proposed for funding in an applicant's
PHDEP plan that are determined to be ineligible will not be funded, and
the applicant's funding for that FFY may be reduced accordingly.
(iii) In accordance with Sec. 761.15(a)(6), an applicant that does
not meet the performance requirements of Sec. 761.23 will be subject to
the sanctions listed in Sec. 761.30(f)(2).
(iv) Both the amount of and continuing eligibility for funding is
subject to the sanctions in Sec. 761.30(f).
(v) Any amounts that become available because of adjustments to an
applicant's funding will be distributed to every other applicant that
qualifies for funding in accordance with paragraphs (a)(1) and (a)(2) of
this section.
(b) AHDEP funding. Information concerning funding made available
under AHDEP for a given FFY will be contained in Notices of Funding
Availability (NOFAs) published in the Federal Register.
[64 FR 49918, Sept. 14, 1999]
Sec. 761.15 Qualifying for funding.
(a) Qualifications for PHDEP funding--(1) Eligible applicants. The
following are eligible applicants for PHDEP funding:
(i) A PHA;
(ii) An RMC; and
(iii) A consortium of PHAs.
(2) Preference PHAs. A PHA that successfully competed for PHDEP
funding under at least one of the PHDEP NOFAs for FFY 1996, FFY 1997 or
FFY 1998 qualifies to receive PHDEP funding.
(3) Needs qualification for funding. An eligible applicant that does
not qualify to receive PHDEP funding under paragraph (a)(2) of this
section must be in one of the following needs categories to qualify for
funding:
[[Page 20]]
(i) The eligible applicant must be in the top 50% of the unit-
weighted distribution of an index of a rolling average rate of violent
crimes of the community, as computed for each Federal Fiscal Year (FFY).
The crime rate used in this needs determination formula is the rate,
from the most recent years feasible, of FBI violent crimes per 10,000
residents of the community (or communities). If this information is not
available for a particular applicant's community, HUD will use the
average of data from recipients of a comparable State and size category
of PHA (less than 500 units, 500 to 1249 units, and more than 1250
units). If fewer than five PHAs have data for a given size category
within a State, then the average of PHAs for a given size category
within the census region will be used; or
(ii) The eligible applicant must have qualified for PHDEP funding,
by receiving an application score of 70 or more points under any one of
the PHDEP NOFAs for FFY 1996, FFY 1997 or FFY 1998, but not have
received an award because of the unavailability of funds.
(4) Consortium of eligible applicants. Eligible applicants may join
together and form a consortium to apply for funding, whether or not each
member would individually qualify for PHDEP funding under paragraphs
(a)(2) or (a)(3) of this section. The act of two or more eligible
applicants joining together to form a consortium, and identifying
related crime problems and eligible activities to address those problems
pursuant to a consortium PHDEP plan, qualifies the consortium for PHDEP
funding of an amount as determined under Sec. 761.13(a)(2).
(5) PHDEP plan requirement. (i) PHAs. Except as provided in
paragraph (a)(5)(ii), below, of this section, to receive PHDEP funding,
a PHA that qualifies to receive PHDEP funding for Federal Fiscal Year
2000 and beyond must include a PHDEP plan that meets the requirements of
Sec. 761.21 with its PHA Plan submitted pursuant to part 903 of this
title for each Federal Fiscal Year for which it qualifies for funding.
(ii) To receive PHDEP funding, a PHA that qualifies to receive PHDEP
funding and is operating under an executed Moving To Work (MTW)
agreement with HUD must submit a PHDEP plan that meets the requirements
of Sec. 761.21 with its required MTW plan for each Federal Fiscal Year
for which it qualifies for funding.
(iii) RMCs. To receive PHDEP funding, an RMC operating in an PHA
that qualifies to receive PHDEP funding must submit a PHDEP plan for the
units managed by the RMC that meets the requirements of Sec. 761.21 to
its PHA. Upon agreement between the RMC and PHA, the PHA must submit to
HUD, with its PHA Plan submitted pursuant to part 903 of this title, the
RMC's PHDEP plan. The RMC will implement its plan as a subrecipient of
the PHA.
(iv) Consortia. To receive PHDEP funding, the consortium members
must prepare and submit a consortium PHDEP plan that meets the
requirements of Sec. 761.21, including the additional requirements that
apply to consortia. Each member must submit the consortium plan with its
PHA plan, submitted pursuant to part 903 of this title, or IHP,
submitted pursuant to subpart C of part 1000 of this title, as
appropriate.
(6) An otherwise qualified recipient PHA, RMC or consortium may not
be funded if HUD determines, on a case-by-case basis, that it does not
meet the performance requirements of Sec. 761.23.
(b) Qualifications for AHDEP funding. Under AHDEP, eligible
applicants are owners of federally assisted low-income housing, as the
term Federally assisted low-income housing is defined in Sec. 761.10.
Notices of Funding Availability (NOFAs) published in the Federal
Register will contain specific information concerning funding
requirements and eligible and ineligible applicants and activities.
[64 FR 49918, Sept. 14, 1999]
Sec. 761.17 Eligible and ineligible activities for funding.
(a) Eligible activities. One or more of the eligible activities
described in 42 U.S.C. 11903 and in this Sec. 761.17(a) are eligible for
funding under PHDEP or AHDEP, as further explained or limited in
paragraph (b) of this section and, for AHDEP, in separate annual Notices
of
[[Page 21]]
Funding Availability (NOFAs). All personnel funded by these programs in
accordance with an eligible activity must meet, and demonstrate
compliance with, all relevant Federal, State, tribal, or local
government insurance, licensing, certification, training, bonding, or
other similar law enforcement requirements.
(1) Employment of security personnel, as provided in 42 U.S.C.
11903(a)(1), with the following additional requirements:
(i) Security guard personnel. (A) Contract security personnel funded
by this program must perform services not usually performed by local law
enforcement agencies on a routine basis. The applicant must identify the
baseline services provided by the local law enforcement agency.
(B) The applicant, the provider (contractor) of the security
personnel and, only if the local law enforcement agency is receiving any
PHDEP funds from the applicant, the local law enforcement agency, are
required, as a part of the security personnel contract, to enter into
and execute a written agreement that describes the following:
(1) The activities to be performed by the security personnel, their
scope of authority, and how they will coordinate their activities with
the local law enforcement agency;
(2) The types of activities that the security personnel are
expressly prohibited from undertaking.
(ii) Employment of HA police. (A) If additional HA police are to be
employed for a service that is also provided by a local law enforcement
agency, the applicant must undertake and retain a cost analysis that
demonstrates the employment of HA police is more cost efficient than
obtaining the service from the local law enforcement agency.
(B) Additional HA police services to be funded under this program
must be over and above those that the existing HA police, if any,
provides, and the tribal, State or local government is contractually
obligated to provide under its Cooperation Agreement with the applying
HA (as required by the HA's Annual Contributions Contract). An applicant
seeking funding for this activity must first establish a baseline by
describing the current level of services provided by both the local law
enforcement agency and the HA police, if any (in terms of the kinds of
services provided, the number of officers and equipment and the actual
percent of their time assigned to the developments proposed for
funding), and then demonstrate that the funded activity will represent
an increase over this baseline.
(C) If the local law enforcement agency is receiving any PHDEP funds
from the applicant, the applicant and the local law enforcement agency
are required to enter into and execute a written agreement that
describes the following:
(1) The activities to be performed by the HA police, their scope of
authority, and how they will coordinate their activities with the local
law enforcement agency;
(2) The types of activities that the HA police are expressly
prohibited from undertaking.
(2) Reimbursement of local law enforcement agencies for additional
security and protective services, as provided in 42 U.S.C. 11903(a)(2),
with the following additional requirements:
(i) Additional security and protective services to be funded must be
over and above those that the tribal, State, or local government is
contractually obligated to provide under its Cooperation Agreement with
the applying HA (as required by the HA's Annual Contributions Contract).
An application seeking funding for this activity must first establish a
baseline by describing the current level of services (in terms of the
kinds of services provided, the number of officers and equipment, and
the actual percent of their time assigned to the developments proposed
for funding) and then demonstrate that the funded activity will
represent an increase over this baseline.
(ii) Communications and security equipment to improve the
collection, analysis, and use of information about drug-related or
violent criminal activities in a public housing community may be
eligible items if used exclusively in connection with the establishment
of a law enforcement substation on the funded premises or scattered site
developments of the applicant. Funds for activities under this section
may not be drawn until the grantee has
[[Page 22]]
executed a contract for the additional law enforcement services.
(3) Physical improvements to enhance security, as provided in 42
U.S.C. 11903(a)(3). For purposes of PHDEP, the following provisions in
paragraphs (a)(3)(i) through (a)(3)(iv) of this section apply:
(i) An activity that is funded under any other HUD program shall not
also be funded by this program.
(ii) Funding is not permitted for physical improvements that involve
the demolition of any units in a development.
(iii) Funding is not permitted for any physical improvements that
would result in the displacement of persons.
(iv) Funding is not permitted for the acquisition of real property.
(4) Employment of investigating individuals, as provided in 42
U.S.C. 11903(a)(4). For purposes of PHDEP, the following provisions in
paragraphs (a)(4)(i) and (a)(4)(ii) of this section apply:
(i) If one or more investigators are to be employed for a service
that is also provided by a local law enforcement agency, the applicant
must undertake and retain a cost analysis that demonstrates the
employment of investigators is more cost efficient than obtaining the
service from the local law enforcement agency.
(ii) The applicant, the investigator(s) and, only if the local law
enforcement agency is receiving any PHDEP funds from the applicant, the
local law enforcement agency, are required, before any investigators are
employed, to enter into and execute a written agreement that describes
the following:
(A) The nature of the activities to be performed by the
investigators, their scope of authority, and how they will coordinate
their activities with the local law enforcement agency;
(B) The types of activities that the investigators are expressly
prohibited from undertaking.
(5) Voluntary tenant patrols, as provided in 42 U.S.C. 11903(a)(5).
For purposes of PHDEP, the following provisions in paragraphs (a)(5)(i)
through (a)(5)(iv) of this section apply:
(i) The provision of training, communications equipment, and other
related equipment (including uniforms), for use by voluntary tenant
patrols acting in cooperation with officials of local law enforcement
agencies is permitted. Grantees are required to obtain liability
insurance to protect themselves and the members of the voluntary tenant
patrol against potential liability for the activities of the patrol. The
cost of this insurance will be considered an eligible program expense.
(ii) The applicant, the members of the tenant patrol and, only if
the local law enforcement agency is receiving any PHDEP funds from the
applicant, the local law enforcement agency, are required, before
putting the tenant patrol into effect, to enter into and execute a
written agreement that describes the following:
(A) The nature of the activities to be performed by the tenant
patrol, the patrol's scope of authority, and how the patrol will
coordinate its activities with the local law enforcement agency;
(B) The types of activities that a tenant patrol is expressly
prohibited from undertaking, to include but not limited to, the carrying
or use of firearms or other weapons, nightsticks, clubs, handcuffs, or
mace in the course of their duties under this program;
(C) The type of initial tenant patrol training and continuing
training the members receive from the local law enforcement agency
(training by the local law enforcement agency is required before putting
the tenant patrol into effect).
(iii) Tenant patrol members must be advised that they may be subject
to individual or collective liability for any actions undertaken outside
the scope of their authority and that such acts are not covered under a
HA's or RMC's liability insurance.
(iv) Grant funds may not be used for any type of financial
compensation for voluntary tenant patrol participants. However, the use
of program funds for a grant coordinator for volunteer tenant foot
patrols is permitted.
(6) Drug prevention, intervention, and treatment programs, as
provided in 42 U.S.C. 11903(a)(6).
(7) Funding resident management corporations (RMCs), resident
councils (RCs), and resident organizations (ROs). For purposes of the
Public Housing Program, funding may be provided for PHAs that receive
grants to contract
[[Page 23]]
with RMCs and incorporated RCs and ROs to develop security and drug
abuse prevention programs involving site residents, as provided in 42
U.S.C. 11903(a)(7).
(8) Youth sports. Sports programs and sports activities that serve
primarily youths from public or other federally assisted low-income
housing projects and are operated in conjunction with, or in furtherance
of, an organized program or plan designed to reduce or eliminate drugs
and drug-related problems in and around such projects, as provided in 42
U.S.C. 11903(a)(8).
(9) Eliminating drug-related and violent crime in PHA-owned housing,
under the Public Housing Program, as provided in 42 U.S.C. 11903(b).
(b) Ineligible activities. For purposes of PHDEP, funding is not
permitted:
(1) For activities not included under paragraph (a) of this section;
(2) For costs incurred before the effective date of the grant
agreement;
(3) For the costs related to screening or evicting residents for
drug-related crime. However, investigators funded under this program may
participate in judicial and administrative proceedings;
(4) For previously funded activities determined by HUD on a case-by-
case basis to be unworthy of continuation.
[64 FR 49919, Sept. 14, 1999]
Subpart C_Application and Selection
Sec. 761.20 Selection requirements.
(a) PHDEP selection. Every PHA, RMC and consortium that meets the
requirements of Sec. 761.15 in a FFY will be selected for funding in
that FFY and, subject to meeting the performance requirements of
Sec. 761.23, for four additional FFYs.
(b) AHDEP selection. HUD will publish specific Notices of Funding
Availability (NOFAs) in the Federal Register to inform the public of the
availability of AHDEP grant amounts under this part 761. The NOFAs will
provide specific guidance with respect to the grant process, including
identifying the eligible applicants; deadlines for the submission of
grant applications; the limits (if any) on maximum grant amounts; the
information that must be submitted to permit HUD to score each of the
selection criteria; the maximum number of points to be awarded for each
selection criterion; the contents of the plan for addressing drug-
related and violent crime that must be included with the application;
the listing of any certifications and assurances that must be submitted
with the application; and the process for ranking and selecting
applicants. NOFAs will also include any additional information, factors,
and requirements that HUD has determined to be necessary and appropriate
to provide for the implementation and administration of AHDEP under this
part 761.
[64 FR 49920, Sept. 14, 1999]
Sec. 761.21 Plan requirement.
(a) General requirement. To receive funding under this part, each
PHDEP qualified recipient or AHDEP applicant must submit to HUD, for
Federal Fiscal Year (FFY) 2000 and each following FFY, a plan for
addressing the problem of drug-related and violent crime in and around
the housing covered by the plan. If the plan covers more than one
development, it does not have to address each development separately if
the same activities will apply to each development. The plan must
address each development separately only where program activities will
differ from one development to another. The plan must include a
description of the planned activity or activities, a description of the
role of plan partners and their contributions to carrying out the plan,
a budget and timetable for implementation of the activities, and the
funding source for each activity, identifying in particular all
activities to be funded under this part. In addition, the plan must set
measurable performance goals and interim milestones for the PHDEP-
supported activities and describe the system for monitoring and
evaluating these activities. Measurable goals must be established for
each category of funded activities, including drug prevention, drug
intervention, drug treatment, tenant patrols, and physical improvements.
The plan under this section serves as the application for PHDEP funding,
and an otherwise qualified recipient that does not
[[Page 24]]
submit a PHDEP plan as required will not be funded. For AHDEP funding,
NOFAs published in the Federal Register may provide additional
information on plan requirements for purposes of this section. Plans
must meet the requirements of this section before grant funds are
distributed. HUD will review the submitted plans for a determination of
whether they meet the requirements of this section.
(b) Additional requirements for consortia. In addition to meeting
the requirements of paragraph (a) of this section, to receive funding
under this part, a consortium's plan must include a copy of the
consortium agreement between the PHAs which are participating in the
consortium, and a copy of the payment agreement between the consortium
and HUD.
[64 FR 49920, Sept. 14, 1999]
Sec. 761.23 Grantee performance requirements.
(a) Basic grantee requirements--(1) Compliance with civil rights
requirements. Grantees must be in compliance with all fair housing and
civil rights laws, statutes, regulations, and executive orders as
enumerated in 24 CFR 5.105(a). Federally recognized Indian tribes must
comply with the Age Discrimination Act of 1975 and the Indian Civil
Rights Act.
(2) Adherence to the grant agreement. The grant agreement between
HUD and the grantee incorporates the grantee's application and plan for
the implementation of grant-funded activities.
(3) Compliance with ``baseline'' funding requirement. Grantees may
not use grant funds to reimburse law enforcement agencies for
``baseline'' community safety services. Grantees must adhere to
Sec. 761.17(a)(2)(i), reimbursement of local law enforcement agencies
for additional security and protective services. In addition, grantees
must provide to HUD a description of the baseline of services for the
unit of general local government in which the jurisdiction of the agency
is located.
(4) Partnerships. Grantees must provide HUD with evidence of
partnerships--in particular, firm commitments by organizations providing
funding, services, or other in-kind resources for PHDEP-funded
activities (e.g., memorandum of agreement, letter of firm commitment).
The partnership agreement must cover the applicable funding period.
(5) MTCS reporting. Grantees must maintain a level of compliance
with MTCS reporting requirements that is satisfactory to HUD.
(b) Planning and reporting requirements--(1) Planning consistency.
PHDEP funded activities must be consistent with the most recent HUD-
approved PHA Plan or Indian Housing Plan, as appropriate. AHDEP funded
activities must be consistent with the most recent Consolidated Plan
under part 91 of this title for the community.
(2) Demonstration of coordination with other law enforcement
efforts. Each grantee must consult with local law enforcement
authorities and other local entities in the preparation of its plan for
addressing the problem of drug-related and violent crime under
Sec. 761.21 and must maintain documentation of such consultation.
Furthermore, a grantee must coordinate its grant-funded activities with
other anti-crime and anti-drug programs, such as Operation Safe Home,
Operation Weed and Seed, and the Safe Neighborhoods Action Program
operating in the community, if applicable and maintain documentation of
such coordination.
(3) Compliance with reporting requirements. Grantees must provide
periodic reports consistent with this part at such times and in such
form as is required by HUD.
(4) Reporting on drug-related and violent crime. Grantees must
report any change or lack of change in crime statistics--especially
drug-related crime and violent crime--or other relevant indicators drawn
from the applicant's or grantee's evaluation and monitoring plan, IHP or
PHA Plan. The grantee must also indicate, if applicable, how it is
adequately addressing any recommendations emanating from other anti-
crime and anti-drug programs, such as Operation Safe Home, Operation
Weed and Seed, and the Safe Neighborhoods Action Program, operating in
the community and is taking appropriate actions, in view of available
resources, such as post-enforcement measures, to take full advantage of
these programs.
[[Page 25]]
(c) Funding and evaluation requirements--(1) Timely obligation and
expenditure of grant funds. The HA must obligate and expend funds in
compliance with all funding notifications, regulations, notices, and
grant agreements. In addition, the HA must obligate at least 50 percent
of funds under a particular grant within 12 months of the execution of
the grant agreement, and must expend at least 25 percent of funds under
a particular grant within 12 months of the execution of the grant
agreement.
(2) Operational monitoring and evaluation system. The grantee must
demonstrate that it has a fully operational system for monitoring and
evaluating its grant-funded activities. A monitoring and evaluation
system must collect quantitative evidence of the number of persons and
units served, including youth served as a separate category, types of
services provided, and the impact of such services on the persons
served. Also, the monitoring and evaluation system must collect
quantitative and qualitative evidence of the impact of grant-funded
activities on the public housing or other housing, the community and the
surrounding neighborhood.
(3) Reduction of violent crime and drug use. The grantee must
demonstrate that it has established, and is attaining, measurable goals
including the overall reduction of violent crime and drug use.
(d) Other requirements. HUD reserves the right to add additional
performance factors consistent with this rule and other related statutes
and regulations on a case-by-case basis.
(e) Sanctions. A grantee that fails to satisfy the performance
requirements of this section will be subject to the sanctions listed in
Sec. 761.30(f)(2).
[64 FR 49921, Sept. 14, 1999]
Sec. 761.25 Resident comments on grant application.
The applicant must provide the residents of developments proposed
for funding under this part 761, as well as any RMCs, RCs, or ROs that
represent those residents (including any HA-wide RMC, RC, or RO), if
applicable, with a reasonable opportunity to comment on its application
for funding under these programs. The applicant must give these comments
careful consideration in developing its plan and application, as well as
in the implementation of funded programs. Grantees must maintain copies
of all written comments submitted for three years.
Subpart D_Grant Administration
Sec. 761.30 Grant administration.
(a) General. Each grantee is responsible for ensuring that grant
funds are administered in accordance with the requirements of this part
761, any specific Notices of Funding Availability (NOFAs) issued for
these programs, 2 CFR part 200, applicable laws and regulations,
applicable OMB circulars, HUD fiscal and audit controls, grant
agreements, grant special conditions, the grantee's approved budget (SF-
424A), budget narrative, plan, and activity timetable.
(b) Grant term extensions--(1) Grant term. Terms of the grant
agreement may not exceed 12 months for the Assisted Housing Program, and
24 months for the Public Housing Program, unless an extension is
approved by the local HUD Office or local HUD Office of Native American
Programs. Any funds not expended at the end of the grant term shall be
remitted to HUD.
(2) Extension. HUD may grant an extension of the grant term in
response to a written request for an extension stating the need for the
extension and indicating the additional time required. HUD will not
consider requests for retroactive extension of program periods. HUD will
permit only one extension. HUD will only consider extensions if the
grantee meets the extension criteria of paragraph (b)(5) of this section
at the time the grantee submits for approval the request for the
extension.
(3) Receipt. The request must be received by the local HUD Office or
local HUD Office of Native American Programs prior to the termination of
the grant, and requires approval by the local HUD Office or local HUD
Office of Native American Programs with jurisdiction over the grantee.
(4) Term. The maximum extension allowable for any program period is
6 months.
[[Page 26]]
(5) Extension criteria. The following criteria must be met by the
grantee when submitting a request to extend the expenditure deadline for
a program or set of programs.
(i) Financial status reports. There must be on file with the local
HUD Office or local HUD Office of Native American Programs current and
acceptable Financial Status Reports, SF-269As.
(ii) Grant agreement special conditions. The grantee must have
satisfied all grant agreement special conditions except those conditions
that the grantee must fulfill in the remaining period of the grant. This
also includes the performance and resolution of audit findings in a
timely manner.
(iii) Justification. The grantee must submit a narrative
justification with the program extension request. The justification must
provide complete details, including the circumstances that require the
proposed extension, and an explanation of the impact of denying the
request.
(6) HUD action. The local HUD Office or local HUD Office of Native
American Programs will attempt to take action on any proposed extension
request within 15 days after receipt of the request.
(c) Duplication of funds. To prevent duplicate funding of any
activity, the grantee must establish controls to assure that an activity
or program that is funded by other HUD programs, or programs of other
Federal agencies, shall not also be funded by the Drug Elimination
Program. The grantee must establish an auditable system to provide
adequate accountability for funds that it has been awarded. The grantee
is responsible for ensuring that there is no duplication of funds.
(d) Insurance. Each grantee shall obtain adequate insurance coverage
to protect itself against any potential liability arising out of the
eligible activities under this part. In particular, applicants shall
assess their potential liability arising out of the employment or
contracting of security personnel, law enforcement personnel,
investigators, and drug treatment providers, and the establishment of
voluntary tenant patrols; evaluate the qualifications and training of
the individuals or firms undertaking these functions; and consider any
limitations on liability under tribal, State, or local law. Grantees
shall obtain liability insurance to protect the members of the voluntary
tenant patrol against potential liability as a result of the patrol's
activities under Sec. 761.15(b)(5). Voluntary tenant patrol liability
insurance costs are eligible program expenses. Subgrantees shall obtain
their own liability insurance.
(e) Failure to implement program. If the grant plan, approved
budget, and timetable, as described in the approved application, are not
operational within 60 days of the grant agreement date, the grantee must
report by letter to the local HUD Office or the local HUD Office of
Native American Programs the steps being taken to initiate the plan and
timetable, the reason for the delay, and the expected starting date. Any
timetable revisions that resulted from the delay must be included. The
local HUD Office or local HUD Office of Native American Programs will
determine if the delay is acceptable, approve/disapprove the revised
plan and timetable, and take any additional appropriate action.
(f) Sanctions. (1) HUD may impose sanctions if the grantee:
(i) Is not complying with the requirements of this part 761, or of
other applicable Federal law;
(ii) Fails to make satisfactory progress toward its drug elimination
goals, as specified in its plan and as reflected in its performance and
financial status reports;
(iii) Does not establish procedures that will minimize the time
elapsing between drawdowns and disbursements;
(iv) Does not adhere to grant agreement requirements or special
conditions;
(v) Proposes substantial plan changes to the extent that, if
originally submitted, the applications would not have been selected for
funding;
(vi) Engages in the improper award or administration of grant
subcontracts;
(vii) Does not submit reports; or
(viii) Files a false certification.
(2) HUD may impose the following sanctions:
[[Page 27]]
(i) Temporarily withhold cash payments pending correction of the
deficiency by the grantee or subgrantee;
(ii) Disallow all or part of the cost of the activity or action not
in compliance;
(iii) Wholly or partly suspend or terminate the current award for
the grantee's or subgrantee's program;
(iv) Require that some or all of the grant amounts be remitted to
HUD;
(v) Condition a future grant and elect not to provide future grant
funds to the grantee until appropriate actions are taken to ensure
compliance;
(vi) Withhold further awards for the program; or
(vii) Take other remedies that may be legally available.
[61 FR 13987, Mar. 28, 1996, as amended at 80 FR 75941, Dec. 7, 2015]
Sec. 761.35 Periodic grantee reports.
Grantees are responsible for managing the day-to-day operations of
grant and subgrant supported activities. Grantees must monitor grant and
subgrant supported activities to assure compliance with applicable
Federal requirements and that performance goals are being achieved.
Grantee monitoring must cover each program, function or activity of the
grant.
(a) Semi-annual (nonconstruction) performance reports. For purposes
of the Public Housing Program only, the following provisions in
paragraph (a) of this section apply:
(1) In accordance with 2 CFR 200.328, grantees are required to
provide the local HUD Office or the local HUD Office of Native American
Programs with a semi-annual performance report that evaluates the
grantee's performance against its plan. These reports shall include (but
are not limited to) the following in summary form:
(i) Any change or lack of change in crime statistics or other
indicators drawn from the applicant's plan assessment and an explanation
of any difference;
(ii) Successful completion of any of the strategy components
identified in the applicant's plan;
(iii) A discussion of any problems encountered in implementing the
plan and how they were addressed;
(iv) An evaluation of whether the rate of progress meets
expectations;
(v) A discussion of the grantee's efforts in encouraging resident
participation; and
(vi) A description of any other programs that may have been
initiated, expanded, or deleted as a result of the plan, with an
identification of the resources and the number of people involved in the
programs and their relation to the plan.
(2) Reporting period. Semi-annual performance reports (for periods
ending June 30 and December 31) are due to the local HUD Office or the
local HUD Office of Native American Programs on July 30 and January 31
of each year. If the reports are not received by the local HUD Office or
the local HUD Office of Native American Programs on or before the due
date, grant funds will not be advanced until the reports are received.
(b) Final performance report. For purposes of both the Assisted
Housing Program and the Public Housing Program, the following provisions
in paragraph (b) of this section apply:
(1) Evaluation. Grantees are required to provide the local HUD
Office or the local HUD Office of Native American Programs, as
applicable, with a final cumulative performance report that evaluates
the grantee's overall performance against its plan. This report shall
include (but is not limited to) the information listed in paragraphs
(a)(1)(i) through (a)(1)(vi) of this section, in summary form.
(2) Reporting period. The final performance report shall cover the
period from the date of the grant agreement to the termination date of
the grant agreement. The report is due to the local HUD Office or the
local HUD Office of Native American Programs, as applicable, within 90
days after termination of the grant agreement.
(c) Semi-annual financial status reporting requirements. For
purposes of both the Assisted Housing Program and the Public Housing
Program, the following provisions in paragraph (c) of this section
apply, as specified below:
(1) Forms. The grantee shall provide a semi-annual financial status
report. For purposes of the Public Housing
[[Page 28]]
Program, this report shall be in accordance with 2 CFR 200.327. For both
the Assisted Housing and Public Housing Programs, the grantee shall use
the form SF-269A, Financial Status Report-Long Form, to report the
status of funds for nonconstruction programs. The grantee shall use SF-
269A, block 12, ``Remarks,'' to report on the status of programs,
functions, or activities within the program.
(2) Reporting period. Semi-annual financial status reports (SF-269A)
must be submitted as follows:
(i) For purposes of the Assisted Housing Program, semi-annual
financial status reports covering the first 180 days of funded
activities must be submitted to the local HUD Office between 190 and 210
days after the date of the grant agreement. If the SF-269A is not
received on or before the due date (210 days after the date of the grant
agreement) by the local HUD Office, grant funds will not be advanced
until the reports are received.
(ii) For purposes of the Public Housing Program, semi-annual
financial status reports (for periods ending June 30 and December 31)
must be submitted to the local HUD Office or the local Office of Indian
Programs, as applicable, by July 30 and January 31 of each year. If the
local HUD Office or the local HUD Office of Native American Programs, as
applicable, does not receive the SF-269A on or before the due date, the
grant funds will not be advanced until the reports are received.
(d) Final financial status report (SF-269A). For purposes of both
the Assisted Housing Program and the Public Housing Program, the
following provisions in paragraph (d) of this section apply:
(1) Cumulative summary. The final report will be a cumulative
summary of expenditures to date and must indicate the exact balance of
unexpended funds. The grantee shall remit all Drug Elimination Program
funds owed to HUD, including any unexpended funds, as follows:
(i) For purposes of the Assisted Housing Program, the grantee must
remit such funds to HUD within 90 days after the termination of the
grant agreement.
(ii) For purposes of the Public Housing Program, the local HUD
Office or the local HUD Office of Native American Programs shall notify
the grantee, in writing, of the requirement to remit such funds to HUD.
The grantee shall remit such funds prior to or upon receipt of the
notice.
(2) Reporting period. The final financial status report shall cover
the period from the date of the grant agreement to the termination date
of the grant agreement. The report is due to the local HUD Office or the
local HUD Office of Native American Programs, as applicable, within 90
days after the termination of the grant agreement.
[61 FR 13987, Mar. 28, 1996, as amended at 80 FR 75941, Dec. 7, 2015]
Sec. 761.40 Other Federal requirements.
In addition to the nondiscrimination and equal opportunity
requirements set forth in 24 CFR part 5, subpart A, use of grant funds
requires compliance with the following Federal requirements:
(a) Labor standards. (1) When grant funds are used to undertake
physical improvements to increase security under Sec. 761.15(b)(3), the
following labor standards apply:
(i) The grantee and its contractors and subcontractors must pay the
following prevailing wage rates, and must comply with all related rules,
regulations and requirements:
(A) For laborers and mechanics employed in the program, the wage
rate determined by the Secretary of Labor pursuant to the Davis-Bacon
Act (40 U.S.C. 276a et seq.) to be prevailing in the locality with
respect to such trades;
(B) For laborers and mechanics employed in carrying out nonroutine
maintenance in the program, the HUD-determined prevailing wage rate. As
used in paragraph (a) of this section, nonroutine maintenance means work
items that ordinarily would be performed on a regular basis in the
course of upkeep of a property, but have become substantial in scope
because they have been put off, and that involve expenditures that would
otherwise materially distort the level trend of maintenance expenses.
Nonroutine maintenance may include replacement of equipment and
materials rendered unsatisfactory because of normal wear
[[Page 29]]
and tear by items of substantially the same kind. Work that constitutes
reconstruction, a substantial improvement in the quality or kind of
original equipment and materials, or remodeling that alters the nature
or type of housing units is not nonroutine maintenance.
(ii) The employment of laborers and mechanics is subject to the
provisions of the Contract Work Hours and Safety Standards Act (40
U.S.C. 327-333).
(2) The provisions of paragraph (a)(1) of this section shall not
apply to labor contributed under the following circumstances:
(i) Upon the request of any resident management corporation, HUD
may, subject to applicable collective bargaining agreements, permit
residents (for purposes of the Public Housing Program, residents of a
program managed by the resident management corporation) to volunteer a
portion of their labor.
(ii) An individual may volunteer to perform services if:
(A) The individual does not receive compensation for the voluntary
services, or is paid expenses, reasonable benefits, or a nominal fee for
voluntary services; and
(B) Is not otherwise employed at any time in the work subject to
paragraphs (a)(1)(i)(A) or (a)(1)(i)(B) of this section.
(b) Flood insurance. Grants will not be awarded for proposed
activities that involve acquisition, construction, reconstruction,
repair or improvement of a building or mobile home located in an area
that has been identified by the Federal Emergency Management Agency
(FEMA) as having special flood hazards unless:
(1) The community in which the area is situated is participating in
the National Flood Insurance Program in accordance with 44 CFR parts 59
through 79; or
(2) Less than a year has passed since FEMA notification to the
community regarding such hazards; and
(3) Flood insurance on the structure is obtained in accordance with
section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4001).
(c) Lead-based paint. 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. 4851-4856), and implementing regulations at part
35, subparts A, B, H, and R of this title.
(d) Conflicts of interest. In addition to the conflict of interest
requirements in 2 CFR 200.112 (for all recipients and subrecipients),
200.317 (for recipients and subrecipients that are States), and
200.318(c) and 200.319(a)(5) (for recipients and subrecipients that are
not States) for the Public Housing Program, no person, as described in
paragraphs (d)(1) and (d)(2) of this section, may obtain a personal or
financial interest or benefit from an activity funded under these drug
elimination programs, or have an interest in any contract, subcontract,
or agreement with respect thereto, or the proceeds thereunder, either
for him or herself or for those with whom he or she has family or
business ties, during his or her tenure, or for one year thereafter:
(1) Who is an employee, agent, consultant, officer, or elected or
appointed official of the grantee, that receives assistance under the
program and who exercises or has exercised any functions or
responsibilities with respect to assisted activities; or
(2) Who is in a position to participate in a decisionmaking process
or gain inside information with regard to such activities.
(e) For IHAs, Sec. 950.115 of this title, ``Applicability of civil
rights requirements,'' and Sec. 950.120 of this title, ``Compliance with
other Federal requirements,'' apply and control to the extent they may
differ from other requirements of this section;
(f) Intergovernmental Review. The requirements of Executive Order
12372 (3 CFR, 1982 Comp., p. 197) and the regulations issued under the
Order in part 52 of this title, to the extent provided by Federal
Register notice in accordance with 24 CFR 52.3, apply to these programs.
(g) Environmental review. Certain eligible activities under this
part 761 are categorically excluded from review under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321) and are not subject to
review under related laws, in accordance with 24 CFR 50.19(b)(4),
(b)(12), or (b)(13). If the PHDEP plan proposes the use of grant
[[Page 30]]
funds to assist any non-exempt activities, HUD will perform an
environmental review to the extent required by 24 CFR part 50, prior to
grant award.
[61 FR 13987, Mar. 28, 1996, as amended at 64 FR 49921, Sept. 14, 1999;
64 FR 50227, Sept. 15, 1999, 80 FR 75941, Dec. 7, 2015]
PARTS 762 790 [RESERVED]
PART 791_ALLOCATIONS OF HOUSING ASSISTANCE FUNDS--Table of Contents
Subpart A_General Provisions
Sec.
791.101 Applicability and scope.
791.102 Definitions.
Subparts B-C [Reserved]
Subpart D_Allocation of Budget Authority for Housing Assistance
791.401 General.
791.402 Determination of low-income housing needs.
791.403 Allocation of housing assistance.
791.404 Field Office allocation planning.
791.405 Reallocations of budget authority.
791.406 Competition.
791.407 Headquarters Reserve.
Authority: 42 U.S.C. 1439 and 3535(d).
Source: 61 FR 10849, Mar. 15, 1996, unless otherwise noted.
Subpart A_General Provisions
Sec. 791.101 Applicability and scope.
This part describes the role and responsibility of HUD in allocation
of budget authority (pursuant to section 213 of the Housing and
Community Development Act of 1974 (42 U.S.C. 1439)) for housing
assistance under the United States Housing Act of 1937 (Section 8 and
public housing) and under section 101 of the Housing and Urban
Development Act of 1965 (12 U.S.C. 1701s), and of budget authority for
housing assistance under section 202 of the Housing Act of 1959 (12
U.S.C. 1710q). This part does not apply to budget authority for the
public housing operating fund or capital fund.
[64 FR 26639, May 14, 1999]
Sec. 791.102 Definitions.
Act. The Housing and Community Development Act of 1974 (42 U.S.D.
1437), as amended.
Allocation area. A municipality, county, or group of municipalities
or counties identified by the HUD field office for the purpose of
allocating housing assistance.
Assistant Secretary. The Assistant Secretary for Housing or the
Assistant Secretary for Public and Indian Housing, as appropriate to the
housing assistance under consideration.
Budget authority. The maximum amount authorized by the Congress for
payments over the term of assistance contracts.
Fiscal year. The official operating period of the Federal
government, beginning on October 1 and ending on September 30.
Metropolitan area. See MSA.
MSA. A metropolitan statistical area established by the Office of
Management and Budget. The term also includes primary metropolitan
statistical areas (PMSAs), which are the component parts of larger
urbanized areas designated as consolidated metropolitan statistical
areas (CMSAs). Where an MSA is divided among two or more field offices,
references to an MSA mean the portion of the MSA within the State/Area
Office jurisdiction.
Public housing agency (PHA). (1) Any State, county, municipality, or
other governmental entity or public body which is authorized to
administer a program under the 1937 Act (or an agency or instrumentality
of such an entity).
(2) In addition, for purposes of the program of Section 8 tenant-
based assistance under part 982 of this title, the term PHA also
includes any of the following:
(i) A consortia of housing agencies, each of which meets the
qualifications in paragraph (1) of this definition, that HUD determines
has the capacity and capability to efficiently administer the program
(in which case, HUD may enter into a consolidated ACC with any legal
entity authorized to act as the legal representative of the consortia
members);
[[Page 31]]
(ii) Any other public or private non-profit entity that was
administering a Section 8 tenant-based assistance program pursuant to a
contract with the contract administrator of such program (HUD or a PHA)
in effect on October 21, 1998; or
(iii) For any area outside the jurisdiction of a PHA that is
administering a tenant-based program, or where HUD determines that such
PHA is not administering the program effectively, a private non-profit
entity or a governmental entity or public body that would otherwise lack
jurisdiction to administer the program in such area.
[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26639, May 14, 1999]
Subparts B-C [Reserved]
Subpart D_Allocation of Budget Authority for Housing Assistance
Sec. 791.401 General.
This subpart D establishes the procedures for allocating budget
authority under section 213(d) of the Act for the programs identified in
Sec. 791.101. It describes the allocation of budget authority by the
appropriate Assistant Secretary to the applicable Program Office
Director in the HUD field office, and by the Program Office Director to
allocation areas within their jurisdiction.
[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26639, May 14, 1999]
Sec. 791.402 Determination of low-income housing needs.
(a) Before budget authority is allocated, the Assistant Secretary
for Policy Development and Research shall determine the relative need
for low-income housing assistance in each HUD field office jurisdiction.
This determination shall be based upon data from the most recent,
available decennial census and, where appropriate, upon more recent data
from the Bureau of the Census or other Federal agencies, or from the
American Housing Survey.
(b) Except for paragraph (c) of this section, the factors used to
determine the relative need for assistance shall be based upon the
following criteria:
(1) Population. The renter population;
(2) Poverty. The number of renter households with annual incomes at
or below the poverty level, as defined by the Bureau of the Census;
(3) Housing overcrowding. The number of renter-occupied housing
units with an occupancy ratio of 1.01 or more persons per room;
(4) Housing vacancies. The number of renter housing units that would
be required to maintain vacancies at levels typical of balanced market
conditions;
(5) Substandard housing. The number of housing units built before
1940 and occupied by renter households with annual incomes at or below
the poverty level, as defined by the Bureau of the Census; and
(6) Other objectively measurable conditions. Data indicating
potential need for rental housing assistance, such as the number of
renter households with incomes below specified levels and paying a gross
rent of more than 30 percent of household income.
(c) For the section 202 elderly program, the data used shall reflect
relevant characteristics of the elderly population. The data shall use
the criteria specified in paragraph (b)(1) and (6) of this section, as
modified to apply specifically to the needs of the elderly population.
(d) Based on the criteria in paragraphs (b) and (c) of this section,
the Assistant Secretary for Policy Development and Research shall
establish housing needs factors for each county and independent city in
the field office jurisdiction, and shall aggregate the factors for such
jurisdiction. The field office total for each factor is then divided by
the respective national total for that factor. The resulting housing
needs ratios under paragraph (b) of this section are then weighted to
provide housing needs percentages for each field office, using the
following weights: population--20 percent; poverty--20 percent; housing
overcrowding--10 percent; housing vacancies--10 percent; substandard
housing--20 percent; other objectively measurable conditions--20
percent. For the section 202 elderly program, the two criteria described
in paragraph (c) of this section are weighted equally.
(e) The Assistant Secretary for Policy Development and Research
shall
[[Page 32]]
adjust the housing needs percentages derived in paragraph (d) of this
section to reflect the relative cost of providing housing among the
field office jurisdictions.
[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26639, May 14, 1999]
Sec. 791.403 Allocation of housing assistance.
(a) The total budget authority available for any fiscal year shall
be determined by adding any available unreserved budget authority from
prior fiscal years to any newly appropriated budget authority for each
housing program.
(b) Budget authority available for the fiscal year, except for that
retained pursuant to Sec. 791.407, shall be allocated to the field
offices as follows:
(1) Budget authority shall be allocated as needed for uses that the
Secretary determines are incapable of geographic allocation by formula,
including--
(i) Amendments of existing contracts, renewal of assistance
contracts, assistance to families that would otherwise lose assistance
due to the decision of the project owner to prepay the project mortgage
or not to renew the assistance contract, assistance to prevent
displacement or to provide replacement housing in connection with the
demolition or disposition of public housing, assistance in support of
the property disposition and loan management functions of the Secretary;
(ii) Assistance which is--
(A) The subject of a line item identification in the HUD
appropriations law, or in the table customarily included in the
Conference Report on the appropriation for the Fiscal Year in which the
funds are to be allocated;
(B) Reported in the Operating Plan submitted by HUD to the
Committees on Appropriations; or
(C) Included in an authorization statute where the nature of the
assistance, such as a prescribed set-aside, is, in the determination of
the Secretary, incapable of geographic allocation by formula,
(iii) Assistance determined by the Secretary to be necessary in
carrying out the following programs authorized by the Cranston-Gonzalez
National Affordable Housing Act: the Homeownership and Opportunity
Through HOPE Act under title IV and HOPE for Elderly Independence under
section 803.
(2) Budget authority remaining after carrying out allocation steps
outlined in paragraph (b)(1) of this section shall be allocated in
accordance with the housing needs percentages calculated under
paragraphs (b), (c), (d), and (e) of Sec. 791.402. HUD may allocate
assistance under this paragraph in such a manner that each State shall
receive not less than one-half of one percent of the amount of funds
available for each program referred to in Sec. 791.101(a) in each fiscal
year. If the budget authority for a particular program is insufficient
to fund feasible projects, or to promote meaningful competition, at the
field office level, budget authority may be allocated among the ten
geographic areas of the country. The funds so allocated will be assigned
by Headquarters to the field office(s) with the highest ranked
applications within the ten geographic areas.
(c) At least annually HUD will publish a notice in the Federal
Register informing the public of all allocations under
Sec. 791.403(b)(2).
[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26640, May 14, 1999]
Sec. 791.404 Field Office allocation planning.
(a) General objective. The allocation planning process should
provide for the equitable distribution of available budget authority,
consistent with the relative housing needs of each allocation area
within the field office jurisdiction.
(b) Establishing allocation areas. Allocation areas, consisting of
one or more counties or independent cities, shall be established by the
field office in accordance with the following criteria:
(1) Each allocation shall be to the smallest practicable area, but
of sufficient size so that at least three eligible entities are viable
competitors for funds in the allocation area, and so that all applicable
statutory requirements can be met. (It is expected that in many
instances individual MSAs will be established as metropolitan allocation
areas.) For the section 202 program for the elderly, the allocation
[[Page 33]]
area must include sufficient units to promote a meaningful competition
among disparate types of providers of such housing (e.g., local as well
as national sponsors, minority as well as non-minority sponsors). The
preceding sentence shall not apply to projects acquired from the
Resolution Trust Corporation under section 21A(c) of the Federal Home
Loan Bank Act.
(2) Each allocation area shall also be of sufficient size, in terms
of population and housing need, that the amount of budget authority
being allocated to the area will support at least one feasible program
or project.
(3) In establishing allocation areas, counties and independent
cities within MSAs should not be combined with counties that are not in
MSAs.
(c) Determining the amount of budget authority. Where the field
office establishes more than one allocation area, it shall determine the
amount of budget authority to be allocated to each allocation area,
based upon a housing needs percentage which represents the needs of that
area relative to the field office jurisdiction. For each program, a
composite housing needs percentage developed under Sec. 791.402 for
those counties and independent cities comprising the allocation area
shall be aggregated into allocation area totals.
(d) Planning for the allocation. The field office should develop an
allocation plan which reflects the amount of budget authority determined
for each allocation area in paragraph (c). The plan should include a map
or maps clearly showing the allocation areas within the field office
jurisdiction. The relative share of budget authority by individual
program type need not be the same for each allocation area, so long as
the total amount of budget authority made available to the allocation
area is not significantly reduced.
[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26640, May 14, 1999]
Sec. 791.405 Reallocations of budget authority.
(a) The field office shall make every reasonable effort to use the
budget authority made available for each allocation area within such
area. If the Program Office Director determines that not all of the
budget authority allocated for a particular allocation area is likely to
be used during the fiscal year, the remaining authority may be allocated
to other allocation areas where it is likely to be used during that
fiscal year.
(b) If the Assistant Secretary determines that not all of the budget
authority allocated to a field office is likely to be used during the
fiscal year, the remaining authority may be reallocated to another field
office where it is likely to be used during that fiscal year.
(c) Any reallocations of budget authority among allocation areas or
field offices shall be consistent with the assignment of budget
authority for the specific program type and established set-asides.
(d) Notwithstanding the requirements of paragraphs (a) through (c)
of this section, budget authority shall not be reallocated for use in
another State unless the Program Office Director or the Assistant
Secretary has determined that other allocation areas within the same
State cannot use the available authority during the fiscal year.
Sec. 791.406 Competition.
(a) All budget authority allocated pursuant to Sec. 791.403(b)(2)
shall be reserved and obligated pursuant to a competition. Any such
competition shall be conducted pursuant to specific criteria for the
selection of recipients of assistance. These criteria shall be contained
in a regulation promulgated after notice and public comment or, to the
extent authorized by law, a notice published in the Federal Register.
(b) This section shall not apply to assistance referred to in
Secs. 791.403(b)(1) and 791.407.
Sec. 791.407 Headquarters Reserve.
(a) A portion of the budget authority available for the housing
programs listed in Sec. 791.101(a), not to exceed an amount equal to
five percent of the total amount of budget authority available for the
fiscal year for programs under the United States Housing Act of 1937
listed in Sec. 791.101(a), may be retained by the Assistant Secretary
for subsequent allocation to specific areas and communities, and may
only be used for:
[[Page 34]]
(1) Unforeseen housing needs resulting from natural and other
disasters, including hurricanes, tornadoes, storms, high water, wind
driven water, tidal waves, tsunamis, earthquakes, volcanic eruptions,
landslides, mudslides, snowstorms, drought, fires, floods, or
explosions, which in the determination of the Secretary cause damage of
sufficient severity and magnitude to warrant Federal housing assistance;
(2) Housing needs resulting from emergencies, as certified by the
Secretary, other than disasters described in paragraph (a)(1) of this
section. Emergency housing needs that can be certified are only those
that result from unpredictable and sudden circumstances causing housing
deprivation (such as physical displacement, loss of Federal rental
assistance, or substandard housing conditions) or causing an unforeseen
and significant increase in low-income housing demand in a housing
market (such as influx of refugees or plant closings);
(3) Housing needs resulting from the settlement of litigation; and
(4) Housing in support of desegregation efforts.
(b) Applications for funds retained under paragraph (a) of this
section shall be made to the field office, which will make
recommendations to Headquarters for approval or rejection of the
application. Applications generally will be considered for funding on a
first-come, first-served basis. Specific instructions governing access
to the Headquarters Reserve shall be published by notice in the Federal
Register, as necessary.
(c) Any amounts retained in any fiscal year under paragraph (a) of
this section that are not reserved by the end of such fiscal year shall
remain available for the following fiscal year in the program under
Sec. 791.101(a) from which the amount was retained. Such amounts shall
be allocated pursuant to Sec. 791.403(b)(2).
PART 792_PUBLIC HOUSING AGENCY SECTION 8 FRAUD RECOVERIES--Table of Contents
Subpart A_General Provisions
Sec.
792.101 Purpose.
792.102 Applicability.
792.103 Definitions.
Subpart B_Recovery of Section 8 Funds
792.201 Conduct of litigation.
792.202 PHA retention of proceeds.
792.203 Application of amounts recovered.
792.204 Recordkeeping and reporting.
Authority: 42 U.S.C. 1437f note and 3535(d).
Source: 59 FR 9409, Feb. 28, 1994, unless otherwise noted.
Editorial Note: Nomenclature changes to part 792 appear at 64 FR
26640, May 14, 1999.
Subpart A_General Provisions
Sec. 792.101 Purpose.
The purpose of this part is to encourage public housing agencies
(PHAs) to investigate and pursue instances of tenant and owner fraud and
abuse in the operation of the Section 8 housing assistance payments
programs.
[64 FR 26640, May 14, 1999]
Sec. 792.102 Applicability.
(a) This part applies to a PHA acting as a contract administrator
under an annual contributions contract with HUD in any section 8 housing
assistance payments program. To be eligible to retain section 8 tenant
or owner fraud recoveries, the PHA must be the principal party
initiating or sustaining an action to recover amounts from families.
(b) This part applies only to those instances when a tenant or owner
committed fraud, and the fraud recoveries are obtained through
litigation brought by the PHA (including settlement of the lawsuit), a
court-ordered restitution pursuant to a criminal proceeding, or an
administrative repayment agreement with the family or owner as a result
of a PHA administrative grievance procedure pursuant to, or
incorporating the requirements of, Sec. 982.555 of this title. This part
does not apply to cases of owner fraud in PHA-
[[Page 35]]
owned or controlled units, or where incorrect payments were made or
benefits received because of calculation errors instead of willful
fraudulent activities.
(c) This part applies to all tenant and owner fraud recoveries
resulting from litigation brought by the PHA (including settlement of
the lawsuit), or a court-ordered restitution pursuant to a criminal
proceeding obtained on or after October 8, 1986, and to all tenant and
owner fraud recoveries obtained through administrative repayment
agreements signed on or after October 28, 1992.
[59 FR 9409, Feb. 28, 1994, as amended at 64 FR 26640, May 14, 1999]
Sec. 792.103 Definitions.
Fraud and abuse. Fraud and abuse means a single act or pattern of
actions:
(1) That constitutes false statement, omission, or concealment of a
substantive fact, made with intent to deceive or mislead; and
(2) That results in payment of section 8 program funds in violation
of section 8 program requirements.
The terms Public Housing Agency (PHA) and Indian Housing Authority
(IHA) are defined in 24 CFR part 5.
Judgment. Judgment means a provision for recovery of section 8
program funds obtained through fraud and abuse, by order of a court in
litigation or by a settlement of a claim in litigation, whether or not
stated in a court order.
Litigation. A lawsuit brought by a PHA to recover section 8 program
funds obtained as a result of fraud and abuse.
Principal party in initiating or sustaining an action to recover.
Principal party in initiating or sustaining an action to recover means
the party that incurs more than half the costs incurred in:
(1) Recertifying tenants who fraudulently obtained section 8 rental
assistance;
(2) Recomputing the correct amounts owed by tenants; and
(3) Taking needed actions to recoup the excess benefits received,
such as initiating litigation.
Costs incurred to detect potential excessive benefits in the routine
day-to-day operations of the program are excluded in determining the
principal party in initiating or sustaining an action to recover. For
example, the cost of income verification during an annual
recertification would not be counted in determining the principal party
in initiating or sustaining an action to recover.
Public housing agency (PHA). A public housing agency as defined in
Sec. 791.102.
Repayment agreement. Repayment agreement means a formal document
signed by a tenant or owner and provided to a PHA in which a tenant or
owner acknowledges a debt, in a specific amount, and agrees to repay the
amount due at specific time period(s).
[59 FR 9409, Feb. 28, 1994, as amended at 61 FR 5212, Feb. 9, 1996; 64
FR 26640, May 14, 1999]
Subpart B_Recovery of Section 8 Funds
Sec. 792.201 Conduct of litigation.
The PHA must obtain HUD approval before initiating litigation in
which the PHA is requesting HUD assistance or participation.
Sec. 792.202 PHA retention of proceeds.
(a) Where the PHA is the principal party initiating or sustaining an
action to recover amounts from tenants that are due as a result of fraud
and abuse, the PHA may retain, the greater of:
(1) Fifty percent of the amount it actually collects from a
judgment, litigation (including settlement of lawsuit) or an
administrative repayment agreement pursuant to, or incorporating the
requirements of, Sec. 982.555 of this title; or
(2) Reasonable and necessary costs that the PHA incurs related to
the collection from a judgment, litigation (including settlement of
lawsuit) or an administrative repayment agreement pursuant to, or
incorporating the requirements of, Sec. 982.555 of this title.
Reasonable and necessary costs include the costs of the investigation,
legal fees and collection agency fees.
(b) If HUD incurs costs on behalf of the PHA in obtaining the
judgment,
[[Page 36]]
these costs must be deducted from the amount to be retained by the PHA.
[59 FR 9409, Feb. 28, 1994, as amended at 64 FR 26640, May 14, 1999]
Sec. 792.203 Application of amounts recovered.
(a) The PHA may only use the amount of the recovery it is authorized
to retain in support of the section 8 program in which the fraud
occurred.
(b) The remaining balance of the recovery proceeds (i.e., the
portion of recovery the PHA is not authorized to retain) must be applied
as directed by HUD.
Sec. 792.204 Recordkeeping and reporting.
To permit HUD to audit amounts retained under this part, an PHA must
maintain all records required by HUD, including:
(a) Amounts recovered on any judgment or repayment agreement;
(b) The nature of the judgment or repayment agreement; and
(c) The amount of the legal fees and expenses incurred in obtaining
the judgment or repayment agreement and recovery.
(Approved by the Office of Management and Budget under Control Number
2577-0053)
PARTS 793 799 [RESERVED]
[[Page 37]]
CHAPTER 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)
--------------------------------------------------------------------
Editorial Note: Nomenclature changes to chapter VIII appear at 59 FR
14090, Mar. 25, 1994.
Part Page
800-810
[Reserved]
811 Tax exemption of obligations of public
housing agencies and related amendments. 39
850 Housing development grants.................. 45
880 Section 8 housing assistance payments
program for new construction............ 48
881 Section 8 housing assistance payments
program for substantial rehabilitation.. 69
882 Section 8 moderate rehabilitation programs.. 76
883 Section 8 housing assistance payments
program--State housing agencies......... 104
884 Section 8 housing assistance payments
program, new construction set-aside for
Section 515 rural rental housing
projects................................ 116
886 Section 8 housing assistance payments
program--Special allocations............ 136
[[Page 38]]
887
[Reserved]
888 Section 8 housing assistance payments
program--Fair market rents and contract
rent annual adjustment factors.......... 174
891 Supportive housing for the elderly and
persons with disabilities............... 184
892-899
[Reserved]
[[Page 39]]
PARTS 800 810 [RESERVED]
PART 811_TAX EXEMPTION OF OBLIGATIONS OF PUBLIC HOUSING AGENCIES
AND RELATED AMENDMENTS--Table of Contents
Sec.
811.101 Purpose and scope.
811.102 Definitions.
811.103 General.
811.104 Approval of Public Housing Agencies (other than agency or
instrumentality PHAS).
811.105 Approval of agency or instrumentality PHA.
811.106 Default under the contract.
811.107 Financing documents and data.
811.108 Debt service reserve.
811.109 Trust indenture provisions.
811.110 Refunding of obligations issued to finance Section 8 projects.
Authority: Sec. 7(d), Dept. of HUD Act (42 U.S.C. 3535(d)); secs.
3(6), 5(b), 8, 11(b) of the U.S. Housing Act of 1937 (42 U.S.C. 1437a,
1437c, 1437f, and 1437).
Source: 44 FR 12360, Mar. 6, 1979, unless otherwise noted.
Sec. 811.101 Purpose and scope.
(a) The purpose of this part is to provide a basis for determining
tax exemption of obligations issued by public housing agencies pursuant
to Section 11(b) of the United States Housing Act of 1937 (42 U.S.C.
1437i) to refund bonds for Section 8 new construction or substantial
rehabilitation projects.
(b) This part does not apply to tax exemption pursuant to Section
11(b) for low-income housing projects developed pursuant to 24 CFR parts
950 and 941.
[61 FR 14460, Apr. 1, 1996]
Sec. 811.102 Definitions.
The terms HUD and Public Housing Agency (PHA) are defined in 24 CFR
part 5.
Act. The United States Housing Act of 1937 (42 U.S.C. 1437, et
seq.).
Agency or Instrumentality PHA. A not-for-profit private or public
organization that is authorized to engage in or assist in the
development or operation of low-income housing and that has the
relationship to a parent entity PHA required by this subpart.
Agreement. An Agreement to Enter Into Housing Assistance Payments
Contract as defined in the applicable Section 8 regulations. The form of
agreement for projects financed with tax-exempt obligations shall be
amended in accordance with this subpart.
Annual Contributions Contract (ACC). An Annual Contributions
Contract as defined in the applicable Section 8 regulations. The form of
ACC for projects financed with tax-exempt obligations shall be amended
in accordance with this subpart.
Applicable Section 8 Regulations. The provisions of 24 CFR parts
880, 881, or 883 that apply to the project.
Contract. A Housing Assistance Payments Contract as defined in the
applicable Section 8 regulations. The form of contract for projects
financed with tax-exempt obligations shall be amended in accordance with
this subpart.
Cost of issuance. Ordinary, necessary, and reasonable costs in
connection with the issuance of obligations. These costs shall include
attorney fees, rating agency fees, trustee fees, printing costs, bond
counsel fees, feasibility studies (for non-FHA-insured projects only),
consultant fees and other fees or expenses approved by HUD.
Debt service reserve. A fund maintained by the trustee as a
supplemental source of money for the payment of debt service on the
obligations.
Financing Agency. The PHA (parent entity PHA or agency or
instrumentality PHA) that issues the tax-exempt obligations for
financing of the project.
Low-income Housing Project. Housing for families and persons of low-
income developed, acquired or assisted by a PHA under Section 8 of the
Act and the improvement of any such housing.
Obligations. Bonds or other evidence of indebtedness that are issued
to provide permanent financing of a low-income housing project. Pursuant
to Section 319(b) of the Housing and Community Development Act of 1974,
the term obligation shall not include any obligation secured by a
mortgage insured under Section 221(d)(3) of the National Housing Act (12
U.S.C. 1715l) and issued by a public agency as mortgagor in connection
with the financing of a project assisted under Section 8 of the Act.
This exclusion does not apply to a public agency as mortgagee.
[[Page 40]]
Owner. An owner as defined in the applicable Section 8 regulations.
Parent Entity PHA. Any state, county, municipality or other
governmental entity or public body that is authorized to engage in or
assist in the development or operation of low-income housing and that
has the relationship to an agency or instrumentality PHA required by
this subpart.
Servicing fees. The annual costs of servicing the obligations
0including any debt service reserve), including trustee fees, mortgage
servicing fees, PHA expenses in connection with annual reviews,
maintenance of books and accounts, audit expenses, agent fees and other
costs of servicing the obligations.
Trust indenture. A contract setting forth the rights and obligations
of the issuer, bondholders, owner and trustee in connection with the
tax-exempt obligations. The trust indenture may also include provisions
regarding the loan to the owner or these may be set forth in a separate
mortgage.
Trustee. The entity that has legal responsibility under the trust
indenture for disposition of the proceeds of a bond issuance and
servicing of the debt represented by the obligations. The trustee must
be a bank or other financial institution that is legally qualified and
experienced in performing fiduciary responsibilities with respect to the
care and investment of funds of a magnitude comparable to those involved
in the financing.
Yield. That percentage rate at which the present worth of all
payments of principal and interest to be paid on the obligations is
equal to the purchase price.
[44 FR 12360, Mar. 6, 1979, as amended at 61 FR 5212, Feb. 9, 1996; 61
FR 14460, Apr. 1, 1996]
Sec. 811.103 General.
(a) In order for obligations to be tax-exempt under this subpart the
obligations must be issued by a PHA in connection with a low-income
housing project approved by HUD under the Act and the applicable Section
8 regulations.
(1) Except as needed for a resident manager or similar requirement,
all dwelling units in a low-income housing project that is to be
financed with obligations issued pursuant to this subpart must be
Section 8 contract units.
(2) A low-income housing project that is to be financed with
obligations issued pursuant to this subpart may include necessary
appurtenances. Such appurtenances may include commerical space not to
exceed 10% of the total net rentable area.
(b) Where the parent entity PHA is not the owner of the project, the
parent entity PHA or other PHA approvable under Sec. 811.104 must agree
to administer the contract pursuant to an ACC with HUD, and such a PHA
must agree that in the event there is a default under the contract it
will pursue all available remedies to achieve correction of the default,
including operation and possession of the project, if called upon by HUD
to do so. If the field office finds that the PHA does not have the
capacity to perform these functions, the Assistant Secretary may approve
alternative contractual arrangements for performing these functions.
Sec. 811.104 Approval of Public Housing Agencies
(other than agency or instrumentality PHAS).
(a)(1) An application to the field office for approval as a Public
Housing Agency, other than an agency or instrumentality PHA, for
purposes of this subpart shall be supported by evidence satisfactory to
HUD to establish that:
(i) The applicant is a PHA as defined in this subpart, and has the
legal authority to meet the requirements of this subpart and applicable
Section 8 regulations, as described in its application. This evidence
shall be supported by the opinion of counsel for the applicant.
(ii) The applicant has or will have the administrative capability to
carry out the responsibilities described in its application.
(2) The evidence shall include any facts or documents relevant to
the determinations required by paragraph (a)(1) of this section,
including identification of any pending application the applicant has
submitted under the Act. In the absence of evidence indicating the
applicant may not be qualified, the
[[Page 41]]
field office may accept as satisfactory evidence:
(i) Identification of any previous HUD approval of the applicant as
a PHA pursuant to this section;
(ii) Identification of any prior ACC with the applicant under the
Act; or
(iii) A statement, where applicable, that the applicant is an
approved participating agency under 24 CFR Part 883 (State Housing
Finance and Development Agencies).
(b) The applicant shall receive no compensation in connection with
the financing of a project, except for its expenses. Such expenses shall
be subject to approval by HUD in determining the development cost, cost
of issuance and servicing fee, as appropriate. Should the applicant
receive any compensation in excess of such expenses, the excess is to be
placed in the debt service reserve.
(c) Where the applicant acts as the financing agency, the applicant
shall be required to furnish to HUD an audit by an independent public
accountant of its books and records in connection with the financing of
the project within 90 days after the execution of the contract or final
endorsement and at least biennially thereafter.
(d) Any subsequent amendments to the documents submitted to HUD
pursuant to this section must be approved by HUD.
Sec. 811.105 Approval of agency or instrumentality PHA.
(a) An application to the field office for approval as an agency or
instrumentality PHA for purposes of this subpart shall:
(1) Identify the parent entity PHA.
(2) Establish by evidence satisfactory to HUD that:
(i) The parent entity PHA meets the requirements of Sec. 811.104.
(ii) The applicant was properly created pursuant to state law as a
not-for-profit entity; is an agency or instrumentality PHA, as defined
in this subpart; has the legal authority to meet the requirements of
this subpart and applicable Section 8 regulations, as described in its
application; and the actions required to establish the legal
relationship with the parent entity PHA prescribed by paragraph (c) of
this section have been taken and are not prohibited by State law. This
evidence shall be supported by the opinion of counsel for the applicant
and counsel for the parent entity PHA.
(iii) The applicant has, or will have, the administrative capability
to carry out the responsibilities described in its application.
(b) The charter or other organic document establishing the applicant
shall limit the activities to be performed by the applicant, and funds
and assets connected therewith, to carrying out or assisting in carrying
out Section 8 projects and other low-income housing projects approved by
the Secretary. Such organic documents shall provide that the applicant
shall receive no compensation in connection with the financing of a
project, except for its expenses. Such expenses shall be subject to
approval by HUD in determining the development cost, cost of issuance
and servicing fee, as appropriate. Should the applicant receive any
compensation in excess of such expenses, the excess is to be placed in
the debt service reserve.
(c) The documents submitted by the applicant shall include the
following with respect to the relationship between the parent entity PHA
and the agency or instrumentality PHA:
(1) Provisions requiring approval by the parent entity PHA of the
charter or other organic instrument and of the bylaws of the applicant,
which organic instrument and bylaws shall specify that any amendments
are subject to approval by the parent entity PHA and by HUD.
(2) Provisions requiring approval by the parent entity PHA of each
project and of the program and expenditures of the applicant.
(3) Provisions requiring approval by the parent entity PHA of each
issue of obligations by the applicant not more than 60 days prior to the
date of issue and approval of any substantive changes to the terms and
conditions of the issuance prior to date of issue.
(4) Provisions requiring the applicant to furnish an audit of all
its books and records by an independent public accountant to the parent
entity PHA within 90 days after execution of the contract or final
endorsement and at
[[Page 42]]
least bennially thereafter; and provisions requiring the parent entity
PHA to perform an annual review of the applicant's performance and to
provide HUD with a copy of such review together with any audits
performed during the reporting period.
(5) Provisions giving the parent entity PHA right of access at any
time to all books and records of the applicant.
(6) Provisions that upon dissolution of the applicant, title to or
other interest in any real or personal property that is owned by such
applicant at the time of dissolution shall be transferred to the parent
entity PHA or to another PHA or to another not-for-profit entity as
determined by the parent entity PHA and approved by HUD, to be used only
for purposes approved by HUD.
(7) Evidence of agreement by the parent entity PHA, or other entity
as may be provided for in alternative contractual arrangements pursuant
to Sec. 811.103(b), to accept title to any real or personal property
pursuant to paragraph (c)(6) of this section.
(d) Any subsequent amendments to the documents submitted to HUD
pursuant to this section must be approved by HUD.
(e) Members, officers, or employees of the parent entity PHA may be
directors or officers of the applicant unless this is contrary to state
law.
[44 FR 12360, Mar. 6, 1979, as amended at 61 FR 14461, Apr. 1, 1996]
Sec. 811.106 Default under the contract.
If HUD finds there is a default under the Contract, the field office
shall so notify the trustee and give the trustee a specified reasonable
time to take action to require the owner to correct such default prior
to any suspension or termination of payments under the contract. In the
event of a default under the contract, HUD may terminate or suspend
payments under the contract, may seek specific performance of the
contract and may pursue other remedies.
[44 FR 12360, Mar. 6, 1979, as amended at 61 FR 14461, Apr. 1, 1996]
Sec. 811.107 Financing documents and data.
(a) The financing agency shall assure that any official statement or
prospectus or other disclosure statement prepared in connection with the
financing shall state on the first page that:
(1) In addition to any security cited in the statement, the bonds
may be secured by a pledge of an Annual Contributions Contract and a
Housing Assistance Payments Contract, executed by HUD;
(2) The faith of the United States is solemnly pledged to the
payment of annual contributions pursuant to the Annual Contributions
Contact or to the payment of housing assistance payments pursuant to the
Housing Assistance Payments Contract, and funds have been obligated by
HUD for such payments;
(3) Except as provided in any contract of mortgage insurance, the
bonds are not insured by HUD;
(4) The bonds are not to be construed as a debt or indebtedness of
HUD or the United States, and payment of the bonds is not guaranteed by
the United States;
(5) Nothing in the text of a disclosure statement is to be
interpreted to conflict with the above; and
(6) HUD has not reviewed or approved and bears no responsibility for
the content of disclosure statements.
(b) The financing agency shall retain in its files the documentation
relating to the financing. A copy of this documentation shall be
furnished to HUD upon request.
[61 FR 14461, Apr. 1, 1996]
Sec. 811.108 Debt service reserve.
(a) FHA-Insured projects. (1) The debt service reserve shall be
invested and the income used to pay principal and interest on that
portion of the obligations which is attributable to the funding of the
debt service reserve. Any excess investment income shall be added to the
debt service reserve. In the event such investment income is
insufficient, surplus cash or residual receipts, to the extent approved
by the field office, may be used to pay such principal and interest
costs.
[[Page 43]]
(2) The debt service reserve and its investment income shall be
available only for the purpose of paying principal or interest on the
obligations. The use of the debt service reserve for this purpose shall
not be a cure for any failure by the owner to make required payments.
(3) Upon full payment of the principal and interest on the
obligations (including that portion of the obligations attributable to
the funding of the debt service reserve), any funds remaining in the
debt service reserve shall be remitted to HUD.
(b) Non-FHA-insured projects. (1) Investment income from the debt
service reserve, up to the amount required for debt service on the bonds
attributable to the debt service reserve, shall be credited toward the
owner's debt service payment. Any excess investment income shall be
added to and become part of the debt service reserve.
(2) The debt service reserve and investment income thereon shall be
available only for the purpose of paying principal or interest on the
obligations. The use of the debt service reserve for this purpose shall
not be a cure for any failure by the owner to make required payments.
(3) Upon full payment of the principal and interest on the
obligations (including that portion of the obligations attributable to
the funding of the debt service reserve), any funds remaining in the
debt service reserve shall be remitted to HUD.
[61 FR 14461, Apr. 1, 1996]
Sec. 811.109 Trust indenture provisions.
Obligations shall be prepaid only under such conditions as HUD shall
require, including reduction of contract rents and continued operation
of the project for the housing of low-income families.
[44 FR 12360, Mar. 6, 1979. Redesignated at 61 FR 14461, Apr. 1, 1996]
Sec. 811.110 Refunding of obligations issued to finance
Section 8 projects.
(a) This section states the terms and conditions under which HUD
will approve refunding or defeasance of certain outstanding debt
obligations which financed new construction or substantial
rehabilitation of Section 8 projects, including fully and partially
assisted projects.
(b) In the case of bonds issued by State Agencies qualified under 24
CFR part 883 to refund bonds which financed projects assisted pursuant
to 24 CFR part 883, HUD requires compliance with the prohibition on
duplicative fees contained in 24 CFR part 883 and with paragraphs (f)
and (h) of this section, as applicable to the projects to be refunded.
(c) No agency shall issue obligations to refund outstanding 11(b)
obligations until the Office of the Assistant Secretary for Housing
sends the financing agency a Notification of Tax Exemption based on
approval of the proposed refunding's terms and conditions as conforming
to this part's requirements, including continued operation of the
project as housing for low-income families, and where possible,
reduction of Section 8 assistance payments through lower contract rents
or an equivalent cash rebate to the U.S. Treasury (i.e. Trustee Sweep).
The agency shall submit such documentation as HUD determines is
necessary for review and approval of the refunding transaction. Upon
conclusion of the closing of refunding bonds, written confirmation must
be sent to the Office of Multifamily Housing by bond counsel, or other
acceptable closing participant, including a schedule of the specific
amount of savings in Section 8 assistance where applicable, CUSIP number
information, and a final statement of Sources and Uses.
(d)(1) HUD approval of the terms and conditions of a Section 8
refunding proposal requires evaluation by HUD's Office of Multifamily
Housing of the reasonableness of the terms of the Agency's proposed
financing plan, including projected reductions in project debt service
where warranted by market conditions and bond yields. This evaluation
shall determine that the proposed amount of refunding obligations is the
amount needed to: pay off outstanding bonds; fund a debt service reserve
to the extent required by credit enhancers or bond rating agencies, or
bond underwriters in the case of unrated refunding bonds; pay credit
enhancement fees acceptable to HUD; and
[[Page 44]]
pay transaction costs as approved by HUD according to a sliding scale
ceiling based on par amount of refunding bond principal. Exceptions may
be approved by HUD, if consistent with applicable statutes, in the event
that an additional issue amount is required for project purposes.
(2) The stated maturity of the refunding bonds may not exceed by
more than one year the remaining term of the project mortgage, or in the
case of an uninsured loan, the later of expiration date of the Housing
Assistance Payments Contract (the ``HAPC'') or final maturity of the
refunded bonds.
(3) The bond yield may not exceed by more than 75 basis points the
20 Bond General Obligation Index published by the Daily Bond Buyer for
the week immediately preceding the sale of the bonds, except as
otherwise approved by HUD. An amount not to exceed one-fourth of one
percent annually of the bonds' outstanding principal balance may be
allowed for servicing and trustee fees.
(e) For projects for which the Agreement to enter into the HAPC was
executed between January 1, 1979, and December 31, 1984 (otherwise known
as ``McKinney Act Projects''), for which a State or local agency
initiates a refunding, the Secretary shall make available to an eligible
issuing agency 50 percent of the Section 8 savings of a refunding, as
determined by HUD on a project-by-project basis, to be used by the
agency in accordance with the terms of a Refunding Agreement executed by
the Agency and HUD which incorporates the Agency's Housing Plan for use
of savings to provide decent, safe, and sanitary housing for very low-
income households. In determining the amount of savings recaptured on a
project-by-project basis, as authorized by section 1012(b) of the
McKinney Act, HUD will take into account the physical condition of the
projects participating in the refunding which generate the McKinney Act
savings and, if necessary, HUD will finance in refunding bond debt
service correction of existing deficiencies which cannot be funded
completely by existing project replacement reserves or by a portion of
reserves released from the refunded bond's indenture. For McKinney Act
refundings of projects which did not receive a Financing Adjustment
Factor (``FAF''), HUD will allow up to 50 percent of debt service
savings to be allocated to the project account; in which case, the
remainder will be shared equally by the Agency and the U.S. Treasury.
(f) For refundings of Section 8 projects other than McKinney Act
Projects, and for all transactions which substitute collateral for, but
do not redeem, outstanding obligations, and for which a HUD approval is
needed (such as assignment of a HAPC or insured mortgage note), the
Office of Multifamily Housing in consultation with HUD Field Office
Counsel will review the HAPC, the Trust Indenture for the outstanding
obligations, applicable HUD regulations, and reasonableness of proposed
financing terms. In particular, HUD review should be obtained for the
release of reserves from the trust indenture of the outstanding 11(b)
bonds that are being refunded, defeased, or pre-paid. A proposal to
distribute to a non-Federal entity the benefits of a refinancing, such
as debt service savings and/or balances in reserves held under the
original Trust Indenture, should be referred to the Office of
Multifamily Housing for further review. In proposals submitted for HUD
approval, HUD will consent to release reserves, as provided by the Trust
Indenture, in an amount remaining after correction of project physical
deficiencies and/or replenishment of replacement reserves, where needed.
In the case of a refunding of 11(b) bonds by a public agency issuer
which is the owner of the project and is entitled to reserves held under
the Trust Indenture, HUD requires execution by the project owner of a
use agreement, and amendment of a regulatory agreement, if applicable,
to extend low-income tenant occupancy for ten years after expiration of
the original HAPC term. In the case of HAP contracts with renewable 5-
year terms, the Use Agreement shall extend for 10 years after the
project owners first opt-out date. The Use Agreement may also be
required of private entity owners, unless the refunding is incidental to
a transfer of project ownership or a transaction which provides a
substantial public
[[Page 45]]
benefit, as determined by the Office of Multifamily Housing. Proposed
use of benefits shall be consistent with applicable appropriations law,
the HAPC, and other requirements applicable to the original project
financing, and the proposed financing terms must be reasonable in
relation to bond market yields and transaction fees, as approved by the
HUD Office of Multifamily Housing.
(g) Agencies shall have wide latitude in the design of specific
delivery vehicles for use of McKinney Act savings, subject to HUD audit
of each Agency's performance in serving the targeted income eligible
population. Savings may be used for shelter costs of providing housing,
rental, or owner-occupied, to very low-income households through new
construction, rehabilitation, repairs, and acquisition with or without
rehab, including assistance to very low-income units in mixed-income
developments. These include programs designed to assist in obtaining
shelter, such as rent or homeownership subsidies. Self-sufficiency
services in support of very low-income housing are also eligible, and
may include, but are not limited to, homeownership counseling,
additional security measures in high-crime areas, construction job
training for residents' repair of housing units occupied by very low-
income families, and empowerment activities designed to support
formation and growth of resident entities. Except for the cost of
providing third-party program audit reports to HUD, eligible costs
exclude consultant fees or reimbursement of Agency staff expenses, but
may include fees for professional services required in the Agency's
McKinney Act programs of assistance to very low-income families. Unless
otherwise specified by HUD in a McKinney Agreement, savings shall be
subject to the above use requirements for 10 years from the date of
receipt of the savings.
(h) Refunding bonds, including interest thereon, approved under this
Section shall be exempt from all taxation now or hereafter imposed by
the United States, and the notification of approval of tax exemption
shall not be subject to revocation by HUD. Whether refunding bonds
approved under this section meet the requirements of Section 103 or any
other provisions of the Internal Revenue Code is not within the
responsibilities of HUD to determine. Such bonds shall be prepaid during
the HAPC term only under such conditions as HUD shall require.
[61 FR 14461, Apr. 1, 1996]
PART 850_HOUSING DEVELOPMENT GRANTS--Table of Contents
Subpart A_General Provisions
Sec.
850.1 Applicability and savings clause.
Subparts B-E [Reserved]
Subpart F_Project Management
850.151 Project restrictions.
850.153 Rent control.
850.155 Securing owner's responsibilities.
Authority: 42 U.S.C. 1437o, 3535(d).
Source: 49 FR 24641, June 14, 1984, unless otherwise noted.
Subpart A_General Provisions
Sec. 850.1 Applicability and savings clause.
(a) Applicability. This part implements the Housing Development
Grant Program contained in section 17 of the United States Housing Act
of 1937 (42 U.S.C. 1437o). The Program authorized the Secretary to make
housing development grants to support the new construction or
substantial rehabilitation of real property to be used primarily for
residential rental purposes. Section 289(b)(1) of the Cranston-Gonzalez
National Affordable Housing Act (42 U.S.C. 12839) repealed section 17
effective October 1, 1991. Section 289(a) prohibited new grants under
the Housing Development Grant Program except for projects for which
binding commitments had been entered into prior to October 1, 1991.
(b) Savings clause. Any grant made pursuant to a binding commitment
entered into before October 1, 1991 will continue to be governed by
subparts A
[[Page 46]]
through E of this part in effect immediately before April 1, 1996, and
by subpart F of this part as currently in effect.
[61 FR 7944, Feb. 29, 1996]
Subparts B-E [Reserved]
Subpart F_Project Management
Sec. 850.151 Project restrictions.
(a) Owner-grantee agreement. The grantee and the owner must enter
into an agreement that requires the owner (including its successors in
interest) to carry out the requirements of this section and of the grant
agreement, as appropriate. The grantee-owner agreement must require the
grantee to monitor (where required) and to take appropriate legal action
to enforce compliance with the owner's responsibilities thereunder. The
owner's compliance with its obligations under this section must be
secured by a mortgage or other security instrument meeting the
requirements of Sec. 850.155. Nothing in this section shall preclude
enforcement by the Federal government of grant agreement provisions,
civil rights statutes, or other provisions of law that apply to the
Housing Development Grant Program.
(b) Restriction on conversion. The owner shall not convert the units
in the project to condominium ownership or to a form of cooperative
ownership that is not eligible to receive a housing development grant,
during the 20-year period from the date on which the units in the
project are available for occupancy.
(c) Tenant selection. The owner shall determine the eligibility of
applicants for lower income units in accordance with the requirements of
24 CFR parts 812 and 813, including the provisions of these parts
concerning citizenship or eligible immigration status and income limits,
and certain assistance to mixed families (families whose members include
those with eligible immigration status, and those without eligible
immigration status.). The owner shall not, during the 20-year period
from the date on which the units in the project are available for
occupancy, discriminate against prospective tenants on the basis of
their receipt of, or eligibility for, housing assistance under any
Federal, State, or local housing assistance program or, except for an
elderly housing project, on the basis that they have a minor child or
children who will be living with them.
(d) Restriction on leasing assisted units. The owner shall assure
that the percentage of low-income units specified in the grant agreement
is occupied, or is available for occupancy, by low-income households
during the period beginning on the date on which the units in the
project are available for occupancy through 20 years from the date on
which 50 percent of the units are occupied. The owner may lease a low-
income unit only to a tenant that is a low-income household at the time
of its initial occupancy. An owner may continue to lease a low-income
unit to a tenant that ceases to qualify as a low-income household only
as provided in paragraph (f) of this section.
(e) Low-income unit rent. (1) Section 17(d)(8)(A) of the U.S.
Housing Act of 1937 prohibits the rents for low-income units from
exceeding ``30 per centum of the adjusted income of a family whose
income equals 50 per centum of the median income for the area, as
determined by the Secretary with adjustments for smaller and larger
families.'' This paragraph describes how these maximum rent
determinations are made.
(2) The maximum rents that may be charged for low-income units are
based on the size of the unit by number of bedrooms, and are calculated
in accordance with the following procedure. For each unit size, HUD will
provide the Section 8 very low-income limits. HUD will also provide
income adjustments for each unit size, consistent with 24 CFR part 813.
An adjusted income amount for each unit size is calculated by the owner
or grantee by subtracting the income adjustment from the Section 8
limit. The adjusted income amount is multiplied by 30 percent and
divided by 12 to obtain the maximum monthly gross rent for each low-
income unit. A monthly allowance for the utilities and services
(excluding telephone) to be paid by the tenant is subtracted from the
maximum monthly gross rent to obtain the maximum
[[Page 47]]
monthly rent that may be charged for low-income units. Information to be
provided by HUD will be available from the responsible HUD Field Office.
(3) The initial monthly allowance for utilities and services to be
paid by the tenant must be approved by HUD. Subsequent calculations of
this allowance must be approved by the grantee in connection with its
review and approval of rent schedules under paragraph (e)(4) of this
section. The maximum monthly rent must be recalculated annually, and may
change as changes in the Section 8 very low-income limit, the income
adjustments, or the monthly allowance for utilities and services
warrant.
(4) The grantee must review and approve any schedule of rents
proposed by the owner for low-income units. Any schedule submitted by an
owner within the permissible maximum will be deemed approved, unless the
grantee informs the owner, within 60 days after receiving the schedule,
that it is disapproved.
(5) Any increase in rents for low-income units is subject to the
provisions of outstanding leases, 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.
(f) Reexamination of tenant income and composition. (1) The owner
shall reexamine the income of each tenant household living in low-income
units at least once a year. At the first regular reexamination after
June 19, 1995 the owner shall follow the requirements of 24 CFR part 812
concerning obtaining and processing evidence of citizenship or eligible
immigration status of all family members. Thereafter, at each regular
reexamination, the owner shall follow the requirements of 24 CFR part
812 concerning verification of the immigration status of any new family
member.
(2) If this reexamination indicates that the tenant no longer
qualifies as a low-income household, the owner must take one of the
following actions, as appropriate: (i) If the unit occupied by the
tenant must be leased to a low- income household to maintain the
percentage of low-income units specified in the grant agreement, the
owner must notify the tenant that it must move when the current lease
expires or six months after the date of the notification, whichever is
later; (ii) If the owner can meet this percentage without the unit
occupied by the tenant (for example, by designating another comparable
unit as a low-income unit), the owner may continue to lease to that
tenant, but is free to renegotiate the rent at the expiration of the
current lease.
(3) For provisions related to termination of assistance for failure
to establish citizenship or eligible immigration status, see 24 CFR
812.9, and also 24 CFR 812.10 for provisions related to certain
assistance to mixed families (families whose members include those with
eligible immigration status, and those without eligible immigration
status) in lieu of termination of assistance, and for provisions related
to deferral of termination of assistance.
(g) Affirmative fair housing marketing. Marketing must be done in
accordance with the HUD-approved Affirmative Fair Housing Marketing
Plan, Form HUD-935.2, and all fair housing and equal opportunity
requirements. The purpose of the Plan and the requirements is to provide
for affirmative marketing through the provision of information regarding
the availability of units in projects assisted. Affirmative marketing
steps consist of good faith efforts to provide information and otherwise
attract eligible persons from all racial, ethnic and gender groups in
the housing market area to the available housing.
(h) Management and maintenance functions. The owner must perform all
management and maintenance functions in compliance with equal
opportunity requirements. These functions include selection of tenants,
reexamination of family income, evictions and other terminations of
tenancy, and all ordinary and extraordinary maintenance and repairs,
including replacement of capital items.
(i) Residency preferences. Local residency requirements are
prohibited. Local residency preferences may be applied in selecting
tenants only to the extent that they are not inconsistent with
affirmative fair housing marketing objectives and the owner's HUD-
[[Page 48]]
approved AFHM Plan. With respect to any residency preference, persons
expected to reside in the community as a result of current or planned
employment will be treated as residents.
[49 FR 24641, June 14, 1984, as amended at 60 FR 14841, Mar. 20, 1995]
Sec. 850.153 Rent control.
A project constructed or substantially rehabilitated with a housing
development grant is not subject to State or local rent control unless
the rent control requirements or agreements (a) (1) were entered into
under a State law or local ordinance of general applicability that was
enacted and in effect in the jurisdiction before November 30, 1983 and
(2) apply generally to rental housing projects not assisted under the
Housing Development Grant Program, or (b) are imposed under this
subpart. State and local rent controls expressly preempted by this
section include, but are not limited to, rent laws or ordinances, rent
regulating agreements, rent regulations, occupancy agreements, or
financial penalties for failure to achieve certain occupancy or rent
projections.
Sec. 850.155 Securing owner's responsibilities.
Assistance provided under this part shall constitute a debt of the
owner (including its successors in interest) to the grantee, and shall
be secured by a mortgage or other security instrument. The debt shall be
repayable in the event of a substantive, uncorrected violation by an
owner of the obligations contained in paragraphs (b), (c), (d) and (e)
of Sec. 850.151. The instruments securing this debt shall provide for
repayment to the grantee in an amount equal to the total amount of
housing development grant assistance outstanding, plus interest which is
determined by the Secretary by adding two percent to the average yield
on outstanding marketable long-term obligations of the United States
during the month preceding the date on which assistance was made
available. The amount to be repaid shall be reduced by 10 percent for
each full year in excess of 10 years that intervened between the
beginning of the term of the owner-grantee agreement and the violation.
PART 880_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR
NEW CONSTRUCTION--Table of Contents
Subpart A_Summary and Applicability
Sec.
880.101 General.
880.104 Applicability of part 880.
880.105 Applicability to proposals and projects under 24 CFR part 811.
Subpart B_Definitions and Other Requirements
880.201 Definitions.
880.205 Limitation on distributions.
880.207 Property standards.
880.208 Financing.
880.211 Audit.
880.212 Broadband infrastructure.
Subparts C-D [Reserved]
Subpart E_Housing Assistance Payments Contract
880.501 The contract.
880.502 Term of contract.
880.503 Maximum annual commitment and project account.
880.504 Leasing to eligible families.
880.505 Contract administration and conversions.
880.506 Default by owner (private-owner/HUD and PHA-owner/HUD
projects).
880.507 Default by PHA and/or owner (private-owner/PHA projects).
880.508 Notice upon contract expiration.
Subpart F_Management
880.601 Responsibilities of owner.
880.602 Replacement reserve.
880.603 Selection and admission of assisted tenants.
880.604 Tenant rent.
880.605 Overcrowded and underoccupied units.
880.606 Lease requirements.
880.607 Termination of tenancy and modification of lease.
880.608 Security deposits.
880.609 Adjustment of contract rents.
880.610 Adjustment of utility allowances.
880.611 Conditions for receipt of vacancy payments.
880.612 Reviews during management period.
880.612a Preference for occupancy by elderly families.
[[Page 49]]
880.613 Emergency transfers for victims of domestic violence, dating
violence, sexual assault, and stalking.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 13611-
13619.
Source: 44 FR 59410, Oct. 15, 1979, unless otherwise noted.
Subpart A_Summary and Applicability
Sec. 880.101 General.
(a) The purpose of the Section 8 program is to provide low-income
families with decent, safe and sanitary rental housing through the use
of a system of housing assistance payments. This part contains the
policies and procedures applicable to the Section 8 new construction
program. The assistance may be provided to public housing agency owners
or to private owners either directly from HUD or through public housing
agencies.
(b) This part does not apply to projects developed under other
Section 8 program regulations, including 24 CFR parts 881, 882, 883,
884, and 885, except to the extent specifically stated in those parts.
Portions of subparts E and F of this part 880 have been cross-referenced
in 24 CFR parts 881 and 883.
[61 FR 13587, Mar. 27, 1996]
Sec. 880.104 Applicability of part 880.
(a) Part 880, in effect as of November 5, 1979, applies to all
proposals for which a notification of selection was not issued before
the November 5, 1979 effective date of part 880. (See 24 CFR part 880,
revised as of April 1, 1980.) Where a notification of selection was
issued for a proposal before the November 5, 1979 effective date, part
880, in effect as of November 5, 1979, applies if the owner notified HUD
within 60 calendar days that the owner wished the provisions of part
880, effective November 5, 1979, to apply and promptly brought the
proposal into conformance.
(b) Subparts E (Housing Assistance Payments Contract) and F
(Management) of this part apply to all projects for which an Agreement
was not executed before the November 5, 1979, effective date of part
880. Where an Agreement was so executed:
(1) The owner and HUD may agree to make the revised subpart E of
this part applicable and to execute appropriate amendments to the
Agreement and/or Contract.
(2) The owner and HUD may agree to make the revised subpart F of
this part applicable (with or without the limitation on distributions)
and to execute appropriate amendments to the Agreement and/or Contract.
(c) Section 880.607 (Termination of tenancy and modification of
leases) applies to all families.
(d) Notwithstanding the provisions of paragraph (b) of this section,
the provisions of 24 CFR part 5 apply to all projects, regardless of
when an Agreement was executed.
[61 FR 13587, Mar. 27, 1996, as amended at 65 FR 16722, Mar. 29, 2000]
Sec. 880.105 Applicability to proposals and projects under 24 CFR part 811.
Where proposals and projects are financed with tax-exempt
obligations under 24 CFR part 811, the provisions of part 811 will be
complied with in addition to all requirements of this part. In the event
of any conflict between this part and part 811, part 811 will control.
Subpart B_Definitions and Other Requirements
Sec. 880.201 Definitions.
Annual Contributions Contract (ACC). As defined in part 5 of this
title.
Agency. As defined in 24 CFR part 883.
Agreement. (Agreement to Enter into Housing Assistance Payments
Contract) The Agreement between the owner and the contract administrator
which provides that, upon satisfactory completion of the project in
accordance with the HUD-approved final proposal, the administrator will
enter into the Contract with the owner.
Annual income. As defined in part 5 of this title.
Contract. (Housing Assistance Payments Contract) The Contract
entered into by the owner and the contract administrator upon
satisfactory completion of the project, which sets forth the rights and
duties of the parties with respect to the project and the payments under
the Contract.
[[Page 50]]
Contract Administrator. The entity which enters into the Contract
with the owner and is responsible for monitoring performance by the
owner. The contract administrator is a PHA in the case of private-owner/
PHA projects, and HUD in private-owner/HUD and PHA-owner/HUD projects.
Contract rent. The total amount of rent specified in the contract as
payable to the owner for a unit.
Covered housing provider. For the Section 8 Housing Assistance
Payment Program for New Construction, ``covered housing provider,'' as
such term is used in HUD's regulations in 24 CFR part 5, subpart L
(Protection for Victims of Domestic Violence, Dating Violence, Sexual
Assault, or Stalking), refers to the owner.
Decent, safe, and sanitary. Housing is decent, safe, and sanitary if
it meets the physical condition requirements in 24 CFR part 5, subpart
G.
Drug-related criminal activity. The illegal manufacture, sale,
distribution, use or possession with the intent to manufacture, sell,
distribute, or use, of a controlled substance as defined in section 102
of the Controlled Substances Act, 21 U.S.C. 802.
Elderly family. As defined in part 5 of this title.
Fair Market Rent (FMR). As defined in part 5 of this title.
Family. As defined in part 5 of this title.
Final proposal. The detailed description of a proposed project to be
assisted under this part, which an owner submits after selection of the
preliminary proposal, except where a preliminary proposal is not
required under Sec. 880.303(c). (The final proposal becomes an exhibit
to the Agreement and is the standard by which HUD judges acceptable
construction of the project.)
Housing assistance payment. The payment made by the contract
administrator to the owner of an assisted unit as provided in the
contract. Where the unit is leased to an eligible family, the payment is
the difference between the contract rent and the tenant rent. An
additional payment is made to the family when the utility allowance is
greater than the total tenant payment. A housing assistance payment,
known as a ``vacancy payment''. may be made to the owner when an
assisted unit is vacant, in accordance with the terms of the contract.
HUD. Department of Housing and Urban Development.
Independent Public Accountant. A Certified Public Accountant or a
licensed or registered public accountant, having no business
relationship with the owner except for the performance of audit, systems
work and tax preparation. If not certified, the Independent Public
Accountant must have been licensed or registered by a regulatory
authority of a State or other political subdivision of the United States
on or before December 31, 1970. In States that do not regulate the use
of the title ``public accountant,'' only Certified Public Accountants
may be used.
Low income family. As defined in part 5 of this title.
NOFA. As defined in part 5 of this title.
Owner. Any private person or entity (including a cooperative) or a
public entity which qualifies as a PHA, having the legal right to lease
or sublease newly constructed dwelling units assisted under this part.
The term owner also includes the person or entity submitting a proposal
under this part.
Partially-assisted Project. A project for non-elderly families under
this part which includes more than 50 units of which 20 percent or fewer
are assisted.
PHA-Owner/HUD Project. A project under this part which is owned by a
PHA. For this type of project, the Agreement and the Contract are
entered into by the PHA, as owner, and HUD, as contract administrator.
Private-Owner/HUD Project. A project under this part which is owned
by a private owner. For this type of project, the Agreement and Contract
are entered into by the private owner, as owner, and HUD, as contract
administrator.
Private-Owner/PHA Project. A project under this part which is owned
by a private owner. For this type of project, the Agreement and Contract
are entered into by the private owner, as owner, and the PHA, as
contract administrator, pursuant to an ACC between the PHA and HUD. The
term also covers the situation where the
[[Page 51]]
ACC is with one PHA and the owner is another PHA.
Project Account. A specifically identified and segregated account
for each project which is established in accordance with Sec. 880.503(b)
out of the amounts by which the maximum annual commitment exceeds the
amount actually paid out under the Contract or ACC, as applicable, each
year.
Public Housing Agency (PHA). As defined in part 5 of this title.
Rent. In the case of an assisted unit in a cooperative project, rent
means the carrying charges payable to the cooperative with respect to
occupancy of the unit.
Replacement cost. The estimated construction cost of the project
when the proposed improvements are completed. The replacement cost may
include the land, the physical improvements, utilities within the
boundaries of the land, architect's fees, and miscellaneous charges
incident to construction as approved by the Assistant Secretary.
Secretary. The Secretary of Housing and Urban Development (or
designee).
Small Project. A project for non-elderly families under this part
which includes a total of 50 or fewer (assisted and unassisted) units.
Tenant rent. As defined in part 5 of this title.
Total tenant payment. As defined in part 5 of this title.
Utility allowance. As defined in part 5 of this title.
Utility reimbursement. As defined in part 5 of this title.
Vacancy payment. The housing assistance payment made to the owner by
the contract administrator for a vacant assisted unit if certain
conditions are fulfilled as provided in the Contract. The amount of the
vacancy payment varies with the length of the vacancy period and is less
after the first 60 days of any vacancy.
Very low income family. As defined in part 5 of this title.
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 18923, Mar. 24, 1980;
48 FR 12703, Mar. 28, 1983; 49 FR 6714, Feb. 23, 1984; 49 FR 17449, Apr.
24, 1984; 49 FR 19943, May 10, 1984; 61 FR 5212, Feb. 9, 1996; 61 FR
13587, Mar. 27, 1996; 61 FR 47382, Sept. 6, 1996; 63 FR 46578, Sept. 1,
1998; 65 FR 16722, Mar. 29, 2000; 81 FR 80811, Nov. 16, 2016]
Sec. 880.205 Limitation on distributions.
(a) Non-profit owners are not entitled to distributions of project
funds.
(b) For the life of the Contract, project funds may only be
distributed to profit-motivated owners at the end of each fiscal year of
project operation following the effective date of the Contract after all
project expenses have been paid, or funds have been set aside for
payment, and all reserve requirements have been met. The first year's
distribution may not be made until cost certification, where applicable,
is completed. Distributions may not exceed the following maximum
returns:
(1) For projects for elderly families, the first year's distribution
will be limited to 6 percent on equity. The Assistant Secretary may
provide for increases in subsequent years' distributions on an annual or
other basis so that the permitted return reflects a 6 percent return on
the value in subsequent years, as determined by HUD, of the approved
initial equity. Any such adjustment will be made by Notice in the
Federal Register.
(2) For projects for non-elderly families, the first year's
distribution will be limited to 10 percent on equity. The Assistant
Secretary may provide for increases in subsequent years' distributions
on an annual or other basis so that the permitted return reflects a 10
percent return on the value in subsequent years, as determined by HUD,
of the approved initial equity. Any such adjustment will be made by
Notice in the Federal Register.
(c) For the purpose of determining the allowable distribution, an
owner's equity investment in a project is deemed to be 10 percent of the
replacement cost of the part of the project attributable to dwelling use
accepted by HUD at cost certification (see Sec. 880.405) unless the
owner justifies a higher equity contribution by cost certification
documentation in accordance with HUD mortgage insurance procedures.
(d) Any short-fall in return may be made up from surplus project
funds in future years.
(e) If HUD determines at any time that project funds are more than
the amount needed for project operations, reserve requirements and
permitted
[[Page 52]]
distribution, HUD may require the excess to be placed in an account to
be used to reduce housing assistance payments or for other project
purposes. Upon termination of the Contract, any excess funds must be
remitted to HUD.
(f) Owners of small projects or partially-assisted projects are
exempt from the limitation on distributions contained in paragraphs (b)
through (d) of this section.
(g) In the case of HUD-insured projects, the provisions of this
section will apply instead of the otherwise applicable mortgage
insurance program provisions.
(h) HUD may permit increased distributions of surplus cash, in
excess of the amounts otherwise permitted, to profit-motivated owners
who participate in a HUD-approved initiative or program to preserve
below-market housing stock. The increased distributions will be limited
to a maximum amount based on market rents and calculated according to
HUD instructions. Funds that the owner is authorized to retain under
section 236(g)(2) of the National Housing Act are not considered
distributions to the owner.
(i) Any State or local law or regulation that restricts
distributions to an amount lower than permitted by this section or
permitted by the Commissioner under this paragraph (i) is preempted to
the extent provided by section 524(f) of the Multifamily Assisted
Housing Reform and Affordability Act of 1997.
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 18923, Mar. 24, 1980;
49 FR 6714, Feb. 23, 1984; 61 FR 5212, Feb. 9, 1996; 65 FR 61074, Oct.
13, 2000]
Sec. 880.207 Property standards.
Projects must comply with:
(a) [Reserved]
(b) In the case of manufactured homes, the Federal Manufactured Home
Construction and Safety Standards, pursuant to Title VI of the Housing
and Community Development Act of 1974, and 24 CFR part 3280;
(c) In the case of congregate or single room occupant housing, the
appropriate HUD guidelines and standards;
(d) HUD requirements pursuant to section 209 of the Housing and
Community Development Act of 1974 for projects for the elderly or
handicapped;
(e) HUD requirements pertaining to noise abatement and control; and
(f) Applicable State and local laws, codes, ordinances and
regulations.
(g) Smoke detectors--(1) Performance requirement. After October 30,
1992, each dwelling unit must include at least one battery-operated or
hard-wired smoke detector, in proper working condition, on each level of
the unit. If the unit is occupied by hearing-impaired persons, smoke
detectors must have an alarm system, designed for hearing-impaired
persons, in each bedroom occupied by a hearing-impaired person.
(2) Acceptability criteria. The smoke detector must be located, to
the extent practicable, in a hallway adjacent to a bedroom, unless the
unit is occupied by a hearing-impaired person, in which case each
bedroom occupied by a hearing-impaired person must have an alarm system
connected to the smoke detector installed in the hallway.
[44 FR 59410, Oct. 15, 1979, as amended at 50 FR 9269, Mar. 7, 1985; 57
FR 33851, July 30, 1992; 63 FR 46578, Sept. 1, 1998]
Sec. 880.208 Financing.
(a) Types of financing. Any type of construction financing and long-
term financing may be used, including:
(1) Conventional loans from commercial banks, savings banks, savings
and loan associations, pension funds, insurance companies or other
financial institutions;
(2) Mortgage insurance programs under the National Housing Act;
(3) Mortgage and loan programs of the Farmers' Home Administration
of the Department of Agriculture compatible with the Section 8 program;
and
(4) Financing by tax-exempt bonds or other obligations.
(b) HUD approval. HUD must approve the terms and conditions of the
financing to determine consistency with these regulations and to assure
they do not purport to pledge or give greater rights or funds to any
party than are provided under the Agreement, Contract, and/or ACC. Where
the project is financed with tax-exempt obligations, the terms and
conditions will be approved in accordance with the following:
[[Page 53]]
(1) An issuer of obligations that are tax-exempt under any provision
of Federal law or regulation, the proceeds of the sale of which are to
be used to purchase GNMA mortgage-backed securities issued by the
mortgagee of the Section 8 project, will be subject to 24 CFR part 811,
subpart B.
(2) Issuers of obligations that are tax-exempt under Section 11(b)
of the U.S. Housing Act of 1937 will be subject to 24 CFR part 811,
subpart A if paragraph (b)(1) of this section is not applicable.
(3) Issuers of obligations that are tax-exempt under any provision
of Federal law or regulation other than section 11(b) of the U.S.
Housing Act of 1937 will be subject to 24 CFR part 811, subpart A if
paragraph (b)(1) of this section is not applicable, except that such
issuers that are State Agencies qualified under 24 CFR part 883 are not
subject to 24 CFR part 811 subpart A and are subject solely to the
requirements of 24 CFR part 883 with regard to the approval of tax-
exempt financing.
(c) Pledge of Contracts. An owner may pledge, or offer as security
for any loan or obligation, an Agreement, Contract or ACC entered into
pursuant to this part: Provided, however, That such financing is in
connection with a project constructed pursuant to this part and approved
by HUD. Any pledge of the Agreement, Contract, or ACC, or payments
thereunder, will be limited to the amounts payable under the Contract or
ACC in accordance with its terms. If the pledge or other document
provides that all payments will be paid directly to the mortgagee or the
trustee for bondholders, the mortgagee or trustee will make all payments
or deposits required under the mortgage or trust indenture or HUD
regulations and remit any excess to the owner.
(d) Foreclosure and other transfers. In the event of foreclosure,
assignment or sale approved by HUD in lieu of foreclosure, or other
assignment or sale approved by HUD:
(1) The Agreement, the Contract and the ACC, if applicable, will
continue in effect, and
(2) Housing assistance payments will continue in accordance with the
terms of the Contract.
(e) Financing of manufactured home parks. In the case of a newly
constructed manufactured home park, the principal amount of any mortgage
attributable to the rental spaces in the park may not exceed an amount
per space determined in accordance with Sec. 207.33(b) of this title.
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 62797, Sept. 22, 1980;
48 FR 12704, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984]
Sec. 880.211 Audit.
Where a non-Federal entity (as defined in 2 CFR 200.69) is the
eligible owner of a project or a contract administrator under
Sec. 880.505 receiving financial assistance under this part, the audit
requirements in 2 CFR part 200, subpart F, shall apply.
[80 FR 75941, Dec. 7, 2015]
Sec. 880.212 Broadband infrastructure.
Any new construction or substantial rehabilitation, as substantial
rehabilitation is defined by 24 CFR 5.100, of a building with more than
4 rental units and that is subject to a Housing Assistance Payments
contract executed or renewed after January 19, 2017 must include
installation of broadband infrastructure, as this term is also defined
in 24 CFR 5.100, except where the owner determines and documents the
determination that:
(a) The location of the new construction or 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.
[81 FR 92637, Dec. 20, 2016]
Subparts C-D [Reserved]
Subpart E_Housing Assistance Payments Contract
Sec. 880.501 The contract.
(a) Contract. The Housing Assistance Payments Contract sets forth
rights
[[Page 54]]
and duties of the owner and the contract administrator with respect to
the project and the housing assistance payments. The owner and contract
administrator execute the Contract in the form prescribed by HUD upon
satisfactory completion of the project.
(b) [Reserved]
(c) Housing Assistance Payments to Owners under the Contract. The
housing assistance payments made under the Contract are:
(1) Payments to the owner to assist eligible families leasing
assisted units, and
(2) Payments to the owner for vacant assisted units (``vacancy
payments'') if the conditions specified in Sec. 880.610 are satisfied.
The housing assistance payments are made monthly by the contract
administrator upon proper requisition by the owner, except payments for
vacancies of more than 60 days, which are made semi-annually by the
contract administrator upon requisition by the owner.
(d) Amount of Housing Assistance Payments to Owner. (1) The amount
of the housing assistance payment made to the owner of a unit being
leased by an eligible family is the difference between the contract rent
for the unit and the tenant rent payable by the family.
(2) A housing assistance payment will be made to the owner for a
vacant assisted unit in an amount equal to 80 percent of the contract
rent for the first 60 days of vacancy, subject to the conditions in
Sec. 880.611. If the owner collects any tenant rent or other amount for
this period which, when added to this vacancy payment, exceeds the
contract rent, the excess must be repaid as HUD directs.
(3) For a vacancy that exceeds 60 days, a housing assistance payment
for the vacant unit will be made, subject to the conditions in
Sec. 880.611, in an amount equal to the principal and interest payments
required to amortize that portion of the debt attributable to the vacant
unit for up to 12 additional months.
(e) Payment of utility reimbursement. Where applicable, the owner
will pay a utility reimbursement in accordance with Sec. 5.632 of this
title. HUD will provide funds for the utility reimbursement to the owner
in trust solely for the purpose of paying the utility reimbursement.
[44 FR 59410, Oct. 15, 1979, as amended at 49 FR 19943, May 10, 1984; 61
FR 13587, Mar. 27, 1996; 65 FR 16722, Mar. 29, 2000]
Sec. 880.502 Term of contract.
(a) Term (except for Manufactured Home Parks). The term of the
contract will be as follows:
(1) For assisted units in a project financed with the aid of a loan
insured or co-insured by the Federal government or a loan made,
guaranteed or intended for purchase by the Federal government, the term
will be 20 years.
(2) For assisted units in a project financed other than as described
in paragraph (a)(1) of this section, the term will be the lesser of (i)
the term of the project's financing (but not less than 20 years), or
(ii) 30 years, or 40 years if (A) the project is owned or financed by a
loan or loan guarantee from a state or local agency, (B) the project is
intended for occupancy by non-elderly families and (C) the project is
located in an area designated by HUD as one requiring special financing
assistance.
(b) Term for Manufactured Home Parks. For manufactured home units or
spaces in newly constructed manufactured home parks, the term of the
Contract will be 20 years.
(c) Staged Projects. If the project is completed in stages, the term
of the Contract must relate separately to the units in each stage. The
total Contract term for the units in all stages, beginning with the
effective date of the Contract for the first stage, may not exceed the
overall maximum term allowable for any one unit under this section, plus
two years.
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 18924, Mar. 24, 1980;
48 FR 12705, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984]
Sec. 880.503 Maximum annual commitment and project account.
(a) Maximum Annual Commitment. Where HUD is the contract
administrator, the maximum annual amount that may be committed under the
Contract is the total of the contract rents and utility allowances for
all assisted units in the project. Where the PHA is
[[Page 55]]
the contract administrator, the maximum annual contribution that may be
contracted for in the ACC is the total of the contract rents and utility
allowances for all assisted units plus an administrative fee for the PHA
as approved by HUD.
(b) Project Account. (1) A project account will be established and
maintained by HUD as a specifically identified and segregated account
for each project. The account will be established out of the amounts by
which the maximum annual commitment exceeds the amount actually paid out
under the Contract or ACC each year. Payments will be made from this
account for housing assistance payments (and fees for PHA
administration, if appropriate) when needed to cover increases in
contract rents or decreases in tenant rents and for other cost
specifically approved by the Secretary.
(2) Whenever a HUD-approved estimate of required annual payments
under the Contract or ACC for a fiscal year exceeds the maximum annual
commitment and would cause the amount in the project account to be less
than 40 percent of the maximum, HUD will, within a reasonable period of
time, take such additional steps authorized by Section 8(c)(6) of the
U.S. Housing Act of 1937, as may be necessary, to assure that payments
under the Contract or ACC will be adequate to cover increases in
Contract rents and decreases in tenant rents.
Sec. 880.504 Leasing to eligible families.
(a) Availability of units for occupancy by Eligible Families. During
the term of the Contract, an owner shall make available for occupancy by
eligible families the total number of units for which assistance is
committed under the Contract. For purposes of this section, making units
available for occupancy by eligible families means that the owner: (1)
Is conducting marketing in accordance with Sec. 880.601(a); (2) has
leased or is making good faith efforts to lease the units to eligible
and otherwise acceptable families, including taking all feasible actions
to fill vacancies by renting to such families; and (3) has not rejected
any such applicant family except for reasons acceptable to the contract
administrator. If the owner is temporarily unable to lease all units for
which assistance is committed under the Contract to eligible families,
one or more units may be leased to ineligible families with the prior
approval of the contract administrator in accordance with HUD
guidelines. Failure on the part of the owner to comply with these
requirements is a violation of the Contract and grounds for all
available legal remedies, including specific performance of the
Contract, suspension or debarment from HUD programs, and reduction of
the number of units under the Contract as set forth in paragraph (b) of
this section.
(b) Reduction of number of units covered by Contract--(1) Part 880
and 24 CFR part 881 projects. HUD (or the PHA at the direction of HUD,
as appropriate) may reduce the number of units covered by the Contract
to the number of units available for occupancy by eligible families if:
(i) The owner fails to comply with the requirements of paragraph (a)
of this section; or
(ii) Notwithstanding any prior approval by the contract
administrator to lease such units to ineligible families, HUD (or the
PHA at the direction of HUD, as appropriate) determines that the
inability to lease units to eligible families is not a temporary
problem.
(2) For 24 CFR part 883 projects. HUD and the Agency may reduce the
number of units covered by the Contract to the number of units available
for occupancy by eligible families if:
(i) The owner fails to comply with the requirements of paragraph (a)
of this section; or
(ii) Notwithstanding any prior approval by the Agency to lease such
units to ineligible families, HUD and the Agency determine that the
inability to lease units to eligible families is not a temporary
problem.
(c) Restoration. For this part 880 and 24 CFR part 881 projects, HUD
will agree to an amendment of the ACC or the Contract, as appropriate,
to provide for subsequent restoration of any reduction made pursuant to
paragraph (b) of this section, and for 24 CFR part 883 projects, HUD
will agree to an amendment of the ACC and the Agency
[[Page 56]]
may agree to an amendment to the Contract to provide for subsequent
restoration of any reduction made pursuant to paragraph (b) of this
section, if:
(1) HUD determines (for 24 CFR part 883 projects, HUD and the Agency
determine) that the restoration is justified by demand,
(2) The owner otherwise has a record of compliance with his
obligations under the Contract, and
(3) Contract and budget authority is available.
(d) Applicability. In accordance with section 555 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, paragraphs (a) and (b)
of this section apply to all Contracts. An owner who had leased an
assisted unit to an ineligible family consistent with the regulations in
effect at the time will continue to lease the unit to that family.
However, the owner must make the unit available for occupancy by an
eligible family when the ineligible family vacates the unit.
(e) Termination of assistance for failure to submit evidence of
citizenship or eligible immigration status. If an owner who is subject
to paragraphs (a) and (b) of this section is required to terminate
housing assistance payments for the family in accordance with 24 CFR
part 5 because the owner determines that the entire family does not have
U.S. citizenship or eligible immigration status, the owner may allow
continued occupancy of the unit by the family without Section 8
assistance following the termination of assistance, or if the family
constitutes a mixed family, as defined in 24 CFR part 5, the owner shall
comply with the provisions of 24 CFR part 5 concerning assistance to
mixed families, and deferral of termination of assistance.
(f) Protections for victims of domestic violence, dating violence,
sexual assault, or stalking. The regulations of 24 CFR part 5, subpart L
(Protection for Victims of Domestic Violence, Dating Violence, Sexual
Assault, or Stalking), apply to this section.
[44 FR 59410, Oct. 15, 1979, as amended at 49 FR 31397, Aug. 7, 1984; 51
FR 11224, Apr. 1, 1986; 53 FR 846, Jan. 13, 1988; 53 FR 6601, Mar. 2,
1988; 59 FR 13652, Mar. 23, 1994; 60 FR 14841, Mar. 20, 1995; 61 FR
13587, Mar. 27, 1996; 73 FR 72342, Nov. 28, 2008; 75 FR 66260, Oct. 27,
2010; 81 FR 80811, Nov. 16, 2016]
Sec. 880.505 Contract administration and conversions.
(a) Contract administration. For private-owner/PHA projects, the PHA
is primarily responsible for administration of the Contract, subject to
review and audit by HUD. For private-owner/HUD and PHA-owner/HUD
projects, HUD is responsible for administration of the Contract. The PHA
or HUD may contract with another entity for the performance of some or
all of its contract administration functions.
(b) PHA fee for Contract administration. A PHA will be entitled to a
reasonable fee, determined by HUD, for administering a Contract except
under certain circumstances (see 24 CFR part 883) where a state housing
finance agency is the PHA and finances the project.
(c) Conversion of Projects from one Ownership/Contractual
arrangement to another. Any project may be converted from one ownership/
contractual arrangement to another (for example, from a private-owner/
HUD to a private-owner/PHA project) if:
(1) The owner, the PHA and HUD agree,
(2) HUD determines that conversion would be in the best interest of
the project, and
(3) In the case of conversion from a private-owner/HUD to a private-
owner/PHA project, contract authority is available to cover the PHA fee
for administering the Contract.
Sec. 880.506 Default by owner (private-owner/HUD and PHA-owner/HUD projects).
The Contract will provide:
(a) That if HUD determines that the owner is in default under the
Contract, HUD will notify the owner and the lender of the actions
required to be taken to cure the default and of the remedies to be
applied by HUD including specific performance under the
[[Page 57]]
Contract, reduction or suspension of housing assistance payments and
recovery of overpayments, where appropriate; and
(b) That if the owner fails to cure the default, HUD has the right
to terminate the Contract or to take other corrective action.
Sec. 880.507 Default by PHA and/or owner (private-owner/PHA projects).
(a) Rights of Owner if PHA defaults under Agreement or Contract. The
ACC, the Agreement and the Contract will provide that, in the event of
failure of the PHA to comply with the Agreement or Contract with the
owner, the owner will have the right, if he is not in default, to demand
that HUD investigate. HUD will first give the PHA a reasonable
opportunity to take corrective action. If HUD determines that a
substantial default exists, HUD will assume the PHA's rights and
obligations under the Agreement or Contract and meet the obligations of
the PHA under the Agreement or Contract including the obligations to
enter into the Contract.
(b) Rights of HUD if PHA defaults under ACC. The ACC will provide
that, if the PHA fails to comply with any of its obligations, HUD may
determine that there is a substantial default and require the PHA to
assign to HUD all of its rights and interests under the Contract;
however, HUD will continue to pay annual contributions in accordance
with the terms of the ACC and the Contract. Before determining that a
PHA is in substantial default, HUD will give the PHA a reasonable
opportunity to take corrective action.
(c) Rights of PHA and HUD if Owner defaults under Contract. (1) The
Contract will provide that if the PHA determines that the owner is in
default under the Contract, the PHA will notify the owner and lender,
with a copy to HUD, (i) of the actions required to be taken to cure the
default, (ii) of the remedies to be applied by the PHA including
specific performance under the Contract, abatement of housing assistance
payments and recovery of overpayments, where appropriate, and (iii) that
if he fails to cure the default, the PHA has the right to terminate the
Contract or to take other corrective action, in its discretion or as
directed by HUD.
(2) If the PHA is the lender, the Contract will also provide that
HUD has an independent right to determine whether the owner is in
default and to take corrective action and apply appropriate remedies,
except that HUD will not have the right to terminate the Contract
without proceeding in accordance with paragraph (b) of this section.
Sec. 880.508 Notice upon contract expiration.
(a) The Contract will provide that the owner will notify each
assisted family, at least 90 days before the end of the Contract term,
of any increase in the amount the family will be required to pay as rent
which may occur as a result of its expiration. If the Contract is to be
renewed but with a reduction in the number of units covered by it, this
notice shall be given to each family who will no longer be assisted
under the Contract.
(b) The notice provided for in paragraph (a) of this section shall
be accomplished by: (1) Sending a letter by first class mail, properly
stamped and addressed, to the family at its address at the project, with
a proper return address; and (2) serving a copy of the notice on any
adult person answering the door at the leased dwelling unit, or if no
adult responds, by placing the notice under or through the door, if
possible, or else by affixing the notice to the door. Service shall not
considered to be effective until both required notices have been
accomplished. The date on which the notice shall be considered to be
received by the family shall be the date on which the owner mails the
first class letter provided for in this paragraph, or the date on which
the notice provided for in this paragraph is properly given, whichever
is later.
(c) The notice shall advise each affected family that, after the
expiration date of the Contract, the family will be required to bear the
entire cost of the rent and that the owner will be free (to the extent
the project is not otherwise regulated by HUD) to alter the rent without
HUD approval, but subject to any applicable requirements or restrictions
under the lease or under State or local law. The notice shall also
state:
[[Page 58]]
(1) The actual (if known) or the estimated rent which will be charged
following the expiration of the Contract; (2) the difference between the
rent and the Total Tenant Payment toward rent under the Contract; and
(3) the date the Contract will expire.
(d) The owner shall give HUD a certification that families have been
notified in accordance with this section with an example of the text of
the notice attached.
(e) This section applies to all Contracts entered into pursuant to
an Agreement executed on or after October 1, 1981, or entered into
pursuant to an Agreement executed before October 1, 1981, but renewed or
amended on or after October 1, 1984.
[49 FR 31283, Aug. 6, 1984]
Subpart F_Management
Sec. 880.601 Responsibilities of owner.
(a) Marketing. (1) The owner must commence diligent marketing
activities in accordance with the Agreement not later than 90 days prior
to the anticipated date of availability for occupancy of the first unit
of the project.
(2) Marketing must be done in accordance with the HUD-approved
Affirmative Fair Housing Marketing Plan and all Fair Housing and Equal
Opportunity requirements. The purpose of the Plan and requirements is to
assure that eligible families of similar income in the same housing
market area have an equal opportunity to apply and be selected for a
unit in projects assisted under this part regardless of their race,
color, creed, religion, sex or national origin.
(3) With respect to non-elderly family units, the owner must
undertake marketing activities in advance of marketing to other
prospective tenants in order to provide opportunities to reside in the
project to non-elderly families who are least likely to apply, as
determined in the Affirmative Fair Housing Marketing Plan, and to non-
elderly families expected to reside in the community by reason of
current or planned employment.
(4) At the time of Contract execution, the owner must submit a list
of leased and unleased units, with justification for the unleased units,
in order to qualify for vacancy payments for the unleased units.
(b) Management and maintenance. The owner is responsible for all
management functions, including determining eligibility of applicants,
selection of tenants, reexamination and verification of family income
and composition, determination of family rent (total tenant payment,
tenant rent and utility reimbursement), collection of rent, termination
of tenancy and eviction, and performance of all repair and maintenance
functions (including ordinary and extraordinary maintenance), and
replacement of capital items. (See part 5 of this title.) All functions
must be performed in accordance with applicable equal opportunity
requirements.
(c) Contracting for services. (1) For this part 880 and 24 CFR part
881 projects, with HUD approval, the owner may contract with a private
or public entity (except the contract administrator) for performance of
the services or duties required in paragraphs (a) and (b) of this
section.
(2) For 24 CFR part 883 projects, with approval of the Agency, the
owner may contract with a private or public entity (but not with the
Agency unless temporarily necessary for the Agency to protect its
financial interest and to uphold its program responsibilities where no
alternative management agent is immediately available) for performance
of the services or duties required in paragraphs (a) and (b) of this
section.
(3) However, such an arrangement does not relieve the owner of
responsibility for these services and duties.
(d) Submission of financial and operating statements. After
execution of the Contract, the owner must submit to the contract
adminstrator:
(1) Financial information in accordance with 24 CFR part 5, subpart
H; and
(2) Other statements as to project operation, financial conditions
and occupancy as HUD may require pertinent to administration of the
Contract and monitoring of project operations.
(e) Use of project funds. (1) Project funds must be used for the
benefit of the project, to make required deposits to the replacement
reserve in accordance with Sec. 880.602 and to provide distributions to
the owner as provided in
[[Page 59]]
Sec. 880.205, Sec. 881.205 of this chapter, or Sec. 883.306 of this
chapter, as appropriate.
(2) For this part 880 and 24 CFR part 881 projects:
(i) Any remaining project funds must be deposited with the mortgagee
or other HUD-approved depository in an interest-bearing residual
receipts account. Withdrawals from this account will be made only for
project purposes and with the approval of HUD.
(ii) Partially-assisted projects are exempt from the provisions of
this section.
(iii) In the case of HUD-insured projects, the provisions of this
paragraph (e) will apply instead of the otherwise applicable mortgage
insurance provisions.
(3) For 24 CFR part 883 projects:
(i) Any remaining project funds must be deposited with the Agency,
other mortgagee or other Agency-approved depository in an interest-
bearing account. Withdrawals from this account may be made only for
project purposes and with the approval of the Agency.
(ii) In the case of HUD-insured projects, the provisions of this
paragraph will apply instead of the otherwise applicable mortgage
insurance provisions, except in the case of partially-assisted projects
which are subject to the applicable mortgage insurance provisions.
(Approved by the Office of Management and Budget under control number
2502-0204)
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 18924, Mar. 24, 1980;
51 FR 11224, Apr. 1, 1986; 53 FR 846, Jan. 13, 1988; 53 FR 1145, Jan.
15, 1988; 53 FR 6601, Mar. 2, 1988; 54 FR 39702, Sept. 27, 1989; 56 FR
7536, Feb. 22, 1991; 60 FR 14841, Mar. 20, 1995; 61 FR 13588, Mar. 27,
1996; 63 FR 46593, Sept. 1, 1998; 65 FR 16722, Mar. 29, 2000]
Sec. 880.602 Replacement reserve.
(a) A replacement reserve must be established and maintained in an
interest-bearing account to aid in funding extraordinary maintenance and
repair and replacement of capital items.
(1) Part 880 and 24 CFR part 881 projects. (i) For this part 880 and
24 CFR part 811 projects, an amount equivalent to .006 of the cost of
total structures, including main buildings, accessory buildings, garages
and other buildings, or any higher rate as required by HUD from time to
time, will be deposited in the replacement reserve annually. This amount
will be adjusted each year by the amount of the automatic annual
adjustment factor.
(ii) The reserve must be built up to and maintained at a level
determined by HUD to be sufficient to meet projected requirements.
Should the reserve achieve that level, the rate of deposit to the
reserve may be reduced with the approval of HUD.
(iii) All earnings including interest on the reserve must be added
to the reserve.
(iv) Funds will be held by the mortgagee or trustee for bondholders,
and may be drawn from the reserve and used only in accordance with HUD
guidelines and with the approval of, or as directed by, HUD.
(v) Partially-assisted part 880 and 24 CFR part 881 projects are
exempt from the provisions of this section.
(2) Part 883 of this chapter projects. (i) For 24 CFR part 883
projects, an amount equivalent to at least .006 of the cost of total
structures, including main buildings, accessory buildings, garages and
other buildings, or any higher rate as required from time to time by:
(A) The Agency, in the case of projects approved under 24 CFR part
883, subpart D; or
(B) HUD, in the case of all other projects, will be deposited in the
replacement reserve annually. For projects approved under 24 CFR part
883, subpart D, this amount may be adjusted each year by up to the
amount of the automatic annual adjustment factor. For all projects not
approved under 24 CFR part 883, subpart D, this amount must be adjusted
each year by the amount of the automatic annual adjustment factor.
(ii) The reserve must be built up to and maintained at a level
determined to be sufficient by the Agency to meet projected
requirements. Should the reserve achieve that level, the rate of deposit
to the reserve may be reduced with the approval of the Agency.
(iii) All earnings, including interest on the reserve, must be added
to the reserve.
(iv) Funds will be held by the Agency, other mortgagee or trustee
for
[[Page 60]]
bondholders, as determined by the Agency, and may be drawn from the
reserve and used only in accordance with Agency guidelines and with the
approval of, or as directed by, the Agency.
(v) The Agency may exempt partially-assisted projects approved under
24 CFR part 883, subpart D, from the provisions of this section. All
partially-assisted projects not approved under the Fast Track Procedures
formerly in 24 CFR part 883, subpart D, are exempt from the provisions
of this section.
(b) In the case of HUD-insured projects, the provisions of this
section will apply instead of the otherwise applicable mortgage
insurance provisions, except in the case of partially-assisted insured
projects which are subject to the applicable mortgage insurance
provisions.
[61 FR 13588, Mar. 27, 1996]
Sec. 880.603 Selection and admission of assisted tenants.
(a) Application. The owner must accept applications for admission to
the project in the form prescribed by HUD. Both the owner (or designee)
and the applicant must complete and sign the application. For this part
880 and 24 CFR part 881 projects, on request, the owner must furnish
copies of all applications to HUD and the PHA, if applicable. For 24 CFR
part 883 projects, on request, the owner must furnish to the Agency or
HUD copies of all applications received.
(b) Determination of eligibility and selection of tenants. The owner
is responsible for obtaining and verifying information related to income
eligibility in accordance with 24 CFR part 5, subpart F, and evidence
related to citizenship and eligible immigration status in accordance
with 24 CFR part 5, subpart E, to determine whether the applicant is
eligible for assistance in accordance with the requirements of 24 CFR
part 5, and to select families for admission to the program, which
includes giving selection preferences in accordance with 24 CFR part 5,
subpart D.
(1) If the owner determines that the family is eligible and is
otherwise acceptable and units are available, the owner will assign the
family a unit of the appropriate size in accordance with HUD standards.
If no suitable unit is available, the owner will place the family on a
waiting list for the project and notify the family of when a suitable
unit may become available. If the waiting list is so long that the
applicant would not be likely to be admitted for the next 12 months, the
owner may advise the applicant that no additional applications are being
accepted for that reason, provided the owner complies with the
procedures for informing applicants about admission preferences as
provided in 24 CFR part 5, subpart D.
(2) If the owner determines that an applicant is ineligible on the
basis of income or family composition, or because of failure to meet the
disclosure and verification requirements for Social Security Numbers (as
provided by 24 CFR part 5), or because of failure by an applicant to
sign and submit consent forms for the obtaining of wage and claim
information from State Wage Information Collection Agencies (as provided
by 24 CFR parts 5 and 813), or that the owner is not selecting the
applicant for other reasons, the owner will promptly notify the
applicant in writing of the determination and its reasons, and that the
applicant has the right to meet with the owner or managing agent in
accordance with HUD requirements. Where the owner is a PHA, the
applicant may request an informal hearing. If the PHA determines that
the applicant is not eligible, the PHA will notify the applicant and
inform the applicant that he or she has the right to request HUD review
of the PHA's determination. The applicant may also exercise other rights
if the applicant believes that he or she is being discriminated against
on the basis of race, color, creed, religion, sex, or national origin.
See 24 CFR part 5 for the informal review provisions for the denial of a
Federal preference or the failure to establish citizenship or eligible
immigration status and for notice requirements where assistance is
terminated, denied, suspended, or reduced based on wage and claim
information obtained by HUD from a State Wage Information Collection
Agency.
(3) Records on applicants and approved eligible families, which
provide racial, ethnic, gender and place of previous residency data
required by HUD,
[[Page 61]]
must be maintained and retained for three years.
(c) Reexamination of family income and composition--(1) Regular
reexaminations. The owner must reexamine the income and composition of
all families at least every 12 months. After consultation with the
family and upon verification of the information, the owner must make
appropriate adjustments in the Total Tenant Payment in accordance with
part 5 of this title and determine whether the family's unit size is
still appropriate. The owner must adjust Tenant Rent and the Housing
Assistance Payment to reflect any change in Total Tenant Payment and
must carry out any unit transfer required by HUD. At the time of the
annual reexamination of family income and composition, the owner must
require the family to disclose the verify Social Security Numbers, as
provided by 24 CFR part 5. For requirements regarding the signing and
submitting of consent forms by families for the obtaining of wage and
claim information from State Wage Information Collection Agencies, see
24 CFR part 5. At the first regular reexamination after June 19, 1995,
the owner shall follow the requirements of 24 CFR part 5 concerning
obtaining and processing evidence of citizenship or eligible immigration
status of all family members. Thereafter, at each regular reexamination,
the owner shall follow the requirements of 24 CFR part 5 and verify the
immigration status of any new family member.
(2) Interim reexaminations. The family must comply with provisions
in its lease regarding interim reporting of changes in income. If the
owner receives information concerning a change in the family's income or
other circumstances between regularly scheduled reexaminations, the
owner must consult with the family and make any adjustments determined
to be appropriate. Any change in the family's income or other
circumstances that results in an adjustment in the Total Tenant Payment,
Tenant Rent and Housing Assistance Payment must be verified. See 24 CFR
part 5 for the requirements for the disclosure and verification of
Social Security Numbers at interim reexaminations involving new family
members. For requirements regarding the signing and submitting of
consent forms for the obtaining of wage and claim information from State
Wage Information Collection Agencies, see 24 CFR part 5. At any interim
reexamination after June 19, 1995, when a new family member has been
added, the owner shall follow the requirements of 24 CFR part 5
concerning obtaining and processing evidence of the citizenship or
eligible immigration status of any new family member.
(3) Continuation of housing assistance payments. A family's
eligibility for Housing Assistance Payments continues until the Total
Tenant Payment equals the contract rent plus any utility allowance. The
termination of eligibility at such point will not affect the family's
other rights under its lease, nor will such termination preclude the
resumption of payments as a result of later changes in income, rents, or
other relevant circumstances during the term of the Contract. However,
eligibility also may be terminated in accordance with HUD requirements,
for such reasons as failure to submit requested verification
information, including failure to meet the disclosure and verification
requirements for Social Security Numbers, as provided by 24 CFR part 5,
or failure to sign and submit consent forms for the obtaining wage and
claim information from State Wage Information Collection Agencies, as
provided by 24 CFR part 5. See 24 CFR part 5 for provisions requiring
termination of assistance for failure to establish citizenship or
eligible immigration status and also for provisions concerning certain
assistance for mixed families (families whose members include those with
eligible immigration status, and those without eligible immigration
status) in lieu of termination of assistance, and for provisions
concerning deferral of termination of assistance.
(4) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
(Approved by the Office of Management and Budget under control number
2502-0204)
[61 FR 13589, Mar. 27, 1996, as amended at 65 FR 16722, Mar. 29, 2000;
70 FR 77744, Dec. 30, 2005; 81 FR 12371, Mar. 8, 2016]
[[Page 62]]
Sec. 880.604 Tenant rent.
The eligible Family pays the Tenant Rent directly to the Owner.
[49 FR 19943, May 10, 1984]
Sec. 880.605 Overcrowded and underoccupied units.
If the contract administrator determines that because of change in
family size an assisted unit is smaller than appropriate for the
eligible family to which it is leased, or that the unit is larger than
appropriate, housing assistance payments with respect to the unit will
not be reduced or terminated until the eligible family has been
relocated to an appropriate alternative unit. If possible, the owner
will, as promptly as possible, offer the family an appropriate unit. The
owner may receive vacancy payments for the vacated unit if he complies
with the requirements of Sec. 880.611.
Sec. 880.606 Lease requirements.
(a) Term of Lease. The term of the lease will be for not less than
one year. The lease may, or in the case of a lease for a term of more
than one year must, contain a provision permitting termination on 30
days advance written notice by the family.
(b) Form--(1) Part 880 and 24 CFR part 881 projects. For this part
880 and 24 CFR part 881 projects, the form of lease must contain all
required provisions, and none of the prohibited provisions specified in
the developer's packet, and must conform to the form of lease included
in the approved final proposal.
(2) 24 CFR part 883 projects. For 24 CFR part 883 projects, the form
of lease must contain all required provisions, and none of the
prohibited provisions specified below.
(i) Required provisions (Addendum to lease).
Addendum to Lease
The following additional Lease provisions are incorporated in full
in the Lease between __________ (Landlord) and __________ (Tenant) for
the following dwelling unit: _________. In case of any conflict between
these and any other provisions of the Lease, these provisions will
prevail.
a. The total rent will be $____ per month.
b. Of the total rent, $____ will be payable by the State Agency
(Agency) as housing assistance payments on behalf of the Tenant and
$_____ will be payable by the Tenant. These amounts will be subject to
change by reason of changes in the Tenant's family income, family
composition, or extent of exceptional medical or other unusual expenses,
in accordance with HUD-established schedules and criteria; or by reason
of adjustment by the Agency of any applicable Utility Allowance; or by
reasons of changes in program rules. Any such change will be effective
as of the date stated in a notification to the Tenant.
c. The Landlord will not discriminate against the Tenant in the
provision of services, or in any other manner, on the grounds of race,
color, creed, religion, sex, or national origin.
d. The Landlord will provide the following services and maintenance:
______
e. A violation of the Tenant's responsibilities under the Section 8
Program, as determined by the Agency, is also a violation of the lease.
Landlord________________________________________________________________
By______________________________________________________________________
Date____________________________________________________________________
Tenant__________________________________________________________________
Date____________________________________________________________________
[End of addendum]
(ii) Prohibited provisions. Lease clauses which fall within the
classifications listed below must not be included in any Lease.
Lease Clauses
a. Confession of Judgment. Consent by the tenant to be sued, to
admit guilt, or to accept without question any judgment favoring the
landlord in a lawsuit brought in connection with the lease.
b. Seize or Hold Property for Rent or Other Charges. Authorization
to the landlord to take property of the tenant and/or hold it until the
tenant meets any obligation which the landlord has determined the tenant
has failed to perform.
c. Exculpatory Clause. Prior agreement by the tenant not to hold the
landlord or landlord's agents legally responsible for acts done
improperly or for failure to act when the landlord or landlord's agent
was required to do so.
d. Waiver of Legal Notice. Agreement by the tenant that the landlord
need not give any notices in connection with (1) a lawsuit against the
tenant for eviction, money damages, or other purposes, or (2) any other
action affecting the tenant's rights under the lease.
[[Page 63]]
e. Waiver of Legal Proceeding. Agreement by the tenant to allow
eviction without a court determination.
f. Waiver of Jury Trial. Authorization to the landlord's lawyer to
give up the tenant's right to trial by jury.
g. Waiver of Right to Appeal Court Decision. Authorization to the
landlord's lawyer to give up the tenant's right to appeal a decision on
the ground of judicial error or to give up the tenant's right to sue to
prevent a judgment being put into effect.
h. Tenant Chargeable with Cost of Legal Actions Regardless of
Outcome of Lawsuit. Agreement by the tenant to pay lawyer's fees or
other legal costs whenever the landlord decides to sue the tenant
whether or not the tenant wins. (Omission of such a clause does not mean
that the tenant, as a party to a lawsuit, may not have to pay lawyer's
fees or other costs if the court so orders.)
[End of clauses]
[44 FR 59410, Oct. 15, 1979, as amended at 61 FR 13590, Mar. 27, 1996]
Sec. 880.607 Termination of tenancy and modification of lease.
(a) Applicability. The provisions of this section apply to all
decisions by an owner to terminate the tenancy of a family residing in a
unit under Contract during or at the end of the family's lease term.
(b) Entitlement of Families to occupancy--(1) Grounds. The owner may
not terminate any tenancy except upon the following grounds:
(i) Material noncompliance with the lease;
(ii) Material failure to carry out obligations under any State
landlord and tenant act;
(iii) Criminal activity by a covered person in accordance with
sections 5.858 and 5.859, or alcohol abuse by a covered person in
accordance with section 5.860. If necessary, criminal records can be
obtained for lease enforcement purposes under section 5.903(d)(3).
(iv) Other good cause, which may include the refusal of a family to
accept an approved modified lease form (see paragraph (d) of this
section). No termination by an owner will be valid to the extent it is
based upon a lease or a provisions of State law permitting termination
of a tenancy solely because of expiration of an initial or subsequent
renewal term. All terminations must also be in accordance with the
provisions of any State and local landlord tenant law and paragraph (c)
of this section.
(2) Notice of good cause. The conduct of a tenant cannot be deemed
``other good cause'' under paragraph (b)(1)(iv) of this section unless
the owner has given the family prior notice that the grounds constitute
a basis for termination of tenancy. The notice must be served on the
family in the same manner as that provided for termination notices under
paragraph (c) of this section and State and local law.
(3) Material noncompliance. (i) Material noncompliance with the
lease includes:
(A) One or more substantial violations of the lease; or
(B) Repeated minor violations of the lease that disrupt the
livability of the building; adversely affect the health or safety of any
person or the right of any tenant to the quiet enjoyment of the leased
premises and related facilities; interfere with the management of the
building or have an adverse financial effect on the building.
(ii) Failure of the family to timely submit all required information
on family income and composition, including failure to submit required
evidence of citizenship or eligible immigration status (as provided by
24 CFR part 5), failure to disclose and verify Social Security Numbers
(as provided by 24 CFR part 5), failure to sign and submit consent forms
(as provided by 24 CFR part 5), or knowingly providing incomplete or
inaccurate information, shall constitute a substantial violation of the
lease.
(c) Termination notice. (1) The owner must give the family a written
notice of any proposed termination of tenancy, stating the grounds and
that the tenancy is terminated on a specified date and advising the
family that it has an opportunity to respond to the owner.
(2) When a termination notice is issued for other good cause
(paragraph (b)(1)(iv) of this section), the notice will be effective,
and it will so state, at the end of a term and in accordance with the
termination provisions of the lease, but in no case earlier than 30 days
after receipt by the family of the
[[Page 64]]
notice. Where the termination notice is based on material noncompliance
with the lease or material failure to carry out obligations under a
State landlord and tenant act pursuant to paragraph (b)(1)(i) or
(b)(1)(ii) of this section, the time of service must be in accord with
the lease and State law.
(3) In any judicial action instituted to evict the family, the owner
may not rely on any grounds which are different from the reasons set
forth in the notice.
(4) See 24 CFR part 5 for provisions related to termination of
assistance because of failure to establish citizenship or eligible
immigration status, including informal hearing procedures and also for
provisions concerning certain assistance for mixed families (families
whose members include those with eligible immigration status, and those
without eligible immigration status) in lieu of termination of
assistance, and for provisions concerning deferral of termination of
assistance.
(5) In actions or potential actions to terminate tenancy, the owner
shall follow 24 CFR part 5, subpart L (Protection for Victims of
Domestic Violence, Dating Violence, Sexual Assault, or Stalking).
(d) Modification of Lease form. The owner, with the prior approval
of HUD or, for a 24 CFR part 883 project, the Agency, may modify the
terms and conditions of the lease form effective at the end of the
initial term or a successive term, by serving an appropriate notice on
the family, together with the offer of a revised lease or an addendum
revising the existing lease. This notice and offer must be received by
the family at least 30 days prior to the last date on which the family
has the right to terminate the tenancy without being bound by the
modified terms and conditions. The family may accept the modified terms
and conditions by executing the offered revised lease or addendum, or
may reject the modified terms and conditions by giving the owner written
notice in accordance with the lease that the family intends to terminate
the tenancy. Any increase in rent must in all cases be governed by
Sec. 880.609 and other applicable HUD regulations.
(Approved by the Office of Management and Budget under control number
2502-0204)
[44 FR 59410, Oct. 15, 1979, as amended at 51 FR 11225, Apr. 1, 1986; 53
FR 846, Jan. 13, 1988; 53 FR 6601, Mar. 2, 1988; 54 FR 39703, Sept. 27,
1989; 56 FR 7537, Feb. 22, 1991; 60 FR 14842, Mar. 20, 1995; 61 FR
13590, Mar. 27, 1996; 61 FR 47382, Sept. 6, 1996; 66 FR 28797, May 24,
2001; 73 FR 72342, Nov. 28, 2008; 75 FR 66260, Oct. 27, 2010; 81 FR
80811, Nov. 16, 2016]
Sec. 880.608 Security deposits.
(a) At the time of the initial execution of the lease, the owner
will require each family to pay a security deposit in an amount equal to
one month's Total Tenant Payment or $50, whichever is greater. The
family is expected to pay the security deposit from its own resources
and/or other public sources. The owner may collect the security deposit
on an installment basis.
(b) The owner must place the security deposits in a segregated,
interest-bearing account. The balance of this account must at all times
be equal to the total amount collected from the families then in
occupancy, plus any accrued interest. The owner must comply with any
applicable State and local laws concerning interest payments on security
deposits.
(c) In order to be considered for the return of the security
deposit, a family which vacates its unit will provide the owner with its
forwarding address or arrange to pick up the refund.
(d) The owner, subject to State and local law and the requirements
of this paragraph, may use the security deposit, plus any accrued
interest, as reimbursement for any unpaid family contribution or other
amount which the family owes under the lease. Within 30 days (or shorter
time if required by State, or local law) after receiving notification of
the family's forwarding address, the owner must:
(1) Refund to a family owing no rent or other amount under the lease
the full amount of the security deposit, plus accrued interest;
(2) Provide to a family owing rent or other amount under the lease a
list itemizing any unpaid rent, damages to the unit, and estimated costs
for repair, along with a statement of the
[[Page 65]]
family's rights under State and local law. If the amount which the owner
claims is owed by the family is less than the amount of the security
deposit, plus accrued interest, the owner must refund the unused balance
to the family. If the owner fails to provide the list, the family will
be entitled to the refund of the full amount of the security deposit
plus accrued interest.
(e) In the event a disagreement arises concerning reimbursement of
the security deposit, the family will have the right to present
objections to the owner in an informal meeting. The owner must keep a
record of any disagreements and meetings in a tenant file for inspection
by the contract administrator. The procedures of this paragraph do not
preclude the family from exercising its rights under State and local
law.
(f) If the security deposit, including any accrued interest, is
insufficient to reimburse the owner for any unpaid tenant rent or other
amount which the family owes under the lease, and the owner has provided
the family with the list required by paragraph (d)(2) of this section,
the owner may claim reimbursement from the contract administrator, as
appropriate, for an amount not to exceed the lesser of:
(1) The amount owed the owner, or
(2) One month's contract rent, minus the amount of the security
deposit plus accrued interest. Any reimbursement under this section will
be applied first toward any unpaid tenant rent due under the lease. No
reimbursement may be claimed for unpaid rent for the period after
termination of the tenancy.
[44 FR 59410, Oct. 15, 1979, as amended at 49 FR 19943, May 10, 1984; 61
FR 13591, Mar. 27, 1996]
Sec. 880.609 Adjustment of contract rents.
(a) Automatic annual adjustment of Contract Rents. Upon request from
the owner to the contract administrator, contract rents will be adjusted
on the anniversary date of the contract in accordance with 24 CFR part
888.
(b) Special additional adjustments. For all projects, special
additional adjustments will be granted, to the extent determined
necessary by HUD (for 24 CFR part 883 projects, by the Agency and HUD),
to reflect increases in the actual and necessary expenses of owning and
maintaining the assisted units which have resulted from substantial
general increases in real property taxes, assessments, utility rates,
and utilities not covered by regulated rates, and which are not
adequately compensated for by annual adjustments under paragraph (a) of
this section. The owner must submit to the contract administrator
required supporting data, financial statements and certifications.
(c) Overall limitation. Any adjustments of contract rents for a unit
after Contract execution or cost certification, where applicable, must
not result in material differences between the rents charged for
assisted units and comparable unassisted units except to the extent that
the differences existed with respect to the contract rents set at
Contract execution or cost certification, where applicable.
[44 FR 59410, Oct. 15, 1979, as amended at 59 FR 22755, May 3, 1994; 61
FR 13591, Mar. 27, 1996]
Sec. 880.610 Adjustment of utility allowances.
In connection with annual and special adjustments of contract rents,
the owner must submit an analysis of the project's Utility Allowances.
Such data as changes in utility rates and other facts affecting utility
consumption should be provided as part of this analysis to permit
appropriate adjustments in the Utility Allowances. In addition, when
approval of a utility rate change would result in a cumulative increase
of 10 percent or more in the most recently approved Utility Allowances,
the project owner must advise the contract administrator and request
approval of new Utility Allowances. Whenever a Utility Allowance for a
unit is adjusted, the owner will promptly notify affected families and
make a corresponding adjustment of the tenant rent and the amount of the
housing assistance payment for the unit.
(Approved by the Office of Management and Budget under control number
2502-0161)
[50 FR 39097, Sept. 27, 1985]
[[Page 66]]
Sec. 880.611 Conditions for receipt of vacancy payments.
(a) General. Vacancy payments under the Contract will not be made
unless the conditions for receipt of these housing assistance payments
set forth in this section are fulfilled.
(b) Vacancies during Rent-up. For each assisted unit that is not
leased as of the effective date of the Contract, the owner is entitled
to vacancy payments in the amount of 80 percent of the contract rent for
the first 60 days of vacancy if the owner:
(1) Conducted marketing in accordance with Sec. 880.601(a) and
otherwise complied with Sec. 880.601;
(2) Has taken and continues to take all feasible actions to fill the
vacancy; and
(3) Has not rejected any eligible applicant except for good cause
acceptable to the contract administrator.
(c) Vacancies after Rent-Up. If an eligible family vacates a unit,
the owner is entitled to vacancy payments in the amount of 80 percent of
the contract rent for the first 60 days of vacancy if the owner:
(1) Certifies that he did not cause the vacancy by violating the
lease, the Contract or any applicable law;
(2) Notified the contract administrator of the vacancy or
prospective vacancy and the reasons for the vacancy immediately upon
learning of the vacancy or prospective vacancy;
(3) Has fulfilled and continues to fulfill the requirements
specified in Sec. 880.601(a) (2) and (3) and paragraph (b) (2) and (3)
of this section; and
(4) For any vacancy resulting from the owner's eviction of an
eligible family, certifies that he has complied with Sec. 880.607.
(d) Vacancies for longer than 60 days. If an assisted unit continues
to be vacant after the 60-day period specified in paragraph (b) or (c)
of this section, the owner may apply to receive additional vacancy
payments in an amount equal to the principal and interest payments
required to amortize that portion of the debt service attributable to
the vacant unit for up to 12 additional months for the unit if:
(1) The unit was in decent, safe and sanitary condition during the
vacancy period for which payments are claimed;
(2) The owner has fulfilled and continues to fulfill the
requirements specified in paragraph (b) or (c) of this section, as
appropriate; and
(3) The owner has (for 24 CFR part 883 projects, the owner and the
Agency have) demonstrated to the satisfaction of HUD that:
(i) For the period of vacancy, the project is not providing the
owner with revenues at least equal to project expenses (exclusive of
depreciation), and the amount of payments requested is not more than the
portion of the deficiency attributable to the vacant unit, and
(ii) The project can achieve financial soundness within a reasonable
time.
(e) Prohibition of double compensation for vacancies. The owner is
not entitled to vacancy payments for vacant units to the extent he can
collect for the vacancy from other sources (such as security deposits,
payments under Sec. 880.608(f), and governmental payments under other
programs).
[44 FR 59410, Oct. 15, 1979, as amended at 61 FR 13591, Mar. 27, 1996]
Sec. 880.612 Reviews during management period.
(a) After the effective date of the Contract, the contract
administrator will inspect the project and review its operation at least
annually to determine whether the owner is in compliance with the
Contract and the assisted units are in decent, safe and sanitary
condition.
(b) In addition:
(1)(i) For this part 880 and 24 CFR part 881 private-owner/PHA
projects, HUD will review the PHA's administration of the Contract at
least annually to determine whether the PHA is in compliance with the
ACC; and
(ii) For 24 CFR part 883 projects, HUD will periodically review the
Agency's administration of the Contract to determine whether it is in
compliance with the Contract.
(2) HUD may independently inspect project operations and units at
any time.
(c) Equal Opportunity reviews may be conducted by HUD at any time.
[44 FR 59410, Oct. 15, 1979, as amended at 61 FR 13591, Mar. 27, 1996]
[[Page 67]]
Sec. 880.612a Preference for occupancy by elderly families.
(a) Election of preference for occupancy by elderly families--(1)
Election by owners of eligible projects. (i) An owner of a project
assisted under this part (including a partially assisted project) that
was originally designed primarily for occupancy by elderly families (an
``eligible project'') may, at any time, elect to give preference to
elderly families in selecting tenants for assisted, vacant units in the
project, subject to the requirements of this section.
(ii) For purposes of this section, a project eligible for the
preference provided by this section, and for which the owner makes an
election to give preference in occupancy to elderly families is referred
to as an ``elderly project.'' ``Elderly families'' refers to families
whose heads of household, their spouses or sole members are 62 years or
older.
(iii) An owner who elects to provide a preference to elderly
families in accordance with this section is required to notify families
on the waiting list who are not elderly that the election has been made
and how the election may affect them if:
(A) The percentage of disabled families currently residing in the
project who are neither elderly nor near-elderly (hereafter,
collectively referred to as ``non-elderly disabled families'') is equal
to or exceeds the minimum required percentage of units established for
the elderly project in accordance with paragraph (c)(1) of this section,
and therefore non-elderly families on the waiting list (including non-
elderly disabled families) may be passed over for covered section 8
units; or
(B) The project, after making the calculation set forth in paragraph
(c)(1) of this section, will have no units set aside for non-elderly
disabled families.
(iv) An owner who elects to give a preference for elderly families
in accordance with this section shall not remove an applicant from the
project's waiting list on the basis of having made the election.
(2) HUD approval of election not required. (i) An owner is not
required to solicit or obtain the approval of HUD before exercising the
election of preference for occupancy provided in paragraph (a)(1) of
this section. The owner, however, if challenged on the issue of
eligibility of the project for the election provided in paragraph (a)(1)
of this section must be able to support the project's eligibility
through the production of all relevant documentation in the possession
of the owner that pertains to the original design of the project.
(ii) The Department reserves the right at any time to review and
make determinations regarding the accuracy of the identification of the
project as an elderly project. The Department can make such
determinations as a result of ongoing monitoring activities, or the
conduct of complaint investigations under the Fair Housing Act (42
U.S.C. 3601 through 3619), or compliance reviews and complaint
investigations under section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794) and other applicable statutes.
(b) Determining projects eligible for preference for occupancy by
elderly families--(1) Evidence supporting project eligibility. Evidence
that a project assisted under this part (or portion of a project) was
originally designed primarily for occupancy by elderly families, and is
therefore eligible for the election of occupancy preference provided by
this section, shall consist of at least one item from the sources
(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or
at least two items from the sources (``secondary'' sources) listed in
paragraph (b)(1)(ii) of this section:
(i) Primary sources. Identification of the project (or portion of a
project) as serving elderly (seniors) families in at least one primary
source such as: The application in response to the notice of funding
availability; the terms of the notice of funding availability under
which the application was solicited; the regulatory agreement; the loan
commitment; the bid invitation; the owner's management plan, or any
underwriting or financial document collected at or before loan closing;
or
(ii) Secondary sources. Two or more sources of evidence such as:
lease records from the earliest two years of occupancy for which records
are available showing that occupancy has been restricted primarily to
households
[[Page 68]]
where the head, spouse or sole member is 62 years of age or older;
evidence that services for elderly persons have been provided, such as
services funded by the Older Americans Act, transportation to senior
citizen centers, or programs coordinated with the Area Agency on Aging;
project unit mix with more than fifty percent of efficiency and one-
bedroom units [a secondary source particularly relevant to
distinguishing elderly projects under the previous section 3(b)
definition (in which disabled families were included in the definition
of ``elderly families'') from non-elderly projects and which in
combination with other factors (such as the number of accessible units)
may be useful in distinguishing projects for seniors from those serving
the broader definition of ``elderly families'' which includes disabled
families]; or any other relevant type of historical data, unless clearly
contradicted by other comparable evidence.
(2) Sources in conflict. If a primary source establishes a design
contrary to that established by the primary source upon which the owner
would base support that the project is an eligible project (as defined
in this section), the owner cannot make the election of preferences for
elderly families as provided by this section based upon primary sources
alone. In any case where primary sources do not provide clear evidence
of original design of the project for occupancy primarily by elderly
families, including those cases where primary sources conflict,
secondary sources may be used to establish the use for which the project
was originally designed.
(c) Reservation of units in elderly projects for non-elderly
disabled families. The owner of an elderly project is required to
reserve, at a minimum, the number of units specified in paragraph (c)(1)
of this section for occupancy by non-elderly disabled families.
(1) Minimum number of units to be reserved for non-elderly disabled
families. The number of units in an elderly project required to be
reserved for occupancy by non-elderly disabled families, shall be, at a
minimum, the lesser of:
(i) The number of units equivalent to the higher of--
(A) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families on October
28, 1992; and
(B) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families upon January
1, 1992; or
(ii) 10 percent of the number of units assisted under this part in
the eligible project.
(2) Option to reserve greater number of units for non-elderly
disabled families. The owner, at the owner's option, and at any time,
may reserve a greater number of units for non-elderly disabled families
than that provided for in paragraph (c)(1) of this section. The option
to provide a greater number of units to non-elderly disabled families
will not obligate the owner to always provide that greater number to
non-elderly disabled families. The number of units required to be
provided to non-elderly disabled families at any time in an elderly
project is that number determined under paragraph (c)(1) of this
section.
(d) Secondary preferences. An owner of an elderly project also may
elect to establish secondary preferences in accordance with the
provisions of paragraph (d) of this section.
(1) Preference for near-elderly disabled families in units reserved
for elderly families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of elderly families who have applied for occupancy
to fill all the vacant units in the elderly project reserved for elderly
families (that is, all units except those reserved for the non-elderly
disabled families as provided in paragraph (c) of this section), the
owner may give preference for occupancy of such units to disabled
families who are near-elderly families.
(2) Preference for near-elderly disabled families in units reserved
for non-elderly disabled families. If the owner of an elderly project
determines, in accordance with paragraph (f) of this section, that there
are an insufficient number of non-elderly disabled families to fill all
the vacant units in the elderly project reserved for non-elderly
disabled families as provided in paragraph (c) of this section, the
owner may give preference
[[Page 69]]
for occupancy of these units to disabled families who are near-elderly
families.
(e) Availability of units to families without regard to preference.
An owner shall make vacant units in an elderly project generally
available to otherwise eligible families who apply for housing, without
regard to the preferences and reservation of units provided in this
section if either:
(1) The owner has adopted the secondary preferences and there are an
insufficient number of families for whom elderly preference, reserve
preference, and secondary preference has been given, to fill all the
vacant units; or
(2) The owner has not adopted the secondary preferences and there
are an insufficient number of families for whom elderly preference, and
reserve preference has been given to fill all the vacant units.
(f) Determination of insufficient number of applicants qualifying
for preference. To make a determination that there are an insufficient
number of applicants who qualify for the preferences, including
secondary preferences, provided by this section, the owner must:
(1) Conduct marketing in accordance with Sec. 880.601(a) to attract
applicants qualifying for the preferences and reservation of units set
forth in this section; and
(2) Make a good faith effort to lease to applicants who qualify for
the preferences provided in this section, including taking all feasible
actions to fill vacancies by renting to such families.
(g) Prohibition of evictions. An owner may not evict a tenant
without good cause, or require that a tenant vacate a unit, in whole or
in part because of any reservation or preference provided in this
section, or because of any action taken by the Secretary pursuant to
subtitle D (sections 651 through 661) of title VI of the Housing and
Community Development Act of 1992 (42 U.S.C. 13611 through 13620).
[59 FR 65850, Dec. 21, 1994, as amended at 61 FR 9046, Mar. 6, 1996; 65
FR 16722, Mar. 29, 2000]
Sec. 880.613 Emergency transfers for victims of domestic violence,
dating violence, sexual assault, and stalking.
(a) Covered housing providers must develop and implement an
emergency transfer plan that meets the requirements in 24 CFR 5.2005(e).
(b) In order to facilitate emergency transfers for victims of
domestic violence, dating violence, sexual assault, and stalking,
covered housing providers have discretion to adopt new, and modify any
existing, admission preferences or transfer waitlist priorities.
(c) In addition to following requirements in 24 CFR 5.2005(e), when
a safe unit is not immediately available for a victim of domestic
violence, dating violence, sexual assault, or stalking who qualifies for
an emergency transfer, covered housing providers must:
(1) Review the covered housing provider's existing inventory of
units and determine when the next vacant unit may be available; and
(2) Provide a listing of nearby HUD subsidized rental properties,
with or without preference for persons of domestic violence, dating
violence, sexual assault, or stalking, and contact information for the
local HUD field office.
(d) Each year, covered housing providers must submit to HUD data on
all emergency transfers requested under 24 CFR 5.2005(e), including data
on the outcomes of such requests.
[81 FR 80811, Nov. 16, 2016]
PART 881_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR
SUBSTANTIAL REHABILITATION--Table of Contents
Subpart A_Summary and Applicability
Sec.
881.101 General.
881.104 Applicability of part 881.
881.105 Applicability to proposals and projects under 24 CFR part 811.
Subpart B_Definitions and Other Requirements
881.201 Definitions.
881.205 Limitation on distributions.
881.207 Property standards.
881.208 Financing.
[[Page 70]]
881.211 Audit.
881.212 Broadband infrastructure.
Subparts C-D [Reserved]
Subpart E_Housing Assistance Payments Contract
881.501 The contract.
881.502 Term of contract.
881.503 Cross-reference.
Subpart F_Management
881.601 Cross-reference.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 13611-
13619.
Source: 45 FR 7085, Jan. 31, 1980, unless otherwise noted.
Subpart A_Summary and Applicability
Sec. 881.101 General.
(a) The purpose of the Section 8 program is to provide low-income
families with decent, safe and sanitary rental housing through the use
of a system of housing assistance payments. This part contains the
policies and procedures applicable to the Section 8 substantial
rehabilitation program. The assistance may be provided to public housing
agency owners or to private owners either directly from HUD or through
public housing agencies.
(b) This part does not apply to projects developed under other
Section 8 program regulations, including 24 CFR parts 880, 882, 883,
884, and 885, except to the extent specifically stated in those parts.
[61 FR 13591, Mar. 27, 1996]
Sec. 881.104 Applicability of part 881.
(a) Part 881, in effect as of February 20, 1980, applies to all
proposals for which a notification of selection was not issued before
the February 20, 1980 effective date of part 881. (See 24 CFR part 881,
revised as of April 1, 1980). Where a notification of selection was
issued for a proposal before the February 20, 1980, effective date, part
881 in effect as of February 20, 1980 applies if the owner notified HUD
within 60 calendar days that the owner wished the provisions of part
881, effective February 20, 1980, to apply and promptly brought the
proposal into conformance.
(b) Subparts E (Housing Assistance Payments Contract) and F
(Management) of this part apply to all projects for which an Agreement
was not executed before the February 20, 1980, effective date of part
881. Where an Agreement was so executed:
(1) The owner and HUD may agree to make the revised subpart E of
this part applicable and to execute appropriate amendments to the
Agreement and/or Contract.
(2) The owner and HUD may agree to make the revised subpart F of
this part applicable (with or without the limitation on distributions)
and to execute appropriate amendments to the Agreement and/or Contract.
(c) Section 881.607 (Termination of tenancy and modification of
leases) applies to all families.
(d) Notwithstanding the provisions of paragraph (b) of this section,
the provisions of 24 CFR part 5 apply to all projects, regardless of
when an Agreement was executed.
[61 FR 13591, Mar. 27, 1996, as amended at 65 FR 16722, Mar. 29, 2000]
Sec. 881.105 Applicability to proposals and projects under 24 CFR part 811.
Where proposals and projects are financed with tax-exempt
obligations under 24 CFR part 811, the provisions of part 811 will be
complied with in addition to all requirements of this part. In the event
of any conflict between this part and part 811, part 811 will control.
Subpart B_Definitions and Other Requirements
Sec. 881.201 Definitions.
Agreement. (Agreement to Enter into Housing Assistance Payments
Contract) The Agreement between the owner and the contract administrator
which provides that, upon satisfactory completion of the project in
accordance with the HUD-approved final proposal, the administrator will
enter into the Contract with the owner.
Annual Contributions Contract (ACC). As defined in part 5 of this
title.
Annual income. As defined in part 5 of this title.
Assisted unit. A dwelling unit eligible for assistance under a
Contract.
[[Page 71]]
Contract. (Housing Assistance Payments Contract) The Contract
entered into by the owner and the contract administrator upon
satisfactory completion of the project, which sets forth the rights and
duties of the parties with respect to the project and the payments under
the Contract.
Contract Administrator. The entity which enters into the Contract
with the owner and is responsible for monitoring performance by the
owner. The contract administrator is a PHA in the case of private-owner/
PHA projects, and HUD is private-owner/HUD and PHA-owner/HUD projects.
Contract rent. The total amount of rent specified in the contract as
payable to the owner for a unit.
Decent, safe, and sanitary. Housing is decent, safe, and sanitary if
it meets the physical condition requirements in 24 CFR part 5, subpart
G.
Elderly family. As defined in part 5 of this title.
Fair Market Rent (FMR). As defined in part 5 of this title.
Family. As defined in part 5 of this title.
Final proposal. The detailed description of a proposed project to be
assisted under this part, which an owner submits after selection of the
preliminary proposal, except where a preliminary proposal is not
required under Sec. 881.303(c). The final proposal becomes an exhibit to
the Agreement and is the standard by which HUD judges acceptable
construction of the project.
Housing assistance payment. The payment made by the contract
administrator to the owner of an assisted unit as provided in the
contract. Where the unit is leased to an eligible family, the payment is
the difference between the contract rent and the tenant rent. An
additional payment is made to the family when the utility allowance is
greater than the total tenant payment. A housing assistance payment,
known as a ``vacancy payment''. may be made to the owner when an
assisted unit is vacant, in accordance with the terms of the contract.
HUD. Department of Housing and Urban Development.
Independent Public Accountant. A Certified Public Accountant or a
licensed or registered public accountant, having no business
relationship with the owner except for the performance of audit, systems
work and tax preparation. If not certified, the Independent Public
Accountant must have been licensed or registered by a regulatory
authority of a State or other political subdivision of the United States
on or before December 31, 1970. In States that do not regulate the use
of the title ``public accountant,'' only Certified Public Accountants
may be used.
Low income family. As defined in part 5 of this title.
NOFA. As defined in part 5 of this title.
Owner. Any private person or entity (including a cooperative) or a
public entity which qualifies as a PHA, having the legal right to lease
or sublease substantially rehabilitated dwelling units assisted under
this part. The term owner also includes the person or entity submitting
a proposal under this part.
Partially-assisted Project. A project for non-elderly families under
this part which includes more than 50 units of which 20 percent or fewer
are assisted.
PHA-Owner/HUD Project. A project under this part which is owned by a
PHA. For this type of project, the Agreement and the Contract are
entered into by the PHA, as owner, and HUD, as contract administrator.
Private-Owner/HUD Project. A project under this part which is owned
by a private owner. For this type of project, the Agreement and Contract
are entered into by the private owner, as owner, and HUD, as contract
administrator.
Private-Owner/PHA Project. A project under this part which is owned
by a private owner. For this type of project, the Agreement and Contract
are entered into by the private owner, as owner, and the PHA, as
contract administrator, pursuant to an ACC between the PHA and HUD. The
term also covers the situation where the ACC is with one PHA and the
owner is another PHA.
Project Account. A specifically identified and segregated account
for each project which is established in accordance with Sec. 881.503(b)
out of the amounts by which the maximum annual commitment exceeds the
amount
[[Page 72]]
actually paid out under the Contract or ACC, as applicable, each year.
Public Housing Agency (PHA). As defined in part 5 of this title.
Rent. In the case of an assisted unit in a cooperative project, rent
means the carrying charges payable to the cooperative with respect to
occupancy of the unit.
Replacement cost. The sum of the ``as is'' value before
rehabilitation of the property as determined by HUD and the estimated
cost of rehabilitation, including carrying and finance charges.
Secretary. The Secretary of Housing and Urban Development (or
designee).
Single Room Occupancy (SRO) Housing. A unit for occupancy by a
single eligible individual capable of independent living, which does not
contain food preparation and/or sanitary facilities and is located
within a multifamily structure consisting of more than 12 units.
Small project. A project for non-elderly families under this part
which includes a total of 50 or fewer (assisted and unassisted) units.
Substantial rehabilitation. (a) The improvement of a property to
decent, safe and sanitary condition in accordance with the standards of
this part from a condition below those standards. Substantial
rehabilitation may vary in degree from gutting and extensive
reconstruction to the cure of substantial accumulation of deferred
maintenance. Cosmetic improvements alone do not qualify as substantial
rehabilitation under this definition.
(b) Substantial rehabilitation may also include renovation,
alteration or remodeling for the conversion or adaptation of
structurally sound property to the design and condition required for use
under this part or the repair or replacement of major building systems
or components in danger of failure.
Tenant rent. As defined in part 5 of this title.
Total tenant payment. As defined in part 5 of this title.
Utility allowance. As defined in part 5 of this title.
Utility reimbursement. As defined in part 5 of this title.
Vacancy payment. The housing assistance payment made to the owner by
the contract administrator for a vacant assisted unit if certain
conditions are fulfilled as provided in the Contract. The amount of the
vacancy payment varies with the length of the vacancy period and is less
after the first 60 days of any vacancy.
Very low income family. As defined in part 5 of this title.
[45 FR 7085, Jan. 31, 1980, as amended at 48 FR 12705, Mar. 28, 1983; 49
FR 17449, Apr. 24, 1984; 49 FR 19944, May 10, 1984; 61 FR 5212, Feb. 9,
1996; 61 FR 13591, Mar. 27, 1996; 63 FR 46578, Sept. 1, 1998; 65 FR
16722, Mar. 29, 2000]
Sec. 881.205 Limitation on distributions.
(a) Non-profit owners are not entitled to distributions of project
funds.
(b) For the life of the Contract, project funds may only be
distributed to profit-motivated owners at the end of each fiscal year of
project operation following the effective date of the Contract after all
project expenses have been paid, or funds have been set aside for
payment, and all reserve requirements have been met. The first year's
distribution may not be made until cost certification, where applicable,
is completed. Distributions may not exceed the following maximum
returns:
(1) For projects for elderly families, the first year's distribution
will be limited to 6 percent on equity. The Assistant Secretary may
provide for increases in subsequent years' distributions on an annual or
other basis so that the permitted return reflects a 6 percent return on
the value in subsequent years, as determined by HUD, of the approved
initial equity. Any such adjustment will be made by Notice in the
Federal Register.
(2) For projects for non-elderly families, the first year's
distribution will be limited to 10 percent on equity. The Assistant
Secretary may provide for increases in subsequent years' distributions
on an annual or other basis so that the permitted return reflects a 10
percent return on the value in subsequent years, as determined by HUD,
of the approved initial equity. Any such adjustment will be made by
Notice in the Federal Register.
(c) For the purpose of determining the allowable distribution, an
owner's equity investment in a project is
[[Page 73]]
deemed to be 10 percent of the replacement cost of the part of the
project attributable to dwelling use accepted by HUD at cost
certification (see Sec. 881.405), unless the owner justifies a higher
equity contribution by cost certification documentation in accordance
with HUD mortgage insurance procedures.
(d) Any short-fall in return may be made up from surplus project
funds in future years.
(e) If HUD determines at any time that project funds are more than
the amount needed for project operations, reserve requirements and
permitted distribution, HUD may require the excess to be placed in an
account to be used to reduce housing assistance payments or for other
project purposes. Upon termination of the Contract, any excess funds
must be remitted to HUD.
(f) Owners of small projects or partially-assisted projects are
exempt from the limitation on distributions contained in paragraphs (b)
through (d) of this section.
(g) In the case of HUD-insured projects, the provisions of this
section will apply instead of the otherwise applicable mortgage
insurance program provisions.
(h) HUD may permit increased distributions of surplus cash, in
excess of the amounts otherwise permitted, to profit-motivated owners
who participate in a HUD-approved initiative or program to preserve
below-market housing stock. The increased distributions will be limited
to a maximum amount based on market rents and calculated according to
HUD instructions. Funds that the owner is authorized to retain under
section 236(g)(2) of the National Housing Act are not considered
distributions to the owner.
(i) Any State or local law or regulation that restricts
distributions to an amount lower than permitted by this section or
permitted by the Commissioner under this paragraph (i) is preempted to
the extent provided by section 524(f) of the Multifamily Assisted
Housing Reform and Affordability Act of 1997.
[45 FR 7085, Jan. 31, 1980, as amended at 65 FR 61074, Oct. 13, 2000]
Sec. 881.207 Property standards.
Projects must comply with:
(a) [Reserved]
(b) In the case of congregate or single room occupant housing, the
appropriate HUD guidelines and standards;
(c) HUD requirements pursuant to section 209 of the Housing and
Community Development Act of 1974 for projects for the elderly or
handicapped;
(d) HUD requirements pertaining to noise abatement and control;
(e) 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. 4851-4856), and implementing regulations at part 35, subparts A,
B, H, and R of this title; and
(f) Applicable State and local laws, codes, ordinances and
regulations.
(g) Smoke detectors--(1) Performance requirement. After October 30,
1992, each dwelling unit must include at least one battery-operated or
hard-wired smoke detector, in proper working condition, on each level of
the unit. If the unit is occupied by hearing-impaired persons, smoke
detectors must have an alarm system, designed for hearing-impaired
persons, in each bedroom occupied by a hearing-impaired person.
(2) Acceptability criteria. The smoke detector must be located, to
the extent practicable, in a hallway adjacent to a bedroom, unless the
unit is occupied by a hearing-impaired person, in which case each
bedroom occupied by a hearing-impaired person must have an alarm system
connected to the smoke detector installed in the hallway.
[45 FR 7085, Jan. 31, 1980, as amended at 52 FR 1893, Jan. 15, 1987; 57
FR 33851, July 30, 1992; 63 FR 46578, Sept. 1, 1998; 64 FR 50227, Sept.
15, 1999]
Sec. 881.208 Financing.
(a) Types of financing. Any type of construction financing and long-
term financing may be used, including:
(1) Conventional loans from commercial banks, savings banks, savings
and loan associations, pension funds, insurance companies or other
financial institutions;
(2) Mortgage insurance programs under the National Housing Act; and
(3) Financing by tax-exmpt bonds or other obligations.
[[Page 74]]
(b) HUD approval. HUD must approve the terms and conditions of the
financing to determine consistency with these regulations and to assure
they do not purport to pledge or give greater rights or funds to any
party than are provided under the Agreement, Contract, and/or ACC. Where
the project is financed with tax-exempt obligations, the terms and
conditions will be approved in accordance with the following:
(1) An issuer of obligations that are tax-exempt under any provision
of Federal law or regulation, the proceeds of the sale of which are to
be used to purchase GNMA mortgage-backed securities issued by the
mortgagee of the Section 8 project, will be subject to 24 CFR part 811,
subpart B.
(2) Issuers of obligations that are tax-exempt under Section 11(b)
of the U.S. Housing Act of 1937 will be subject to 24 CFR part 811,
subpart A if paragraph (b)(1) of this section is not applicable.
(3) Issuers of obligations that are tax-exempt under any provision
of Federal law or regulation other than Section 11(b) of the U.S.
Housing Act of 1937 will be subject to 24 CFR 811, subpart A if
paragraph (b)(1) of this section is not applicable, except that such
issuers that are State Agencies qualified under 24 CFR part 883 are not
subject to 24 CFR part 811, subpart A and are subject solely to the
requirements of 24 CFR part 883 with regard to the approval of tax-
exempt financing.
(c) Pledge of contracts. An owner may pledge, or offer as security
for any loan or obligation, an Agreement, Contract or ACC entered into
pursuant to this part: Provided, however, That such financing is in
connection with a project constructed pursuant to this part and approved
by HUD. Any pledge of the Agreement, Contract, or ACC, or payments
thereunder, will be limited to the amounts payable under the Contract or
ACC in accordance with its terms. If the pledge or other document
provides that all payments will be paid directly to the mortgagee or the
trustee for bondholders, the mortgagee or trustee will make all payments
or deposits required under the mortgage, trust indenture of HUD
regulations and remit any excess to the owner.
(d) Foreclosure and other transfers. In the event of foreclosure,
assignment or sale approved by HUD in lieu of foreclosure, or other
assignment or sale approved by HUD:
(1) The Agreement, the Contract and the ACC, if applicable, will
continue in effect, and
(2) Housing assistance payments will continue in accordance with the
terms of the Contract.
(e) Financing of manufactured home parks. In the case of a
substantially rehabilitated manufactured home park, the principal amount
of any mortgage attributable to the rental spaces in the park may not
exceed an amount per space determined in accordance with Sec. 207.33(b)
of this Title.
[45 FR 7085, Jan. 31, 1980, as amended at 45 FR 62797, Sept. 22, 1980;
48 FR 12706, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984]
Sec. 881.211 Audit.
(a) Where a non-Federal entity (as defined in 2 CFR 200.69) is the
eligible owner of a project or a contract administrator under
Sec. 881.505 receiving financial assistance under this part, the audit
requirements in 2 CFR part 200, subpart F, shall apply.
[80 FR 75941, Dec. 7, 2015]
Sec. 881.212 Broadband infrastructure.
Any new construction or substantial rehabilitation, as substantial
rehabilitation is defined by 24 CFR 5.100, of a building with more than
4 rental units and that is subject to a Housing Assistance Payments
contract executed or renewed after January 19, 2017 must include
installation of broadband infrastructure, as this term is also defined
in 24 CFR 5.100, except where the owner determines and documents the
determination that:
(a) The location of the new construction or 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
[[Page 75]]
(c) The structure of the housing to be substantially rehabilitated
makes installation of broadband infrastructure infeasible.
[81 FR 92637, Dec. 20, 2016]
Subparts C-D [Reserved]
Subpart E_Housing Assistance Payments Contract
Sec. 881.501 The contract.
(a) Contract. The Housing Assistance Payments Contract sets forth
rights and duties of the owner and the contract administrator with
respect to the project and the housing assistance payments. The owner
and contract administrator execute the Contract in the form prescribed
by HUD upon satisfactory completion of the project.
(b) [Reserved]
(c) Housing assistance payments to owners under the contract. The
housing assistance payments made under the Contract are:
(1) Payments to the owner to assist eligible families leasing
assisted units, and
(2) Payments to the owner for vacant assisted units (``vacancy
payments'') if the conditions specified in Sec. 881.611 are satisfied.
The housing assistance payments are made monthly by the contract
administrator upon proper requisition by the owner, except payments for
vacancies of more than 60 days, which are made semi-annually by the
contract administrator upon requisition by the owner.
(d) Amount of housing assistance payments to owner. (1) The amount
of the housing assistance payment made to the owner of a unit being
leased by an eligible family is the difference between the contract rent
for the unit and the tenant rent payable by the family.
(2) A housing assistance payment will be made to the owner for a
vacant assisted unit in an amount equal to 80 percent of the contract
rent for the first 60 days of vacancy, subject to the conditions in
Sec. 881.611. If the owner collects any tenant rent or other amount for
this period which, when added to this vacancy payment, exceeds the
contract rent, the excess must be repaid as HUD directs.
(3) For a vacancy that exceeds 60 days, a housing assistance payment
for the vacant unit will be made, subject to the conditions in
Sec. 881.611, in an amount equal to the principal and interest payments
required to amortize that portion of the debt attributable to the vacant
unit for up to 12 additional months.
(e) Payment of utility reimbursement. Where applicable, the Utility
Reimbursement will be paid to the Family as an additional Housing
Assistance Payment. The Contract will provide that the Owner will make
this payment on behalf of the contract administrator. Funds for this
purpose will be paid to the Owner in trust solely for the purpose of
making the additional payment. If the Family and the utility company
consent, the Owner may pay the Utility Reimbursement jointly to the
Family and the utility company or directly to the utility company.
[45 FR 7085, Jan. 31, 1980, as amended at 49 FR 19944, May 10, 1984; 61
FR 13591, Mar. 27, 1996]
Sec. 881.502 Term of contract.
(a) Term (except for Manufactured Home Parks). The term of the
Contract will be as follows:
(1) Where the estimated cost of the rehabilitation is less than 25
percent of the estimated value of the project after completion of the
rehabilitation, the contract will be for a term of 20 years for any
dwelling unit.
(2) Where the estimated cost of rehabilitation is 25 percent or more
of the estimated value of the project after completion of
rehabilitation, the contract may be for a term which:
(i) Will cover the longest term, but not less than 20 years, of a
single credit instrument covering:
(A) The cost of rehabilitation, or
(B) The existing indebtedness, or
(C) The cost of rehabilitation and the refinancing of the existing
indebtedness, or
(D) The cost of rehabilitation and the acquisition of the property;
and
(ii) For assisted units in a project financed with the aid of a loan
insured
[[Page 76]]
or co-insured by the Federal government or a loan made, guaranteed or
intended for purchase by the Federal government, will be 20 years for
any dwelling unit; or
(iii) For units in a project financed other than as described in
paragraph (a)(2)(ii) of this section will not exceed 30 years for any
dwelling unit except that this limit will be 40 years if (A) the project
is owned or financed by a loan or loan guarantee from a state or local
agency, (B) the project is intended for occupancy by non-elderly
families and (C) the project is located in an area designated by HUD as
one requiring special financing assistance.
(b) Term for manufactured home parks. For manufactured home units or
spaces in substantially rehabilitated manufactured home parks, the term
of the Contract will be 20 years.
(c) Staged projects. If the project is completed in stages, the term
of the Contract must relate separately to the units in each stage. The
total Contract term for the units in all stages, beginning with the
effective date of the Contract for the first stage, may not exceed the
overall maximum term allowable for any one unit under this section, plus
two years.
[48 FR 12707, Mar. 28, 1983, and 49 FR 17449, Apr. 24, 1984]
Sec. 881.503 Cross-reference.
All of the provisions of Secs. 880.503, 880.504, 880.505, 880.506,
880.507, and 880.508 of this chapter apply to projects assisted under
this part, subject to the requirements of Sec. 881.104.
[61 FR 13592, Mar. 27, 1996]
Subpart F_Management
Sec. 881.601 Cross-reference.
All of the provisions of part 880, subpart F, of this chapter apply
to projects assisted under this part, subject to the requirements of
Sec. 881.104.
[61 FR 13592, Mar. 27, 1996]
PART 882_SECTION 8 MODERATE REHABILITATION PROGRAMS--Table of Contents
Subpart A_Applicability, Scope and Basic Policies
Sec.
882.101 Applicability.
882.102 Definitions.
882.103-882.122 [Reserved]
882.123 Conversion of Section 23 Units to Section 8 and Section 23
monitoring.
882.124 Audit.
Subparts B-C [Reserved]
Subpart D_Special Procedures for Moderate Rehabilitation_Basic Policies
882.401 Eligible properties.
882.402 [Reserved]
882.403 ACC, housing assistance payments contract, and lease.
882.404 Physical condition standards; physical inspection requirements.
882.405 Financing.
882.406 [Reserved]
882.407 Other federal requirements.
882.408 Initial contract rents.
882.409 Contract rents at end of rehabilitation loan term.
882.410 Rent adjustments.
882.411 Payments for vacancies.
882.412 Subcontracting of owner services.
882.413 Responsibility of the Family.
882.414 Security and utility deposits.
Subpart E_Special Procedures for Moderate Rehabilitation_Program
Development and Operation
882.501-882.506 [Reserved]
882.507 Completion of rehabilitation.
882.508 [Reserved]
882.509 Overcrowded and under occupied units.
882.510 Adjustment of utility allowance.
882.511 Lease and termination of tenancy.
882.512 Reduction of number of units covered by contract.
882.513 Public notice to low-income families; waiting list.
882.514 Family participation.
882.515 Reexamination of family income and composition.
882.516 Maintenance, operation and inspections.
882.517 HUD review of contract compliance.
882.518 Denial of admission and termination of assistance for criminals
and alcohol abusers.
[[Page 77]]
Subparts F-G [Reserved]
Subpart H_Section 8 Moderate Rehabilitation Single Room Occupancy
Program for Homeless Individuals
882.801 Purpose.
882.802 Definitions.
882.803 Project eligibility and other requirements.
882.804 Other Federal requirements.
882.805 HA application process, ACC execution, and pre-rehabilitation
activities.
882.806 Agreement to enter into housing assistance payments contract.
882.807 Housing assistance payments contract.
882.808 Management.
882.809 Waivers.
882.810 Displacement, relocation, and acquisition.
Authority: 42 U.S.C. 1437f and 3535(d).
Source: 43 FR 61246, Dec. 29, 1978, unless otherwise noted.
Subpart A_Applicability, Scope and Basic Policies
Sec. 882.101 Applicability.
(a) The provisions of this part apply to the Section 8 Moderate
Rehabilitation program.
(b) This part states the policies and procedures to be used by a PHA
in administering a Section 8 Moderate Rehabilitation program. The
purpose of this program is to upgrade substandard rental housing and to
provide rental subsidies for low-income families.
(c) Subpart H of this part only applies to the Section 8 Moderate
Rehabilitation Single Room Occupancy Program for Homeless Individuals.
[63 FR 23853, Apr. 30, 1998]
Sec. 882.102 Definitions.
(a) Terms found elsewhere. The following terms are defined in part
5, subpart A of this title: 1937 Act, covered person, drug, drug-related
criminal activity, federally assisted housing, guest, household, HUD,
MSA, other person under the tenant's control, public housing agency
(PHA), Section 8, and violent criminal activity.
(b) In addition, the following definitions apply to this part:
ACC reserve account (or ``project account''). The account
established and maintained in accordance with Sec. 882.403(b).
Agreement to enter into Housing Assistance Payments Contract
(``Agreement''). A written agreement between the Owner and the PHA that,
upon satisfactory completion of the rehabilitation in accordance with
requirements specified in the Agreement, the PHA will enter into a
Housing Assistance Payments Contract with the Owner.
Annual Contributions Contract (``ACC''). The written agreement
between HUD and a PHA to provide annual contributions to the PHA to
cover housing assistance payments and other expenses pursuant to the
1937 Act.
Assisted lease (or ``lease''). A written agreement between an Owner
and a Family for the leasing of a unit by the Owner to the Family with
housing assistance payments under a Housing Assistance Payments Contract
between the Owner and the PHA.
Congregate housing. Housing for elderly persons or persons with
disabilities that meets the HQS for congregate housing.
Contract. See definition of Housing Assistance Payments Contract.
Contract rent. The total amount of rent specified in the Housing
Assistance Payments Contract as payable to the Owner by the Family and
by the PHA to the Owner on the Family's behalf.
Covered housing provider. For the Section 8 Moderate Rehabilitation
Programs, as provided in subparts A, D, and E of this part, ``covered
housing provider,'' as such term is used in HUD's regulations in 24 CFR
part 5, subpart L (Protection for Victims of Domestic Violence, Dating
Violence, Sexual Assault, or Stalking), refers to the PHA or owner, as
applicable given the responsibilities of the covered housing provider as
set forth in 24 CFR part 5, subpart L. For example, the PHA is the
covered housing provider responsible for providing the notice of
occupancy rights under VAWA and certification form described at 24 CFR
5.2005(a), though the PHA may provide this notice and form to owners,
and charge owners with distributing the notice and form to tenants. In
addition, the owner is the covered housing provider that may choose to
bifurcate
[[Page 78]]
a lease as described at 24 CFR 5.2009(a), while both the PHA and owner
are both responsible for ensuring that an emergency transfer plan is in
place in accordance with 24 CFR 5.2005(e), and the owner is responsible
for implementing the emergency transfer plan when an emergency occurs.
Decent, safe, and sanitary. Housing is decent, safe, and sanitary if
it meets the physical condition standards in 24 CFR part 5, subpart G.
Gross rent. The total monthly cost of housing an eligible Family,
which is the sum of the Contract Rent and any utility allowance.
Group home. A dwelling unit that is licensed by a State as a group
home for the exclusive residential use of two to twelve persons who are
elderly or persons with disabilities (including any live-in aide).
Housing Assistance Payment. The payment made by the PHA to the Owner
of a unit under lease by an eligible Family, as provided under the
Contract. The payment is the difference between the Contract Rent and
the tenant rent. An additional payment (the ``utility reimbursement'')
is made by the PHA when the utility allowance is greater than the total
tenant payment.
Housing Assistance Payments Contract (``Contract''). A written
contract between a PHA and an Owner for the purpose of providing housing
assistance payments to the Owner on behalf of an eligible Family.
Moderate rehabilitation. Rehabilitation involving a minimum
expenditure of $1000 for a unit, including its prorated share of work to
be accomplished on common areas or systems, to:
(1) Upgrade to decent, safe and sanitary condition to comply with
the Housing Quality Standards or other standards approved by HUD, from a
condition below these standards (improvements being of a modest nature
and other than routine maintenance); or
(2) Repair or replace major building systems or components in danger
of failure.
Owner. Any person or entity, including a cooperative, having the
legal right to lease or sublease existing housing.
Single room occupancy housing (SRO). A unit that contains no
sanitary facilities or food preparation facilities, or contains either,
but not both, types of facilities.
Statement of Family responsibility. An agreement in the form
prescribed by HUD, between the PHA and a Family to be assisted under the
Program, stating the obligations and responsibilities of the Family.
[63 FR 23853, Apr. 30, 1998, as amended at 63 FR 46578, Sept. 1, 1998;
66 FR 28797, May 24, 2001; 81 FR 80812, Nov. 16, 2016]
Secs. 882.103-882.122 [Reserved]
Sec. 882.123 Conversion of Section 23 Units to Section 8 and
Section 23 monitoring.
(a)-(d) [Reserved]
(e) Section 23 policies for units planned for conversion on or
before September 30, 1981. (1) PHAs shall not enter into new leases with
owners for additional units nor shall they renew or extend leases with
owners except consistent with the conversion schedules.
(2) Subject to the rights of families under existing leases, PHAs
may continue to lease units to families under Section 23 only on a
month-to-month basis.
(3) PHAs shall conduct annual inspections of all units to determine
whether the units are decent, safe and sanitary.
(4) PHAs shall certify with their requisitions to HUD for payments
under the ACC that the units are decent, safe and sanitary, or the PHA
shall furnish HUD with a report of the nature of the deficiencies of the
units which are not so certified. If an owner's units are not decent,
safe and sanitary.
(i) Where the owner is responsible under the terms of the lease for
correcting the deficiencies, the PHA shall send the owner written
notification requiring the owner to take specified corrective action
within a specified time. The notification shall also state that, if the
owner fails to comply, rent payments will be suspended. If the owner
fails to comply with the first notification, he shall be notified by the
PHA of the noncompliance and rent payments shall be suspended
immediately. In the
[[Page 79]]
event of such suspension of rent payments, the PHA shall requisition a
correspondingly lower ACC payment.
(ii) Where the PHA is responsible under the terms of the lease for
correcting the deficiencies, the Field Office shall send written
notification requiring the PHA to take specified corrective action
within a specified time. The notification shall also state that, if the
PHA fails to comply, HUD will make reduced payments to the PHA only in
the amount of the rent due the owner. If the PHA fails to comply with
the first notification, the PHA shall be notified of the noncompliance,
and the PHA shall not receive any fees for performing management
functions until the PHA has complied with the Field Office request and
has corrected the noted deficiencies.
(f) [Reserved]
(g) Section 23 policies for units not planned to be converted. (1)
PHAs shall not enter into new leases with owners for additional units
nor shall they renew or extend leases with owners for more than one
year.
(2) The provisions contained in paragraphs (e) (3) and (4) of this
section shall apply.
(h) Request for rent increases. An owner may submit to the PHA a
request for rent increase because of increases in operating cost, when
the rents to the owner, after adjustments based on provisions in the
lease, are insufficient to provide decent, safe and sanitary housing.
Such a request shall be supported by an audited financial statement, and
the data shall clearly show that failure to obtain additional revenue
will result in deterioriation of units and loss of decent, safe and
sanitary housing for low-income families. The PHA shall inspect the
units to determine whether the units are decent, safe and sanitary.
Where the need for an adjustment under this paragraph is shown:
(1) Subject to available contract authority and prior approval by
the HUD Field Office, the PHA may grant an adjustment to the extent
documented and justified for those items of expenses (excluding debt
service) for which the owner is responsible under the lease.
(2) The amount of the adjustment must be reasonable when compared
with similar items under the Section 8 Existing Housing program.
(3) The adjusted amount for expenses shall not exceed the result of
applying the appropriate Section 8 Existing Housing Annual Adjustment
Factor (24 CFR part 888) most recently published by HUD in the Federal
Register to the appropriate expense base in effect under the lease prior
to this adjustment.
(4) The adjustment shall not be retroactive to pay for costs that
the owner had previously incurred.
(5) The adjustment shall be effective for a period not to exceed one
year.
[44 FR 28276, Nov. 14, 1979, as amended at 60 FR 34694, July 3, 1995]
Sec. 882.124 Audit.
PHAs receiving financial assistance under this part are subject to
audit requirements in 2 CFR part 200, subpart F .
[50 FR 39091, Sept. 27, 1985; 51 FR 30480, Aug. 27, 1986; 80 FR 75941,
Dec. 7, 2015]
Subparts B-C [Reserved]
Subpart D_Special Procedures for Moderate Rehabilitation_Basic Policies
Source: 47 FR 34379, Aug. 9, 1982, unless otherwise noted.
Sec. 882.401 Eligible properties.
(a) Eligible properties. Except as provided in paragraph (b) of this
section, housing suitable for moderate rehabilitation as defined in
Sec. 882.102 is eligible for inclusion under the Moderate Rehabilitation
Program. Existing structures of various types may be appropriate for
this program, including single-family houses, multi-family structures
and group homes.
(b) Ineligible properties. (1) Nursing homes, units within the
grounds of penal, reformatory, medical, mental and similar public or
private institutions, and facilities providing continual psychiatric,
medical or nursing services are not eligible for assistance under the
Moderate Rehabilitation Program.
[[Page 80]]
(2) Housing owned by a State or unit of general local government is
not eligible for assistance under this program.
(3) High rise elevator projects for families with children may not
be utilized unless HUD determines there is no practical alternative.
(HUD may make this determination for a locality's Moderate
Rehabilitation Program in whole or in part and need not review each
building on a case-by-case basis.)
(4) Single room occupancy (SRO) housing may not be utilized unless:
(i) The property is located in an area in which there is a
significant demand for such units as determined by the HUD Field Office;
and
(ii) The PHA and the unit of general local government in which the
property is located approve of such units being utilized for such
purpose.
(5) No Section 8 assistance may be provided with respect to any unit
occupied by an Owner; however, cooperatives will be considered as rental
housing for purposes of the Moderate Rehabilitation Program.
[63 FR 23854, Apr. 30, 1998, as amended at 64 FR 14832, Mar. 29, 1999]
Sec. 882.402 [Reserved]
Sec. 882.403 ACC, housing assistance payments contract, and lease.
(a) Maximum Total ACC Commitments. The maximum total annual
contribution that may be contracted for is the total of the Moderate
Rehabilitation Fair Market Rents for all the units. The fee for the
costs of PHA administration is payable out of the annual contribution.
(b) Project account. (1) A project account will be established and
maintained by HUD as a specifically identified and segregated account
for each project. The account will contain the sum of the amounts by
which the maximum annual commitment exceeds the amount actually paid out
for the project under the ACC each year. Payments will be made from this
account when needed to cover increases in Contract Rents or decreases in
Gross Family Contributions for (i) housing assistance (including
vacancy) payments, (ii) the amount of the fee for PHA costs of
administration, and (iii) other costs specifically approved by the
Secretary.
(2) When a HUD-approved estimate of required payments under the ACC
for a fiscal year exceeds the maximum annual commitment, and would cause
the amount in the project account to be less than 40 percent of the
maximum, HUD will, within a reasonable period of time, take such
additional steps authorized by Section 8(c)(6) of the U.S. Housing Act
of 1937, as may be necessary, to assure that payments under the ACC will
be adequate to cover increases in Contract Rents and decreases in Gross
Family Contributions.
(c) Term of Housing Assistance Payments Contract. The Contract for
any unit rehabilitated in accordance with the Program must be for a term
of 15 years.
(d) Term of Lease. (1) The initial lease between the family and the
Owner must be for at least one year or the term of the HAP contract,
whichever is shorter. In cases where there is less than one year
remaining on the HAP contract, the owner and the PHA may mutually agree
to terminate the unit from the HAP contract instead of leasing the unit
to an eligible family.
(2) Any renewal or extension of the lease term for any unit must in
no case extend beyond the remaining term of the HAP contract.
[47 FR 34379, Aug. 9, 1982, as amended at 64 FR 53869, Oct. 4, 1999]
Sec. 882.404 Physical condition standards; physical inspection
requirements.
(a) Compliance with physical condition standards. Housing in this
program must be maintained and inspected in accordance with the
requirements in 24 CFR part 5, subpart G.
(b) Space and security. In addition to the standards in 24 CFR part
5, subpart G, a dwelling unit used in the Section 8 moderate
rehabilitation program that is not SRO housing must have a living room,
a kitchen area, and a bathroom. Such a dwelling unit must have at least
one bedroom or living/sleeping room for each two persons.
(c) Special housing types. The following provisions in 24 CFR part
982, subpart M (Special Housing Types) apply to the Section 8 moderate
rehabilitation program:
[[Page 81]]
(1) 24 CFR 982.605(b) (for SRO housing). For the Section 8 moderate
rehabilitation SRO program under subpart H of this part 882, see also
Sec. 882.803(b).
(2) 24 CFR 982.609(b) (for congregate housing).
(3) 24 CFR 982.614(c) (for group homes).
(d) Lead-based paint. 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. 4851-4856), and implementing regulations at part
35, subparts A, B, H, and R of this title apply to the Section 8
moderate rehabilitation program.
[63 FR 46579, Sept. 1, 1998; 64 FR 50227, Sept. 15, 1999]
Sec. 882.405 Financing.
(a) Types. Any type of public or private financing may be utilized
with the exception of the rehabilitation loan program under Section 312
of the Housing Act of 1964.
(b) Use of Contract as security for financing. An Owner may pledge,
or offer as security for any loan or obligation, an Agreement or
Contract entered into pursuant to this Program, Provided That (1) such
security is in connection with a unit(s) rehabilitated pursuant to this
Program and (2) the terms of the financing or any refinancing must be
approved by the PHA in accordance with standards provided by HUD. Any
pledge of the Agreement or Contract, or payments thereunder, will be
limited to the amounts payable under the Contract in accordance with its
terms.
Sec. 882.406 [Reserved]
Sec. 882.407 Other Federal requirements.
(a) The moderate rehabilitation program is subject to applicable
Federal requirements in 24 CFR 5.105 and to the requirements for
protection for victims of domestic violence, dating violence, sexual
assault, or stalking in 24 CFR part 5, subpart L (Protection for Victims
of Domestic Violence, Dating Violence, Sexual Assault, or Stalking).
(b) In order to facilitate emergency transfers for victims of
domestic violence, dating violence, sexual assault, or stalking, covered
housing providers have discretion to adopt and modify any existing
admission preferences or transfer waitlist priorities for victims of
domestic violence, dating violence, sexual assault, or stalking.
(c) Covered housing providers must develop and implement an
emergency transfer plan that meets the requirements in 24 CFR 5.2005(e),
and when a safe unit is not immediately available for a victim of
domestic violence, dating violence, sexual assault, and stalking who
qualifies for an emergency transfer, covered housing providers must, at
a minimum:
(1) Review the covered housing provider's existing inventory of
units and determine when the next vacant unit may be available; and
(2) Provide a listing of nearby HUD subsidized rental properties,
with or without preference for persons of domestic violence, dating
violence, sexual assault, or stalking, and contact information for the
local HUD field office.
(d) Each year, the covered housing provider must submit to HUD data
on all 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.
[81 FR 80812, Nov. 16, 2016]
Sec. 882.408 Initial contract rents.
(a) Fair Market Rent limitation. The Fair Market Rent Schedule for
Moderate Rehabilitation is 120 percent of the Existing Housing Fair
Market Rent Schedule, except that the Fair Market Rent limitation
applicable to single room occupancy housing is 75 percent of the
Moderate Rehabilitation Fair Market Rent for a 0-bedroom unit. The
initial Gross Rent for any Moderate Rehabilitation unit must not exceed
the Moderate Rehabilitation Fair Market Rent applicable to the unit on
the date that the Agreement is executed except by up to 10 percent as
provided in paragraph (b) of this section. Additionally, to the extent
provided in paragraph (d) of this section, the PHA may approve changes
in the Contract Rent subsequent to execution of the Agreement which
result in an initial Gross Rent which exceeds the Moderate
[[Page 82]]
Rehabilitation Fair Market Rent applicable to the unit by up to 20
percent.
(b) Exception rents. With HUD Field Office approval, the PHA may
approve initial Gross Rents which exceed the applicable Moderate
Rehabilitation Fair Market Rents by up to 10 percent for all units of a
given size in specified areas where HUD has determined that the rents
for standard units suitable for the Existing Housing Program are more
than 10 percent higher than the Existing Housing Fair Market Rents. The
PHA must submit documentation demonstrating the necessity for such
exception rents in the area to the HUD Field Office. In areas where HUD
has approved the use of exception rents for 0-bedroom units, the single
room occupancy housing exception rent will be 75 percent of the
exception rent applicable to Moderate Rehabilitation 0-bedroom units.
(c) Determination Initial Contract Rents. (1) The initial Contract
Rent and base rent for each unit must be computed in accordance with HUD
requirements. These amounts may be determined in accordance with
paragraph (c)(2), or in accordance with an alternative method prescribed
by HUD. However, the initial Contract Rent may in no event be more
than--
(i) The Moderate Rehabilitation Fair Market Rent or exception rent
applicable to the unit on the date that the Agreement is executed, minus
(ii) Any applicable allowance for utilities and other services
attributable to the unit.
(2) When the initial Contract Rent is computed under this paragraph,
the rent will be equal to the base rent plus the monthly cost of a
rehabilitation loan (but not more than the maximum stated in paragraph
(c)(1)). The base rent must be calculated using the rent charged for the
unit or the estimated costs to the Owner of owning, managing and
maintaining the rehabilitated unit. The monthly cost of a rehabilitation
loan must be calculated using:
(i) The actual interest rate on the portion of the rehabilitation
costs borrowed by the Owner,
(ii) The HUD-FHA maximum interest rate for multifamily housing (or
another rate prescribed by HUD) for rehabilitation costs paid by the
Owner out of nonborrowed funds, and
(iii) At least a 15 year loan term, except that if the total amount
of rehabilitation is less than $15,000, the actual loan term will be
used for the portion of the rehabilitation costs borrowed by the Owner.
(HUD Field Offices may authorize loan terms which differ from the above
in accordance with HUD requirements.)
(d) Changes in Initial Contract Rents during rehabilitation. (1) The
initial Contract Rents established pursuant to paragraph (c) of this
section will be the Contract Rents on the effective date of the Contract
except under the following circumstances:
(i) When, during rehabilitation, work items (including substantial
and necessary design changes) which (A) could not reasonably have been
anticipated or are necessitated by a change in local codes or
ordinances, and (B) were not listed in the work write-up prepared or
approved by the PHA, are subsequently required and approved by the PHA.
(ii) When the actual cost of the rehabilitation performed is less
than that estimated in the calculation of Contract Rents for the
Agreement or the actual, certified costs are more than estimated due to
unforeseen factors beyond the owner's control (e.g., strikes, weather
delays or unexpected delays caused by local governments).
(iii) When the PHA (or HUD) approves changes in financing.
(iv) When the actual relocation payments made by the Owner to
temporarily relocated Families varies from the cost estimated in the
calculation of Contract Rents for the Agreement.
(v) When necessary to correct errors in computation of the base and
Contract Rents to comply with the HUD requirements.
(2) Should changes occur as specified in paragraph (d)(1) (either an
increase or decrease), the PHA will approve any necessary change in work
and amendment of the work write-up and cost estimate, recalculate the
initial Contract Rents in accordance with paragraph (d)(3) of this
section, and amend the Contract or Agreement, as appropriate, to reflect
the revised rents.
(3) In establishing the revised Contract Rents, the PHA must
determine
[[Page 83]]
that the resulting Gross Rents do not exceed the Moderate Rehabilitation
Fair Market Rent or the exception rent in effect at the time of
execution of the Agreement. The Fair Market Rent or exception rent, as
appropriate, may only be exceeded when the PHA determines in accordance
with paragraph (d)(1) of this section that it will be necessary for the
revised Gross Rent to exceed the Moderate Rehabilitation Fair Market
Rent or exception rent. Should this determination be made, the PHA may
not execute a revised Agreement or Contract for Gross Rents exceeding
the Fair Market Rents by more than 10 percent until it receives HUD
Field Office approval. The HUD Field Office may approve revised Gross
Rents which exceed the Fair Market Rents by up to 20 percent for reasons
specified in paragraph (d)(1) of this section upon proper justification
by the PHA of the necessity for the increase.
[47 FR 34379, Aug. 9, 1982, as amended at 52 FR 19725, May 27, 1987]
Sec. 882.409 Contract rents at end of rehabilitation loan term.
For a Contract where the initial Contract Rent was based upon a loan
term shorter than 15 years, the Contract must provide for reduction of
the Contract Rent effective with the rent for the month following the
end of the term of the rehabilitation loan. The amount of the reduction
will be the monthly cost of amortization of the rehabilitation loan.
This reduction should result in a new Contract Rent equal to the base
rent established pursuant to Sec. 882.408(c) plus all subsequent
adjustments.
Sec. 882.410 Rent adjustments.
(a) Annual and special adjustments. Contract Rents will be adjusted
as provided in paragraphs (a) (1) and (2) of this section upon submittal
to the PHA by the Owner of a revised schedule of Contract Rents,
provided that the unit is in decent, safe, and sanitary condition and
that the Owner is otherwise in compliance with the terms of the Lease
and Contract. Subject to the foregoing, adjustments of Contract Rents
will be as follows:
(1) The Annual Adjustment Factors which are published annually by
HUD (see Schedule C, 24 CFR part 888) will be utilized. On or after each
annual anniversary date of the Contract, the Contract Rents may be
adjusted in accordance with HUD procedures, effective for the month
following the submittal by the Owner of a revised schedule of Contract
Rents. The changes in rent as a result of the adjustment cannot exceed
the amount established by multiplying the Annual Adjustment Factor by
the base rents. However, if the amounts borrowed to finance the
rehabilitation costs or to finance purchase of the property are subject
to a variable rate or are otherwise renegotiable, Contract Rents may be
adjusted in accordance with other procedures as prescribed by HUD, and
specified in the Contract, provided that the adjusted Contract Rents
cannot exceed the rents established by multiplying the Annual Adjustment
Factor by the Contract Rents. Adjusted Contract Rents must then be
examined in accordance with paragraph (b) of this section and may be
adjusted accordingly. Contract Rents may be adjusted upward or downward,
as may be appropriate.
(2) Special Adjustments. (i) A special adjustment, to the extent
determined by HUD to reflect increases in the actual and necessary
expenses of owning and maintaining the unit which have resulted from
substantial general increases in real property taxes, assessments,
utility rates and utilities not covered by regulated rates, may be
recommended by the PHA for approval by HUD. Subject to appropriations, a
special adjustment may also be recommended by the PHA for approval by
HUD when HUD determines that a project is located in a community where
drug-related criminal activity is generally prevalent, and not specific
to a particular project, and the project's operating, maintenance, and
capital repair expenses have substantially increased primarily as a
result of the prevalence of such drug-related activity. HUD may, on a
project-by-project basis, provide adjustments to the maximum monthly
rents, to a level no greater than 120 percent of the current gross rents
for each unit size under a
[[Page 84]]
Housing Assistance Payments Contract, to cover the costs of maintenance,
security, capital repairs and reserves required for the Owner to carry
out a strategy acceptable to HUD for addressing the problem of drug-
related criminal activity. Prior to approval of a special adjustment to
cover the cost of physical improvements, HUD will perform an
environmental review to the extent required by HUD's environmental
regulations at 24 CFR part 50, including the applicable related
authorities at 24 CFR 50.4.
(ii) The aforementioned special rent adjustments will only be
approved if and to the extent the Owner clearly demonstrates that these
general increases have caused increases in the owners operating costs
which are not adequately compensated for by annual adjustments.
(iii) The Owner must submit financial information to the PHA which
clearly supports the increase. For Contracts of more than twenty units,
the Owner must submit audited financial information.
(b) Overall limitation. Notwithstanding any other provisions of this
part, adjustments as provided in this section must not result in
material differences between the rents charged for assisted and
comparable unassisted units, as determined by the PHA (and approved by
HUD in the case of adjustments under paragraph (a)(2) of this section).
However, unless the rents have been adjusted in accordance with
Sec. 882.409, this limitation should not be construed to prohibit
differences in rents between assisted and comparable unassisted units to
the extent that differences existed with respect to the initial Contract
Rents.
(Approved by the Office of Management and Budget under OMB approval
number 2577-0196)
[47 FR 34379, Aug. 9, 1982, as amended at 59 FR 47773, Sept. 16, 1994]
Sec. 882.411 Payments for vacancies.
(a) Vacancies from execution of Contract to initial occupancy. If a
Contract unit which has been rehabilitated in accordance with this
Program is not leased within 15 days of the effective date of the
Contract, the Owner will be entitled to housing assistance payments in
the amount of 80 percent of the Contract Rent for the unit for a vacancy
period not exceeding 60 days from the effective date of the Contract,
provided that the Owner (1) has complied with Secs. 882.506(d) and
882.508(c); (2) has taken and continues to take all feasible actions to
fill the vacancy; and (3) has not rejected any eligible applicant except
for good cause acceptable to the PHA.
(b) Vacancies after initial occupancy. (1) If an Eligible Family
vacates its unit (other than as a result of action by the Owner which is
in violation of the Lease or the Contract or any applicable law), the
Owner may receive the housing assistance payments due under the Contract
for so much of the month in which the Family vacates the unit as the
unit remains vacant. Should the unit continue to remain vacant, the
Owner may receive from the PHA a housing assistance payment in the
amount of 80 percent of the Contract Rent for a vacancy period not
exceeding an additional month. However, if the Owner collects any of the
Family's share of the rent for this period, the payment must be reduced
to an amount which, when added to the Family's payment, does not exceed
80 percent of the Contract Rent. Any such excess must be reimbursed by
the Owner to the PHA. The Owner will not be entitled to any payment
under this paragraph (b)(1) of this section unless the Owner:
(i) Immediately upon learning of the vacancy, has notified the PHA
of the vacancy or prospective vacancy, and
(ii) has taken and continues to take all feasible actions specified
in paragraphs (a) (2) and (3) of this section.
(2) If the Owner evicts an Eligible Family, the Owner will not be
entitled to any payment under paragraph (b)(1) of this section unless
the PHA determines that the Owner complied with all requirements of the
Contract.
(c) Prohibition of double compensation for vacancies. The Owner will
not be entitled to housing assistance payments with respect to vacant
units under this section if the Owner is entitled to payments from other
sources (for example, payments for losses of rental income incurred for
holding units vacant for relocatees pursuant to Title I of the
[[Page 85]]
HCD Act of 1974 or payments for unpaid rent under Sec. 882.414 (Security
and Utility Deposits)).
[47 FR 34379, Aug. 9, 1982, as amended at 63 FR 23855, Apr. 30, 1998]
Sec. 882.412 Subcontracting of owner services.
(a) General. Any Owner may contract with any private or public
entity to perform for a fee the services required by the Agreement,
Contract or Lease, provided that such contract may not shift any of the
Owner's responsibilities or obligations.
(b) PHA management. If the Owner and a PHA wish to enter into a
management contract, they may do so provided that:
(1) The Housing Assistance Payments Contract with respect to the
housing involved is administered by another PHA, or
(2) Should another PHA not be available and willing to administer
the Housing Assistance Payments Contract and no other management
alternative exists, the HUD Field Office may authorize PHA management of
units administered by the PHA in accordance with specified criteria.
(3) Notwithstanding the provisions of Sec. 882.408 (b) and (c), a
PHA may not approve, without prior HUD approval, rents which exceed the
appropriate Moderate Rehabilitation Fair Market Rent for a unit for
which it provides the management functions under this section.
Sec. 882.413 Responsibility of the Family.
(a) A family receiving housing assistance under this Program must
fulfill all of its obligations under the Lease and Statement of Family
Responsibility.
(b) No family member may engage in drug-related criminal activity or
violent criminal activity. Failure of the Family to meet its
responsibilities under the Lease, the Statement of Family
Responsibility, or this section shall constitute rounds for termination
of assistance by the PHA. Should the PHA determine to terminate
assistance to the Family, the provisions of Sec. 882.514(f) must be
followed.
[55 FR 28546, July 11, 1990, as amended at 63 FR 23855, Apr. 30, 1998]
Sec. 882.414 Security and utility deposits.
(a) If at the time of the initial execution of the Lease the Owner
wishes to collect a security deposit, the maximum amount shall be the
greater of one month's Total Tenant Payment or $50. However, this amount
shall not exceed the maximum amount allowable under State or local law.
For units leased in place, security deposits collected prior to the
execution of a Contract which are in excess of this maximum amount do
not have to be refunded until the Family vacates the unit subject to the
lease terms. The Family is expected to pay security deposits and utility
deposits from its resources and/or other public or private sources.
(b) If a Family vacates the unit, the Owner, subject to State and
local law, may use the security deposit as reimbursement for any unpaid
Tenant Rent or other amount which the Family owes under the Lease. If a
Family vacates the unit owing no rent or other amount under the Lease
consistent with State or local law or if such amount is less than the
amount of the security deposit, the Owner shall refund the full amount
or the unused balance to the Family.
(c) In those jurisdictions where interest is payable by the Owner on
security deposits, the refunded amount shall include the amount of
interest payable. The Owner shall comply with all State and local laws
regarding interest payments on security deposits.
(d) If the security deposit is insufficient to reimburse the Owner
for the unpaid Tenant Rent or other amounts which the Family owes under
the Lease, or if the Owner did not collect a security deposit, the Owner
may claim reimbursement from the PHA for an amount not to exceed the
lesser of:
(1) The amount owed the Owner, or
(2) Two month's Contract Rent; minus, in either case, the greater of
the security deposit actually collected or the amount of security
deposit the Owner could have collected under the program (pursuant to
paragraph (a) of
[[Page 86]]
this section). Any reimbursement under this section must be applied
first toward any unpaid Tenant Rent due under the Lease and then to any
other amounts owed. No reimbursement may be claimed for unpaid rent for
the period after the Family vacates.
[43 FR 61246, Dec. 29, 1978, as amended at 44 FR 31176, May 31, 1979; 49
FR 19945, May 10, 1984. Redesignated at 63 FR 23854, Apr. 30, 1998]
Subpart E_Special Procedures for Moderate Rehabilitation_Program
Development and Operation
Source: 47 FR 34383, Aug. 9, 1982, unless otherwise noted.
Secs. 882.501-882.506 [Reserved]
Sec. 882.507 Completion of rehabilitation.
(a) Notification of completion. The Owner must notify the PHA when
the work is completed and submit to the PHA the evidence of completion
and certifications described in paragraphs (b) and (c) of this section.
(b) Evidence of completion. Completion of the unit(s) must be
evidenced by furnishing the PHA with the following:
(1) A certificate of occupancy and/or other official approvals as
required by the locality.
(2) A certification by the Owner that:
(i) The unit(s) has been completed in accordance with the
requirements of the Agreement;
(ii) The unit(s) is in good and tenantable condition;
(iii) The unit(s) has been rehabilitated in accordance with the
applicable zoning, building, housing and other codes, ordinances or
regulations, as modified by any waivers obtained from the appropriate
officials;
(iv) The unit(s) are in compliance with part 35, subparts A, B, H,
and R of this title.
(iv) Any unit(s) built prior to 1973 are in compliance with
Sec. 882.404(c)(3) and Sec. 882.404(c)(4).
(v) If applicable, the Owner has complied with the provisions of the
Agreement relating to the payment of not less than prevailing wage rates
and that to the best of the Owner's knowledge and belief there are no
claims of underpayment concerning alleged violations of said provisions
of the Agreement. In the event there are any such pending claims to the
knowledge of the Owner, PHA or HUD, the Owner will be required to place
sufficient amount in escrow, as determined by the PHA or HUD, to assure
such payments.
(c) Actual cost and rehabilitation loan certifications. The Owner
must provide the PHA with a certification of the costs incurred for the
rehabilitation and any temporary relocation as well as the interest rate
and term of any rehabilitation loan. The Owner must certify that these
are the actual costs, interest rate, and term.
The PHA must review for completeness and accuracy and accept these
certifications subject to the right of post audit. The PHA must then
establish the Contract Rents as provided in Sec. 882.408 which will be
subject to reduction based on a post audit.
(d) Review and inspections. The PHA must review the evidence of
completion for compliance with paragraph (b) of this section. The PHA
also must inspect the unit(s) to be assisted to determine that the
unit(s) has been completed in accordance with the Agreement and meets
the Housing Quality Standards or other standards approved by HUD for the
Program. If the inspection discloses defects or deficiencies, the
inspector must report these in detail.
(e) Acceptance. (1) If the PHA determines from the review and
inspection that the unit(s) has been completed in accordance with the
Agreement, the unit(s) will be accepted.
(2) If there are any items of delayed completion which are minor
items or which are incomplete because of weather conditions, and in any
case which do not preclude or affect occupancy, and all other
requirements of the Agreement have been met, the unit(s) must be
accepted. An escrow fund determined by the PHA to be sufficient to
assure completion for items of delayed completion must be required, as
well as a written agreement between the PHA and the Owner, to be
included as an exhibit to the Contract, specifying the schedule for
completion. If the items are not completed within the agreed time
period, the PHA may
[[Page 87]]
terminate the Contract or exercise other rights under the Contract.
(3) If other deficiencies exist, the PHA must determine whether and
to what extent the deficiencies are correctable, and whether the
Contract Rents should be reduced. The Owner must be notified of the
PHA's decision. If the corrections required by the PHA are possible, the
PHA and the Owner must enter into an agreement for the correction of the
deficiencies within a specified time. If the deficiencies are corrected
within the agreed period of time, the PHA must accept the unit(s).
(4) Otherwise, the unit(s) may not be accepted, and the Owner must
be notified with a statement of the reasons for nonacceptance.
[47 FR 34383, Aug. 9, 1982, as amended at 52 FR 1895, Jan. 15, 1987; 64
FR 50227, Sept. 15, 1999]
Sec. 882.508 [Reserved]
Sec. 882.509 Overcrowded and under occupied units.
If the PHA determines that a Contract unit is not decent, safe, and
sanitary by reason of increase in Family size, or that a Contract unit
is larger than appropriate for the size of the Family in occupancy,
housing assistance payments with respect to the unit will not be abated;
However, the Owner must offer the Family a suitable alternative unit
should one be available and the Family will be required to move. If the
Owner does not have a suitable available unit, the PHA must assist the
Family in locating other standard housing in the locality within the
Family's ability to pay and require the Family to move to such a unit as
soon as possible. In no case will a Family be forced to move nor will
housing assistance payments under the Contract be terminated unless the
Family rejects without good reason the offer of a unit which the PHA
judges to be acceptable.
Sec. 882.510 Adjustment of utility allowance.
The PHA must determine, at least annually, whether an adjustment is
required in the Utility Allowance applicable to the dwelling units in
the Program, on grounds of changes in utility rates or other change of
general applicability to all units in the Program. The PHA may also
establish a separate schedule of allowances for each building of 20 or
more assisted units, based upon at least one year's actual utility
consumption data following rehabilitation under the Program. If the PHA
determines that an adjustment should be made in its Schedule of
Allowances or if it establishes a separate schedule for a building which
will change the allowance, the PHA must then determine the amounts of
adjustments to be made in the amount of rent to be paid by affected
Families and the amount of housing assistance payments and must notify
the Owners and Families accordingly. Any adjustment to the Allowance
must be implemented no later than at the Family's next reexamination or
at lease renewal, whichever is earlier.
[47 FR 34383, Aug. 9, 1982, as amended at 49 FR 19946, May 10, 1984]
Sec. 882.511 Lease and termination of tenancy.
(a) Lease. (1) The lease must include all provisions required by
HUD, and must not include any provisions prohibited by HUD.
(2) 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 the owner to terminate
tenancy. In addition, the lease must provide that the owner may
terminate the tenancy of a family when the owner determines that a
household member is illegally using a drug or when the owner determines
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.
(b) Applicability. The provisions of this section apply to decisions
by an Owner to terminate the tenancy of a Family during or at the end of
the Family's lease term.
(c) Grounds for termination of or refusal to renew the lease. The
Owner must not terminate or refuse to renew the lease except upon the
following grounds:
[[Page 88]]
(1) Serious or repeated violation of the terms and conditions of the
lease.
(2) Violation of applicable Federal, State or local law.
(3) Other good cause.
(d) Notice of termination of tenancy. (1) The Owner must serve a
written notice of termination of tenancy on the Family which states the
date the tenancy shall terminate. Such date must be in accordance with
the following:
(i) When termination is based on failure to pay rent, the date of
termination must be not less than five working days after the Family's
receipt of the notice.
(ii) When termination is based on serious or repeated violation of
the terms and conditions of the lease or on violation of applicable
Federal, State or local law, the date of termination must be in
accordance with State and local law.
(iii) When termination is based on other good cause, the date of
termination must be no earlier than 30 days after the notice is served
on the Family.
(2) The notice of termination must:
(i) State the reasons for such termination with enough specificity
to enable the Family to prepare a defense.
(ii) Advise the Family that if a judicial proceeding for eviction is
instituted, the tenant may present a defense in that proceeding.
(iii) Be served on the Family by sending a prepaid first class
properly addressed letter (return receipt requested) to the tenant at
the dwelling unit or by delivering a copy of the notice to the dwelling
unit.
(3) Substitution of State and local requirements. In the case of
failure to pay rent, a notice of termination which is issued pursuant to
State or local law or is common practice in the locality and which
satisfies paragraph (c)(2) may be substituted for or run concurrently
with the notice required herein.
(e) Eviction. All evictions must be carried out through judical
process under State and local law. ``Eviction'' means the dispossession
of the Family from the dwelling unit pursuant to State or local court
action.
(f) Lease. The requirements of this section shall be incorporated
into the dwelling lease between the Owner and the Family.
(g) In actions or potential actions to terminate tenancy, the owner
shall follow 24 CFR part 5, subpart L (Protection for Victims of
Domestic Violence, Dating Violence, Sexual Assault, or Stalking).
[47 FR 34383, Aug. 9, 1982, as amended at 63 FR 23855, Apr. 30, 1998; 66
FR 28797, May 24, 2001; 73 FR 72342, Nov. 28, 2008; 75 FR 66261, Oct.
27, 2010; 81 FR 80812, Nov. 16, 2016]
Sec. 882.512 Reduction of number of units covered by contract.
(a) Limitation on leasing to ineligible Families. Owners must lease
all assisted units under Contract to Eligible Families. Leasing of
vacant, assisted units to ineligible tenants is a violation of the
Contract and grounds for all available legal remedies, including
suspension or debarment from HUD programs and reduction of the number of
units under the Contract, as set forth in paragraph (b) of this section.
Once the PHA has determined that a violation exists, the PHA must notify
HUD of its determination and the suggested remedies. At the direction of
HUD, the PHA must take the appropriate action.
(b) Reduction for failure to lease to Eligible Families. If, at any
time beginning six months after the effective date of the Contract, the
Owner fails for a period of six continuous months to have at least 90
percent of the assisted units leased or available for leasing by
Eligible Families (because families initially eligible have become
ineligible), the PHA may, on at least 30 days' notice, reduce the number
of units covered by the Contract. The PHA may reduce the number of units
to the number of units actually leased or available for leasing by
Eligible Families plus 10 percent (rounded up). If the Owner has only
one unit under Contract and if one year has elapsed since the date of
the last housing assistance payment, the Contract may be terminated with
the consent of the Owner.
(c) Restoration. The PHA will agree to an amendment of the Contract,
to provide for subsequent restoration of any reduction made pursuant to
paragraph (b) if:
(1) The PHA determines that the restoration is justified by demand,
[[Page 89]]
(2) The Owner otherwise has a record of compliance with obligations
under the Contract, and
(3) Contract authority is available.
Sec. 882.513 Public notice to low-income families; waiting list.
(a) Public notice to low-income Families. (1) If the PHA does not
have a waiting list which is sufficient to provide applicants for the
units under the Moderate Rehabilitation Program, the PHA must, promptly
after receiving the executed ACC, make known to the public the
availability of the Program.
(i) The notice must state that assistance under this Program will be
available only in specified units which have been rehabilitated under
the Program.
(ii) The notice must be made in accordance with the PHA's HUD-
approved application and with the HUD guidelines for fair housing
requiring the use of the equal housing opportunity logotype, statement
and slogan.
(b) Waiting list. The PHA must maintain a waiting list for
applicants for the Moderate Rehabilitation Program. This requirement may
be met through the use of waiting lists for other subsidized housing
programs such as the Existing Housing Program.
Sec. 882.514 Family participation.
(a) Initial determination of family eligibility. (1) The PHA is
responsible for receipt and review of applications, and determination of
family eligibility for participation in accordance with HUD regulations
(see 24 CFR parts 5, 750 and 760). The PHA is responsible for verifying
the sources and amount of the family's income and other information
necessary for determining income eligibility and the amount of the
assistance payments.
(2) PHA records on applicants and Families selected to participate
must be maintained so as to provide HUD with racial, gender, and ethnic
data.
(b) Selection of Families for participation. When vacancies occur,
the PHA will refer to the Owner one or more appropriate size Families on
its waiting list. The PHA must select Families for participation in
accordance with the provisions of the Program and in accordance with the
PHA's application, including any PHA requirement or preferences as
approved by HUD. The PHA must select Families eligible for housing
assistance payments currently residing in units that are designated for
rehabilitation under the Program without requiring that these Families
be placed on the waiting list. Notwithstanding the fact that the PHA may
not be accepting additional applications for participation because of
the length of the waiting list, the PHA may not refuse to place an
applicant on the waiting list if the applicant is otherwise eligible for
partcipation and claims that he or she qualifies for a Federal
preference as provided in 24 CFR part 5, unless the PHA determines, on
the basis of the number of applicants who are already on the waiting
list and who claim a Federal preference, and the anticipated number of
admissions under this part, that--
(1) There is an adequate pool of applicants who are likely to
qualify for a Federal preference and
(2) It is unlikely that, on the basis of the PHA's system for
applying the Federal preferences, the preference or preferences that the
applicant claims, and the preferences claimed by applicants on the
waiting list, the applicant would qualify for assistance before other
applicants on the waiting list.
(c) Owner selection of Families. All vacant units under Contract
must be rented to Eligible Families referred by the PHA from its waiting
list. However, if the PHA is unable to refer a sufficient number of
interested applicants on the waiting list to the Owner within 30 days of
the Owner's notification to the PHA of a vacancy, the Owner may
advertise or solicit applications from Low-Income Families and refer
such Families to the PHA to determine eligibility. Since the Owner is
responsible for tenant selection, the Owner may refuse any family,
provided that the Owner does not unlawfully discriminate. However, the
owner must not deny program assistance or admission to an applicant
based on the fact that the applicant is or has been a victim of domestic
violence, dating violence, sexual assault, or stalking, if the applicant
otherwise qualifies for assistance or admission. Should the Owner reject
a Family, and should the Family believe that the Owner's rejection was
[[Page 90]]
the result of unlawful discrimination, the Family may request the
assistance of the PHA in resolving the issue. If the issue cannot be
resolved promptly, the Family may file a complaint with HUD, and the PHA
may refer the Family to the next available Moderate Rehabilitation unit.
(d) Briefing of Families. (1) When a Family is initially determined
to be eligible for housing assistance payments or is selected for
participation in accordance with this section, the PHA must provide the
Family with information as to the Tenant Rent and the PHA's schedule of
Utility Allowances. Each Family must also, either in group or individual
sessions, be provided with a full explanation of the following:
(i) Family and Owner responsibilities under the Lease and Contract;
(ii) Significant aspects of the applicable State and local laws;
(iii) Significant aspects of Federal, State and local fair housing
laws;
(iv) The fact that the subsidy is tied to the unit and the Family
must occupy a unit rehabilitated under the Program;
(v) The Family's options under the Program should the Family be
required to move due to an increase or decrease in Family size; and
(vi) The advisability and availability of blood lead level screening
for children under 6 years of age and HUD's lead-based paint
requirements in part 35, subparts A, B, H, and R of this title.
(2) For all Families to be temporarily relocated, the briefing must
include a discussion of the relocation policies.
(e) Continued participation of Family when Contract is terminated.
If an Owner evicts an assisted family in violation of the Contract or
otherwise breaches the Contract, and the Contract for the unit is
terminated, and if the Family was not at fault and is eligible for
continued assistance, the Family may continue to receive housing
assistance through the conversion of the Moderate Rehabilitation
assistance to ten-
ant-based assistance under the Section 8 certificate or voucher program.
The Family must then be issued a certificate or voucher, and treated as
any participant in the tenant-based programs under 24 CFR part 982, and
must be assisted by the PHA in finding a suitable unit. All requirements
of 24 CFR part 982 will be applicable except that the term of any
housing assistance payments contract may not extend beyond the term of
the initial Moderate Rehabilitation Contract. If the Family is
determined ineligible for continued assistance, the certificate or
voucher may be offered to the next Family on the PHA's waiting list. The
unit will remain under the Moderate Rehabilitation ACC which provides
for such a conversion of the units; therefore no amendment to the ACC
will be necessary to convert to the Section 8 tenant-based assistance
programs.
(f) Families determined by the PHA to be ineligible. If a Family is
determined to be ineligible in accordance with the PHA's HUD-approved
application, either at the application stage or after assistance has
been provided on behalf of the Family, the PHA shall promptly notify the
Family by letter of the determination and the reasons for it and the
letter shall state that the Family has the right within a reasonable
time (specified in the letter) to request an informal hearing. If, after
conducting such an informal hearing, the PHA determines, based on a
preponderance of the evidence, that the Family is ineligible, it shall
notify the Family in writing. The procedures of this paragraph do not
preclude the Family from exercising its other rights if it believes it
is being discriminated against on the basis of race, color, religion,
sex, age, handicap, familial status, or national origin. The informal
review provisions for the denial of a Federal selection preference under
Sec. 882.517 are contained in paragraph (k) of that section. The
informal hearing requirements for denial and termination of assistance
on
[[Page 91]]
the basis of ineligible immigration status are contained in 24 CFR part
5.
(Approved by the Office of Management and Budget under control number
2502-0123)
[47 FR 34383, Aug. 9, 1982, as amended at 49 FR 19945, May 10, 1984; 51
FR 11226, Apr. 1, 1986; 52 FR 1895, Jan. 15, 1987; 53 FR 847, Jan. 13,
1988; 53 FR 1155, Jan. 15, 1988; 53 FR 6601, Mar. 2, 1988; 54 FR 39705,
Sept. 27, 1989; 55 FR 28547, July 11, 1990; 56 FR 7539, Feb. 22, 1991;
60 FR 14844, Mar. 20, 1995; 61 FR 9046, Mar. 6, 1996; 61 FR 13625, Mar.
27, 1996; 63 FR 23855, Apr. 30, 1998; 64 FR 50227, Sept. 15, 1999; 66 FR
28797, May 24, 2001; 73 FR 72342, Nov. 28, 2008; 75 FR 66261, Oct. 27,
2010; 81 FR 80812, Nov. 16, 2016]
Sec. 882.515 Reexamination of family income and composition.
(a) Regular reexaminations. The PHA must reexamine the income and
composition of all families at least once every 12 months. After
consultation with the family and upon verification of the information,
the PHA must make appropriate adjustments in the Total Tenant Payment in
accordance with part 813 of this chapter and determine whether the
family's unit size is still appropriate (see Sec. 882.213). The PHA must
adjust Tenant Rent and the Housing Assistance Payment to reflect any
change in Total Tenant Payment. At the time of the annual reexamination
of family income and composition, the PHA must require the family to
disclose and verify Social Security Numbers. For requirements regarding
the signing and submitting of consent forms by families for the
obtaining of wage and claim information from State Wage Information
Collection Agencies, see part 5, subpart B, of this title. At the first
regular reexamination after June 19, 1995, the PHA shall follow the
requirements of 24 CFR part 5 concerning obtaining and processing
evidence of citizenship or eligible immigration status of all family
members. Thereafter, at each regular reexamination, the PHA shall follow
the requirements of 24 CFR part 5 concerning verification of immigration
status of any new family member.
(b) Interim reexaminations. If the PHA receives information
concerning a change in the family's income or other circumstances
between regularly scheduled reexaminations, the PHA must consult with
the family and make any adjustments determined to be appropriate. Any
change in the family's income or other circumstances that results in an
adjustment in the Total Tenant Payment, Tenant Rent, and Housing
Assistance Payment must be verified. See part 5, subpart B, of this
title for the requirements for the disclosure and verification of Social
Security Numbers at interim reexaminations involving new family members.
For requirements regarding the signing and submitting of consent forms
by families for the obtaining of wage and claim information from State
Wage Information Collection Agencies, see part 5, subpart B, of this
title. At any interim reexamination after June 19, 1995 when there is a
new family member, the PHA shall follow the requirements of 24 CFR part
5 concerning obtaining and processing evidence of citizenship or
eligible immigration status of the new family member.
(c) Obligation to supply information. The family must supply such
certification, release, information or documentation as the PHA or HUD
determine to be necessary, including submission of required evidence of
citizenship or eligible immigration status, submission of social
security numbers and verifying documentation, submission of signed
consent forms for the obtaining of wage and claim information from State
Wage Information Collection Agencies, and submissions required for an
annual or interim reexamination of family income and composition. See 24
CFR part 5.
(d) Continuation of housing assistance payments. A family's
eligibility for Housing Assistance Payments shall continue until the
Total Tenant Payment equals the Gross Rent. The termination of
eligibility at such point will not affect the family's other rights
under its lease, nor will such termination preclude the resumption of
payments as a result of later changes in income, rents or other relevant
circumstances during the term of the Contract. However, eligibility also
may be terminated in accordance with HUD requirements for such reasons
as failure to submit requested verification information, including
failure to meet the disclosure and verification requirements for Social
Security Numbers, as
[[Page 92]]
provided by part 5, subpart B, of this title, or failure to sign and
submit consent forms for the obtaining of wage and claim information
from State Wage Information Collection Agencies, as provided by part 5,
subpart B, of this title. For provisions requiring termination of
assistance when the PHA determines that a family member is not a U.S.
citizen or does not have eligible immigration status, see 24 CFR parts 5
and 982 for provisions concerning certain assistance for mixed families
(families whose members include those with eligible immigration status,
and those without eligible immigration status) in lieu of termination of
assistance, and for provisions concerning deferral of termination of
assistance.
[56 FR 7539, Feb. 22, 1991, as amended at 60 FR 14844, Mar. 20, 1995; 61
FR 11118, Mar. 18, 1996; 61 FR 13625, Mar. 27, 1996; 63 FR 23855, Apr.
30, 1998]
Sec. 882.516 Maintenance, operation and inspections.
(a) Maintenance and operation. The Owner must provide all the
services, maintenance and utilities as agreed to under the Contract,
subject to abatement of housing assistance payments or other applicable
remedies if the Owner fails to meet these obligations.
(b) Periodic inspection. In addition to the inspections required
prior to execution of the Contract, the PHA must inspect or cause to be
inspected each dwelling unit under Contract at least annually and at
such other times as may be necessary to assure that the Owner is meeting
the obligations to maintain the unit in decent, safe and sanitary
condition and to provide the agreed upon utilities and other services.
The PHA must take into account complaints and any other information
coming to its attention in scheduling inspections.
(c) Units not decent, safe and sanitary. If the PHA notifies the
Owner that the unit(s) under Contract are not being maintained in
decent, safe and sanitary condition and the Owner fails to take
corrective action (including corrective action with respect to the
Family where the condition of the unit is the fault of the Family)
within the time prescribed in the notice, the PHA may exercise any of
its rights or remedies under the Contract, including abatement of
housing assistance payments (even if the Family continues in occupancy),
termination of the Contract on the affected unit(s) and assistance to
the Family in accordance with Sec. 882.514(e).
(d) PHA management. Where the PHA is managing units on which it is
also administering the Housing Assistance Payments Contract pursuant to
a management contract approved by HUD in accordance with Sec. 882.412,
HUD will make reviews of project operations, including inspections, in
addition to required PHA reviews. These HUD reviews will be sufficient
to assure that the Owner and the PHA are in full compliance with the
terms and conditions of the Contract and the ACC. Should HUD determine
that there are deficiencies, it may exercise any rights or remedies
specified for the PHA under the Contract or reserved for HUD in the ACC,
require termination of the management contract, or take other
appropriate action.
(e) Periodic PHA audits must be conducted as required by HUD, in
accordance with 2 CFR part 200, subpart F .
[47 FR 34383, Aug. 9, 1982, as amended at 53 FR 8065, Mar. 11, 1988; 80
FR 75941, Dec. 7, 2015]
Sec. 882.517 HUD review of contract compliance.
HUD will review program operations at such intervals as it deems
necessary to ensure that the Owner and the PHA are in full compliance
with the terms and conditions of the Contract and the ACC. Equal
Opportunity review may be conducted with the scheduled HUD review or at
any time deemed appropriate by HUD.
[43 FR 61246, Dec. 29, 1978. Redesignated at 63 FR 23854, Apr. 30, 1998]
Sec. 882.518 Denial of admission and termination of assistance for
criminals and alcohol abusers.
(a) Requirement to deny admission--(1) Prohibiting admission of drug
criminals. (i) The PHA must prohibit admission to the program of an
applicant for three years from the date of termination of tenancy if any
household member's federally assisted housing tenancy has been
terminated for drug-
[[Page 93]]
related criminal activity. However, the PHA may admit the household if
the PHA determines:
(A) The household member who engaged in drug-related criminal
activity and whose tenancy was terminated has successfully completed an
approved supervised drug rehabilitation program, or
(B) The circumstances leading to the termination of tenancy no
longer exist (for example, the criminal household member has died or is
imprisoned).
(ii) The PHA must establish standards that permanently prohibit
admission to the program if any household member has ever been convicted
of drug-related criminal activity for manufacture or production of
methamphetamine on the premises of federally assisted housing.
(iii) The PHA must establish standards that prohibit admission of a
household to the program if the PHA determines that any household member
is currently engaging in illegal use of a drug or that it has reasonable
cause to believe that a household member's pattern of illegal use of a
drug, as defined in Sec. 5.100 of this title, may threaten the health,
safety, or right to peaceful enjoyment of the premises by other
residents.
(2) Prohibiting admission of sex offenders. The PHA must establish
standards that prohibit admission to the program if any member of the
household is subject to a lifetime registration requirement under a
State sex offender registration program. In this screening of
applicants, the PHA must perform criminal history background checks
necessary to determine whether any household member is subject to a
lifetime sex offender registration requirement in the State where the
housing is located and in other States where household members are known
to have resided.
(b) Authority to deny admission--(1) Prohibiting admission of other
criminals. The PHA may prohibit admission of a household to the program
under standards established by the PHA if the PHA determines that any
household member is currently engaged in or has engaged in during a
reasonable time before the admission decision:
(i) Drug-related criminal activity;
(ii) Violent criminal activity;
(iii) Other criminal activity which may threaten the health, safety,
or right to peaceful enjoyment of the premises by other residents;
(iv) Other criminal activity which may threaten the health or safety
of the owner or any employee, contractor, subcontractor or agent of the
owner who is involved in the owner's housing operations.
(2) Reasonable time. The PHA may establish a period before the
admission decision during which an applicant must not have engaged in
the activities specified in paragraph (b)(1) of this section
``reasonable time''.
(3) Sufficient evidence. If the PHA has denied admission to an
applicant because a member of the household engaged in criminal activity
in accordance with paragraph (b)(1) of this section, the PHA may
reconsider the applicant if the PHA has sufficient evidence that the
members of the household are not currently engaged in, and have not
engaged in criminal activity during a reasonable period, as determined
by the PHA, before the admission decision.
(i) The PHA 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 the PHA verified.
(ii) For purposes of this section, a household member is ``currently
engaged in'' criminal activity if the person has engaged in the behavior
recently enough to justify a reasonable belief that the behavior is
current.
(4) Prohibiting admission of alcohol abusers. The PHA must establish
standards that prohibit admission to the program if the PHA determines
that it has reasonable cause to believe that a household member's abuse
or pattern of abuse of alcohol may threaten the health, safety, or right
to peaceful enjoyment of the premises by other residents.
(c) Terminating assistance--(1) Terminating assistance for drug
criminals. (i)
[[Page 94]]
The PHA may terminate assistance for 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. In addition, the PHA may terminate
assistance if the PHA determines that a household member is illegally
using a drug or when the PHA determines 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.
(ii) The PHA must immediately terminate assistance for a family
under the program if the PHA determines that any member of the household
has ever been convicted of drug-related criminal activity for
manufacture or production of methamphetamine on the premises of
federally assisted housing.
(2) Terminating assistance for other criminals. (i) The PHA must
establish standards that allow the PHA to terminate assistance for a
family if the PHA determines that any household member is engaged in
criminal activity that threatens the health, safety, or right of
peaceful enjoyment of the premises by other residents or by persons
residing in the immediate vicinity of the premises.
(ii) The PHA may terminate assistance for a family if the PHA
determines that a member of the household is:
(A) 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
(B) Violating a condition of probation or parole imposed under
Federal or State law.
(3) Evidence of criminal activity. (i) The PHA may terminate
assistance for criminal activity in accordance with this section if the
PHA determines, based on a preponderance of the evidence, that a covered
person has engaged in the criminal activity, regardless of whether the
covered person has been arrested or convicted for such activity.
(ii) See part 5, subpart J, of this title for provisions concerning
access to criminal records.
(4) Terminating assistance for alcohol abusers. The PHA must
establish standards that allow termination of assistance for a family if
the PHA determines 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.
[66 FR 28797, May 24, 2001]
Subparts F-G [Reserved]
Subpart H_Section 8 Moderate Rehabilitation Single Room Occupancy
Program for Homeless Individuals
Source: 61 FR 48057, Sept. 11, 1996, unless otherwise noted.
Sec. 882.801 Purpose.
The purpose of the Section 8 Moderate Rehabilitation Program for
Single Room Occupancy (SRO) Dwellings for Homeless Individuals is to
provide rental assistance for homeless individuals in rehabilitated SRO
housing. The Section 8 assistance is in the form of rental assistance
payments. These payments equal the rent for the unit, including
utilities, minus the portion of the rent payable by the tenant under the
U.S. Housing Act of 1937 (42 U.S.C. 1437 et seq.).
Sec. 882.802 Definitions.
In addition to the definitions set forth in 24 CFR part 5 and
Sec. 882.102 (except for the definition of ``Single Room Occupancy (SRO)
Housing'' therein) the following will apply:
Agreement to enter into housing assistance payments contract
(Agreement). A written agreement between the owner and the HA that, upon
satisfactory completion of the rehabilitation in accordance with
requirements specified in the Agreement, the HA will enter into a
housing assistance payments contract with the owner.
Applicant. A public housing agency or Indian housing authority
(collectively
[[Page 95]]
referred to as HAs), or a private nonprofit organization that applies
for assistance under this program. HUD will require private nonprofit
applicants to subcontract with public housing agencies to administer
their rental assistance.
Covered housing provider. For the Section 8 Moderate Rehabilitation
Single Room Occupancy Program for Homeless Individuals, ``covered
housing provider,'' as such term is used in HUD's regulations in 24 CFR
part 5, subpart L (Protection for Victims of Domestic Violence, Dating
Violence, Sexual Assault, or Stalking), refers to the owner.
Eligible individual (``individual''). An individual who is capable
of independent living and is authorized for admission to assisted
housing under 24 CFR part 5.
Homeless individual. An individual as described in section 103 of
the McKinney Act (42 U.S.C. 11302).
McKinney Act. The Stewart B. McKinney Homeless Assistance Act (42
U.S.C. 11301 et seq.).
Moderate rehabilitation. Rehabilitation involving a minimum
expenditure of $3,000 for a unit, including its prorated share of work
to be accomplished on common areas or systems, to upgrade to decent,
safe, and sanitary condition to comply with the Housing Quality
Standards or other standards approved by HUD, from a condition below
those standards (improvements being of a modest nature and other than
routine maintenance).
Private nonprofit organization. An organization, no part of the net
earnings of which inures to the benefit of any member, founder,
contributor, or individual. The organization must:
(1) Have a voluntary board;
(2) Have a functioning accounting system that is operated in
accordance with generally accepted accounting principles, or designate
an entity that will maintain a functioning accounting system for the
organization in accordance with generally accepted accounting
principles; and
(3) Practice nondiscrimination in the provision of assistance.
Single room occupancy (SRO) housing. A unit for occupancy by one
person, which need not but may contain food preparation, sanitary
facilities, or both.
Statement of individual responsibility. An agreement, in the form
prescribed by HUD, between the HA and an individual to be assisted under
the program, stating the obligations and responsibilities of the two
parties.
[61 FR 48057, Sept. 11, 1996, as amended at 63 FR 23855, Apr. 30, 1998;
81 FR 80812, Nov. 16, 2016]
Sec. 882.803 Project eligibility and other requirements.
(a) Eligible and ineligible properties. (1) Except as otherwise
provided in paragraph (a) of this section, housing suitable for moderate
rehabilitation is eligible for inclusion under this program. Existing
structures of various types may be appropriate for this program,
including single family houses and multifamily structures.
(2) Housing is not eligible for assistance under this program if it
is receiving Federal funding for rental assistance or operating costs
under other HUD programs.
(3) Nursing homes and related facilities such as intermediate care
or board and care homes; units within the grounds of penal, reformatory,
medical, mental, and similar public or private institutions; and
facilities providing continual psychiatric, medical, or nursing services
are not eligible for assistance under this program.
(4) No Section 8 assistance may be provided with respect to any unit
occupied by an owner.
(5) Housing located in the Coastal Barrier Resources System
designated under the Coastal Barriers Resources Act is not eligible.
(6) Single-sex facilities are allowable under this program, provided
that the HA determines that because of the physical limitations or
configuration of the facility, considerations of personal privacy
require that the facility (or parts of the facility) be available only
to members of a single sex.
(b)(1) Physical condition standards. Section 882.404 applies to this
program.
(2) Site standards. (i) The site must be adequate in size, exposure,
and contour to accommodate the number and type of units proposed;
adequate utilities and streets must be available to service
[[Page 96]]
the site. (The existence of a private disposal system and private
sanitary water supply for the site, approved in accordance with local
law, may be considered adequate utilities.)
(ii) The site must be 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), title VIII
of the Civil Rights Act of 1968 (42 U.S.C. 3601-19), E.O. 11063 (as
amended by E.O. 12259; 3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980
Comp., p. 307), and HUD regulations issued pursuant thereto.
(iii) The site must be accessible to social, recreational,
educational, commercial, and health facilities, and other appropriate
municipal facilities and services.
(c) Financing. Section 882.405 applies to this program.
(d) Relocation. Section 882.406 applies to a project assisted under
this program.
(e) HA-owned housing. (1) A unit that is owned by the HA that
administers the assistance under the ACC (including a unit owned by an
entity substantially controlled by the HA) may only be assisted if:
(i) The unit is not ineligible under Sec. 882.803(a); and
(ii) HUD approves the base and contract rent calculations prior to
execution of the Agreement and prior to execution of the HAP contract.
(2) The HA as owner is subject to the same program requirements that
apply to other owners in the program.
[61 FR 48057, Sept. 11, 1996, as amended at 63 FR 46579, Sept. 1, 1998;
64 FR 50227, Sept. 15, 1999]
Sec. 882.804 Other Federal requirements.
(a) Participation in this program requires compliance with the
Federal requirements set forth in 24 CFR 5.105, with the Americans with
Disabilities Act (42 U.S.C. 12101 et seq.), and with the regulations in
24 CFR part 5, subpart L (Protection for Victims of Domestic Violence,
Dating Violence, Sexual Assault, or Stalking).
(b) In order to facilitate emergency transfers for victims of
domestic violence, dating violence, sexual assault, or stalking, covered
housing providers have discretion to adopt and modify any existing
admission preferences or transfer waitlist priorities for victims of
domestic violence, dating violence, sexual assault, or stalking.
(c) Covered housing providers must develop and implement an
emergency transfer plan that meets the requirements in 24 CFR 5.2005(e),
and when a safe unit is not immediately available for a victim of
domestic violence, dating violence, sexual assault, and stalking who
qualifies for an emergency transfer, covered housing providers must, at
a minimum:
(1) Review the covered housing provider's existing inventory of
units and determine when the next vacant unit may be available; and
(2) Provide a listing of nearby HUD subsidized rental properties,
with or without preference for persons of domestic violence, dating
violence, sexual assault, or stalking, and contact information for the
local HUD field office.
(d) Each year, the covered housing provider must submit to HUD data
on all 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.
(e) For agreements covering nine or more assisted units, the
following requirements for labor standards apply:
(1) Not less than the wages prevailing in the locality, as
determined by the Secretary of Labor under the Davis-Bacon Act (40
U.S.C. 276a through 276a-5), must be paid to all laborers and mechanics
employed in the development of the project, other than volunteers under
the conditions set out in 24 CFR part 70;
(2) The employment of laborers and mechanics is subject to the
provisions of the Contract Work Hours and Safety Standards Act (40
U.S.C. 327-333); and
(3) HAs, owners, contractors, and subcontractors must comply with
all related rules, regulations, and requirements.
(f) The environmental review requirements of 24 CFR part 58,
implementing the National Environmental Policy Act
[[Page 97]]
and related environmental laws and authorities, apply to this program.
[61 FR 48057, Sept. 11, 1996, as amended at 81 FR 80812, Nov. 16, 2016]
Sec. 882.805 HA application process, ACC execution, and pre-rehabilitation
activities.
(a) Review. When funds are made available for assistance, HUD will
publish a notice of funding availability (NOFA) in the Federal Register
in accordance with the requirements of 24 CFR part 4. HUD will review
and screen applications in accordance with the guidelines, rating
criteria, and procedures published in the NOFA.
(b) ACC Execution. (1) Before execution of the annual contributions
contract (ACC), the HA must submit to the appropriate HUD field office
the following:
(i) Estimates of Required Annual Contributions, Forms HUD-52672 and
HUD-52673;
(ii) Administrative Plan, which should include:
(A) Procedures for tenant outreach;
(B) A policy governing temporary relocation; and
(C) A mechanism to monitor the provision of supportive services.
(iii) Proposed Schedule of Allowances for Tenant-Furnished Utilities
and Other Services, Form HUD-52667, with a justification of the amounts
proposed;
(iv) If applicable, proposed variations to the acceptability
criteria of the Housing Quality Standards (see Sec. 882.803(b)); and
(v) The fire and building code applicable to each structure.
(2) After HUD has approved the HA's application, the review and
comment requirements of 24 CFR part 791 have been complied with, and the
HA has submitted (and HUD has approved) the items required by paragraph
(b)(1) of this section, HUD and the HA must execute the ACC in the form
prescribed by HUD. The initial term of the ACC must be 11 years. This
term allows one year to rehabilitate the units and place them under a
10-year HAP contract. The ACC must give HUD the option to renew the ACC
for an additional 10 years.
(3) Section 882.403(a) (Maximum Total ACC Commitments) applies to
this program.
(4) Section 882.403(b) (Project account) applies to this program.
(c)(1) If an owner is proposing to accomplish at least $3000 per
unit of rehabilitation by including work to make the unit(s) accessible
to a person with disabilities occupying the unit(s) or expected to
occupy the unit(s), the PHA may approve such units not to exceed 5
percent of the units under its Program, provided that accessible units
are necessary to meet the requirements of 24 CFR part 8, which
implements section 504 of the Rehabilitation Act of 1973. The
rehabilitation must make the unit(s), and access and egress to the
unit(s), barrier-free with respect to the disability of the individual
in residence or expected to be in residence.
(2) The PHA must take the applications and determine the eligibility
of all tenants residing in the approved units who wish to apply for the
Program. After eligibility of all the tenants has been determined, the
Owner must be informed of any adjustment in the number of units to be
assisted. In order to make the most efficient use of housing assistance
funds, an Agreement may not be entered into covering any unit occupied
by a family which is not eligible to receive housing assistance
payments. Therefore, the number of units approved by the PHA for a
particular proposal must be adjusted to exclude any unit(s) determined
by the PHA to be occupied by a family not eligible to receive housing
assistance payments. Eligible Families must also be briefed at this
stage as to their rights and responsibilities under the Program.
(3) Should the Owner agree with the assessment of the PHA as to the
work that must be accomplished, the preliminary feasibility of the
proposal, and the number of units to be assisted, the Owner, with the
assistance of the PHA where necessary, must prepare detailed work write-
ups including specifications and plans (where necessary) so that a cost
estimate may be prepared. The work write-up will describe how the
deficiencies eligible for amortization through the Contract Rents are to
be corrected including minimum
[[Page 98]]
acceptable levels of workmanship and materials. From this work write-up,
the Owner, with the assistance of the PHA, must prepare a cost estimate
for the accomplishment of all specified items.
(4) The owner is responsible for selecting a competent contractor to
undertake the rehabilitation. The PHA must propose opportunities for
minority contractors to participate in the program.
(5) The PHA must discuss with the Owner the various financing
options available. The terms of the financing must be approved by the
PHA in accordance with standards prescribed by HUD.
(6) Before execution of the Agreement, the HA must:
(i)(A) Inspect the structure to determine the specific work items
that need to be accomplished to bring the units to be assisted up to the
Housing Quality Standards (see Sec. 882.803(b)) or other standards
approved by HUD;
(B) Conduct a feasibility analysis, and determine whether cost-
effective energy conserving improvements can be added;
(C) Ensure that the owner prepares the work write-ups and cost
estimates required by paragraph (c)(3) of this section;
(D) Determine initial base rents and contract rents;
(ii) Assure that the owner has selected a contractor in accordance
with paragraph (c)(4) of this section;
(iii) After the financing and a contractor are obtained, determine
whether the costs can be covered by initial contract rents, computed in
accordance with paragraph (d) of this section; and, if a structure
contains more than 50 units to be assisted, submit the base rent and
contract rent calculations to the appropriate HUD field office for
review and approval in sufficient time for execution of the Agreement in
a timely manner;
(iv) Obtain firm commitments to provide necessary supportive
services;
(v) Obtain firm commitments for other resources to be provided;
(vi) Determine that the $3,000 minimum amount of work requirement
and other requirements in paragraph (c)(1) of this section are met;
(vii) Determine eligibility of current tenants, and select the units
to be assisted, in accordance with paragraph (c)(2) of this section;
(viii) Comply with the financing requirements in paragraph (c)(5) of
this section;
(ix) Assure compliance with all other applicable requirements of
this subpart; and
(x) If the HA determines that any structure proposed in its
application is infeasible, or the HA proposes to select a different
structure for any other reason, the HA must submit information for the
proposed alternative structure to HUD for review and approval. HUD will
rate the proposed structure in accordance with procedures in the
applicable notice of funding availability. The HA may not proceed with
processing for the proposed structure or execute an Agreement until HUD
notifies the HA that HUD has approved the proposed alternative structure
and that all requirements have been met.
(d) Initial contract rents. Section 882.408 (Initial contract
rents), including the establishment of fair market rents for SRO units
at 75 percent of the O-bedroom Moderate Rehabilitation Fair Market Rent,
applies to this program, except as follows:
(1)(i) In determining the monthly cost of a rehabilitation loan, in
accordance with Sec. 882.408(c)(2), a loan term of a least 10 years
(instead of 15 years) may be used. The exception in
Sec. 882.408(c)(2)(iii) for using the actual loan term if the total
amount of the rehabilitation is less than $15,000 continues to apply. In
addition, the cost of the rehabilitation that may be included for the
purpose of calculating the amount of the initial contract rent for any
unit must not exceed the lower of:
(A) The projected cost of rehabilitation; or
(B) The per unit cost limitation that is established by Federal
Register notice, plus the cost of the fire and safety improvements
required by 24 CFR 982.605(b)(4). HUD may, however, increase the
limitation in paragraph (d)(1)(i)(B) of this section by an amount HUD
determines is reasonable and necessary to accommodate special local
conditions, including high construction
[[Page 99]]
costs or stringent fire or building codes. HUD will publish future cost
limitation changes in the Federal Register in the Notice of Funding
Availability issued each year.
(ii) If the Federal Housing Administration (FHA) believes that high
construction costs warrant an increase in the per unit cost limitation
in paragraph (d)(1)(i)(B) of this section, the HA must demonstrate to
HUD's satisfaction that a higher average per unit amount is necessary to
conduct this program, and that every appropriate step has been taken to
contain the amount of the rehabilitation within the published per unit
cost limitation established at that time, plus the cost of the required
fire and safety improvements. These higher amounts will be determined as
follows:
(A) HUD may approve a higher per unit amount up to, but not to
exceed, an amount computed by multiplying the HUD-approved High Cost
Percentage for Base Cities (used for computing FHA high cost area
adjustments) for the area, by the current published cost limitation plus
the cost of the required fire and safety improvements.
(B) HUD may, on a structure-by-structure basis, increase the level
approved in paragraph (d)(1)(i) of this section to up to an amount
computed by multiplying 2.4 by the current published cost limitation
plus the cost of the required fire and safety improvements.
(2) In approving changes to initial contract rents during
rehabilitation in accordance with Sec. 882.408(d), the revised initial
contract rents may not reflect an average per unit rehabilitation cost
that exceeds the limitation specified in paragraph (d)(1) of this
section.
(3) If the structure contains four or fewer SRO units, the Fair
Market Rent for that size structure (the Fair Market Rent for a 1-, 2-,
3-, or 4-bedroom unit, as applicable) must be used to determine the Fair
Market Rent limitation instead of using the separate Fair Market Rent
for each SRO unit. To determine the Fair Market Rent limitation for each
SRO unit, the Fair Market Rent for the structure must be apportioned
equally to each SRO unit.
(4) Contract rents must not include the costs of providing
supportive services, transportation, furniture, or other nonhousing
costs, as determined by HUD. SRO program assistance may be used for
efficiency units selected for rehabilitation under this program, but the
gross rent (contract rent plus any Utility Allowance) for these units
will be no higher than for SRO units (i.e., 75 percent of the 0-bedroom
Moderate Rehabilitation Fair Market Rent).
(Approved by the Office of Management and Budget under control number
2506-0131)
[61 FR 48057, Sept. 11, 1996, as amended at 63 FR 23855, Apr. 30, 1998]
Sec. 882.806 Agreement to enter into housing assistance payments contract.
(a) Rehabilitation period--(1) Agreement. Before the owner begins
any rehabilitation, the HA must enter into an Agreement with the owner
in the form prescribed by HUD.
(2) Timely performance of work. (i) After execution of the
Agreement, the Owner must promptly proceed with the rehabilitation work
as provided in the Agreement. If the work is not so commenced,
diligently continued, or completed, the PHA will have the right to
rescind the Agreement, or take other appropriate action.
(ii) The Agreement must provide that the work must be completed and
the contract executed within 12 months of execution of the ACC. HUD may
reduce the number of units or the amount of the annual contribution
commitment if, in HUD's determination, the HA fails to demonstrate a
good faith effort to adhere to this schedule or if other reasons justify
reducing the number of units.
(3) Inspections. The PHA must inspect, as appropriate, during
rehabilitation to ensure that work is proceeding on schedule and is
being accomplished in accordance with the terms of the Agreement,
particularly that the work meets the acceptable levels of workmanship
and materials specified in the work write-up.
(4) Changes. (i) The Owner must submit to the PHA for approval any
changes from the work specified in the Agreement which would alter the
design or the quality of the required rehabilitation. The PHA may
condition
[[Page 100]]
its approval of such changes on a reduction of the Contract Rents. If
changes are made without prior PHA approval, the PHA may determine that
Contract Rents must be reduced or that the Owner must remedy any
deficiency as a condition for acceptance of the unit(s).
(ii) Contract rents may not be increased except in accordance with
Secs. 882.408(d) and 882.805(d)(2).
(b) Completion of rehabilitation--(1) Notification of completion.
Section 882.507(a) applies to this program.
(2) Evidence of completion. Section 882.507(b) applies to this
program, except that Sec. 882.507(b)(2)(iv), concerning lead-based paint
requirements, does not apply.
(3) Actual cost and rehabilitation loan certifications. Section
882.507(c) applies to this program, except that contract rents must be
established in accordance with Sec. 882.805(d).
(4) Review and inspections. Section 882.507(d) applies to this
program.
(5) Acceptance. Section 882.507(e) applies to this program.
(Approved by the Office of Management and Budget under control number
2502-0367)
[61 FR 48057, Sept. 11, 1996, as amended at 63 FR 23856, Apr. 30, 1998]
Sec. 882.807 Housing assistance payments contract.
(a) Time of execution. Upon PHA acceptance of the unit(s) and
certifications pursuant to Sec. 882.507, the Contract will be executed
by the Owner and the PHA. The effective date must be no earlier than the
PHA inspection which provides the basis for acceptance as specified in
Sec. 882.507(e).
(b) Term of contract. The contract for any unit rehabilitated in
accordance with this program must be for a term of 10 years. The
contract must give the HA the option to renew the contract for an
additional 10 years.
(c) Changes in contract rents from agreement. The contract rents may
be higher or lower than those specified in the Agreement, in accordance
with Sec. 882.805(d).
(d) Unleased unit(s). At the time of execution of the Contract, the
Owner will be required to submit a list of dwelling unit(s) leased and
not leased as of the effective date of the Contract.
(e) Contract rents at end of rehabilitation loan term. For a
contract in which the initial contract rent was based upon a loan term
shorter than 10 years, the contract must provide for reduction of the
contract rent effective with the rent for the month following the end of
the term of the rehabilitation loan. The amount of the reduction will be
the monthly cost of amortization of the rehabilitation loan. This
reduction should result in a new contract rent equal to the base rent
plus all subsequent adjustments.
(Approved by the Office of Management and Budget under control number
2502-0367)
[61 FR 48057, Sept. 11, 1996, as amended at 63 FR 23856, Apr. 30, 1998]
Sec. 882.808 Management.
(a) Outreach to homeless individuals and appropriate organizations.
(1) The HA or the owner must undertake outreach efforts to homeless
individuals so that they may be brought into the program. The outreach
effort should include notification to emergency shelter providers and
other organizations that could provide referrals of homeless
individuals. If the owner conducts the outreach effort, the owner must
notify the HA so that it may provide referrals of homeless individuals.
(2) Additional outreach concerns. If the procedures that the HA or
owner intends to use to publicize the availability of this program are
unlikely to reach persons of any particular race, color, religion, sex,
age, national origin, or mental or physical disability who may qualify
for admission to the program, the HA or owner must establish additional
procedures that will ensure that such persons are made aware of the
availability of the program. The HA or owner must also adopt and
implement procedures to ensure that interested persons can obtain
information concerning the existence and location of services and
facilities that are accessible to persons with disabilities.
(3) First priority for homeless individuals. Homeless individuals
must have the first priority for occupancy of housing rehabilitated
under this program.
(b) Individual participation--(1) Initial determination of
individual eligibility.
[[Page 101]]
Section 882.514(a) applies to this program.
(2) Owner selection of individuals. The owner must rent all vacant
units under contract to homeless individuals located through HA or owner
outreach efforts and determined by the HA to be eligible. The owner is
responsible for tenant selection and may refuse any individual, provided
the owner does not unlawfully discriminate. If the owner rejects an
individual, and the individual believes that the owner's rejection was
the result of unlawful discrimination, the individual may request the
assistance of the HA in resolving the issue and may also file a
complaint with HUD's Office of Fair Housing and Equal Opportunity in
accordance with 24 CFR 103.25. If the individual requests the assistance
of the HA, and if the HA cannot resolve the complaint promptly, the HA
should advise the individual that he or she may file a complaint with
HUD, and provide the individual with the address of the nearest HUD
Office of Fair Housing and Equal Opportunity.
(3) Briefing of individuals. Section 882.514(d) applies to this
program, except that Sec. 882.514(d)(1)(vi) does not apply.
(4) Continued participation of individual when contract is
terminated. Section 882.514(e) applies to this program.
(5) Individuals determined by the HA to be ineligible. Section
882.514(f) applies to this program. In addition, individuals are not
precluded from exercising other rights if they believe they have been
discriminated against on the basis of age.
(c) Lease. Sections 882.403(d) and 882.511(a) apply to this program.
In addition, the lease must limit occupancy to one eligible individual.
(d) Security and utility deposits. Section 882.414 applies to this
program.
(e) Rent adjustments. Section 882.410 applies to this program.
(f) Payments for vacancies. Section 882.411 applies to this program.
(g) Subcontracting of owner services. Section 882.412 applies to
this program.
(h) Responsibility of the individual. Section 882.413 applies to
this program.
(i) Reexamination of individual income--(1) Regular reexaminations.
The HA must reexamine the income of all individuals at least once every
12 months. After consultation with the individual and upon verification
of the information, the HA must make appropriate adjustments in the
Total Tenant Payment in accordance with 24 CFR part 5, subpart F, and
verify that only one individual is occupying the unit. The HA must
adjust Tenant Rent and the Housing Assistance Payment to reflect any
change in Total Tenant Payment. At each regular reexamination, the HA
must follow the requirements of 24 CFR part 5, subpart E concerning
verification of immigration status of any new family member.
(2) Interim reexaminations. The individual shall supply such
certification, release, information, or documentation as the PHA or HUD
determines to be necessary, including submissions required for interim
reexaminations of individual income and determinations as to whether
only one individual is occupying the unit. In addition Sec. 882.515(b)
shall apply.
(3) Continuation of Housing Assistance Payments. Section 882.515(d)
applies to this program.
(j) Overcrowded units. If the HA determines that anyone other than,
or in addition to, the eligible individual is occupying an SRO unit
assisted under this program, the HA must take all necessary action, as
soon as reasonably feasible, to ensure that the unit is occupied by only
one eligible individual.
(k) Adjustment of utility allowance. Section 882.510 applies to this
program.
(l) Termination of tenancy. Section 882.511 applies to this program.
For provisions requiring termination of assistance when the HA
determines that a family member is not a U.S. citizen or does not have
eligible immigration status, see 24 CFR part 5, subpart E for provisions
concerning certain assistance for mixed families (families whose members
include those with eligible immigration status, and those without
eligible immigration status) in lieu of termination of assistance, or
for provisions concerning deferral of termination of assistance.
(m) Reduction of number of units covered by contract. Section
882.512 applies to this program.
[[Page 102]]
(n) Maintenance, operation, and inspections. Section 882.516 applies
to this program.
(o) HUD review of contract compliance. Section 882.517 applies to
this program.
(p) Records and reports. Each recipient of assistance under this
subpart must keep any records and make any reports that HUD may require
within the timeframe required.
(q) Participation of homeless individuals. (1) Each approved
applicant receiving assistance under this program, except HAs, must
provide for the participation of not less than one homeless individual
or formerly homeless individual on the board of directors or other
equivalent policymaking entity of such applicant, to the extent that the
entity considers and makes policies and decisions regarding the
rehabilitation of any housing with assistance under this subpart. This
requirement is waived if the applicant is unable to meet this
requirement and presents a plan that HUD approves to consult with
homeless or formerly homeless individuals in considering and making such
policies and decisions.
(2) To the maximum extent practicable, each approved applicant must
involve homeless individuals and families, through employment, volunteer
services, or otherwise, in rehabilitating and operating facilities
assisted under this subpart, and in providing services for occupants of
such facilities.
(Approved by the Office of Management and Budget under control number
2506-0131)
[61 FR 48057, Sept. 11, 1996, as amended at 63 FR 23857, Apr. 30, 1998]
Sec. 882.809 Waivers.
Section 5.405(b) of this title does not apply to this program.
Sec. 882.810 Displacement, relocation, and acquisition.
(a) Minimizing displacement. (1) Consistent with the other goals and
objectives of this part, owners must assure that they have taken all
reasonable steps to minimize the displacement of persons (households,
businesses, nonprofit organizations, and farms) as a result of a project
assisted under this part. 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
project upon its completion.
(2) Whenever a building/complex is rehabilitated, and some but not
all of the rehabilitated units will be assisted upon completion of the
rehabilitation, the relocation requirements described in this section
apply to the occupants of each rehabilitated unit, whether or not
Section 8 assistance will be provided for the unit.
(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;
(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 project
upon completion; and
(iv) The assistance required under paragraph (b)(1) of this section.
(c) Relocation assistance for displaced persons. A ``displaced
person'' (defined in paragraph (g) 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, as amended (URA) (42 U.S.C. 4601-4655)
and implementing regulations 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) and, if the comparable replacement dwelling used to establish
the amount of the replacement housing payment to be provided to a
minority is located in an area of minority concentration, such person
also must be given, if possible, referrals to comparable and suitable,
decent, safe, and
[[Page 103]]
sanitary replacement dwellings not located in such areas.
(d) Real property acquisition requirements. The acquisition of real
property for a project is subject to the URA and the requirements
described in 49 CFR part 24, subpart B.
(e) Appeals. A person who disagrees with the HA's determination
concerning whether the person qualifies as a displaced person, or the
amount of relocation assistance for which the person is eligible, may
file a written appeal of that determination with the HA. A person who is
dissatisfied with the HA's determination on his or her appeal may submit
a written request for review of that determination to the HUD field
office.
(f) Responsibility of HA. (1) The HA must certify (i.e., provide
assurance of compliance as required by 49 CFR part 24) that it will
comply with the URA, the regulations in 49 CFR part 24, and the
requirements of this section, and must ensure such compliance
notwithstanding any third party's contractual obligation to the HA to
comply with these provisions.
(2) The cost of required relocation assistance is an eligible
project cost in the same manner and to the same extent as other project
costs. Such costs may be paid for with local public funds or funds
available from other sources. The cost of HA advisory services for
temporary relocation of tenants to be assisted under the program also
may be paid from preliminary administrative funds.
(3) The HA must maintain records in sufficient detail to demonstrate
compliance with the provisions of this section. The HA must maintain
data on the racial, ethnic, gender, and disability status of displaced
persons.
(g) Definition of displaced person. (1) For purposes of this
section, the term displaced person means a person (household, business,
nonprofit organization, or farm) 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 under
this part. The term displaced person includes, but may not be limited
to:
(i) A person who moves permanently from the real property after
receiving notice requiring such move, if the move occurs on or after the
date the owner submits to the HA the owner proposal that is later
approved;
(ii) A person, including a person who moves from the property before
the date the owner submits the proposal to the HA, if the HA or HUD
determines that the displacement resulted directly from acquisition,
rehabilitation, or demolition for the assisted project; or
(iii) A tenant-occupant of a dwelling unit who moves from the
building/complex permanently after the execution of the Agreement
between the owner and the HA (or, for projects assisted under subpart H
of this part, after the ``initiation of negotiations'' (see paragraph
(h) of this section)), if the move occurs before the tenant is provided
a written notice offering him or her the opportunity to lease and occupy
a suitable, decent, safe, and sanitary dwelling in the same building/
complex, under reasonable terms and conditions, upon its completion.
Such reasonable terms and conditions must include a monthly rent and
estimated average monthly utility costs that do not exceed the greater
of:
(A) The tenant's monthly rent before the execution of the agreement
and estimated average monthly utility costs; or
(B) Thirty percent of gross household income.
(C) For projects assisted under subpart H of this part, the amount
cannot exceed the greater of the tenant's monthly rent before the
``initiation of negotiations'' and estimated average monthly utility
costs; or (if the tenant is low-income) the total tenant payment, as
determined under 24 CFR 5.613, or (if the tenant is not low-income) 30
percent of gross household income; or
(iv) A tenant-occupant of a dwelling, who is required to relocate
temporarily, but does not return to the building/complex, if either:
(A) The tenant is not offered payment for all reasonable out-of-
pocket expenses incurred in connection with the temporary relocation; or
(B) Other conditions of the temporary relocation are not reasonable;
or
[[Page 104]]
(v) A tenant-occupant of a dwelling who moves from the building/
complex permanently after he or she has been required to move to another
dwelling unit in the building/complex, if either:
(A) The tenant is not offered reimbursement for all reasonable out-
of-pocket expenses incurred in connection with the move; or
(B) Other conditions of the move are not reasonable.
(2) Notwithstanding the provisions of paragraph (g)(1) of this
section, a person does not qualify as a displaced person (and is not
eligible for relocation assistance under the URA or this section), if:
(i) The person has been evicted for 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
HA determines that the eviction was not undertaken for the purpose of
evading the obligation to provide relocation assistance;
(ii) The person moved into the property after the submission of the
preliminary proposal (or application, if there is no preliminary
proposal), and before signing a lease and commencing occupancy, received
written notice of the project and its possible impact on the person
(e.g., the person may be displaced, temporarily relocated, or suffer a
rent increase) and the fact that the person would not qualify as a
displaced person (or for any assistance provided under this section) as
a result of the project;
(iii) The person is ineligible under 49 CFR 24.2(g)(2); or
(iv) HUD determines that the person was not displaced as a direct
result of acquisition, rehabilitation, or demolition for the project.
(3) The HA may request, at any time, HUD's determination of whether
a displacement is or would be covered by this section.
(h) Definition of initiation of negotiations. For purposes of
determining the formula for computing the replacement housing assistance
to be provided to a residential tenant displaced as a direct result of
private-owner rehabilitation or demolition of the real property, the
term initiation of negotiations means the execution of the Agreement
between the owner and the HA.
(Approved by the Office of Management and Budget under OMB control
number 2506-0121)
[61 FR 48056, Sept. 11, 1996. Redesignated and amended at 63 FR 23857,
Apr. 30, 1998]
PART 883_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM_STATE
HOUSING AGENCIES--Table of Contents
Subpart A_Summary and Guide
Sec.
883.101 General.
883.105 Applicability of part 883 in effect as of February 29, 1980.
883.106 Applicability and relationships between HUD and State agencies.
Subpart B [Reserved]
Subpart C_Definitions and Other Requirements
883.301 Applicability.
883.302 Definitions.
883.306 Limitation on distributions.
883.307 Financing.
883.308 Adjustments to reflect changes in terms of financing.
883.310 Property standards.
883.313 Audit.
883.314 Broadband infrastructure.
Subparts D-E [Reserved]
Subpart F_Housing Assistance Payments Contract
883.601 Applicability.
883.602 The contract.
883.603 Term of contract.
883.604 Maximum annual commitment and project account.
883.605 Leasing to eligible families.
883.606 Administration fee.
883.607 Default by owner and/or agency.
883.608 Notice upon contract expiration.
Subpart G_Management
883.701 Cross-reference.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-13619.
Source: 45 FR 6889, Jan. 30, 1980, unless otherwise noted.
[[Page 105]]
Subpart A_Summary and Guide
Sec. 883.101 General.
(a) The purpose of the Section 8 program is to provide decent, safe
and sanitary housing for low-income families through the use of a system
of housing assistance payments. These needs may be met by statewide or
special purpose housing agencies established by the various States.
(b) The regulations in this part 883 contain the policies and
procedures applicable to the Section 8 program for these State agencies.
[61 FR 13592, Mar. 27, 1996]
Sec. 883.105 Applicability of part 883 in effect as of February 29, 1980.
(a) Part 883, in effect as of February 29, 1980, applies to projects
for which the initial application was submitted on or after the February
29, 1980, effective date. (See 24 CFR part 883, revised as of April 1,
1980.) Projects for which applications or proposals were submitted
before the February 29, 1980, effective date of part 883 have been
processed under the part 883 regulations and procedures in effect at the
date of submission. If, however, the agency notified HUD within 60
calendar days of the February 29, 1980, effective date of the part 883
regulations that they chose to have the provisions of part 883, in
effect as of February 29, 1980, apply to a specific case, it must have
promptly modified the application(s) and proposal(s) to comply.
(b) Subpart F of this part, dealing with the HAP contract and
subpart G of this part, dealing with management, apply to all projects
for which an Agreement was not executed before the February 29, 1980,
effective date of part 883. In cases where an Agreement has been
executed:
(1) The Agency, owner and HUD may agree to make the revised subpart
F of this part applicable and execute appropriate amendments to the
Agreement or Contract;
(2) The Agency, Owner and HUD may agree to make the revised subpart
G of this part applicable (with or without the limitation on
distributions) and execute appropriate amendments to the Agreement or
Contract.
(c) Section 883.708, Termination of Tenancy and Modifications of
Leases, applies to new families who begin occupancy or execute a lease
on or after 30 days following the February 29, 1980, effective date of
part 883. This section also applies to families not covered by the
preceding sentence, including families currently under lease, who have a
lease in which a renewal becomes effective on or after the 60th day
following the February 29, 1980 effective date of part 883. A lease is
considered renewed when both the landlord and the family fail to
terminate a tenancy under a lease permitting either to terminate.
(d) Notwithstanding the provisions of paragraph (b) of this section,
the provisions of 24 CFR part 5 (concerning preferences for selection of
applicants) apply to all projects, regardless of when am Agreement was
executed.
[61 FR 13592, Mar. 27, 1996]
Sec. 883.106 Applicability and relationships between HUD and State agencies.
(a) Applicability. This subpart A applies to contract authority set
aside for a State Agency.
(b) General responsibilities and relationships. Subject to audit and
review by HUD to assure compliance with Federal requirements and
objectives, Housing Finance Agencies (HFAs) shall assume responsibility
for project development and for supervision of the development,
management and maintenance functions of owners.
(c) Certifications and HUD monitoring. (1) Generally, when reviewing
any of the certifications of an HFA required by this part, HUD shall
accept the certification as correct. If HUD has substantial reason to
question the correctness of any element in a certification, HUD shall
promptly bring the matter to the attention of the HFA and ask it to
provide documentation supporting the certifications. When the HFA
provides such evidence, HUD will act in accordance with the HFA's
judgment or evaluation unless HUD determines that the certification is
clearly not supported by the documentation.
(2) HUD will periodically monitor the activities of HFA's
participating under this part only with respect to Section 8
[[Page 106]]
or other HUD programs. This monitoring is intended primarily to ensure
that certifications submitted and projects operated under this part
reflect appropriate compliance with Federal law and requirements.
[61 FR 13592, Mar. 27, 1996]
Subpart B [Reserved]
Subpart C_Definitions and Other Requirements
Sec. 883.301 Applicability.
The provisions of this subpart are applicable to newly constructed
and substantially rehabilitated housing allocated contract authority
under subpart B of this part and processed and constructed under the
Fast Tract Procedures of subpart D. The definitions contained in
Sec. 883.302 and the provisions of Sec. 883.307(b) regarding review and
approval of financing documents, however, apply to all of this part.
Sec. 883.302 Definitions.
The terms Fair Market Rent (FMR), HUD, and Public Housing Agency
(PHA) are defined in 24 CFR part 5.
ACC (Annual Contributions Contract). The contract between the State
Agency and HUD under which HUD commits to provide the Agency with the
funds needed to make housing assistance payments to the Owner and to pay
the Agency for administrative fees in cases where it is eligible for
them.
Agency. See State Agency.
Agreement--(Agreement to enter into Housing Assistance Payments
Contract). The agreement between the owner and the State Agency on new
construction and substantial rehabilitation projects which provides
that, upon satisfactory completion of the project in accordance with the
HUD-approved proposal or final proposal, the Agency will enter into a
Housing Assistance Payments Contract with the owner.
Annual Income. As defined in part 5 of this title.
Assisted unit. A dwelling unit eligible for assistance under a
Contract.
Application. A request, submitted by a State Agency, to assign a
portion of its set-aside to a specific jurisdiction or project.
Contract--(Housing Assistance Payments Contract). The Contract
entered into by the owner and the State Agency upon satisfactory
completion of a new construction or substantial rehabilitation project
which sets forth the rights and duties of the parties with respect to
the project and the payments under the Contract.
Contract Rent. The total amount of rent specified in the Contract as
payable by the Agency and the tenant to the owner for an assisted unit.
In the case of the rental of only a manufactured home space, ``contract
rent'' is the total rent specified in the Contract as payable by the
Agency and the tenant to the owner for rental of the space, including
fees or charges for management and maintenance services with respect to
the space, but excluding utility charges for the manufactured home.
Covered housing provider. For the Section 8 Housing Assistance
Payments Programs--State Housing Agencies, ``covered housing provider,''
as such term is used in HUD's regulations in 24 CFR part 5, subpart L
(Protection for Victims of Domestic Violence, Dating Violence, Sexual
Assault, or Stalking), refers to the HFA or owner, as applicable given
the responsibilities of the covered housing provider as set forth in 24
CFR part 5, subpart L. For example, the PHA is the covered housing
provider responsible for providing the notice of occupancy rights under
VAWA and certification form described at 24 CFR 5.2005(a), though the
PHA may provide this notice and form to owners, and charge owners with
distributing the notice and form to tenants. In addition, the owner is
the covered housing provider that may choose to bifurcate a lease as
described at 24 CFR 5.2009(a), while both the PHA and owner are both
responsible for ensuring that an emergency transfer plan is in place in
accordance with 24 CFR 5.2005(e), and the owner is responsible for
implementing the emergency transfer plan when an emergency occurs.
Decent, safe, and sanitary. Housing is decent, safe, and sanitary if
it meets the physical condition requirements in 24 CFR part 5, subpart
G.
Existing Housing. Housing assisted under a contract entered into
pursuant
[[Page 107]]
to 24 CFR part 882. (See subpart E of this part.)
Fast Track procedures. The procedures contained in subpart D for
processing and construction of new construction and substantial
rehabilitation projects. In order to be eligible for these procedures, a
State Agency must provide permanent financing without Federal mortgage
insurance or a Federal guarantee except coinsurance under Section 244 of
the National Housing Act.
Financing Cost Contingency (FCC). The maximum amount of contract
authority which may be used to amend the Annual Contributions Contract
(ACC) and Housing Assistance Payments Contract (HAP Contract) to provide
increased contract rents to cover higher than anticipated debt service
on the loan for a new construction or substantial rehabilitation
project.
Gross Rent. As defined in part 813 of this chapter.
Household type. The three household types are (1) elderly and
handicapped, (2) family, and (3) large family.
Housing Assistance Payment. The payment made to the Owner of an
assisted unit by the State Agency as provided in the Contract. Where the
unit is leased to an eligible Family, the payment is the difference
between the Contract Rent and the Tenant Rent. An additional payment is
made to the Family when the Utility Allowance is greater than Total
Tenant Payment. In the case of a Family renting only a manufactured home
space as provided in Sec. 883.303(i), the Housing Assistance Payment is
the difference between Gross Rent and the Total Tenant Payment, but such
payment may not exceed the Contract Rent for the space, and no
additional payment is made to the Family. A Housing Assistance Payment,
known as a ``vacancy payment'', may be made to the Owner when an
assisted unit is vacant, as provided in Sec. 883.712.
Housing Assistance Plan (HAP). A housing plan submitted by a unit of
general local or State government and approved by HUD as being
acceptable under the standards of 24 CFR part 570.
Housing type. The three housing types are new construction,
substantial rehabilitation, and existing housing/moderate
rehabilitation.
HFA (Housing Finance Agency). A State Agency which provides
permanent financing for newly constructed or substantially rehabilitated
housing processed under subpart D and financed without Federal mortgage
insurance or a Federal guarantee except coinsurance under Section 244 of
the National Housing Act.
Independent Public Accountant. Certified Public Accountant or a
licensed or registered public accountant, none of which has a business
relationship with the owner or State Agency except for the performance
of audit, systems work and tax preparation. If not certified, the
Independent Public Accountant must have been licensed or registered by a
regulatory authority of a State or other political subdivision of the
United States on or before December 31, 1970. In States that do not
regulate the use of the title ``public accountant,'' only Certified
Public Accountants may be used.
Moderate rehabilitation. The improvement of dwelling units in
accordance with HUD requirements, under 24 CFR part 882.
New construction. Housing for which construction starts after
execution of an Agreement, or housing which is already under
construction when the Agreement is executed provided that:
(a) At the date an application is submitted to HUD, a substantial
amount of construction (generally at least 25 percent) remains to be
completed;
(b) At the date of application to HUD, the project cannot be
completed and occupied by eligible families without assistance under
this part; and
(c) At the time construction was initiated, all of the parties
reasonably expected that the project would be completed without
assistance under this part.
Override. The difference between an HFA's cost of borrowing on
obligations issued to finance a new construction or substantial
rehabilitation project and the lending rate at which they provide
permanent financing for the project.
Owner. Any private person or entity (including a cooperative) or a
public entity, having the legal right to lease or sublease dwelling
units assisted under this part. The term Owner also
[[Page 108]]
includes the person or entity submitting a proposal to a State Agency
under this part.
Partially-assisted Project. A project for non-elderly families under
this part which includes more than 50 units, of which the number of
assisted units does not exceed the greater of (a) 20 percent of the
units in the project, rounded to the next highest whole number of units,
or (b) the minimum percentage required by State law as a condition of
HFA permanent financing, if the Assistant Secretary approves such
minimum percentage for purposes of applicability of this definition.
Permanent financing. An Agency is determined to provide permanent
financing if HUD determines that (a) the Agency permanently finances a
project from its own funds, including the sale of its obligations; or
(b) permanent financing for projects developed or administered by the
Agency is provided by the State government or by an agency or
instrumentality thereof other than the Agency; or (c) the permanent
financing (by a public or private entity other than the Agency) is
backed by the commitment of the Agency to assume the risks of loss on
default or foreclosure of the loan.
Project Account. A specifically identified and segregated account
for each project which is established in accordance with Sec. 883.604(b)
out of the amounts by which the maximum Annual Contributions Contract
commitment exceeds the amount actually paid out under the ACC each year.
Proposal. A proposal for a project that is submitted by an HFA to
HUD for Section 8 assistance under this part.
Rent. In the case of an assisted unit in a cooperative project, rent
means the carrying charges payable to the cooperative with respect to
occupancy of the unit.
Replacement cost--(a) New construction. The estimated construction
cost of the project when the proposed improvements are completed. The
replacement cost may include the land, the physical improvements,
utilities within the boundaries of the land, architect's fees,
miscellaneous charges incident to construction as approved by the
Assistant Secretary.
(b) Substantial rehabilitation. The sum of the ``as is'' value
before rehabilitation of the property as determined by the Agency and
the estimated cost of rehabilitation, including carrying and finance
charges.
Single Room Occupancy (SRO) Housing. A unit for occupancy by a
single eligible individual capable of independent living, which does not
contain food preparation and/or sanitary facilities and is located
within a multifamily structure consisting of more than 12 units.
Secretary. The Secretary of Housing and Urban Development (or
designee).
Small Project. A project for non-elderly families under this part
which includes a total of 50 or fewer units (assisted and unassisted).
State Agency (Agency). An agency which has been notified by HUD in
accordance with Sec. 883.203 that it is authorized to apply for a set-
aside and/or to use the Fast Track Procedures of this part.
Substantial rehabilitation. (a) The improvement of a property to
decent, safe and sanitary condition in accordance with the standards of
this part from a condition below these standards. Substantial
Rehabilitation may vary in degree from gutting and extensive
reconstruction to the cure of substantial accumulation of deferred
maintenance. Cosmetic improvements alone do not qualify as Substantial
Rehabilitation under this definition.
(b) Substantial Rehabilitation may also include renovation,
alteration or remodeling for the conversion or adaptation of
structurally sound property to the design and condition required for use
under this part, or the repair or replacement of major building systems
or components in danger of failure.
(c) Housing on which rehabilitation work has already started when
the Agreement is executed is eligible for assistance as a Substantial
Rehabilitation project under this part provided:
(1) At the date of application to HUD, a substantial amount of
construction (generally at least 25 percent) remains to be completed;
(2) At the date of application to HUD, the project cannot be
completed and occupied by eligible families without assistance under
this part; and
[[Page 109]]
(3) At the time construction was initiated, all of the parties
reasonably expected that the project would be completed without
assistance under this part.
Tenant Rent. The monthly amount defined in, and determined in
accordance with part 813 of this chapter.
Total Tenant Payment. The monthly amount defined in, and determined
in accordance with part 813 of this chapter.
Utility Allowance. As defined in part 813 of this chapter, made or
approved by HUD.
Utility reimbursement. As defined in part 813 of this chapter.
Vacancy payments. The housing assistance payment made to the owner
by the State Agency for a vacant, assisted unit if certain conditions
are fulfilled as provided in the Contract. The amount of vacancy payment
varies with the length of the vacancy period and is less after the first
60 days of any vacancy.
Very Low-Income Family. As defined in part 813 of this chapter.
[45 FR 6889, Jan. 30, 1980, as amended at 45 FR 56326, Aug. 22, 1980; 48
FR 12708, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984; 49 FR 19946, May
10, 1984; 61 FR 5213, Feb. 9, 1996; 61 FR 13592, Mar. 27, 1996; 63 FR
46579, Sept. 1, 1998; 70 FR 77744, Dec. 30, 2005; 81 FR 80813, Nov. 16,
2016]
Sec. 883.306 Limitation on distributions.
(a) Non-profit owners are not entitled to distributions of project
funds.
(b) For the life of the Contract, project funds may only be
distributed to profit-motivated owners at the end of each fiscal year of
project operation following the effective date of the Contract and after
all project expenses have been paid, or funds have been set aside for
payment, and all reserve requirements have been met. The first year's
distribution may not be made until the HFA certification of project
costs, (See Sec. 883.411), where applicable, has been submitted to HUD.
The HFA must certify that distributions will not exceed the following
maximum returns:
(1) For projects for elderly families, the first year's distribution
will be limited to 6 percent on equity. The Assistant Secretary may
provide for increases in subsequent years' distributions on an annual or
other basis so that the permitted return reflects a 6 percent return on
the value, in subsequent years, as determined in accordance with HUD
guidelines, of the approved initial equity. Any such adjustments will be
made in accordance with a Notice in the Federal Register. The HFA may
approve a lesser increase or no increase in subsequent years'
distributions.
(2) For projects for non-elderly families the first year's
distribution will be limited to 10 percent on equity. The Assistant
Secretary may provide for increases in subsequent years' distributions
on an annual or other basis so that the permitted return reflects a 10
percent return on the value, in subsequent years, as determined in
accordance with HUD guidelines, of the approved initial equity. Any such
adjustments will be made in accordance with a Notice in the Federal
Register. The HFA may approve a lesser increase or no increase in
subsequent years' distributions.
(c) For the purpose of determining the allowable distribution, an
owner's equity investment in a project is deemed to be 10 percent of the
replacement cost of the part of the project attributable to dwelling use
accepted by the HFA at cost certification (See Sec. 883.411), or as
specified in the Proposal where cost certification is not required,
unless the owner justifies a higher equity contribution through cost
certification documentation accepted by the HFA.
(d) Any short-fall in return may be made up from surplus project
funds in future years.
(e) If the HFA determines at any time that surplus project funds are
more than the amount needed for project operations, reserve requirements
and permitted distributions, the HFA may require the excess to be placed
in a separate account to be used to reduce housing assistance payments
or for other project purposes. Upon termination of the Contract, any
excess project funds must be remitted to HUD.
(f) Owners of small projects or partially assisted projects are
exempt from the limitation on distributions
[[Page 110]]
contained in paragraphs (b) through (d) of this section.
(g) HUD may permit increased distributions of surplus, in excess of
the amounts otherwise permitted, to profit-motivated owners who
participate in a HUD-approved initiative or program to preserve below-
market housing stock. The increased distributions will be limited to a
maximum amount based on market rents and calculated according to HUD
instructions. Funds that the owner is authorized to retain under section
236(g)(2) of the National Housing Act are not considered distributions
to the owner.
(h) Any State or local law or regulation that restricts
distributions to an amount lower than permitted by this section or
permitted by the Commissioner under this paragraph (h) is preempted as
provided by section 524(f) of the Multifamily Assisted Housing Reform
and Affordability Act of 1997.
[45 FR 6889, Jan. 30, 1980, as amended at 65 FR 61075, Oct. 13, 2000; 65
FR 68891, Nov. 15, 2000]
Sec. 883.307 Financing.
(a) Types of financing. A State Agency that used the Fast Track
Procedures formerly in this part must provide permanent financing for
any new construction or substantial rehabilitation project without
Federal mortgage insurance, except coinsurance under section 244 under
the National Housing Act (12 U.S.C. 1701 et seq). Obligations issued by
the HFA for this purpose may be taxable under section 802 of the Housing
and Community Development Act of 1974 (42 U.S.C. 1440) or tax-exempt
under section 103 of the Internal Revenue Code (26 U.S.C. 103), 24 CFR
part 811 or other Federal Law.
(b) HUD approval. (1) A State Agency, prior to receiving HUD
approval of its first New Construction or Substantial Rehabilitation
Proposal using contract authority under this part, must submit copies of
the documents relating to the method of financing Section 8 projects to
HUD for review. These documents shall include bond resolutions or
indentures, loan agreements, regulatory agreements, notes, mortgages or
deeds of trust and other related documents, if any, but does not need to
include the ``official statement'' or copies of the prospectus for
individual bond issues. HUD review will be limited to making certain
that the documents are not inconsistent with or in violation of these
regulations and the administrative procedures used to implement them.
After review, HUD must notify the Agency that the documents are
acceptable or, if unacceptable, will request clarification or changes.
This review and approval will meet the requirements of 24 CFR
811.107(a).
(2) When an Agency which has received HUD approval of its financing
documents proposes substantive changes in them which affect the Section
8 program, the revised documents must be submitted for review. HUD
review will be limited to the areas indicated in paragraph (b)(1) of
this section and must be carried out promptly. HUD will notify the
Agency that the revised documents are acceptable, or, if unacceptable,
will request clarification or changes.
(3) The review and approval of financing documents required under 24
CFR part 811 will constitute HUD approval under this section.
(4) The Agency must retain in its files, and make available for HUD
inspection, the documentation relating to its financing of Section 8
projects, including any relating to the certifications of compliance
with applicable Department of Treasury or HUD regulations (24 CFR part
811) regarding tax-exempt financing.
(c) Pledge of Contracts. The HFA or owner may pledge, or offer as
security for any loan or obligation, an Agreement, Contract, or ACC
entered into pursuant this part provided that such security is in
connection with a project constructed pursuant to this part. Any pledge
of the Agreement, Contract, or ACC, or payments thereunder will be
limited to the amounts payable under the Contract or ACC in accordance
with its terms. If the pledge or other document provides that all
payments will be paid directly to the HFA, other mortgagee or the
trustee for bondholders, the HFA, other mortgagee or trustee may make
all payments or deposits required under the mortgage or trust indenture
and remit any excess to the owner.
[[Page 111]]
(d) Foreclosure and other transfers. In the event of assignment,
sale, or other disposition of the project or the contracts agreed to by
the HFA and approved by HUD (which approval shall not be unreasonably
delayed or withheld), foreclosure, or assignment of the mortgage or deed
in lieu of foreclosure,
(1) The Agreement, the Contract and the ACC will continue in effect,
and
(2) Housing assistance payments will continue in accordance with the
terms of the Contract, unless approval to amend or terminate the
Agreement, the Contract or the ACC has been obtained from the Assistant
Secretary.
(e) In the case of a newly constructed or substantially
rehabilitated manufactured home park, the principal amount of any
mortgage attributable to the rental spaces in the park may not exceed an
amount per space determined in accordance with Sec. 207.33(b) of this
title.
[45 FR 6889, Jan. 30, 1980, as amended at 45 FR 56327, Aug. 22, 1980; 48
FR 12709, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984; 61 FR 13592, Mar.
27, 1996]
Sec. 883.308 Adjustments to reflect changes in terms of financing.
(a) Certifications of projected financing terms. When an HFA, under
this part, provides permanent financing for a project through the
issuance of obligations and these are not sold until after the contract
rents for a project have been set, the HFA must submit, with the
Proposal, a certification of:
(1) Its projected rate of borrowing (net interest cost), based on a
reasonable evaluation of market conditions, on obligations issued to
provide interim and permanent financing for the project,
(2) The projected cost of borrowing to the owner on interim
financing for the project,
(3) The projected loan amount for the project,
(4) The projected cost of borrowing and the term of the permanent
financing to be provided to the owner for the project,
(5) The projected annual debt service for the permanent financing on
which the Contract Rents are based, and
(6) The override, if any.
(b) Revised certifications. If, at any time prior to the execution
of the Agreement, the terms and conditions of financing change, other
than the HFA's projected cost of borrowing, the HFA must submit revised
certifications based upon the new terms.
(c) Certifications of actual financing terms. After a project has
been permanently financed, the HFA must submit a certification which
specifies the actual financing terms. The items that must be included in
this certification include:
(1) The HFA's actual cost of borrowing (net interest cost) on
obligations from which funds were used to permanently finance the
project,
(2) The override, if any, added to the actual cost of borrowing on
obligations in setting the rate of lending to the owner,
(3) The annual debt service to the owner for the permanent financing
on which contract rents are based; and,
(4) The actual loan amount and the term on which the annual debt
service is based.
(d) Reduction of Contract Rents. If the actual debt service to the
owner under the permanent financing is lower than the anticipated debt
service on which the Contract Rents were based, the initial Contract
Rents, or the Contract Rents currently in effect, must be reduced
commensurately, and the amount of the savings credited to the project
account.
(e) Increase of Contract Rents. This paragraph (e) applies only if
the HFA is using its set-aside for the project and it is processed under
subpart D. If the actual debt service to the owner under the permanent
financing is higher than the anticipated debt service on which the
Contract Rents are based, the initial Contract Rents or the Contract
Rents currently in effect may, if sufficient contract and budget
authority is available, be increased commensurately based on the
certification submitted under paragraph (c) of this section. The amount
of this increase may not exceed the amount of the Financing Cost
Contingency (FCC) authorized but not reserved for the project at the
time the proposal is approved. The adjustment must not exceed the amount
necessary to reflect an increase in debt
[[Page 112]]
service (based on the difference between the projected and actual terms
of the permanent financing) resulting from an increase over the
projected interest rate of not more than:
(1) One and one-half percent if the projected override was three-
fourths of one percent or less, or
(2) One percent if such projected override was more than three-
fourths of one percent but not more than one percent, or
(3) One-half of one percent if such projected override was more than
one percent.
(f) Recoupment of savings in financing costs. In the event that
interim financing is continued after the first year of the term of the
Contract and the debt service of the interim financing for any period of
three months after such first year is less than the anticipated debt
service under the permanent financing on which the Contract Rents were
based, an appropriate amount reflecting the savings in financing cost
will be credited by HUD to the Project Account and withheld from housing
assistance payments payable to the owner. If during the course of the
same year there is any period of three months in which the debt service
is greater than the anticipated debt service under the projected
permanent financing, an adjustment will be made so that only the net
amount of savings in debt service for the year is credited by HUD to the
Project Account and withheld from housing assistance payments to the
owner. No increased payments will be made to the owner on account of any
net excess for the year of actual interim debt service over the
anticipated debt service under the permanent financing. Nothing in this
paragraph will be construed as requiring a permanent reduction in the
Contract Rents or precluding adjustments of Contract Rents in accordance
with paragraphs (d) or (e) of this section.
(g) Compliance with other regulations. The HFA must also submit a
certification specifying:
(1) That the terms of financing, the amount of the obligations
issued with respect to the project and the use of the funds will be in
compliance with any regulation governing the issuance of the
obligations, e.g., Department of the Treasury regulations regarding
arbitrage or HUD regulations regarding Tax Exemption of Obligations of
Public Housing Agencies (24 CFR part 811), and
(2) That the override, if any, on the permanent financing for the
project will not be greater than the projected override nor greater than
the override allowed for the borrowing as a whole under applicable
regulations, e.g., the Department of Treasury regulations regarding
arbitrage. The certifications required under 24 CFR 811.107(a)(2) will
be sufficient to meet the certification requirements of this paragraph
(g).
Sec. 883.310 Property standards.
(a) New Construction. Projects must comply with:
(1) [Reserved]
(2) In the case of manufactured homes, the Federal Manufactured Home
Construction and Safety Standards, pursuant to Title VI of the Housing
and Community Development Act of 1974, and 24 CFR part 3280;
(3) In the case of congregate or single room occupant housing, the
appropriate HUD guidelines and standards,
(4) HUD requirements pursuant to Section 209 of the Housing and
Community Development Act of 1974 for projects for the elderly or the
handicapped;
(5) HUD requirements pertaining to noise abatement and control; and
(6) Applicable state and local laws, codes, ordinances, and
regulations.
(b) Substantial Rehabilitation. Projects must comply with:
(1) [Reserved]
(2) In the case of congregate or single room occupant housing, the
appropriate HUD guidelines and standards,
(3) HUD requirements pursuant to Section 209 of the HCD Act for
projects for the elderly or the handicapped;
(4) HUD requirements pertaining to noise abatement and control;
(5) 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. 4851-4856), and implementing regulations at part 35, subparts A,
B, H, and R of this title.
(6) Applicable State and local laws, codes, ordinances, and
regulations.
[[Page 113]]
(c) Smoke detectors--(1) Performance requirement. After October 30,
1992, each dwelling unit must include at least one battery-operated or
hard-wired smoke detector, in proper working condition, on each level of
the unit. If the unit is occupied by hearing-impaired persons, smoke
detectors must have an alarm system, designed for hearing-impaired
persons, in each bedroom occupied by a hearing-impaired person.
(2) Acceptability criteria. The smoke detector must be located, to
the extent practicable, in a hallway adjacent to a bedroom, unless the
unit is occupied by a hearing-impaired person, in which case each
bedroom occupied by a hearing-impaired person must have an alarm system
connected to the smoke detector installed in the hallway.
[45 FR 6889, Jan. 30, 1980, as amended at 50 FR 9269, Mar. 7, 1985; 57
FR 33851, July 30, 1992; 63 FR 46579, Sept. 1, 1998; 64 FR 50227, Sept.
15, 1999]
Sec. 883.313 Audit.
Where housing assistance under the Section 8 Program is provided for
projects developed or owned by non-Federal entities (as defined in 2 CFR
200.69), the audit requirements in 2 CFR part 200, subpart F, shall
apply.
[80 FR 75941, Dec. 7, 2015]
Sec. 883.314 Broadband infrastructure.
Any new construction or substantial rehabilitation, as substantial
rehabilitation is defined by 24 CFR 5.100, of a building with more than
4 rental units and that is subject to a Housing Assistance Payments
contract executed or renewed after January 19, 2017 must include
installation of broadband infrastructure, as this term is also defined
in 24 CFR 5.100, except where the owner determines and documents the
determination that:
(a) The location of the new construction or 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.
[81 FR 92638, Dec. 20, 2016]
Subparts D-E [Reserved]
Subpart F_Housing Assistance Payments Contract
Sec. 883.601 Applicability.
The provisions of this subpart apply to new construction and
substantial rehabilitation projects using contract authority allocated
under subpart B, Allocation and Assignment of Contract Authority, or
processed and constructed under subpart D, Fast Track Procedures.
Sec. 883.602 The contract.
(a) Contract. The Housing Assistance Payments Contract sets forth
rights and duties of the owner and State Agency with respect to the
project and the Housing Assistance payments.
(b) Housing Assistance Payments to Owners under the Contract. The
Housing Assistance Payments made under the Contract are:
(1) Payments to the owner to assist eligible families leasing
assisted units, and
(2) Payments to the owner for vacant assisted units (``vacancy
payments'') if the conditions specified in Sec. 880.611 of this chapter
are satisfied.
The housing assistance payments are made monthly by the State Agency
upon proper requisition by the owner, except payments for vacancies of
more than 60 days, which are made semi-annually by the Agency upon
proper requisition by the owner.
(c) Amount of Housing Assistance Payments to the Owner. (1) The
amount of the housing assistance payments made to the owner of a unit
being leased by an eligible family is the difference between the
contract rent for the unit and the tenant rent payable by the family.
(2) A housing assistance payment will be made to the owner for a
vacant assisted unit in an amount equal to 80 percent of the contract
rent for the first 60 days of vacancy, subject to the conditions in
Sec. 880.611 of this chapter. If the owner collects any tenant rent or
[[Page 114]]
other amount for this period which, when added to this vacancy payment,
exceeds the contract rent, the excess must be repaid as the Agency
directs in accordance with HUD guidelines.
(3) For a vacancy that exceeds 60 days, a housing assistance payment
for the vacant unit will be made, subject to the conditions in
Sec. 880.611 of this chapter, in an amount equal to the principal and
interest payments required to amortize that portion of the debt
attributable to the vacant unit for up to 12 additional months.
(d) Payment of utility reimbursement. Where applicable, the Utility
Reimbursement will be paid to the Family as an additional Housing
Assistance Payment. The Contract will provide that the Owner will make
this payment on behalf of the Agency. Funds will be paid to the Owner in
trust solely for the purpose of making this additional payment. If the
Family and the utility company consent, the Owner may pay the Utility
Reimbursement jointly to the Family and the utility company or directly
to the utility company.
[45 FR 6889, Jan. 30, 1980, as amended at 49 FR 19946, May 10, 1984; 61
FR 13593, Mar. 27, 1996]
Sec. 883.603 Term of contract.
(a) New Construction. The term of the Contract will be governed by
the following provisions:
(1) For assisted units in a project financed with the aid of a loan
insured by the Federal government (including coinsurance under Section
244 of the National Housing Act) or a loan made, guaranteed or intended
for purchase by the Federal government and for assisted units in newly
constructed manufactured home parks, the term of the Contract will be 20
years.
(2) For assisted units in a project owned by or financed by a loan
or loan guarantee from a State or local agency, where the assisted units
are intended for occupancy by non-elderly families and where it is
located in an area designated by the Assistant Secretary as one
requiring special financial assistance, the Contract will be for an
initial term of 20 years for any dwelling unit, with provision for
renewal for additional terms of not more than 5 years each. The total
term of initial and renewal terms will not exceed the lesser of (i) 40
years for any dwelling unit, or (ii) the term of the permanent financing
(but not less than 20 years).
(3) For assisted units in all other projects, the Contract will be
for an initial term of 20 years for any dwelling unit, with provision
for renewal for additional terms of not more than 5 years each. The
total term of initial and renewal terms will not exceed the lesser of
(i) 30 years for any dwelling unit, or (ii) the term of the permanent
financing (but not less than 20 years).
(b) Substantial Rehabilitation. The Contract will be for a term
which is consistent with paragraph (b)(1) and with paragraph (b) (2),
(3), or (4) of this section.
(1) The Contract term will cover the longest term, but not less than
20 years, of a single credit instrument covering:
(i) The cost of rehabilitation or
(ii) The existing indebtedness, or
(iii) The cost of rehabilitation and the refinancing of the existing
indebtedness, or
(iv) The cost of rehabilitation and the acquisition of the property;
and
(2) For assisted units in a project financed with the aid of a loan
(including coinsurance under Section 244 of the National Housing Act),
or a loan made, guaranteed or intended for purchase by the Federal
Government, and for assisted units in a substantially rehabilitated
manufactured home park, the term of the Contract will not exceed 20
years; or
(3) For assisted units in a project owned or financed by a loan or
loan guarantee from a State or local agency where the assisted units are
intended for occupancy by non-elderly families and where it is located
in an area designated by the Assistant Secretary as one requiring
special financial assistance, the Contract will be for an initial term
of 20 years for any dwelling unit. There will be a provision for renewal
for additional terms of not more than 5 years each. The total of initial
and renewal terms will not exceed the lesser of (i) 40 years for any
dwelling unit, or (ii) the term of the permanent financing (but not less
than 20 years); or
[[Page 115]]
(4) For assisted units in projects financed other than as described
in paragraph (b) (2) or (3) of this section, the Contract will be for an
initial term of 20 years for any dwelling unit. There will be a
provision for renewal for additional terms of not more than 5 years
each. The total of initial and renewal terms will not exceed the lesser
of (i) 30 years for any dwelling unit, or (ii) the term of the permanent
financing (but not less than 20 years).
(c) Staged Projects. If a project is completed in stages, the term
of the Contract must relate separately to the units in each stage unless
the Agency and the owner agree that only the units in the first stage
will be assisted for the maximum term of the Contract. The total
Contract term, for the units in all stages, beginning with the effective
date of the Contract for the first stage, may not exceed the overall
maximum term allowable for any one unit under this section, plus two
years.
[45 FR 56327, Aug. 22, 1980, as amended at 48 FR 12710, Mar. 28, 1983;
49 FR 17449, Apr. 24, 1984]
Sec. 883.604 Maximum annual commitment and project account.
(a) Maximum annual commitment. The maximum annual contribution that
may be contracted for in the ACC is the total of the contract rents and
utility allowances for all assisted units in the project, plus the HUD-
approved fees, if any, for State Agency administration of the Contract.
(See Sec. 883.606)
(b) Project Account. (1) A project account will be established and
maintained by HUD as a specifically identified and segregated account
for each project. The account will be established out of the amounts by
which the maximum annual commitment exceeds the amount actually paid out
under the ACC each year. Payments will be made from this account for
housing assistance payments (and fees for Agency admininstration, if
appropriate) when needed to cover increases in contract rents or
decreases in tenant rents and for other costs specifically approved by
the Secretary.
(2) Whenever a HUD-approved estimate of required payments under the
ACC for a fiscal year exceeds the maximum annual commitment and would
cause the amount in the project account to be less than 40 percent of
the maximum, HUD will, within a reasonable period of time, take such
additional steps authorized by Section 8(c)(6) of the 1937 Act, as may
be necessary, to assure that payments under the ACC will be adequate to
cover increases in contract rents and decreases in tenant rents.
[45 FR 6889, Jan. 30, 1980, as amended at 61 FR 13593, Mar. 27, 1996]
Sec. 883.605 Leasing to eligible families.
The provisions of 24 CFR 880.504 apply to this section, including
reference at 24 CFR 880.504(f) to the requirements of 24 CFR part 5,
subpart L (Protection for Victims of Domestic Violence, Dating Violence,
Sexual Assault, or Stalking), subject to the requirements of
Sec. 883.105.
[81 FR 80813, Nov. 16, 2016]
Sec. 883.606 Administration fee.
(a) The State Agency is responsible for administration of the
Contract subject to periodic review and audit by HUD.
(b) The Agency is entitled to a reasonable fee, determined by HUD,
for administering a Contract on newly constructed or substantially
rehabilitated units provided there is no override on the permanent loan
granted by the Agency to the owner for a project containing assisted
units.
Sec. 883.607 Default by owner and/or agency.
(a) Rights of Owner if Agency defaults under Agreement or Contract.
The ACC, the Agreement and the Contract will provide that, in the event
of failure of the Agency to comply with the Agreement or Contract with
the owner, the owner will have the right, if he/she is not in default,
to demand that HUD investigate. HUD will first give the Agency a
reasonable opportunity to take corrective action. If HUD determines that
a substantial default exists, HUD will assume the Agency's rights and
obligations under the Agreement or Contract and meet the obligations of
the Agency under the Agreement or Contract including the obligation to
enter into the Contract.
[[Page 116]]
(b) Rights of HUD if Agency defaults under ACC. The ACC will provide
that, if the Agency fails to comply with any of its obligations, HUD may
determine that there is a substantial default and require the Agency to
assign to HUD all of its rights and interests under the Contract;
however, HUD will continue to pay annual contributions in accordance
with the terms of the ACC and the Contract. Before determining that an
Agency is in substantial default, HUD will give the Agency a reasonable
opportunity to take corrective action.
(c) Rights of Agency and HUD if Owner defaults under Contract. (1)
The Contract will provide that if the Agency determines that the owner
is in default under the Contract, the Agency will notify the owner, and
lender, if applicable, with a copy to HUD,
(i) Of the actions required to be taken to cure the default,
(ii) Of the remedies to be applied by the Agency including specific
performance under the Contract, abatement of housing assistance payments
and recovery of overpayments, where appropriate; and
(iii) That, if he/she fails to cure the default, the Agency has the
right to terminate the Contract or to take other corrective action, in
its discretion.
(2) If the Agency provided the permanent financing, the Contract
will also provide that HUD has an independent right to determine whether
the owner is in default and to take corrective action and apply
appropriate remedies, except that HUD will not have the right to
terminate the Contract without proceeding in accordance with paragraph
(c) of this section.
Sec. 883.608 Notice upon contract expiration.
The provisions of Sec. 880.508 of this chapter apply, subject to the
requirements of Sec. 883.105.
[61 FR 13593, Mar. 27, 1996]
Subpart G_Management
Sec. 883.701 Cross-reference.
All of the provisions of part 880, subpart F, of this chapter apply
to projects assisted under this part, subject to the requirements of
Sec. 883.105. For purposes of this subpart G, all references in part
880, subpart F, of this chapter to ``contract administrator'' shall be
construed to refer to ``Agency''.
[61 FR 13593, Mar. 27, 1996]
PART 884_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS--Table of Contents
Subpart A_Applicability, Scope and Basic Policies
Sec.
884.101 Applicability and scope.
884.102 Definitions.
884.104 Maximum total annual contract commitment and project account
(private-owner or PHA-owner projects).
884.105 Maximum total ACC commitment and project account (private-
owner/PHA projects).
884.106 Housing assistance payments to owners.
884.108 Term of housing assistance payments contract.
884.108a Notice upon contract expiration.
884.109 Rent adjustments.
884.110 Types of housing and property standards.
884.114 Financing.
884.115 Security and utility deposits.
884.116 Establishment of income limit schedules; 30 percent occupancy
by very-low income families.
884.117 Disclosure and verification of Social Security and Employer
Identification Numbers by owners.
884.118 Responsibilities of the owner.
884.119 Responsibility for contract administration and defaults
(private-owner and PHA-owner projects).
884.120 Responsibility for contract administration and defaults
(private-owner/PHA projects).
884.121 Rights of owner if PHA defaults under agreement (private-owner/
PHA projects).
884.122 Separate project requirement.
884.123 Conversions.
884.124 Audit.
884.125 Broadband infrastructure.
Subpart B_Project Development and Operation
884.212 Project completion.
884.213 Execution of housing assistance payments contract.
[[Page 117]]
884.214 Marketing.
884.215 Lease requirements.
884.216 Termination of tenancy.
884.217 Maintenance, operation and inspections.
884.218 Reexamination of family income and composition.
884.219 Overcrowded and underoccupied units.
884.220 Adjustment of utility allowances.
884.221 Continued family participation.
884.222 Inapplicability of low-rent public housing model lease and
grievance procedures.
884.223 Leasing to eligible families.
884.223a Preference for occupancy by elderly families.
884.224 HUD review of contract compliance.
884.225 PHA reporting requirements. [Reserved]
884.226 Emergency transfers for victims of domestic violence, dating
violence, sexual assault, and stalking.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-13619.
Source: 41 FR 47168, Oct. 27, 1976, unless otherwise noted.
Redesignated at 45 FR 6909, Jan. 30, 1980.
Subpart A_Applicability, Scope and Basic Policies
Sec. 884.101 Applicability and scope.
(a) The policies and procedures in subparts A and B of this part
apply to the making of Housing Assistance Payments on behalf of Eligible
Families leasing newly constructed housing pursuant to the provisions of
section 8 of the 1937 Act. They are applicable only to proposals
submitted by the Department of Agriculture/Farmers Home Administration
(now the Department of Agriculture/Rural Housing and Community
Development Service) that have been charged against the set-aside of
section 8 contract authority specifically established for projects to be
funded under section 515 of title V of the Housing Act of 1949 (42
U.S.C. 1485).
(b) For the purpose of these subparts A and B, ``new construction''
shall mean newly constructed housing for which, prior to the start of
construction, an Agreement to Enter into Housing Assistance Payments
Contract is executed between the Owner and HUD or a Public Housing
Agency.
[41 FR 47168, Oct. 27, 1976, as amended at 61 FR 13593, Mar. 27, 1996]
Sec. 884.102 Definitions.
The terms Fair Market Rent (FMR), HUD, Public housing agency (PHA),
and Secretary are defined in 24 CFR part 5.
Agreement to enter into housing assistance payments contract
(``agreement''). (a) In the case of a Private-Owner Project or a PHA-
Owner Project, a written agreement between the Owner and HUD that, upon
satisfactory completion of the housing in accordance with the HUD-
approved Proposal and submission by RHCDS of the required
certifications, HUD will enter into a Housing Assistance Payments
Contract with the Owner.
(b) In the case of a Private-Owner/PHA Project, a written agreement
between the private owner and the PHA, approved by HUD, that, upon
satisfactory completion of the housing in accordance with the HUD-
approved Proposal and submission by RHCDS of the required
certifications, the PHA will enter into a Housing Assistance Payments
Contract with the Private Owner.
Annual contributions contract (``ACC''). In the case of a Private-
Owner/PHA Project, a written agreement between HUD and the PHA to
provide annual contributions to the PHA with respect to the project.
Annual income. As defined in part 5 of this title.
Contract. See definition of Housing Assistance Payments Contract.
Contract rent. The rent payable to the Owner under his Contract
including the portion of the rent payable by the Family. In the case of
a cooperative, the term ``Contract Rent'' means charges under the
occupancy agreements between the members and the cooperative.
Covered housing provider. For the Section 8 Housing Assistance
Payments Programs, New Construction Set-Aside for Section 515 Rural
Rental Housing, ``covered housing provider,'' as such term is used in
HUD's regulations at 24 CFR part 5, subpart L (Protection for Victims of
Domestic Violence, Dating Violence, Sexual Assault, or Stalking), refers
to the owner.
Decent, safe, and sanitary. Housing is decent, safe, and sanitary if
it meets the physical condition requirements in 24 CFR part 5, subpart
G.
[[Page 118]]
Drug-related criminal activity. The illegal manufacture, sale,
distribution, use or possession with the intent to manufacture, sell,
distribute, or use, of a controlled substance as defined in section 102
of the Controlled Substances Act, 21 U.S.C. 802.
Family. As defined in part 5 of this title.
HCD Act. The Housing and Community Development Act of 1974.
Housing Assistance Payment. The payment made by the contract
administrator to the Owner of an assisted unit as provided in the
Contract. Where the unit is leased to an eligible Family, the payment is
the difference between the Contract Rent and Tenant Rent. An additional
Housing Assistance Payment is made to the Family when the Utility
Allowance is greater than the Total Tenant Payment. A Housing Assistance
Payment may be made to the Owner when a unit becomes vacant, in
accordance with the terms of the Contract.
Housing assistance payments contract (``Contract''). (a) In the case
of a Private-Owner Project or a PHA-Owner Project, a written contract
between the Owner and HUD for the purpose of providing housing
assistance payments to the Owner on behalf of Eligible Families.
(b) In the case of a Private-Owner/PHA Project, a written contract
between the private Owner, and the PHA, approved by HUD, for the purpose
of providing housing assistance payments to the Owner on behalf of
Eligible Families.
Income. Income from all sources of each member of the household as
determined in accordance with criteria established by HUD and as defined
in 24 CFR part 5, subpart F.
Lease. A written agreement between an Owner and an Eligible Family
for the leasing of a Decent, Safe, and Sanitary dwelling unit in
accordance with the applicable Contract, which agreement is in
compliance with the provisions of this part.
Local housing assistance plan. A housing assistance plan submitted
by a unit of general local government and approved by HUD under Section
104 of the HCD Act or, in the case of a unit of general local government
not participating under Title I of the HCD Act, a housing plan which
contains the elements set forth in Section 104(a)(4) of the HCD Act and
which is approved by the Secretary as meeting the requirements of
Section 213 of that Act.
Low-income family. As defined in part 5 of this title.
Owner. Any private person or entity, including a cooperative or a
PHA, having the legal right to lease or sublease newly constructed
dwelling units.
PHA-owner proposal and PHA-owner project. A proposal for a project
under this part (and the resulting project) to be owned by a PHA
throughout the term of the Agreement and Contract where such Agreement
and Contract are to be entered into between the PHA and HUD.
Private-owner/PHA proposal and private-owner/PHA project. A proposal
for a project under this part (and the resulting project) to be owned by
a private Owner throughout the term of the Agreement and Contract where
such Agreement and Contract are to be entered into between the private
Owner and the PHA pursuant to an ACC between the PHA and HUD. The term
also covers the situation where the ACC is with one PHA and the Owner is
another PHA.
Private-owner proposal and private-owner project. A proposal for a
project under this part (and the resulting project) to be owned by a
private Owner throughout the term of the Agreement and Contract where
such Agreement and Contract are to be entered into between the private
Owner and HUD.
Project account. The account established and maintained in
accordance with Sec. 884.104 or Sec. 884.105.
Proposal. A proposal for a Private-Owner or PHA-Owner/PHA Project to
provide newly constructed housing submitted to HUD by RHCDS on the
prescribed RHCDS form.
RHCDS. The Rural Housing and Community Development Service.
Tenant rent. As defined in part 5 of this title.
Total tenant payment. As defined in part 5 of this title.
Utility allowance. As defined in part 5 of this title.
[[Page 119]]
Utility reimbursement. As defined in part 5 of this title.
Very low-income family. As defined in part 5 of this title.
[41 FR 47168, Oct. 27, 1976, as amended at 42 FR 63745, Dec. 19, 1977.
Redesignated at 45 FR 6909, Jan. 30, 1980, and amended at 48 FR 12710,
Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984; 49 FR 19947, May 10, 1984; 50
FR 38795, Sept. 25, 1985; 61 FR 5213, Feb. 9, 1996; 61 FR 13593, Mar.
27, 1996; 61 FR 47382, Sept. 6, 1996; 63 FR 46579, Sept. 1, 1998; 65 FR
16723, Mar. 29, 2000; 70 FR 77744, Dec. 30, 2005; 81 FR 80813, Nov. 16,
2016]
Sec. 884.104 Maximum total annual contract commitment and project
account (private-owner or PHA-owner projects).
(a) Maximum total annual contract commitment. The maximum total
annual housing assistance payments that may be committed under the
Contract shall be the total of the Gross Rents for all the Contract
units in the project.
(b) Project account. In order to assure that housing assistance
payments will be increased on a timely basis to cover increases in
Contract Rents or decreases in Family Incomes:
(1) A Project Account shall be established and maintained in an
amount as determined by the Secretary consistent with his
responsibilities under Section 8(c)(6) of the Act, out of amounts by
which the maximum annual Contract commitment per year exceeds amounts
paid under the Contract for any year. This account shall be established
and maintained by HUD as a specifically identified and segregated
account, and payment shall be made therefrom only for the purposes of
(i) housing assistance payments, and (ii) other costs specifically
authorized or approved by the Secretary.
(2) Whenever a HUD-approved estimate of required housing assistance
payments for a fiscal year exceeds the maximum annual Contract
commitment, and would cause the amount in the Project Account to be less
than an amount equal to 40 percent of such maximum annual Contract
commitment, HUD shall, within a reasonable period of time, take such
additional steps authorized by Section 8(c)(6) of the Act as may be
necessary to carry out this assurance, including (as provided in that
section of the Act) ``the reservation of annual contributions authority
for the purpose of amending housing assistance contracts or the
allocation of a portion of new authorizations for the purpose of
amending housing assistance contracts.''
Sec. 884.105 Maximum total ACC commitment and project account
(private-owner/PHA projects).
(a) Maximum total ACC commitment. The maximum total annual
contribution that may be contracted for in the ACC for a project shall
be the total of the Contract Rents plus any utility allowances for all
the Contract units in the project, plus a fee for the regular costs of
PHA administration. HUD-approved preliminary costs for administration
(including administrative costs in connection with PHA activities
related to relocation of occupants) shall be payable out of this total.
(b) Project account. In order to assure that housing assistance
payments will be increased on a timely basis to cover increases in
Contract Rents or decreases in Family Incomes:
(1) A Project Account shall be established and maintained, in an
amount as determined by the Secretary consistent with his
responsibilities under Section 8(c)(6) of the 1937 Act, out of amounts
by which the maximum ACC commitment per year exceeds amounts paid under
the ACC for any year. This account shall be established and maintained
by HUD as a specifically identified and segregated account, and payment
shall be made therefrom only for the purposes of (i) housing assistance
payments and (ii) other costs specifically authorized or approved by the
Secretary.
(2) Whenever a HUD-approved estimate of required Annual Contribution
exceeds the maximum ACC commitment then in effect, and would cause the
amount in the Project Account to be less than an amount equal to 40
percent of such maximum ACC commitment, HUD shall, within a reasonable
period of time, take such additional steps authorized by Section 8(c)(6)
of the 1937 Act as may be necessary to carry out this assurance,
including (as provided in that section of the Act)
[[Page 120]]
``the reservation of annual contributions authority for the purpose of
amending housing assistance contracts or the allocation of a portion of
new authorizations for the purpose of amending housing assistance
contracts.''
[41 FR 47168, Oct. 27, 1976, as amended at 61 FR 13593, Mar. 27, 1996;
65 FR 16723, Mar. 29, 2000]
Sec. 884.106 Housing assistance payments to owners.
(a) General. Housing Assistance Payments shall be paid to Owners for
units under lease by eligible families, in accordance with the Contract
and as provided in this section. These Housing Assistance Payments will
cover the difference between the Contract Rent and the Tenant Rent.
Where applicable, the Utility Reimbursement will be paid to the Family
as an additional Housing Assistance Payment. The Contract will provide
that the Owner will make this payment on behalf of the contract
administrator. Funds will be paid to the Owner in trust solely for the
purpose of making this additional payment. If the Family and the utility
company consent, the Owner may pay the utility reimbursement jointly to
the Family and the utility company or directly to the utility company.
No Section 8 assistance may be provided for any unit occupied by an
Owner; however, cooperatives are considered rental housing, rather than
Owner-occupied housing, for this purpose.
(b) Vacancies during rent-up. If a Contract Unit is not leased as of
the effective date of the Contract, the Owner shall be entitled to
housing assistance payments in the amount of 80 percent of the Contract
Rent for the unit for a vacancy period not exceeding 60 days from the
effective date of the Contract, in accordance with the procedure set
forth in Sec. 884.213(b): Provided, That the Owner: (1) Commenced
marketing and otherwise complied with Sec. 884.211(e), (2) has taken and
continues to take all feasible actions to fill the vacancy, including,
but not limited to, contacting applicants on his waiting list, if any,
requesting the PHA and other appropriate sources to refer eligible
applicants, and advertising the availability of the unit, and (3) has
not rejected any eligible applicant, except for good cause acceptable to
HUD or the PHA, as the case may be.
(c) Vacancies after rent-up. (1) If an Eligible Family vacates its
unit (other than as a result of action by the Owner which is in
violation of the Lease or the Contract or any applicable law), the Owner
shall receive housing assistance payments in the amount of 80 percent of
the Contract Rent for a vacancy period not exceeding 60 days; provided,
however, That if the Owner collects any of the Family's share of the
rent for this period in an amount which, when added to the 80 percent
payments, results in more than the Contract Rent, such excess shall be
payable to HUD or as HUD may direct. (See also Sec. 884.115). The Owner
shall not be entitled to any payment under this paragraph (c)(1) unless
he: (i) Immediately upon learning of the vacancy, has notified HUD or
the PHA, as the case may be, of the vacancy or prospective vacancy and
the reasons for the vacancy, and (ii) has taken and continues to take
the actions specified in paragraphs (b) (2) and (3) of this section.
(2) If the Owner evicts an Eligible Family, he shall not be entitled
to any payment under paragraph (c)(1) of this section unless the request
for such payment is supported by a certification that: (i) He gave such
Family a written notice of the proposed eviction, stating the grounds
and advising the Family that it had 10 days within which to present its
objections to the Owner in writing or in person and (ii) the proposed
eviction was not in violation of the Lease or the Contract or any
applicable law.
(d) Debt-service vacancy payments. (1) If a unit continues to be
vacant after the 60-day period specified in paragraph (b) or (c) of this
section, the owner may submit a claim to receive additional housing
assistance payments on a semiannual basis with respect to the vacant
unit in an amount equal to the principal and interest payments required
to amortize the portion of the debt attributable to that unit for the
period of the vacancy, whether the vacancy commenced during rent-up or
after rent-up.
[[Page 121]]
(2) Additional payments under this paragraph (d) for any unit shall
not be for more than 12 months for any vacancy period, and shall be made
only if:
(i) The unit was in decent, safe and sanitary condition during the
vacancy period for which payments are claimed.
(ii) The Owner has taken and is continuing to take the actions
specified in paragraphs (b) (1), (2) and (3) or paragraphs (c)(1) (i)
and (ii) and (c)(2) of this section, as appropriate.
(iii) The owner has demonstrated, in connection with the semiannual
claim on a form and in accordance wih the standards prescribed by HUD
with respect to the period of the vacancy, that the project is not
providing the owner with revenues at least equal to the project costs
incurred by the owner and that the amount of the payments requested is
not in excess of the amount needed to make up the deficiency.
(iv) The owner has submitted to HUD or the PHA, as appropriate, in
connection with the semiannual claim, a statement with relevant
supporting evidence that there is a reasonable prospect that the project
can achieve financial soundness within a reasonable time. The statement
shall indicate the causes of the deficiency; the corrective steps that
have been and will be taken; and the time by which it is expected that
the project revenues will at least equal project costs without the
additional payments provided under this paragraph.
(3) HUD or the PHA, as appropriate, may deny any claim for
additional payments or suspend or terminate payments if it determines
that, based on the owner's statement and other evidence, there is not a
reasonable prospect that the project can achieve financial soundness
within a reasonable time.
(e) Prohibition of double compensation for vacancies. The Owner
shall not be entitled to housing assistance payments with respect to
vacant units under this section to the extent he is entitled to payments
from other sources (for example, payments for losses of rental income
incurred for holding units vacant for relocatees pursuant to Title I of
the HCD Act or payments under Sec. 884.115).
[41 FR 47168, Oct. 27, 1976, as amended at 42 FR 12983, Mar. 7, 1977; 43
FR 33880, Aug. 1, 1978. Redesignated at 45 FR 6909, Jan. 30, 1980; 49 FR
19947, May 10, 1984]
Sec. 884.108 Term of housing assistance payments contract.
(a) Except in the case of a Contract described in paragraph (b) of
this section, the Contract shall be for an initial term of 20 years:
Provided, That at the end of such Contract term and at the request of
RHCDS, HUD may, subject to the availability of contract and budget
authority, authorize the execution of a new Contract providing for a
total Contract term of an additional 20 years.
(b) In the case of a Contract under which housing assistance
payments are made with respect to a project owned by a State or local
agency, the total Contract term may be equal to the term of such
financing but may not exceed 40 years for any dwelling unit.
(c) If the project is completed in stages, the dates for the initial
and the renewal terms shall be separately related to the units in each
stage: Provided, however, That the total Contract term for the units in
all the stages, beginning with the effective date of the Contract with
respect to the first stage, may not exceed the overall maximum term
allowable for any one unit, plus two years.
[41 FR 47168, Oct. 27, 1976. Redesignated at 45 FR 6909, Jan. 30, 1980,
and amended at 48 FR 12710, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984;
61 FR 13593, Mar. 27, 1996]
Sec. 884.108a Notice upon contract expiration.
(a) The Contract will provide that the owner will notify each
assisted family, at least 90 days before the end of the Contract term,
of any increase in the amount the family will be required to pay as rent
which may occur as a result of its expiration. If the Contract is to be
renewed but with a reduction in the number of units covered by it, this
notice shall be given to each family who will no longer be assisted
under the Contract.
[[Page 122]]
(b) The notice provided for in paragraph (a) of this section shall
be accomplished by: (1) Sending a letter by first class mail, properly
stamped and addressed, to the family at its address at the project, with
a proper return address, and (2) serving a copy of the notice on any
adult person answering the door at the leased dwelling unit, or if no
adult responds, by placing the notice under or through the door, if
possible, or else by affixing the notice to the door. Service shall not
be considered to be effective until both required notices have been
accomplished. The date on which the notice shall be considered to be
received by the family shall be the date on which the owner mails the
first class letter provided for in this paragraph, or the date on which
the notice provided for in this paragraph is properly given, whichever
is later.
(c) The notice shall advise each affected family that, after the
expiration date of the Contract, the family will be required to bear the
entire cost of the rent and that the owner will be free (to the extent
the project is not otherwise regulated by HUD) to alter the rent without
HUD approval, but subject to any applicable requirements or restrictions
under the lease or under State or local law. The notice shall also
state: (1) The actual (if known) or the estimated rent which will be
charged following the expiration of the Contract; (2) the difference
between the rent and the Total Tenant Payment toward rent under the
Contract; and (3) the date the Contract will expire.
(d) The owner shall give HUD a certification that families have been
notified in accordance with this section with an example of the text of
the notice attached.
(e) This section applies to all Contracts entered into pursuant to
an Agreement executed on or after October 1, 1981, or entered into
pursuant to an Agreement executed before October 1, 1981, but renewed or
amended on or after October 1, 1984.
[49 FR 31284, Aug. 6, 1984]
Sec. 884.109 Rent adjustments.
(a) Funding of adjustments. Housing assistance payments will be made
in increased amounts commensurate with Contract Rent adjustments under
this paragraph, up to the maximum amount authorized under the Contract.
(See Secs. 884.104 and 884.105).
(b) Automatic annual adjustments. (1) Automatic Annual Adjustment
Factors will be determined by HUD at least annually; interim revisions
may be made as market conditions warrant. Such Factors and the basis for
their determination will be published in the Federal Register. These
published Factors will be reduced appropriately by HUD where utilities
are paid directly by Families.
(2) On each anniversary date of the Contract, the Contract Rents
shall be adjusted by applying the applicable Automatic Annual Adjustment
Factor most recently published by HUD. Contract Rents may be adjusted
upward or downward, as may be appropriate; however, in no case shall the
adjusted rents be less than the Contract Rents on the effective date of
the Contract.
(c) Special additional adjustments. Special additional adjustments
shall be granted, when approved by HUD, to reflect increases in the
actual and necessary expenses of owning and maintaining the Contract
Units which have resulted from substantial general increases in real
property taxes, utility rates, or similar costs (i.e., assessments, and
utilities not covered by regulated rates), but only if and to the extent
that the Owner clearly demonstrates that such general increases have
caused increases in the Owner's operating costs which are not adequately
compensated for by automatic annual adjustments. The Owner shall submit
to HUD financial statements which clearly support the increase.
(d) Overall limitation. Notwithstanding any other provisions of this
part, adjustments as provided in this section shall not result in
material differences between the rents charged for assisted and
comparable unassisted units, as determined by HUD: Provided, however,
That this limitation shall not be construed to prohibit differences in
rents between assisted and comparable unassisted units to the extent
that such differences may have existed with respect to the initial
Contract Rents.
[[Page 123]]
Sec. 884.110 Types of housing and property standards.
(a) Newly constructed single-family houses and multifamily
structures may be utilized in this program. Congregate housing may be
developed for elderly, disabled, or handicapped Families and
individuals. Except in the case of housing predominantly for the
elderly, high-rise elevator projects for Families with children may not
be utilized unless HUD determines there is no practical alternative.
(b) Participation in this program requires compliance with:
(1) [Reserved]
(2) In the case of congregate housing, the appropriate HUD
guidelines and standards;
(3) HUD requirements pursuant to section 209 of the HCD Act for
projects for the elderly, disabled, or handicapped;
(4) HUD requirements pertaining to noise abatement and control; and
(5) Applicable State and local laws, codes, ordinances, and
regulations.
(c) Housing assisted under this part shall be modest in design.
Amenities in projects assisted under this part (except partially
assisted projects) will be limited to those amenities, as determined by
HUD, which are generally provided in unassisted, decent, safe and
sanitary housing for low-income families, in the market area. The use of
more durable, high-quality materials to control or reduce maintenance,
repair and replacement costs will not be considered an excess amenity.
(d) Smoke detectors--(1) Performance requirement. After October 30,
1992, each dwelling unit must include at least one battery-operated or
hard-wired smoke detector, in proper working condition, on each level of
the unit. If the unit is occupied by hearing-impaired persons, smoke
detectors must have an alarm system, designed for hearing-impaired
persons, in each bedroom occupied by a hearing-impaired person.
(2) Acceptability criteria. The smoke detector must be located, to
the extent practicable, in a hallway adjacent to a bedroom, unless the
unit is occupied by a hearing-impaired person, in which case each
bedroom occupied by a hearing-impaired person must have an alarm system
connected to the smoke detector installed in the hallway.
[48 FR 12710, Mar. 28, 1983, as amended at 57 FR 33852, July 30, 1992;
63 FR 46579, Sept. 1, 1998]
Sec. 884.114 Financing.
(a) Types. Eligible projects under this program shall be financed
under Section 515, Title V of the Housing Act of 1949.
(b) Use of contract as security for financing. (1) An Owner may
pledge, or offer as security for any loan or obligation, an Agreement or
Contract entered into pursuant to this part: Provided, however, That
such security is in connection with a project constructed pursuant to
this part, and the terms of the financing or any refinancing have been
approved by HUD. It is the Owner's responsibility to request such
approval in sufficient time before he needs the financing to permit
review of the method and terms of the financing and the instrument of
pledge, offer or other assignment that HUD is requested to approve.
(2) Any pledge of the Agreement, Contract, or ACC, or payments
thereunder, shall be limited to the amounts payable under the Contract
or ACC in accordance with its terms.
(3) In the event of foreclosure and in the event of assignment or
sale agreed to by HUD, housing assistance payments shall continue in
accordance with the Terms of the Contract.
Sec. 884.115 Security and utility deposits.
(a) An Owner may require Families to pay a security deposit in an
amount equal to one month's Gross Family Contribution. If a Family
vacates its unit, the Owner, subject to State and local laws, may
utilize the deposit as reimbursement for any unpaid rent or other amount
owed under the Lease. If the Family has provided a security deposit, and
it is insufficient for such reimbursement, the Owner may claim
reimbursement from HUD or the PHA, as appropriate, not to exceed an
amount equal to the remainder of one month's Contract Rent. Any
reimbursement under this section shall be applied first toward any
unpaid rent. If a Family vacates the unit owing no rent or other amount
under the Lease or if such
[[Page 124]]
amount is less than the amount of the security deposit, the Owner shall
refund the full amount or the unused balance, as the case may be, to the
Family.
(b) In those jurisdictions where interest is payable by the Owner on
security deposits, the refunded amount shall include the amount of
interest payable. All security deposit funds shall be deposited by the
Owner in a segregated bank account, and the balance of this account, at
all times, shall be equal to the total amount collected from tenants
then in occupancy, plus any accrued interest. The Owner shall comply
with all State and local laws regarding interest payments on security
deposits.
(c) Families shall be expected to obtain the funds to pay security
and utility deposits, if required, from their own resources and/or other
private or public sources.
Sec. 884.116 Establishment of income limit schedules; 30 percent
occupancy by very-low income families.
(a) HUD will establish schedules of Income limits for determining
whether families qualify as Low-Income Families and Very Low-Income
Families.
(b) In the leasing of units, the Owner shall comply with HUD
requirements concerning the permissible income levels of families, as
prescribed in part 5 of this title.
[41 FR 47168, Oct. 27, 1976. Redesignated at 45 FR 6909, Jan. 30, 1980,
and amended at 49 FR 19947, May 10, 1984; 65 FR 16723, Mar. 29, 2000]
Sec. 884.117 Disclosure and verification of Social Security and
Employer Identification Numbers by owners.
To be eligible to become an owner of housing assisted under this
part, the owner (other than a PHA) must meet the disclosure and
verification requirements for Social Security and Employer
Identification Numbers, as provided by 24 CFR part 5.
(Approved by the Office of Management and Budget under control number
2502-0204)
[54 FR 39707, Sept. 27, 1989, as amended at 61 FR 13593, Mar. 27, 1996]
Sec. 884.118 Responsibilities of the owner.
(a) The Owner shall be responsible (subject to post-review or audit
by HUD or the PHA, as the case may be) for management and maintenance of
the project. These responsibilities shall include but not be limited to:
(1) Payment for utilities and services (unless paid directly by the
Family), insurance and taxes;
(2) Performance of all ordinary and extraordinary maintenance;
(3) Performance of all management functions, including the taking of
applications; determining eligibility of applicants in accordance with
part 5 of this title; selection of families, including verification of
income, provision of Federal selection preferences in accordance with 24
CFR part 5, obtaining and verifying Social Security Numbers submitted by
applicants (as provided by 24 CFR part 5), obtaining signed consent
forms from applicants for the obtaining of wage and claim information
from State Wage Information Collection Agencies (as provided in 24 CFR
part 5), and other pertinent requirements; and determination of the
amount of tenant rent in accordance with HUD established schedules and
criteria;
(4) Collection of Tenant Rents;
(5) Termination of tenancies, including evictions;
(6) Preparation and furnishing of information required under the
Contract;
(7) Reexamination of family income and composition; redetermination,
as appropriate, of the amount of Tenant Rent and the amount of housing
assistance payment in accordance with part 5 of this title; obtaining
and verifying Social Security Numbers submitted by participants, as
provided by 24 CFR part 5; and obtaining signed consent forms from
participants for the obtaining of wage and claim information from State
Wage Information Collection Agencies, as provided by 24 CFR part 5;
(8) Redetermination of amount of Tenant Rent and amount of housing
assistance payment in accordance with part 5 of this title as a result
of an adjustment by the PHA or HUD, as appropriate, of any applicable
Utility Allowance; and
(9) Compliance with equal opportunity requirements issued by RHCDS
and HUD with respect to project operation.
[[Page 125]]
(b) Subject to HUD approval, any Owner may contract with any private
or public entity to perform for a fee the services required by paragraph
(a) of this section: Provided, That such contract shall not relieve the
Owner of his responsibilities or obligations. However, no entity which
is responsible for administration of the Contract (for example, a PHA in
the case of a Private-Owner/PHA Project) may contract to perform
management and maintenance of the project: Provided, however, That this
prohibition shall not preclude management by the PHA in the event it
takes possession as the result of foreclosure or assignment in lieu of
foreclosure. (See, however, Sec. 884.123(b), which permits conversion of
a Private-Owner/PHA Project to a Private-Owner Project.)
(Approved by the Office of Management and Budget under control number
2502-0204)
[41 FR 47168, Oct. 27, 1976. Redesignated at 45 FR 6909, Jan. 30, 1980,
and amended at 49 FR 19947, May 10, 1984; 51 FR 11227, Apr. 1, 1986; 53
FR 847, Jan. 13, 1988; 53 FR 1162, Jan. 15, 1988; 53 FR 6601, Mar. 2,
1988; 54 FR 39707, Sept. 27, 1989; 56 FR 7540, Feb. 22, 1991; 60 FR
14845, Mar. 20, 1995; 61 FR 13593, Mar. 27, 1996; 65 FR 16723, Mar. 29,
2000]
Sec. 884.119 Responsibility for contract administration and
defaults (private-owner and PHA-owner projects).
(a) Contract administration. HUD is responsible for administration
of the Contract. HUD may contract with another entity for the
performance of some or all of its Contract administration functions.
(b) Defaults by owner. The Contract shall contain a provision to the
effect (1) that if HUD determines that the Owner is in default under the
Contract, HUD shall notify the Owner (with a copy to RHCDS) of the
actions required to be taken to cure the default and of the remedies to
be applied by HUD including abatement of housing assistance payments and
recovery of overpayments, where appropriate; and (2) that if he fails to
cure the default, HUD has the right to terminate the Contract or to take
other corrective action.
[41 FR 47168, Oct. 27, 1976, as amended at 61 FR 13593, Mar. 27, 1996]
Sec. 884.120 Responsibility for contract administration and
defaults (private-owner/PHA projects).
(a) Contract administration. The PHA is primarily responsible for
administration of the Contract, subject to review and audit by HUD.
(b) Defaults by PHA and/or owner. (1) The ACC and the Contract shall
contain a provision to the effect that in the event of failure of the
PHA to comply with the Contract with the Owner, the Owner shall have the
right, if he is not in default, to demand that HUD determine, after
notice to the PHA giving it a reasonable opportunity to take corrective
action, whether a substantial default exists, and if HUD determines that
such a default exists, that HUD assure that the obligations of the PHA
to the Owner are carried out.
(2) The ACC shall contain a provision to the effect that if the PHA
fails to comply with any of its obligations (including specifically
failure to enforce its rights under the Contract, in the event of any
default by the Owner, to achieve compliance to the satisfaction of HUD
or to terminate the Contract in whole or in part, as directed by HUD),
HUD may, after notice to the PHA giving it a reasonable opportunity to
take corrective action, determine that there is a substantial default
and require the PHA to assign to HUD all of the PHA's rights and
interests under the Contract. In such case, HUD will continue to pay
annual contributions in accordance with the terms of the ACC and the
Contract.
(3) The Contract shall contain a provision to the effect (i) that if
the PHA determines that the Owner is in default under the Contract, the
PHA shall notify the Owner, with a copy to HUD and RHCDS, of the actions
required to be taken to cure the default and of the remedies to be
applied by the PHA including abatement of housing assistance payments
and recovery of overpayments, where appropriate; and (ii) that if he
fails to cure the default, the PHA has the right to terminate the
Contract or to take other corrective action, in its discretion or as
directed by HUD.
[41 FR 47168, Oct. 27, 1976, as amended at 61 FR 13593, Mar. 27, 1996]
[[Page 126]]
Sec. 884.121 Rights of owner if PHA defaults under agreement
(private-owner/PHA projects).
The ACC and the Agreement shall contain a provision to the effect
that in the event of failure of the PHA to comply with the Agreement
with the Owner, the Owner shall have the right, if he is not in default,
to demand that HUD determine, after notice to the PHA giving it a
reasonable opportunity to take corrective action, whether a substantial
default exists, and if HUD determines that such a default exists, that
HUD assume the PHA's rights and obligations under the Agreement, and
carry out the obligations of the PHA under the Agreement, including the
obligation to enter into the Contract.
Sec. 884.122 Separate project requirement.
(a) In the case of a Private-Owner Project or a PHA-Owner Project,
each Agreement and Contract shall constitute a separate project.
(b) In the case of a Private-Owner/PHA Project such project may not
include more than one type of Section 8 assistance, shall be processed
with a separate ACC List and ACC Part I and shall be assigned a separate
project number. All new construction units to be placed under a single
Contract shall comprise a separate project. However, the field office
director may designate as a single project the units to be covered by
two or more such Contracts for new construction projects where:
(1) The units are placed under ACC on the same date; and
(2) Such consolidation is necessary in the interest of
administrative efficiency.
Sec. 884.123 Conversions.
(a) Conversion of private-owner project to private-owner/PHA
project. HUD may request the Owner of a Private-Owner Project and an
appropriate PHA to agree, if they are willing, to a conversion of any
such project to a Private-Owner/PHA Project if HUD determines that such
conversion would promote efficient project administration.
(b) Conversion of private-owner/PHA project to private-owner
project. The Private Owner and the PHA, in the case of a Private-Owner/
PHA Project, may request HUD to agree to a conversion of any such
project to a Private-Owner or PHA-Owner Project. HUD shall agree to such
conversion if it determines it to be in the best interest of the
project.
Sec. 884.124 Audit.
Where a non-Federal entity (as defined in 2 CFR 200.69) is the
eligible owner of a project, or is a contract administrator under
Sec. 884.119 or Sec. 884.120, receiving financial assistance under this
part, the audit requirements in 2 CFR part 200, subpart F, shall apply.
[80 FR 75941, Dec. 7, 2015]
Sec. 884.125 Broadband infrastructure.
Any new construction or substantial rehabilitation, as substantial
rehabilitation is defined by 24 CFR 5.100, of a building with more than
4 rental units and that is subject to a Housing Assistance Payments
contract executed or renewed after January 19, 2017 must include
installation of broadband infrastructure, as this term is also defined
in 24 CFR 5.100, except where the owner determines and documents the
determination that:
(a) The location of the new construction or 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.
[81 FR 92638, Dec. 20, 2016]
Subpart B_Project Development and Operation
Sec. 884.212 Project completion.
(a) FmHA certifications upon completion. Upon completion of the
project, FmHA shall inspect the project and, if determined to be
acceptable, submit to the HUD field office the following certifications:
(1) The project has been completed in accordance with the
requirements of the Agreement;
[[Page 127]]
(2) The project is in good and tenantable condition;
(3) There are no defects or deficiencies in the project other than
punchlist items, or incomplete work awaiting seasonal opportunity;
(4) There has been no change in management capability.
(b) HUD review. HUD shall promptly review the certifications
submitted pursuant to paragraphs (a) and (b) of this section (see
Sec. 884.203(b)).
(c) HUD acceptance. If HUD determines from the review that the
certifications are acceptable in accordance with these subparts, the
project shall be accepted.
(d) Acceptance where defects or deficiencies reported. If the only
defects or deficiencies are punchlist items or incomplete items awaiting
seasonal opportunity, the project may be accepted and the Contract
executed. If the Owner fails to complete the items within a reasonable
time to the satisfaction of HUD (and the PHA, if applicable), HUD may,
after consultation with FmHA, upon 30 days notice to the Owner (and the
PHA, if applicable), terminate the Contract and/or exercise its other
rights thereunder or, if the Contract is with a PHA, cancel its approval
of the Contract and require its termination and/or exercise its other
rights under the Contract and the ACC.
(e) Arbitration. In the event the Owner disputes HUD determinations,
he may submit the controversy to third-party arbitration at his expense,
provided that the arbitration is advisory only.
(f) Completion in stages. If the project is to be completed in
stages, the procedures of this section shall apply to each stage.
Sec. 884.213 Execution of housing assistance payments contract.
(a) Time of execution. Upon acceptance of the project by HUD
pursuant to Sec. 884.212, the Contract shall be executed first by the
Owner and then by HUD, or, in the case of a Private-Owner/PHA Project,
executed by the Owner and the PHA and then approved by HUD.
(b) Unleased units. At the time of execution of the Contract, HUD
(or the PHA, as appropriate) shall examine the lists of dwelling units
leased and not leased, referred to in Sec. 884.211(e) and shall
determine whether or not the Owner has met his obligations under that
section with respect to any unleased units. HUD (or the PHA, as
appropriate) shall state in writing its determination with respect to
the unleased units and for which of those units it will make housing
assistance payments. The Owner shall indicate in writing his concurrence
with this determination or his disagreement, reserving his rights to
claim housing assistance payments for the unleased units pursuant to the
Contract, without prejudice by reason of his signing the Contract.
Copies of all documents referred to this paragraph shall be furnished to
HUD in the case of a Private-Owner/PHA Project.
Sec. 884.214 Marketing.
(a) Compliance with equal opportunity requirements. Marketing of
units and selection of Families by the Owner shall be in accordance with
the Owner's FmHA-approved Affirmative Fair Housing Marketing Plan, if
required, and with all regulations relating to fair housing advertising
including use of the equal opportunity logotype statement and slogan in
all advertising. Projects shall be managed and operated without regard
to race, color, creed, religion, sex, or national origin.
(b) Eligibility, selection and admission of families. (1) The owner
is responsible for determination of eligibility of applicants in
accordance with the procedure of 24 CFR part part 5, selection of
families from among those determined to be eligible (including provision
of Federal selection preferences in accordance with 24 CFR part 5), and
computation of the amount of housing assistance payments on behalf of
each selected family, in accordance with schedules and criteria
established by HUD.
(2) For every family that applies for admission, the owner and the
applicant will complete and sign the form of application prescribed by
HUD. However, if there are no vacant units and the owner's waiting list
is such that there would be an unreasonable length of
[[Page 128]]
time before the applicant could be admitted, the owner may advise the
applicant that the owner is not accepting applications for that reason.
The owner must retain copies of all completed applications together with
any related correspondence for three years. For each family selected for
admission, the owner must submit one copy of the completed and signed
application to the HUD field office (in the case of private-owner/PHA
projects, the owner simultaneously must send a copy of the form to the
PHA). Housing assistance payments will not be made on behalf of an
admitted family unit after this copy has been received by the HUD field
office (or, in the case of private-owner/PHA projects, until the copy
has been received by the PHA with a certification by the owner that the
owner has sent a copy to HUD).
(3) If the Owner determines that the applicant is eligible on the
basis of Income and family composition and is otherwise acceptable but
the Owner does not have a suitable unit to offer, the Owner shall place
such Family on his waiting list and so advise the Family.
(4) If the Owner determines that the applicant is eligible on the
basis of Income and family composition and is otherwise acceptable and
if the Owner has a suitable unit, the Owner and the Family shall enter
into a Lease. Such Lease shall be on the form of Lease included in the
Owner's approved Final Proposal and shall otherwise be in conformity
with the provisions of this part.
(5) Records on applicant families and approved Families shall be
maintained by the Owner so as to provide HUD with racial, ethnic and
gender data and shall be retained by the Owner for three years.
(6) In the case of a PHA-Owner project, (i) if the PHA places a
Family on its waiting list, it shall notify the Family of the
approximate date of availability of a suitable unit insofar as such date
can be reasonably determined, and (ii) if the PHA determines that an
applicant is ineligible on the basis of income or family composition, or
that the PHA is not selecting the applicant for other reasons, the PHA
shall promptly send the applicant a letter notifying him of the
determination and the reasons and that the applicant has the right
within a reasonable time (specified in the letter) to request an
informal hearing. If, after conducting such an informal hearing, the PHA
determines that the applicant shall not be admitted, the PHA shall so
notify the applicant in writing and such notice shall inform the
applicant that he has the right to request a review by HUD of the PHA's
determination. The procedures of this subparagraph do not preclude the
applicant from exercising his other rights if he believes he is being
discriminated against on the basis of race, color, creed, religion, sex,
or national origin. The PHA shall retain for three years a copy of the
application, the letter, the applicant's response if any, the record of
any informal hearing, and a statement of final disposition.
(7) See 24 CFR part 5 for the informal review provisions for the
denial of a Federal selection preference.
(8) For the informal hearing provisions related to denial of
assistance based upon failure to establish citizenship or eligible
immigration status, see part 5 of this title for provisions concerning
certain assistance for mixed families (families whose members include
those with eligible immigration status, and those without eligible
immigration status) in lieu of denial of assistance.
[41 FR 47168, Oct. 27, 1976. Redesignated at 45 FR 6909, Jan. 30, 1980,
and amended at 53 FR 1162, Jan. 15, 1988; 53 FR 6601, Mar. 2, 1988; 60
FR 14845, Mar. 20, 1995; 61 FR 9047, Mar. 6, 1996; 61 FR 13594, Mar. 27,
1996; 65 FR 16723, Mar. 29, 2000]
Sec. 884.215 Lease requirements.
The Lease shall contain all required provisions specified in
paragraph (b) of this section and none of the prohibited provisions
listed in paragraph (c) of this section.
(a) Term of lease. The term of the Lease shall be for not less than
one year. The Lease may (or, in the case of a Lease for a term of more
than one year, shall) contain a provision permitting termination upon 30
days advance written notice by either party.
[[Page 129]]
(b) Required provisions. The Lease between the Owner (Lessor) and
the Family (Lessee) shall contain the following provisions:
Addendum to Lease
The following additional Lease provisions are incorporated in full
in the Lease between __________ (Lessor) and __________ (Lessee) for the
following dwelling unit: __________. In case of any conflict between
these and any other provisions of the Lease, these provisions shall
prevail.
a. The total rent shall be $______ per month.
b. Of the total rent, $______ shall be payable by or at the
direction of the Department of Housing and Urban Development (``HUD'')
as housing assistance payments on behalf of the Lessee and $______ shall
be payable by the Lessee. These amounts shall be subject to change by
reason of changes in the Lessee's family income, family composition, or
extent of exceptional medical or other unusual expenses, in accordance
with HUD-established schedules and criteria; or by reason of adjustment
by HUD, or the PHA, if appropriate, of any applicable Allowance for
Utilities and Other Services. Any such change shall be effective as of
the date stated in a notification to the Lessee.
c. The Lessor shall not discriminate against the Lessee in the
provision of services, or in any other manner, on the grounds of race,
color, creed, religion, sex, or national origin.
d. The Lessor shall provide the following services and maintenance:
Lessor__________________________________________________________________
By______________________________________________________________________
Date____________________________________________________________________
Lessee__________________________________________________________________
Date____________________________________________________________________
(c) Prohibited provisions. Lease clauses which fall within the
classifications listed below shall not be included in any Lease.
(1) Confession of judgment. Prior consent by tenant to any lawsuit
the landlord may bring against him in connection with the Lease and to a
judgment in favor of the landlord.
(2) Distraint for rent or other charges. Authorization to the
landlord to take property of the tenant and hold it as a pledge until
the tenant performs any obligation which the landlord has determined the
tenant has failed to perform.
(3) Exculpatory clause. Agreement by tenant not to hold the landlord
or landlord's agents liable for any acts or omissions whether
intentional or negligent on the part of the landlord or the landlord's
authorized representative or agents.
(4) Waiver of legal notice to tenant prior to actions for eviction
or money judgments. Agreement by tenant that the landlord may institute
suit without any notice to the tenant that the suit has been filed.
(5) Waiver of legal proceedings. Authorization to the landlord to
evict the tenant or hold or sell the tenant's possessions whenever the
landlord determines that a breach or default has occurred, without
notice to the tenant or any determination by a court of the rights and
liabilities of the parties.
(6) Waiver of jury trial. Authorization to the landlord's lawyer to
appear in court for the tenant and to waive the tenant's right to a
trial by jury.
(7) Waiver of right to appeal judicial error in legal proceedings.
Authorization to the landlord's lawyer to waive the tenant's right to
appeal on the ground of judicial error in any suit or the tenant's right
to file a suit in equity to prevent the execution of a judgment.
(8) Tenant chargeable with costs of legal actions regardless of
outcome. Agreement by the tenant to pay attorney's fees or other legal
costs whenever the landlord decides to take action against the tenant
even though the court finds in favor of the tenant. (Omission of such
clause does not mean that the tenant as a party to a lawsuit may not be
obligated to pay attorney's fee or other costs if he loses the suit.)
Sec. 884.216 Termination of tenancy.
(a) The owner is responsible for termination of tenancies, including
evictions. However, conditions for payment of housing assistance
payments for any resulting vacancies must be as set forth in
Sec. 884.106(c)(1). Failure of the family to sign and submit consent
forms for the obtaining of wage and claim information from State Wage
Information Collection Agencies, as provided by 24 CFR part 5, shall be
grounds for termination of tenancy. For provisions requiring termination
of assistance for failure to establish citizenship or eligible
immigration status, including the applicable informal requirements, see
24 CFR part 5 and also
[[Page 130]]
for provisions concerning assistance for mixed families (families whose
members include those with eligible immigration status, and those
without eligible immigration status) in lieu of termination of
assistance, and for provisions concerning deferral of termination of
assistance.
(b) Termination of tenancy for criminal activity by a covered person
is subject to 24 CFR 5.858 and 5.859, and termination of tenancy for
alcohol abuse by a covered person is subject to 24 CFR 5.860.
(c) In actions or potential actions to terminate tenancy, the owner
shall follow 24 CFR part 5, subpart L (Protection for Victims of
Domestic Violence, Dating Violence, Sexual Assault, or Stalking).
[56 FR 7541, Feb. 22, 1991, as amended at 60 FR 14845, Mar. 20, 1995; 61
FR 13594, Mar. 27, 1996; 61 FR 47382, Sept. 6, 1996; 66 FR 28798, May
24, 2001; 73 FR 72343, Nov. 28, 2008; 75 FR 66261, Oct. 27, 2010; 81 FR
80813, Nov. 16, 2016]
Sec. 884.217 Maintenance, operation and inspections.
(a) Maintenance and operation. The Owner shall maintain and operate
the project so as to provide Decent, Safe, and Sanitary housing and he
shall provide all the services, maintenance and utilities which he
agrees to provide under the Contract, subject to abatement of housing
assistance payments or other applicable remedies if he fails to meet
these obligations.
(b) Inspection prior to occupancy. Prior to occupancy of any unit by
a Family, the Owner and the Family shall inspect the unit and both shall
certify, on forms prescribed by HUD, that they have inspected the unit
and have determined it to be Decent, Safe, and Sanitary in accordance
with the criteria provided in the prescribed forms. Copies of these
reports shall be kept on file by the Owner for at least three years.
(c) Periodic inspections. HUD (or the PHA, as appropriate) will
inspect or cause to be inspected each Contract unit and related
facilities at least annually and at such other times (including prior to
initial occupancy and rerenting of any unit) as HUD (or the PHA) may
determine to be necessary to assure that the Owner is meeting his
obligation to maintain the units in Decent, Safe, and Sanitary condition
and to provide the agreed upon utilities and other services. HUD (or the
PHA) will take into account complaints by occupants and any other
information coming to its attention in scheduling inspections and shall
notify the Owner and the Family of its determination.
(d) Units not decent, safe, and sanitary. If HUD (or the PHA, as
appropriate) notifies the Owner that he has failed to maintain a
dwelling unit in Decent, Safe, and Sanitary condition and the Owner
fails to take corrective action within the time prescribed in the
notice, HUD (or the PHA) may exercise any of its rights or remedies
under the Contract, including abatement of housing assistance payments,
even if the Family continues to occupy the unit. If, however, the Family
wishes to be rehoused in another dwelling unit with Section 8 assistance
and HUD (or the PHA) does not have other Section 8 funds for such
purposes, HUD (or the PHA) may use the abated housing assistance
payments for the purpose of rehousing the Family in another dwelling
unit. Where this is done, the Owner shall be notified that he will be
entitled to resumption of housing assistance payments for the vacated
dwelling unit if:
(1) The unit is restored to Decent, Safe, and Sanitary condition;
(2) The Family is willing to and does move back to the restored
dwelling unit; and
(3) A deduction is made for the expenses incurred by the Family for
both moves.
Sec. 884.218 Reexamination of family income and composition.
(a) Regular reexaminations. The owner must reexamine the income and
composition of all families at least once each year. Upon verification
of the information, the owner must make appropriate adjustments in the
Total Tenant Payment in accordance with part 5 of this title and
determine whether the family's unit size is still appropriate. The owner
must adjust Tenant Rent and the Housing Assistance Payment to reflect
any change in Total Tenant Payment and carry out any unit transfer
required by HUD. At the time of the annual reexamination
[[Page 131]]
of family income and composition, the owner must require the family to
disclose and verify Social Security Numbers, as provided by 24 CFR part
5. For requirements regarding the signing and submitting of consent
forms by families for the obtaining of wage and claim information from
State Wage Information Collection Agencies, see 24 CFR part 5. At the
first regular reexamination after June 19, 1995, the owner shall follow
the requirements of 24 CFR part 5 concerning obtaining and processing
evidence of citizenship or eligible immigration status of all family
members. Thereafter, at each regular reexamination, the owner shall
follow the requirements of 24 CFR part 5 concerning verification of the
immigration status of any new family member.
(b) Interim reexaminations. The family must comply with provisions
of its lease regarding interim reporting of changes in income. If the
owner receives information concerning a change in the family's income or
other circumstances between regularly scheduled reexaminations, the
owner must consult with the family and make any adjustments determined
to be appropriate. Any change in the family's income or other
circumstances that results in an adjustment in the Total Tenant Payment,
Tenant Rent and Housing Assistance Payment must be verified. See 24 CFR
750.10(d)(2)(i) for the requirements for the disclosure and verification
of Social Security Numbers at interim reexaminations involving new
family members. For requirements regarding the signing and submitting of
consent forms by families for the obtaining of wage and claim
information from State Wage Information Collection Agencies, see 24 CFR
part 5. At any interim reexamination after June 19, 1995 when there is a
new family member, the owner shall follow the requirements of 24 CFR
part 5 concerning obtaining and processing evidence of citizenship or
eligible immigration status of the new family member.
(c) Continuation of housing assistance payments. A family's
eligibility for Housing Assistance Payments continues until the Total
Tenant Payment equals the Contract Rent plus any utility allowance, or
until the family loses eligibility for continued occupancy under
Farmer's Home Administration regulations. However, eligibility also may
be terminated in accordance with HUD requirements, for such reasons as
failure to submit requested verification information, including failure
to meet the disclosure and verification requirements for Social Security
Numbers, as provided by 24 CFR part 5, or failure to sign and submit
consent forms for the obtaining of wage and claim information from State
Wage Information Collection Agencies, as provided by 24 CFR part 5. For
provisions requiring termination of assistance for failure to establish
citizenship or eligible immigration status, see 24 CFR part 5 and also
for provisions concerning certain assistance for mixed families
(families whose members include those with eligible immigration status,
and those without eligible immigration status) in lieu of termination of
assistance, and for provisions concerning deferral of termination of
assistance.
(d) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
[56 FR 7541, Feb. 22, 1991, as amended at 60 FR 14845, Mar. 20, 1995; 61
FR 13594, Mar. 27, 1996; 65 FR 16723, Mar. 29, 2000; 81 FR 12371, Mar.
8, 2016]
Sec. 884.219 Overcrowded and underoccupied units.
If HUD or the PHA, as the case may be, determines that a Contract
unit assisted under this part is not Decent, Safe, and Sanitary by
reason of increase in Family size, or that a Contract unit is larger
than appropriate for the size of the Family in occupancy, housing
assistance payments with respect to such unit will not be abated, unless
the Owner fails to offer the Family a suitable unit as soon as one
becomes vacant and ready for occupancy. In the case of an overcrowded
unit, if the Owner does not have any suitable units or if no vacancy of
a suitable unit occurs within a reasonable time, HUD (or the PHA) will
assist the Family in finding a suitable dwelling unit and require the
Family to move to such a unit as soon as possible. The Owner may receive
housing assistance payments for the vacated unit if
[[Page 132]]
he complies with the requirements of Sec. 884.106(c)(1).
Sec. 884.220 Adjustment of utility allowances.
In connection with annual and special adjustments of contract rents,
the owner must submit an analysis of the project's Utility Allowances.
Such data as changes in utility rates and other facts affecting utility
consumption should be provided as part of this analysis to permit
appropriate adjustments in the Utility Allowances. In addition, when
approval of a utility rate change would result in a cumulative increase
of 10 percent or more in the most recently approved Utility Allowances,
the project owner must advise the Secretary and request approval of new
Utility Allowances. Whenever a Utility Allowance for a unit is adjusted,
the owner will promptly notify affected families and make a
corresponding adjustment of the tenant rent and the amount of the
housing assistance payment for the unit.
(Approved by the Office of Management and Budget under control number
2502-0161)
[50 FR 39098, Sept. 27, 1985]
Sec. 884.221 Continued family participation.
A Family must continue to occupy its approved unit to remain
eligible for participation in the Housing Assistance Payments Program
except that if the Family (a) wishes to vacate its unit at the end of
the Lease term (or prior thereto but in accordance with the provisions
of the Lease), or (b) is required to move for reasons other than
violation of the Lease on the part of the Family, and if the Family
wishes to receive the benefit of housing assistance payments in another
approvable unit, the Family should give reasonable notice of the
circumstances to HUD or to the PHA, as appropriate, so that HUD or the
PHA may have the opportunity to consider the Family's request.
Sec. 884.222 Inapplicability of low-rent public housing model lease
and grievance procedures.
Model lease and grievance procedures established by HUD for PHA-
owned low-rent public housing are applicable only to PHA-Owner Projects
under the Section 8 Housing Assistance Payments Program.
Sec. 884.223 Leasing to eligible families.
(a) Availability of units for occupancy by Eligible Families. During
the term of the Contract, an owner shall make available for occupancy by
eligible families the total number of units for which assistance is
committed under the Contract. For purposes of this section, making units
available for occupancy by eligible families means that the owner: (1)
Is conducting marketing in accordance with Sec. 884.214; (2) has leased
or is making good faith efforts to lease the units to eligible and
otherwise acceptable families, including taking all feasible actions to
fill vacancies by renting to such families; and (3) has not rejected any
such applicant family except for reasons acceptable to HUD (or the PHA
in accordance with HUD guidelines and at the direction of HUD, as
appropriate). If the owner is temporarily unable to lease all units for
which assistance is committed under the Contract to eligible families,
one or more units may be leased to ineligible families with the prior
approval of HUD (or the PHA in accordance with HUD guidelines and at the
direction of HUD, as appropriate). Failure on the part of the owner to
comply with these requirements is a violation of the Contract and
grounds for all available legal remedies, including specific performance
of the Contract, suspension or debarment from HUD programs, and
reduction of the number of units under the Contract as set forth in
paragraph (b) of this section.
(b) Reduction of number of units covered by Contract. HUD (or the
PHA at the direction of HUD, as appropriate), after consultation with
the Farmers Home Administration, may reduce the number of units covered
by the Contract to the number of units available for occupancy by
eligible families if:
(1) The owner fails to comply with the requirements of paragraph (a)
of this section; or
(2) Notwithstanding any prior approval by HUD (or the PHA at the
direction of HUD, as appropriate) to lease such units to ineligible
families, HUD (or the PHA at the direction of HUD, as appropriate)
determines that
[[Page 133]]
the inability to lease units to eligible families is not a temporary
problem.
(c) Restoration. HUD will agree to an amendment of the ACC or the
Contract, as appropriate, to provide for subsequent restoration of any
reduction made pursuant to paragraph (b) of this section if:
(1) HUD determines that the restoration is justified by demand;
(2) The owner otherwise has a record of compliance with his or her
obligations under the Contract; and
(3) Contract and budget authority are available.
(d) Applicability. In accordance with section 555 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, paragraphs (a) and (b)
of this section apply to all contracts. An owner who had leased an
assisted unit to an ineligible family consistent with the regulations in
effect at the time will continue to lease the unit to that family.
However, the owner must make the unit available for occupancy by an
eligible family when the ineligible family vacates the unit.
(e) Termination of assistance for failure to establish citizenship
or eligible immigration status. If an owner subject to paragraphs (a)
and (b) of this section is required to terminate housing assistance
payments for the family in accordance with 24 CFR part 5 because the
owner determines that the entire family does not have U.S. citizenship
or eligible immigration status, the owner may allow continued occupancy
of the unit by the family without Section 8 assistance following the
termination of assistance, or if the family constitutes a mixed family,
as defined in 24 CFR part 5, the owner shall comply with the provisions
of 24 CFR part 5 concerning assistance to mixed families, and deferral
of termination of assistance.
(f) The regulations in 24 CFR part 5, subpart L (Protection for
Victims of Domestic Violence, Dating Violence, Sexual Assault, or
Stalking) apply to this section.
[49 FR 31398, Aug. 7, 1984, as amended at 53 FR 847, Jan. 13, 1988; 53
FR 6601, Mar. 2, 1988; 59 FR 13653, Mar. 23, 1994; 60 FR 14846, Mar. 20,
1995; 61 FR 13594, Mar. 27, 1996; 73 FR 72343, Nov. 28, 2008; 75 FR
66261, Oct. 27, 2010; 81 FR 80813, Nov. 16, 2016]
Sec. 884.223a Preference for occupancy by elderly families.
(a) Election of preference for occupancy by elderly families--(1)
Election by owners of eligible projects. (i) An owner of a project
assisted under this part (including a partially assisted project) that
was originally designed primarily for occupancy by elderly families (an
``eligible project'') may, at any time, elect to give preference to
elderly families in selecting tenants for assisted, vacant units in the
project, subject to the requirements of this section.
(ii) For purposes of this section, a project eligible for the
preference provided by this section, and for which the owner makes an
election to give preference in occupancy to elderly families is referred
to as an ``elderly project.'' ``Elderly families'' refers to families
whose heads of household, their spouses or sole members are 62 years or
older.
(iii) An owner who elects to provide a preference to elderly
families in accordance with this section is required to notify families
on the waiting list who are not elderly that the election has been made
and how the election may affect them if:
(A) The percentage of disabled families currently residing in the
project who are neither elderly nor near-elderly (hereafter,
collectively referred to as ``non-elderly disabled families'') is equal
to or exceeds the minimum required percentage of units established for
the elderly project in accordance with paragraph (c)(1) of this section,
and therefore non-elderly families on the waiting list (including non-
elderly disabled families) may be passed over for covered section 8
units; or
(B) The project, after making the calculation set forth in paragraph
(c)(1) of this section, will have no units set aside for non-elderly
disabled families.
(iv) An owner who elects to give a preference for elderly families
in accordance with this section shall not remove an applicant from the
project's waiting list solely on the basis of having made the election.
(2) HUD approval of election not required. (i) An owner is not
required to solicit or obtain the approval of HUD
[[Page 134]]
before exercising the election of preference for occupancy provided in
paragraph (a)(1) of this section. The owner, however, if challenged on
the issue of eligibility of the project for the election provided in
paragraph (a)(1) of this section must be able to support the project's
eligibility through the production of all relevant documentation in the
possession of the owner that pertains to the original design of the
project.
(ii) The Department reserves the right at any time to review and
make determinations regarding the accuracy of the identification of the
project as an elderly project. The Department can make such
determinations as a result of ongoing monitoring activities, or the
conduct of complaint investigations under the Fair Housing Act (42
U.S.C. 3601 through 3619), or compliance reviews and complaint
investigations under section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794) and other applicable statutes.
(b) Determining projects eligible for preference for occupancy by
elderly families--(1) Evidence supporting project eligibility. Evidence
that a project assisted under this part (or portion of a project) was
originally designed primarily for occupancy by elderly families, and is
therefore eligible for the election of occupancy preference provided by
this section, shall consist of at least one item from the sources
(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or
at least two items from the sources (``secondary'' sources) listed in
paragraph (b)(1)(ii) of this section:
(i) Primary sources. Identification of the project (or portion of a
project) as serving elderly (seniors) families in at least one primary
source such as: the application in response to the notice of funding
availability; the terms of the notice of funding availability under
which the application was solicited; the regulatory agreement; the loan
commitment; the bid invitation; the owner's management plan, or any
underwriting or financial document collected at or before loan closing;
or
(ii) Secondary sources. Two or more sources of evidence such as:
lease records from the earliest two years of occupancy for which records
are available showing that occupancy has been restricted primarily to
households where the head, spouse or sole member is 62 years of age or
older; evidence that services for elderly persons have been provided,
such as services funded by the Older Americans Act, transportation to
senior citizen centers, or programs coordinated with the Area Agency on
Aging; project unit mix with more than fifty percent of efficiency and
one-bedroom units [a secondary source particularly relevant to
distinguishing elderly projects under the previous section 3(b)
definition (in which disabled families were included in the definition
of ``elderly families'') from non-elderly projects and which in
combination with other factors (such as the number of accessible units)
may be useful in distinguishing projects for seniors from those serving
the broader definition of ``elderly families'' which includes disabled
families]; or any other relevant type of historical data, unless clearly
contradicted by other comparable evidence.
(2) Sources in conflict. If a primary source establishes a design
contrary to that established by the primary source upon which the owner
would base support that the project is an eligible project (as defined
in this section), the owner cannot make the election of preferences for
elderly families as provided by this section based upon primary sources
alone. In any case where primary sources do not provide clear evidence
of original design of the project for occupancy primarily by elderly
families, including those cases where sources documents conflict,
secondary sources may be used to establish the use for which the project
was originally designed.
(c) Reservation of units in elderly projects for non-elderly
disabled families. The owner of an elderly project is required to
reserve, at a minimum, the number of units specified in paragraph (c)(1)
of this section for occupancy by non-elderly disabled families.
(1) Minimum number of units to be reserved for non-elderly disabled
families. The number of units in an elderly project required to be
reserved for occupancy by non-elderly disabled families, shall be, at a
minimum, the lesser of:
[[Page 135]]
(i) The number of units equivalent to the higher of--
(A) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families on October
28, 1992; and
(B) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families upon January
1, 1992; or
(ii) 10 percent of the number of units assisted under this part in
the eligible project.
(2) Option to reserve greater number of units for non-elderly
disabled families. The owner, at the owner's option, and at any time,
may reserve a greater number of units for non-elderly disabled families
than that provided for in paragraph (c)(1) of this section. The option
to provide a greater number of units to non-elderly disabled families
will not obligate the owner to always provide that greater number to
non-elderly disabled families. The number of units required to be
provided to non-elderly disabled families at any time in an elderly
project is that number determined under paragraph (c)(1) of this
section.
(d) Secondary preferences. An owner of an elderly project also may
elect to establish secondary preferences in accordance with the
provisions of this paragraph (d) of this section.
(1) Preference for near-elderly disabled families in units reserved
for elderly families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of elderly families who have applied for occupancy
to fill all the vacant units in the elderly project reserved for elderly
families (that is, all units except those reserved for the non-elderly
disabled families as provided in paragraph (c) of this section), the
owner may give preference for occupancy of such units to disabled
families who are near-elderly families.
(2) Preference for near-elderly disabled families in units reserved
for non-elderly disabled families. If the owner of an elderly project
determines, in accordance with paragraph (f) of this section, that there
are an insufficient number of non-elderly disabled families to fill all
the vacant units in the elderly project reserved for non-elderly
disabled families as provided in paragraph (c) of this section, the
owner may give preference for occupancy of these units to disabled
families who are near-elderly families.
(e) Availability of units to families without regard to preference.
An owner shall make vacant units in an elderly project generally
available to otherwise eligible families who apply for housing, without
regard to the preferences and reservation of units provided in this
section if either:
(1) The owner has adopted the secondary preferences and there are an
insufficient number of families for whom elderly preference, reserve
preference, and secondary preference has been given, to fill all the
vacant units; or
(2) The owner has not adopted the secondary preferences and there
are an insufficient number of families for whom elderly preference, and
reserve preference has been given to fill all the vacant units.
(f) Determination of insufficient number of applicants qualifying
for preference. To make a determination that there are an insufficient
number of applicants who qualify for the preferences, including
secondary preferences, provided by this section, the owner must:
(1) Conduct marketing in accordance with Sec. 884.214(a) to attract
applicants qualifying for the preferences and reservation of units set
forth in this section; and
(2) Make a good faith effort to lease to applicants who qualify for
the preferences provided in this section, including taking all feasible
actions to fill vacancies by renting to such families.
(g) Prohibition of evictions. An owner may not evict a tenant
without good cause, or require that a tenant vacate a unit, in whole or
in part because of any reservation or preference provided in this
section, or because of any action taken by the Secretary pursuant to
subtitle D (sections 651 through 661) of title VI of the Housing and
Community Development Act of 1992 (42 U.S.C. 13611 through 13620).
[59 FR 65855, Dec. 21, 1994, as amended at 61 FR 9047, Mar. 6, 1996; 65
FR 16723, Mar. 29, 2000]
[[Page 136]]
Sec. 884.224 HUD review of contract compliance.
HUD will review project operation at such intervals as it deems
necessary to ensure that the Owner is in full compliance with the terms
and conditions of the Contract. Equal Opportunity review may be
conducted with the scheduled HUD review or at any time deemed
appropriate by HUD.
Sec. 884.225 PHA reporting requirements. [Reserved]