[Federal Register Volume 59, Number 75 (Tuesday, April 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9392]
[[Page Unknown]]
[Federal Register: April 19, 1994]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Public and Indian Housing
24 CFR Part 941
[Docket No. R-94-1711; FR-3591-F-01]
RIN 2577-AB39
PHA Acquisition of Single Family HUD/VA/RTC Properties
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule.
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SUMMARY: This rule revises existing regulations to expedite public
housing agency (PHA) acquisition of single family properties (with or
without rehabilitation) that are secured by an FHA-insured or HUD-held
mortgage or owned by HUD, VA, or RTC by eliminating the requirements
for approval by the Assistant Secretary and allowing Field Offices to
exercise more discretion in determining the nature and scope of
required technical reviews.
EFFECTIVE DATE: May 19, 1994.
FOR FURTHER INFORMATION CONTACT: Janice Rattley, Director, Office of
Construction, Rehabilitation and Maintenance, Office of Public and
Indian Housing, room 4138, 451 Seventh Street SW., Washington, DC
20410, Telephone (202) 708-1800. A telecommunications device for speech
and/or hearing impaired persons (TDD) is available at (202) 708-0850.
(These are not toll-free telephone numbers.)
SUPPLEMENTARY INFORMATION: The current regulation for public housing
development provides, in part, at 24 CFR 941.206(c), that PHA
acquisition of properties (with or without rehabilitation) that are
secured by an FHA-insured or HUD-held mortgage or are owned by HUD may
not be approved, except with the prior written approval of the
Assistant Secretary for Public and Indian Housing. This rule amends
Sec. 941.206(c) by removing the requirement for prior approval by the
Assistant Secretary and by adding properties owned by the Veterans
Administration (VA) or the Resolution Trust Corporation (RTC) as
eligible for acquisition under this section.
This rule also streamlines the procedure for acquiring such
properties by expanding the limited proposal procedure for scattered-
site projects to permit the PHA purchase of HUD/VA/RTC properties, any
combination of such, and/or in combination with the purchase of
eligible properties on the open market. The limited proposal procedure
would be the same for any single family acquisition regardless of its
ownership.
This rule permits Field Offices to exercise more discretion in
determining the nature and scope of required reviews. In order to
enable a Field Office to have the ability to limit its reviews and
expedite processing, the PHA is required to certify, either as part of
its limited proposal or at the time the PHA identifies a property it
wants to acquire and provides the proposed sales contract, that
compliance with all necessary applicable requirements will be met:
e.g.,
(1) Prevailing wages;
(2) Nondiscrimination requirements;
(3) Site and neighborhood standards;
(4) Intergovernmental review;
(5) Accessibility requirements;
(6) Relocation requirements;
(7) Minimum Property Standards (MPS) or Housing Quality Standards
(HQS);
(8) If replacement housing under section 18 is involved, that the
housing to be acquired is consistent with the replacement housing plan
approved by HUD;
(9) Generally, properties constructed prior to 1978 should not be
considered; however, if a proposed property was built prior to 1978,
that lead-based paint testing and the determination of the cost
feasibility of abatement will be done before the transfer of title to
and payment of funds by the PHA or the contract is null and void; and
(10) Any other Federal requirements listed under 24 CFR 941.202
through 941.209. These PHA certifications do not provide a basis for
waiving or dispensing with the applicability of the aforementioned
requirements, environmental assessments and other Federal requirements
listed under 24 CFR 941.202 through 941.209.
Based on the PHA's submission, including the certifications, each
Field Office is allowed to decide, on its own discretion, whether or
not to require the submission, technical review and approval of any
further information. In order to expedite processing, the Field
Office's Housing Specialist will distribute simultaneously to each of
HUD's technical offices (in accordance with the recent reorganization
at the Field Office level) the PHA's submission to determine as soon as
possible if any technical reviews are necessary. The Field Office is
responsible for performing the reviews to assure compliance with
applicable requirements and development within the approved development
cost limits, while at the same time keeping the number of technical
reviews at a minimum. Under this rule, there is a target period of 50
days from the time the PHA indicates it wants to acquire a specific
property and when the Field Office approves or rejects the request;
after approval notification, the PHA has an additional 10 day target
period to close on the property. Properties involving extensive
rehabilitation, lead-based paint testing and abatement, historic
preservation requirements and/or an uncompleted environmental
assessment, may require extension of the target date. The payment of
Single Family Property Disposition (SFPD) customary extension fees is
considered an eligible public housing development expense.
The rule provides guidance on the factors that a Field Office is to
consider in deciding whether or not to require additional submissions
for review and approval. The Field Office is to take into account the
total development cost of the proposed project, and the management and
development capabilities of the PHA, including the PHA's performance
rating under the Public Housing Management Assessment Program (PHMAP)
at 24 CFR part 901. The Field Office can, at its own discretion, accept
all PHA certifications that required compliances will be met, except
the environmental assessment; by law, only HUD can certify compliance
with 24 CFR part 50. If the Field Office is satisfied with the PHA
submission, including its certifications, additional submissions and
technical reviews will not be necessary.
These changes to HUD's development review process are a part of the
overall effort that the Department is undertaking to promote
decentralization. More authority is entrusted to the Field Offices to
exercise discretion with respect to the activities of PHAs that they
deal with on a close and regular basis. PHAs are themselves empowered
to act without the prior approval of the Assistant Secretary and with
the potential for more informal consultations with the Field Office.
The end result is anticipated to be a more streamlined and efficient
property acquisition process.
This rule further specifies that the limited proposal procedure
under Sec. 941.404(n) for scattered site properties would also be
followed for acquisition of HUD/VA/RTC properties. PHAs may identify
such properties to consider for acquisition as described below in the
succeeding paragraph. Section 941.404(n) is amended to include these
properties within its scope, and to include the list of certifications
discussed above. The unnumbered closing paragraph of Sec. 941.404(n) is
revised to reflect the Department's streamlined review procedures.
Purchase of HUD-Owned Properties
Acquisition by PHAs of HUD's single family acquired properties must
routinely follow the established current procedures used by HUD's
Division of Single Family Property Disposition (SFPD). This includes
the process by which all other nonprofit organizations and government
agencies purchase properties. After a PHA receives notice of property
availability, the PHA has 5 days to indicate interest and then an
additional 15 days to submit a signed sales contract. Upon execution of
the contract by SFPD, the PHA will close the sale within the Field
Office closing timeframe, generally 30-60 days. During this remaining
period, all regulatory and statutory regulations must be met by the PHA
before the transfer of title to and payment of funds by the PHA or the
contract is null and void.
HUD would like to expedite sales to PHAs and encourages PHAs to
contact the Director of Housing Management in the HUD field office
having jurisdiction over the area in which the PHA has authority to
determine the availability of HUD-owned single family properties, and
the status of HUD-held mortgages which may be in the process of being
foreclosed.
Purchase of Properties Owned by the Veteran's Administration (VA)
and the Resolution Trust Corporation (RTC)
Pursuant to a Memorandum of Agreement between the Secretary of
Housing and Urban Development and the Secretary of Veteran Affairs, a
framework will be established for a continuing working relationship
between HUD and VA to coordinate the sale of VA-acquired properties to
PHAs. Upon request, the local VA field office will make available a
list, by computer or otherwise, of single family (one to four units)
properties owned by VA and located within the PHA's jurisdiction. PHAs
will have a right of first option on these properties for a period of
time from the date the list is furnished to the PHA, and the PHA and VA
will follow an agreed upon procedure for the property purchase.
With regard to RTC properties, RTC sells foreclosed single family
properties in conjunction with its responsibilities for resolving
failed financial institutions. Under the RTC's Affordable Housing
Disposition (AHD) Program, public agencies, nonprofit organizations and
low/moderate-income buyers have an exclusive right for a period of time
to purchase lower-priced single family properties that the RTC has
placed on the market. RTC offers these properties at their fair market
value and publicizes the availability of these properties through
various state and local housing agencies and Federal Home Loan Banks,
which serve as property information clearinghouses. PHAs are to contact
the Affordable Housing Disposition Department Head at the local RTC
field offices in order to be placed on the RTC property mailing list.
The Department has determined that the changes made by this rule
should be adopted without the delay occasioned by requiring prior
notice and comment. These changes primarily constitute a change in the
Department's own review procedures and the elimination of a requirement
to obtain prior approval of the Assistant Secretary before a PHA may
acquire certain properties. As such, prior notice and comment are
unnecessary, and the rule is exempt under 24 CFR part 10 from notice
and comment requirements.
Findings and Certifications
A. Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969. The Finding of No Significant Impact is available for
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the
Office of the Rules Docket Clerk at the above address.
B. Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule do not have federalism implications and, thus,
are not subject to review under the Order. This rule removes a layer of
prior HUD review and approval and allows Field Offices to exercise more
discretion at multiple processing stages for the acquisition of certain
properties. It will not have substantial, direct effects on States, on
their political subdivisions, or on their relationships with the
Federal government, or on the distribution of power and
responsibilities between them and other levels of government.
C. Family Impact
The General Counsel, as the Designated Official under Executive
Order 12606, the Family, has determined that this rule will have only
an indirect, though beneficial, impact on family formation,
maintenance, and general well-being, since it should simplify the
development of housing by PHAs, and thus, is not subject to review
under the Order.
This rule was not listed in the Department's Semiannual Agenda of
Regulations published on October 25, 1993 (58 FR 56402) under Executive
Order 12291 and the Regulatory Flexibility Act.
List of Subjects in 24 CFR Part 941
Grant programs--housing and community development, Loan programs--
housing and community development, Public housing.
Accordingly, the Department amends 24 CFR part 941 as set forth
below:
PART 941--PUBLIC HOUSING DEVELOPMENT
1. The authority citation for 24 CFR part 941 continues to read as
follows:
Authority: 42 U.S.C. 1437b, 1437c, 1437g, and 3535(d).
2. In Sec. 941.206, paragraph (c) is revised to read as follows:
Sec. 941.206 Eligible properties.
* * * * *
(c) Single family properties secured by an FHA-insured or HUD-held
mortgage, or owned by HUD, the Veterans Administration (VA), or the
Resolution Trust Corporation (RTC). (1) Proposals for the acquisition
of single family properties (with or without rehabilitation) that are
secured by an FHA-insured or HUD-held mortgage or are owned by HUD, the
Veterans Administration (VA), or the Resolution Trust Corporation
(RTC), must be submitted to the Field Office for approval. The limited
proposal procedure for scattered-site projects, as set forth at 24 CFR
941.404(n), may be followed to facilitate the PHA purchase for
scattered-site projects of HUD/VA/RTC properties, any combination of
such, and/or in combination with the purchase of eligible properties on
the open market.
(2) After approval of the limited proposal and execution of the
ACC, Field Offices will determine the nature and scope of required
technical reviews, taking into consideration the PHA submission
identifying a property it wants to acquire that includes the proposed
sales contract and PHA certifications that compliance with all
necessary requirements will be met. If the PHA has provided the
certifications as part of its limited proposal, the Field Office can,
at its own discretion, accept all PHA certifications that required
compliances will be met except the environmental assessment; by law,
only HUD can certify compliance with 24 CFR part 50. The PHA
certifications do not waive or dispense with the applicability of other
Federal requirements pursuant to 24 CFR 941.202 through 941.209, but
only serve to facilitate the approval process. These certifications
shall address, but are not limited to:
(i) Prevailing wages;
(ii) Nondiscrimination requirements;
(iii) Site and neighborhood standards;
(iv) Intergovernmental review;
(v) Accessibility requirements;
(vi) Relocation requirements;
(vii) Minimum Property Standards (MPS) or Housing Quality Standards
(HQS);
(viii) If replacement housing under section 18 is involved, that
the housing to be acquired is consistent with the Replacement Housing
Plan approved by HUD;
(ix) Generally, properties constructed prior to 1978 should not be
considered; however, if a proposed property was built prior to 1978,
that lead-based paint testing and the determination of the cost
feasibility of abatement will be done before the transfer to and
payment of funds by the PHA or the contract is null and void; and
(x) Any other Federal requirements listed under 24 CFR 941.202
through 941.209.
(3) After receiving a PHA's submission in accordance with paragraph
(c) (2) of this section, each Field Office will decide whether or not
to require the review and approval of any further information, based on
its consideration of the PHA's submission, the acquisition cost of the
property, and the management and development capabilities of the PHA,
including the PHA's performance rating, under the Public Housing
Management Assessment Program (PHMAP) at 24 CFR part 901.
(4) The Field Office will perform all necessary reviews to assure
all compliance requirements are met.
(5) Under this section, there is a target period of 50 days from
the time the PHA indicates it wants to acquire a specific property and
when the Field Office approves or rejects the request; after approval
notification, the PHA has an additional 10 day target period in which
to close on the property. Properties involving additional requirements,
such as acquisition with extensive rehabilitation, lead-based paint
testing and abatement, historic preservation requirements and/or an
uncompleted environmental assessment, may require extension of the
target date.
3. In Sec. 941.404, paragraph (n) is amended by designating the
introductory text as paragraph (n)(1); by revising the section heading
and the newly designated paragraph (n)(1); by redesignating existing
paragraphs (n)(1) through (n)(9) as paragraphs (n)(1)(i) through
(n)(1)(ix), respectively; by adding a new paragraph (n)(1)(x); by
designating the undesignated paragraph as paragraph (n)(2); and by
revising the newly designated paragraph (n)(2), to read as follows:
Sec. 941.404 Proposal content.
* * * * *
(n) Special procedures for HUD/VA/RTC properties and scattered site
projects. (1) PHAs may, in lieu of submission of the complete proposal
described in this section, submit a limited proposal if: the proposal
is for the acquisition of properties secured by an FHA-insured or HUD-
held mortgage, or owned by HUD, the Veterans Administration (VA), or
the Resolution Trust Corporation (RTC); or the proposal is for a
project involving scattered-site acquisition or a scattered-site
conventional new construction or rehabilitation development, and the
proposal has been determined to be eligible for front-end funding
pursuant to Sec. 941.402(c) or Sec. 941.403(c), and the diversity of
ownership of the properties is expected to make site control difficult.
* * * * *
(x) Certification that the PHA will comply with the following HUD
requirements:
(A) Prevailing wages;
(B) Nondiscrimination requirements;
(C) Site and neighborhood standards;
(D) Intergovernmental review;
(E) Accessibility requirements;
(F) Relocation requirements;
(G) Minimum Property Standards (MPS) or Housing Quality Standards
(HQS);
(H) If replacement housing under section 18 is involved, that the
housing to be acquired is consistent with the Replacement Housing Plan
approved by HUD;
(I) Generally, properties constructed prior to 1978 should not be
considered; however, if a proposed property was built prior to 1978,
that lead-based paint testing and the determination of the cost
feasibility of abatement will be done before the transfer to and
payment of funds by the PHA or the contract is null and void; and
(J) Any other Federal requirements listed under 24 CFR 941.202
through 941.209.
(2) HUD will review the limited proposal, in accordance with
Sec. 941.405, and upon approval of the proposal, HUD will execute the
ACC and permit advances for the purposes and amounts described in
Sec. 941.406(b)(3). The PHA will select individual properties in
accordance with its approved limited proposal, but will not acquire a
property or make a commitment to acquire without specific HUD site
approval, and a determination that the property, including the
resulting total development cost, is consistent with the approved
limited proposal.
Dated: April 11, 1994.
Joseph Shuldiner,
Assistant, Secretary for Public and Indian Housing.
[FR Doc. 94-9392 Filed 4-18-94; 8:45 am]
BILLING CODE 4210-33-P