[Federal Register Volume 59, Number 165 (Friday, August 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20866]


[[Page Unknown]]

[Federal Register: August 26, 1994]


_______________________________________________________________________

Part IV





Department of Housing and Urban Development





_______________________________________________________________________



Office of the Secretary



Office of Assistant Secretary



_______________________________________________________________________



24 CFR Parts 58 and 92




HOME Investment Partnerships Program and Amendment to NOFA for FY 1994 
for Indian Applicants Under the HOME Program; Interim Rule and Notice
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 58 and 92

[Docket No. R-94-1735; FR-3716-I-01]
RIN 2501-AB77

 
HOME Investment Partnerships Program

AGENCY: Office of the Secretary, HUD.

ACTION: Interim rule.

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

SUMMARY: This interim rule amends the existing interim rule for the 
HOME Investment Partnerships Program by making it conform with program 
changes enacted in the Multifamily Housing Property Disposition Reform 
Act of 1994 and by making a number of additional clarifying changes.

DATES: Effective date: September 26, 1994, except amendments to part 92 
effective October 26, 1994 through June 30, 1995.
    Comments due date: Comments on this interim rule must be submitted 
on or before October 25, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding 
this interim rule to the Rules Docket Clerk, Office of General Counsel, 
Room 10276, Department of Housing and Urban Development, 451 Seventh 
Street, S.W., Washington, D.C. 20410. Communications should refer to 
the above docket number and title. A copy of each communication 
submitted will be available for public inspection and copying between 
7:30 a.m. and 5:30 p.m. weekdays at the above address. FAXED comments 
will not be accepted.

FOR FURTHER INFORMATION CONTACT: Mary Kolesar, Director, Program Policy 
Division, Office of Affordable Housing Programs, 451 Seventh Street, 
S.W., Washington, D.C. 20410, telephone (202) 708-2470, TDD (202) 708-
2565. (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act Statement

    The information collection requirements for the HOME Investment 
Partnerships Program have been approved by the Office of Management and 
Budget, under section 3504(h) of the Paperwork Reduction Act of 1980 
(44 U.S.C. 3501-3520), and assigned OMB control number 2501-0013. This 
interim rule does not contain additional information collection 
requirements.

II. Background

    The HOME Investment Partnerships Program (HOME) was enacted under 
title II (42 U.S.C. 12701-12839) of the Cranston-Gonzalez National 
Affordable Housing Act (NAHA) (Pub. L. 101-625, approved November 28, 
1990). Implementing regulations for the HOME Program are at 24 CFR part 
92.
    The Housing and Community Development Act of 1992 (HCDA 1992) (Pub. 
L. 102-550, approved October 28, 1992) included a substantial number of 
amendments to the HOME program. These amendments were implemented in 
rules published on December 22, 1992 (57 FR 60960), June 23, 1993 (58 
FR 34130), and April 19, 1994 (59 FR 18626).
    The Multifamily Housing Property Disposition Reform Act of 1994 
(MHPDRA) (Pub. L. 102-233, approved April 11, 1994) included an 
additional number of amendments to the HOME Program. The following 
discussion, arranged according to the sequence of the MHPDRA sections, 
summarizes the changes made to the HOME program regulation in this 
interim rule.
    Section 201 of MHPDRA amends section 104(2) of NAHA to allow 
governors to designate State agencies or instrumentalities of the State 
(e.g., housing finance agencies or housing authorities) to administer 
HOME Program funds. Prior to this change, a subrecipient agreement was 
required between the State and its instrumentality to administer the 
HOME funds. This amendment provides greater flexibility to designate 
such an organization to run the program and the definition of State in 
Sec. 92.2 is amended accordingly.
    Section 202 of MHPDRA amends section 214(1) of NAHA which required 
that at least 90 percent of the HOME funds invested in rental housing 
be for units occupied by families below 60 percent of median income. 
This amendment changes the requirement to say that at least 90 percent 
of the units assisted, and in the case of tenant-based rental 
assistance, the families assisted be below 60 percent of median income. 
This amendment, as implemented through Sec. 92.216, will simplify the 
targeting requirement since it is easier to count units than funds 
invested.
    Section 203 of MHPDRA amends section 215(b) of NAHA in two ways. 
The first change is the elimination of the ``first-time'' designation 
for homebuyers. The HCDA 1992 amendment broadened the eligibility of 
``first-time'' homebuyers to include almost all low-income homebuyers. 
By eliminating the designation, participating jurisdictions will not 
have to document the statutory category under which income-eligible 
homebuyers qualify. The change will also conform the HOME Program to 
the CDBG Program, which does not restrict homebuyer assistance to 
first-time homebuyers.
    The second change would permit participating jurisdictions to use 
funds recaptured from the sale of homebuyer units for any eligible HOME 
cost. The provision formerly limited the use of the recaptured funds to 
assistance for additional first-time homebuyers. This change will 
effect the use of current and future recaptured funds. Conforming 
changes have been made to Secs. 92.2, 92.61(b)(4), 92.150(b)(4), 
92.205(a)(1), 92.206(b), 92.214(a)(7), 92.254(a), and 92.354 to 
implement the new homebuyer requirements.
    Section 204 of MHPDRA amends section 220(a) of NAHA to effect a 
flat 25 percent match on all funds drawn down for HOME projects or 
tenant-based rental assistance. This provision eliminates the 30 
percent match of funds drawn down for new construction. This new, lower 
match rate will be applied to all Fiscal Year 1993 funds currently 
expended or future year funds drawn down for eligible HOME activities, 
and Sec. 92.218 has been changed accordingly.
    The new environmental provisions make three amendments to section 
288 of NAHA which are implemented for the HOME Program by Sec. 92.352, 
for Subpart M--HOME Funds for Indian Tribes at Sec. 92.633, and also by 
revisions to HUD regulations in 24 CFR part 58, which govern the 
assumption of environmental responsibilities by recipients under the 
HOME program and other programs with similar statutory authority for 
recipient environmental reviews. The first amendment provides for 
assumption of HUD's environmental review responsibilities by all 
jurisdictions receiving assistance under the HOME Program, not just 
participating jurisdictions, as well as Indian tribes and insular 
areas.
    The second amendment to Section 288 makes HOME environmental review 
procedures consistent with the procedures under the Community 
Development Block Grant and McKinney Act homeless assistance programs 
with regard to States' responsibilities. Where a State makes funds 
available to a unit of general local government, the State would 
perform the release of funds function otherwise performed by HUD, and 
local governments would assume the responsibility for performing 
environmental reviews. To the extent that the State would be using the 
HOME funds directly, HUD would approve the request for release of 
funds.
    Third, a new paragraph, Sec. 58.77(d), is added to part 58, which 
adds the new statutory provisions for monitoring, training, and 
termination or suspension of assumption of review responsibilities.
    The amendments to 24 CFR part 58 in this interim rule contain 
changes consistent with the above changes in part 92. In addition, 
Section 305 of MHPDRA amends Section 1011 of the HCDA 1992 to provide 
that for purposes of environmental review, decisionmaking and action, 
certain grants for lead-based paint hazard reduction and abatement 
shall be treated as assistance under the HOME Investment Partnership 
Act and shall be subject to HUD's regulations implementing section 288 
of that Act. In other words, recipients of these lead-based paint 
grants will assume environmental responsibilities to the same extent as 
recipients under the HOME program and will be subject to 24 CFR part 
58. The grants covered by this provision are lead-based paint hazard 
reduction grants under section 1011, as well as grants to States and 
units of general local government for abatement of lead-based paint and 
lead dust hazards pursuant to title II of the Departments of Veterans 
Affairs and Housing and Urban Development, and Independent Agencies 
Appropriations Act, 1992 (approved October 28, 1991, Pub. L. 102-139), 
(92 App. Act). Accordingly, Sec. 58.1(c) is amended to reflect the 
applicability of part 58 to these lead-based paint grants.
    Section 208 of MHPDRA creates a new section 290 of NAHA which 
permits the Secretary to waive certain statutory provisions for PJs 
that are in federally-declared disaster areas under title IV of the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act and 
that will be using HOME funds to address damage. However, the Secretary 
may not waive requirements related to public notice of funding 
availability, nondiscrimination, fair housing, labor standards, 
environmental standards and low-income housing affordability. With 
regard to low-income housing affordability, projects must meet the 
occupancy rent and periods of affordability provisions outlined in 
Secs. 92.252 and 92.254. It is the Department's intent to provide 
waivers on other HOME requirements based on the circumstances of a 
particular disaster, tailoring the waivers to the needs of the 
participating jurisdiction.
    The Department is making a technical correction to 
Sec. 92.211(a)(2) to reflect the 1992 amendments to the Section 
6(c)(4)(A) of the Housing Act of 1937. Selection policies and criteria 
for a tenant-based rental assistance program funded by HOME are 
considered reasonably related to the Federal preference rules if, at 
least, 50% of the families would meet the Federal preferences. The 
change reduces the proportion of families required to meet the Federal 
preferences from 70% to 50%.
    The Department is amending Sec. 92.254(a) to include the 
requirement that homeownership under a lease-purchase agreement, in 
conjunction with a homebuyer program, must occur within 36 months. This 
addition serves to integrate policy guidance enunciated previously to 
the field into the rule. The Department believes that 36 months should 
be ample time for a homebuyer to resolve any outstanding credit 
problems, to complete homeowner education courses, or build up 
sufficient equity for homeownership (especially since HOME funds can be 
used for down-payment assistance). Lease-purchase arrangements in 
connection with homebuyer programs are not subject to the same 
occupancy and rental restrictions as are HOME rental projects and, 
therefore, the Department is concerned that any longer lease period 
would be contrary to the statutory requirements governing HOME rental 
projects. The Department would appreciate any comment regarding this 
regulatory amendment, whether the 36 month period is too long or not 
long enough or whether the time period should be determined by the PJ.
    The HOME Program regulations published April 19, 1994 made a change 
to Sec. 92.252(a)(2) designed to prevent ``Low HOME Rents,'' as 
calculated, to be higher than ``High HOME Rents'' as a result of fair 
market rents in some regions. The change was made to correct this 
problem by indicating that if the low HOME rents were higher than the 
high HOME rents that the figure for the lower rent would be used for 
all HOME units. That change, however, has been interpreted as limiting 
the method for calculation of low HOME rents, which was not intended. 
Revisions have been made to Sec. 92.252(a)(2)(iii) to clarify this 
point.
    This interim rule also makes clarifying changes to three cross-
cutting program provisions in the HOME rule. First, this interim rule 
amends Sec. 92.257, ``Religious organizations,'' to remove a reference 
relating to control of wholly secular entities established by 
``primarily religious organizations'' to rehabilitate or construct 
housing which will therefore not be owned by such primarily religious 
organizations. The Department recognizes the important role served by 
religious groups in providing lower income housing. This change 
conforms the rule to the same principles and tests applied in the 
Community Development Block Grant regulations at Sec. 570.200(j) and in 
the section 202 program for elderly housing assistance. This 
clarification is intended to indicate the availability of no lesser 
role in the HOME program for entities established by a ``primarily 
religious organization,'' a term equivalent to what the United States 
Supreme Court describes as a ``pervasively sectarian institution,'' one 
in which ``religion is so pervasive that a substantial portion of its 
functions are subsumed in the religious mission.'' Hunt v. McNair, 413 
U.S. 734, 743 (1973).
    Second, this interim rule revises Sec. 92.353(e) to set out the 
requirement that HOME participating jurisdictions must comply with the 
requirements of a Residential Antidisplacement and Relocation 
Assistance Plan (Plan). The change reflects a statutory amendment to 
the Comprehensive Housing Affordability Strategy made by Section 220(b) 
of the Housing and Community Development Act of 1992. A participating 
jurisdiction with a Community Development Block Grant (CDBG) must 
follow a Plan identical to its CDBG Plan. A participating jurisdiction 
that is not a CDBG grantee must follow a Plan that meets the 
requirements of the applicable CDBG regulation (24 CFR 570.606(c) for a 
local jurisdiction and Sec. 570.488(c) for States). A certification 
requirement related to this provision is also added to 
Sec. 92.10(c)(4). On July 1, 1994, HUD published a proposed rule at 24 
CFR part 43 (59 FR 34300) describing proposed changes to Plan 
requirements. The deadline for public comments was August 1, 1994.
    Finally, this interim rule also amends Sec. 92.354(a)(2), regarding 
Davis-Bacon Act applicability. The change is intended to make clear 
that construction contracts covering 12 or more units, disregarding the 
number of projects involved, are subject to Davis-Bacon requirements. 
Also, dividing a single project into multiple construction contracts 
for purposes of avoiding Davis-Bacon requirements is not permitted.

III. Findings and Certifications

Justification for Interim Rulemaking

    The Department has determined that this interim rule should be 
adopted without the delay occasioned by requiring prior notice and 
comment. This interim rule simply constitutes the implementation of 
statutory language with the exercise of little or no discretion on the 
part of the Department and makes a number of clarifying changes to 
existing provisons. As such, prior notice and comment are unnecessary 
under 24 CFR Part 10. This rule is being published as an interim rule 
and not as a final rule because the HOME program regulation at 24 CFR 
part 92 has not yet been issued as a final rule.

Environmental Review

    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.

Regulatory Planning and Review

    This interim rule has been reviewed and approved in accordance with 
Executive Order 12866, issued by the President on September 30, 1993 
(58 FR 51735, October 4, 1993). Any changes to the interim rule 
resulting from this review are available for public inspection between 
7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket 
Clerk.

Impact on Small Entities

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 
605(b)), the undersigned hereby certifies that this interim rule does 
not have a significant economic impact on a substantial number of small 
entities, because jurisdictions that are statutorily eligible to 
receive formula allocations are relatively larger cities, counties or 
States.

Regulatory Agenda

    This interim rule was not listed in the Department's Semiannual 
Agenda of Regulations published on April 25, 1994 (59 FR 20424) under 
Executive Order 12866 and the Regulatory Flexibility Act.

Federalism Impact

    The General Counsel has determined, as the Designated Official for 
HUD under section 6(a) of Executive Order 12612, Federalism, that this 
interim rule does not have federalism implications concerning the 
division of local, State, and federal responsibilities. While the HOME 
Program interim rule amended by this interim rule was determined to be 
a rule with federalism implications and the Department submitted a 
Federalism Assessment concerning the interim rule to OMB, this amending 
rule only makes limited adjustments to the interim rule and does not 
significantly affect any of the factors considered in the Federalism 
Assessment for the interim rule.

Impact on the Family

    The General Counsel, as the designated official under Executive 
Order 12606, The Family, has determined that this interim rule would 
not have significant impact on family formation, maintenance, and 
general well-being. Assistance provided under this interim rule can be 
expected to support family values, by helping families achieve security 
and independence; by enabling them to live in decent, safe, and 
sanitary housing; and by giving them the means to live independently in 
mainstream American society. This interim rule would not, however, 
affect the institution of the family, which is requisite to coverage by 
the Order. Even if this interim rule had the necessary family impact, 
it would not be subject to further review under the Order, since the 
provision of assistance under this interim rule is required by statute, 
and is not subject to agency discretion.
    The Catalog of Federal Domestic Assistance Number for the HOME 
Program is 14.239.

List of Subjects

24 CFR Part 58

    Environmental protection, Community development block grants, 
Environmental impact statements, Grant programs--housing and community 
development, Reporting and recordkeeping requirements.

24 CFR Part 92

    Administrative practice and procedure, Grant programs--housing and 
community development, Grant programs--Indians, Indians, Low and 
moderate income housing, Manufactured homes, Rent subsidies, Reporting 
and recordkeeping requirements.

    Accordingly, the Department amends parts 58 and 92 of title 24 of 
the Code of Federal Regulations as follows:

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR RECIPIENTS ASSUMING 
HUD RESPONSIBILITIES

    1. The authority citation for part 58 is revised to read as 
follows:

    Authority: 42 U.S.C. 1437o(i)(1) and (2), 3535(d), 4332, 4852, 
5304(g), 11402, and 12838.

    2. Section 58.1 is amended by:
    a. Revising the second sentence in the introductory text of 
paragraph (c);
    b. Removing the word ``and'' at the end of paragraph (c)(3);
    c. Removing the period at the end of paragraph (c)(4) and adding 
``; and'' ; and
    d. Adding a new paragraph (c)(5), to read as follows:


Sec. 58.1  Purpose, scope and applicability.

* * * * *
    (c) Applicability. * * * Programs and activities subject to this 
part include:
* * * * *
    (5) Grants to States and units of general local government for 
abatement of lead-based paint and lead dust hazards pursuant to title 
II of the Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act, 1992, and 
grants for lead-based paint hazard reduction under Section 1011 of the 
Housing and Community Development Act of 1992, in accordance with 
section 1011(o) (42 U.S.C. 4852(o)).
    3. In Sec. 58.2, paragraph (a)(4) is revised to read as follows:


Sec. 58.2  Terms, abbreviations and definitions.

    (a) * * *
    (4) Recipient means:
    (i) A State that does not distribute HUD assistance under the 
program to a unit of general local government;
    (ii) Guam, the Northern Mariana Islands, the Virgin Islands, 
American Samoa, the Trust Territory of the Pacific Islands;
    (iii) A unit of general local government; or
    (iv) An Indian tribe.
* * * * *
    4. In Sec. 58.4, the second sentence of paragraph (c)(1) is revised 
to read as follows:


Sec. 58.4  HUD legal authority.

* * * * *
    (c) * * *
    (1) * * * The State must submit the certification and RROF to HUD.
* * * * *
    5. In Sec. 58.77, a new paragraph (d) is added to read as follows:


Sec. 58.77  Effect of approval of certification.

* * * * *
    (d) Responsibility for monitoring and training. (1) At least once 
every three years, HUD intends to conduct in-depth monitoring of the 
environmental activities performed by recipients that have assumed 
responsibilities for environmental review, decisionmaking, and action 
under this part. Limited monitoring of these environmental activities 
will be conducted during each program monitoring site visit. If through 
limited or in-depth monitoring of these environmental activities or by 
other means, HUD becomes aware of any environmental deficiencies, HUD 
may take one or more of the following actions:
    (i) In the case of problems found during limited monitoring, HUD 
may schedule in-depth monitoring at an earlier date or may schedule in-
depth monitoring more frequently;
    (ii) HUD may require attendance by recipient staff at HUD sponsored 
or approved training, which will be provided periodically at various 
locations around the country;
    (iii) HUD may refuse to accept the certifications of environmental 
compliance on subsequent grants;
    (iv) HUD may suspend or terminate the recipient's assumption of the 
environmental review responsibility;
    (v) HUD may initiate sanctions, corrective actions or other 
remedies provided in program regulations or agreements or contracts 
with the recipient.
    (2) HUD's responsibilities and action under paragraph (d)(1) of 
this section shall not be construed to limit or reduce any 
responsibility assumed by a recipient with respect to any particular 
release of funds under this part. Whether or not HUD takes action under 
paragraph (d)(1) of this section, the Certifying Officer remains the 
responsible Federal official under Sec. 58.17 with respect to projects 
and activities for which the Certifying Officer has submitted a RROF 
and certification under this part.

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

    6. The authority citation for part 92 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 12701-12839.

    7. In Sec. 92.2, the definition of ``First-time homebuyer'' is 
removed, and the definition of ``State'' is revised to read as follows:


Sec. 92.2  Definitions.

* * * * *
    State means any State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, or any agency or 
instrumentality thereof that is established pursuant to legislation and 
designated by the chief executive officer to act on behalf of the State 
with regard to the provisions of this part.
* * * * *
    8. Section 92.4 is redesignated Sec. 92.5, and a new Sec. 92.4 is 
added to read as follows:


Sec. 92.4  Suspension of requirements for disaster areas.

    The Secretary may suspend any HOME statutory requirements (except 
for those related to public notice of funding availability, 
nondiscrimination, fair housing, labor standards, environmental 
standards, and low-income housing affordability) or regulatory 
requirements, for HOME funds designated by a recipient to address the 
damage in an area for which a disaster is declared under title IV of 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
    9. In Sec. 92.61, paragraph (b)(4) is revised to read as follows:


Sec. 92.61  Program description and housing strategy.

* * * * *
    (b) * * *
    (4) If the insular area intends to use HOME funds for homebuyers, 
the guidelines for resale or recapture as required in 
Sec. 92.254(a)(4);
* * * * *
    10. In Sec. 92.150, paragraphs (b)(5) and (c)(4) are revised to 
read as follows:


Sec. 92.150  Submission of program description and certifications.

* * * * *
    (b) * * *
    (5) If the participating jurisdiction intends to use HOME funds for 
homebuyers, the guidelines for resale or recapture must be described as 
required in Sec. 92.254(a)(4);
* * * * *
    (c) * * *
    (4) A certification that the participating jurisdiction:
    (i) Is following a Residential Antidisplacement and Relocation 
Assistance Plan as described in Sec. 92.353(e);
    (ii) Will comply with the Uniform Relocation Assistance and Real 
Property Acquisition Policies Act of 1970 and implementing regulations 
at 49 CFR part 24; and
    (iii) Will comply with the requirements in Sec. 92.353.
* * * * *
    11. In Sec. 92.205, paragraph (a)(1) is revised to read as follows:


Sec. 92.205  Eligible activities: General.

    (a) * * *
    (1) HOME funds may be used by a participating jurisdiction to 
provide incentives to develop and support affordable rental housing and 
homeownership affordability through the acquisition (including 
assistance to homebuyers), new construction, reconstruction, or 
moderate or substantial rehabilitation of non-luxury housing with 
suitable amenities, including real property acquisition, site 
improvements, conversion, demolition, and other expenses, including 
financing costs, relocation expenses of any displaced persons, 
families, businesses, or organizations, to provide tenant-based rental 
assistance, including security deposits; to provide payment of 
reasonable administrative and planning costs; and to provide for the 
payment of operating expenses of community housing development 
organizations. The housing must be permanent or transitional housing, 
and includes permanent housing for disabled homeless persons, and 
single-room occupancy housing. The specific eligible costs for these 
activities are set forth in Secs. 92.206 through 92.209.
* * * * *
    12. In Sec. 92.206, paragraph (b) is revised to read as follows:


Sec. 92.206  Eligible costs.

* * * * *
    (b) Acquisition costs. Costs of acquiring improved or unimproved 
real property, including acquisition by homebuyers.
* * * * *
    13. In Sec. 92.211, paragraph (a)(2) is revised to read as follows:


Sec. 92.211  Tenant-based rental assistance.

    (a) * * *
    (2) The participating jurisdiction selects families in accordance 
with written tenant selection policies and criteria that are consistent 
with the purposes of providing housing to very low- and low-income 
families and are reasonably related to preference rules established 
under section 6(c)(4)(A) of the Housing Act of 1937 (42 U.S.C. 1437 et 
seq.). Selection policies and criteria meet the ``reasonably related'' 
requirement if at least 50% of the families assisted qualify, or would 
qualify in the near future without tenant-based rental assistance, for 
one of the three Federal preferences under section 6(c)(4)(A) of the 
Housing Act of 1937. These are families that occupy substandard housing 
(including families that are homeless or living in a shelter for 
homeless families); families that are paying more than 50 percent of 
(gross) family income for rent; or families that are involuntarily 
displaced. The participating jurisdiction may select low-income 
families currently residing in units that are designated for 
rehabilitation or acquisition under the participating jurisdiction's 
HOME program without requiring that the family meet the written tenant 
selection policies and criteria. Families so selected may use the 
tenant-based assistance in the rehabilitation or acquired unit or in 
other qualified housing.
* * * * *
    14. In Sec. 92.214, paragraph (a)(7) is revised to read as follows:


Sec. 92.214  Prohibited activities.

    (a) * * *
    (7) Provide assistance (other than tenant-based rental assistance 
or assistance to a homebuyer to acquire housing previously assisted 
with HOME funds) to a project previously assisted with HOME funds 
during the period of affordability established by the participating 
jurisdiction under Sec. 92.502 or Sec. 92.504. However, additional HOME 
funds may be committed to a project up to one year after project 
completion (see Sec. 92.502), but the amount of HOME funds in the 
project may not exceed the maximum per-unit subsidy amount established 
under Sec. 92.250.
* * * * *
    15. In Sec. 92.216, paragraphs (a)(1) and (a)(2) are revised to 
read as follows:


Sec. 92.216  Income targeting: Tenant-based rental assistance and 
rental units--Initial eligibility determination and reexamination.

    (a) * * *
    (1) Not less than 90 percent of:
    (i) The families receiving such rental assistance are families 
whose annual incomes do not exceed 60 percent of the median family 
income for the area, as determined and made available by HUD with 
adjustments for smaller and larger families (except that HUD may 
establish income ceilings higher or lower than 60 percent of the median 
for the area on the basis of HUD's findings that such variations are 
necessary because of prevailing levels of construction cost or fair 
market rent, or unusually high or low family income) at the time of 
occupancy or at the time funds are invested, whichever is later; or
    (ii) The dwelling units assisted with such funds are occupied by 
families having such incomes; and
    (2) The remainder of:
    (i) The families receiving such rental assistance are households 
that qualify as low-income families (other than families described in 
paragraph (a)(1) of this section) at the time of occupancy or at the 
time funds are invested, whichever is later; or
    (ii) The dwelling units assisted with such funds are occupied by 
such households.
* * * * *
    16. In Sec. 92.218, paragraph (a) is revised to read as follows:


Sec. 92.218  Amount of matching contribution.

    (a) Each participating jurisdiction must make contributions to 
housing that qualifies as affordable housing under the HOME program, 
throughout a fiscal year. The contributions must total not less than 25 
percent of the funds drawn from the jurisdiction's HOME Investment 
Trust Fund Treasury account in that fiscal year.
* * * * *
    17. In Sec. 92.252, paragraph (a)(2)(iii) is revised, to read as 
follows:


Sec. 92.252  Qualification as affordable housing and income targeting: 
Rental housing.

    (a) * * *
    (2) * * *
    (iii) If the rent determined under this paragraph (a)(2) is higher 
than the applicable rent under (a)(1) of this section, then the 
applicable maximum rent for units under this paragraph would be that 
calculated under (a)(1) of this section.
* * * * *
    18. In Sec. 92.254, paragraphs (a)(3), (a)(4)(ii)(C) and 
(a)(4)(ii)(D) are revised, to read as follows:


Sec. 92.254  Qualification as affordable housing: homeownership.

    (a) * * *
    (3) Is purchased within 36 months if a lease-purchase agreement in 
conjunction with a homebuyer program is used to acquire the housing;
    (4) * * *
    (ii) * * *
    (C) The HOME investment that is subject to recapture is the HOME 
assistance that enabled the homebuyer to buy the dwelling unit. This 
includes any HOME assistance, whether a direct subsidy to the homebuyer 
or a construction or development subsidy, that reduced the purchase 
price from fair market value to an affordable price. The recaptured 
funds must be used to carry out HOME-eligible activities. If no HOME 
funds will be subject to recapture, the provisions at 
Sec. 92.254(a)(4)(i) apply.
    (D) Upon recapture of the HOME funds used in a single-family, 
homebuyer project with two to four units, the affordability period on 
the rental units may be terminated at the discretion of the 
participating jurisdiction.
* * * * *
    19. Section 92.257 is revised to read as follows:


Sec. 92.257  Religious organizations.

    HOME funds may not be provided to primarily religious 
organizations, such as churches, for any activity including secular 
activities. In addition, HOME funds may not be used to rehabilitate or 
construct housing owned by primarily religious organizations or to 
assist primarily religious organizations in acquiring housing. However, 
HOME funds may be used by a secular entity to acquire housing from a 
primarily religious organization, and a primarily religious entity may 
transfer title to property to a wholly secular entity and the entity 
may participate in the HOME program in accordance with the requirements 
of this part. The entity may be an existing or newly established 
entity, which may be an entity established by the religious 
organization. The completed housing project must be used exclusively by 
the owner entity for secular purposes, available to all persons 
regardless of religion. In particular, there must be no religious or 
membership criteria for tenants of the property.
    20. In Sec. 92.352, paragraph (b) is revised to read as follows:


Sec. 92.352  Environmental review.

* * * * *
    (b) Responsibility for review. (1) The jurisdiction (e.g., the 
participating jurisdiction or state recipient) or insular area must 
assume responsibility for environmental review, decisionmaking, and 
action for each activity that it carries out with HOME funds, in 
accordance with the requirements imposed on a recipient under 24 CFR 
part 58. In accordance with 24 CFR part 58, the jurisdiction or insular 
area must carry out the environmental review of an activity and obtain 
approval of its request for release of funds before HOME funds are 
committed for the activity.
    (2) A state participating jurisdiction must also assume 
responsibility for approval of requests for release of HOME funds 
submitted by state recipients.
    (3) HUD will perform the environmental review, in accordance with 
24 CFR part 50, for a competitively awarded application for HOME funds 
submitted to HUD by an entity that is not a jurisdiction.
    21. In Sec. 92.353, paragraph (e) is revised to read as follows:


Sec. 92.353  Displacement, relocation, and acquisition.

* * * * *
    (e) Residential antidisplacement and relocation assistance plan. 
Each participating jurisdiction shall comply with the Residential 
Antidisplacement and Relocation Assistance Plan requirements described 
at 24 CFR 570.606(c), or, in the case of a State-administered HOME 
Program, the requirements at 24 CFR 570.488(c). These policies require 
one-for-one replacement of low/moderate-income housing demolished or 
converted to another use and the provision of relocation assistance to 
lower income persons displaced by such conversion or by demolition.
* * * * *
    22. In Sec. 92.354, paragraph (a)(2) is revised to read as follows:


Sec. 92.354  Labor.

    (a) * * *
    (2) The contract for construction must contain these wage 
provisions if HOME funds are used for any project costs (as defined in 
Sec. 92.206), including construction or nonconstruction costs, of 
housing with 12 or more HOME-assisted units. When HOME funds are only 
used to assist homebuyers to acquire single-family housing, and not for 
any other project costs, the wage provisions apply to the construction 
of the housing if there is a written agreement with the owner or 
developer of the housing that HOME funds will be used to assist 
homebuyers to buy the housing and the construction contract covers 12 
or more housing units to be purchased with HOME assistance. The wage 
provisions apply to any construction contract that includes a total of 
12 or more HOME-assisted units, whether one or more than one project is 
covered by the construction contract. Once they are determined to be 
applicable, the wage provisions must be contained in the construction 
contract so as to cover all laborers and mechanics employed in the 
development of the entire project, including portions other than the 
assisted units. Arranging multiple construction contracts within a 
single project for the purpose of avoiding the wage provisions is not 
permitted.
* * * * *
    23. Section 92.633 is revised to read as follows:


Sec. 92.633  Environmental review.

    The Indian tribe must assume responsibility for environmental 
review, decisionmaking, and action for each activity that it carries 
out with HOME funds, in accordance with the requirements imposed on a 
recipient under 24 CFR part 58. In accordance with 24 CFR part 58, the 
Indian tribe must carry out the environmental review of an activity and 
obtain approval of its request for release of funds before HOME funds 
are committed for the activity.

    Dated: August 18, 1994.
Henry G. Cisneros,
Secretary.
[FR Doc. 94-20866 Filed 8-25-94; 8:45 am]
BILLING CODE 4210-32-P