[Federal Register Volume 60, Number 76 (Thursday, April 20, 1995)]
[Notices]
[Pages 19759-19760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9728]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner
[Docket No. N-95-3913; FR-3821-N-01]


Comprehensive Needs Assessments--Instead of Notices of Funding 
Availability (NOFAs) for Flexible Subsidy and Loan Management Set-Aside

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice of funding through comprehensive needs assessments.

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SUMMARY: HUD plans to exclude the Flexible Subsidy and the Loan 
Management Set-Aside programs from the traditional NOFA process, 
beginning with Fiscal Year 1995. Instead, the funding for the projects 
under those two programs will be made on a noncompetitive basis. 
Funding will be based on Comprehensive Needs Assessments (CNAs) and 
other applicable program requirements. Funds will be allocated on a 
first come, first served basis from among those projects selected by 
local HUD offices to participate in the CNA program. The CNA approach 
will provide HUD with the flexibility to target limited resources to 
those projects most in need of repair. At a later date, HUD will 
publish a separate notice announcing the funding and criteria for the 
Flexible Subsidy and Loan Management Set-Aside Programs.

EFFECTIVE DATE: Funding through Comprehensive Needs Assessments for the 
Flexible Subsidy and Loan Management Set-aside programs will be 
effective April 20, 1995.

FOR FURTHER INFORMATION CONTACT: Barbara Hunter, Acting Director, 
Planning and Procedures Division, Office of Multifamily Housing 
Management, Department of Housing and Urban Development, Room 6184, 451 
Seventh Street, SW, Washington, DC 20410; Telephone (202) 708-3944, or 
(202) 708-4594 (voice/TDD). (These are not toll-free telephone 
numbers.)

SUPPLEMENTARY INFORMATION:

I. Legal Authority and Purpose

(a) Authority

    Comprehensive Needs Assessments (CNAs) are legislatively authorized 
by Title IV of the Housing and Community Development Act of 1992 (HCDA 
1992) (12 U.S.C. 1715z-1a note), as amended by section 103 of the 
Multifamily Housing Property Disposition Reform Act of 1994 (Pub. L. 
103-233; approved April 11, 1994).

(b) Purpose

    HUD is publishing this notice to inform HUD clients of a 
forthcoming change in funding practice. HUD will fund the Flexible 
Subsidy program (24 CFR part 219) and the Loan Management Set-Aside 
program (LMSA) (24 CFR part 886) through the CNA approach instead of 
the Notice of Funding Availability (NOFA) process. The purpose of this 
change is to provide HUD with the flexibility to target limited 
resources to those projects HUD deems to be most in need of repair.

II. Description of the CNA Approach

    HUD will publish a separate notice announcing the funding and 
criteria for the Flexible Subsidy and Loan Management Set-Aside 
programs. For the funding of the Flexible Subsidy program, all parts of 
section 201(n) of the HCDA of 1978 will be met, including the parts 
that provide that the Secretary may make exceptions to the CNA approach 
when funding flexible subsidy to address certain emergency needs in 
projects. Loan Management Set-Aside will be funded based upon the needs 
identified in the Comprehensive Needs Assessment and other program 
requirements. HUD has issued a separate notice (H-95-27, dated 3/30/95) 
to the local HUD offices and industry explaining the CNA Program and 
process, and informing them how to select projects, beginning in Fiscal 
Year (FY) 1995.

(a) Contents in General

    The CNAs submitted by applicants for the Flexible Subsidy and LMSA 
programs must contain the following information about the property:
    (1) A description of current and future financial resources and 
needs of certain multifamily projects;
    (2) A description of the involvement of project residents in its 
development, from start to finish;
    (3) The results of a thorough and detailed physical inspection of 
the project;
    (4) A statement of any assistance needed under programs 
administered by HUD;
    (5) A description of available funding for meeting the current and 
future needs of the project and the likelihood of obtaining such 
resources. These resources include the assistance of private 
foundations, State and local governments, any HUD programs (including 
Community Planning and Development programs), rent increases, 
refinancing, Flexible Subsidy, LMSA, and Section 241 loans;
    (6) Descriptions of modernization needs and activities, supportive 
services needed and provided, and any personnel needs of the project.

(b) Applicability of CNA Approach

    Unless their project has received or is receiving assistance under 
the HOME Investment Partnerships Act, owners of the following kinds of 
projects are required to submit a Comprehensive Needs Assessment:
    (1) Section 221(d)(3) (Market Interest Rate) projects, Section 
221(d)(5) (Below Market Interest Rate) projects, and Section 236 
projects with mortgages insured, assisted or held by HUD (including 
State/Local Agency Section 236 projects), unless the owner is receiving 
or has received assistance under titles II (ELIHPHA) or VI (LIHPRHA) or 
has filed a Notice of Intent under those statutes.

    Note: Projects subject to prepayment restrictions under Title II 
or Title VI and that have not received assistance or filed a Notice 
of Intent under those statutes may not participate in the CNA 
Program in fiscal years 1995 or 1996 but may do so thereafter.

    (2) Section 202 projects for elderly and handicapped and Section 
202 Supportive Housing for the Elderly.
    (3) Section 811 Supportive Housing for Persons with Disabilities.

(c) Cost Features for CNA

    The project's mortgagor is responsible to pay for the preparation 
of the CNA. Based on section 404(e) of the HCDA 1992, HUD will consider 
CNA expenses up to $5,000 as eligible project expenses (payable from 
project funds). Up to that limit, HUD will authorize releases from 
Residual Receipts accounts and Reserve Fund for Replacement accounts 
when a project's operating account is insufficient to fund the CNA. 
While CNA preparation costs are considered to be an eligible project 
expense, they cannot be included to calculate rent increases.

    [[Page 19760]] Dated: April 13, 1995.
Jeanne K. Engel,
General Deputy Assistant Secretary for Housing-Federal Housing 
Commissioner.
[FR Doc. 95-9728 Filed 4-19-95; 8:45 am]
BILLING CODE 4210-27-P