[Federal Register Volume 61, Number 45 (Wednesday, March 6, 1996)]
[Rules and Regulations]
[Pages 9040-9048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5024]




[[Page 9039]]

_______________________________________________________________________

Part IV





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Part 5, et al.



Regulatory Reinvention: Consolidation of Admission Preferences for 
Assisted Housing; Final Rule

  Federal Register / Vol. 61, No. 45 / Wednesday, March 6, 1996 / Rules 
and Regulations   

[[Page 9040]]


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
24 CFR Parts 5, 880, 881, 882, 883, 884, 885, 886, 889, 904, 960, 
982, and 983
[Docket No. FR-3980-F-01]
RIN 2501-AC10

Regulatory Reinvention--Consolidation of Admission Preferences 
for Assisted Housing
AGENCY: Office of the Secretary, HUD.
ACTION: Final rule.

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

SUMMARY: This final rule amends the various program regulations 
governing assisted housing programs to remove the nearly identical 
provisions concerning admission preferences found in numerous parts of 
title 24 of the Code of Federal Regulations and adds several sections 
on this subject in 24 CFR part 5. The amendments made by this rule do 
not change the substance of the provisions but eliminate redundant 
provisions by placing in a general part the provisions that derive from 
parallel statutory provisions in the United States Housing Act of 1937.

EFFECTIVE DATE: April 5, 1996.

FOR FURTHER INFORMATION CONTACT: For the Section 8 project-based 
programs other than the Moderate Rehabilitation and Project-Based 
Certificate programs: Barbara Hunter, Director, Program Management 
Division, Office of Housing, telephone (202) 708-3944 (voice).
    For the Section 8 Certificate, Voucher and Moderate Rehabilitation 
programs and for the public housing program: Linda Campbell, Director 
of Marketing, Leasing and Management Division, Office of Public and 
Indian Housing, telephone (202) 708-0744 (voice).
    Both of these officials are located at the Department of Housing 
and Urban Development, 451 Seventh Street, SW, Washington, D.C. 20410. 
For hearing- or speech-impaired persons, the above-stated telephone 
numbers may be accessed via TDD by calling the Federal Information 
Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

    There are no changes to the information collection requirements 
contained in these provisions. An agency may not conduct or sponsor, 
and a person is not required to respond to, a collection of information 
unless the collection displays a valid control number.

I. Background

    The impetus for this rule is the Secretary's desire to simplify the 
Department's regulations. In response to the President's initiative to 
reinvent regulations, the Secretary has determined that the regulations 
currently found in parts 880, 881, 882, 883, 884, 885, 886, 889, 904, 
960, 982, and 983 concerning preferences in admission to assisted 
housing for persons that are involuntarily displaced, living in 
substandard housing, or paying more than 50 percent of income for rent, 
can be consolidated into one set of provisions to apply to these 
programs without changing the policies implemented by those provisions. 
This consolidation will eliminate 56 pages from the Department's 
regulations codified at title 24 of the Code of Federal Regulations.
    The continuing resolution enacted on January 26, 1996, approving 
partial funding for the Department, provides that the statutory 
provisions on admissions preferences implemented by the regulations 
being consolidated in this rulemaking are suspended for Fiscal Year 
1996. Therefore, this consolidated rule and the regulations that it 
amends have no effect until October 1, 1996.

II. Action

    The nearly identical provisions in parts 880, 881, 882, 883, 884, 
885, 889, 960, 982, and 983 shown in the following chart are being 
removed and consolidated in the corresponding sections of part 5. Cross 
references to those sections are revised to refer to the Federal 
preference provisions of 24 CFR part 5:

                   Corresponding Preference Provisions                  
                    [New provision at head of column]                   
------------------------------------------------------------------------
    5.410          5.415          5.420          5.425          5.430   
------------------------------------------------------------------------
880.613......      880.614        880.615        880.616       880.617  
881.613......      881.614        881.615        881.616       881.617  
882.517......      882.518        882.519        882.520       882.521  
883.714......      883.715        883.716        883.717       883.718  
884.226......      884.227        884.228        884.229       884.230  
886.132......      886.133        886.134        886.135       886.136  
886.337......                                                           
889.611......      889.612        889.613        889.614       889.615  
904.122......                                                           
960.211......      960.212        960.213        960.214       960.215  
982.209......      982.210        982.211        982.212       982.213  
983.203......                                                           
------------------------------------------------------------------------

Findings and Certifications

Justification for Final Rule

    It is HUD's policy to publish rules for public comment before their 
issuance for effect, in accordance with its own regulations on 
rulemaking found at 24 CFR part 10. However, part 10 provides that 
prior public procedure will be omitted if HUD determines that it is 
``impracticable, unnecessary, or contrary to the public interest'' (24 
CFR 10.1). HUD finds that in this case, prior public comment is 
unnecessary because the removal of nearly identical program 
requirements and consolidation of these provisions into a single part 
does not affect or establish policy. The primary purpose of this rule 
is to relocate provisions concerning admission preferences, not to 
revise them.

Impact on the Environment

    A Finding of No Significant Impact with respect to the environment 
was made in accordance with HUD regulations at 24 CFR part 50 that 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969, 42 U.S.C. 4332 when the admission preference rules (FR-3122 and 
FR-3727) were promulgated as final rules. Those Findings of No 
Significant Impact are available for public inspection and copying 
during regular business hours (7:30 a.m. to 5:30 p.m.) in the Office of 
the Rules Docket Clerk, room 10276, 451 Seventh Street, SW, Washington, 
DC 20410-0500. 

[[Page 9041]]


Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that actions taken 
in this rule do not have significant impact on States or their 
political subdivisions, since the rule merely relocates provisions 
regarding admission preferences for assisted housing.

Impact on the Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this rule does not have 
potential for significant impact on family formation, maintenance, and 
general well-being. Therefore, the proposed rule is not subject to 
review under the Order. No significant change in existing HUD policies 
or programs will result from promulgation of this rule, as those 
policies and programs relate to family concerns.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this rule before publication and by 
approving it certifies that this rule will not have a significant 
impact on a substantial number of small entities. The rule is limited 
to consolidating identical provisions found in various program 
regulations.

Regulatory Review

    This rule was reviewed by the Office of Management and Budget under 
Executive Order 12866, Regulatory Planning and Review. Any changes made 
to the rule as a result of that review are clearly identified in the 
docket file, which is available for public inspection at the address 
stated above for review of the environmental finding.

Catalog

    The Catalog of Federal Domestic Assistance numbers for the 
program affected by this rule are 14.157, 14.182, 14.850, and 
14.856.

List of Subjects

24 CFR Part 5

    Administrative practive and procedure, Grant programs--housing and 
community development, Low and moderate income housing, Public housing, 
Reporting and recordkeeping requirements.

24 CFR Part 880

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 881

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 882

    Grant programs--housing and community development, Homeless, Lead 
poisoning, Manufactured homes, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 883

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 884

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements, Rural areas.

24 CFR Part 885

    Aged, Individuals with disabilities, Loan programs--housing and 
community development, Low and moderate income housing, Reporting and 
recordkeeping requirements.

24 CFR Part 886

    Grant programs--housing and community development, Lead poisoning, 
Rent subsidies, Reporting and recordkeeping requirements.

24 CFR Part 889

    Aged, Capital advance programs, Grant programs--housing and 
community development, Loan programs--housing and community 
development, Low and moderate income housing, Rent subsidies, Reporting 
and recordkeeping requirements.

24 CFR Part 904

    Grant programs--housing and community development, Loan programs--
housing and community development, Public housing.

24 CFR Part 960

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Public housing.

24 CFR Part 982

    Grant programs--housing and community development, Housing, Rent 
subsidies, Reporting and recordkeeping requirements.

24 CFR Part 983

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

    Accordingly, for the reasons stated in the preamble, parts 5, 880, 
881, 882, 883, 884, 885, 886, 889, 904, 960, 982, and 983 of title 24 
of the Code of Federal Regulations are amended as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

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

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

    2. New Secs. 5.410, 5.415, 5.420, 5.425, and 5.430, are added to 
subpart D of part 5, to read as follows:

Subpart D--Definitions and Other General Requirements for Assistance 
Under the United States Housing Act of 1937

* * * * *
5.410  Selection preferences.
5.415  Federal preferences: general.
5.420  Federal preference: involuntary displacement.
5.425  Federal preference: substandard housing.
5.430  Federal preference: rent burden.

Subpart D--Definitions and Other General Requirements for 
Assistance Under the United States Housing Act of 1937

* * * * *


Sec. 5.410  Selection preferences.

    (a) Applicability. The selection preferences that are described in 
this part are applicable to public housing and housing assisted under 
the Section 8 Housing Assistance Payments program. (Corresponding 
provisions applicable to the Indian housing program are found in 24 CFR 
part 950.) These preferences are administered by the entity responsible 
for admission functions in the programs covered (``responsible 
entity''), i.e., the public housing agency (``HA'') in the public 
housing and Section 8 Certificate/Voucher and Moderate Rehabilitation 
programs and the owner in all other Section 8 programs.
    (b) Types of preference. There are three types of admission 
preferences:
    (1) ``Federal preferences'' are admission preferences for three 
categories of families, as prescribed in 42 U.S.C. 1437d(c)(4)(A), 
1437f(d)(1)(A), 1437f(o)(3), and 1437f note. Federal preference is 
given for selection of families that are:
    (i) Involuntarily displaced;
    (ii) Living in substandard housing (including families that are 
homeless or living in a shelter for the homeless); or
    (iii) Paying more than 50 percent of family income for rent.
    
[[Page 9042]]

    (2) ``Ranking preferences'' are preferences that may be established 
by the responsible entity to use in selecting among applicants that 
qualify for federal preferences.
    (3) ``Local preferences'' are preferences for use in selecting 
among applicants without regard to their federal preference status. 
(See 42 U.S.C. 1437d(c)(4)(A), 1437f(d)(1)(A), 1437f(o)(3), and 1437f 
note.)
    (c) System. In the Section 8 programs other than the Certificate/
Voucher and Moderate Rehabilitation programs, the owner must establish 
a system for selection of applicants from the waiting list that 
includes the following:
    (1) How the federal preferences will be used;
    (2) How any ranking preferences will be used;
    (3) How any local preferences will be used; and
    (4) How any residency preference will be used.
    (d) Use of preference in selection process. (1) Factors other than 
federal and local preferences. (i) Characteristics of the unit. For 
developments administered under the Section 8 New Construction and 
Substantial Rehabilitation programs and the public housing program, the 
responsible entity may match other characteristics of the applicant 
family with the type of unit available, e.g., number of bedrooms. In 
selection of a family for a unit that has special accessibility 
features, the responsible entity must give preference to families that 
include persons with disabilities who can benefit from those features 
of the unit (see 24 CFR 8.27 and 24 CFR 100.202(c)(3)). Also, in 
selection of a family for a unit in a mixed population project, the 
responsible entity will give preference to elderly families and 
disabled families (see subpart D of part 960 or Sec. 880.612a or 
Sec. 881.612a of this title).
    (ii) Singles preference. See Sec. 5.405.
    (2) Local preference admissions. (i) Local preferences may be 
adopted or amended by an HA to respond to local housing needs and 
priorities after the HA has conducted a public hearing.
    (ii) For Section 8 programs other than the Section 8 Certificate/
Voucher, Project-Based Certificate, and Moderate Rehabilitation 
programs operated under 24 CFR part 982, 983, and 882, respectively, if 
the owner wants to use preferences to select among applicants without 
regard to their federal preference status, it must use the local 
preference system adopted for use in the Section 8 Certificate/Voucher 
programs by the housing agency for the jurisdiction. If there is more 
than one HA for the jurisdiction, the owner shall use the local 
preference system of the HA for the lowest level of government that has 
jurisdiction where the project is located. For the public housing 
program, the HA may use a local preference system it adopts for that 
program.
    (iii) In the Section 8 programs other than the Certificate/Voucher, 
Project-Based Certificate, and Moderate Rehabilitation programs 
operated under 24 CFR parts 982, 983 and 882, respectively, before an 
owner implements the HA's local preferences, the owner must receive 
approval from the HUD Field Office. HUD shall review these preferences 
to ensure that they are applicable to any tenant eligibility 
limitations for the subject housing and that they are consistent with 
HUD requirements pertaining to nondiscrimination and the Affirmative 
Fair Housing Marketing objectives. If HUD determines that the local 
preferences are in violation of those requirements, the owner will not 
be permitted to admit applicants on the basis of any local preferences.
    (iv) In any year, the number of families given preference in 
admission pursuant to a local preference over families with a federal 
preference may not exceed the local preference limit. ``Local 
preference limit'' means the following:
    (A) For an HA's Section 8 Certificate/Voucher program operated 
under 24 CFR part 982, ten percent of annual waiting list admissions;
    (B) For an HA's public housing program, fifty percent of annual 
admissions;
    (C) For an HA's Section 8 Moderate Rehabilitation program, thirty 
percent of annual admissions;
    (D) For Section 8 New Construction, Substantial Rehabilitation, and 
Loan Management/Property Disposition projects, thirty percent of annual 
admissions to each project; and
    (E) For the Section 8 Project-Based Certificate program, thirty 
percent of total annual waiting list admissions to the HA's Project-
Based Certificate program (including admissions pursuant to 24 CFR 
983.203(c)(3)).
    (3) Prohibition of preference if applicant was evicted for drug-
related criminal activity. With respect to the Section 8 Certificate, 
Voucher, Loan Management, and Property Disposition programs and the 
public housing program, the HA may not give a preference (federal 
preference, local preference, or ranking preference) to an applicant if 
any member of the family is a person who was evicted during the past 
three years from housing assisted under a 1937 Housing Act program 
because of drug-related criminal activity. However, the HA may give an 
admission preference in any of the following cases:
    (i) If the HA determines that the evicted person has successfully 
completed a rehabilitation program approved by the HA;
    (ii) If the HA determines that the evicted person clearly did not 
participate in or know about the drug-related criminal activity; or
    (iii) If the HA determines that the evicted person no longer 
participates in any drug-related criminal activity.
    (4) Retention of federal preference status. With respect to 
determining the preference status of an applicant for the Section 8 
Certificate/Voucher programs, an applicant who is receiving tenant-
based assistance under the HOME program (24 CFR part 92) and an 
applicant who resides in public or Indian housing of the same HA (and 
was on the tenant-based program waiting list when admitted to the HA's 
public or Indian housing on or after April 26, 1993), the HA determines 
whether the applicant qualifies for federal preference based on the 
situation of the applicant at the time the applicant began to receive 
tenant-based assistance under the HOME program or was admitted to the 
HA's public or Indian housing program (beginning of initial public or 
Indian housing lease).
    (e) Income-based admission. (1) In public housing, the HA may only 
give preference to select a relatively higher income family for 
admission if the preference is pursuant to a ``local preference'' 
admission. (For other income-related restrictions on selection, see 24 
CFR 913.105.)
    (2) In Section 8 programs, the responsible entity may not select a 
family for admission in an order different from the order on the 
waiting list for the purpose of selecting a relatively higher income 
family for admission.
    (f) Informing applicants about admission preferences. (1) The 
responsible entity must inform all applicants about available 
preferences and must give applicants an opportunity to show that they 
qualify for available preferences (federal preference, ranking 
preference, or local preference).
    (2) If the responsible entity determines that the notification to 
all applicants on a waiting list required by paragraph (f)(1) of this 
section is impracticable because of the length of the list, the 
responsible entity may provide this notification to fewer than all 
applicants on the list at any given time. The responsible entity must, 
however, have notified a sufficient 

[[Page 9043]]
number of applicants at any given time that, on the basis of the 
entity's determination of the number of applicants on the waiting list 
who already claim a federal preference and the anticipated number of 
project admissions:
    (i) There is an adequate pool of applicants who are likely to 
qualify for a federal preference; and
    (ii) It is unlikely that, on the basis of the responsible entity's 
framework for applying the preferences under paragraph (c) of this 
section and the federal preferences claimed by those already on the 
waiting list, any applicant who has not been so notified would receive 
assistance before those who have received notification.
    (g) Notice and opportunity for a meeting where preference is 
denied. (1) If the responsible entity determines that an applicant does 
not qualify for a federal preference, ranking preference, or local 
preference claimed by the applicant, the responsible entity must 
promptly give the applicant written notice of the determination. The 
notice must contain a brief statement of the reasons for the 
determination, and state that the applicant has the right to meet with 
a representative of the responsible entity to review the determination. 
The meeting may be conducted by any person or persons designated by the 
responsible entity, who may be an officer or employee of the 
responsible entity, including the person who made or reviewed the 
determination or a subordinate employee.
    (2) The applicant may exercise other rights if the applicant 
believes that the applicant has been discriminated against on the basis 
of race, color, religion, sex, national origin, age, disability or 
familial status.
    (h) Residency preferences. A ``residency preference'' is a 
preference for admission of families that reside anywhere in a 
specified ``residency preference area.'' A residency preference may be 
used as a ranking or local preference.
    (1) Section 8 programs other than Certificate/Voucher and Project-
Based Certificate. In these developments, local residency requirements 
are prohibited.
    (2) Section 8 Certificate/Voucher and Project-Based Certificate 
programs. Any residency preference must be approved by HUD.
    (i) A county or municipality may be used as a residency preference 
area.
    (ii) An area smaller than a county or municipality may not be used 
as a residency preference area.
    (3) All projects. With respect to any residency preference, 
applicants who are working or who have been notified that they are 
hired to work in the residency preference area shall be treated as 
residents of the residency preference area. A residency preference may 
not be based on how long the applicant has resided in or worked in the 
residency preference area.
    (i) Nondiscrimination. (1) Any selection preferences must be 
established and administered in accordance with the following 
authorities:
    (i) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and 
the implementing regulations at 24 CFR part 1;
    (ii) The Fair Housing Act (42 U.S.C. 3601-3619) and the 
implementing regulations at 24 CFR parts 100, 108, 109, and 110;
    (iii) Executive Order 11063 on Equal Opportunity in Housing and the 
implementing regulations at 24 CFR part 107;
    (iv) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) 
and the implementing regulations at 24 CFR part 8;
    (v) The Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and 
the implementing regulations at 24 CFR part 146; and
    (vi) The Americans with Disabilities Act (42 U.S.C. 12101-12213) to 
the extent applicable.
    (2) Such preferences also must be consistent with HUD's affirmative 
fair housing objectives and (where applicable) the owner's HUD-approved 
affirmative fair housing marketing plan.

(Approved by the Office of Management and Budget under OMB control 
numbers 2577-0105 and 2502-0372.)


Sec. 5.415  Federal preferences: general.

    (a) Definitions. The definitions of these preference categories 
stated in Secs. 5.420, 5.425, and 5.430 must be used by the responsible 
entity, except that an HA may use its own alternative definitions if 
they have been approved by HUD.
    (b) Ranking preferences: selection among federal preference 
holders. The responsible entity's system of administering the federal 
preferences (its admission policy, in the case of the Section 8 
Certificate/Voucher programs) may provide for use of ranking preference 
for selecting among applicants who qualify for federal preference.
    (1) The responsible entity may give preference to working 
families--so long as the prohibition of Sec. 5.410 against selection 
based on income and the nondiscrimination provisions that protect 
against discrimination on the basis of age or disability are not 
violated. (If a responsible entity adopts such a preference, it may not 
give greater weight to an applicant based on the amount of employment 
income, and an applicant household shall be given the benefit of the 
preference if the head and spouse, or sole member, are age 62 or older 
or are receiving social security disability, supplemental security 
income disability benefits, or any other payments based on an 
individual's inability to work.) A responsible entity may give 
preference to graduates of, as well as active participants in, 
educational and training programs that are designed to prepare 
individuals for the job market. The responsible entity also may use the 
housing agency's ``local preferences'' for the Section 8 Certificate 
and Voucher programs to rank federal preference holders.
    (2) The ranking preferences may give different weight to the 
federal preferences, through such means as:
    (i) Aggregating the federal preferences (e.g., provide that two 
federal preferences outweigh one);
    (ii) Giving greater weight to holders of a particular category of 
federal preference; or
    (iii) Giving greater weight to a federal preference holder who fits 
a particular category of federal preference.
    (c) Qualifying for a federal preference. (1) Certification of 
preference. An applicant may claim qualification for a federal 
preference by certifying to the responsible entity that the family 
qualifies for federal preference. The responsible entity must accept 
this certification, unless the responsible entity verifies that the 
applicant is not qualified for federal preference.
    (2) Verification of preference. (i) Before admitting an applicant 
on the basis of a federal preference, the responsible entity must 
require the applicant to provide information needed by the responsible 
entity to verify that the applicant qualifies for a federal preference 
because of the applicant's current status. The applicant's current 
status must be determined without regard to whether there has been a 
change in the applicant's qualification for a federal preference 
between the time of application and selection for admission, including 
a change from one federal preference category to another.
    (ii) In the case of Section 8 programs other than the Section 8 
Certificate/Voucher, Project-Based Certificate, and Moderate 
Rehabilitation programs, the owner must use the verification procedures 
specified in Sec. 5.420(c) (involuntary displacement); Sec. 5.425(c) 
(substandard housing); and Sec. 5.430(b) (rent burden). In the case of 
the Section 8 Certificate/Voucher, Project-Based 

[[Page 9044]]
Certificate, and Moderate Rehabilitation programs and the public 
housing program, the HA may adopt its own verification procedure.
    (iii) Once the responsible entity has verified an applicant's 
qualification for a federal preference, the responsible entity need not 
require the applicant to provide information needed by the responsible 
entity to verify such qualification again unless:
    (A) The responsible entity determines reverification is desirable 
because a long time has passed since verification; or
    (B) The responsible entity has reasonable grounds to believe that 
the applicant no longer qualifies for a federal preference.
    (3) Effect of current residence in assisted housing. No applicant 
is to be denied a federal preference for which the family otherwise 
qualifies on the basis that the applicant already resides in assisted 
housing; for example, the actual condition of the housing unit must be 
considered, or the possibility of involuntary displacement resulting 
from domestic violence must be evaluated.
    (d) Approval of special conditions satisfying preference 
definitions. With respect to Section 8 programs other than the Section 
8 Certificate/Voucher, Project-Based Certificate and Moderate 
Rehabilitation programs, HUD may specify additional conditions under 
which the federal preferences, as described in Secs. 5.420, 5.425, and 
5.430, can be satisfied. In such cases, appropriate certification of 
qualification must be provided. (See HUD Handbook 4350.3, which is 
available at HUD field offices.) (Approved by the Office of Management 
and Budget under OMB control number 2502-0372 and 2577-0105.)


Sec. 5.420  Federal preference: involuntary displacement.

    (a) How applicant qualifies for displacement preference. (See 
Sec. 5.415(a)(2) and (c)(2)(ii) for applicability of this section to 
the Section 8 Certificate/Voucher, Project-Based Certificate, and 
Moderate Rehabilitation programs and the public housing program.)
    (1) An applicant qualifies for a federal preference on the basis of 
involuntary displacement if either of the following apply:
    (i) The applicant has been involuntarily displaced and is not 
living in standard, permanent replacement housing; or
    (ii) The applicant will be involuntarily displaced within no more 
than six months from the date of preference status certification by the 
family or verification by the responsible entity.
    (2)(i) ``Standard, permanent replacement housing'' is housing:
    (A) That is decent, safe, and sanitary;
    (B) That is adequate for the family size; and
    (C) That the family is occupying pursuant to a lease or occupancy 
agreement.
    (ii) ``Standard, permanent replacement housing'' does not include:
    (A) Transient facilities, such as motels, hotels, or temporary 
shelters for victims of domestic violence or homeless families; or
    (B) In the case of domestic violence, the housing unit in which the 
applicant and the applicant's spouse or other member of the household 
who engages in such violence live.
    (b) Meaning of involuntary displacement. An applicant is or will be 
involuntarily displaced if the applicant has vacated or will have to 
vacate the unit where the applicant lives because of one or more of the 
following:
    (1) Displacement by disaster. An applicant's unit is uninhabitable 
because of a disaster, such as a fire or flood.
    (2) Displacement by government action. Activity carried on by an 
agency of the United States or by any State or local governmental body 
or agency in connection with code enforcement or a public improvement 
or development program.
    (3) Displacement by action of housing owner. (i) Action by a 
housing owner forces the applicant to vacate its unit.
    (ii) An applicant does not qualify as involuntarily displaced 
because action by a housing owner forces the applicant to vacate its 
unit unless:
    (A) The applicant cannot control or prevent the owner's action;
    (B) The owner action occurs although the applicant met all 
previously imposed conditions of occupancy; and
    (C) The action taken by the owner is other than a rent increase.
    (iii) To qualify as involuntarily displaced because action by a 
housing owner forces the applicant to vacate its unit, reasons for an 
applicant's having to vacate a housing unit include, but are not 
limited to, conversion of an applicant's housing unit to non-rental or 
non-residential use; closing of an applicant's housing unit for 
rehabilitation or for any other reason; notice to an applicant that the 
applicant must vacate a unit because the owner wants the unit for the 
owner's personal or family use or occupancy; sale of a housing unit in 
which an applicant resides under an agreement that the unit must be 
vacant when possession is transferred; or any other legally authorized 
act that results or will result in the withdrawal by the owner of the 
unit or structure from the rental market.
    (iv) Such reasons do not include the vacating of a unit by a tenant 
as a result of actions taken by the owner because the tenant refuses:
    (A) To comply with HUD program policies and procedures for the 
occupancy of under-occupied or overcrowded units; or
    (B) To accept a transfer to another housing unit in accordance with 
a court decree or in accordance with policies and procedures under a 
HUD-approved desegregation plan.
    (4) Displacement by domestic violence. (i) An applicant is 
involuntarily displaced if:
    (A) The applicant has vacated a housing unit because of domestic 
violence; or
    (B) The applicant lives in a housing unit with a person who engages 
in domestic violence.
    (ii) ``Domestic violence'' means actual or threatened physical 
violence directed against one or more members of the applicant family 
by a spouse or other member of the applicant's household.
    (iii) To qualify as involuntarily displaced because of domestic 
violence:
    (A) The responsible entity must determine, in accordance with HUD's 
administrative instructions, that the domestic violence occurred 
recently or is of a continuing nature; and
    (B) The applicant must certify that the person who engaged in such 
violence will not reside with the applicant family unless the 
responsible entity has given advance written approval. If the family is 
admitted, the responsible entity may deny or terminate assistance to 
the family for breach of this certification.
    (5) Displacement to avoid reprisals. (i) An applicant family is 
involuntarily displaced if:
    (A) Family members provided information on criminal activities to a 
law enforcement agency; and
    (B) Based on a threat assessment, a law enforcement agency 
recommends rehousing the family to avoid or minimize a risk of violence 
against family members as a reprisal for providing such information.
    (ii) The responsible entity may establish appropriate safeguards to 
conceal the identity of families requiring protection against such 
reprisals.
    (6) Displacement by hate crimes. (i) An applicant is involuntarily 
displaced if:
    (A) One or more members of the applicant's family have been the 
victim of one or more hate crimes; and 

[[Page 9045]]

    (B) The applicant has vacated a housing unit because of such crime, 
or the fear associated with such crime has destroyed the applicant's 
peaceful enjoyment of the unit.
    (ii) ``Hate crime'' means actual or threatened physical violence or 
intimidation that is directed against a person or his or her property 
and that is based on the person's race, color, religion, sex, national 
origin, handicap, or familial status.
    (iii) The responsible entity must determine, in accordance with 
HUD's administrative instructions, that the hate crime involved 
occurred recently or is of a continuing nature.
    (7) Displacement by inaccessibility of unit. An applicant is 
involuntarily displaced if:
    (i) A member of the family has a mobility or other impairment that 
makes the person unable to use critical elements of the unit; and
    (ii) The owner is not legally obligated to make the changes to the 
unit that would make critical elements accessible to the disabled 
person as a reasonable accommodation.
    (8) Displacement because of HUD disposition of multifamily project. 
Involuntary displacement includes displacement because of disposition 
of a multifamily rental housing project by HUD under section 203 of the 
Housing and Community Development Amendments of 1978.
    (c) Involuntary displacement preference: Verification. A private 
owner's verification of an applicant's involuntary displacement is 
established by the following documentation:
    (1) Displacement by disaster. Certification, in a form prescribed 
by the Secretary, from a unit or agency of government that an applicant 
has been or will be displaced as a result of a disaster that results in 
the uninhabitability of an applicant's unit.
    (2) Displacement by government action. Certification, in a form 
prescribed by the Secretary, from a unit or agency of government that 
an applicant has been or will be displaced by activity carried on by an 
agency of the United States or by any State or local governmental body 
or agency in connection with code enforcement or a public improvement 
or development program.
    (3) Displacement by owner action. Certification, in a form 
prescribed by the Secretary, from an owner or owner's agent that an 
applicant had to or will have to vacate a unit by a date certain 
because of owner action.
    (4) Displacement because of domestic violence. Certification, in a 
form prescribed by the Secretary, of displacement because of domestic 
violence from the local police department, social services agency, or 
court of competent jurisdiction, or a clergyman, physician, or public 
or private facility that provides shelter or counseling to the victims 
of domestic violence.
    (5) Displacement to avoid reprisals. A threat assessment by a law 
enforcement agency.
    (6) Displacement by hate crime. Certification by a law enforcement 
agency or other reliable information.
    (7) Displacement by inaccessibility of unit. Certification by a 
health care professional that a family member has a mobility or other 
impairment that makes critical elements of the current unit 
inaccessible, and statement by the owner that it is unable to make 
necessary changes to the unit to make it accessible.
    (8) Displacement by HUD disposition of multifamily project. 
Certification by HUD with respect to the disposition.


Sec. 5.425  Federal preference: substandard housing.

    (a) When unit is substandard. (See Sec. 5.415(a)(2) and (c)(2)(ii) 
for applicability of this section to the Section 8 Certificate/Voucher, 
Project-Based Certificate, Moderate Rehabilitation programs and the 
public housing program.) A unit is substandard if it:
    (1) Is dilapidated;
    (2) Does not have operable indoor plumbing;
    (3) Does not have a usable flush toilet inside the unit for the 
exclusive use of a family;
    (4) Does not have a usable bathtub or shower inside the unit for 
the exclusive use of a family;
    (5) Does not have electricity, or has inadequate or unsafe 
electrical service;
    (6) Does not have a safe or adequate source of heat;
    (7) Should, but does not, have a kitchen; or
    (8) Has been declared unfit for habitation by an agency or unit of 
government.
    (b) Other definitions. (1) Dilapidated unit. A housing unit is 
dilapidated if:
    (i) The unit does not provide safe and adequate shelter, and in its 
present condition endangers the health, safety, or well-being of a 
family; or
    (ii) The unit has one or more critical defects, or a combination of 
intermediate defects in sufficient number or extent to require 
considerable repair or rebuilding. The defects may involve original 
construction, or they may result from continued neglect or lack of 
repair or from serious damage to the structure.
    (2) Homeless family. (i) An applicant that is a ``homeless family'' 
is considered to be living in substandard housing.
    (ii) A ``homeless family'' includes:
    (A) Any person or family that lacks a fixed, regular, and adequate 
nighttime residence; and
    (B) Any person or family that has a primary nighttime residence 
that is:
    (1) A supervised publicly or privately operated shelter designed to 
provide temporary living accommodations (including welfare hotels, 
congregate shelters, and transitional housing);
    (2) An institution that provides a temporary residence for 
individuals intended to be institutionalized; or
    (3) A public or private place not designed for, or ordinarily used 
as, a regular sleeping accommodation for human beings.
    (iii) A ``homeless family'' does not include any person imprisoned 
or otherwise detained pursuant to an Act of Congress or a State law.
    (3) Status of SRO housing. In determining whether an individual 
living in single room occupancy (SRO) housing qualifies for federal 
preference, SRO housing is not considered substandard solely because it 
does not contain sanitary or food preparation facilities.
    (c) Substandard housing preference: verification. The following 
provisions are applicable to private owners:
    (1) Verification that an applicant is living in substandard housing 
consists of certification, in a form prescribed by the Secretary, from 
a unit or agency of government or from an applicant's present landlord 
that the applicant's unit is ``substandard housing'' (as described in 
this section).
    (2) In the case of a ``homeless family'' (as described in this 
section), verification consists of certification, in a form prescribed 
by the Secretary, of this status from a public or private facility that 
provides shelter for such individuals, or from the local police 
department or social services agency.


Sec. 5.430  Federal preference: rent burden.

    (a) Rent burden preference: how determined. (See Sec. 5.415(a)(2) 
and (c)(2)(ii) for applicability of this section to the Section 8 
Certificate/Voucher, Project-Based Certificate, and Moderate 
Rehabilitation programs and the public housing program.)
    (1) ``Rent burden preference'' means the federal preference for 
admission of applicants that pay more than 50 percent of family income 
for rent.
    (2) For purposes of determining whether an applicant qualifies for 
the rent burden preference: 

[[Page 9046]]

    (i) ``Family income'' means Monthly Income, as defined in 24 CFR 
813.102.
    (ii) ``Rent'' means:
    (A) The actual monthly amount due under a lease or occupancy 
agreement between a family and the family's current landlord; and
    (B) For utilities purchased directly by tenants from utility 
providers:
    (1) The utility allowance for family-purchased utilities and 
services that is used in the HA tenant-based program; or
    (2) If the family chooses, the average monthly payments that the 
family actually made for these utilities and services for the most 
recent 12-month period or, if information is not obtainable for the 
entire period, for an appropriate recent period.
    (iii) Amounts paid to or on behalf of a family under any energy 
assistance program must be subtracted from the otherwise applicable 
rental amount, to the extent that they are not included in the family's 
income.
    (iv) For purposes of the Section 8 Certificate/Voucher programs, 
rent for an applicant who owns a manufactured home, but rents the space 
upon which it is located, includes the monthly payment to amortize the 
purchase price of the home, calculated in accordance with HUD's 
requirements. In addition, for this program, rent for members of a 
cooperative means the charges under the occupancy agreement between the 
members and the cooperative.
    (3) An applicant does not qualify for a rent burden preference if 
either of the following is applicable:
    (i) The applicant has been paying more than 50 percent of income 
for rent for less than 90 days.
    (ii) The applicant is paying more than 50 percent of family income 
to rent a unit because the applicant's housing assistance for occupancy 
of the unit under any of the following programs has been terminated 
because of the applicant's refusal to comply with applicable program 
policies and procedures on the occupancy of underoccupied and 
overcrowded units:
    (A) The Section 8 programs or public and Indian housing programs 
under the United States Housing Act of 1937;
    (B) The rent supplement program under section 101 of the Housing 
and Urban Development Act of 1965; or
    (C) Rental assistance payments under section 236(f)(2) of the 
National Housing Act.
    (b) Rent burden preference: verification of income and rent. The 
owner must verify that an applicant is paying more than 50 percent of 
family income for rent, as follows:
    (1) How to verify income. The owner must verify a family's income 
by using the standards and procedures that it uses to verify family 
income under 24 CFR part 813.
    (2) How to verify rent. The owner must verify the amount due to the 
family's landlord (or cooperative) under the lease or occupancy 
agreement:
    (i) By requiring the family to furnish copies of its most recent 
rental (or cooperative charges) receipts (which may include canceled 
checks or money order receipts) or a copy of the family's current lease 
or occupancy agreement; or
    (ii) By contacting the landlord (or cooperative) or its agent 
directly.
    (3) Utilities. To verify the actual amount that a family paid for 
utilities and other housing services, the owner must require the family 
to provide copies of the appropriate bills or receipts, or must obtain 
the information directly from the utility or service supplier.

PART 880-SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW 
CONSTRUCTION

    3. The authority citation for part 880 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 
13611-13619.

Subpart F--Management


Sec. 880.603  [Amended]

    4. Section 880.603 is amended by:
    a. Amending the introductory text of paragraph (b) by removing the 
phrase ``Secs. 880.613 through 880.617.'' from the end of the 
paragraph, and adding in its place the phrase ``24 CFR part 5.'';
    b. Amending paragraph (b)(1) introductory text by removing the term 
``Sec. 880.613(c)(2)'' from the third sentence, and adding in its place 
the phrase ``24 CFR part 5''; and
    c. Amending paragraph (b)(2) by removing the term 
``Sec. 880.613(k)'' from the fifth sentence, and adding in its place 
``24 CFR 5.410''.


Sec. 880.612a  [Amended]

    5. In Sec. 880.612a, paragraph (g) is amended by removing the term 
``Sec. 880.613'' in the two places where it appears, and by adding the 
term ``24 CFR part 5'' in those two places.


Secs. 880.613, 880.614, 880.615, 880.616, and 880.617  [Removed]

    6. Sections 880.613, 880.614, 880.615, 880.616, and 880.617 are 
removed.

PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR 
SUBSTANTIAL REHABILITATION

    7. The authority citation for part 881 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 
13611-13619.

Subpart F--Management


Sec. 881.603  [Amended]

    8. Section 881.603 is amended by:
    a. Amending the introductory text of paragraph (b) by removing the 
phrase ``Secs. 881.613 through 881.617'' from the end of the paragraph, 
and adding in its place the phrase ``24 CFR part 5'';
    b. Amending paragraph (b)(2) introductory text by removing the term 
``Sec. 881.613(c)(2)'' from the third sentence, and adding in its place 
the phrase ``24 CFR part 5''; and
    c. Amending paragraph (b)(3) by removing the term 
``Sec. 881.613(k)'' from the fifth sentence, and adding in its place 
the term ``Sec. 24 CFR 5.410''.


Sec. 881.612a  [Amended]

    9. In Sec. 881.612a, paragraph (g) is amended by removing the term 
``Sec. 881.613'' in the two places where it appears, and by adding the 
term ``24 CFR part 5'' in those two places.


Secs. 881.613, 881.614, 881.615, 881.616, and 881.617  [Removed]

    10. Sections 881.613, 881.614, 881.615, 881.616, and 881.617 are 
removed.

PART 882--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--EXISTING 
HOUSING

    11. The authority citation for part 882 is revised to read as 
follows:

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

Subpart E--Special Procedures for Moderate Rehabilitation--Program 
Development and Operation


Sec. 882.514  [Amended]

    12. Section 882.514 is amended by:
    a. Amending paragraph (a)(1) by adding, before the term ``750'' in 
the parenthetical phrase, the term ``5, ``, and by removing the last 
sentence, and
    b. Amending the introductory text of paragraph (b) by removing the 
term ``Sec. 882.517(c)(2)'' from the fourth sentence, and adding in its 
place the phrase ``24 CFR part 5''.


Secs. 882.517, 882.518, 882.519, 882.520, and 882.521  [Removed]

    13. Sections 882.517, 882.518, 882.519, 882.520, and 882.521 are 
removed. 

[[Page 9047]]


PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE 
HOUSING AGENCIES

    14. The authority citation for part 883 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

Subpart G--Management of New Construction and Substantial 
Rehabilitation Projects


Sec. 883.704  [Amended]

    15. Section 883.704 is amended by:
    a. Amending the introductory text of paragraph (b) by removing the 
phrase ``parts 750 and 760 of chapter VII'', and adding in its place 
the phrase ``24 CFR parts 5, 750, and 760'', and by removing the phrase 
``, including giving a Federal preference in accordance with 
Sec. 883.714'' from the end of the paragraph;
    b. Amending paragraph (b)(2) by removing the term 
``Sec. 883.714(c)(2)'' from the third sentence, and adding in its place 
the phrase ``24 CFR part 5''; and
    c. Amending paragraph (b)(3) by removing the term ``883.714(k)'' 
from the third sentence, and adding in its place ``24 CFR 5.410''.


Sec. 883.704a  [Amended]

    15a. In Sec. 883.704a, paragraph (g) is amended by removing the 
term ``Sec. 883.714'' in the two places it appears, and adding in its 
places the term ``24 CFR part 5''.


Secs. 883.714, 883.715, 883.716, 883.717, and 883.718  [Removed]

    16. Sections 883.714, 883.715, 883.716, 883.717, and 883.718 are 
removed.

PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW 
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING 
PROJECTS

    17. The authority citation for part 884 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

    17a. The table of contents for part 884 is amended to add the 
reference to ``Sec. 884.223a Preference for occupancy by elderly 
families.''

Subpart B--Project Development and Operation


Sec. 884.214  [Amended]

    18. Section 884.214 is amended as follows:
    a. Paragraph (b)(1) is amended by removing the term 
``Sec. 884.226'' from the parenthetical phrase, and adding in its place 
the phrase ``24 CFR part 5'';
    b. Paragraph (b)(2) is amended by removing the term 
``Sec. 884.226(c)(2)'' from the second sentence, and adding in its 
place the phrase ``24 CFR part 5''; and
    c. Paragraph (b)(7) is revised, to read as follows:


Sec. 884.214  Marketing.

* * * * *
    (b) * * *
    (7) See 24 CFR part 5 for the informal review provisions for the 
denial of a Federal selection preference.
* * * * *


Sec. 884.223a  [Amended]

    19. In Sec. 884.223a, paragraph (g) is amended by removing the term 
``Sec. 884.226'' in the two places where it appears, and by adding in 
those places the phrase ``24 CFR part 5''.


Secs. 884.226, 884.227, 884.228, 884.229, and 884.230  [Removed]

    20. Sections 884.226, 884.227, 884.228, 884.229, and 884.230 are 
removed.

PART 885--LOANS FOR HOUSING FOR THE ELDERLY OR HANDICAPPED

    21. The authority citation for part 885 continues to read as 
follows:

    Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437f and 3535(d).

Subpart B--Section 202 Projects for the Elderly or Handicapped--
Section 8 Assistance


Sec. 885.427  [Amended]

    22. Section 885.427 is amended by removing the term 
``Secs. 880.613-880.617 of this chapter'' and adding in its place the 
phrase ``24 CFR part 5, subpart D''.

PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL 
ALLOCATIONS

    23. The authority citation for part 886 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

Subpart A--Additional Assistance Program for Projects With HUD-
Insured and HUD-Held Mortgages


Sec. 886.119  [Amended]

    24. In Sec. 886.119, paragraph (a)(3) is amended by removing the 
term ``Sec. 886.132'' and adding in its place the phrase ``24 CFR part 
5''.
    25. Section 886.132 is revised to read as follows:


Sec. 886.132  Selection preferences.

    Sections 5.410 through 5.430 of this title govern the use of 
preferences in the selection of tenants under this subpart A.


Secs. 886.133, 886.134, 886.135, and 886.136  [Removed]

    26. Sections 886.133, 886.134, 886.135, and 886.136 are removed.

Subpart C--Section 8 Housing Assistance Program for the Disposition 
of HUD-Owned Projects


Sec. 886.337  [Amended]

    27. Section 886.337 is amended by removing the phrase ``Sections 
886.132 through 886.136'' and by adding the phrase ``Sections 5.410 
through 5.430''.

PART 889--SUPPORTIVE HOUSING FOR THE ELDERLY

    28. The authority citation for part 889 is revised to read as 
follows:

    Authority: 12 U.S.C. 1701q; 42 U.S.C. 3535(d).

Subpart F--Project Management

    29. In Sec. 889.610, paragraph (a) is revised to read as follows:


Sec. 889.610  Selection and admission of tenants.

    (a) Written procedures. The owner shall adopt written tenant 
selection procedures that ensure nondiscrimination in the selection of 
tenants and that are consistent with the purpose of improving housing 
opportunities for very low-income elderly persons; that are reasonably 
related to program eligibility and an applicant's ability to perform 
the obligations of the lease; and that conform to the requirements on 
preferences contained in 24 CFR part 5. Owners shall promptly inform in 
writing any rejected applicant of the grounds for any rejection. 
Additionally, owners shall maintain a written, chronological waiting 
list showing the name, race, gender, ethnicity and date of each person 
applying for the program.
* * * * *


Secs. 889.611, 889.612, 889.613, 889.614, and 889.615  [Removed]

    30. Sections 889.611, 889.612, 889.613, 889.614, and 889.615 are 
removed.

PART 904--LOW RENT HOUSING HOMEOWNERSHIP OPPORTUNITIES

    31. The authority citation for part 904 continues to read as 
follows:

    Authority: 42 U.S.C. 1437-1437ee and 3535(d). 
    
[[Page 9048]]


Subpart B--Turnkey III Program Description


Sec. 904.122  [Amended]

    32. Section 904.122 is amended by removing the phrase 
``Secs. 960.211 through 960.215'' and adding in its place the phrase 
``24 CFR 5.410 through 5.430''.

PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING

    33. The authority citation for part 960 continues to read as 
follows:

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

Subpart B--Admission, Rent and Reexamination


Sec. 960.203  [Removed and reserved]

    34. Section 960.203 is removed and reserved.


Sec. 960.204  [Amended]

    35. In Sec. 960.204, paragraph (a) is amended by adding after the 
word ``chapter'', the phrase ``and 24 CFR part 5''; and by removing 
paragraph (d).


Sec. 960.205  [Amended]

    36. In Sec. 960.205, paragraph (c) is amended by removing the two 
parenthetical phrases that read ``(see Sec. 960.211)'' and ``(But see 
Sec. 960.211(d)''.


Sec. 960.206  [Amended]

    37. In Sec. 960.206, paragraph (a) is amended by removing the 
reference to ``Sec. 960.211'' and by adding in its place the phrase 
``24 CFR part 5''.


Sec. 960.207  [Amended]

    38. In Sec. 960.207, paragraph (a) is amended by removing the 
phrase ``(see Sec. 960.211)''.


Secs. 960.211, 960.212, 960.213, 960,214, and 960.215  [Removed]

    39. Sections 960.211, 960.212, 960.213, 960,214, and 960.215 are 
removed.

PART 982--SECTION 8 TENANT-BASED ASSISTANCE: UNIFIED RULE FOR 
TENANT-BASED ASSISTANCE UNDER THE SECTION 8 RENTAL CERTIFICATE 
PROGRAM AND THE SECTION 8 RENTAL VOUCHER PROGRAM

    40. The authority citation for part 982 continues to read as 
follows:

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

Subpart A--General Information


Sec. 982.3  [Amended]

    41. Section 982.3 is amended by removing the definitions of 
``Federal preference,'' Federal preference holder,'' ``Local 
preference,'' ``Local preference limit,'' ``Ranking preference,'' 
``Residency preference,'' and ``Residency preference area.''

Subpart E--Admission to Tenant-Based Program


Sec. 982.202  [Amended]

    42. Section 982.202 is amended by:
    a. Redesignating paragraph (b)(4)(i) as paragraph (b)(4);
    b. Redesignating paragraphs (b)(4)(i)(A), (b)(4)(i)(B), 
(b)(4)(i)(C), (b)(4)(i)(D), and (b)(4)(i)(E), as paragraphs (b)(4)(i), 
(b)(4)(ii), (b)(4)(iii), (b)(4)(iv), and (b)(4)(v), respectively; and
    c. Removing paragraph (b)(4)(ii).
    43. Section 982.207 is revised to read as follows:


Sec. 982.207  Waiting list: Use of preferences.

    (a) The HA must use the following to select among applicants on the 
waiting list with the same preference status:
    (1) Date and time of application; or
    (2) A drawing or other random choice technique.
    (b)(1) The method for selecting applicants from preference 
categories must be consistent with requirements governing federal 
preference and the singles preference, as described in 24 CFR part 5.
    (2) In its system for applying the preferences described in 24 CFR 
part 5, the following provisions apply:
    (i) The HA may limit the number of applicants that may qualify for 
any ranking preference or local preference.
    (ii) The local preference limit only applies to admission of an 
applicant from the HA waiting list. A special admission is not counted 
against the local preference limit.
    (iii) The local preference limit does not apply when an applicant 
is received in an HA program under portability procedures. The 
admission of a portability family by a receiving HA does not count 
against the receiving HA local preference limit. The admission of such 
a family (not qualified for federal preference) counts against the 
local preference limit of the initial HA.
    (c) The method for selecting applicants from preference categories 
must leave a clear audit trail that can be used to verify that each 
applicant has been selected in accordance with the method specified in 
the administrative plan.


Secs. 982.208, 982.209, 982.210, 982.211, 982.212, and 
982.213  [Removed]

    44. Sections 982.208, 982.209, 982.210, 982.211, 982.212, and 
982.213 are removed.

PART 983--SECTION 8 PROJECT-BASED CERTIFICATE PROGRAM

    45. The authority citation for part 983 continues to read as 
follows:

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

Subpart E--Management


Sec. 983.203  [Amended]

    46. Section 983.203 is amended as follows:
    a. Paragraph (a)(1) is amended by removing the phrase, ``except 
(b)(1), and 982.208 through 982.213 of this chapter'', and adding in 
its place the phrase, ``and 24 CFR 5.410 through 5.430''; and
    b. Paragraph (a)(5) is removed, and paragraphs (a)(6) and (a)(7) 
are redesignated as paragraphs (a)(5) and (a)(6), respectively.

    Dated: February 22, 1996.
Henry G. Cisneros,
Secretary.
[FR Doc. 96-5024 Filed 3-5-96; 8:45 am]
BILLING CODE 4210-32-P