[Federal Register Volume 61, Number 60 (Wednesday, March 27, 1996)] [Rules and Regulations] [Pages 13614-13627] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-7188] [[Page 13613]] _______________________________________________________________________ Part V Department of Housing and Urban Development _______________________________________________________________________ Office of the Secretary _______________________________________________________________________ 24 CFR Part 5, et al. Consolidation and Streamlining of the Restrictions on Assistance to Noncitizens; Final Rule Federal Register / Vol. 61, No. 60 / Wednesday, March 27, 1996 / Rules and Regulations [[Page 13614]] DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Office of the Secretary 24 CFR Parts 5, 200, 236, 247, 812, 882, 887, 904, 912, 960, and 982 [Docket No. FR-3988-F-01] RIN 2501-AC12 Consolidation and Streamlining of the Restrictions on Assistance to Noncitizens AGENCY: Office of the Secretary, HUD. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: On March 20, 1995, HUD issued its final rule implementing Section 214 of the Housing and Community Development Act of 1980, as amended. Section 214 prohibits HUD from making financial assistance available to persons other than United States citizens, nationals, or certain categories of eligible noncitizens in HUD's Public Housing and Indian Housing programs (including homeownership); the Section 8 housing assistance payments programs; the Housing Development Grants program; the Section 236 interest reduction and rental assistance programs; the Rent Supplement program; and the Section 235 homeownership program. HUD's March 20, 1995 final rule, which became effective on June 19, 1995, promulgated virtually identical ``noncitizen'' regulations for the HUD programs covered by Section 214. This final rule eliminates the redundancy of these duplicative regulations by consolidating noncitizens requirements and relocating them to a single location in 24 CFR part 5. This rule does not consolidate or revise the noncitizens requirements for HUD's Indian Housing programs. EFFECTIVE DATE: April 26, 1996. FOR FURTHER INFORMATION CONTACT: For the covered programs, the following persons should be contacted: (1) For Public Housing, Section 8 Rental Certificate, Rental Voucher, and Moderate Rehabilitation (except Single Room Occupancy-- ``SRO'') programs--Linda Campbell, Office of Public Housing, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-5000, telephone (202) 708-0744; (2) For Indian Housing programs--Deborah Lalancette, Office of Native American Programs, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-5000, telephone (202) 755-0088; (3) For the Section 8 Moderate Rehabilitation SRO program--Dave Pollack, Office of Special Needs Assistance Programs, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-7000, telephone (202) 708-4300; (4) For the other Section 8 programs, the Section 236 programs, Housing Development Grants and Rent Supplement--Barbara Hunter, Office of Multifamily Management, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-8000, telephone (202) 708-3944; and (5) For the Section 235 homeownership program--William Heyman, Office of Lender Activities and Land Sales Registration, Office of Single Family Housing, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-8000, telephone (202) 708- 1824. For persons with hearing or speech impairment, the TTY number is 1- 800-877-8339 (Federal Information Relay Service TTY). With the exception of the ``800'' number, none of the foregoing telephone numbers are toll-free. SUPPLEMENTARY INFORMATION: I. Background A. The March 20, 1995 Final Rule On March 20, 1995 (60 FR 14816), HUD issued its final rule implementing Section 214 of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). Section 214 prohibits HUD from making financial assistance available to persons other than United States citizens, nationals, or certain categories of eligible noncitizens in HUD's: (1) Public Housing and Indian Housing programs (including homeownership); (2) the Section 8 housing assistance payments programs; (3) the Housing Development Grants program; (4) the Section 236 interest reduction and rental assistance programs; (5) the Rent Supplement program; and (6) the Section 235 homeownership program. B. Regulatory Reform President Clinton's Regulatory Reform Initiative calls for immediate, comprehensive regulatory reform. The President has directed all Federal departments and agencies to undertake an exhaustive review of their regulations. This initiative, which is part of the National Performance Review, calls for the elimination of redundant, unnecessary, or obsolete regulatory requirements, and the modification of others to increase flexibility and reduce burden. On February 9, 1996 (61 FR 5198), HUD, as part of its continuing regulatory reform efforts, published a final rule creating a new 24 CFR part 5. HUD established part 5 to set forth those requirements which are applicable to one or more program regulations. Consolidation in part 5 of requirements applicable to one or more programs will eliminate redundancy in title 24 and assist in HUD's overall efforts to streamline the content of its regulations. HUD's March 20, 1995 final rule implementing Section 214, which became effective on June 19, 1995, promulgated virtually identical noncitizen regulations for the HUD programs covered by Section 214. Subpart G of part 200, subpart B of part 812, and subpart B of part 912, contain, with minor exceptions, the same noncitizen requirements. This final rule eliminates the repetitiveness of these duplicative regulations by consolidating the noncitizens requirements and relocating them to a single location in 24 CFR part 5. This rule does not consolidate the noncitizens requirements for HUD's Indian Housing programs. These provisions will continue to be located in 24 CFR part 950, which sets forth the consolidated regulatory requirements for the Indian Housing programs. Although HUD is consolidating its noncitizen requirements, it is not revising the requirements nor is it modifying any differences in the requirements among the program regulations. This final rule eliminates redundancy in the existing noncitizen requirements wherever possible, but it retains those provisions which are specific to certain of the Section 214 covered programs. C. Technical Corrections/Clarifying Changes Additionally, although HUD is not making substantive changes, it is making certain clarifying changes. These changes are as follows. First, this streamlining rule clarifies that a noncitizen student alien's family may be eligible for assistance if the family meets the conditions for prorated assistance for mixed families. Second, this rule removes from the text of the regulation those INS documents that are required to show proof of immigration status. Because INS may change these documents from time to time, notification of the documents that are required to show proof of immigration status is best accomplished through notice in the Federal Register. The INS uses the Federal Register frequently to list appropriate documents for various immigration categories. Third, the rule also provides increased flexibility on when verification of immigration status [[Page 13615]] is to occur for public housing projects. Fourth, the rule clarifies that for tenants receiving assistance under the Section 8 Moderate Rehabilitation assistance, Section 8 tenant-based assistance, and the Section 8 project-based certificate assistance programs, that the applicable hearing procedures are found in parts 882, 982, and 983, respectively. Section 812.9(f)(3) of the March 20, 1995 rule incorrectly referred to the procedures in part 966, which are the public housing hearing procedures. This rule does not revise the noncitizens requirements for HUD's Indian Housing programs in 24 CFR part 950. Additionally, this rule makes one technical change unrelated to the noncitizens requirements. On February 13, 1996, HUD published a final rule which consolidated HUD's general requirements for assistance under the United States Housing Act of 1937 in a new subpart D of part 5. This final rule amends paragraph (c)(2) of Sec. 5.405 to add the phrase ``as determined by the HA subsidy standard.'' The addition of this phrase will clarify how the limitations on housing assistance for single persons is applied under the tenant-based assistance programs. With regard to more substantive changes to HUD's noncitizens regulations, HUD is aware that some housing providers desire certain changes be made to the noncitizen requirements set forth in the March 20, 1995 rule. In some cases, the types of changes requested cannot be made because the changes would affect statutory requirements not regulatory ones. Other changes which could possibly be made are not those that can be addressed by this streamlining final rule, but rather, would need to be addressed through rulemaking that provides for advance notice and public comment. Because the March 20, 1995 final rule became effective June 19, 1995, implementation of Section 214 remains fairly recent. HUD is monitoring implementation of Section 214 and will consider making changes to the regulations (to the extent that HUD can give the statutory requirements) after opportunity to review the results of the procedures provided in the March 20, 1995 rule. D. New Immigration Legislation and Changes to Noncitizen Requirements HUD is also aware of several immigration bills that have been proposed by House and Senate committees that would possibly amend Section 214. As of the date of publication of this rule, no changes have been made to Section 214. If and when changes are made to Section 214 that may require changes to the regulations issued on March 20, 1995, HUD will undertake whatever regulatory action may be required in accordance with any new immigration legislation or by the Administrative Procedures Act. E. Nondiscrimination in the Implementation of Section 214 HUD reiterates the statement made in the March 20, 1995 final rule that all regulatory procedures involved in implementation of Section 214 must be administered in the uniform manner prescribed without regard to race, national origin, or personal characteristics (e.g., accent, language spoken, or familial association with a noncitizen). II. Justification for Final Rulemaking 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 comment is unnecessary since this final rule does not affect or establish policy. This rule merely consolidates HUD's noncitizen requirements in 24 CFR part 5. Where consolidation is not possible, this rule retains those provisions which are applicable to several, but not all, Section 214 covered programs. This final rule does not add or remove program requirements, but merely relocates them to a single part of HUD's regulations. III. Other Matters Environmental Review. This rulemaking does not have an environmental impact. This rulemaking simply amends existing regulations by consolidating and streamlining provisions and does not alter the environmental effect of the regulations being amended. A Finding of No Significant Impact with respect to the environment was made in accordance with HUD regulations in 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332) at the time of development of regulations implementing Section 214 of the Housing and Community Development Act of 1980. That Finding remains applicable to this rule, and is available for public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk, Room 10276, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. Regulatory Flexibility Act. The Secretary, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this final rule before publication, and by approving it, certifies that this rule does not have a significant economic impact on a substantial number of small entities. This rule is limited to consolidating and streamlining existing regulations. Executive Order on Federalism. The General Counsel, as the Designated Official under section 6(a) of Executive Order 12612, Federalism, has determined that the policies contained in this final rule will not have substantial direct effects on States or their political subdivisions, or the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. Specifically, this final rule merely consolidates HUD's noncitizen requirements which are currently repeated throughout title 24 of the Code of Federal Regulations. Executive Order 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 significant impact on family formation, maintenance, and general well-being. This final rule merely consolidates HUD's noncitizen requirements which are currently repeated throughout title 24 of the Code of Federal Regulations. List of Subjects 24 CFR Part 5 Administrative practice and procedure, Aged, Grant programs-- housing and community development, Individuals with disabilities, Loan programs--housing and community development, Low and moderate income housing, Mortgage insurance, Pets, Public housing, Rent subsidies, Reporting and recordkeeping requirements. 24 CFR Part 200 Administrative practice and procedure, Claims, Equal employment opportunity, Fair housing, Home improvement, Housing standards, Incorporation by reference, Lead poisoning, Loan programs--housing and community development, Minimum property standards, Mortgage insurance, Organization and functions (Government agencies), Penalties, Reporting and recordkeeping requirements, Social security, Unemployment compensation, Wages. [[Page 13616]] 24 CFR Part 236 Grant programs--housing and community development, Low and moderate income housing, Mortgage insurance, Rent subsidies, Reporting and recordkeeping requirements. 24 CFR Part 247 Grant programs--housing and community development, Loan programs-- housing and community development, Low and moderate income housing, Rent subsidies. 24 CFR Part 812 Low and moderate income housing, 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 887 Grant programs--housing and community development, 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 912 Grant programs--housing and community development, Public housing, Reporting and recordkeeping requirements. 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. Accordingly, under the authority of 42 U.S.C. 3535(d), parts 5, 200, 236, 247, 812, 882, 887, 904, 912, 960, and 982 of title 24 of the Code of Federal Regulations, are amended as follows: PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS 1. The authority citation for part 5 is revised to read as follows: Authority: 12 U.S.C. 101r-1; 42 U.S.C. 1436a, 3535(d), 3543, and 3544. 2. Section 5.405 is amended by revising paragraph (c)(2) to read as follows: Sec. 5.405 Basic eligibility; preference over single persons; and housing assistance limitation for single persons. * * * * * (c) * * * (2) For tenant-based assistance, housing assistance for which the family unit size as determined by the HA subsidy standard exceeds the one bedroom level. * * * * * 3. A new subpart E is added to read as follows: Subpart E--Restrictions on Assistance to Noncitizens Sec. 5.500 Applicability. 5.502 Requirements concerning documents. 5.504 Definitions. 5.506 General provisions. 5.508 Submission of evidence of citizenship or eligible immigration status. 5.510 Documents of eligible immigration status. 5.512 Verification of eligible immigration status. 5.514 Delay, denial, reduction or termination of assistance. 5.516 Availability of preservation assistance to mixed families and other families. 5.518 Types of preservation assistance to mixed families and other families. 5.520 Proration of assistance. 5.522 Prohibition of assistance to noncitizen students. 5.524 Compliance with nondiscrimination requirements. 5.526 Protection from liability for responsible entities and State, and local government agencies and officials. 5.528 Liability of ineligible tenants for reimbursement of benefits. Subpart E--Restrictions on Assistance to Noncitizens Sec. 5.500 Applicability. (a) Covered programs/assistance. This subpart E implements Section 214 of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). Section 214 prohibits HUD from making financial assistance available to persons who are not in eligible status with respect to citizenship or noncitizen immigration status. This subpart E is applicable to financial assistance provided under: (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the Section 235 Program); (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants paying below market rent only) (the Section 236 Program); (3) Section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent Supplement Program); and (4) The United States Housing Act of 1937 (42 U.S. C. 1437 et seq.) which covers: (i) HUD's Public Housing Programs; (ii) The Section 8 Housing Assistance Programs; and (iii) The Housing Development Grant Programs (with respect to low income units only). (b) Covered individuals and entities. (1) Covered individuals/ persons and families. The provisions of this subpart E apply to both applicants for assistance and persons already receiving assistance covered under this subpart E. (2) Covered entities. The provisions of this subpart E apply to Public Housing Agencies (PHAs), project (or housing) owners, and mortgagees under the Section 235 Program. The term ``responsible entity'' is used in this subpart E to refer collectively to these entities, and is further defined in Sec. 5.504. Sec. 5.502 Requirements concerning documents. For any notice or document (decision, declaration, consent form, etc.) that this subpart E requires the responsible entity to provide to an individual, or requires the responsible entity to obtain the signature of an individual, the responsible entity, where feasible, must arrange for the notice or document to be provided to the individual in a language that is understood by the individual if the individual is not proficient in English. (See 24 CFR 8.6 of HUD's regulations for requirements concerning communications with persons with disabilities.) Sec. 5.504 Definitions. (a) The definitions ``1937 Act'', ``HUD'', ``Public Housing Agency (PHA)'', and ``Section 8'' are defined in subpart A of this part. (b) As used in this subpart E: Child means a member of the family other than the family head or spouse who is under 18 years of age. Citizen means a citizen or national of the United States. Evidence of citizenship or eligible status means the documents which must be submitted to evidence citizenship or eligible immigration status. (See Sec. 5.508(b).) Family has the same meaning as provided in the program regulations of the relevant Section 214 covered program. Head of household means the adult member of the family who is the head of the household for purposes of determining income eligibility and rent. Housing covered programs means the following programs administered by the Assistant Secretary for Housing: [[Page 13617]] (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the Section 235 Program); (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants paying below market rent only) (the Section 236 Program); and (3) Section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent Supplement Program). INS means the U.S. Immigration and Naturalization Service. Mixed family means a family whose members include those with citizenship or eligible immigration status, and those without citizenship or eligible immigration status. National means a person who owes permanent allegiance to the United States, for example, as a result of birth in a United States territory or possession. Noncitizen means a person who is neither a citizen nor national of the United States. Project owner means the person or entity that owns the housing project containing the assisted dwelling unit. Public Housing covered programs means the public housing programs administered by the Assistant Secretary for Public and Indian Housing under title I of the 1937 Act. This definition does not encompass HUD's Indian Housing programs administered under title II of the 1937 Act. Further, this term does not include those programs providing assistance under section 8 of the 1937 Act. (See definition of ``Section 8 Covered Programs'' in this section.) Responsible entity means the person or entity responsible for administering the restrictions on providing assistance to noncitizens with ineligible immigrations status. The entity responsible for administering the restrictions on providing assistance to noncitizens with ineligible immigration status under the various covered programs is as follows: (1) For the Section 235 Program, the mortgagee. (2) For Public Housing, the Section 8 Rental Certificate, the Section 8 Rental Voucher, and the Section 8 Moderate Rehabilitation programs, the PHA administering the program under an ACC with HUD. (3) For all other Section 8 programs, the Section 236 Program, and the Rent Supplement Program, the owner. Section 8 covered programs means all HUD programs which assist housing under Section 8 of the 1937 Act, including Section 8-assisted housing for which loans are made under section 202 of the Housing Act of 1959. Section 214 means section 214 of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). Section 214 covered programs is the collective term for the HUD programs to which the restrictions imposed by Section 214 apply. These programs are set forth in Sec. 5.500. Tenant means an individual or a family renting or occupying an assisted dwelling unit. For purposes of this subpart E, the term tenant will also be used to include a homebuyer, where appropriate. Sec. 5.506 General provisions. (a) Restrictions on assistance. Financial assistance under a Section 214 covered program is restricted to: (1) Citizens; or (2) Noncitizens who have eligible immigration status under one of the categories set forth in Section 214 (see 42 U.S.C. 1436a(a)). (b) Family eligibility for assistance. (1) A family shall not be eligible for assistance unless every member of the family residing in the unit is determined to have eligible status, as described in paragraph (a) of this section, or unless the family meets the conditions set forth in paragraph (b)(2) of this section. (2) Despite the ineligibility of one or more family members, a mixed family may be eligible for one of the three types of assistance provided in Secs. 5.516 and 5.518. A family without any eligible members and receiving assistance on June 19, 1995 may be eligible for temporary deferral of termination of assistance as provided in Secs. 5.516 and 5.518. Sec. 5.508 Submission of evidence of citizenship or eligible immigration status. (a) General. Eligibility for assistance or continued assistance under a Section 214 covered program is contingent upon a family's submission to the responsible entity of the documents described in paragraph (b) of this section for each family member. If one or more family members do not have citizenship or eligible immigration status, the family members may exercise the election not to contend to have eligible immigration status as provided in paragraph (e) of this section, and the provisions of Secs. 5.516 and 5.518 shall apply. (b) Evidence of citizenship or eligible immigration status. Each family member, regardless of age, must submit the following evidence to the responsible entity. (1) For citizens, the evidence consists of a signed declaration of U.S. citizenship; (2) For noncitizens who are 62 years of age or older or who will be 62 years of age or older and receiving assistance under a Section 214 covered program on June 19, 1995, the evidence consists of: (i) A signed declaration of eligible immigration status; and (ii) Proof of age document. (3) For all other noncitizens, the evidence consists of: (i) A signed declaration of eligible immigration status; (ii) One of the INS documents referred to in Sec. 5.510; and (iii) A signed verification consent form. (c) Declaration. (1) For each family member who contends that he or she is a U.S. citizen or a noncitizen with eligible immigration status, the family must submit to the responsible entity a written declaration, signed under penalty of perjury, by which the family member declares whether he or she is a U.S. citizen or a noncitizen with eligible immigration status. (i) For each adult, the declaration must be signed by the adult. (ii) For each child, the declaration must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. (2) For Housing covered programs: The written declaration may be incorporated as part of the application for housing assistance or may constitute a separate document. (d) Verification consent form. (1) Who signs. Each noncitizen who declares eligible immigration status (except certain noncitizens who are 62 years of age or older as described in paragraph (b)(2) of this section) must sign a verification consent form as follows. (i) For each adult, the form must be signed by the adult. (ii) For each child, the form must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. (2) Notice of release of evidence by responsible entity. The verification consent form shall provide that evidence of eligible immigration status may be released by the responsible entity without responsibility for the further use or transmission of the evidence by the entity receiving it, to: (i) HUD, as required by HUD; and (ii) The INS for purposes of verification of the immigration status of the individual. (3) Notice of release of evidence by HUD. The verification consent form also shall notify the individual of the possible release of evidence of eligible immigration status by HUD. Evidence of eligible immigration status shall only be released to the INS for purposes of establishing eligibility for financial assistance and not for any other [[Page 13618]] purpose. HUD is not responsible for the further use or transmission of the evidence or other information by the INS. (e) Individuals who do not contend that they have eligible status. If one or more members of a family elect not to contend that they have eligible immigration status, and other members of the family establish their citizenship or eligible immigration status, the family may be eligible for assistance under Secs. 5.516 and 5.518, or Sec. 5.520, despite the fact that no declaration or documentation of eligible status is submitted for one or more members of the family. The family, however, must identify in writing to the responsible entity, the family member (or members) who will elect not to contend that he or she has eligible immigration status. (f) Notification of requirements of Section 214. (1) When notice is to be issued. Notification of the requirement to submit evidence of citizenship or eligible immigration status, as required by this section, or to elect not to contend that one has eligible status as provided by paragraph (e) of this section, shall be given by the responsible entity as follows: (i) Applicant's notice. The notification described in paragraph (f)(1) of this section shall be given to each applicant at the time of application for assistance. Applicants whose applications are pending on June 19, 1995, shall be notified of the requirement to submit evidence of eligible status as soon as possible after June 19, 1995. (ii) Notice to tenants. The notification described in paragraph (f)(1) of this section shall be given to each tenant at the time of, and together with, the responsible entity's notice of regular reexamination of income, but not later than one year following June 19, 1995. (iii) Timing of mortgagor's notice. A mortgagor receiving Section 235 assistance must be provided the notification described in paragraph (f)(1) of this section and any additional requirements imposed under the Section 235 Program. (2) Form and content of notice. The notice shall: (i) State that financial assistance is contingent upon the submission and verification, as appropriate, of evidence of citizenship or eligible immigration status as required by paragraph (a) of this section; (ii) Describe the type of evidence that must be submitted, and state the time period in which that evidence must be submitted (see paragraph (g) of this section concerning when evidence must be submitted); and (iii) State that assistance will be prorated, denied or terminated, as appropriate, upon a final determination of ineligibility after all appeals have been exhausted (see Sec. 5.514 concerning INS appeal, and informal hearing process) or, if appeals are not pursued, at a time to be specified in accordance with HUD requirements. Tenants also shall be informed of how to obtain assistance under the preservation of families provisions of Secs. 5.516 and 5.518. (g) When evidence of eligible status is required to be submitted. The responsible entity shall require evidence of eligible status to be submitted at the times specified in paragraph (g) of this section, subject to any extension granted in accordance with paragraph (h) of this section. (1) Applicants. For applicants, responsible entities must ensure that evidence of eligible status is submitted not later than the date the responsible entity anticipates or has knowledge that verification of other aspects of eligibility for assistance will occur (see Sec. 5.512(a)). (2) Tenants. For tenants, evidence of eligible status is required to be submitted as follows: (i) For financial assistance under a Section 214 covered program, with the exception of Section 235 assistance payments, the required evidence shall be submitted at the first regular reexamination after June 19, 1995, in accordance with program requirements. (ii) For financial assistance in the form of Section 235 assistance payments, the mortgagor shall submit the required evidence in accordance with requirements imposed under the Section 235 Program. (3) New occupants of assisted units. For any new occupant of an assisted unit (e.g., a new family member comes to reside in the assisted unit), the required evidence shall be submitted at the first interim or regular reexamination following the person's occupancy. (4) Changing participation in a HUD program. Whenever a family applies for admission to a Section 214 covered program, evidence of eligible status is required to be submitted in accordance with the requirements of this subpart unless the family already has submitted the evidence to the responsible entity for a Section 214 covered program. (5) One-time evidence requirement for continuous occupancy. For each family member, the family is required to submit evidence of eligible status only one time during continuously assisted occupancy under any Section 214 covered program. (h) Extensions of time to submit evidence of eligible status. (1) When extension must be granted. The responsible entity shall extend the time, provided in paragraph (g) of this section, to submit evidence of eligible immigration status if the family member: (i) Submits the declaration required under Sec. 5.508(a) certifying that any person for whom required evidence has not been submitted is a noncitizen with eligible immigration status; and (ii) Certifies that the evidence needed to support a claim of eligible immigration status is temporarily unavailable, additional time is needed to obtain and submit the evidence, and prompt and diligent efforts will be undertaken to obtain the evidence. (2) Prohibition on indefinite extension period. Any extension of time, if granted, shall be for a specific period of time. The additional time provided should be sufficient to allow the individual the time to obtain the evidence needed. The responsible entity's determination of the length of the extension needed shall be based on the circumstances of the individual case. (3) Grant or denial of extension to be in writing. The responsible entity's decision to grant or deny an extension as provided in paragraph (h)(1) of this section shall be issued to the family by written notice. If the extension is granted, the notice shall specify the extension period granted. If the extension is denied, the notice shall explain the reasons for denial of the extension. (i) Failure to submit evidence or to establish eligible status. If the family fails to submit required evidence of eligible immigration status within the time period specified in the notice, or any extension granted in accordance with paragraph (h) of this section, or if the evidence is timely submitted but fails to establish eligible immigration status, the responsible entity shall proceed to deny, prorate or terminate assistance, or provide continued assistance or temporary deferral of termination of assistance, as appropriate, in accordance with the provisions of Secs. 5.514, 5.516, and 5.518. (ii) [Reserved] Sec. 5.510 Documents of eligible immigration status. (a) General. A responsible entity shall request and review original documents of eligible immigration status. The responsible entity shall retain photocopies of the documents for its own records and return the original documents to the family. [[Page 13619]] (b) Acceptable evidence of eligible immigration status. Acceptable evidence of eligible immigration status shall be the original of a document designated by INS as acceptable evidence of immigration status for the specific immigration status claimed by the individual. Sec. 5.512 Verification of eligible immigration status. (a) When verification is to occur. The responsible entity is encouraged to commence verification of immigration status at a date that the responsible entity believes will allow for verification of immigration status, including any appeals or informal hearings, to be completed by the time that verification of other aspects of eligibility for assistance under a Section 214 covered program will be completed. In no case may verification of immigration status occur later than the date the responsible entity commences verification of other aspects of eligibility for assistance under a Section 214 covered program. The responsible entity shall verify eligible immigration status in accordance with the INS procedures described in this section. (b) Primary verification. (1) Automated verification system. Primary verification of the immigration status of the person is conducted by the responsible entity through the INS automated system (INS Systematic Alien Verification for Entitlements (SAVE)). The INS SAVE system provides access to names, file numbers and admission numbers of noncitizens. (2) Failure of primary verification to confirm eligible immigration status. If the INS SAVE system does not verify eligible immigration status, secondary verification must be performed. (c) Secondary verification. (1) Manual search of INS records. Secondary verification is a manual search by the INS of its records to determine an individual's immigration status. The responsible entity must request secondary verification, within 10 days of receiving the results of the primary verification, if the primary verification system does not confirm eligible immigration status, or if the primary verification system verifies immigration status that is ineligible for assistance under a Section 214 covered program. (2) Secondary verification initiated by responsible entity. Secondary verification is initiated by the responsible entity forwarding photocopies of the original INS documents required for the immigration status declared (front and back), attached to the INS document verification request form G-845S (Document Verification Request), or such other form specified by the INS to a designated INS office for review. (Form G-845S is available from the local INS Office.) (3) Failure of secondary verification to confirm eligible immigration status. If the secondary verification does not confirm eligible immigration status, the responsible entity shall issue to the family the notice described in Sec. 5.514(d), which includes notification of the right to appeal to the INS of the INS finding on immigration status (see Sec. 5.514(d)(4)). (d) Exemption from liability for INS verification. The responsible entity shall not be liable for any action, delay, or failure of the INS in conducting the automated or manual verification. Sec. 5.514 Delay, denial, reduction or termination of assistance. (a) General. Assistance to a family may not be delayed, denied, reduced or terminated because of the immigration status of a family member except as provided in this section. (b) Restrictions on delay, denial, reduction or termination of assistance. (1) Restrictions on reduction, denial or termination of assistance. Assistance to an applicant or tenant shall not be delayed, denied, reduced, or terminated, on the basis of ineligible immigration status of a family member if: (i) The primary and secondary verification of any immigration documents that were timely submitted has not been completed; (ii) The family member for whom required evidence has not been submitted has moved from the assisted dwelling unit; (iii) The family member who is determined not to be in an eligible immigration status following INS verification has moved from the assisted dwelling unit; (iv) The INS appeals process under Sec. 5.514(e) has not been concluded; (v) For a tenant, the informal hearing process under Sec. 5.514(f) has not been concluded; (vi) Assistance is prorated in accordance with Sec. 5.520; (vii) Assistance for a mixed family is continued in accordance with Secs. 5.516 and 5.518; or (viii) Deferral of termination of assistance is granted in accordance with Secs. 5.516 and 5.518. (2) When delay of assistance to an applicant is permissible. Assistance to an applicant may be delayed after the conclusion of the INS appeal process, but not denied until the conclusion of the informal hearing process, if an informal hearing is requested by the family. (c) Events causing denial or termination of assistance. (1) General. Assistance to an applicant shall be denied, and a tenant's assistance shall be terminated, in accordance with the procedures of this section, upon the occurrence of any of the following events: (i) Evidence of citizenship (i.e., the declaration) and eligible immigration status is not submitted by the date specified in Sec. 5.508(g) or by the expiration of any extension granted in accordance with Sec. 5.508; or (ii) Evidence of citizenship and eligible immigration status is timely submitted, but INS primary and secondary verification does not verify eligible immigration status of a family member; and (A) The family does not pursue INS appeal or informal hearing rights as provided in this section; or (B) INS appeal and informal hearing rights are pursued, but the final appeal or hearing decisions are decided against the family member. (2) Termination of assisted occupancy. For termination of assisted occupancy, see paragraph (i) of this section. (d) Notice of denial or termination of assistance. The notice of denial or termination of assistance shall advise the family: (1) That financial assistance will be denied or terminated, and provide a brief explanation of the reasons for the proposed denial or termination of assistance; (2) That the family may be eligible for proration of assistance as provided under Sec. 5.520; (3) In the case of a tenant, the criteria and procedures for obtaining relief under the provisions for preservation of families in Secs. 5.514 and 5.518; (4) That the family has a right to request an appeal to the INS of the results of secondary verification of immigration status and to submit additional documentation or a written explanation in support of the appeal in accordance with the procedures of paragraph (e) of this section; (5) That the family has a right to request an informal hearing with the responsible entity either upon completion of the INS appeal or in lieu of the INS appeal as provided in paragraph (f) of this section; (6) For applicants, the notice shall advise that assistance may not be delayed until the conclusion of the INS appeal process, but assistance may be delayed during the pendency of the informal hearing process. (e) Appeal to the INS. (1) Submission of request for appeal. Upon receipt of [[Page 13620]] notification by the responsible entity that INS secondary verification failed to confirm eligible immigration status, the responsible entity shall notify the family of the results of the INS verification, and the family shall have 30 days from the date of the responsible entity's notification, to request an appeal of the INS results. The request for appeal shall be made by the family communicating that request in writing directly to the INS. The family must provide the responsible entity with a copy of the written request for appeal and proof of mailing. For good cause shown, the responsible entity shall grant the family an extension of the time within which to request an appeal. (2) Documentation to be submitted as part of appeal to INS. The family shall forward to the designated INS office any additional documentation or written explanation in support of the appeal. This material must include a copy of the INS document verification request form G-845S (used to process the secondary verification request) or such other form specified by the INS, and a cover letter indicating that the family is requesting an appeal of the INS immigration status verification results. (3) Decision by INS. (i) When decision will be issued. The INS will issue to the family, with a copy to the responsible entity, a decision within 30 days of its receipt of documentation concerning the family's appeal of the verification of immigration status. If, for any reason, the INS is unable to issue a decision within the 30 day time period, the INS will inform the family and responsible entity of the reasons for the delay. (ii) Notification of INS decision and of informal hearing procedures. When the responsible entity receives a copy of the INS decision, the responsible entity shall notify the family of its right to request an informal hearing on the responsible entity's ineligibility determination in accordance with the procedures of paragraph (f) of this section. (4) No delay, denial, reduction, or termination of assistance until completion of INS appeal process; direct appeal to INS. Pending the completion of the INS appeal under this section, assistance may not be delayed, denied, reduced or terminated on the basis of immigration status. (f) Informal hearing. (1) When request for hearing is to be made. After notification of the INS decision on appeal, or in lieu of request of appeal to the INS, the family may request that the responsible entity provide a hearing. This request must be made either within 14 days of the date the responsible entity mails or delivers the notice under paragraph (d) of this section, or within 14 days of the mailing of the INS appeal decision issued in accordance with paragraph (e) of this section (established by the date of postmark). (2) Extension of time to request hearing. The responsible entity shall extend the period of time for requesting a hearing (for a specified period) upon good cause shown. (3) Informal hearing procedures. (i) Tenants assisted under a Section 8 covered program: For tenants assisted under a Section 8 covered program, the procedures for the hearing before the responsible entity are set forth in: (A) For Section 8 Moderate Rehabilitation assistance: 24 CFR part 882; (B) For Section 8 tenant-based assistance: 24 CFR part 982; or (C) For Section 8 project-based certificate program: 24 CFR part 983. (ii) Tenants assisted under any other Section 8 covered program or a Public Housing covered program: For tenants assisted under a Section 8 covered program not listed in paragraph (f)(3)(i) of this section or a Public Housing covered program, the procedures for the hearing before the responsible entity are set forth in 24 CFR part 966. (iii) Families under Housing covered programs and applicants for assistance under all covered programs. For all families under Housing covered programs (applicants as well as tenants already receiving assistance) and for applicants for assistance under all covered programs, the procedures for the informal hearing before the responsible entity are as follows: (A) Hearing before an impartial individual. The family shall be provided a hearing before any person(s) designated by the responsible entity (including an officer or employee of the responsible entity), other than a person who made or approved the decision under review, and other than a person who is a subordinate of the person who made or approved the decision; (B) Examination of evidence. The family shall be provided the opportunity to examine and copy at the individual's expense, at a reasonable time in advance of the hearing, any documents in the possession of the responsible entity pertaining to the family's eligibility status, or in the possession of the INS (as permitted by INS requirements), including any records and regulations that may be relevant to the hearing; (C) Presentation of evidence and arguments in support of eligible status. The family shall be provided the opportunity to present evidence and arguments in support of eligible status. Evidence may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings; (D) Controverting evidence of the responsible entity. The family shall be provided the opportunity to controvert evidence relied upon by the responsible entity and to confront and cross-examine all witnesses on whose testimony or information the responsible entity relies; (E) Representation. The family shall be entitled to be represented by an attorney, or other designee, at the family's expense, and to have such person make statements on the family's behalf; (F) Interpretive services. The family shall be entitled to arrange for an interpreter to attend the hearing, at the expense of the family, or responsible entity, as may be agreed upon by the two parties to the proceeding; and (G) Hearing to be recorded. The family shall be entitled to have the hearing recorded by audiotape (a transcript of the hearing may, but is not required to, be provided by the responsible entity). (4) Hearing decision. The responsible entity shall provide the family with a written final decision, based solely on the facts presented at the hearing, within 14 days of the date of the informal hearing. The decision shall state the basis for the decision. (g) Judicial relief. A decision against a family member, issued in accordance with paragraphs (e) or (f) of this section, does not preclude the family from exercising the right, that may otherwise be available, to seek redress directly through judicial procedures. (h) Retention of documents. The responsible entity shall retain for a minimum of 5 years the following documents that may have been submitted to the responsible entity by the family, or provided to the responsible entity as part of the INS appeal or the informal hearing process: (1) The application for financial assistance; (2) The form completed by the family for income reexamination; (3) Photocopies of any original documents (front and back), including original INS documents; (4) The signed verification consent form; (5) The INS verification results; (6) The request for an INS appeal; (7) The final INS determination; (8) The request for an informal hearing; and (9) The final informal hearing decision. (i) Termination of assisted occupancy. (1) Under Housing covered programs, [[Page 13621]] and in the Section 8 covered programs other than the Section 8 Rental Certificate, Rental Voucher, and Moderate Rehabilitation programs, assisted occupancy is terminated by: (i) If permitted under the lease, the responsible entity notifying the tenant that because of the termination of assisted occupancy the tenant is required to pay the HUD-approved market rent for the dwelling unit. (ii) The responsible entity and tenant entering into a new lease without financial assistance. (iii) The responsible entity evicting the tenant. While the tenant continues in occupancy of the unit, the responsible entity may continue to receive assistance payments if action to terminate the tenancy under an assisted lease is promptly initiated and diligently pursued, in accordance with the terms of the lease, and if eviction of the tenant is undertaken by judicial action pursuant to State and local law. Action by the responsible entity to terminate the tenancy and to evict the tenant must be in accordance with applicable HUD regulations and other HUD requirements. For any jurisdiction, HUD may prescribe a maximum period during which assistance payments may be continued during eviction proceedings and may prescribe other standards of reasonable diligence for the prosecution of eviction proceedings. (2) In the Section 8 Rental Certificate, Rental Voucher, and Moderate Rehabilitation programs, assisted occupancy is terminated by terminating assistance payments. (See provisions of this section concerning termination of assistance.) The PHA shall not make any additional assistance payments to the owner after the required procedures specified in this section have been completed. In addition, the PHA shall not approve a lease, enter into an assistance contract, or process a portability move for the family after those procedures have been completed. Sec. 5.516 Availability of preservation assistance to mixed families and other families. (a) Assistance available for tenant mixed families. (1) General. Preservation assistance is available to tenant mixed families, following completion of the appeals and informal hearing procedures provided in Sec. 5.514. There are three types of preservation assistance: (i) Continued assistance (see paragraph (a) of Sec. 5.518); (ii) Temporary deferral of termination of assistance (see paragraph (b) of Sec. 5.518); or (iii) Prorated assistance (see Sec. 5.520, a mixed family must be provided prorated assistance if the family so requests). (2) Availability of assistance. (i) For Housing covered programs: One of the three types of assistance described is available to tenant mixed families assisted under a National Housing Act or 1965 HUD Act covered program, depending upon the family's eligibility for such assistance. Continued assistance must be provided to a mixed family that meets the conditions for eligibility for continued assistance. (ii) For Section 8 or Public Housing covered programs. One of the three types of assistance described may be available to tenant mixed families assisted under a Section 8 or Public Housing covered program. (b) Assistance available for applicant mixed families. Prorated assistance is also available for mixed families applying for assistance as provided in Sec. 5.520. (c) Assistance available to other families in occupancy. Assistance may be available to families receiving assistance under a Section 214 covered program on June 19, 1995, and who have no members with eligible immigration status, as set forth in paragraphs (c)(1) and (c)(2) of this section. (1) For Housing covered programs: Temporary deferral of termination of assistance is available to families assisted under a Housing covered program. (2) For Section 8 or Public Housing covered programs: The responsible entity may make temporary deferral of termination of assistance to families assisted under a Section 8 or Public Housing covered program. (d) Section 8 covered programs: Discretion afforded to provide certain family preservation assistance. (1) Project owners. With respect to assistance under a Section 8 Act covered program administered by a project owner, HUD has the discretion to determine under what circumstances families are to be provided one of the two statutory forms of assistance for preservation of the family (continued assistance or temporary deferral of assistance). HUD is exercising its discretion by specifying the standards in this section under which a project owner must provide one of these two types of assistance to a family. However, project owners and PHAs must offer prorated assistance to eligible mixed families. (2) PHAs. The PHA, rather than HUD, has the discretion to determine the circumstances under which a family will be offered one of the two statutory forms of assistance (continued assistance or temporary deferral of termination of assistance). The PHA must establish its own policy and criteria to follow in making its decision. In establishing the criteria for granting continued assistance or temporary deferral of termination of assistance, the PHA must incorporate the statutory criteria, which are set forth in paragraphs (a) and (b) of Sec. 5.518. However, the PHA must offer prorated assistance to eligible families. Sec. 5.518 Types of preservation assistance available to mixed families and other families. (a) Continued assistance. A mixed family may receive continued housing assistance if all of the following conditions are met (a mixed family assisted under a Housing covered program must be provided continued assistance if the family meets the following conditions): (1) The family was receiving assistance under a Section 214 covered program on June 19, 1995; (2) The family's head of household or spouse has eligible immigration status as described in Sec. 5.506; and (3) The family does not include any person (who does not have eligible immigration status) other than the head of household, any spouse of the head of household, any parents of the head of household, any parents of the spouse, or any children of the head of household or spouse. (b) Temporary deferral of termination of assistance. (1) Eligibility for this type of assistance. If a mixed family qualifies for prorated assistance (and does not qualify for continued assistance), but decides not to accept prorated assistance, or if a family has no members with eligible immigration status, the family may be eligible for temporary deferral of termination of assistance if necessary to permit the family additional time for the orderly transition of those family members with ineligible status, and any other family members involved, to other affordable housing. Other affordable housing is used in the context of transition of an ineligible family from a rent level that reflects HUD assistance to a rent level that is unassisted; the term refers to housing that is not substandard, that is of appropriate size for the family and that can be rented for an amount not exceeding the amount that the family pays for rent, including utilities, plus 25 percent. (2) Housing covered programs: Conditions for granting temporary deferral of termination of assistance. The responsible entity shall grant a [[Page 13622]] temporary deferral of termination of assistance to a mixed family if the family is assisted under a Housing covered program and one of the following conditions is met: (i) The family demonstrates that reasonable efforts to find other affordable housing of appropriate size have been unsuccessful (for purposes of this section, reasonable efforts include seeking information from, and pursuing leads obtained from the State housing agency, the city government, local newspapers, rental agencies and the owner); (ii) The vacancy rate for affordable housing of appropriate size is below five percent in the housing market for the area in which the project is located; or (iii) The consolidated plan, as described in 24 CFR part 91 and if applicable to the covered program, indicates that the local jurisdiction's housing market lacks sufficient affordable housing opportunities for households having a size and income similar to the family seeking the deferral. (3) Time limit on deferral period. If temporary deferral of termination of assistance is granted, the deferral period shall be for an initial period not to exceed six months. The initial period may be renewed for additional periods of six months, but the aggregate deferral period shall not exceed a period of three years. (4) Notification requirements for beginning of each deferral period. At the beginning of each deferral period, the responsible entity must inform the family of its ineligibility for financial assistance and offer the family information concerning, and referrals to assist in finding, other affordable housing. (5) Determination of availability of affordable housing at end of each deferral period. (i) Before the end of each deferral period, the responsible entity must satisfy the applicable requirements of either paragraph (b)(5)(i) (A) or (B) of this section. Specifically, the responsible entity must: (A) For Housing covered programs: Make a determination that one of the three conditions specified in paragraph (b)(2) of this section continues to be met (note: affordable housing will be determined to be available if the vacancy rate is five percent or greater), the owner's knowledge and the tenant's evidence indicate that other affordable housing is available; or (B) For Section 8 or Public Housing covered programs: Make a determination of the availability of affordable housing of appropriate size based on evidence of conditions which when taken together will demonstrate an inadequate supply of affordable housing for the area in which the project is located, the consolidated plan (if applicable, as described in 24 CFR part 91), the responsible entity's own knowledge of the availability of affordable housing, and on evidence of the tenant family's efforts to locate such housing. (ii) The responsible entity must also: (A) Notify the tenant family in writing, at least 60 days in advance of the expiration of the deferral period, that termination will be deferred again (provided that the granting of another deferral will not result in aggregate deferral periods that exceed three years), and a determination was made that other affordable housing is not available; or (B) Notify the tenant family in writing, at least 60 days in advance of the expiration of the deferral period, that termination of financial assistance will not be deferred because either granting another deferral will result in aggregate deferral periods that exceed three years, or a determination has been made that other affordable housing is available. (c) Option to select proration of assistance at end of deferral period. A family who is eligible for, and receives temporary deferral of termination of assistance, may request, and the responsible entity shall provide proration of assistance at the end of the deferral period if the family has made a good faith effort during the deferral period to locate other affordable housing. (d) Notification of decision on family preservation assistance. A responsible entity shall notify the family of its decision concerning the family's qualification for family preservation assistance. If the family is ineligible for family preservation assistance, the notification shall state the reasons, which must be based on relevant factors. For tenant families, the notice also shall inform the family of any applicable appeal rights. Sec. 5.520 Proration of assistance. (a) Applicability. This section applies to a mixed family other than a family receiving continued assistance, or other than a family who is eligible for and requests and receives temporary deferral of termination of assistance. An eligible mixed family who requests prorated assistance must be provided prorated assistance. (b) Method of prorating assistance for Housing covered programs. (1) Proration under Rent Supplement Program. If the household participates in the Rent Supplement Program, the rent supplement paid on the household's behalf shall be the rent supplement the household would otherwise be entitled to, multiplied by a fraction, the denominator of which is the number of people in the household and the numerator of which is the number of eligible persons in the household; (2) Proration under Section 235 Program. If the household participates in the Section 235 Program, the interest reduction payments paid on the household's behalf shall be the payments the household would otherwise be entitled to, multiplied by a fraction the denominator of which is the number of people in the household and the numerator of which is the number of eligible persons in the household; (3) Proration under Section 236 Program without the benefit of additional assistance. If the household participates in the Section 236 Program without the benefit of any additional assistance, the household's rent shall be increased above the rent the household would otherwise pay by an amount equal to the difference between the market rate rent for the unit and the rent the household would otherwise pay multiplied by a fraction the denominator of which is the number of people in the household and the numerator of which is the number of ineligible persons in the household; (4) Proration under Section 236 Program with the benefit of additional assistance. If the household participates in the Section 236 Program with the benefit of additional assistance under the rent supplement, rental assistance payment or Section 8 programs, the household's rent shall be increased above the rent the household would otherwise pay by: (i) An amount equal to the difference between the market rate rent for the unit and the basic rent for the unit multiplied by a fraction, the denominator of which is the number of people in the household, and the numerator of which is the number of ineligible persons in the household, plus; (ii) An amount equal to the rent supplement, housing assistance payment or rental assistance payment the household would otherwise be entitled to multiplied by a fraction, the denominator of which is the number of people in the household and the numerator of which is the number of ineligible persons in the household. (c) Method of prorating assistance for Section 8 covered programs. (1) Section 8 assistance other than Section 8 rental [[Page 13623]] voucher assistance. For Section 8 assistance other than assistance provided under the Section 8 Rental Voucher Program, the PHA shall prorate the family's assistance as follows: (i) Step 1. Determine gross rent for the unit. (Gross rent is contract rent plus any allowance for tenant paid utilities). (ii) Step 2. Determine total tenant payment in accordance with 24 CFR 813.107(a). (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (iii) Step 3. Subtract amount determined in paragraph (c)(1)(ii), (Step 2), from amount determined in paragraph (c)(1)(i), (Step 1). (iv) Step 4. Multiply the amount determined in paragraph (c)(1)(iii), (Step 3) by a fraction for which: (A) The numerator is the number of family members who have established eligible immigration status; and (B) The denominator is the total number of family members. (v) Prorated housing assistance. The amount determined in paragraph (c)(1)(iv), (Step 4) is the prorated housing assistance payment for a mixed family. (vi) No effect on contract rent. Proration of the housing assistance payment does not affect contract rent to the owner. The family must pay as rent the portion of contract rent not covered by the prorated housing assistance payment. (2) Section 8 Rental Voucher assistance. For assistance under the Section 8 Rental Voucher Program, the PHA shall prorate the family's assistance as follows: (i) Step 1. Determine the amount of the pre-proration voucher housing assistance payment in accordance with 24 CFR part 887. (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (ii) Step 2. Multiply the amount determined in paragraph (c)(2)(i), (Step 1) by a fraction for which: (A) The numerator is the number of family members who have established eligible immigration status; and (B) The denominator is the total number of family members. (iii) Prorated housing assistance. The amount determined in paragraph (c)(2)(ii), (Step 2) is the prorated housing assistance payment for a mixed family. (iv) No effect on rent to owner. Proration of the voucher housing assistance payment does not affect rent to the owner. The family must pay as rent the portion of rent not covered by the prorated housing assistance payment. (d) Method of prorating assistance for Public Housing covered programs. The PHA shall prorate the family's assistance by: (1) Step 1. Determining total tenant payment in accordance with 24 CFR 913.107(a). (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (2) Step 2. Subtracting the total tenant payment from a HUD- supplied ``public housing maximum rent'' applicable to the unit or the PHA. (This ``maximum rent'' shall be determined by HUD using the 95th percentile rent for the PHA.) The result is the maximum subsidy for which the family could qualify if all members were eligible (``family maximum subsidy''). (3) Step 3. Dividing the family maximum subsidy by the number of persons in the family (all persons) to determine the maximum subsidy per each family member who has citizenship or eligible immigration status (``eligible family member''). The subsidy per eligible family member is the ``member maximum subsidy''. (4) Step 4. Multiplying the member maximum subsidy by the number of family members who have citizenship or eligible immigration status (``eligible family members''). (5) Step 5. The product of steps 1 through 4, as set forth in paragraph (d)(2) of this section is the amount of subsidy for which the family is eligible (``eligible subsidy''). The family's rent is the ``public housing maximum rent'' minus the amount of the eligible subsidy. Sec. 5.522 Prohibition of assistance to noncitizen students. (a) General. The provisions of Secs. 5.516 and 5.518 permitting continued assistance or temporary deferral of termination of assistance for certain families do not apply to any person who is determined to be a noncitizen student as in paragraph (c)(2)(A) of Section 214 (42 U.S.C. 1436a(c)(2)(A)). The family of a noncitizen student may be eligible for prorated assistance, as provided in paragraph (b)(2) of this section. (b) Family of noncitizen students. (1) The prohibition on providing assistance to a noncitizen student as described in paragraph (a) of this section extends to the noncitizen spouse of the noncitizen student and minor children accompanying the student or following to join the student. (2) The prohibition on providing assistance to a noncitizen student does not extend to the citizen spouse of the noncitizen student and the children of the citizen spouse and noncitizen student. Sec. 5.524 Compliance with nondiscrimination requirements. The responsible entity shall administer the restrictions on use of assisted housing by noncitizens with ineligible immigration status imposed by this part in conformity with all applicable nondiscrimination and equal opportunity requirements, including, but not limited to, title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-5) and the implementing regulations in 24 CFR part 1, section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and the implementing regulations in 24 CFR part 8, the Fair Housing Act (42 U.S.C. 3601-3619) and the implementing regulations in 24 CFR part 100. Sec. 5.526 Protection from liability for responsible entities and State and local government agencies and officials. (a) Protection from liability for responsible entities. Responsible entities are protected from liability as set forth in paragraph (e) of section 214. (b) Protection from liability for State and local government agencies and officials. State and local government agencies and officials shall not be liable for the design or implementation of the verification system described in Sec. 5.512 and the informal hearings provided under Sec. 5.514, as long as the implementation by the State and local government agency or official is in accordance with prescribed HUD rules and requirements. Sec. 5.528 Liability of ineligible tenants for reimbursement of benefits. Where a tenant has received the benefit of HUD financial assistance to which the tenant was not entitled because the tenant intentionally misrepresented eligible status, the ineligible tenant is responsible for reimbursing HUD for the assistance improperly paid. If the amount of the assistance is substantial, the responsible entity is encouraged to refer the case to the HUD Inspector General's office for further investigation. Possible criminal prosecution may follow based on the False Statements Act (18 U.S.C. 1001 and 1010). PART 200--INTRODUCTION 4. The authority citation for 24 CFR part 200 is revised to read as follows: Authority: 12 U.S.C. 1701-1715z-18; 42 U.S.C. 3535(d). [[Page 13624]] Subpart G--[Removed and Reserved] 5. Subpart G, consisting of Secs. 200.180 through 200.192, is removed and reserved. PART 235--MORTGAGE INSURANCE AND ASSISTANCE PAYMENTS FOR HOME OWNERSHIP AND PROJECT REHABILITATION 6. The authority citation for part 235 continues to read as follows: Authority: 12 U.S.C. 1715b and 1715z; 42 U.S.C. 3535(d). 7. Section 235.1 is revised to read as follows: Sec. 235.1 Applicability of regulations. The regulations regarding eligibility requirements (including eligibility requirements for noncitizens) for homes for lower income families in force before December 8, 1995, will continue to govern the rights and obligations of mortgagors, mortgagees, and the Department of Housing and Urban Development with respect to loans insured under section 235(i) of the National Housing Act. 8. Section 235.375 is amended by revising paragraph (b)(6) to read as follows: Sec. 235.375 Termination, suspension, or reinstatement of the assistance payments contract. * * * * * (b) * * * (6) Failure to provide evidence of citizenship or eligible immigration status in accordance with 24 CFR part 5: (i) For a new member of the family, except with respect to a mortgagor described under Sec. 235.1. (ii) At the first recertification of an assistance contract, except with respect to a mortgagor described under Sec. 235.1; or (iii) Upon modification of an existing assistance contract. * * * * * PART 236--MORTGAGE INSURANCE AND INTEREST REDUCTION PAYMENTS FOR RENTAL PROJECTS 9. The authority citation for part 236 continues to read as follows: Authority: 12 U.S.C. 1715b and 1715z-1; 42 U.S.C. 3535(d). 10. Section 236.2 is amended by revising paragraph (3) of the definition of ``Qualified Tenant'' to read as follows: Sec. 236.2 Definitions. * * * * * Qualified Tenant. * * * * * (3) For restrictions on financial assistance to noncitizens with ineligible immigration status, see 24 CFR part 5. * * * * * 11. In Sec. 236.70, paragraph (a)(1) is revised to read as follows: Sec. 236.70 Occupancy requirements. (a)(1) The housing owner shall determine eligibility following procedures prescribed by the Commissioner when processing applications for admission. The restrictions on assistance to noncitizens set forth in 24 CFR part 5 govern the submission and verification of information related to citizenship and eligible immigration status for those applicants who seek admission at a below market rent. * * * * * 12. Section 236.80 is amended by revising: a. The two sentences at the end of paragraph (a); b. The last sentence of paragraph (b); and c. The last two sentences at the end of paragraph (c), to read as follows: Sec. 236.80 Reexamination of income. (a) * * * At the first regular reexamination after June 19, 1995, the owner shall follow the requirements of 24 CFR part 5, concerning obtaining and processing information on the citizenship or eligible immigration status of all family members. Thereafter, at each regular reexamination, the owner shall follow the requirements of 24 CFR part 5 concerning obtaining and processing information on the citizenship or eligible immigration status of any new family member. (b) * * * At any interim reexamination after June 19, 1995 when there is a new family member, the owner shall follow the requirements of 24 CFR part 5 concerning obtaining and processing information on the citizenship or eligible immigration status of the new family member. (c) * * * When termination is based upon a determination that the tenant does not have eligible immigration status, the procedures of 24 CFR part 5 apply. The procedures include the provision of assistance to certain mixed families (families whose members include those with eligible immigration status, and those without eligible immigration status) in lieu of termination. 13. Section 236.710 is amended by revising the sentence at the end of the section to read as follows: Sec. 236.710 Qualified tenant. * * * For restrictions on financial assistance to noncitizens with ineligible immigration status, see 24 CFR part 5. 14. Section 236.715 is amended by revising the sentence at the end of paragraph (a) to read as follows: Sec. 236.715 Determination of eligibility. (a) * * * The requirements of 24 CFR part 5 govern the submission and verification of information related to citizenship and eligible immigration status for applicants, and the procedures for denial of assistance based upon a failure to establish eligible immigration status. * * * * * 15. Section 236.765 is revised to read as follows: Sec. 236.765 Determination of eligible immigration status of applicants and tenants; protection from liability. (a) Housing owner's obligation to make determination. A housing owner shall obtain and verify information regarding the citizenship or immigration status of applicants and tenants in accordance with the procedures of 24 CFR part 5. (b) Protection from liability. HUD will not take any compliance, disallowance, penalty or other regulatory action against a housing owner with respect to any error in its determination to make an individual eligible for financial assistance based upon citizenship or eligible immigration status, as provided in 24 CFR part 5. PART 247--EVICTIONS FROM CERTAIN SUBSIDIZED AND HUD-OWNED PROJECTS 16. The authority citation for part 247 continues to read as follows: Authority: 12 U.S.C. 1701q, 1701s, 1715b, 1715l, 1715z-1; 42 U.S.C. 1437a, 1437c, 1437f, 3535(d). 17. Section 247.3 is amended by revising paragraph (c)(3), to read as follows: Sec. 247.3 Entitlement of tenants to occupancy. * * * * * (c) * * * (3) If the tenant: (i) Fails to supply on time all required information on the income and composition, or eligibility factors, of the tenant household, as provided in 24 CFR part 5; or (ii) Knowingly provides incomplete or inaccurate information as required under these provisions; and * * * * * [[Page 13625]] PART 812--[REMOVED] 18-19. Part 812 is removed. PART 882--SECTION 8 CERTIFICATE AND MODERATE REHABILITATION PROGRAMS 20. The authority citation for part 882 continues to read as follows: Authority: 42 U.S.C. 1437f and 3535(d). 21. In Sec. 882.118, paragraph (a)(1) is revised to read as follows: Sec. 882.118 Obligations of the Family. (a) * * * (1) Supply such certification, release, information or documentation as the PHA or HUD determine to be necessary, including submission of required evidence of citizenship or eligible immigration status (as provided by 24 CFR part 5), submission of Social Security Numbers and verifying documentation (as provided by 24 CFR part 5), submission of signed consent forms for the obtaining of wage and claim information from State Wage Information Collection Agencies (as provided by 24 CFR part 5), and submissions required for an annual or interim reexamination of family income and composition. * * * * * 22. Section 882.212 is amended by revising the two sentences at the end of paragraph (a), and the sentence at the end of paragraphs (b) and (c), to read as follows: Sec. 882.212 Reexamination of Family income and composition. (a) * * * At the first regular reexamination after June 19, 1995 the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing evidence of citizenship or eligible immigration status of all family members. Thereafter, at each regular reexamination, the PHA shall follow the requirements of 24 CFR part 5 concerning verification of the immigration status of any new family member. (b) * * * At any interim reexamination after June 19, 1995 when there is a new family member, the PHA shall follow the requirements of 24 CFR part 5, subpart E concerning obtaining and processing evidence of citizenship or eligible immigration status of the new family member. (c) * * * For provisions requiring termination of housing assistance payments when the PHA determines that a member is not a U.S. citizen or does not have eligible immigration status, see 24 CFR parts 5 and 982 for provisions concerning certain assistance for mixed families (families whose members include those with eligible immigration status, and those without eligible immigration status) in lieu of termination of assistance, and for provisions concerning deferral of termination of assistance. * * * * * 23. Section 882.514 is amended by revising the sentence at the end of paragraph (f) to read as follows: Sec. 882.514 Family participation. * * * * * (f) * * * The informal hearing requirements for denial and termination of assistance on the basis of ineligible immigration status are contained in 24 CFR part 5. * * * * * 24. Section 882.515 is amended by revising the two sentences at the end of paragraph (a), and by revising the sentence at the end of paragraphs (b) and (c), to read as follows: Sec. 882.515 Reexamination of family income and composition. (a) * * * At the first regular reexamination after June 19, 1995, the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing evidence of citizenship or eligible immigration status of all family members. Thereafter, at each regular reexamination, the PHA shall follow the requirements of 24 CFR part 5 concerning verification of immigration status of any new family member. (b) * * * At any interim reexamination after June 19, 1995 when there is a new family member, the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing evidence of citizenship or eligible immigration status of the new family member. (c) * * * For provisions requiring termination of assistance when the PHA determines that a family member is not a U.S. citizen or does not have eligible immigration status, see 24 CFR parts 5 and 982 for provisions concerning certain assistance for mixed families (families whose members include those with eligible immigration status, and those without eligible immigration status) in lieu of termination of assistance, and for provisions concerning deferral of termination of assistance. 25. Section 882.808 is amended by revising the two sentences at the end of paragraph (i)(1), the sentence at the end of paragraph (i)(2), and the sentence at the end of paragraph (l), to read as follows: Sec. 882.808 Management. * * * * * (i) * * * (1) * * * At the first regular reexamination after June 19, 1995, the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing evidence of citizenship or eligible immigration status of all family members. Thereafter, at each regular reexamination, the PHA shall follow the requirements of 24 CFR part 5 concerning verification of immigration status of any new family member. (2) * * * At any interim reexamination after June 19, 1995 when there is a new family member, the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing evidence of citizenship or eligible immigration status of the new family member. * * * * * (l) * * * For provisions requiring termination of assistance when the PHA determines that a family member is not a U.S. citizen or does not have eligible immigration status, see 24 CFR parts 5 and 982 for provisions concerning certain assistance for mixed families (families whose members include those with eligible immigration status, and those without eligible immigration status) in lieu of termination of assistance, or for provisions concerning deferral of termination of assistance. * * * * * PART 887--HOUSING VOUCHERS 26. The authority citation for part 887 continues to read as follows: Authority: 42 U.S.C. 1437f(o) and 3535(d). 27. Section 887.355 is amended by revising paragraph (b) to read as follows: Sec. 887.355 Regular reexamination of family income and composition. * * * * * (b) At the first regular reexamination after June 19, 1995, the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing evidence of citizenship or eligible immigration status of all family members. Thereafter, at each regular reexamination, the PHA shall follow the requirements of 24 CFR part 5 concerning verification of the immigration status of any new family member. * * * * * 28. Section 887.357 is amended by revising the sentence at the end of the section to read as follows: [[Page 13626]] Sec. 887.357 Interim reexamination of family income and composition. * * * At any interim reexamination after June 19, 1995 that involves the addition of a new family member, the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing evidence of citizenship or eligible immigration status of the new family member. PART 904--LOW RENT HOUSING HOMEOWNERSHIP OPPORTUNITIES 29. The authority citation for part 904 continues to read as follows: Authority: 42 U.S.C. 1437-1437ee and 3535(d). 30. Section 904.104 is amended by revising the first sentence of paragraph (b)(1) and the first sentence of paragraph (g)(2)(iii), to read as follows: Sec. 904.104 Eligibility and selection of homebuyers. * * * * * (b) Eligibility and standards for admission. (1) Homebuyers shall be lower income families that are determined to be eligible for admission in accordance with the provisions of 24 CFR parts 5 and 913, which prescribe income definitions, income limits, and restrictions concerning citizenship or eligible immigration status. * * * * * * * * (g) * * * (2) * * * (iii) For denial of assistance for failure to establish citizenship or eligible immigration status, the applicant may request, in addition to the informal hearing, an appeal to the INS, in accordance with 24 CFR part 5. * * * * * 31. In Sec. 904.107, paragraphs (j)(2) and (m)(1) are revised to read as follows: Sec. 904.107 Responsibilities of homebuyer. * * * * * (j) * * * (2) For purposes of determining eligibility of an applicant (see 24 CFR parts 5 and 913, as well as this part) and the amount of Homebuyer payments under paragraph (j)(1) of this section, the LHA shall examine the family's income and composition and follow the procedures required by 24 CFR part 5 for determining citizenship or eligible immigration status before initial occupancy. Thereafter, for the purposes stated in this paragraph and to determine whether a Homebuyer is required to purchase the home under Sec. 904.104(h)(1), the LHA shall reexamine the Homebuyer's income and composition regularly, at least once every 12 months, and shall undertake such further determination and verification of citizenship or eligible immigration status as required by 24 CFR part 5. The Homebuyer shall comply with the LHA's policy regarding required interim reporting of changes in the family's income and composition. If the LHA receives information from the family or other source concerning a change in the family income or other circumstances between regularly scheduled reexaminations, the LHA, upon consultation with the family and verification of the information (in accordance with 24 CFR parts 5 and 913 of this chapter) shall promptly make any adjustments determined to be appropriate in the Homebuyer payment amount or take appropriate action concerning the addition of a family member who is not a citizen with eligible immigration status. Any change in the family's income or other circumstances that results in an adjustment in the Total Tenant Payment and Tenant Rent must be verified. * * * * * (m) Termination by LHA. (1) In the event the homebuyer breaches the Homebuyers Ownership Opportunity Agreement by failure to make the required monthly payment within ten days after its due date, by misrepresenting or withholding of information in applying for admission or in connection with any subsequent reexamination of income and family composition (including the failure to submit any required evidence of citizenship or eligible immigration status, as provided by 24 CFR part 5; the failure to meet the disclosure and verification requirements for Social Security Numbers, as provided by 24 CFR part 5; or the failure to sign and submit consent forms for the obtaining of wage and claim information from State Wage Information Collection Agencies, as provided by 24 CFR part 5), or by failure to comply with any of the other homebuyer obligations under the Agreement, the LHA may terminate the Agreement. No termination under this paragraph may occur less than 30 days after the LHA gives the homebuyer notice of its intention to do so, in accordance with paragraph (m)(3) of this section. For termination of assistance for failure to establish citizenship or eligible immigration status under 24 CFR part 5, the requirements of 24 CFR parts 5 and 966 shall apply. * * * * * PART 912--[REMOVED] 32-33. Part 912 is removed. PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING 34. The authority citation for part 960 continues to read as follows: Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, and 3535(d). 35. Section 960.204 is amended by revising paragraph (a) to read as follows: Sec. 960.204 Tenant selection policies. (a) Selection policies. (1) The PHA shall establish and adopt written policies for admission of tenants. (2) These policies shall be designed: (i) To attain, to the maximum extent feasible, a tenant body in each project that is composed of families with a broad range of incomes and to avoid concentrations of the most economically deprived families with serious social problems; (ii) To preclude admission of applicants whose habits and practices reasonably may be expected to have a detrimental effect on the residents or the project environment; (iii) To give a preference in selection of tenants to applicants who qualify for a federal preference, ranking preference, or local preference, in accordance with 24 CFR part 5; and (iv) To establish objective and reasonable policies for selection by the PHA among otherwise eligible applicants. (3) The PHA tenant selection policies shall include the following: (i) Requirements for applications and waiting lists (see 24 CFR 1.4); (ii) Description of the policies for selection of applicants from the waiting list that includes the following: (A) How the ``federal preferences'' (described in 24 CFR part 5) will be used; (B) How any ``ranking preferences'' (described in 24 CFR part 5) will be used; (C) How any ``local preferences'' (described in 24 CFR part 5) will be used; and (D) How any residency preference will be used; (iii) Policies for verification and documentation of information relevant to acceptance or rejection of an applicant, including documentation and verification of citizenship and eligible immigration status under 24 CFR part 5; and (iv) Policies for participant transfer between units, projects, and programs. For example, a PHA could adopt a criterion for voluntary transfer that the tenant had met all obligations under the current program, including payment of charges to the PHA. * * * * * [[Page 13627]] 36. Section 960.206 is amended by revising paragraph (a) to read as follows: Sec. 960.206 Verification procedures. (a) General. Adequate procedures must be developed to obtain and verify information with respect to each applicant. (See 24 CFR parts 5 and 913.) Information relative to the acceptance or rejection of an applicant or the grant or denial of a ranking preference, or a local preference under 24 CFR part 5 must be documented and placed in the applicant's file. * * * * * 37. Section 960.209 is amended by revising the two sentences at the end of paragraph (a), revising the sentence at the end of paragraph (b), and by revising paragraph (c), to read as follows: Sec. 960.209 Reexamination of family income and composition. (a) * * * At the first regular reexamination after June 19, 1995, the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing information on the citizenship or eligible immigration status of all family members. Thereafter, at each regular reexamination, the PHA shall follow the requirements of 24 CFR part 5 concerning verification of the immigration status of any new family member. (b) * * * At any interim reexamination after June 19, 1995 when there is a new family member, the PHA shall follow the requirements of 24 CFR part 5 concerning obtaining and processing information on the citizenship or eligible immigration status of the new family member. (c) Termination. For provisions requiring termination of participation for failure to establish citizenship or eligible immigration status, see 24 CFR part 5 for provisions concerning assistance to certain mixed families (families whose members include those with citizenship and eligible immigration status and those without eligible immigration status) in lieu of termination of assistance. 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 38. The authority citation for part 982 continues to read as follows: Authority: 42 U.S.C. 1437f and 3535(d). 39. Section 982.153 is amended by revising paragraph (b)(9) to read as follows: Sec. 982.153 HA responsibilities. * * * * * (b) * * * (9) Obtain and verify evidence of citizenship and eligible immigration status in accordance with 24 CFR part 5. * * * * * 39a. Section 982.201 is amended by revising the second sentence in paragraph (a) to read as follows: Sec. 982.201 Eligibility. (a) * * * To be eligible, the applicant must be a ``family'', must be income-eligible, and must be a citizen or a noncitizen who has eligible immigration status as determined in accordance with 24 CFR part 5. * * * * * 40. Section 982.551 is amended by revising paragraph (b)(1) to read as follows: Sec. 982.551 Obligations of participant. * * * * * (b) * * * (1) The family must supply any information that the HA or HUD determines is necessary in the administration of the program, including submission of required evidence of citizenship or eligible immigration status (as provided by 24 CFR part 5). ``Information'' includes any requested certification, release or other documentation. * * * * * 41. Section 982.552 is amended by revising paragraph (e) to read as follows: Sec. 982.552 HA denial or termination of assistance for family. * * * * * (e) Restrictions on assistance to noncitizens. The family must submit required evidence of citizenship or eligible immigration status. See 24 CFR part 5 for a statement of circumstances in which the HA must deny or terminate assistance because a family member does not establish citizenship or eligible immigration status, and the applicable informal hearing procedures. See 24 CFR part 5 for provisions on assistance for mixed families (families whose members include those with eligible immigration status, and those without eligible immigration status) instead of denial or termination of assistance, and for provisions on deferral of termination of assistance. * * * * * 42. Section 982.554 is amended by revising paragraph (d) to read as follows: Sec. 982.554 Informal review for applicant. * * * * * (d) Restrictions on assistance for noncitizens. The informal hearing provisions for the denial of assistance on the basis of ineligible immigration status are contained in 24 CFR part 5. 43. Section 982.555 is amended by revising paragraph (g) to read as follows: Sec. 982.555 Informal hearing for participant. * * * * * (g) Restrictions on assistance to noncitizens. The informal hearing provisions for the denial of assistance on the basis of ineligible immigration status are contained in 24 CFR part 5. Dated: March 12, 1996. Henry G. Cisneros, Secretary. [FR Doc. 96-7188 Filed 3-26-96; 8:45 am] BILLING CODE 4210-32-P