[Federal Register Volume 62, Number 102 (Wednesday, May 28, 1997)]
[Rules and Regulations]
[Pages 28926-28930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13730]



[[Page 28925]]

_______________________________________________________________________

Part II





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Part 92



HOME Investment Partnerships Program: Technical Amendment to Final Rule

  Federal Register / Vol. 62, No. 102 / Wednesday, May 28, 1997 / Rules 
and Regulations  

[[Page 28926]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 92

[Docket No. FR-3962-F-04]
RIN 2501-AC06


HOME Investment Partnerships Program: Technical Amendment to 
Final Rule

AGENCY: Office of the Secretary, HUD.

ACTION: Technical amendment to final rule.

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

SUMMARY: This document makes a number of technical amendments to a 
final rule issued by the Department of Housing and Urban Development 
(Department) to implement the HOME Investment Partnerships Program.

DATES: Effective date: June 27, 1997.
    Retroactive applicability: This technical amendment applies 
retroactively to the final rule published September 16, 1996 (61 FR 
48736), that became effective on October 16, 1996.

FOR FURTHER INFORMATION CONTACT: Mary Kolesar, Director, Program Policy 
Division, Office of Affordable Housing Programs, Room 7162, Department 
of Housing and Urban Development, 451 Seventh Street, SW, Washington, 
DC 20410, telephone number (202) 708-2470. (This is not a toll-free 
number.) A telecommunications device for hearing-and speech-impaired 
persons (TTY) is available at 1-800-877-8339 (Federal Information Relay 
Service).

SUPPLEMENTARY INFORMATION: On September 16, 1996 (61 FR 48736), the 
Department published a final rule for the HOME Investment Partnerships 
Program (the HOME program). This document makes a number of technical 
amendments, described below, to the final rule.
    Section 92.50(d)(1) contains an incorrect reference to paragraph 
(a)(1). The reference is changed to paragraph (a).
    Section 92.202(b) incorrectly cites 24 CFR 893.6(b). The correct 
cite should be to 24 CFR 983.6(b). This section is also amended to 
clarify that the participating jurisdiction, not the Department, is 
responsible for determining and documenting that proposed sites for new 
construction of HOME-assisted housing meet the standards of 
Sec. 983.6(b).
    Section 92.203(a)(1) is amended to clarify that participating 
jurisdictions must make the initial determination of income eligibility 
for families to be assisted with HOME funds, using source documentation 
as described in paragraph (a)(1)(i), and also must conduct periodic 
income determinations for tenants in HOME-assisted rental units during 
the period of affordability. Although this provision appears in 
Sec. 92.252(h), Rental Housing, it is added to the Income Determination 
section to avoid any confusion.
    The October 18, 1996 Federal Register, at 61 FR 54492, contains a 
final rule that removes 24 CFR part 813 (Definition of income, income 
limits, rent and reexamination of family income for the Section 8 
program) and creates a new subpart F to part 5 which covers income, 
income limits, and related issues for public housing and Section 8 
programs. The HOME final rule at Secs. 92.203 (b)(1) and (c), and 
Sec. 92.353(c)(2)(i)(C)(1)(ii), refers to part 813 and therefore must 
be amended to reference part 5 instead.
    The text of Sec. 92.203(c) is amended because the current language 
might lead to the assumption that only the Section 8 definition of 
income had to be adjusted, and not the IRS or Census definitions. The 
reference in this section is also amended from citing paragraph (a) of 
the section to citing paragraph (b).
    Section 92.205(d) is amended to clarify that the eligible HOME 
development costs for multi-unit projects include all costs made 
eligible for HOME funding under Sec. 92.206. The final rule 
inadvertently limited the eligible costs to those listed in paragraphs 
(a), (b), and (c) of Sec. 92.206.
    Section 92.206(a)(5) is amended to clarify that utility connections 
and site improvements are eligible project-related soft costs in 
connection with the acquisition of standard housing. The language in 
the final rule inadvertently limited the eligibility of these costs to 
rehabilitation and new construction of housing. However, the Department 
recognizes that such improvements may be necessary in instances where 
standard housing is being acquired with HOME funds.
    Section 92.209(c)(2) contains language reflecting a provision in 
HUD's FY 1996 appropriations act that the Federal preferences do not 
apply for FY 1996. This section is amended to reflect the same 
provision for FY 1997 included in HUD's FY 1997 appropriations act. A 
reference to a special provision affecting the Federal preferences for 
FY 1995 is deleted because it is no longer applicable.
    Section 92.209(j) is amended to clarify that the income 
determination and Housing Quality Standards inspection requirements 
apply to security deposit assistance only at the point at which the 
assistance is provided. It was not HUD's intention to apply ongoing 
requirements to this limited form of assistance.
    To implement a provision of HUD's FY 1997 appropriations act which 
permits the use of HOME funds for a priority purchaser under the Low-
Income Housing Preservation and Resident Homeownership Act of 1990 
(LIHPRHA), Sec. 92.214(a)(6) is amended.
    Section 92.219(b)(1)(i) is amended to more accurately reflect the 
requirements of Sec. 92.209 that apply to tenant-based rental 
assistance programs not funded with HOME that will be counted as match. 
The final rule specifically exempted these programs only from the term 
of rental assistance contract requirements of paragraph (e). However, 
paragraphs (b) (General requirement), (e) (Term of rental assistance 
contract), (g) (Tenant protections), (h) (Maximum subsidy), (j) 
(Security deposits), (k) (Program operation) and (l) (Use of Section 8 
assistance) contain requirements that should apply only to HOME-
assisted TBRA and not to tenant-based rental assistance funded through 
other sources. The provisions of paragraph (d) (Portability of 
assistance) are descriptive only and need not be included in the 
provisions applicable to non-HOME tenant-based rental assistance. The 
paragraphs that apply to non-HOME tenant-based rental assistance are 
(a) (Eligible costs), (c) (Tenant selection), (f) (Rent 
reasonableness), and (i) (Housing quality standards).
    Section 92.219(b)(2)(iv) is amended to correct an internal 
inconsistency in the rule and reflect that two sources of match credit 
(supportive services at Sec. 92.220(a)(10) and homebuyer counseling at 
92.220(a)(11)) in addition to those presently listed are limited to 
HOME-assisted units.
    Section 220(a)(10) is amended to add as eligible match the direct 
cost of supportive services provided to recipients of HOME-funded 
tenant-based rental assistance. The final rule established the direct 
cost of supportive services as a new source of match. However, the 
language in the rule limited eligibility to residents of HOME-assisted 
units. It was not the Department's intention to prohibit the value of 
supportive services provided to other HOME-assisted tenants, those 
receiving HOME tenant-based rental assistance, from being counted as 
match. The direct cost of supportive services provided to families 
residing in HOME-eligible units or receiving tenant-based rental 
assistance not funded with HOME is not an eligible match contribution.
    Section 92.220(b)(4) is amended to eliminate an internal 
inconsistency in

[[Page 28927]]

the final rule. Section 92.220(a)(8) permits the value of donated or 
voluntary labor or professional services in connection with the 
provision of affordable housing to be counted as match. Section 
92.220(b)(4) contradicts that provision by establishing as ineligible 
cash or other contributions from recipients of HOME contracts. It was 
not HUD's intention to eliminate as eligible match the value of labor 
or professional services provided to affordable housing at a reduced 
rate as a donation by an individual or entity that has a contract to 
provide labor or services to a HOME-assisted project. If, for example, 
an architect enters into a contract to provide services to a HOME-
assisted project and agrees, as a donation to affordable housing, to 
accept a lower rate, the participating jurisdiction may count the value 
of the difference between architect's normal rate and the reduced rate.
    As part of the recent effort to streamline regulations, 24 CFR 
221.514 was deleted. To reflect this change with respect to maximum 
per-unit subsidy amounts for the HOME Program, the citations to various 
paragraphs of Sec. 221.514 are deleted from Sec. 92.250(a) and replaced 
with citations to the appropriate section of the National Housing Act.
    The preamble to the final rule mischaracterized the provisions of 
Sec. 92.251 (property standards). In explaining changes to this 
section, the preamble stated that units rehabilitated or constructed 
with HOME funds must meet local codes, rehabilitation standards, 
ordinances and zoning ordinances or, in the absence of local codes, the 
units must meet one of several model codes specified in the regulation. 
The preamble went on to state that ``(A)ll other HOME units including 
those occupied by tenants receiving HOME tenant-based rental 
assistance, must meet the Section 8 Housing Quality Standards (HQS).'' 
This language may lead to the conclusion that housing that is acquired 
with HOME funds must meet HQS. In fact, Sec. 92.251(a)(2) provides that 
all other HOME-assisted housing (i.e., housing that is not 
rehabilitated or constructed with HOME funds) must meet all applicable 
State or local codes or, in the absence of such codes, HQS. Units 
occupied by recipients of HOME tenant-based rental assistance are 
required to meet HQS, in accordance with Sec. 92.251(d). No changes to 
the text of the rule are required.
    Section 92.251(a)(1) of the final rule established the Standard 
Building Code as one of the three model codes that may be used for 
HOME-assisted rehabilitation or new construction in the absence of 
State or local codes. This model code, which was established by the 
Southern Building Code Congress International (SBCCI), was formerly 
known as the Southern Building Code. To avoid confusion, a 
parenthetical reference to the former, commonly used title of this code 
has been added to this paragraph.
    As a point of clarification, the word ``acquisition'' is added as a 
parenthetical reference to Sec. 92.251(a)(2) as an example of other 
HOME-assisted housing.
    Section 92.251(a)(3) cited 24 CFR 5.105(a) as the implementing 
regulations for accessibility requirements under section 504 of the 
Rehabilitation Act of 1973 and the Fair Housing Act. The reference has 
been amended to be more specific and now cites to 24 CFR part 8, which 
contains the implementing regulations for section 504, and to the 
design and construction standards of the Fair Housing Act at 24 CFR 
100.205, which apply to multifamily dwellings assisted with HOME funds.
    In revising Sec. 92.251 with respect to the property standards 
applicable to all HOME-assisted units, the Department did not 
specifically address manufactured housing. In doing so, it created some 
confusion among participating jurisdictions and omitted language 
stating that all new manufactured housing (whether or not it receives 
HOME assistance) must meet the construction and safety standards in 24 
CFR 3280. A new paragraph (a)(4) is added to explain the property 
standards applicable to manufactured housing. The Federal construction 
and safety standards preempt State and local codes or laws covering the 
same aspects of performance for such housing. For installation, 
participating jurisdictions must follow State or local codes or comply 
with the manufacturer's written installation instructions. Manufactured 
housing rehabilitated with HOME funds is subject to the requirements of 
paragraph (a)(1) of this section.
    In Sec. 92.252(h), the reference to Sec. 92.203 is clarified to 
read more precisely Sec. 92.203(a)(1)(i). Initial income determinations 
must be based upon source documents in accordance with 
Sec. 92.203(a)(1)(i). The original reference included initial 
determinations of income eligibility based upon written statements and 
certifications provided by the applicant family or written statements 
provided by the administrators of other government programs under which 
the HOME applicant is assisted. These two methods may be used for 
verifying income in subsequent years, consistent with the provisions in 
Sec. 92.252(h).
    In Sec. 92.300(a)(1), the fourth sentence is corrected to clarify 
that funds can be provided not only to a community housing development 
organization (CHDO) or its subsidiary, but also to a partnership of 
which the CHDO or its subsidiary is the managing general partner.
    In Sec. 92.300(f), the paragraph heading is amended to read 
Limitation on community housing development organization operating 
expenses. This change is made to further clarify the content of the 
paragraph.
    In Sec. 92.350(a), the reference to the nondiscrimination and equal 
opportunity provisions in 24 CFR 5.105(a) has been changed. The correct 
reference is to 24 CFR part 5, subpart A and the requirements included 
in this subpart are listed.
    Section 92.350(b), which provides for obtaining OMB circulars, is 
redesignated as paragraph (c) of Sec. 92.505, which lists applicable 
OMB circulars.
    A new Sec. 92.350(b) is added. This paragraph applies the 
nondiscrimination requirements at section 282 of the Cranston Gonzalez 
National Affordable Housing Act (NAHA), which had been erroneously 
omitted from the final rule, to the HOME Program. The paragraph also 
implements section 213 of HUD's FY 1997 appropriations act, which 
permits HUD to waive the nondiscrimination requirements of the HOME 
statute at section 282 of NAHA in connection with the use of HOME funds 
on lands set aside under the Hawaiian Homes Commission Act, 1920 (42 
Stat. 108).
    Although the Department made the Section 8 HQS provisions optional 
in the final rule, it intended to continue to apply the HQS lead-based 
paint provisions to HOME-assisted housing. To accomplish this, 
Sec. 982.401(j) was cited in section 92.355. This change has led to 
some confusion because the HQS provisions state that they supersede 24 
CFR part 35, which also applies to the HOME Program. The provisions of 
both part 35 and Sec. 982.401(j) continue to apply to all HOME-assisted 
housing. To avoid further confusion, language has been added to 
Sec. 92.355 to clarify that the HQS provisions do not supersede part 
35, but constitute additional lead-based paint requirements applicable 
to HOME-assisted housing.
    The term ``elected or appointed official'' is added to the conflict 
of interest provisions applicable to owners and developers under 
Sec. 92.356(f)(1), so that the language will parallel that in paragraph 
(c), Persons covered. The

[[Page 28928]]

language in this paragraph is also amended to make clear that an 
individual who receives HOME funds to acquire or rehabilitate his or 
her principal residence is exempt from this provision. Organizations do 
not qualify as homebuyers or owner-occupants.
    A new Sec. 92.358 is added to implement a provision in HUD's 
appropriation act that imposes limitations on compensation of 
consultants to be paid with HOME funds. The regulatory language, 
similar to that established for the Community Development Block Grant 
(CDBG) Program, was erroneously omitted from the final rule.
    In Sec. 92.500(d), paragraphs (1), (2), and (3) are revised to 
remove from each the parenthetical phrase stating that HUD will notify 
the participating jurisdiction of its execution of the HOME Investment 
Partnership Agreement on the date that HUD executes the agreement. 
Notification of participating jurisdictions must be performed in 
accordance with congressional notification procedures and the date of 
notification is often not the same date that HUD signs the grant 
agreement. To avoid the confusion caused by the reference to the 
notification on the date that HUD executes the agreement, these 
parenthetical references are deleted. In addition, these paragraphs are 
redesignated as paragraphs (d)(1) (A), (B), and (C), to permit the 
addition of a new paragraph (d)(2), as discussed immediately below.
    In Sec. 92.500(d), a new paragraph (2) is added to explain the 
Department's practice with respect to the reduction of a participating 
jurisdiction's HOME Investment Partnership Account when funds are not 
committed or expended in accordance with the 24-month or 5-year 
deadlines, respectively. For a participating jurisdiction to be deemed 
to have met the requirement for commitment of a fiscal year's 
allocation by its deadline, the sum of commitments from that allocation 
and all subsequent allocations must be equal to or greater than the 
amount of the allocation being examined, and the sum of funds reserved 
for and/or committed to community housing development organizations 
from that allocation and all subsequent allocations must be equal to or 
greater than 15 percent of the allocation being examined. For a 
participating jurisdiction to be deemed to have met the requirement for 
the expenditure of a fiscal year's allocation by its deadline, the 
amount of funds expended from that allocation and all subsequent 
allocations must be equal to or greater than the amount of the 
allocation being examined.

List of Subjects in 24 CFR Part 92

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

    Accordingly, 24 CFR part 92 is amended as follows:

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

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

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

    2. In Sec. 92.50, paragraph (d)(1) is revised to read as follows:


Sec. 92.50  Formula allocation.

* * * * *
    (d) Calculating formula allocations for units of general local 
government. (1) Initial allocation amounts for units of general local 
government described in paragraph (a) of this section are determined by 
multiplying the sum of the shares of the six factors in paragraph (c) 
of this section by 60 percent of the amount available under paragraph 
(b) of this section for formula allocation. The shares are the ratio of 
the weighted factor for each jurisdiction over the corresponding factor 
for the total for all of these units of general local government.
* * * * *
    3. In Sec. 92.202, paragraph (b) is revised to read as follows:


Sec. 92.202  Site and neighborhood standards.

* * * * *
    (b) New rental housing. In carrying out the site and neighborhood 
requirements with respect to new construction of rental housing, a 
participating jurisdiction is responsible for making the determination 
that proposed sites for new construction meet the requirements in 24 
CFR 983.6(b).
    4. In Sec. 92.203, paragraphs (a)(1) introductory text, (b)(1) and 
(c) are revised to read as follows:


Sec. 92.203  Income determinations.

    (a) * * *
    (1) For families who are tenants in HOME-assisted housing and not 
receiving HOME tenant-based rental assistance, the participating 
jurisdiction must initially determine annual income using the method in 
paragraph (a)(1)(i) of this section. For subsequent income 
determinations during the period of affordability, the participating 
jurisdiction may use any one of the following methods in accordance 
with Sec. 92.252(h):
* * * * *
    (b) * * *
    (1) ``Annual income'' as defined at 24 CFR 5.609 (except when 
determining the income of a homeowner for an owner-occupied 
rehabilitation project, the value of the homeowner's principal 
residence may be excluded from the calculation of Net Family Assets); 
or
* * * * *
    (c) Although the participating jurisdiction may use any of the 
three definitions of ``annual income'' permitted in paragraph (b) of 
this section, to calculate adjusted income it must apply exclusions 
from income established at 24 CFR 5.611. The HOME rents for very low-
income families established under Sec. 92.252(b)(2) are based on 
adjusted income. In addition, the participating jurisdiction may base 
the amount of tenant-based rental assistance on the adjusted income of 
the family.
* * * * *
    5. In Sec. 92.205, paragraph (d) is amended by revising the second 
sentence to read as follows:


Sec. 92.205  Eligible activities: general.

* * * * *
    (d) Multi-unit projects. * * * Only the actual HOME eligible 
development costs of the assisted units may be charged to the HOME 
program. * * *
* * * * *
    6. Section 92.206 is amended by adding a new paragraph (a)(5) to 
read as follows:


Sec. 92.206  Eligible project costs.

* * * * *
    (a) * * *
    (5) Costs to make utility connections or to make improvements to 
the project site, in accordance with the provisions of 
Sec. 92.206(a)(3) (ii) and (iii) are also eligible in connection with 
acquisition of standard housing.
* * * * *
    7. Section 92.209 is amended by revising paragraph (c)(2) and 
paragraph (j)(5) to read as follows:


Sec. 92.209  Tenant-based rental assistance: Eligible costs and 
requirements.

* * * * *
    (c) * * *
    (2) Federal preferences. At least 50 percent of the families 
assisted must qualify, or would qualify in the near future without 
tenant-based rental assistance, for one of the three Federal 
preferences under section 6(c)(4)(A) of

[[Page 28929]]

the 1937 Act. These are families that occupy substandard housing 
(including families that are homeless or living in a shelter for 
homeless families); families that are paying more than 50 percent of 
their annual income for rent; or families that are involuntarily 
displaced. [During FY 1996 and FY 1997, the Federal preferences do not 
apply.]
* * * * *
    (j) * * *
    (5) Paragraphs (b), (c), (d), (f), (g), and (i) of this section are 
applicable to HOME security deposit assistance, except that income 
determinations pursuant to paragraph (c)(1) of this section and Housing 
Quality Standard inspections pursuant to paragraph (i) of this section 
are required only at the time the security deposit assistance is 
provided.
* * * * *
    8. In Sec. 92.214, paragraph (a)(6) is revised to read as follows:


Sec. 92.214  Prohibited activities.

    (a) * * *
    (6) Provide assistance to eligible low-income housing under 24 CFR 
part 248 (Prepayment of Low Income Housing Mortgages), except that 
assistance may be provided to priority purchasers as defined in 24 CFR 
248.101;
* * * * *
    9. In Sec. 92.219, paragraphs (b)(1)(i) and (b)(2)(iv) are revised 
to read as follows:


Sec. 92.219  Recognition of matching contribution.

* * * * *
    (b) * * *
    (1) * * *
    (i) The contribution must be made with respect to a tenant who is 
assisted with tenant-based rental assistance that meets the 
requirements of Sec. 92.203 (Income determinations) and paragraphs (a), 
(c), (f), and (i) of Sec. 92.209 (Tenant-based rental assistance); and
* * * * *
    (2) * * *
    (iv) The match may be in any eligible form of match except those in 
Sec. 92.220(a)(2) (forbearance of fees), (a)(4) (on-site and off-site 
infrastructure), (a)(10) (direct cost of supportive services) and 
(a)(11) (direct costs of homebuyer counseling services).
* * * * *
    10. Section 92.220 is amended by revising the first sentence in 
paragraph (a)(10) and by revising paragraph (b)(4) to read as follows:


Sec. 92.220  Form of matching contribution.

    (a) * * *
    (10) The direct cost of supportive services provided to families 
residing in HOME-assisted units during the period of affordability or 
receiving HOME tenant-based rental assistance during the term of the 
tenant-based rental assistance contract. * * *
* * * * *
    (b) * * *
    (4) Cash or other forms of contributions from applicants for or 
recipients of HOME assistance or contracts, or investors who own, are 
working on, or are proposing to apply for assistance for a HOME-
assisted project. The prohibition in this paragraph (b)(4) does not 
apply to contractors (who do not own any HOME project) contributing 
professional services in accordance with paragraph (a)(8) of this 
section or to persons contributing sweat equity in accordance with 
paragraph (a)(9) of this section.
    11. In Sec. 92.250, paragraph (a) is revised to read as follows:


Sec. 92.250  Maximum per-unit subsidy amount and subsidy layering.

    (a) Maximum per-unit subsidy amount. The amount of HOME funds that 
a participating jurisdiction may invest on a per-unit basis in 
affordable housing may not exceed the per-unit dollar limits 
established under section 221(d)(3)(ii) of the National Housing Act (12 
U.S.C. 17151(d)(3)(ii)) for elevator-type projects that apply to the 
area in which the housing is located. These limits are available from 
the Multifamily Division in the HUD Field Office. If the participating 
jurisdiction's per-unit subsidy amount has already been increased to 
210% as permitted under section 221(d)(3)(ii) of the National Housing 
Act, upon request of the Field Office, HUD will allow the per-unit 
subsidy amount to be increased on a program-wide basis to an amount, up 
to 240% of the original per unit limits.
* * * * *
    12. Section 92.251 is amended by revising paragraph (a) to read as 
follows:


Sec. 92.251  Property standards.

    (a) (1) Housing that is constructed or rehabilitated with HOME 
funds must meet all applicable local codes, rehabilitation standards, 
ordinances, and zoning ordinances at the time of project completion, 
except as provided in paragraph (b) of this section. The participating 
jurisdiction must have written standards for rehabilitation that ensure 
that HOME-assisted housing is decent, safe, and sanitary. In the 
absence of a local code for new construction or rehabilitation, HOME-
assisted new construction or rehabilitation must meet, as applicable, 
one of three model codes: Uniform Building Code (ICBO), National 
Building Code (BOCA), Standard (Southern) Building Code (SBCCI); or the 
Council of American Building Officials (CABO) one or two family code; 
or the Minimum Property Standards (MPS) in 24 CFR 200.925 or 200.926. 
To avoid duplicative inspections when FHA financing is involved in a 
HOME-assisted property, a participating jurisdiction may rely on a 
Minimum Property Standards (MPS) inspection performed by a qualified 
person. Newly constructed housing must meet the current edition of the 
Model Energy Code published by the Council of American Building 
Officials.
    (2) All other HOME-assisted housing (e.g., acquisition) must meet 
all applicable State and local housing quality standards and code 
requirements and if there are no such standards or code requirements, 
the housing must meet the housing quality standards in 24 CFR 982.401.
    (3) The housing must meet the accessibility requirements at 24 CFR 
part 8, which implements Section 504 of the Rehabilitation Act of 1973 
(29 U.S.C. 794) and covered multifamily dwellings, as defined at 24 CFR 
100.201, must also meet the design and construction requirements at 24 
CFR 100.205, which implement the Fair Housing Act (42 U.S.C. 3601-
3619).
    (4) Construction of all manufactured housing must meet the 
Manufactured Home Construction and Safety Standards established in 24 
CFR part 3280. These standards pre-empt State and local codes covering 
the same aspects of performance for such housing. Participating 
jurisdictions providing HOME assistance to install manufactured housing 
units must comply with applicable State and local laws or codes. In the 
absence of such laws or codes, the participating jurisdiction must 
comply with the manufacturer's written instructions for installation of 
manufactured housing units. Manufactured housing that is rehabilitated 
using HOME funds must meet the requirements set out in paragraph (a)(1) 
of this section.
* * * * *
    13. Section 92.252 is amended by revising the first sentence of 
paragraph (h) to read as follows:


Sec. 92.252  Qualification as affordable housing: Rental housing.

* * * * *
    (h) Tenant income. The income of each tenant must be determined 
initially in accordance with Sec. 92.203(a)(1)(i). * * *
* * * * *
    14. Section 92.300 is amended by revising the fourth sentence of

[[Page 28930]]

paragraph (a)(1), and the paragraph heading of paragraph (f) to read as 
follows:


Sec. 92.300  Set-aside for community housing development organizations 
(CHDOs).

    (a) (1) * * * The funds must be provided to a community housing 
development organization, its subsidiary, or a partnership of which it 
or its subsidiary is the managing general partner. * * *
* * * * *
    (f) Limitation on community housing development organization 
operating funds. * * *
    15. Section 92.350 is revised to read as follows:


Sec. 92.350  Other Federal requirements and nondiscrimination.

    (a) The Federal requirements set forth in 24 CFR part 5, subpart A, 
are applicable to participants in the HOME program. The requirements of 
this subpart include: nondiscrimination and equal opportunity; 
disclosure requirements; debarred, suspended or ineligible contractors; 
and drug-free workplace.
    (b) The nondiscrimination requirements at section 282 of the Act 
are applicable. These requirements are waived in connection with the 
use of HOME funds on lands set aside under the Hawaiian Homes 
Commission Act, 1920 (42 Stat. 108).
    16. In Sec. 92.353, paragraph (c)(2)(i)(C)(1)(ii) is revised to 
read as follows:


Sec. 92.353  Displacement, relocation, and acquisition.

* * * * *
    (c) * * *
    (2) * * *
    (i) * * *
    (C) * * *
    (1) * * *
    (ii) The total tenant payment, as determined under 24 CFR 5.613, if 
the tenant is low-income, or 30 percent of gross household income, if 
the tenant is not low-income; or
* * * * *
    17. Section 92.355 is revised to read as follows:


Sec. 92.355  Lead-based paint.

    Housing assisted with HOME funds is subject to the Lead-Based Paint 
Poisoning Prevention Act (42 U.S.C. 4821 et seq.) and 24 CFR part 35. 
The lead-based paint provisions of 24 CFR 982.401(j), except 24 CFR 
982.401(j)(1)(i), also apply, irrespective of the applicable property 
standard under Sec. 92.251. In a project in which not all units are 
assisted with HOME funds, the lead-based paint requirements apply to 
all units and common areas in the project. Unless otherwise provided, 
the participating jurisdiction is responsible for testing and abatement 
activities.
    18. In Sec. 92.356, paragraph (f)(1) is revised to read as follows:


Sec. 92.356  Conflict of interest.

* * * * *
    (f) Owners and Developers. (1) No owner, developer or sponsor of a 
project assisted with HOME funds (or officer, employee, agent, elected 
or appointed official or consultant of the owner, developer or sponsor) 
whether private, for profit or non-profit (including a community 
housing development organization (CHDO) when acting as an owner, 
developer or sponsor) may occupy a HOME-assisted affordable housing 
unit in a project. This provision does not apply to an individual who 
receives HOME funds to acquire or rehabilitate his or her principal 
residence or to an employee or agent of the owner or developer of a 
rental housing project who occupies a housing unit as the project 
manager or maintenance worker.
* * * * *
    19. A new Sec. 92.358 is added to subpart H to read as follows:


Sec. 92.358  Consultant activities.

    No person providing consultant services in an employer-employee 
type relationship shall receive more than a reasonable rate of 
compensation for personal services paid with HOME funds. In no event, 
however, shall such compensation exceed the limits in effect under the 
provisions of any applicable statute (e.g., annual HUD appropriations 
acts which have set the limit at the equivalent of the daily rate paid 
for Level IV of the Executive Schedule, see the Departments of Veterans 
Affairs and Housing and Urban Development, and Independent Agencies 
Appropriations Act, 1997, Pub. L. 104-204 (September 26, 1996)). Such 
services shall be evidenced by written agreements between the parties 
which detail the responsibilities, standards, and compensation. 
Consultant services provided under an independent contractor 
relationship are not subject to the compensation limitation of Level IV 
of the Executive Schedule.
    20. In Sec. 92.500, paragraph (d) is revised to read as follows:


Sec. 92.500  The HOME Investment Trust Fund.

* * * * *
    (d)(1) Reductions. HUD will reduce or recapture HOME funds in the 
HOME Investment Trust Fund by the amount of:
    (A) Any funds in the United States Treasury account that are 
required to be reserved (i.e., 15 percent of the funds) by a 
participating jurisdiction under Sec. 92.300 that are not reserved for 
a community housing development organization pursuant to a written 
agreement within 24 months after the last day of the month in which HUD 
notifies the participating jurisdiction of HUD's execution of the HOME 
Investment Partnership Agreement;
    (B) Any funds in the United States Treasury account that are not 
committed within 24 months after the last day of the month in which HUD 
notifies the participating jurisdiction of HUD's execution of the HOME 
Investment Partnership Agreement;
    (C) Any funds in the United States Treasury account that are not 
expended within five years after the last day of the month in which HUD 
notifies the participating jurisdiction of HUD's execution of the HOME 
Investment Partnership Agreement; and
    (D) Any penalties assessed by HUD under Sec. 92.552.
    (2) For purposes of determining the amount by which the HOME 
Investment Trust Fund will be reduced or recaptured under paragraphs 
(d)(1)(A), (B) and (C) of this section, HUD will consider the sum of 
commitments to CHDOs, commitments, or expenditures, as applicable, from 
the fiscal year allocation being examined and from subsequent 
allocations. This sum must be equal to or greater than the amount of 
the fiscal year allocation being examined, or in the case of 
commitments to CHDOs, 15 percent of that fiscal year allocation.
    21. Section 92.505 is amended by adding a new paragraph (c) to read 
as follows:


Sec. 92.505  Applicability of uniform administrative requirements.

* * * * *
    (c) OMB Circulars referenced in this part may be obtained from: 
Executive Office of the President, Publication Service, 725 17th 
Street, N.W., Suite G-2200, Washington, DC 20503; telephone: (202) 395-
7332.

    Dated: April 23, 1997.
Andrew Cuomo,
Secretary.
[FR Doc. 97-13730 Filed 5-27-97; 8:45 am]
BILLING CODE 4210-32-P