[Federal Register Volume 63, Number 135 (Wednesday, July 15, 1998)]
[Notices]
[Pages 38252-38275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18932]



[[Page 38251]]

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Part VI





Department of Housing and Urban Development





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Funding Availability for the HUD Colonias Initiative (HCI), Fiscal Year 
1998; Notice

  Federal Register / Vol. 63, No. 135 / Wednesday, July 15, 1998 / 
Notices  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4380-N-01]


Notice of Funding Availability for the HUD Colonias Initiative 
(HCI), Fiscal Year 1998

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Notice of funding availability (NOFA).

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SUMMARY: This NOFA announces the availability of $5 million for 
assistance to organizations serving colonia residents. Of this amount, 
up to $4 million will be provided to carry out development projects in 
colonias. One grant of $1 million may be provided to one or more 
private intermediary organization(s) (for profit and nonprofit) that 
would provide capacity-building loans, grants, or technical assistance 
to local nonprofit organizations serving colonias residents. This 
document sets forth the application instructions for the development 
grants and capacity-building grants made available under the NOFA. As 
indicated in the body of this NOFA, applicants may use either of two 
definitions for the term ``rural county.''

APPLICATION DUE DATES: Completed applications (one original and two 
copies) must be submitted no later than 12:00 midnight, Eastern time, 
on August 14, 1998, to the address shown below. The above-stated 
application deadline is firm as to date and hour. In the interest of 
fairness to all applicants, HUD will treat as ineligible for 
consideration any application that is not received before the 
application deadline. Applicants should submit their materials as early 
as possible to avoid any risk of loss of eligibility because of 
unanticipated delays or other delivery-related problems. HUD will not 
accept, at any time during the NOFA competition, application materials 
sent by facsimile (FAX) transmission.

ADDRESSES AND APPLICATION SUBMISSION PROCEDURES: Addresses: Completed 
applications (one original and two copies) must be submitted to: 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Room 7184, Washington, DC 20410; ATTN: HUD Colonias Initiative.
    Applications Procedures. Mailed Applications. Applications will be 
considered timely filed if postmarked on or before 12:00 midnight on 
the application due date and received at the address above on or within 
five (5) days of the application due date.
    Applications Sent by Overnight/Express Mail Delivery. Applications 
sent by overnight delivery or express mail will be considered timely 
filed if received before or on the application due date, or upon 
submission of documentary evidence that they were placed in transit 
with the overnight delivery service by no later than the specified 
application due date.
    Hand Carried Applications. Hand carried applications delivered 
before and on the application due date must be brought to the specified 
location and room number between the hours of 8:45 am to 5:15 pm, 
Eastern time. Applications hand carried on the application due date 
will be accepted in the South Lobby of the HUD Headquarters Building at 
the above address from 5:15 pm until 12:00 midnight, Eastern time.

FOR APPLICATION KITS, FURTHER INFORMATION, AND TECHNICAL ASSISTANCE: 
All information and materials required to submit an application for 
funding under the HUD Colonias Initiative are included in the appendix 
to this notice. For information concerning the HUD Colonias Initiative, 
and technical assistance, contact Yvette Aidara, Office of Block Grant 
Assistance, Department of Housing and Urban Development, 451 7th 
Street, SW, Room 7184, Washington, DC 20410; telephone (202) 708-1322 
(this is not a toll-free number). Persons with speech or hearing 
impairments may access this number via TTY by calling the toll-free 
Federal Information Relay Service at 1-800-877-8339.
    All program documents referred to in this NOFA are accessible 
through HUD's web site at http://www.hud.gov.

SUPPLEMENTAL INFORMATION:

I. Authority; Definitions; Background; Purpose; Amount Allocated; 
Eligibility

(A) Authority

    Title II of the Departments of Veterans Affairs and Housing and 
Urban Development, and Independent Agencies Appropriations Act, 1998 
(Pub.L. 105-65, 111 Stat. 1357, approved October 27, 1997) (FY 1998 HUD 
Appropriations Act).

(B) Definitions

    Capacity-building is the transferring of skills and knowledge in 
planning, developing and administering activities funded under this 
NOFA. For purposes of this NOFA, capacity-building may include 
provision of loans and grants as well as training and technical 
assistance activities.
    Colonia means any identifiable community that:
    (a) Is located in the State of Arizona, California, New Mexico, or 
Texas;
    (b) Is located in the U.S.-Mexico border region (that is, within 
150 miles of the border between the U.S. and Mexico); and
    (c) Meets objective criteria, including lack of potable water 
supply, lack of adequate sewage systems, and lack of decent, safe, 
sanitary, and accessible housing.
    Although section 916(e)(4) of the Cranston-Gonzalez National 
Affordable Housing Act (42 U.S.C. 5306(e)(4)) included the notation 
that a colonia must have been in existence and generally recognized as 
such prior to its enactment, HUD recognizes that additional 
identifiable colonias have come into existence, in the near-decade 
since the enactment, and are in need of assistance to the same extent 
as older colonias. These newer colonias are eligible for assistance 
under this NOFA. Rural County may be defined in either of two ways:
    (a) Bureau of the Census Definition. A rural county is a place 
having fewer than 2,500 inhabitants (within or outside of metropolitan 
areas).
    (b) Department of Agriculture's Beale Code Definition. A rural 
county is a county with no urban population (i.e., city) of 20,000 
inhabitants or more.
    Visitability means at least one entrance at grade (no steps), 
approached by an accessible route such as a sidewalk; the entrance door 
and all interior passage doors provide a minimum 2 feet 10 inches (34-
inch) clear opening. Allowing use of 2'10'' doors is consistent with 
the Fair Housing Act (at least for the interior doors), and may be more 
acceptable than requiring the 3 foot doors that are required in fully 
accessible areas under the Uniform Federal Accessibility Standards for 
a small percentage of units.

(C) Background

    (1) Colonias eligible for assistance under this NOFA are any of the 
severely distressed, rural, unplanned, predominantly unincorporated 
settlements located along the 2,000 mile United States-Mexico border. 
Due to a lack of affordable housing in this area, many colonias came 
into existence as a result of developers selling unimproved lots, to 
buyers with extremely limited means, under high-interest bearing 
contracts for deed (i.e., the developers retain title to the land until 
the debt is fully paid). Due to the nature of land contract sales, 
buyers typically could not secure mortgage-secured loans to build 
standard housing. As a consequence, they often constructed

[[Page 38253]]

whatever limited dwellings or shelters they could afford. Thus, most 
colonias developed without regard to local zoning or other laws or 
covenants, adequate roads and drainage, and non-existent water and/or 
sewer facilities. The majority of housing in colonias is sub-standard 
and not in accordance with building codes.
    (2) One response to these needs was passage of Section 916 of the 
Cranston-Gonzalez National Affordable Housing Act which required the 
States of Arizona, California, New Mexico, and Texas to set aside ten 
percent of their Fiscal Year 1991 State Community Development Block 
Grant allocations to assist colonias. Subsequent years required 
colonias to be assisted at up to ten percent (California has been 
funded at two percent), as determined by HUD to be appropriate. Texas, 
with the largest population of colonia residents, accounts for 
approximately two-thirds of the set-aside in any given year.
    (3) Due to the limited State CDBG colonias set-asides in relation 
to the overwhelming needs, funding has generally been given to 
infrastructure activities, with special consideration to water and 
sewer services. The provision of housing has not been a primary focus 
of the limited CDBG funds available to colonias. This current 
initiative, in an effort to address the continuing need for decent, 
safe, sanitary, and accessible housing for colonias residents, is 
designed to encourage the production of decent, safe, sanitary, and 
accessible affordable housing for colonia residents.

(D) Purpose

    The FY 1998 HUD Appropriations Act provided $25 million to test 
comprehensive approaches to developing a job base through economic 
development, developing affordable low- and moderate-income rental and 
homeownership housing, and increasing the investment of both private 
and nonprofit capital in rural and tribal areas of the US. Of that 
amount, $5 million has been targeted for this initiative to support 
assistance to organizations administering projects to address the 
housing needs of colonia residents in rural areas. HUD anticipates 
making grants totaling $4 to 5 million to address housing needs in the 
four border States where colonias are found (California, Arizona, New 
Mexico, and Texas). Of the $5 million, $1 million may be provided to 
one or more private intermediary organization(s) (for profit and 
nonprofit) that would provide capacity-building loans, grants, or 
technical assistance to local nonprofit organizations serving colonia 
residents. The intermediary organization would demonstrate experience 
in providing technical assistance in housing development to colonias or 
areas with similar economic and social conditions that exist in 
colonias and the capacity to administer a program to increase the 
capacity of colonia-based organizations to address local housing needs.

(E) Amounts Allocated

    This NOFA makes available a total of $5 million in FY 1998 funding. 
Of this amount, HUD expects to allocate a total of $4 to 5 million for 
programs administered by competitively selected grantees in each of the 
four colonias border states. It is expected that applicants serving 
colonias residents in the State of Texas will receive a greater portion 
of the funds available under this NOFA since Texas has the largest 
population of colonia residents. Based on final negotiations of budgets 
and project plans, the Department reserves the right to award grants of 
up to $800,000 per applicant in each of the four states. The Department 
also reserves the right to provide multiple grants in each state, with 
multiple awards likely in Texas.
    Additionally, of the total $5 million available, HUD may award up 
to $1 million to one or more private organizations (for profit and 
nonprofit) for the purpose of building capacity among locally-based 
nonprofit organizations meeting the affordable housing needs of colonia 
residents. Preference will be given to applicants with the ability to 
serve the broadest area of the colonias region, and with the ability to 
serve colonia residents with disabilities. Note that if there are 
insufficient fundable applications for the capacity-building 
competition (i.e., scoring a minimum of 70 points), HUD reserves the 
right to shift the balance (including up to the full $1 million) to the 
housing development category to allow full utilization of the funding 
targeted for this initiative.

(F) Eligible Applicants/Recipients

    Private (for profit and nonprofit) entities currently providing 
assistance to and for residents of colonias, including in any of the 
four colonia States (Arizona, California, New Mexico, and Texas) are 
eligible to apply for funds under the development activities portion of 
this NOFA to undertake activities within their respective States. 
Private (for profit and nonprofit) with the ability to provide 
capacity-building resources and technical assistance to locally-based 
nonprofit organizations serving colonias in the four-State colonias 
region are eligible to compete for the capacity-building funds. For-
profit organizations are eligible to apply for funding under this NOFA 
with the stipulation that compensation be provided in accordance with 
Federal procurement guidelines (i.e., payment will be on a cost 
reimbursement basis without profit).

(G) Eligible Activities

    (1) General. HUD Colonias Initiative (HCI) funds are to be used to 
address the housing and related needs of residents of colonias. The 
Department is especially interested in supporting self-help housing 
construction, homeownership opportunities, and rehab of units (where 
rehab is a viable alternative to new construction) for current 
residents of colonias. In undertaking activities under this NOFA, 
applicants must comply with applicable provisions of the Americans with 
Disabilities Act and should design construction, rehabilitation or 
modifications to buildings and facilities to be accessible and 
visitable for persons with disabilities and others who may also 
benefit, such as mothers with strollers or persons delivering 
appliances. In providing technical assistance and other educational 
opportunities, training and informational materials related to program 
activities should be made available in languages appropriate to the 
residents served or in video or audio formats. Use of intermediaries 
and collaborative partnerships, to the greatest extent possible, and 
leveraging of the funds provided under this NOFA to achieve the maximum 
positive impact is encouraged.
    (2) Primary Activities. It is expected that the majority of funding 
for each proposed project will be budgeted for the following primary 
housing activities that will result in decent, safe, sanitary, and 
accessible affordable housing:
    (a) New housing construction, including self-help, energy-efficient 
and innovative housing design initiatives. Housing may be single- or 
multi-family, owner- or renter-occupied;
    (b) Self-help construction training for residents and prospective 
owners/tenants;
    (c) Homeownership assistance;
    (d) Rehabilitation of existing permanent housing structures to meet 
local codes;
    (e) Construction of additions onto existing permanent housing 
structures, such as to provide for bathroom facilities or to reduce 
overcrowding, where cost-effective;
    (f) Installation of water wells or septic systems for individual 
permanent housing structures;

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    (g) Refinancing of existing landowner/homeowner debt to convert 
contracts-for-deed into mortgages;
    (h) Acquisition of land from existing owners or deed-holders, for 
resale to colonias residents;
    (i) Surveying and replatting of existing subdivisions;
    (j) Acquisition of land, relocation payments to residents and costs 
of developing new subdivisions, where existing development sites have 
been determined to be legally or environmentally inappropriate for 
habitation; and
    (k) Tenant-based assistance.
    (3) Other Related Activities to Support Housing Development. 
Applicants may propose other activities (public improvements, economic 
development, public services, administrative costs), that directly 
support the housing activities listed above, providing such activities 
do not constitute more than thirty percent (30%) of the budget in the 
aggregate, and clearly support and serve the same general population as 
the housing activities. Such activities may include:
    (a) Construction of publicly- or privately-owned utilities needed 
to serve the housing site(s) for which primary activities are funded, 
such as water supply/distribution systems, sewage collection/treatment 
systems, electricity or gas distribution lines;
    (b) Construction of public facilities such as libraries, parks and 
recreation centers, fire stations (including purchase of fire trucks 
and other equipment), or community centers;
    (d) Provision of financial or technical assistance to start or 
expand businesses, for purposes of creating jobs or providing goods or 
services for colonias residents living in or near the proposed housing 
site(s);
    (e) Funding microenterprise assistance programs to enable colonias 
residents to start their own businesses or to expand existing 
businesses;
    (f) Provision of public services which are directly supportive of 
the housing activities proposed, including but not limited to legal 
assistance, housing counseling, classes on purchasing a home, home 
maintenance and repair training, tenant services, education, health 
services, recreation programs, day care, transportation services, or 
costs of operating recreation centers, libraries or community centers; 
and
    (g) Recipient costs of administering the funding and carrying out 
of activities, to the extent allowed at 24 CFR part 84, but at a rate 
not to exceed 10% of the funds provided.
    (4) Capacity-Building Funds. Applicants for Capacity-Building funds 
(not to exceed $1 million) will provide loans, grants or technical 
assistance to regionally or locally-based nonprofit organizations 
working in colonias to meet housing and related needs. The nonprofit 
organizations may use the assistance for:
    (a) Provision of planning, training, and pre-development assistance 
to existing nonprofit organizations to expand their scope of expertise, 
to implement larger-scale projects, and/or enhance existing projects;
    (b) Self-help assistance, including skill in fiscal management, for 
colonias residents;
    (c) Dissemination of capacity-building information and citizen 
participation activities; and
    (d) Coordination of existing resources to maximize housing or 
economic opportunities funded under the provisions of this NOFA.

(H) Ineligible Activities

    The following activities are not eligible for funding under this 
NOFA:
    (1) Acquisition, construction or rehabilitation of buildings for 
the general conduct of government, such as city halls, county 
courthouses, county jails, etc.;
    (2) General government expenses required to carry out the regular 
responsibilities of a unit of general local government;
    (3) Political activities; and
    (4) Provision of technical assistance to staff of award recipients.

II. Program Requirements

(A) Compliance With Fair Housing and Civil Rights Laws

    All applicants must comply with all Fair Housing and civil rights 
laws, statutes, regulations and executive orders as enumerated in 24 
CFR Sec. 5.105(a).

(B) Additional Nondiscrimination Requirements

    Applicants must also comply with the Americans with Disabilities 
Act, and Title IX of the Education Amendments Act of 1972.

(C) Affirmatively Furthering Fair Housing

    Recipients will have a duty to affirmatively further fair housing. 
Applicants should include in their work plan the specific steps that 
they will take to (1) address the elimination of impediments to fair 
housing that were identified in the jurisdiction's Analysis of 
Impediments (AI) to Fair Housing Choice; (2) remedy discrimination in 
housing; or (3) promote fair housing rights and fair housing choice. 
Further, applicants have a duty to carry out the specific activities 
cited in their responses to the Factors for Award that address 
affirmatively furthering fair housing.

(D) Economic Opportunities for Low and Very Low-Income Persons (Section 
3)

    Recipients of HUD assistance must comply with section 3 of the 
Housing and Urban Development Act of 1968, 12 U.S.C. 1701u (Economic 
Opportunities for Low and Very Low-Income Persons) and the HUD 
regulations at 24 CFR part 135, including the reporting requirements 
subpart E. Section 3 provides that recipients shall ensure that 
training, employment and other economic opportunities, to the greatest 
extent feasible, be directed to: (1) low and very low income persons, 
particularly those who are recipients of government assistance for 
housing; and (2) business concerns which provide economic opportunities 
to low and very low income persons.

(E) Relocation

    Any person (including individuals, partnerships, corporations or 
associations) who moves from real property or moves personal property 
from real property as a direct result of a written notice to acquire or 
the acquisition of the real property, in whole or in part, for a HUD-
assisted activity is covered by acquisition policies and procedures and 
the relocation requirements of the Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970, as amended (URA), and 
the implementing governmentwide regulation at 49 CFR part 24. Any 
person who moves permanently from real property or moves personal 
property from real property as a direct result of rehabilitation or 
demolition for an activity undertaken with HUD assistance is covered by 
the relocation requirements of the URA and the governmentwide 
regulation.

(F) OMB Circulars

    The policies, guidances, and requirements of OMB Circular No. A-122 
(Cost Principles for Nonprofit Organizations) and 24 CFR part 84 
(Grants and Agreements with Institutions of Higher Education, 
Hospitals, and other Non-Profit Organizations) apply to the award, 
acceptance and use of assistance under this NOFA, and to the remedies 
for noncompliance, except when inconsistent with the provisions of the 
FY 1998 HUD Appropriations Act, other Federal statutes or the 
provisions of this NOFA. Copies of the OMB Circular may

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be obtained from EOP Publications, Room 2200, New Executive Office 
Building, Washington, DC 10503, telephone (202) 395-7332 (this is not a 
toll free number).

(G) Conflicts of Interest

    Consultants or experts assisting HUD in rating and ranking 
applicants for funding under this NOFA are subject to 18 U.S.C. 208, 
the Federal criminal conflict of interest statute, and to the Standards 
of Ethical Conduct for Employees of the Executive Branch regulation 
published at 5 CFR part 2635. As a result, individuals who have 
assisted or plan to assist applicants with preparing applications for 
this NOFA may not serve on a selection panel or as a technical advisor 
to HUD for this NOFA. All individuals involved in rating and ranking 
this NOFA, including experts and consultants, must avoid conflicts of 
interest or the appearance of conflicts. If the selection or non-
selection of any applicant under this NOFA affects the individual's 
financial interests set forth in 18 U.S.C. 208 or involves any party 
with whom the individual has a covered relationship under 5 CFR 
2635.502, that individual must, prior to participating in any matter 
regarding this NOFA, disclose this fact to the General Counsel or the 
Ethics Law Division.

(H) Eligible Populations to be Served

    The HCI is designed to serve colonias in rural areas in the States 
of Arizona, California, New Mexico, and Texas. See definitions of 
``colonias'' and ``rural county'' above.

(I) Grant Amounts

    In the event an applicant is awarded an HCI grant that has been 
reduced (e.g. the application contained some activities that were 
ineligible or budget information did not support the request), the 
applicant will be required to modify its project plans and application 
to conform to the terms of HUD's approval before execution of a grant 
agreement. HUD reserves the right to reduce or de-obligate the HCI 
award if approvable modifications to the proposed project are not 
submitted by the awardee in the required amounts in a timely manner. 
Any modifications must be within the scope of the original HCI 
application. HUD reserves the right not to make awards under this NOFA.

(J) Grant Period

    Recipients will have 36 months from the date of funding award to 
complete all project activities except the final evaluation and 
reporting, fulfillment of audit requirements and final project close-
out.

(K) Leveraging of Other Resources

    (1) A key component of the HCI is the leveraging of other sources 
of capital to significantly expand the scope of accomplishments to be 
realized with this funding.
    (2) Potential recipients must demonstrate the commitment of 
additional resources to support their proposed projects. Sources of 
this other funding can be other public (Federal, State or local) 
agencies, private funding or internal resources. In-kind services, 
``sweat equity'' and commitments of funds for activities which are 
already being implemented may be counted toward the leveraging 
requirements. Funding for which commitments were received prior to 
publication of this NOFA may be counted, provided that the commitment 
is still valid, is for the project activities proposed, and that 
implementation of the activity had not yet begun. Final negotiation of 
budgets and implementation schedules may be conditioned upon evidence 
that leveraging requirements have been met.

(L) Negotiations

    After all applications have been rated and ranked and a selection 
has been made, HUD may require that awardees participate in 
negotiations to determine the specific tasks and grant budget. Where a 
specific area or one or more specific sites for project activities are 
identified in an application or during negotiations, HUD may undertake 
and complete its environmental review during negotiations. In cases 
where HUD cannot successfully conclude negotiations or a selected 
applicant fails to provide HUD with requested information, or if the 
reduced amount of funding makes the project infeasible, awards will not 
be made. In such instances, HUD will offer an award to the next highest 
ranking applicant and proceed with negotiations with that next highest 
ranking applicant.

(M) Adjustments to Funding

    (1) HUD reserves the right to fund less than the full amount 
requested in any application to ensure the purpose of the initiative is 
met. HUD may not fund portions of the applications that are ineligible 
for funding under applicable program statutory or regulatory 
requirements, or which do not meet the requirements of this NOFA, but 
may fund eligible portions of the applications.
    (2) If funds remain after funding the highest ranking applications 
in each State, HUD may fund part of the next highest ranking 
application in the same category (i.e., development or capacity-
building). If the applicant turns down the award offer, or if the 
project is not feasible at the proposed funding level, HUD will make 
the same determination for the next highest ranking applications in 
each category.

(N) Environmental Review

    Selection for award does not constitute approval of any proposed 
sites. Following selection for award, HUD will perform an environmental 
review of activities proposed for assistance under this part, in 
accordance with 24 CFR part 50. The results of the environmental review 
may require that proposed activities be modified or that proposed sites 
be rejected. Applicants are particularly cautioned not to undertake or 
commit funds for acquisition or development of proposed properties 
prior to HUD approval of specific properties or areas. Each application 
shall contain an assurance that the applicant will assist HUD to comply 
with part 50; will supply HUD with all available, relevant information 
to perform an environmental review for each proposed property; will 
carry out mitigating measures required by HUD or select alternate 
property; and will not acquire, rehabilitate, convert, lease, repair or 
construct property, nor commit HUD or local funds for these program 
activities with respect to any eligible property, until HUD approval of 
the property is received.

III. Application Selection Process

(A) Rating and Ranking

    (1) General. To review and rate applications, HUD may establish 
panels including outside experts or consultants to obtain certain 
expertise and outside points of view, including views from other 
Federal agencies. A total of 100 points is possible. For the capacity-
building category, a minimum score of 70 points must be achieved to be 
considered for funding.
    (2) Rating. All applicants for funding under this NOFA will be 
evaluated against the criteria below. The rating of the ``applicant'' 
or the ``applicant's organization and staff'' for technical merit or 
threshold compliance, unless otherwise specified, will include any sub-
contractors, consultants, sub-recipients, and members of consortia 
which are firmly committed to the project.
    (3) Ranking. Applicants will be ranked within each of the two set-
aside program areas: housing development activities and capacity-
building. Applicants will be ranked only against

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others in the separate set-aside program areas. Once scores are 
assigned, all applications will be ranked in order of points assigned, 
with the applications receiving more points ranking above those 
receiving fewer points. The highest ranking applications in each State 
area will be funded; the highest ranking capacity-building application 
will be funded, provided it has achieved a score of at least 70 points. 
As noted above, if the highest ranking application in the capacity-
building category may be funded at an amount less than $1 million, 
additional grants may be made to the extent funds and fundable 
applicants remain.
    (4) If HUD determines that an application rated, ranked and 
fundable could be funded at a lesser HCI grant amount than requested 
consistent with feasibility of the funded project or activities and the 
purposes of this NOFA, HUD reserves the right to reduce the amount of 
the HCI grant award and fund the next ranking application in that State 
if sufficient funds remain to undertake a feasible project in the scope 
of that application. Any remaining amounts may be pooled to fund the 
next highest ranked application in any of the four states.

(B) Threshold Requirements

    HUD will review each application to determine whether the 
application meets all of the threshold criteria described for program 
funding made available under this NOFA. Applications that meet the 
threshold criteria will be eligible to be rated and ranked, based on 
the criteria described, and the total number of points to be awarded. 
The threshold criteria are:
    (1) An applicant must be a private for-profit or nonprofit entity 
organized according to State law where situated.
    (2) If an applicant (a) has been charged with a violation of the 
Fair Housing Act by the Secretary; (b) is the defendant in a Fair 
Housing Act lawsuit filed by the Department of Justice; (c) has 
received a letter of noncompliance findings under Title VI of the Civil 
Rights Act or Section 504 of the Rehabilitation Act; or (d) has been 
debarred, the applicant is not eligible to apply for funding under this 
NOFA until the applicant resolves such charge, lawsuit, letter of 
findings, or debarment to the satisfaction of the Department.

(C) Narrative Statement

    Each applicant shall provide: (1) a narrative statement describing 
the activities that will be carried out with the HCI grant funds; and 
(2) an explanation of how the use of HCI grant funds meets the rating 
factors identified below. The description of activities should include 
a statement of how the proposed uses of HCI funds will meet the 
objectives of this initiative. The application as a whole (narrative 
and responses to the Factors for Award, below) shall not exceed 25 
8.5'' by 11'' pages. Applicants may also submit videotapes and/or 
photographs of the area or neighborhood that would be assisted by grant 
funds under this NOFA. The applicant must indicate which factor(s) the 
photographs and/or video tapes address.

(D) Factors for Award

    All applicants will be considered for selection based on the 
following factors that demonstrate the need for the proposed project or 
activities, and the applicant's creativity, capacity and commitment to 
provide the maximum benefit to the residents of the colonias areas 
served and the extent to which the proposed project will increase the 
supply of decent, safe, sanitary, and accessible affordable housing in 
colonias. The maximum points awarded for the factors total 100.
    Rating Factor 1: Capacity of the Applicant and Relevant 
Organizational Staff (20 points).
    This factor addresses the applicant's organizational experience in 
administering similar types of funding, and the demonstrated capacity 
to carry out the proposed activities. Applicants must demonstrate 
previous relevant experience working in colonias. When responding to 
this factor, the applicant should identify the number of projects 
undertaken, the type of project, and the number of units of affordable 
housing developed, as applicable. The response should include a 
discussion of how housing units were made affordable for low-income 
persons. The rating of the applicant or the applicant's organization 
and staff for technical merit will include any faculty, subcontractors, 
consultants, subrecipients, and members of consortia which are firmly 
committed (i.e. has a written agreement or a signed letter of 
understanding with the applicant agreeing in principle to its 
participation and role in the project). HUD will also consider past 
performance in carrying out HUD-funded or other projects, including 
projects similar in size and scope to the project proposed, and the 
extent to which projects encourage and incorporate collaborative and 
partnership relationships in serving colonia residents.
    Rating Factor 2: Need/Extent of the Problem (20 points).
    This factor addresses the extent of colonia need(s) for housing, 
including accessible housing, and related investments, including a 
description of physical and social conditions. In applying this factor, 
HUD will consider current levels of distress in the immediate community 
to be served by the project. Level of distress will be indicated most 
directly by data on the size and condition of the existing housing 
stock, homeownership and land tenure, availability of housing finance, 
and rental assistance need. Additional indicators of distress may 
include: infrastructure and community facility needs, education and 
employment of residents, and the need for legal or other assistance. 
HUD requires that applicants use sound, reliable and verifiable data to 
support the level of distress claimed in the application.
    Rating Factor 3: Soundness of Approach (40 points).
    This factor addresses the appropriateness and effectiveness of the 
proposed activities in substantially addressing identified needs. HUD 
will consider the extent to which the plan is logical, feasible, and 
substantially likely to achieve its stated purpose and provides 
benchmarks to measure actual increase in the number of decent, safe, 
sanitary, and accessible affordable housing units. HUD's desire is to 
fund projects and activities which will quickly produce demonstrable 
results and advance the public interest including the number of colonia 
residents to be assisted and the impact of the projects and activities 
on the distress factors indicated by the applicant's response to Factor 
2. An applicant must demonstrate that it has an understanding of the 
steps required to implement its project, the actions that it and others 
responsible for implementing the project must complete and shall 
include a reasonable time schedule for carrying out the project. In 
considering this factor, HUD will take into account the cost per unit 
for construction or rehab of housing units.
    Rating Factor 4: Financial Feasibility/Leveraging Resources (20 
points).
    This factor addresses the extent to which the proposed project will 
leverage the use of other public and private financial resources to 
provide a fiscally sound project. A minimum ratio of RDDC funds in any 
project is not specified. However, applicants that have the greatest 
ratio of other funds or in-kind services to RDDC funds will receive a 
greater number of points for leveraging resources. Documentation of 
funds pledged and in-kind services to be provided must be submitted 
with the application to be considered. This documentation might include 
letters of financial commitment or verifiable evidence of other loan or 
grant

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assistance to address the housing development needs of the colonia 
project area and residents. Also considered in determining the points 
for this factor must be the extent to which project costs (as evidenced 
by a complete budget-by-task) are reasonable and financially feasible.

IV. Application Submission Requirements

    The application must include an original and two copies of the 
items listed below:
    (A) Transmittal letter from applicant;
    (B) Table of contents;
    (C) A signed SF-424 (application form);
    (D) A narrative statement as described above;
    (E) Responses to each of the Factors for Award;
    (F) Written agreements or signed letters of understanding in 
support of Rating Factor 1: ``Capacity of the Applicant and Relevant 
Organizational Staff'';
    (G) Documentation of funds pledged in support of Rating Factor 4: 
``Financial Feasibility/Leveraging Resources'';
    (H) A budget-by-task to accompany Factor 4;
    (I) Required certifications (signed, as appropriate, and attached 
as an appendix); and
    (J) Acknowledgment of Application Receipt form (submitted with 
application and returned to applicant as verification of timely 
receipt).

V. Corrections to Deficient Applications

    After the application due date, HUD may not, consistent with 24 CFR 
part 4, subpart B, consider unsolicited information from an applicant. 
HUD may contact an applicant, however, to clarify an item in the 
application or to correct technical deficiencies. Applicants should 
note, however, that HUD may not seek clarification of items or 
responses that improve the substantive quality of the applicant's 
response to any eligibility or selection criterion. Examples of curable 
technical deficiencies include failure to submit an application 
containing an original signature by an authorized official. In each 
case, HUD will notify the applicant in writing by describing the 
clarification or technical deficiency. HUD will notify applicants by 
facsimile or by return receipt requested mail. Applicants must submit 
clarifications or corrections of technical deficiencies in accordance 
with the information provided by HUD within 7 calendar days of the date 
of receipt of the HUD notification. If the deficiency is not corrected 
within this time period, HUD will reject the application as incomplete.

VI. Findings and Certifications

(A) Paperwork Reduction Act Statement

    The information collection requirements contained in this NOFA have 
been submitted to the Office of Management and Budget (OMB) for 
approval in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3501-3520). The OMB approval number, once assigned, will be 
published in the Federal Register. An agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless the collection displays a valid control number.

(B) Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
implementing section 102(2)(C) of the National Environmental Policy Act 
of 1969 (42 U.S.C. 4332). The Finding of No Significant Impact is 
available for public inspection during business hours in the Office of 
the Rules Docket Clerk, Room 10276, Department of Housing and Urban 
Development, 451 Seventh Street, SW, Washington, DC 20410-0500.

(C) Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this NOFA 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. As a result, 
the notice is not subject to review under the Order. This notice is a 
funding notice and does not substantially alter the established roles 
of HUD, the States, and local governments.

(D) Accountability in the Provision of HUD Assistance

    Section 102 of the Department of Housing and Urban Development 
Reform Act of 1989 (HUD Reform Act) and the regulations in 24 CFR part 
4, subpart A contain a number of provisions that are designed to ensure 
greater accountability and integrity in the provision of certain types 
of assistance administered by HUD. On January 14, 1992 (57 FR 1942), 
HUD published a notice that also provides information on the 
implementation of section 102. HUD will comply with the documentation, 
public access, and disclosure requirements of section 102 with regard 
to the assistance awarded under this NOFA, as follows:
    (1) Documentation and public access requirements. HUD will ensure 
that documentation and other information regarding each application 
submitted pursuant to this NOFA are sufficient to indicate the basis 
upon which assistance was provided or denied. This material, including 
any letters of support, will be made available for public inspection 
for a 5-year period beginning not less than 30 days after the award of 
the assistance. Material will be made available in accordance with the 
Freedom of Information Act (5 U.S.C. 552) and HUD's implementing 
regulations at 24 CFR part 15. In addition, HUD will include the 
recipients of assistance pursuant to this NOFA in its Federal Register 
notice of all recipients of HUD assistance awarded on a competitive 
basis.
    (2) Disclosures. HUD will make available to the public for 5 years 
all applicant disclosure reports (HUD Form 2880) submitted in 
connection with this NOFA. Update reports (also Form 2880) will be made 
available along with the applicant disclosure reports, but in no case 
for a period less than 3 years. All reports--both applicant disclosures 
and updates--will be made available in accordance with the Freedom of 
Information Act (5 U.S.C. 552) and HUD's implementing regulations at 24 
CFR part 15.

(E) Section 103 HUD Reform Act

    HUD will comply with section 103 of the Department of Housing and 
Urban Development Reform Act of 1989 and HUD's implementing regulations 
in subpart B of 24 CFR part 4 with regard to the funding competition 
announced today. These requirements continue to apply until the 
announcement of the selection of successful applicants. HUD employees 
involved in the review of applications and in the making of funding 
decisions are limited by section 103 from providing advance information 
to any person (other than an authorized employee of HUD) concerning 
funding decisions, or from otherwise giving any applicant an unfair 
competitive advantage. Persons who apply for assistance in this 
competition should confine their inquiries to the subject areas 
permitted under section 103 and subpart B of 24 CFR part 4.
    Applicants or employees who have ethics related questions should 
contact the HUD Office of Ethics (202) 708-3815. (This is not a toll-
free number.)

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(F) Prohibition Against Lobbying Activities

     Applicants for funding under this NOFA are subject to the 
provisions of section 319 of the Department of Interior and Related 
Agencies Appropriation Act for Fiscal Year 1991 (31 U.S.C. 1352) (the 
Byrd Amendment) and to the provisions of the Lobbying Disclosure Act of 
1995 (Pub. L. 104-65; approved December 19, 1995).
    The Byrd Amendment, which is implemented in regulations at 24 CFR 
part 87, prohibits applicants for Federal contracts and grants from 
using appropriated funds to attempt to influence Federal executive or 
legislative officers or employees in connection with obtaining such 
assistance, or with its extension, continuation, renewal, amendment, or 
modification. The Byrd Amendment applies to the funds that are the 
subject of this NOFA. Therefore, applicants must file a certification 
stating that they have not made and will not make any prohibited 
payments and, if any payments or agreement to make payments of 
nonappropriated funds for these purposes have been made, a form SF-LLL 
disclosing such payments must be submitted. The certification and the 
SF-LLL are included in the application.
    The Lobbying Disclosure Act of 1995 (Pub. L. 104-65; approved 
December 19, 1995), which repealed section 112 of the HUD Reform Act, 
requires all persons and entities who lobby covered executive or 
legislative branch officials to register with the Secretary of the 
Senate and the Clerk of the House of Representatives and file reports 
concerning their lobbying activities.

    Dated: July 10, 1998.
Saul N. Ramirez, Jr.,
Assistant Secretary for Community Planning and Development.

Appendix--Checklist, Forms and Certifications

Page No.

______ 1. Transmittal Letter
______ 2. Checklist and Submission Table of Contents
______ 3. Standard Form for Application for Federal Assistance (SF-
424)
______ 4. Narrative Statement
______ 5. Response to Factors for Award
______ 6. Written Agreements/Signed Letters of Understanding in 
Support of Rating Factor 1
______ 7. Budget-by-Task and Benchmarks in Support of Rating Factor 
3
______ 8. Documentation of Funds/In-Kind Services Pledged in Support 
of Rating Factor 4
______ 9. Required Certifications (signed)
    ______ a. Certification for a Drug-Free Workplace (HUD-50070)
    ______ b. Certification of Payments to Influence Federal 
Transactions (HUD-50071) (See 24 CFR part 87, Appendix A)
    ______ c. If required, Disclosure of Lobbying Activities (SF-
LLL) (See 24 CFR part 87, Appendix B)
    ______ d. Applicant/Recipient Disclosure/Update Report (HUD-
2880)
    ______ e. Applicant Nondiscrimination Certifications
    ______ f. Certification Regarding Debarment & Suspension (HUD-
2992)
______ 10. Acknowledgement of Application Receipt (to be returned to 
applicant)

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[FR Doc. 98-18932 Filed 7-13-98; 11:31 am]
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