[Federal Register Volume 64, Number 44 (Monday, March 8, 1999)]
[Notices]
[Pages 11246-11275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5537]



[[Page 11245]]

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Part VII





Department of Housing and Urban Development





_______________________________________________________________________



Rural Housing and Economic Development Program, Funding Availability 
for Fiscal Year 1999; Notice

  Federal Register / Vol. 64, No. 44 / Monday, March 8, 1999 / 
Notices  

[[Page 11246]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4483-N-01]


Notice of Funding Availability for the HUD Rural Housing and 
Economic Development Program for Fiscal Year 1999

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

ACTION: Notice of funding availability (NOFA).

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

SUMMARY: Purpose of Program: The purpose of the Rural Housing and 
Economic Development program is to build capacity at the State and 
local level for rural housing and economic development and to support 
innovative housing and economic development activities in rural areas. 
The funds made available under this program will be awarded 
competitively, through a selection process conducted by HUD in 
consultation with the United States Department of Agriculture (USDA).
    Available Funds: Approximately $27 million in Fiscal Year (FY) 1998 
and 1999 funding.
    Eligible Applicants: Local rural non-profit organizations, 
community development corporations, Indian tribes, State housing 
finance agencies, and State economic development or community 
development agencies.
    Application Deadline: April 30, 1999.
    Match: None.

SUPPLEMENTARY INFORMATION: If you are interested in applying for 
funding under this program, please review carefully the following 
information:

I. Application Due Date and Technical Assistance

    Application Due Date: Completed applications (one original and two 
copies) must be submitted on or before 12:00 midnight, Eastern time, on 
April 30, 1999 to the address shown below.
    Address for Submitting Applications: Completed applications (one 
original and two copies) must be submitted to: Processing and Control 
Unit, Room 7255, Office of Community Planning and Development, 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410; ATTN: Rural Housing and Economic Development 
program. When submitting your application, please include your name, 
mailing address (including zip code) and telephone number (including 
area code).
    (1) Mailed Applications. Your applications will be considered 
timely filed if postmarked on or before 12:00 midnight (Eastern time) 
on the application due date and received at the address above on or 
within five (5) calendar days of the application due date.
    (2) 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.
    (3) Hand Carried Applications. Hand carried applications delivered 
before and on the application due date must be brought to the specified 
location at HUD Headquarters 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. This deadline date is firm. Please make 
appropriate arrangements to arrive at the HUD Headquarters Building 
before 12:00 midnight on the application due date.
    For Further Information and Technical Assistance. All information 
and materials required to submit an application for funding under the 
HUD Rural Housing and Economic Development program are included in the 
Appendix to this NOFA.
    For information concerning the HUD Rural Housing and Economic 
Development program, contact Michael T. Savage, Office of Community 
Planning and Development, Department of Housing and Urban Development, 
451 7th Street, SW, Room 7136, Washington, DC 20410; telephone (202) 
708-2290 (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.
    Prior to the application deadline, HUD at the numbers above will be 
available to provide general guidance, but not guidance in actually 
preparing the application. Following selection, but prior to award, HUD 
staff will be available to assist in clarifying or confirming 
information that is a prerequisite to the offer of an award by HUD.

II. Amount Allocated

(A) Available Funds

    Approximately $27 million in Fiscal Year (FY) 1998 and 1999 funding 
is being made available through this NOFA for the Rural Housing and 
Economic Development program. The breakdown for this funding is 
discussed below.

(B) The FY 1999 HUD Appropriations Act

    The Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act, 1999 (Pub. L. 
105-276, approved October 21, 1998; 112 Stat. 2461, 2475) (the ``FY 
1999 HUD Appropriations Act'') made $24 million in FY 1999 funds 
available for competitive funding under the Rural Housing and Economic 
Development program. The FY 1999 HUD Appropriations Act also specifies 
that certain unobligated funds authorized by the FY 1998 HUD 
Appropriations Act (Pub.L. 105-65, approved October 27, 1997; 111 Stat. 
1344, 1357) shall be also made available under the Rural Housing and 
Economic Development program. The amount of unobligated funds from this 
source is $3 million. Therefore, the total amount of funding made 
available under this NOFA is $27 million.

(C) Funding Categories/Expected Average Award Amounts

    HUD will award up to $27 million ($24 million in FY 1999 funds and 
$3 million in unobligated FY 1998 funds, as discussed above) on a 
competitive basis in the following three funding categories. HUD 
reserves the right to modify the size of a grant award to meet the 
objectives of the Rural Housing and Economic Development program.
(1) Capacity Building
    HUD will award up to $4 million ($3 million in FY 1999 funds and $1 
million in FY 1998 funds) to build capacity at the State, tribal, and 
local level for rural housing and economic development. This amount 
will go directly to local rural nonprofits, community development 
corporations (CDCs) and Indian tribes to support capacity building and 
technical assistance. HUD expects the average award amount under this 
funding category to be $150,000.
(2) Support for Innovative Activities
    HUD will award up to $17 million ($16 million in FY 1999 funds and 
$1 million in FY 1998 funds) to Indian tribes, State Housing Finance 
Agencies (HFA)s, state community and/or economic development agencies, 
local rural non-profits and CDCs to support innovative housing and 
economic development activities in rural areas. HUD expects the average 
award amount under this funding category to be $500,000.

[[Page 11247]]

(3) Seed Support
    HUD will award up to $6 million ($5 million in FY 1999 funds and $1 
million in FY 1998 funds) in seed support for Indian tribes, local 
rural non-profits and CDCs that are located in areas that have limited 
capacity for the development of rural housing and economic development 
activities. HUD expects the average award amount under this funding 
category to be $200,000.

(D) Innovative Strategies Clearinghouse

    In addition to the three funding categories described above, $1 
million in FY 1999 Rural Housing and Economic Development program funds 
will be used to create a clearinghouse of ideas for innovative 
strategies for rural housing and economic development and 
revitalization.

III. Program Description; Eligible Applicants; Eligible Activities

(A) Program Description

(1) Background
    There is a great need for expanding the supply of housing in rural 
America, particularly affordable housing for low income families and 
individuals. There are a number of rural areas which have experienced 
rapid in-migration as a result of a growth in employment opportunities, 
but which have a shortage of affordable housing. In addition, because 
of out-migration from rural areas, and other factors causing economic 
dislocation, many rural areas suffer from severe economic distress. 
There has been a growing national recognition of the need to enhance 
the capacity of local and State governments, Indian tribes, local rural 
nonprofits, and CDCs to expand the supply of affordable housing and to 
engage in economic development activities in rural areas.
    A number of resources are available from the Federal government to 
address these problems, including programs of the United States 
Department of Agriculture (USDA), the Economic Development 
Administration (EDA), the Appalachian Regional Commission (ARC), the 
Department of Interior (for Indian Tribes) and HUD. The Rural Housing 
and Economic Development program has been developed to supplement these 
resources and to focus specifically on capacity building and innovative 
approaches to both housing and economic development in rural areas. In 
administering these funds, HUD will encourage coordination between all 
Federal agencies in support of the program objectives.
(2) Definitions
    Areas that have limited capacity for the development of rural 
housing and economic development means areas in which very few or no 
institutions or organizations exist which have the capacity to develop 
housing or economic development activities of the sort proposed in the 
application.
    Colonia means any identifiable community that:
    (i) Is located in the State of Arizona, California, New Mexico, or 
Texas;
    (ii) Is located in the U.S.-Mexico border region (that is, within 
150 miles of the border between the U.S. and Mexico); and
    (iii) 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.
    Farmworker means a farm employee of an owner, tenant, labor 
contractor, or other operator raising or harvesting agricultural or 
aquacultural commodities; or a worker in the employ of a farm operator, 
handling planting, drying, packing, grading, storing, delivering to 
storage or market, or carrying to market agricultural or aquacultural 
commodities produced by the operator. Seasonal farmworkers are those 
farm employees who typically do not have a constant year round salary. 
Migrant farmworkers are those farm employees whose work requires travel 
that prevents the employee from returning to his or her permanent place 
of residence within the same day.
    Firm commitment means the agreement by which an applicant's partner 
agrees to perform an activity specified in the application and 
demonstrates the financial capacity to deliver the resources necessary 
to carry out the activity, and commits the resources to the activity. 
Although a firm commitment need not be legally binding, or enforceable, 
at the time the grant is awarded, it must be legally binding before 
grant funds may be expended. In documenting a firm commitment, the 
applicant's partner must:
    (i) Specify the authority by which the commitment is made, the 
amount of the commitment and the use of funds. If the committed 
activity is to be self-financed, the applicant's partner must evidence 
its financial capability through a corporate or personal financial 
statement or other appropriate means. If any portion of it is to be 
financed through a lending institution, the participant must evidence 
the institution's commitment to fund the loan;
    (ii) State the amount and use of the grant, and the relationship of 
the grant to the proposed investment; and
    (iii) Affirm that its investment is contingent upon receipt of the 
total grant or other public money (or a specified portion thereof), and 
state a willingness on the part of the signatory to sign a legally 
binding commitment upon award of the grant.
    Indian tribe means any entity eligible to apply for funding under 
the Indian Community Development Block Grant (ICDBG) program (see 24 
CFR 1003.5(a)).
    Innovative housing and economic development activities means tools, 
techniques, methods, combinations of assistance, construction methods 
materials, and financing institutions or sources new to the area, 
region or population served. The innovative activities can also build 
upon and enhance a model that already exists.
    Local rural non-profit or community development corporation means 
either:
    (i) Any private entity with tax exempt status recognized by the 
Internal Revenue Service (IRS) which serves the rural area involved in 
the application (including local affiliates of national organizations 
that provide technical and capacity building assistance in rural 
areas); or
    (ii) Any public non-profit such as a Council of Governments that 
serves the rural area.
    Rural area may be defined in one of five ways:
    (i) A place having fewer than 2,500 inhabitants (within or outside 
of metropolitan areas).
    (ii) A county with no urban population (i.e., city) of 20,000 
inhabitants or more.
    (iii) Territory, persons, and housing units in the rural portions 
of ``extended cities.'' The U.S. Census Bureau identifies the rural 
portions of extended cities in the United States.
    (iv) Open country which is not part of or associated with an urban 
area. The United States Department of Agriculture (USDA) determines 
what constitutes ``open country.''
    (v) Any place with a population not in excess of 20,000 which is 
not located in a Metropolitan Statistical Area.

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    State economic development or community development agency means 
any state agency which has promotion of statewide or local community/
economic development as its primary purpose.
    State Housing Finance Agency means any state agency created to 
assist local communities and housing providers with financing 
assistance for development of housing, particularly for low and 
moderate income people.
(3) Eligible Applicants
    Eligible applicants for each of the funding categories are as 
follows:
    (a) For capacity building funding. If you are a local rural non-
profit, CDC, or Indian tribe, you are eligible for capacity building 
assistance. If you are a local rural nonprofit/CDC applying for 
capacity building funds (and are not a local affiliate of a national 
organization), you must either:
    (i) Have experience in providing technical assistance and capacity 
building assistance in rural areas; or
    (ii) Partner with another organization that has such experience.
    (b) For support for innovative activities funding. If you are a 
local rural non-profit, CDC, Indian tribe, State HFA, or State economic 
development or community development agency, you may apply for funding 
to support innovative housing or economic development activities in 
rural areas.
    (c) For seed support funding. If you are a local rural non-profit, 
CDC, or Indian tribe, you may apply for seed support funding.
(4) Eligible Activities
    The following are examples of eligible activities under the Rural 
Housing and Economic Development program. The examples are illustrative 
and are not meant to limit the activities that you may propose in your 
application. Any activity that meets the objective of the Rural Housing 
and Economic Development program will be considered eligible.
    (a) For capacity building funding. Capacity building for rural 
housing and economic development involves the enhancement of existing 
organizations to carry out new functions and/or perform more 
effectively existing functions; and the creation of new organizations 
or institutions to carry out specific functions.
    (i) Activities in connection with strengthening existing 
organizations include hiring qualified staff, supporting and training 
existing staff, providing software and other tools to provide 
networking and research capability, and obtaining expertise from 
outside sources. They also include hiring staff and training to improve 
management capability, including development of accounting systems, MIS 
support and related activities. Eligible activities also include 
arranging for technical assistance to conduct need assessments, conduct 
asset inventories, develop strategic plans, assist businesses to 
prepare pro formas, conduct market research. These activities also 
include the promotion of fair housing by training local organizations 
and residents in fair housing issues, and by helping them to file fair 
housing complaints with HUD, when warranted.
    (ii) With regard to new organizations, the Rural Housing and 
Economic Development program is intended to create new funding sources 
and financing mechanisms and improve access to existing resources. 
Eligible activities include technical assistance for and the costs of 
establishing (but not capitalizing) private community development 
financial institutions (CDFIs) using Federal funds, lines of credit, 
revolving loan funds, microenterprises, small business incubators etc. 
The legal costs of establishing an organization or creating a 
subsidiary of an existing one are also eligible.
    (b) For support of innovative rural housing and economic 
development funding. (i) This category is intended to support, but not 
be limited to, ``hard costs'' for both housing and economic 
development. Eligible activities include preparation of plans, 
architectural and engineering drawings and reports, financial 
assistance for acquisition of land and buildings, demolition, purchase 
of materials, construction costs, the use of local labor markets, and 
provision of infrastructure.
    (ii) With regards to housing, eligible activities include 
homeownership counseling, application of innovative construction 
methods, encouraging building design which reflects terrain, weather, 
and availability of indigenous materials. The latter would include 
construction training, remedial education and social service support. 
Building design is subject to the requirements of the Americans with 
Disabilities Act and section 504 of the Rehabilitation Act of 1973.
    (iii) For both housing and economic development, eligible 
activities include establishing CDFIs, lines of credit, revolving loan 
funds, microenterprises, small business incubators, provision of direct 
financial assistance to homeowners/businesses/developers, etc. This can 
be in the form of establishing default reserves, pooling/securitization 
mechanisms, loans, grants, etc.
    (c) For seed support funding. This category is intended to provide 
funds for start up costs, either for new organizations/institutions, or 
for specific projects that will support innovative housing and economic 
development activities. For organizations, this could include ``up 
front'' money for acquiring space and support facilities, as well as 
hiring staff and other appropriate activities discussed under capacity 
building. For both housing and economic development projects, eligible 
activities include purchase of land, options, purchase of inventory and 
other business ``start up'' costs as well as all other types of 
administrative expenses cited in 24 CFR 570.206(g) of the Community 
Development Block Grant entitlement regulations.

IV. Program Requirements

(A) Statutory Requirements

    To be eligible for funding under this NOFA, you, the applicant, 
must meet all applicable statutory and regulatory requirements. If you 
need copies of the HUD regulations referenced in this NOFA, they are 
available at the HUD web site located at http://www.HUD.gov. HUD may 
reject an application from further funding consideration if the 
activities or projects proposed in the application are not eligible 
activities and projects, or HUD may eliminate the ineligible activities 
from funding consideration and reduce the grant amount accordingly.

(B) Threshold Requirements--Compliance With Fair Housing and Civil 
Rights Laws.

    With the exception of Federally recognized Indian tribes, all 
applicants and their subrecipients must comply with all Fair Housing 
and civil rights laws, statutes, regulations and executive orders as 
enumerated in 24 CFR 5.105(a). If you are a Federally recognized Indian 
tribe, you must comply with the Age Discrimination Act of 1975, section 
504 of the Rehabilitation Act of 1973, and the Indian Civil Rights Act.
    If you, the applicant, or any of your partners or affiliates--
    (1) Have been charged with a systemic violation of the Fair Housing 
Act by the Secretary alleging ongoing discrimination;
    (2) Are a defendant in a Fair Housing Act lawsuit filed by the 
Department of Justice alleging an ongoing pattern or practice of 
discrimination; or
    (3) Have received a letter of noncompliance findings under Title 
VI,

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Section 504 of the Rehabilitation Act of 1973, or Section 109 of the 
Housing and Community Development Act of 1974--
    HUD will not rank and rate your application under this NOFA if the 
charge, lawsuit, or letter of findings has not been resolved to the 
satisfaction of the Department before the application deadline stated 
in this NOFA. HUD's decision regarding whether a charge, lawsuit, or a 
letter of findings has been satisfactorily resolved will be based upon 
whether appropriate actions have been taken to address allegations of 
ongoing discrimination in the policies or practices involved in the 
charge, lawsuit, or letter of findings.

(C) Additional Nondiscrimination Requirements

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

(D) Affirmatively Furthering Fair Housing

    With the exception of Indian tribes, if you are a successful 
applicant, you will have a duty to affirmatively further fair housing. 
You, the applicant, should include in your work plan the specific steps 
that you will take to promote and ensure fair housing rights and fair 
housing choice.

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

    You 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 in subpart E, if:
    (1) The amount of your grant exceeds $200,000; and
    (2) Your funded project involves the construction, reconstruction, 
conversion or rehabilitation of housing (including the reduction and 
abatement of lead-based paint hazards), or other public construction 
which involves buildings and improvements (regardless of ownership).
    Section 3 requires recipients to ensure that, to the greatest 
extent feasible, training, employment and other economic opportunities 
will be directed to low and very low income persons, particularly those 
who are recipients of government assistance for housing; and business 
concerns which provide economic opportunities to low and very low 
income persons.

(F) Relocation

    Any person (including individuals, partnerships, farms, 
corporations or associations) who moves from real property or moves 
personal property from real property directly (1) because of a written 
notice to acquire real property in whole or in part, or (2) because of 
the acquisition of the real property, in whole or in part, for a HUD-
assisted activity is covered by the Federal relocation statute and 
regulations. Specifically, this type of move is covered by the 
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. The relocation 
requirements of the URA and the governmentwide regulations also cover 
any person who moves permanently from real property or moves personal 
property from real property directly because of rehabilitation or 
demolition for an activity undertaken with HUD assistance.

(G) Forms, Certifications and Assurances

    You, the applicant, are required to submit signed copies of the 
standard forms, certifications, and assurances included in the Appendix 
to this NOFA.

(H) OMB Circulars

    The policies, guidance, and requirements of OMB Circular No. A-87 
(Cost Principles Applicable to Grants, Contracts and Other Agreements 
with State and Local Governments), OMB Circular No. A-122 (Cost 
Principles for Nonprofit Organizations), OMB Circular No. A-133 (Audits 
of States, Local Governments, and Non-Profit Organizations), 24 CFR 
part 84 (Grants and Agreements with Institutions of Higher Education, 
Hospitals, and other Non-Profit Organizations) and 24 CFR part 85 
(Administrative Requirements for Grants and Cooperative Agreements to 
State, Local, and Federally recognized Indian tribal governments) apply 
to the award, acceptance and use of assistance under the Rural Housing 
and Economic Development program NOFA, and to the remedies for 
noncompliance, except when inconsistent with the provisions of the FY 
1999 HUD Appropriations Act, other Federal statutes or the provisions 
of this NOFA. Copies of the OMB Circulars may 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).

(I) 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 you, 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, not commit HUD or local funds for these 
program activities with respect to any eligible property, until HUD 
approval of the property is received. In supplying HUD with 
environmental information, grantees are to use the same guidance as 
provided in the HUD Handbook entitled ``Field Environmental Review 
Processing for HUD Colonias Initiative (HCI) grants'' issued January 
27, 1998.

(J) Grant Amounts

    In the event you, the applicant, are awarded a grant that has been 
reduced (e.g. the application contained some activities that were 
ineligible or budget information did not support the request), you will 
be required to modify your 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 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 application. HUD reserves the right 
not to make awards under this NOFA.

(K) 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 and audit requirements and final project close-
out.

(L) Negotiations

    After all applications have been rated and ranked and a selection 
has been

[[Page 11250]]

made, HUD may require that grantees 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 your application to ensure the purpose of the program 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 funding category, HUD may fund part of the next highest ranking 
application in the same category (i.e., 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) All property assisted under the Rural Housing and Economic 
Development program is covered by the Lead-Based paint Poisoning 
Prevention Act (42 U.S.C. 4821-4846) and HUD's implementing regulations 
at 24 CFR part 35.

V. 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.
(2) Rating
    All applicants for funding will be evaluated against the criteria 
below.
(3) Ranking
    Applicants will be ranked separately within each of the three 
funding categories. Applicants will be selected for funding in 
accordance with their rank order in each category. If two or more 
applications are rated fundable and have the same score, but there are 
insufficient funds to fund all of them, the application(s) with the 
highest score for Rating Factor 3 (Soundness of Approach) shall be 
selected.

(B) Initial Screening

    During the period immediately following the application deadline, 
HUD will screen each application to determine eligibility. Applications 
will be rejected if they:
    (1) Are submitted by ineligible applicants (including applicants 
that do not meet the fair housing and civil rights threshold 
requirement described in section IV(B) of this NOFA);
    (2) Do not serve an eligible rural area; or
    (3) Propose a program for which significant activities are 
ineligible.
    HUD will notify you if your application failed to pass the initial 
screening review.

(C) Rating Factors for Award

    Rating Factor 1--Capacity of the Applicant and Relevant 
Organizational Experience (up to 25 points).
    This rating factor addresses the qualifications and experience of 
the applicant and participating parties to carry out the objectives of 
the proposed activities within a reasonable time period. HUD will 
review and evaluate the information provided documenting capacity.
    (a) Rating standard applicable to all funding categories. For all 
three funding categories, you must submit evidence of the experience of 
you and your partners (if any) in leveraging other Federal, local, 
State and private sector funds.
    (b) Rating standards applicable to individual funding categories. 
The three funding categories have different objectives. Accordingly, in 
addition to the generally applicable rating standard discussed above, 
different standards will be used to judge the experience and 
qualifications of the applicants and any partners for each of the three 
funding categories.
    (i) Capacity Building. (1) If you, the applicant, are an existing 
organization, HUD will consider the experience of you and your partners 
(if any) in housing or economic development programs and the 
competencies of your core staff to effectively utilize the funds which 
are being proposed for capacity building. You must demonstrate 
experience, including number of units built or economic development 
activities accomplished. You must describe your basic organization, 
management structure, and include evidence of internal and external 
coordination and an adequate accounting system.
    (2) If you, the applicant, are a new institution or fund, HUD will 
consider the experience of a parent or sponsoring organization and its 
partners (if any) in areas related to the institution or funds and the 
organizational framework within which they will be established. You 
must describe the competencies of your core staff to manage the new 
institution or programs. If your parent or sponsoring organization has 
a governing board, HUD will consider the experience and relevant 
background of the board members.
    (ii) Support for Innovative Rural Housing and Economic Development 
Activities. HUD will consider the demonstrated experience of you and 
your partners (if any) in carrying out the type of housing or economic 
development project or activity for which funding is being sought and 
the competencies of your staff who will be responsible for carrying it 
out. Since these funds are for implementation, not capacity building, 
you must describe the experience, including past achievements, that you 
and your partners (if any) have in conducting the specific type of 
activities for which funding is requested. You must also describe the 
competencies of your core staff to carry out the proposed activities 
for which you are requesting funding. You must also submit evidence of 
the experience of you and your partners (if any) in leveraging other 
Federal, local, State and private sector funds.
    (iii) Seed support. HUD will consider the demonstrated experience 
of you and your partners (if any) in carrying out the specific type of 
program for which the seed support is being requested. You must 
describe the experience that you and your partners (if any) have in 
conducting the types of activities for which you are seeking funding, 
including the competencies of core staff. You must also submit evidence 
of the experience of you and your partners (if any) in leveraging other 
Federal, local, State and private sector funds.
    Rating Factor 2--Need and Extent of the Problem (up to 25 points).
    The Rural Housing and Economic Development program has been 
designed to address the problems of rural poverty, inadequate housing 
and lack of economic opportunity. Need will be addressed in two ways--
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documentation of the demographics of economic distress (including the 
special factors discussed below); and demonstrated need for the 
specific activity or project.
    (a) Demographics of Economic Distress (up to 10 points). You must 
provide data documenting economic distress. These data may include 
poverty rates, unemployment data, out-migration information and other 
statistics including health problem, crime rates, drug use, wage 
levels, high school dropout rates, literacy rates, incidence of 
homelessness, and rates/number of people on public assistance. Because 
of distances between population centers and low population densities in 
rural areas, considerable latitude will be allowed in establishing the 
most appropriate area to which the data apply. If housing shortages in 
an area are being caused by rapid in-migration, provide information 
regarding number of new residents and their housing needs. In addition 
to the data for the area itself, comparative statistics must be 
provided for the region or State which will document the high level of 
distress in the area to be served.
    (b) Demographics of Economic Distress--Special Factors (5 points). 
Because of the concern of the Department with meeting the needs of 
certain underserved areas, you will be awarded a total of five points 
if you are located in or propose to serve the following:
    (i) Areas with very small populations in non-urban areas (2,500 
population or less);
    (ii) Migrant and seasonal farmworkers;
    (iii) Indian Tribes; or
    (iv) Colonias
    (c) Demonstrated Need (up to 10 points).
    (i) For capacity building. You must document the need for 
improvement of existing organizations, creation of new institutions, 
etc. If a new institution or organization is being proposed, you must 
provide evidence documenting that no existing organization serves the 
identified need(s) in the area(s) to be served.
    (ii) For support for Innovative Rural Housing and Economic 
Development Activities. (1) General. HUD will evaluate the importance 
of the project to the community and the projected outcomes. For both 
housing and economic development projects, you must describe the 
importance of the activities to be funded by the grant to the total 
project. HUD will also consider the degree to which the need for the 
project or activity has been reflected in the planning processes of the 
community.
    (2) For economic development proposals, you must describe the 
number of jobs to be created, provisions for job training and linkage 
to jobs for area residents and the potential for attracting or creating 
new industry niches, and the extent to which it will build wealth in 
the community.
    (3) For housing projects, HUD will evaluate the extent to which the 
proposed housing satisfies an unmet need. You must provide data which 
documents the need for increasing the supply of affordable housing in 
the areas in which housing is to be provided. You must address the 
issues of the affordability of housing and the cost of housing, as well 
as the availability of financing. You must use census tracts, political 
boundaries, neighborhood designations or other delineations to define 
the area to be served. You must state the source of the information 
provided. You must provide information on:
    (A) Vacancy rates;
    (B) Substandard housing;
    (C) Shortage of affordable housing (if the shortage of housing has 
been caused by recent in-migration, provide statistics regarding the 
number of new residents and describe the problem which this has 
caused); and
    (D) Rent burden.
    (iii) For Seed Support. HUD will evaluate the relative importance 
of the seed support which is being sought to the viability of the 
project or activity. You must describe the importance of the seed money 
to be provided to the total project.
    Rating Factor 3--Soundness of Approach (up to 30 points).
    This factor addresses the quality and anticipated effectiveness of 
your Statement of Work in meeting the needs you have identified in 
rating factor 2. HUD will be evaluating your Statement of Work for its 
proposed activities, reasonableness of costs, and management plan for 
assuring timely completion of all work. HUD is interested in quickly 
creating housing and economic development opportunities in rural areas. 
HUD will consider:
    (a) The extent to which your Statement of Work meets the purposes 
of this NOFA, is logical, feasible, and provides a schedule for the 
completion of major tasks and deliverables. If your proposed activities 
will quickly produce demonstrable results and advance the purposes of 
the Rural Housing and Economic Development program, you will receive a 
higher score.
    (b) The rationale for your proposed activities and methods and why 
you believe these activities will be most effective in addressing the 
identified need. If you are proposing new methods for which there is 
limited knowledge of the effectiveness, you must provide the basis for 
modifying past practices, and your rationale for why the modified 
approach will yield more effective results.
    (c) The extent to which your management plan identifies the 
specific actions that you and others responsible for implementing the 
project will take to complete your proposed activities on time and 
within budget.
    (d) The quality, thoroughness, and reasonableness of the cost 
estimates provided, including costs broken down by line item for each 
proposed activity.
    Rating Factor 4--Leveraging Resources (up to 10 points).
    (a) Leveraging of Other Funding Commitments (All Funding 
Categories) (up to 5 points). HUD will evaluate the extent to which 
applicants for any of the three funding categories have obtained firm 
commitments of resources from other Federal, State, local, and private 
sources. In assigning points for this criterion, HUD will consider the 
level of outside resources obtained for cash or in kind services that 
support activities proposed in your application. This criterion is 
applicable to all three funding categories under this NOFA. The level 
of outside resources for which commitments are obtained will be 
evaluated based on their importance to the total program.
    (b) Financial Leverage Projects (Innovative Grants Only) (up to 5 
points). Because HUD fully supports the expansion of lending 
opportunities to disadvantaged areas of rural America, HUD will award 
up to 5 points to those applicants which propose--either individually 
or through coalitions of organizations--to carry out diversified 
financial leveraging linkages that are designed to mitigate the risk of 
lending by securing a pool of much larger funds from other funding 
sources, e.g., private institutions and foundations. In awarding these 
points, HUD will consider the level of existing leveraging relations 
with private institutions, foundations, and other entities; and the 
proposed use of the leveraging funds, e.g., to establish a loan loss 
reserve; provide gap financing, homeownership assistance, or business 
loans for firms; to serve as a financial intermediary, etc. This 
criterion is applicable only to funding for support of innovative rural 
housing and economic development activities.

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    Rating Factor 5--Comprehensiveness and Coordination (10 points).
    This factor addresses the extent to which your proposed program is 
coordinated with other ongoing and related activities in the area you 
propose to serve. The purpose of this factor is to ensure that whenever 
possible, activities are not operated in isolation, but rather are 
linked with related activities and organizations to improve the overall 
effectiveness of all efforts being undertaken as part of your overall 
effort. In evaluating this factor, HUD will consider the extent to 
which you have coordinated your activities with other known 
organizations, participate or promote participation in the state's 
Consolidated Planning process, and have addressed your described need 
in a holistic and comprehensive manner through linkages with other 
activities in the area or approved plans and programs funded by state 
or local governments.
    In evaluating this factor, HUD will consider the extent to which 
you demonstrate that you have:
    (a) Coordinated your proposed plan of activities with those of 
other groups or organizations in order to best complement and mutually 
support others' ongoing efforts or programs;
    (b) Identified specific actions that have been taken or will be 
taken to coordinate comprehensive solutions through meetings, 
information networks, planning processes and other mechanisms with:
    (i) Other HUD funded projects/activities; and
    (ii) Other Federal, State or locally funded activities, including 
those proposed or ongoing in the area.

VI. Application Submission Requirements

    You must submit a separate application for each funding category 
you are applying for under this NOFA. The portion of your application 
consisting of your Statement of Work (see below) must be no more than 
25 pages, and must be submitted on 8.5'' by 11'' paper, with lines 
double spaced and printed only one side. All pages of the application 
shall be numbered sequentially. Your application must include the 
following:

(A) Statement of Work

    You must submit a Statement of Work which addresses the rating 
factors discussed in Section V(C) of this NOFA. The Statement of Work 
must start with a summary of the proposed program, including your 
objective, partners (if any), activities, and costs. All of the issues 
covered in the respective rating factors must be covered in order to 
receive full credit in the evaluation of the proposal. Following the 
summary, the Statement of Work must be organized as follows:
    (1) You must describe your organization and the assignment of 
responsibilities for the work to be carried out under the grant (Rating 
Factor 1).
    (2) You must describe the need and extent of the problem (Rating 
Factor 2).
    (a) If you propose to create a new organization or institution 
under the capacity building funding category, you must provide evidence 
documenting that no existing organization or institution exists which 
serves the need identified in the area.
    (b) If you are applying for seed support funding, you must provide 
evidence documenting that the area has limited capacity for the 
development of rural housing and economic development.
    (3) You must describe the objective of your proposed program 
(Rating Factor 3). In addressing this submission requirement, you must:
    (a) Describe the activities you propose to undertake to address the 
needs which have been identified, and describe the specific outcomes 
you expect to achieve.
    (b) Include a budget in the format provided which explains the uses 
of both Federal and non-Federal funds and the period of performance 
under the grant.
    (c) Include a discussion of the process by which the work 
accomplished with the grant will be evaluated to determine if the 
objectives of the grant were met. Be specific regarding the 
qualifications of the evaluator and the process to be used.
    (4) You must identify the resources which will be leveraged and 
explain their importance to the program (Rating Factor 4). To receive 
the maximum number of points under Rating Factor 4(a), you must provide 
evidence of firm commitments. The commitment can be contingent upon HUD 
site approval following environmental review.
    (5) You must describe the extent to which your program reflects a 
coordinated, community based process of identifying needs and building 
a system to address these needs (Rating Factor 5).
    (B) In addition to the Statement of Work, your application must 
also include an original and two copies of the items listed below:
    (1) A transmittal letter;
    (2) A table of contents;
    (3) A signed SF-424 (application form);
    (4) A budget for all funds (Federal and Non-Federal) and a 
breakdown of all Federal funds requested, in the format provided in the 
Appendix to this NOFA;
    (5) Documentation of funds pledged in support of Rating Factor 4--
``Leveraging Resources'';
    (6) The required certifications (signed, as appropriate, and 
attached as an Appendix);
    (7) Acknowledgment of Application Receipt form (submitted with 
application and returned to you as verification of timely receipt).
    (8) If you are a private nonprofit organization, a copy of your 
organization's IRS ruling providing tax-exempt status under section 501 
of the IRS Code of 1986, as amended.
    (9) Documentation demonstrating that the area served meets one of 
the five definitions of the term ``rural area'' set forth in section 
III(A)(2) of this NOFA.
    (10) The Environmental Review Assurance.

VII. Corrections to Deficient Applications

    After the application due date, HUD may not, consistent with its 
regulations in 24 CFR part 4, subpart B, consider any unsolicited 
information you, the applicant, may want to provide. HUD may contact 
you, however, to clarify an item in your application or to correct 
technical deficiencies. You should note, however, that HUD may not seek 
clarification of items or responses that improve the substantive 
quality of your response to any eligibility or selection factors. 
Examples of curable (correctable) technical deficiencies include your 
failure to submit the proper certifications or your failure to submit 
an application that contains an original signature by an authorized 
official. In each case, HUD will notify you in writing by describing 
the clarification or technical deficiency. HUD will notify applicants 
by facsimile or by return receipt requested. Applicants must submit 
clarifications or corrections of technical deficiencies in accordance 
with the information provided by HUD within 5 calendar days of the date 
of receipt of the HUD notification. If your deficiency is not corrected 
within this time period, HUD will reject your application as 
incomplete, and it will not be considered for funding.

VIII. Findings and Certifications

Paperwork Reduction Act Statement

    The information collection requirements related to this program 
have been approved by the Office of Management and Budget (OMB) in

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accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520). The OMB approval number, once approved, 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.

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.

Federalism, Executive Order 12612

    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 on the relationship between 
the Federal Government and the States, or on the distribution of power 
and responsibilities among the various levels of government. 
Specifically, the NOFA solicits applicants to build capacity at the 
State and local level for rural housing and economic development and to 
support innovative housing and economic development activities in rural 
areas, and does not impinge upon the relationships between the Federal 
government and State and local governments. As a result, the NOFA is 
not subject to review under the Order.

Prohibition Against Lobbying Activities

    You, the applicant, 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), which prohibits 
recipients of Federal contracts, grants, or loans from using 
appropriated funds for lobbying the executive or legislative branches 
of the Federal Government in connection with a specific contract, 
grant, or loan. You are required to certify, using the certification 
found at Appendix A to 24 CFR part 87, that you will not, and have not, 
used appropriated funds for any prohibited lobbying activities. In 
addition, you must disclose, using Standard Form LLL, ``Disclosure of 
Lobbying Activities,'' any funds, other than Federally appropriated 
funds, that will be or have been used to influence Federal employees, 
members of Congress, and congressional staff regarding specific grants 
or contracts. Tribes and tribally designated housing entities (TDHEs) 
established by an Indian tribe as a result of the exercise of the 
tribe's sovereign power are excluded from coverage of the Byrd 
Amendment, but tribes and TDHEs established under State law are not 
excluded from the statute's coverage.

Section 102 of the HUD Reform Act; Documentation and Public Access 
Requirements

    Section 102 of the Department of Housing and Urban Development 
Reform Act of 1989 (42 U.S.C. 3545) (HUD Reform Act) and the 
regulations codified 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. The 
documentation, public access, and disclosure requirements of section 
102 apply to 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 in 24 CFR part 15.
    (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 5.
    (3) Publication of Recipients of HUD Funding. HUD's regulations at 
24 CFR 4.7 provide that HUD will publish a notice in the Federal 
Register on at least a quarterly basis to notify the public of all 
decisions made by the Department to provide:
    (i) Assistance subject to section 102(a) of the HUD Reform Act; or
    (ii) Assistance that is provided through grants or cooperative 
agreements on a discretionary (non-formula, non-demand) basis, but that 
is not provided on the basis of a competition.

Section 103 HUD Reform Act

    HUD's regulations implementing section 103 of the Department of 
Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3537a), 
codified in 24 CFR part 4, apply to this funding competition. The 
regulations 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 the 
regulations 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 must confine their 
inquiries to the subject areas permitted under 24 CFR part 4.
    Applicants or employees who have ethics related questions should 
contact the HUD Ethics Law Division at (202) 708-3815. (This is not a 
toll-free number.) For HUD employees who have specific program 
questions, the employee should contact the appropriate field office 
counsel, or Headquarters counsel for the program to which the question 
pertains.

IX. Authority

    The Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act, 1999 (Pub.L. 
105-276, approved October 21, 1998; 112 Stat. 2461, 2475).

    Dated: March 2, 1999.
Cardell Cooper,
Assistant Secretary for Community Planning and Development.

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[FR Doc. 99-5537 Filed 3-5-99; 8:45 am]
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