[Federal Register Volume 68, Number 97 (Tuesday, May 20, 2003)]
[Notices]
[Pages 27680-27719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12458]



[[Page 27679]]

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Part III





Department of Housing and Urban Development





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Notice of Funding Availability (NOFA) for the Research Studies on 
Homeownership and Affordable Lending Fiscal Year (FY 2002); Notice

  Federal Register / Vol. 68, No. 97 / Tuesday, May 20, 2003 / 
Notices  

[[Page 27680]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4778-N-01]


Notice of Funding Availability (NOFA) for the Research Studies on 
Homeownership and Affordable Lending Fiscal Year (FY 2002)

AGENCY: Office of Policy Development and Research, HUD.

ACTION: Notice of funding availability (NOFA).

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SUMMARY: Purpose of the NOFA. The purpose of this NOFA is to fund 
technical studies that will guide development of public policy to 
increase affordable lending, reduce downpayment constraints, and 
promote homeownership, especially for low- and moderate-income and 
minority families and in geographical areas which have been underserved 
by the mortgage finance system. HUD particularly seeks studies that 
will provide empirical basis for its regulation and monitoring of two 
Government-Sponsored Enterprises (GSEs)--Fannie Mae and Freddie Mac, 
including the effects of such regulation and monitoring on affordable 
lending in the primary mortgage market. Specific topics of interest 
include:

1. Homeownership

    a. Factors underlying the increase in homeownership during the 
1990s and policy implications for the current decade;
    b. Accounting for the remaining income and racial disparities in 
homeownership rates, and policy approaches that could remove barriers 
for prospective low-income and minority homeowners; and
    c. Supply constraints and regulatory barriers that impact 
homeownership opportunities and could potentially impair the 
effectiveness of affordable lending programs.

2. Affordable Lending

    a. Determinants of problems faced by low-income and minority 
families in accessing mortgage credit;
    b. Determinants of downpayments;
    c. The role of major mortgage market institutions such as Fannie 
Mae, Freddie Mac, the Federal Housing Administration, and depository 
institutions in increasing credit access for low- and moderate-income 
and minority families and their communities; and
    d. Effects on targeted populations of setting alternative levels of 
the GSE affordable housing goals and defining the goals in alternative 
ways.
    Available Funds. $570,000 from HUD's FY 2002 research and 
technology appropriation. HUD anticipates funding 15 to 20 studies on 
these topics; studies will be funded through cooperative agreements, up 
to a maximum of $40,000.
    Eligible Applicants. Academic and not-for-profit institutions 
located in the U.S., state and local governments, and federally 
recognized Indian tribes are eligible to apply. For-profit businesses 
also are eligible; however, they are not allowed to earn a fee or 
profit.
    Application Deadline. July 21, 2003.
    Match. None required.

Additional Information

I. Application Due Date, Further Information and Technical Assistance

    Application Due Date. Your completed application is due on or 
before July 21, 2003.
    Address for Submitting Applications. All applications must be 
either mailed or sent via overnight/express mail delivery, addressed 
to: Department of Housing and Urban Development, Financial Institutions 
Regulation Division, Office of Policy Development and Research, 451 
Seventh St., SW., Room 8212, Washington, DC 20410.
    Application Submission Requirements. New Security Procedures. HUD 
has implemented new security procedures that affect application 
submission procedures. Please read the following instructions carefully 
and completely. HUD will not accept hand-delivered applications. 
Applications may be mailed using the United States Postal Service 
(USPS) or may be shipped via one of the following delivery services: 
DHL, Falcon Carrier, FedEx, United Parcel Service (UPS), or United 
States Postal Service Express Mail. No other delivery services are 
permitted into HUD Headquarters without escort. You must, therefore, 
use one of these carriers.
    Mailed Applications. Your application will be considered timely 
filed if your application is postmarked on or before 12 midnight on the 
application due date and received by the designated HUD office on or 
within fifteen (15) calendar days of the application due date. All 
applicants must obtain and save a Certificate of Mailing showing the 
date when the application was submitted to the USPS. The Certificate of 
Mailing (which is USPS Form 3817) will be your documentary evidence 
that your application was timely filed.
    Applications Sent by Overnight/Express Mail Delivery. If your 
application is sent by overnight delivery or express mail, your 
application will be timely filed if it is received before or on the 
application due date, or when you submit documentary evidence that your 
application was placed in transit with the overnight delivery/express 
mail service by no later than the application due date. Due to new 
security measures, you must use either USPS express mail or one of four 
carrier services that do business with HUD headquarters regularly. 
These services are DHL, Falcon Carrier, FedEx, and UPS. Delivery by 
these services must be made during HUD's headquarters business hours, 
i.e., between 8:30 a.m. and 5:30 p.m. eastern time, Monday through 
Friday.
    Other Transmission Methods. Only applications submitted via mail or 
one of the express carrier services identified above will be accepted. 
Facsimile, e-mail, or other types of transmission are not acceptable.
    For Further Information. You may contact: Dr. John Gardner, 
Financial Institutions Regulation Division, at the Department of 
Housing and Urban Development, Financial Institutions Regulation 
Division, Office of Policy Development and Research, 451 Seventh St., 
SW., Room 8212, Washington, DC 20410, telephone (202) 708-0614, 
extension 5868, or Mr. Patrick Tewey, Grants Officer, extension 4098 
(these are not toll-free numbers). Hearing- and speech-impaired persons 
may access the above telephone number via TTY by calling the toll-free 
Federal Information Relay Service at 1-800-877-8339.

II. Amount Allocated

    Approximately $570,000 from HUD's FY 2002 Research and Technology 
appropriation will be available to fund research studies proposals in 
FY 2002. Cooperative agreements will be awarded on a competitive basis 
according to the Rating Factors described in Section VII(D). HUD 
anticipates awarding 15 to 20 cooperative agreements ranging up to 
$40,000 each. Applications exceeding this amount (unless the excess is 
provided through cost-sharing) will be deemed to be non-responsive.

III. Program Description; Eligible Applicants; Eligible Activities

    (A) Program Description. Background.
    (1) General Goals and Objectives. Homeownership. HUD invites 
proposals for studies of:
    (i) Homeownership changes during the 1990s, particularly models 
that explain national and local trends in home buying, and policy 
implications of the changes;

[[Page 27681]]

    (ii) How economic, demographic, and other factors influence gains 
and losses in homeownership across metropolitan and rural housing 
markets;
    (iii) Factors that enable low-income families to stay in their 
homes;
    (iv) House price changes and associated impacts on affordability;
    (v) Effects of supply constraints, including zoning or other types 
of regulations, that restrict housing supply and could create barriers 
to homeownership and lessen the impacts of targeted affordable housing 
programs; and
    (vi) Issues related to immigrant homeownership, the causes of 
racial gaps in homeownership, and other important policy issues and 
topics related to homeownership. These studies should provide diverse 
insights on homeownership across local housing markets, which will help 
HUD identify the best vehicles to advance its future homeownership 
strategies to close existing gaps in homeownership.
    Affordable Lending. HUD invites proposals for studies of:
    (i) The effects on lower-income families of the increase in low-
downpayment mortgage programs and the growth of affordable lending 
during the 1990s, and particularly the programs of Fannie Mae and 
Freddie Mac;
    (ii) The role of major mortgage market institutions such as Fannie 
Mae, Freddie Mac, the Federal Housing Administration, and depository 
institutions in increasing credit access for low- and moderate-income 
and minority families and their communities;
    (iii) The extent to which low-downpayment initiatives have 
furthered affordable lending and homeownership;
    (iv) Effects on targeted populations of setting alternative levels 
of the GSE affordable housing goals and defining the goals in 
alternative ways; and
    (v) Barriers that limit access to credit for low-income and 
minority families and families in inner cities and low-income 
neighborhoods.
    (2) Background on Homeownership. Promoting homeownership has been a 
long-standing goal of HUD. Underlying this goal is the belief that 
homeownership is an important aspiration of many American families and 
that homeownership confers advantages to the homeowner family as well 
as to society at large. An owned home can provide a decent and safe 
living environment and is an important source of wealth accumulation. 
The wealth accumulated from homeownership has made possible the funding 
of college education of children and a secure retirement for many 
American families. The homeownership rate is at a record high, not only 
for the entire population, but also for the major minority groups in 
the nation. Even with the current high homeownership rates, many 
American families who do not yet own a home continue to aspire for 
homeownership. Homeownership studies are part of an ongoing agenda at 
HUD to increase opportunities for homeownership for low-income and 
minority households.\1\ HUD recently sponsored studies of the benefits 
of homeownership \2\ and the impact of the GSE housing goals on 
homeownership.\3\ HUD's Office of Policy Development and Research 
recently published staff research on homeownership issues.\4\ HUD has 
an ongoing study on the determinants of homeownership gaps among low-
income and minority borrowers and neighborhoods.\5\ The studies under 
this Request for Applications will complement these other studies.
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    \1\ In this NOFA, ``low-income households'' refers generally to 
households with incomes below 80 percent of area median income. 
Details appear in HUD's regulation on its oversight of Fannie Mae 
and Freddie Mac, at 24 CFR part 81.
    \2\ Robert Dietz and Donald R. Haurin, ``The Social and Private 
Consequences of Homeownership.'' Report submitted to the U.S. 
Department of Housing and Urban Development, Office of Policy 
Development and Research, May 15, 2001, Grant P-CHI-00615.
    \3\ Brent Ambrose, Thomas Thibodeau, and Ken Temkin, An Analysis 
of the Effects of the GSE Affordable Goals on Low- and Moderate-
Income Families. Conducted under contract by the Urban Institute for 
the U.S. Department of Housing and Urban Development, Office of 
Policy Development and Research, April 2002.
    \4\ Recent examples include ``First-Time Homebuyers: Trends From 
The American Housing Survey,'' U.S. Housing Market Conditions, 3rd 
Quarter 2001, U.S. Department of Housing and Urban Development, 
Office of Policy Development and Research, November 2001; and 
``Changing Importance of Unmarried Women as Homebuyers: Trends From 
The American Housing Survey,'' U.S. Housing Market Conditions, 4th 
Quarter 2001, U.S. Department of Housing and Urban Development, 
Office of Policy Development and Research, February 2002.
    \5\ A HUD-funded study, ``Homeownership Gaps Among Low-Income 
and Minority Borrowers and Neighborhoods,'' is being conducted by 
Abt Associates under contract C-OPC-21895 Task Order 4.
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    (3) Background on Affordable Lending. Growth of Affordable Lending 
During the 1990s. Economic expansion and lower mortgage rates 
substantially improved housing affordability during the 1990s. These 
underlying economic developments were enhanced by new and expanded 
affordable lending programs developed by primary mortgage market 
originators, private mortgage insurers, nonprofits, and Fannie Mae and 
Freddie Mac. During the 1990s, FHA also continued to offer its low-
downpayment program that was particularly attractive to low-income and 
minority first-time homebuyers. As a result of initiatives in both the 
conventional and government markets, many young, low-income, and 
minority families who were closed out of the housing market during the 
1980s re-entered the market during the 1990s. However, many households 
still lacked the financial resources and earning power to take 
advantage of housing opportunities in recent years. Several trends 
contributed to the reduction in the real earnings of young adults 
without college education over the last 15 years, including 
technological changes that favored white-collar employment, losses of 
manufacturing jobs, and wage pressures exerted by globalization. Fully 
45 percent of the nation's population between the ages of 25 and 34 
have no advanced education and are therefore at risk of being unable to 
afford homeownership. This is especially true of African Americans and 
Hispanics, who have lower average levels of educational attainment than 
whites.
    HUD's Secondary Mortgage Market Regulatory Role. Fannie Mae and 
Freddie Mac, government-sponsored enterprises (GSEs) in the secondary 
mortgage market, are the two largest sources of housing finance in the 
United States. They play a dominant role in determining the nature and 
volume of affordable lending activities in the primary mortgage market. 
They provide funding for additional mortgage lending by purchasing 
loans from mortgage lenders and holding purchased loans in portfolio. 
Fannie Mae and Freddie Mac also issue mortgage-backed securities (MBS), 
which are then sold in the capital markets to a wide variety of 
investors.
    In 1992, Congress enacted the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (FHEFSSA). This act established the 
current regulatory structure for the GSEs. One important aspect of this 
legislation required the Secretary of HUD to establish annual 
affordable and geographic goals for the GSEs' purchases of mortgages. 
Under this authority, the Secretary initially set goals for 1993-95 
(referred to as the ``transition period''), raised them for 1996-2000, 
and raised them again for 2001-03. The three broad goals include:
    1. A low- and moderate-income goal, which focuses on families with 
below-median incomes;
    2. An underserved areas goal, targeted to low-income and minority 
census tracts in metropolitan areas and counties in non-metro areas; 
and

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    3. A special affordable goal, directed to very low-income families 
and low-income families in low-income areas.
    Congress also expressed concern in 1992 about an ``information 
vacuum'' with regard to the activities of Fannie Mae and Freddie Mac. 
Thus, FHEFSSA required the GSEs to submit loan-level data to the 
Secretary about their mortgage purchases, including detailed 
information on borrower, property, and mortgage characteristics. It 
also required HUD, after taking proprietary considerations into 
account, to make the loan-level data submitted by the GSEs available to 
interested parties in the form of a public use database. The studies to 
be funded under this NOFA will further this mission of providing state-
of-the-art research on the affordable lending efforts of Fannie Mae and 
Freddie Mac.
    Previous and Ongoing PD&R Research. The Financial Institutions 
Regulation Division of the Office of Policy Development and Research 
(PD&R) has conducted considerable internal research on affordable 
lending in recent years, and it has contracted for or provided grants 
for additional research.
    Specifically, the Division inaugurated a series of studies, Working 
Papers in Housing Finance, which has resulted in the publication of 16 
reports to date. The most recent papers are ``The GSEs' Funding of 
Affordable Loans: A 2000 Update,'' by Harold L. Bunce, and ``Black and 
White Disparities in Subprime Mortgage Refinance Lending,'' by Randall 
M. Scheessele, both published in April 2002, and ``Goal Performance and 
Characteristics of Mortgages Purchased by Fannie Mae and Freddie Mac, 
1998-2000,'' by Paul B. Manchester, published in May 2002.
    In 1997, the Division funded grants for 11 studies on various 
aspects of the GSEs' mortgage purchase activities. These studies 
provided useful background information for the reconsideration of the 
housing goals in 2000. Five of these studies were published in PD&R's 
journal Cityscape, Volume 5, Number 3 (2001), and four more were 
published in Cityscape, Volume 6, Number 1 (2002). The other two 
studies have been published in professional journals.
    Examples of recent contract studies funded by the Financial 
Institutions Regulation Division include three studies by the Urban 
Institute: A Study of the GSEs' Single Family Underwriting Guidelines 
(February 1999); Subprime Markets, the Role of the GSEs, and Risk-Based 
Pricing (March 2002); and, An Analysis of the Effects of the GSE 
Affordable Goals on Low- and Moderate-Income Families (May 2002). In 
addition, Abt Associates wrote A Study of Multifamily Underwriting and 
the GSEs' Role in the Multifamily Market (August 2001). Additional 
studies are underway.
    (4) Background on Relevant Data Sources. HUD anticipates that a 
variety of mortgage and housing market data sources may be used, 
including the 1990 and 2000 censuses, Home Mortgage Disclosure Act 
(HMDA) data, American Housing Survey, Panel Survey of Income Dynamics, 
Survey of Consumer Finance, Survey of Residential Finance, and 
databases on mortgages insured by the Federal Housing Administration 
and mortgages purchased or securitized by Fannie Mae and Freddie Mac, 
among others. For example, the Census 2000 long-form data on family 
incomes and housing characteristics provide an important data source 
for examining issues covered by this solicitation. HUD anticipates that 
these studies will be among the first to utilize these newly available 
Census data to examine issues related to homeownership and affordable 
lending. The American Housing Survey offers a consistent longitudinal 
sample to study homeownership and affordable lending issues through 
2001.
    The GSEs have provided HUD with loan-level data on each of their 
mortgage transactions since the beginning of 1993. From this database, 
HUD has extracted a Public Use Data Base for each calendar year from 
1993 through 2001. The single-family component of the Public Use Data 
Base is structured as three separate loan-level data files including 
fields such as the loan amount, the census tract location of each 
property backing a GSE mortgage acquisition, demographic 
characteristics of these tracts, loan-to-value ratio, degree of 
affordability, demographic information on the borrower, loan purpose 
(refinance/purchase), and whether the property is owner-occupied.
    (B) Eligible Activities.
    Below you will find a listing of major topics and questions on 
which HUD seeks information. HUD is interested in high-quality research 
that offers a unique contribution to the literature on affordable 
lending and homeownership.
    [sbull] Your study may combine descriptive and analytical 
approaches.
    [sbull] Your study may identify or measure the factors associated 
with particular outcomes and the underlying causes of particular 
outcomes.
    [sbull] You may describe and analyze the impacts of existing 
policies, and in this case your proposal should highlight the policy 
implications of the potential findings of your proposed research, 
particularly with respect to affordable lending and homeownership 
policies that have been successful in underserved markets.
    [sbull] Your methodology may include statistical techniques, 
econometric estimation, application of geographic information systems 
(GIS) techniques, case studies, or critical review of the present state 
of knowledge and meta-analysis of existing studies. In each case, the 
methodology must reflect the state-of-the-art in the respective 
discipline.
    [sbull] If your study is empirical, your final report must include 
a succinct discussion of the literature related to the issue being 
analyzed that provides background for the methodology of the study and 
a useful context for identifying the analytical and policy 
contributions of the study.
    (1) Studies on Homeownership.
    (a) Changes in Homeownership Rates. The release of the 2000 Census 
data (short and long form data) now presents an opportunity to study 
changes in homeownership over the past decade (1990-2000), at both the 
national and local levels. Similarly, the recent release of the 2001 
American Housing Survey offers the opportunity to study homeownership 
changes over the past 10-15 years with that database as well. The 1990s 
was a decade that saw a great emphasis on promoting homeownership. 
Significant housing policy measures such as the setting of quantitative 
goals for GSE purchase activity were implemented in this decade. There 
was a greater emphasis in the 1990s on promoting homeownership among 
first-time homebuyers, low-income families, minority families, and 
families living in underserved areas. Research under this sub-topic 
includes, but is not limited to, the following:
    (i) What are the general policy implications of the changes in 
homeownership rates in the decade 1990-2000 and specific implications 
arising from the pattern of changes across regions, locations, income 
groups, racial and ethnic groups, groups such as the elderly and the 
disabled, and household types?
    (ii) Are there significant differences in the homeownership rates 
of recent immigrant groups compared with non-immigrants? What is the 
pattern of homeownership rate changes for particular immigrant groups? 
What factors influence the greater likelihood of homeownership among 
certain recent immigrant groups compared with other recent immigrant 
groups?
    (iii) What factors are responsible for the changes in homeownership 
rates

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experienced between 1990 and 2000? What is the relative importance of 
different factors, such as demographic factors (age composition and 
household composition of the population, cultural background, etc.); 
economic factors (income and wealth, interest rates, house prices and 
their appreciation); and public policy factors, in determining the 
changes in homeownership rates?
    (iv) What changes were seen in the home value of owner-occupied 
homes over 1990-2000 (or some similar recent period)? What patterns may 
be discerned from the changes in home value? Was there greater home 
value appreciation in certain regions and locations? Did home value 
changes vary by the minority status of owner-occupants or the minority 
composition of the tract? Did these results hold after certain relevant 
factors were controlled for?
    (v) How have recent changes in house prices (as measured by repeat 
sales and other house price indexes) affected the affordability of 
homeownership, in the nation as a whole, in particular regions and 
metropolitan areas, and for particular groups such as minorities and 
immigrants?
    (vi) What have been the changes in homeownership in rural areas 
over the decade, 1990-2000? What have been the changes in home values 
in rural areas over 1990-2000? What factors explain these changes?
    (vii) How has the geography of homeownership changed between 1990 
and 2000? Has there been greater suburbanization of homeownership over 
this period? What was the nature of homeownership gains in our inner 
cities in terms of the types of homes owned, home values, and income 
and racial/ethnic characteristics of homeowners? (viii) Did minority 
homeowners live in more segregated or less segregated neighborhoods in 
2000 than in 1990? How has the degree of integration changed over this 
period?
    Many of these research topics could be addressed using the 1990 and 
2000 Census data (short and long forms).\6\ While homeownership data 
are available in the short form data, home value is available only in 
the long form data. Longer-term comparisons may be made using data from 
the Censuses before 1990. The Census data may be supplemented with 
other databases such as the Home Mortgage Disclosure Act (HMDA) data, 
the American Housing Survey data (including the geocoded version of 
that database), or other national or local databases. Tract-level 
analyses may be conducted using these multiple databases. In addition, 
there are several available measures of house prices and their change 
that could be used for this analysis (e.g., NAR median house price 
series, Freddie Mac's repeat sales index, AHS and Census home value 
information).
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    \6\ Applicants should take note of changes in minority 
categorization, metropolitan area specification, etc. that became 
effective with the 2000 Census.
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    (b) Sustaining Homeownership and Wealth-Accumulation for Low- and 
Moderate-Income and Minority Families.\7\ While increasing numbers of 
low- and moderate-income and minority families have achieved the 
American Dream of homeownership, sustaining the Dream has sometimes 
presented enormous challenges. The difficulty in making mortgage, 
insurance, tax and utility payments on time has put many households on 
the brink of foreclosure or other hardship. Many benefits of 
homeownership such as gains from price appreciation accrue only after a 
certain period of sustained homeownership. Thus, ensuring that new 
homeowners can sustain their homeownership is integral to realizing the 
American Dream of homeownership as a public policy goal. Even with 
sustained homeownership, the wealth accumulated in home equity can be 
dissipated through refinances that overtap equity. In recent times, 
many households have engaged in such refinances, and often repeatedly. 
Low-income and elderly households are particularly affected by such 
transactions. Refinance counseling to educate homeowners of the 
possibility of erosion in accumulated wealth in the home through 
refinances is seen as necessary. Research related to sustaining 
homeownership for low- and moderate-income and minority families 
includes, but is not limited to, the following:
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    \7\ ``Families'' and ``households'' are also used 
interchangeably here.
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    (i) What has been the recent experience of low- and moderate-income 
and minority households with respect to sustained homeownership? How 
many low- and moderate-income and minority households have sustained 
homeownership for several years?
    (ii) Have low- and moderate-income and minority families built 
assets (wealth) through homeownership? Have refinances resulted in 
erosion of accumulated housing wealth? What has been the level of 
appreciation in the values of the homes that low- and moderate-income 
and minority households have owned for different time horizons (but at 
least eight years)? How is the home value appreciation distributed 
across different locations (e.g., regional, urban versus suburban, 
neighborhoods) and population groups (e.g., different racial groups and 
their neighborhoods)? What are the policy implications of these 
developments?
    (iii) What factors can be identified as being associated with 
sustained homeownership among low- and moderate-income and minority 
families? What is the relative importance of the socio-economic 
characteristics of these families, the role of institutions (such as 
special mortgage lending programs and homeownership and refinance 
counseling programs), and the state of the economy (local and national) 
in helping sustain homeownership among low- and moderate-income and 
minority families?
    (iv) How many low- and moderate-income and minority households 
failed to sustain homeownership in spite of having wanted to remain 
homeowners? What were the causes of failure to sustain homeownership? 
Can failure to sustain homeownership be reliably predicted using 
available data sets?
    (v) What housing adjustments and non-housing adjustments have 
homeowners, on the brink of losing their homes, made in order to 
sustain homeownership? Has housing counseling made a difference?
    (vi) Are difficulties with sustaining homeownership associated more 
with certain types of mortgages? If so, are mortgage characteristics 
responsible for the difficulties; or are the characteristics of the 
households (who are more likely to use such mortgages), their housing 
units, or neighborhoods, responsible?
    (vii) What role have non-profit organizations, such as Community 
Development Corporations (CDCs), faith-based organizations and HUD-
approved counseling agencies \8\ played in helping sustain 
homeownership? What types of programs of these institutions (such as 
financial counseling, job training, providing micro-finance and 
assistance with renovations) have been most effective in helping 
sustain homeownership?
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    \8\ HUD-approved housing counseling agencies are listed on the 
Internet at http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm.
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    Longitudinal panel data, such as the AHS (panel of non-mover 
sample), Survey of Income and Program Participation (SIPP), Panel Study 
of Income Dynamics (PSID) and the National Longitudinal Surveys (NLS), 
are examples of databases that could be used to address these topics. 
Other special purpose databases may also be available. Case studies on

[[Page 27684]]

homeownership experiences may be used where appropriate.
    (c) Barriers to Homeownership. Aspiration for homeownership is 
widespread among American families who are not yet owners. Many such 
families perceive barriers that prevent them from becoming homeowners. 
Financial barriers, including down payment and credit constraints, are 
faced by many households. Other barriers to homeownership include 
discrimination and information barriers. Studying the nature and 
significance of these barriers is a first step towards designing 
policies to remove, minimize, or overcome these barriers. Research on 
barriers to homeownership includes, but is not limited to, the 
following:
    (i) What are the main barriers to homeownership that American 
families currently face?
    (ii) What is the relative importance of homeownership barriers such 
as financial barriers, poor credit history, information barriers, 
discrimination barriers, lack of availability of affordable housing 
stock, and lack of personal capacities to manage homeownership? What is 
the relative importance of these barriers for different population 
groups such as minorities, the elderly, the disabled, and first-time 
homebuyers?
    (iii) To what extent is a downpayment constraint a barrier to 
homeownership? What are the common sources of downpayment for American 
homebuyers? Is homeownership for persons below a certain age related to 
parental wealth? What roles do family gifts and gifts from others play 
in opening up homeownership opportunities for young, low-income, and 
minority families?
    (iv) Are homeownership rates among minority groups in particular 
locations related to some measure of the degree of discrimination that 
the minority groups face at those locations? Researchers may use long-
range panel data like the PSID to address some of these questions. 
Researchers may also use the Survey of Consumer Finances (SCF), AHS, 
HMDA data, and other databases.
    (v) To what extent do housing supply constraints affect 
homeownership? For example, do zoning or other types of regulations 
that restrain housing supply tend to create barriers to homeownership 
through their effects on housing prices? Are there barriers and supply 
constraints specifically in underserved neighborhoods that lessen the 
impacts of targeted affordable housing programs?
    (d) Promoting Homeownership. There are a number of programs and 
policies aimed at promoting homeownership in the U.S. Some of these 
directly address the barriers to homeownership mentioned above. The 
mortgage finance industry clearly has a vital role to play in promoting 
homeownership. The role of secondary mortgage market institutions, 
including the GSEs, in promoting homeownership is of critical interest. 
FHA has played a major role in the first-time homebuyer market. It is 
important to study the role played by these institutions in the past 
and present, as well as their potential role in promoting homeownership 
in the future. Many first-time homebuyers with low-income, as well as 
other buyers, have benefited from the efforts of non-profit 
organizations such as Community Development Corporations (CDCs) and 
faith-based organizations. The efforts of these institutions include 
promoting innovative homeownership programs, such as sweat-equity 
programs, rent-to-own programs and co-operative forms of ownership, and 
providing micro-finance and homeownership counseling to households. HUD 
has worked with non-profit organizations in promoting homeownership 
through a number of its programs, including the Self-Help Housing 
Opportunity Program (SHOP). HUD's Homeownership Voucher Program 
specifically addresses the downpayment constraint that low-income 
households face. Research related to promoting homeownership includes, 
but is not limited to, the following:
    (i) What has been the role of secondary mortgage market 
institutions in promoting homeownership? What role have the GSEs 
(including Fannie Mae, Freddie Mac, Federal Home Loan Banks), and the 
Federal Housing Administration played in promoting homeownership? Has 
the introduction of quantitative housing goals for Fannie Mae and 
Freddie Mac in 1993 directly increased homeownership among low- and 
moderate-income households and among households in underserved 
areas?\9\
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    \9\ The Urban Institute has recently completed a report for HUD, 
``An Analysis of the Effects of the GSE Affordable Goals on Low- and 
Moderate-Income Families.'' The study is a significant first step in 
addressing this issue.
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    (ii) How has the purchase activity of Fannie Mae and Freddie Mac 
with respect to mortgages obtained by low-income, minority or first-
time homebuyers changed over the recent years? Can these changes be 
seen as being beneficial to the promotion of homeownership among these 
groups?
    (iii) What is the evidence on the effectiveness of pre- and post-
purchase homeownership counseling programs of HUD-approved counseling 
agencies, and programs sponsored by FHA, the GSEs and other 
organizations? Does homeownership counseling adequately address 
homeowners' decisions to refinance?
    (iv) What is the role of manufactured housing in promoting 
homeownership through providing affordable housing? Are first-time 
homebuyers, low-income households, and minority households more likely 
to achieve homeownership through purchasing manufactured housing? What 
are the barriers (such as financial, technological, informational and 
attitudinal) to homeowners achieving homeownership through buying 
manufactured homes?
    (v) What has been the role of non-profits, Community Development 
Corporations (CDCs) and faith-based organizations in promoting 
homeownership? What types of programs of these institutions have been 
most effective in increasing homeownership? What constraints do these 
institutions face in promoting homeownership in their communities? What 
is the scope for HUD programs (existing and new) to help overcome some 
of these constraints?
    Researchers may use the Fannie Mae and Freddie Mac Public Use Data 
Base (PUDB), HMDA data, case studies, AHS, and other databases in 
addressing these research areas.
    (2) Studies on Affordable Lending.
    (a) Studies on Barriers to Credit Access. Barriers to credit access 
include limited savings to make a downpayment, insufficient income to 
afford the requisite monthly payments, high debt burdens, and an 
inadequately documented or poor credit history. In some or many cases, 
obtaining credit to purchase a home may not be realistic, and such 
families may need to rent for a time to build their savings, increase 
their incomes, reduce their debts, and establish a satisfactory credit 
history. However, in many other cases, credit may be obtainable if 
lenders adopt more flexible underwriting guidelines and devote 
additional time to reviewing applications that do not qualify under the 
automated underwriting programs commonly in use in today's mortgage 
market.
    An additional barrier to obtaining credit is the fear and 
uncertainty about the buying process and the risks of ownership. To 
overcome this, a number of programs have been developed to enhance 
education about the credit process in recent years, including Freddie 
Mac's ``Don't Borrow Trouble'' campaign. Also, despite progress in 
recent years, there is evidence that discrimination in mortgage lending

[[Page 27685]]

continues to exist.\10\ Disparities in treatment between borrowers of 
different races and neighborhoods of different racial makeup have been 
well documented.
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    \10\ Recent studies include What We Know About Mortgage Lending 
Discrimination in America, U.S. Department of Housing and Urban 
Development, Office of Policy Development and Research, September 
1999, and All Other Things Being Equal: A Paired Testing Study of 
Mortgage Lending Institutions, report prepared by The Urban 
Institute for the U.S. Department of Housing and Urban Development, 
Office of Fair Housing and Equal Opportunity, April 2002.
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    HUD seeks information on these various barriers to credit access 
and feasible steps that might be taken to improve such access among 
minorities and other groups that have traditionally had difficulty in 
obtaining credit. Study topics include, but are not limited to, the 
following:
    (i) The effectiveness of credit education programs established by 
various participants in the mortgage process in recent years.
    (ii) The nature and adequacy of lender reviews of mortgage 
applications that don't qualify for approval under automated 
underwriting.
    (iii) The effects on savings for down payments of various policy 
initiatives in recent years, such as Individual Development Accounts 
(IDAs), under which participants' savings in restricted accounts are 
matched by outside sources, and under which these matching funds can 
only be withdrawn for program-specified purposes, such as to put a down 
payment on a home.
    (b) Impacts of Broad Initiatives to Promote Affordable Lending. HUD 
is interested in quantitative studies of the impacts of broad 
initiatives to promote affordable lending. Data sources for such 
studies are listed above in section III (A)(4), but other databases may 
also yield useful insights.
    These studies could utilize econometric techniques to evaluate 
these questions. An example of this type of study is a recent report 
prepared for HUD by the Urban Institute. This report, authored by Brent 
Ambrose, Thomas Thibodeau, and Ken Temkin, is titled An Analysis of the 
Effects of the GSE Affordable Goals on Low- and Moderate-Income 
Families. The report presented several theoretical models and developed 
empirical analyses relating to the relationships among GSE market 
shares and interest rates, financing for target groups, and 
homeownership.
    Study topics could include, but are not limited to, the following:
    (i) Factors accounting for changes in GSE market shares over time.
    (ii) Effects of HUD's GSE affordable housing goals on homeownership 
rates for underserved groups and areas targeted by the goals.
    (iii) Relationship between GSE market share in specific 
metropolitan areas and the homeownership rate for targeted groups in 
those areas.
    (c) Evaluation of Specific Affordable Lending Programs. In addition 
to the quantitative studies outlined in the previous section, HUD seeks 
information on the effects, costs, and benefits of various affordable 
lending programs developed in the 1990s. Programs that could be 
analyzed include, but are not limited to, the following:
    (i) Freddie Mac's affordable lending programs. Information on these 
programs is available from Freddie Mac's Web site and from its Annual 
Housing Activity Reports (AHARs) submitted to HUD.
    (ii) Fannie Mae's affordable lending programs. With respect to 
Fannie Mae, information is available on Fannie Mae's Web site and from 
its AHARs submitted to HUD.
    (iii) Programs of primary mortgage market lenders.
    (iv) Programs of primary mortgage market insurers, including 
private insurers and the Federal Housing Administration (FHA).
    (d) Studies on Down Payments. Several studies have suggested that 
the greatest barrier to affordable lending is not the inability to make 
monthly mortgage payments; rather it is the lack of sufficient 
resources to make the initial down payment. While FHA has traditionally 
been the main source of low-downpayment loans for first-time 
homebuyers, data suggest that conventional lenders increased their low-
downpayment lending during the latter half of the 1990s. Fannie Mae and 
Freddie Mac began offering less-than-five-percent down payment programs 
during that period. There has been little recent research on the 
determinants of down payments and on the characteristics of 
conventional low-downpayment loans originated during the mid-to-late 
1990s. Research is particularly needed on the relationship between the 
new conventional programs and first-time homeownership. Are these 
conventional and GSE low-downpayment programs providing an avenue for 
cash-constrained families to obtain first-time homeownership, along the 
same lines that FHA has been doing? Topics, issues, and questions that 
could be analyzed include:
    (i) Market sectors (e.g., FHA, depositories, the GSEs) that provide 
substantial numbers of low-downpayment mortgages for low-income and 
minority families and for first-time homebuyers.
    (ii) Characteristics that differentiate between low-income and 
minority borrowers who are able to make substantial down payments and 
those who are not able to do so.
    (iii) The GSEs' role in the low-downpayment mortgage market. Do 
their low-downpayment loans go to low-income and minority homebuyers? 
To first-time homebuyers?
    (iv) Comparisons of the down payment characteristics of mortgages 
originated in the entire primary conventional mortgage market and 
mortgages purchased by the GSEs.
    (v) In order for HUD to define the GSE housing goals in precise 
terms and set the goals at specific levels, HUD is seeking research 
that will determine whether the goals affect supply in the market. 
Specifically, HUD is interested in a model that can provide 
quantitative estimates of the impact of setting the goals at various 
levels on the financial condition of the GSEs and on targeted outcomes.

IV. Cooperative Agreement Structure; Publication of Studies

    The awards will be structured as cooperative agreements, in order 
to provide latitude to researchers to proceed independently, but with 
opportunity for HUD to provide comments at appropriate points in the 
research. As detailed below, HUD's participation in the research will 
include review and comment on the detailed study design, review and 
comment on the draft final report, and organizing and participating in 
a seminar on the research. If you believe that a greater extent of HUD 
involvement in your project would be advantageous for the successful 
accomplishment of your research objectives, please include in your 
project description/narrative a discussion of the desired HUD resources 
and the rationale. (This is item 6 in the list of application items 
provided in section VI.A, below.) Formal commitments regarding this 
aspect of the cooperative agreement would then become a matter for 
negotiation prior to award.
    The technical study plan portion of your application (see item 3 in 
Section VI(A)(5) below) must include provisions for the following work 
steps to be performed by you and by HUD:
    (a) You must submit a detailed study design, comprising identified 
research issue(s), a technical proposal, and methodological approach. 
This will be due no later than six weeks from the

[[Page 27686]]

date of award, unless you indicate a specific rationale for a different 
schedule. HUD will provide comments to you on the study design.
    (b) You must submit a draft report to HUD no later than twenty (20) 
weeks prior to the scheduled ending date of the project. HUD will 
provide comments on the draft report, which may include comments of 
peer reviewers engaged by HUD.
    (c) Travel to Washington (or another location, as mutually agreed) 
to present the study, at a time to be arranged with HUD 
representatives, subsequent to submission of the draft final report. 
Your project budget must include provision for this.
    (d) You must submit a final report taking account of the comments.
    A cost-reimbursement award based on the negotiated budget is 
anticipated.
    A payment schedule based on the completion of project milestones 
will be established in negotiation. An amount equal to 20 percent of 
the total amount of the cooperative agreement will be withheld and paid 
by HUD only after the final project report has been received and 
accepted by HUD.
    The terms and conditions of the cooperative agreement will include 
restrictions against release of work products, quotation or 
paraphrasing from work products, or disclosures of interim findings 
prior to 60 days after HUD acceptance of your final report except with 
HUD approval. Thereafter, recipients are free to publish without HUD 
approval. The present provisions of OMB-Circular A-110, and HUD 
regulations at 24 CFR part 84 subpart C shall govern the right to 
intellectual or intangible property developed as a result of a 
recipient's performance under a cooperative agreement.

V. Program Requirements.

    (A) Threshold Requirements.
    (1) Eligible Applicants. Academic and not-for-profit institutions 
located in the U.S., state and local governments, and federally 
recognized Indian tribes are eligible to apply under this NOFA. For-
profit firms also are eligible; however, they are not allowed to earn a 
fee (i.e., no profit can be made from the project). Federal agencies 
and federal employees are not eligible to submit applications.
    (2) Compliance with Fair Housing and Civil Rights Laws.
    (a) With the exception of federally recognized Indian tribes and 
their instrumentalities, 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 
non-discrimination provisions enumerated at 24 CFR 1003.601, as 
applicable.
    (b) If you, the applicant:
    (i) Have been charged with a systemic violation of the Fair Housing 
Act alleging ongoing discrimination;
    (ii) Are a defendant in a Fair Housing Act lawsuit filed by the 
Department of Justice alleging an on-going pattern or practice of 
discrimination; or,
    (iii) Have received a letter of non-compliance findings under title 
VI, section 504, or section 109, and if the charge, lawsuit, or letter 
of findings has not been resolved to HUD's satisfaction before the 
application deadline stated in this NOFA, then you may not apply for 
assistance under this NOFA. HUD will not rate and rank your 
application. 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 
on-going discrimination in the policies or practices involved in the 
charge, lawsuit, or letter of findings.
    (3) Conducting Business In Accordance With Core Values and Ethical 
Standards. Entities subject to 24 CFR parts 84 and 85 (most non-profit 
organizations and state, local and tribal governments or government 
agencies or instrumentalities that receive federal awards of financial 
assistance) are required to develop and maintain a written code of 
conduct (see Sec. Sec.  84.42 and 85.36(b)(3)). Consistent with 
regulations governing specific programs, your code of conduct must: 
prohibit real and apparent conflicts of interest that may arise among 
officers, employees, or agents; prohibit the solicitation and 
acceptance of gifts or gratuities by your officers, employees, and 
agents for their personal benefit in excess of minimal value; and, 
outline administrative and disciplinary actions available to remedy 
violations of such standards. If awarded assistance under this NOFA, 
you will be required, prior to entering into a cooperative agreement 
with HUD, to submit a copy of your code of conduct and describe the 
methods you will use to ensure that all officers, employees, and agents 
of your organization are aware of your code of conduct.
    (B) Program Requirements.
    (1) Number of Proposals and Topics. A particular author or group of 
co-authors may submit separate research proposals on more than one 
topic, but no more than one award will be made to any one such author 
or group of co-authors.
    You may address more than one of the technical study topic areas 
within your proposal or submit separate applications for different 
topic areas. Projects need not address all of the objectives within a 
given topic area. While you will not be penalized for not addressing 
all of the specific objectives for a given topic area, if two 
applications for technical study in a given topic have equal scores, 
HUD will select the applicant whose project addresses the most 
objectives.
    (2) Period of Performance. The period of performance may not exceed 
18 months from the time of award.
    (3) Conflict of Interest. You must include information in your 
proposal concerning any past and current relationships that you and any 
other individuals, contractors, subcontractors or consultants proposed 
to be involved in the work may have with Fannie Mae or Freddie Mac. 
Substantial conflict of interest may be a basis for HUD disapproval of 
a proposed investigator's involvement.
    If your study bears in any way on the role or activities of 
financial institutions, you will be required upon the completion of 
your work to provide to HUD a succinct statement summarizing any past 
or current relationships between project personnel (either individually 
or through their institutions), and Fannie Mae, or Freddie Mac. In any 
subsequent public release of the research by the Office of Policy 
Development and Research, either through formal publication or 
otherwise, this statement will be included, to inform readers of the 
nature and extent of any such relationships.
    (4) Existing Resources. HUD technical studies funds may not replace 
existing resources dedicated to any ongoing project.
    (5) Protection of Human Subjects. Human research subjects must be 
protected from research risks in conformance with Federal Policy for 
the Protection of Human Subjects, codified by HUD at 24 CFR part 60.
    (6) Ensuring the Participation of Small Businesses, Small 
Disadvantaged Businesses, and Women-Owned Businesses. HUD is committed 
to ensuring that small businesses, small disadvantaged businesses, and 
women-owned businesses participate fully in HUD's direct contracting 
and in contracting opportunities generated by HUD cooperative agreement 
funds. Too often, these businesses still experience difficulty 
accessing information and successfully bidding on federal contracts. 
State, local, and tribal governments are required by 24 CFR 85.36(e), 
and non-profit recipients of assistance by 24 CFR 84.44(b), to take all 
necessary affirmative steps in contracting for purchase of goods or

[[Page 27687]]

services to assure that minority firms, women's business enterprises, 
and labor surplus area firms are used when possible.
    (7) Additional Non-Discrimination Requirements. You, the applicant, 
and your subrecipients must comply with the Americans with Disabilities 
Act of 1990 (42 U.S.C. 1201 et seq.) and title IX of the Education 
Amendments Act of 1972 (20 U.S.C. 1681 et seq.)
    (8) 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 non-
appropriated funds for these purposes have been made, a form SF-LLL 
disclosing such payments must be submitted.
    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.

VI. Application Submission Requirements

    (A) Applicant Information.
    Your application must contain the items listed in this section VI, 
as follows:
    (1) A transmittal letter (limited to one page) which identifies the 
purpose for which the technical study program funds are requested, the 
dollar amount requested, and the applicant or applicants submitting the 
application. If two or more organizations are working together on the 
project, a primary applicant must be designated.
    (2) Checklist and submission table of contents (see Appendix A).
    (3) Name of primary applicant and any sub-recipients (such as 
consortium associates, partners, subcontractors, joint venture 
participants, or others contributing resources to your project), with 
contact information (i.e., name, mailing address, and telephone number 
of principal contact person) for each.
    (4) An abstract (limited to two pages) containing the following 
information: The project title, the names and affiliations of all 
investigators, and a summary of the research problem and study design 
as described in the project narrative.
    (5) A project narrative (limited to a total of 25 pages) that 
discusses your qualifications and your study plan and addresses the 
following topics, which correspond to the rating factors for award of 
funding as stated in section VII(D), below. The narrative statement 
must be organized in sections numbered in accordance with this outline:
    1. Applicant and organizational qualifications, including 
qualifications of the principal investigator and key personnel, 
experience in managing similar projects, and past performance in 
managing project funds. See the discussion of Rating Factor 1 in 
section VII(D).
    2. The problem to be addressed. See Rating Factor 2.
    3. Technical study plan, including study design, quality assurance 
mechanisms, and project management plan. See Rating Factor 3; also see 
section IV, above.
    4. Statement of non-HUD resources to be applied, if any. See Rating 
Factor 4.
    5. Statement on coordination, self-sufficiency, and sustainability 
of your work. See Rating Factor 5. Any pages in excess of the 25-page 
limit will not be read.
    (6) Discussion of desired HUD resources, if applicable. See section 
IV.
    (7) Conflict of interest disclosure. See section V(B)(3).
    (8) You may provide attachments, appendices, bibliography, or other 
relevant materials that support your project narrative, but these must 
not exceed 20 pages in the aggregate. Any pages in excess of this limit 
will not be read.
    (9) The resumes of the principal investigator and other key 
personnel. Resumes shall not exceed three pages each and are limited to 
information that is relevant in assessing the qualifications of key 
personnel to conduct and/or manage the proposed technical studies.
    (10) Indirect Cost Rate Agreement, if available. Applicants that 
have established indirect cost rate agreements shall provide a copy of 
the agreement from their cognizant Federal agency. The cognizant agency 
is the Federal agency responsible for negotiating.
    (B) Standard Forms, Certifications and Assurances.
    You, the applicant, are required to submit signed copies of the 
following forms, certifications, and assurances:
    (i) Application for Federal Assistance (HUD-424);
    (ii) Applicant Assurances and Certifications (HUD-424-B);
    (iii) Detailed Budget (HUD-424-CB);
    (iv) Detailed Budget Worksheet (HUD-424-CBW);
    Note that the thoroughness, clarity, and coherence of the budget 
information that you provide on the Detailed Budget Worksheet will be 
evaluated under Rating Factor 3, item 4. You must thoroughly document 
and justify all budget categories and costs and all major tasks, for 
yourself and any sub-recipients contributing resources to the project. 
Your budget should include the cost of travel to Washington for at 
least one investigator to meet with HUD representatives or participate 
in a research seminar or symposium.
    (v) If required, the Disclosure Form Regarding Lobbying (SF-LLL). 
See the first paragraph under ``certifications'' on page 2 of form HUD-
424. See also section V(B)(8) above;
    (vi) Disclosure/Update Report (HUD-2880);
    (vii) Acknowledgment of Application Receipt (HUD-2993); and
    (viii) Client Comments and Suggestions (HUD 2994).
    Copies of these standard forms, with instructions as applicable, 
are appended to this NOFA.

VII. Application Selection Process

    (A) Program Threshold Requirements. HUD will review your 
application to determine whether it meets all of the program threshold 
requirements described in section V(A) above. Only applications that 
meet all of the threshold requirements will be eligible to be rated and 
ranked.
    (B) Rating. Applications that meet all of the threshold 
requirements will be eligible to be scored and ranked, based on the 
total number of points allocated for each of the rating factors 
described below. Your application must receive a total score of at 
least 70 points to remain in consideration for funding.
    (C) Ranking and Selection. Selection of award recipients will be 
based on the ranking of aggregate scores, within the limits of funding 
availability. Awards may be made to two or more recipients proposing 
work on a particular topic, if deemed to be in the best interests of 
the government. HUD reserves the right to

[[Page 27688]]

select applications out of rank order to achieve balance among the 
topics selected for funding.
    (D) Rating Factors. The factors for rating and ranking applicants, 
and maximum points for each factor, are provided below. The maximum 
number of points to be awarded is 100.
Rating Factor 1: Capacity of the Applicant and Relevant Organizational 
Experience (30 Points)
    Points will be awarded under the following three sub-factors, based 
on the extent to which your proposal indicates that you have the 
ability and organizational resources necessary to implement 
successfully your proposed activities in a timely manner. The rating of 
you, the ``applicant,'' will include any sub-recipients that will 
contribute resources to the project. In rating this factor, HUD will 
consider and award points based on the extent to which your application 
demonstrates:
    (1) That the principal investigator and key personnel are capable 
and qualified to accomplish the proposed research, based on their 
education/training and previous completed research. (15 points.) 
Qualifications to carry out the proposed study will be evaluated based 
on the academic background of personnel, relevant publications, and 
recent (within the past 10 years) research experience relevant to the 
type of work proposed. Publications and research experience are 
considered relevant if they required the acquisition and use of 
knowledge and skills that can be applied in the planning and execution 
of the technical study that is proposed.
    (2) That the project manager(s) have demonstrated ability to manage 
this research, based on past performance in managing similar projects. 
(10 points.) Points will be awarded based on demonstrated ability to 
successfully manage your study in such areas as personnel management, 
project management, data management, quality control, community study 
involvement (if applicable), and report writing, as well as overall 
success in project completion (i.e., projects completed on time and 
within budget). You should also demonstrate that your project would 
have adequate administrative support, including clerical and 
specialized support in areas such as accounting and equipment 
maintenance, as relevant.
    (3) That the primary applicant and any sub-recipients are capable 
of managing project funds, based on past performance. (5 points.) 
Points will be awarded based on the extent of demonstrated ability to 
account for funds appropriately as well as on timely use of funds 
received either from HUD or from other Federal, state, or local 
programs, or private programs. HUD may consider information at hand or 
available from public sources such as, but not limited to, newspapers, 
Inspector General or Government Accounting Office Reports or Findings, 
and/or hotline complaints that have been proven to have merit.
Rating Factor 2: Need/Extent of the Problem (10 Points)
    Points will be awarded based on the extent to which your proposal 
establishes that your proposed research will address documented 
problems, target areas or target groups. In responding to this factor, 
you should document in detail how your project would make a significant 
contribution towards achieving some or all of HUD's stated goals and 
objectives for one or more of the topic areas described in section III 
(A).
Rating Factor 3: Soundness of Technical Study Approach (50 Points)
    Points will be awarded based on the quality of the technical study 
plan portion of your application, under the following four sub-factors. 
Specific components that will be evaluated include the following:
    (1) Soundness of the study design. (30 points.) The thoroughness 
and feasibility of your project description/study design, and the 
extent to which it reflects a comprehensive understanding of the 
relevant technical literature. It should clearly describe how your 
study builds upon the current state of knowledge for your focus area. 
If possible, your study should be designed to address testable 
hypotheses, which are clearly stated. Your study design should be 
statistically based, with sufficient data to provide an adequate test 
of your stated hypotheses. The study design should be presented as a 
logical sequence of steps or phases, with individual activities or 
tasks described for each. You should identify any important ``decision 
points'' in your study plan, and you should discuss plans for data 
management, analysis and archiving.
    (2) Quality assurance mechanisms. (10 points.) The adequacy of 
quality assurance mechanisms that will be integrated into your project 
design to ensure the validity and quality of the results. Areas to be 
addressed include acceptance criteria for data quality, procedures for 
selection of samples/sample sites, sample handling, measurement and 
analysis, and any standard/nonstandard quality assurance/control 
procedures to be followed. Documents (e.g., government reports, peer-
reviewed academic literature) that provide the basis for your quality 
assurance mechanisms should be cited.
    (3) Project management plan. (8 points.) The extent to which your 
schedule for the completion of major activities, tasks and 
deliverables, and your budget, confirm that there will be adequate 
resources (e.g., personnel, financial) to carry out your study design 
successfully within the proposed time frame, taking account of timing 
requirements stated in section IV, above.
    (4) Budget proposal. (2 Points) Two points will be awarded if your 
budget proposal on the HUD-424CB thoroughly estimates all applicable 
direct and indirect costs and is presented in a clear and coherent 
format as provided in section VI (B). One point, or no point, will be 
awarded if your budget proposal is deficient in these regards, based on 
the degree of deficiency.
Rating Factor 4: Leveraging of Resources (5 Points)
    You are encouraged to demonstrate that the effectiveness of HUD's 
funds will be increased by securing other public and/or private 
resources or by structuring the project in a cost-effective manner, 
such as integrating the project into an existing study. Resources may 
include funding or in-kind contributions (such as services, facilities 
or equipment) allocated to the purpose(s) of your project. Staff and 
in-kind contributions should be given a monetary value. Larger 
commitments of this kind will be awarded more points under this rating 
factor.
    You should provide evidence of leveraging/partnerships by attaching 
to your application letters of firm commitment, memoranda of 
understanding, or agreements to participate from those entities 
identified as partners in the project efforts. Each letter of 
commitment, memorandum of understanding, or agreement to participate 
must include the organization's name, proposed level of commitment 
(with monetary value) and responsibilities as they relate to specific 
activities or tasks of your proposed program. The commitment must also 
be signed by an official of the organization legally able to make 
commitments on behalf of the organization.
Rating Factor 5: Coordination, Self-Sufficiency and Sustainability (5 
Points)
    (1) The extent to which you have coordinated your activities with 
other organizations that have been or are in

[[Page 27689]]

the process of conducting similar or related work.
    (2) Evidence that your proposed study builds upon the existing body 
of related work and it does not significantly duplicate work that is 
currently being conducted, or has been conducted, by other 
organizations (to the extent that this can be ascertained).
    (3) The extent to which your project will help generate practical 
solutions that can be implemented on the local or national level for 
increasing homeownership and/or improving housing affordability for 
low- and moderate-income families, minority families, and families in 
underserved geographical areas.
    (E) Adjustments to Funding.
    (1) HUD reserves the right to fund less than the full amount 
requested in your application to ensure the fair distribution of the 
funds and that the purposes of this program are met.
    (2) HUD will not fund any portion of your application that is not 
eligible for funding under specific program statutory or regulatory 
requirements; does not meet the requirements of this NOFA; or that may 
be duplicative of other funded programs or activities from previous 
years' awards or other selected applicants. Only the eligible portions 
of your application (including non-duplicative portions) may be funded.
    (3) Purchase or lease of equipment having a per unit cost in excess 
of $5,000 will not be funded unless prior written approval is obtained 
from HUD.
    (4) If funds remain after funding the highest-ranking applications, 
HUD may fund all or part of the next highest-ranking application in a 
given program. If you, the applicant, turn down an award offer, HUD 
will make an offer of funding to the next highest-ranking application. 
If funds remain after all selections have been made, remaining funds 
may be available for other competitions for each program where there is 
a balance of funds.
    (5) In the event HUD commits an error that, when corrected, would 
result in selection of an otherwise eligible applicant during the 
funding round of this NOFA, HUD may select that applicant when 
sufficient funds become available.
    (F) Audit.
    Grantees/applicants that expend $300,000 or more in a year in 
federal awards shall have a single or program-specific audit conducted 
for that year in accordance with OMB Circular A-133. Grantees/
applicants shall ensure that their most recent completed audit has been 
submitted to the Federal Audit Clearinghouse for review by HUD (refer 
to harvester.census.gov/sac/). Grantees that do not have such an audit 
or are not subject to OMB Circular A-133 will be asked to provide a 
copy of their organization's most recent audit or other evidence that 
financial controls are in place before an award can be finalized.

VIII. Corrections, Debriefing

    (A) 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 to clarify an item in your 
application or to correct technical deficiencies. HUD may not seek 
clarification of items or responses that improve the substantive 
quality of your response to any rating factors. In order not 
unreasonably to exclude applications from being rated and ranked, HUD 
may contact applicants to ensure proper completion of the application 
and will do so on a uniform basis for all applicants. Examples of 
curable (correctable) technical deficiencies include failure to submit 
the proper certifications or 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 (FAX) or 
by USPS, return receipt requested. Clarifications or corrections of 
technical deficiencies in accordance with the information provided by 
HUD must be submitted within 14 calendar days of the date of receipt of 
the HUD notification. (If the due date falls on a Saturday, Sunday, or 
Federal holiday, your correction must be received by HUD on the next 
day that is not a Saturday, Sunday, or Federal holiday.) If the 
deficiency is not corrected within this time period, HUD will reject 
the application as incomplete and it will not be considered for 
funding.
    (B) Applicant Debriefing. Beginning not less than 30 days after the 
awards for assistance are announced in the Federal Register, and for at 
least 120 days after awards for assistance are announced, HUD will 
provide any requesting applicant with a debriefing on their 
application. All requests for debriefing must be made by the principal 
investigator for the proposed study or by the authorized official whose 
signature appears on the HUD-424 or his or her successor in office. 
Submit your request to Mr. Patrick Tewey, who may be reached at (202) 
702-0614, extension 4098 (this is not a toll-free number). Information 
provided to you during your debriefing will include, at a minimum, the 
final score you received for each rating factor, final evaluator 
comments for each rating factor, and the final assessment indicating 
the basis upon which assistance was provided or denied.

IX. Findings and Certifications

    (A) Federalism Impact. Executive Order 13132 (captioned 
``Federalism'') prohibits, to the extent practicable and permitted by 
law, an agency from promulgating a regulation that has federalism 
implications and either imposes substantial direct compliance costs on 
state and local governments and is not required by statute, or preempts 
state law, unless the relevant requirements of section 6 of the 
Executive Order are met. This NOFA does not have federalism 
implications and does not impose substantial direct compliance costs on 
state and local governments nor preempt state law within the meaning of 
the Executive Order.
    (B) 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.
    (2) Disclosures. HUD will make available for public inspection for 
5 years all applicant disclosure reports (HUD Form 2880) submitted in 
connection with this NOFA. Update reports (also reported on HUD Form 
2880) will be made available along with the applicant disclosure 
reports, but in no case for a period of less than three

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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.
    (3) Publication of Recipients of HUD Funding. HUD's regulations at 
24 CFR part 4 provide that HUD will publish a notice in the Federal 
Register 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; 
and/or,
    (ii) Assistance 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.
    (C) 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 Ethics Law Division at (202) 708-3815 (this is not a 
toll-free number). For HUD employees who have specific program 
questions, such as whether particular subject matter can be discussed 
with persons outside HUD, the employee should contact the appropriate 
Field Office Counsel.
    (D) Paperwork Reduction Act Statement. The information collection 
requirements in this NOFA have been approved by the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501-3520). The OMB control number is 2528-0228. Under the 
Paperwork Reduction Act, 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.
    (E) Environmental Requirements. This NOFA does not direct, provide 
for assistance or loan and mortgage insurance for, or otherwise govern 
or regulate, real property acquisition, disposition, leasing, 
rehabilitation, alteration, demolition, or new construction, or 
establish, revise or provide for standards for construction or 
construction materials, manufactured housing, or occupancy. In 
accordance with 24 CFR 50.19(b)(1) of HUD regulations, activities under 
this program are categorically excluded from environmental review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321), and are 
not subject to environmental review under the related laws and 
authorities.
    (F) Catalog of Federal Domestic Assistance Numbers. The Federal 
Domestic Assistance number for this program is 14.506.

X. Authority

    These cooperative agreements are authorized under sections 501 and 
502 of the Housing and Urban Development Act of 1970 (12 U.S.C. 1701z-1 
et seq.).

    Dated: May 9, 2003.
Christopher Lord,
Deputy Assistant Secretary for Policy Development and Research.
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[FR Doc. 03-12458 Filed 5-19-03; 8:45 am]
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