[Federal Register Volume 69, Number 241 (Thursday, December 16, 2004)]
[Notices]
[Pages 75418-75434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27534]



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Part IV





Department of Housing and Urban Development





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Emergency Capital Repair Grants for Multifamily Housing Projects 
Designated for Occupancy by the Elderly; Notice

  Federal Register / Vol. 69, No. 241 / Thursday, December 16, 2004 / 
Notices  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4955-N-01]


Emergency Capital Repair Grants for Multifamily Housing Projects 
Designated for Occupancy by the Elderly

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: This notice announces the availability of up to $10 million in 
grant funds to make emergency capital repairs to eligible multifamily 
projects that are owned by private nonprofit entities and designated 
for occupancy by elderly tenants. The capital repair needs must relate 
to items that present an immediate threat to the health, safety, and 
quality of life of the tenants. The intent of these grants is to 
provide one-time assistance for emergency items that could not be 
absorbed within the project's operating budget, and where the tenants 
continued occupancy in the immediate near future would be called into 
question by a delay in initiating the proposed cure. The notice 
provides instructions for owners to request the funding and 
instructions for the HUD field offices to process the request.

DATES: Effective Date: December 16, 2004.

FOR FURTHER INFORMATION CONTACT: Aretha Williams, Director, Grant 
Policy and Management Division, Office of Housing, Room 6142, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Washington, DC 20410; telephone 202-708-3000 (this is not a toll-free 
number). Persons with hearing or speech impairments may access this 
number via TTY by calling the toll-free Federal Information Relay 
Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 202b of the Housing Act of 1959 (12 U.S.C. 1701q-2) and the 
Consolidated Appropriations Act, 2004 (Public Law 108-199, approved 
January 23, 2004) authorize HUD to provide grants for substantial 
capital repairs to eligible multifamily projects with elderly tenants 
that are needed to rehabilitate, modernize, or retrofit aging 
structures, common areas or individual dwelling units. The Consolidated 
Appropriations Act, 2004 provides $25,000,000 for grants for conversion 
of eligible units to assisted living ``and for emergency capital 
repairs as determined by the Secretary'' of HUD.
    This notice announces the availability of up to $10 million in 
grant funds to make emergency capital repairs to eligible multifamily 
projects that are owned by private nonprofit entities. The capital 
repair needs must relate to items that present an immediate threat to 
the health, safety, and quality of life of the tenants. The intent of 
these grants is to provide one-time assistance for emergency items that 
could not be absorbed within the project's operating budget, and where 
the tenants continued occupancy in the immediate near future would be 
called into question by a delay in initiating the proposed cure. The 
notice provides instructions for owners to request the funding and 
instructions for the HUD field offices to process the request.

II. Definition of ``Emergency Capital Repairs''

    For purposes of this notice, ``emergency capital repairs'' are 
defined as repairs at a project to correct a situation that presents an 
immediate threat to the life, health and safety of project tenants. 
Assistance is limited to those projects with emergency problems that 
are of such a magnitude that:
    1. The problem poses an immediate threat to the quality of life of 
the tenants; and
    2. The continuation of the problem could potentially result in an 
evacuation of the tenants or long-term tenant displacement unless the 
repairs were rendered.

III. Eligibility Requirements

    Only private nonprofit owners of eligible multifamily assisted 
housing developments designated for occupancy by elderly tenants as 
specified in sections 683(2)(B), (C), (D), (E), (F), or (G) of the 
Housing and Community Development Act of 1992 (Public Law 102-550, 
approved October 28,1992) are eligible for emergency capital repair 
grants under this notice. Projects must have had final closing on or 
before January 1, 1999.
    To be eligible for an emergency capital repair grant under this 
notice, a project owner must be in compliance with:
    1. Its Loan Agreement, Capital Advance Agreement, Regulatory 
Agreement, Housing Assistance Payment contract, Project Rental 
Assistance Contract, Rent Supplement or LMSA contract, or any other HUD 
grant or contract document.
    2. All fair housing and civil rights laws, statutes, regulations, 
and executive orders as enumerated in 24 CFR 5.105(a).

IV. Grant Requirements

A. Conditions for Assistance

    The following conditions apply to emergency capital grants awarded 
under this notice:
    1. The request for funding must clearly identify the emergency and 
must contain a detailed justification in support of the emergency 
designation.
    2. Funds awarded may only be expended for approved uses.
    3. Repairs must be initiated immediately upon receiving the grant 
award and must be sufficiently completed within six months of the 
initial start with final repairs completed no later than 12 months 
after receipt of funding. Unless there are safety concerns, tenants 
must be able to remain in their units while the repairs are being done.
    4. The project owner must demonstrate that: (i) The project 
accounts have been maintained in accordance with all HUD requirements; 
and (ii) there are insufficient funds in the operating budget, the 
reserve for replacement and/or residual receipts to fund emergency 
capital repairs. HUD encourages owners to use residual receipts when 
available. Owners are required to rebuild replacement reserves to help 
ensure that sufficient funds will be readily available for emergency 
capital repairs that may be required in the future.
    5. The project owner's most recent management review rating is 
``satisfactory'' or above.
    6. The most recent Real Estate Assessment Center (REAC) physical 
inspection report for the project must have a score of 60 or above. 
Developments scoring less than 60 are ineligible.
    7. The project is well maintained except for the current emergency 
capital repair needs.
    8. The project does not have a recent history of mortgage defaults.
    9. The project owner does not have any material adverse financial 
or managerial actions or omissions with regard to any project that is 
federally assisted or financed with a loan or capital advance from or 
mortgage insured by an agency of the federal government.
    10. Tenants must be notified of the request for the grant and must 
be informed of the overall plan to complete the capital repairs, if at 
all possible.
    11. The owner's Affirmative Fair Housing Marketing Plan (AFHMP) 
must meet all applicable HUD requirements. If not, the owner must have 
an acceptable plan in place prior to completion of the repairs.

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    12. The project owner is in compliance with all fair housing and 
equal opportunity statutes or has an approved plan for compliance prior 
to completion of the repairs.

B. Funding

    The following requirements apply to emergency capital grant amounts 
awarded under this notice:
    1. The maximum amount an individual project owner may apply for is 
$500,000.
    2. HUD will fund all approved applications on an as submitted basis 
until funds have been fully expended.
    3. HUD retains the right to adjust the amount of the grant up to 
the maximum grant of $500,000 or down based upon review of the 
reasonableness of the costs for completing the repairs.
    4. Project owners should be aware as they prepare their request 
that the prevailing wage rate requirements of the Davis-Bacon Act may 
be applicable.

C. Eligible Uses of Funds

    Grant funds are available only for emergency capital repairs that 
relate to immediate health/safety needs that impact upon the quality of 
life of the tenants if the repairs are not made. The project owner must 
submit a description of the proposed use of the funds and demonstrate 
how the repairs relate to eliminating the immediate emergency for the 
tenants. The award is a one-time opportunity for correction of the 
threat to the tenants. Funds may be used to repair or replace systems 
including, but not limited to:
    1. Major building and structural components that are in critical 
condition; and
    2. Repairs or replacements to mechanical equipment to the extent 
they are necessary for health and safety reasons.

D. Ineligible Uses of Funds

    Emergency capital repair grants may not be used for the following 
costs:
    1. Deferred maintenance items.
    2. Lead-based paint abatement.
    3. Demolition and reconstruction activities.
    4. Security systems.

E. Use Agreement

    If there are less than 10 years remaining on the existing mortgage, 
owners must enter into a Use Agreement (Attachment I) to extend the 
remaining affordability of the project for up to 10 years. For example, 
if the maturity date of the mortgage is three years from the execution 
of the Grant Agreement, the owner must enter into a Use Agreement for 
seven years beyond the term of the mortgage; if the maturity date of 
the mortgage is 15 years, the owner will not need to execute a Use 
Agreement unless the mortgage is prepaid. All Use Agreements must be 
recorded.

V. Request Process

A. Owner Submission Requirements

    An emergency categorization is critical to qualifying for 
participation in this program. Priority will be given to areas subject 
to a current declaration of ``Federal Disaster Assistance.'' Requests 
for grants must be submitted in accordance with the procedures 
described below:
    1. The request must be made in writing and submitted by the project 
owner to the local field office (Attachment II). The request must 
clearly identify all repairs of an emergency nature for which funding 
is requested, the basis for the emergency declaration and how it 
impacts upon the health and safety of the tenants as well as what would 
happen if the emergency repair was not done immediately. Requests 
signed by a consultant or management agent on behalf of the owner are 
not acceptable.

    Note: Repair items identified on the REAC physical inspection 
report are not sufficient to be classified as emergency in nature.

    2. Action items should be written in a manner that specifically 
describes the scope of work to be performed, provides an estimate of 
the cost of the work to be performed, and an explanation of the basis 
for the estimate. The estimate provided for the cost of each action 
item must be reasonable.
    3. The request must demonstrate that the repairs cannot be 
corrected at a cost that can be absorbed within the operating budget or 
use of the reserve for replacement and/or residual receipts funds.
    4. The request must provide a project plan for completing the 
repairs within six months but no longer than one year from the date of 
the grant award.
    5. The project owner must notify the tenants of the plans to apply 
for this grant, if possible. If applicable, the request must provide 
evidence that the tenants were notified and given the opportunity to 
make comments. Any comments received from the tenants must be submitted 
to the local HUD field office along with the repair request.
    6. The request must provide a description of all unsuccessful 
attempts (if any) the owner has made to acquire funds from other 
sources, including letters of denial from funding sources, to complete 
the outstanding emergency capital repairs.
    7. The request must provide a description of any previous grants or 
loans received by the project for repairs.

B. Field Office Processing

    1. The Hub Director/Program Center Director is responsible for 
ensuring that the requests are promptly and thoroughly reviewed and 
submitted to HUD headquarters.
    2. Incomplete applications will not be processed and will be 
returned to the owner. Owners may re-submit a revised application, but 
it will be processed as a new request in the order in which it is 
received the second time.
    3. Each field office has the responsibility for conducting a 
comprehensive review of the project's files that may include an on-site 
review. The review should consist of completion of the questions in 
Attachment IV and may include any other concerns the field office may 
have about the project.

C. Approval Process

    1. All approvable requests along with the Certifications from the 
Program Centers (Attachment III) should be sent to the Multifamily Hub 
Director. Hub Directors will fax the approvable request to the Office 
of Housing Assistance and Grant Administration in Headquarters, 
Attention: Willie Spearmon at (202) 708-3104. In addition, an original 
copy of the request should be mailed to Willie Spearmon.
    2. Once Headquarters receives the approval of the request for 
emergency capital repairs from the Hub Director, the Office of Housing 
Assistance and Grant Administration will process the request and award 
the funds.

    Note: Due to limitations of funding, approval of such 
recommendations are strictly based on an as submitted basis until 
the exhaustion of funds. HUD Headquarters reserves the right to deny 
or reduce any request for funds. Priority will be given to areas 
subject to a current declaration of ``Federal Disaster Assistance.''

    3. Once the grant funds have been reserved, Headquarters will 
notify the Multifamily Director in the field office who will notify the 
owner of the grant award.
    4. Headquarters will notify field staff by electronic mail at the 
time the reservation documents are sent to the Fort Worth Accounting 
Center to assign the funds. Field staff should check in LOCCS to 
confirm reservation of the funds. Once funds have been reserved, the 
Multifamily Hub/Program Center Director should execute the Grant 
Agreement.

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VI. Environmental Review

    In accordance with 24 CFR 50.19(b)(10) of HUD's regulations, this 
notice provides assistance for temporary or permanent improvements that 
do not alter environmental conditions and are limited to protection, 
repair or restoration activities necessary only to control or arrest 
the effects from disasters or imminent threats to public safety 
including those resulting from physical deterioration. Therefore, 
emergency capital repair grants provided under this notice are 
categorically excluded from the requirements of the National 
Environmental Policy Act (42 U.S.C. 4332 et seq.).

    Dated: December 13, 2004.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
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[FR Doc. 04-27534 Filed 12-13-04; 12:22 pm]
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