[Federal Register Volume 86, Number 194 (Tuesday, October 12, 2021)]
[Notices]
[Pages 56764-56787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22046]



[[Page 56763]]

Vol. 86

Tuesday,

No. 194

October 12, 2021

Part II





Department of Housing and Urban Development





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Waivers and Alternative Requirements for Implementation of the HOME 
American Rescue Plan (HOME-ARP) Program; Notice

  Federal Register / Vol. 86 , No. 194 / Tuesday, October 12, 2021 / 
Notices  

[[Page 56764]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6296-N-01]


Waivers and Alternative Requirements for Implementation of the 
HOME American Rescue Plan (HOME-ARP) Program

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

ACTION: Notice.

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SUMMARY: This notice publishes the waivers and alternative requirements 
that apply to a grantee's use of HOME Investment Partnerships Program 
funds made available under Section 3205 of the American Rescue Plan Act 
(ARP) of 2021 (``HOME-ARP''). On September 13, 2021, HUD issued a 
notice imposing the requirements applicable to the use of HOME-ARP 
funds (the ``HOME-ARP Notice''). At the same time, HUD published an 
Appendix to the HOME-ARP Notice describing all waivers and alternative 
requirements applicable to HOME-ARP funds. Consistent with HUD's 
responsibility under the HUD Reform Act, HUD is providing additional 
notice to the public and all interested parties of the HOME-ARP waivers 
and alternative requirements by republishing the Appendix in this 
notice.

FOR FURTHER INFORMATION CONTACT: Virginia Sardone, Director, Office of 
Affordable Housing Programs, U.S. Department of Housing and Urban 
Development at [email protected], or at telephone number 202-
402-4606 (this is not a toll-free number). Persons with hearing or 
speech challenges may access this number through TTY by calling the 
Federal Relay Service at 800-877-8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

    On March 11, 2021, President Biden signed the American Rescue Plan 
Act (ARP) of 2021 (Pub. L. 117-2) into law, which provides over $1.9 
trillion in relief to address the continued impact of the COVID-19 
pandemic on the economy, public health, State and local governments, 
individuals, and businesses. To address the need for homelessness 
assistance and supportive services, Congress appropriated $5 billion in 
ARP funds to the HOME Investment Partnerships Program (HOME) to be 
administered by HUD to primarily benefit qualifying individuals or 
families through the following activities: (1) Development and support 
of affordable housing; (2) tenant-based rental assistance (TBRA); (3) 
provision of supportive services; and (4) acquisition and development 
of non-congregate shelter units. The program for the use of the $5 
billion in ARP funds is the HOME-American Rescue Plan or ``HOME-ARP.''
    Under HOME-ARP, qualifying individuals or families are those that 
are (1) homeless; (2) at risk of homelessness; (3) fleeing, or 
attempting to flee domestic violence, dating violence, sexual assault, 
stalking, or human trafficking; (4) part of other populations where 
providing supportive services or assistance would prevent a family's 
homelessness or would serve those with the greatest risk of housing 
instability; or (5) veterans and families that include a veteran family 
member that meet the criteria in one of (1)-(4) above.
    On April 8, 2021, in accordance with ARP, HUD allocated HOME-ARP 
funds to 651 grantees. The list of grantees and allocation amounts can 
be found at: https://www.hud.gov/sites/dfiles/CPD/documents/HOME-ARP.pdf. On September 13, 2021, HUD issued Community Planning and 
Development Notice CPD-21-10, Requirements for the Use of Funds in the 
HOME-American Rescue Plan Program (https://www.hud.gov/sites/dfiles/OCHCO/documents/2021-10cpdn.pdf) (the ``HOME-ARP Notice''), which set 
forth the requirements for the use of HOME-ARP funds, including 
criteria for qualifying populations, permissible targeting and 
preferences, requirements for the funds allocation plan and eligible 
activities. At the same time, HUD published an Appendix to the HOME-ARP 
Notice (https://www.hud.gov/sites/dfiles/OCHCO/documents/cpdWaiverHOMEARP.pdf) that describes all waivers and alternative 
requirements applicable to the use of HOME-ARP funds.

II. Applicable Rules, Waiver, and Alternative Requirements

    Section 3205 of ARP authorizes the Secretary of HUD to waive or 
specify alternative requirements for any provision of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12701 et seq.) 
(``NAHA'') or regulation for the administration of funds appropriated 
to HOME-ARP, other than requirements related to fair housing, 
nondiscrimination, labor standards, and the environment, upon a finding 
that the waiver or alternative requirement is necessary to expedite or 
facilitate the use of HOME-ARP funds. Title II of NAHA is the 
authorizing statute for HOME and applicable HOME regulations are at 24 
CFR part 92. Consolidated plan requirements for the use of HOME funds 
are in Title I of NAHA with applicable regulations in 24 CFR part 91.
    Pursuant to the Secretary's HOME-ARP statutory authority and 
regulatory waiver authority in 24 CFR 5.110, the Secretary is waiving 
the provisions of NAHA and HOME regulations and imposing the 
alternative requirements as set forth in the Appendix in this notice. 
The Secretary has determined that each waiver and alternative 
requirement described in this notice is necessary to expedite or 
facilitate the use of HOME-ARP funds. A participating jurisdiction may 
request additional waivers and alternative requirements from HUD to 
address specific needs related to its use of HOME-ARP funds.
    Principal Deputy Assistant Secretary for Community Planning and 
Development, James Arthur Jemison II, having reviewed and approved this 
document, is delegating the authority to electronically sign this 
document to submitter, Aaron Santa Anna, who is the Federal Register 
Liaison for HUD, for purposes of publication in the Federal Register.

Aaron Santa Anna,
Federal Liaison for the Department of Housing and Urban Development.

Appendix: Waivers and Alternative Requirements

Overall Requirements

    A. Compliance with HOME-ARP Notice. The requirements in 24 CFR 
part 92, as revised by this notice, apply to HOME-ARP. All 
references to compliance with requirements of or in ``this part'' in 
24 CFR part 92 shall mean compliance with the requirements in ``24 
CFR part 92, as revised by the HOME-ARP Notice, including the 
Appendix to the HOME-ARP Notice published on HUD's website, unless 
specifically stated otherwise herein.''
    B. Substitution of ``HOME-ARP'' for ``HOME.'' All references to 
``HOME'' throughout 24 CFR part 92 shall mean ``HOME-ARP'' for the 
use of HOME-ARP funds unless otherwise stated in the HOME-ARP 
Notice.
    C. Use of ``the Act'' and ``title II of NAHA.'' The definition 
of ``Act'' is not revised, however ``title II of NAHA'' and ``Act'' 
are used interchangeably throughout the Appendix in this notice and 
24 CFR part 92 and mean the HOME Investment Partnerships Act at 
title II of the Cranston-Gonzalez National Affordable Housing Act, 
as amended, 42 U.S.C. 12701 et seq.
    D. Substitution of ``nonprofit organization'' for ``community 
housing development organization.'' All references to ``community 
housing development organization'' or ``CHDO'' in 24 CFR part 92, 
except the definition of CHDO in 24 CFR 92.2, are

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waived and revised to ``nonprofit organization.''
    E. Matching Contribution Requirements. The requirements of 24 
CFR 92.218 through 24 CFR 92.222 and any other requirements for 
matching contributions in 24 CFR part 92 shall not apply to HOME-ARP 
funds, as section 3205(c)(1) of ARP states that the underlying 
statutory requirement at section 220 of NAHA (42 U.S.C. 12750) does 
not apply to HOME-ARP funds.
    F. Set-aside for Community Housing Development Organizations 
(CHDOs). The requirements of Sec. Sec.  92.300, 92.301, 92.302, 
92.303, 92.452, 92.504(c)(3)(x), and 92.504(c)(7) and any other 
requirements for amounts set-aside for CHDOs shall not apply to 
HOME-ARP funds as section 3205(c)(1) of ARP states that the 
underlying statutory requirements at section 231 of NAHA (42 U.S.C. 
12771) do not apply to HOME-ARP funds. In addition, the statutory 
requirements in sections 232, 233, and 234 of NAHA (42 U.S.C. 12772, 
12773, and 12774(a)) for the use of set-aside funds for CHDOs are 
waived.
    G. Expiration of right to draw funds. The requirements of 24 CFR 
92.500(d) and any other requirements for the 24-month deadline for 
the commitment of funds shall not apply to HOME-ARP funds as section 
3205(c)(1) of ARP states that the underlying statutory requirement 
at section 218(g) of NAHA (42 U.S.C. 12748) does not apply to HOME-
ARP funds.
    H. Homebuyer activities/Existing homeowner requirements. All 
statutory requirements for homebuyer or existing homeowner 
activities in NAHA are waived for the use of HOME-ARP funds because 
homebuyer/existing homeowner assistance is not an eligible activity 
under HOME-ARP. Specifically, HUD waives the requirements in 
sections 212(a)(1), 215(b), 254 of NAHA (42 U.S.C. 12742(a)(1), 
12745, 12804) for homeownership, homebuyer, and owner-occupied 
activities, including the development of affordable housing for 
homeownership and homeowner rehabilitation. Requirements in 
Sec. Sec.  92.205, 92.206, 92.207, 92.217, 24 92.251(c)(3), 92.254, 
92.255, 92.258, and 92.504(c)(3)(ii)(B) applicable to homeownership 
activities shall not apply and are waived.
    I. Other Support for State and Local Housing Strategies and 
Specified Model Program. The statutory requirements in section 213 
(42 U.S.C. 12743), sections 241 to 245 of NAHA (42 U.S.C. 12781-
12785), and sections 251 to 260 (42 U.S.C. 12801-12810) do not apply 
to HOME-ARP and are waived.

Waivers and Alternative Requirements

A. Subpart A--General

    The definitions in 24 CFR 92.2 apply to the use of HOME-ARP 
funds except that HUD waives 24 CFR 92.2 and imposes the following 
revised definitions as alternative requirements:
    Commitment means (1) The participating jurisdiction has executed 
a legally binding written agreement (that includes the date of the 
signature of each person signing the agreement) that meets the 
minimum requirements for a written agreement in Sec.  92.504(c), as 
revised by the Appendix in this notice, and the HOME-ARP Notice. An 
agreement between the participating jurisdiction and a subrecipient 
that is controlled by the participating jurisdiction (e.g., an 
agency whose officials or employees are official or employees of the 
participating jurisdiction) does not constitute a commitment. An 
agreement between the representative unit and a member unit of 
general local government of a consortium does not constitute a 
commitment. Funds for administrative and planning costs of the HOME-
ARP program are committed based on the amount in the program 
disbursement and information system for administration and planning. 
The written agreement must be:
    (i) With a State recipient or a subrecipient to use a specific 
amount of HOME-ARP funds to produce affordable housing, acquire and 
develop non-congregate shelter, provide tenant-based rental 
assistance, or provide supportive services;
    (ii) With a nonprofit organization carrying out HOME-ARP 
activities to provide funds for operating expenses, in accordance 
with the HOME-ARP Notice;
    (iii) To develop the capacity of nonprofit organizations in the 
jurisdiction carrying out HOME-ARP activities, in accordance with 
the HOME-ARP Notice; or
    (iv) To commit to a specific local project, as defined in 
paragraph (2) of this definition and the HOME-ARP Notice.
    (2) Commit to a specific local project means:
    (i) Rental Housing.
    (A) If the project consists of rehabilitation or new 
construction (with or without acquisition) the participating 
jurisdiction (or State recipient or sub recipient) and project owner 
have executed a written legally binding agreement under which HOME-
ARP assistance will be provided to the owner for an identifiable 
project for which all necessary financing has been secured, a budget 
and schedule have been established, and underwriting has been 
completed and under which construction is scheduled to start within 
twelve months of the agreement date. If the project is owned by the 
participating jurisdiction or State recipient, the project has been 
set up in the disbursement and information system established by 
HUD, and construction can reasonably be expected to start within 
twelve months of the project set-up date.
    (B) If the project consists of acquisition of standard housing 
and the participating jurisdiction (or State recipient or 
subrecipient) is acquiring the property with HOME-ARP funds, the 
participating jurisdiction (or State recipient or subrecipient) and 
the property owner have executed a legally binding contract for sale 
of an identifiable property and the property title will be 
transferred to the participating jurisdiction (or State recipient or 
subrecipient) within six months of the date of the contract.
    (C) If the project consists of acquisition of standard housing 
and the participating jurisdiction (or State recipient or 
subrecipient) is providing HOME-ARP funds to a purchaser to acquire 
rental housing, the participating jurisdiction (or State recipient 
or subrecipient) and the purchaser have executed a written agreement 
under which HOME-ARP assistance will be provided for the purchase of 
rental housing and the property title will be transferred to the 
purchaser within six months of the agreement date.
    (ii) Non-Congregate Shelter.
    (A) If the project consists of rehabilitation or new 
construction (with or without acquisition) the participating 
jurisdiction (or State recipient or sub recipient) and project owner 
have executed a written legally binding agreement under which HOME-
ARP assistance will be provided to the owner for an identifiable 
project for which development is reasonably expected to begin within 
12 months of the date of commitment.
    (B) If the project consists of acquisition (without 
rehabilitation or new construction) of a property and the 
participating jurisdiction (or State recipient or subrecipient) is 
either acquiring the property with HOME-ARP funds or providing HOME-
ARP funds to a purchaser to acquire the property for use as a non-
congregate shelter that is reasonably expected to operate within six 
months of the date the commitment, the participating jurisdiction 
(or State recipient or subrecipient) and the property owner or 
purchaser have executed a legally binding contract for sale of an 
identifiable property and the property title will be transferred 
from the property owner to the participating jurisdiction (or State 
recipient or subrecipient) or purchaser.
    (iii) Tenant-based rental assistance. If the project consists of 
tenant-based rental assistance, the participating jurisdiction (or 
State recipient, or subrecipient) has entered into a rental 
assistance contract with the owner, the tenant, or the sponsor of 
the qualifying household in accordance with the provisions of the 
HOME-ARP Notice.
    (iv) Supportive Services. If the project consists of providing 
supportive services, the participating jurisdiction (or State 
recipient, or subrecipient) has entered into a legally binding 
written agreement or contract with the contractor or subrecipient 
providing services to qualifying households in accordance with the 
HOME-ARP Notice.
    HOME-ARP funds mean funds made available under Section 3205 of 
the American Rescue Plan Act of 2021 (Pub. L. 117-2) through 
allocations.
    Housing includes manufactured housing and manufactured housing 
lots, permanent housing for disabled homeless persons, transitional 
housing, single-room occupancy housing, and group homes. Housing 
does not include emergency shelters, congregate or non-congregate 
shelters (including shelters for disaster victims), or facilities 
such as nursing homes, convalescent homes, hospitals, residential 
treatment facilities, correctional facilities, halfway houses, 
housing for students, or dormitories (including farmworker 
dormitories).
    Program income. Program income means gross income received by 
the participating jurisdiction, State recipient, or a subrecipient 
directly generated from the use of HOME-ARP funds. When program 
income is generated by housing or shelter that is only partially 
assisted with HOME-ARP funds, the income shall be prorated to 
reflect the

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percentage of HOME-ARP funds used. Program income includes, but is 
not limited to, the following:
    (1) Proceeds from the disposition by sale or long-term lease of 
real property acquired, rehabilitated, or constructed with HOME-ARP 
funds;
    (2) Gross income from the use or rental of real property, owned 
by the participating jurisdiction, State recipient, or a 
subrecipient, that was acquired, rehabilitated, or constructed, with 
HOME-ARP funds, less costs incidental to generation of the income 
(Program income does not include gross income from the use, rental 
or sale of real property received by the project owner, developer, 
or sponsor, unless the funds are paid by the project owner, 
developer, or sponsor to the participating jurisdiction, 
subrecipient or State recipient);
    (3) Payments of principal and interest on loans made using HOME-
ARP funds;
    (4) Proceeds from the sale of loans made with HOME-ARP funds;
    (5) Proceeds from the sale of obligations secured by loans made 
with HOME-ARP funds;
    (6) Interest earned on program income pending its disposition;
    (7) Any other interest or return on the investment of HOME-ARP 
funds permitted under Sec.  92.205(b) or the HOME-ARP Notice; and,
    (8) Any operating cost assistance or replacement reserve funds 
returned to the participating jurisdiction after the required 
compliance or use period, in accordance with the HOME-ARP Notice.
    Project means a site or sites together with any building 
(including a manufactured housing unit) or buildings located on the 
site(s) that are under common ownership, management, and financing 
and are to be assisted with HOME-ARP funds as a single undertaking 
under 24 CFR part 92 and the HOME-ARP Notice. The project includes 
all the activities associated with the site and building. For HOME-
ARP tenant-based rental assistance or supportive services, project 
means assistance to a qualifying individual or family.
    Project completion means that all necessary title transfer 
requirements and construction work, if applicable, have been 
performed; the project complies with the requirements of the HOME-
ARP Notice and applicable requirements of this part, as revised by 
the Appendix in this notice (including the property standards); the 
final drawdown of HOME funds has been disbursed for the project; and 
the project completion information has been entered into the 
disbursement and information system established by HUD, except that 
with respect to rental housing project completion, for the purposes 
of Sec.  92.502(d), project completion occurs upon completion of 
construction and before occupancy. For HOME-ARP tenant-based rental 
assistance or supportive services, project completion means the 
final drawdown has been disbursed for the project.
    Subrecipient means a public agency or nonprofit organization 
selected by the participating jurisdiction to receive HOME-ARP funds 
to administer all or some of the participating jurisdiction's HOME-
ARP programs. A public agency or nonprofit organization that 
receives HOME-ARP funds solely as a developer or owner of a housing 
project or non-congregate shelter is not a subrecipient. The 
participating jurisdiction's selection of a subrecipient is not 
subject to the procurement procedures and requirements.
    All other definitions in Sec.  92.2 applicable to HOME-ARP 
remain unchanged.

B. Subpart B--Allocation Formula

    1. Formula Allocation. ARP required the Secretary to allocate 
HOME-ARP funds pursuant to section 217 of NAHA (42 U.S.C. 12747) to 
grantees that received allocations in fiscal year (FY) 2021 pursuant 
to that same formula, within 30 days of enactment of ARP. Therefore, 
section 216(1) (42 U.S.C. 12746(1)) which requires the allocation of 
funds provided under title II of NAHA in 20 days from the date of 
enactment of the appropriation and sections 216(10) (42 U.S.C. 
12746(10)) and 217(a)(4) (42 U.S.C. 12747(a)(4)) which provide for a 
threshold reduction do not apply. The requirements in 24 CFR 92.50 
and 92.60 apply only to the extent that they do not conflict with 
this ARP statutory requirement. All regulatory requirements related 
to the participation threshold amount do not apply to HOME-ARP.

Insular Areas

    2. Program description. The requirements in 24 CFR 92.61 are 
waived to the extent they apply to HOME-ARP funds and HUD imposes 
the alternative requirement that insular areas must comply with the 
requirements for participating jurisdictions for the HOME-ARP 
allocation plan in the HOME-ARP Notice, unless stated otherwise in 
the HOME-ARP Notice.
    3. Review of program description and certifications. The 
requirements for the HOME-ARP allocation plan for participating 
jurisdictions in the HOME-ARP Notice apply to insular areas, 
therefore 24 CFR 92.62 is waived to the extent that it conflicts 
with the following alternative requirements:
    (a) Review of HOME-ARP allocation plan. The responsible HUD 
Field Office will review an insular area's HOME-ARP allocation plan 
and will approve the plan unless the insular area has submitted a 
substantially incomplete HOME-ARP allocation plan; has submitted a 
HOME-ARP allocation plan that is inconsistent with the purposes of 
ARP; has failed to submit information sufficient to allow HUD to 
make the necessary determinations that the HOME-ARP allocation plan 
complies with the requirements in the HOME-ARP Notice; or if the 
level of proposed projects or eligible activities is not within the 
management capability demonstrated by past performance in housing 
and community development programs.
    An insular area's allocation plan is inconsistent with ARP if it 
allocates HOME-ARP funds for uses other than a HOME-ARP eligible 
activity, as described in the HOME-ARP Notice. An insular area's 
HOME-ARP allocation plan is substantially incomplete if the insular 
area does not complete the required public participation or 
consultation or fails to describe those efforts in the plan; if the 
insular area fails to include the required elements outlined in the 
HOME-ARP Notice, including the amount of HOME-ARP funds for each 
eligible HOME-ARP activity type; the insular area fails to identify 
and describe the responsibilities of the subrecipient or contractor 
administering all of its HOME-ARP award, if applicable; or HUD 
rejects the insular area's certifications as inaccurate.
    If the insular area has not submitted information in its HOME-
ARP allocation plan that is satisfactory to HUD to demonstrate 
compliance with HOME-ARP allocation plan requirements; or if the 
level of proposed projects or eligible activities is not within the 
management capability demonstrated by past performance in housing 
and community development programs, the insular area may be required 
to furnish such further information or assurances as HUD may 
consider necessary to find the HOME-ARP allocation plan and 
certifications satisfactory. The HUD Field Office shall work with 
the insular area to achieve a complete and satisfactory plan.
    (b) Review period. Within thirty days of receipt of the HOME-ARP 
allocation plan, the HUD Field Office will notify the insular area 
if determinations cannot be made based on the information submitted 
that the HOME-ARP allocation plan complies with HOME-ARP allocation 
plan requirements, or if the proposed projects or activities are 
beyond currently demonstrated capability as demonstrated by past 
performance in housing and community development programs. The 
insular area will have a reasonable period of time, agreed upon 
mutually, to submit the necessary supporting information or to 
revise the proposed projects or activities in its HOME-ARP 
allocation plan.
    (c) HOME Investment Partnership Agreement. Upon issuance of the 
HOME-ARP Notice, HUD will obligate all HOME-ARP grants to insular 
areas through the signing of the HOME-ARP Grant Agreements by both 
parties. After obligation, HUD will permit the insular area to use 5 
percent of its award for eligible administrative and planning costs 
in accordance with the HOME-ARP Notice. After submission and 
acceptance of the insular area's HOME-ARP allocation plan, the 
remainder of the HOME-ARP funds will be made available to the 
insular area for expenditure.
    4. Amendments to program description. HUD waives 24 CFR 92.63 
and imposes the following alternative requirement for insular areas:
    Insular areas must make a substantial amendment to its HOME-ARP 
allocation plan for a change in the method of distributing funds; to 
carry out an activity not previously described in the plan; to 
change the purpose, scope, location, or beneficiaries of an 
activity, including new preferences not previously described in the 
plan; a change in the guidelines that apply to HOME-ARP funds for 
other forms of investment (24 CFR 92.61(b)(6)), minority and women 
business outreach program (24 CFR 92.61(b)(7)), or refinancing (24 
CFR 92.61(b)(8)); or a change

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in the tenure type of the project or activities; or a funding 
increase to a project or activity of $100,000 or 50 percent 
(whichever is greater). Participating jurisdictions must make the 
proposed substantial amendment public and provide for a 15-day 
public comment period prior to submission. Upon completion, 
participating jurisdictions must submit substantial amendments to 
HUD in accordance with the process for submitting the HOME-ARP 
allocation plan as described in Section V.D.
    The HUD Field Office will notify the insular area if its HOME-
ARP allocation plan, as amended, does not permit a determination 
that the HOME-ARP allocation plan complies with the requirements in 
the HOME-ARP Notice, or if the level of proposed projects or 
eligible activities is not within the management capability 
demonstrated by past performance in housing and community 
development programs, within 30 days of receipt. The insular area 
will have a reasonable period of time, agreed upon mutually, to 
submit the necessary supporting information to revise the proposed 
projects or activities in its HOME-ARP allocation plan.
    5. Applicability of HOME-ARP requirements to insular areas. The 
requirements in 24 CFR 92.64 are revised to impose the alternative 
requirement that insular areas are subject to the same HOME-ARP 
requirements in the HOME-ARP Notice as participating jurisdictions, 
and applicable regulatory requirements for insular areas that are 
not revised by the HOME-ARP Notice. The following exceptions in 24 
CFR 92.64, as revised, still apply to insular areas:
    (1) Subpart K (Program Administration): References to HOME 
Investment Trust Fund in 24 CFR 92.500(b), as revised by the HOME-
ARP Notice shall be ``HOME account'' for insular areas. The 
requirements in 24 CFR 92.502(c) Local Account do not apply to 
insular areas, and instead insular areas must comply with Treasury 
Circular No. 1075 (31 CFR part 205) and 2 CFR 200.305.
    (2) Section 92.504 (Participating jurisdiction responsibilities; 
written agreements; on-site inspections) applies, except that the 
written agreement must require compliance with the requirements in 
the HOME-ARP Notice, including the Appendix.
    (3) Subpart L (Performance Reviews and Sanctions). Section 
92.552 does not apply. Instead, 24 CFR 92.65 applies.
    Exceptions in Sec.  92.64(a)(1), (4), and (5) do not apply to 
HOME-ARP for insular areas and are waived. The requirements in 24 
CFR 92.64(b), (c), and (d) for insular areas are not revised.
    6. Reallocation. Section 217 of NAHA (42 U.S.C. 12747) and the 
regulation at 24 CFR 92.66 for the reallocation of funds for insular 
areas are waived so that any HOME-ARP funds which are reduced or 
recaptured from an insular area's allocation will be reallocated by 
HUD in accordance with 24 CFR part 92, subpart J, as revised by the 
Appendix in this notice.

C. Subpart C--Consortia; Designation and Revocation of Designation as a 
Participating Jurisdiction

    1. Continuous designation as a participating jurisdiction. 24 
CFR 92.106 is waived and revised to the alternative requirement that 
once a State or unit of general local government is designated a 
participating jurisdiction for HOME-ARP, it must remain a HOME-ARP 
participating jurisdiction for its HOME-ARP period of performance 
and the requirements of 24 CFR 92.102 through 92.105 do not apply, 
unless HUD revokes the designation in accordance with 24 CFR 92.107, 
as revised by the Appendix in this notice. Once allocated HOME-ARP 
funds, a HOME-ARP participating jurisdiction does not have to be a 
participating jurisdiction under the HOME program to remain a 
participating jurisdiction under the HOME-ARP program.
    2. Revocation of designation as a participating jurisdiction. 
The requirements in 24 CFR 92.107(a) apply to HOME-ARP. The 
requirements in Sec.  92.107(b) and (c) are waived. Reallocation 
requirements in Sec.  92.107(c) are replaced with the alternative 
requirements for 24 CFR part 92, subpart J, as revised by the 
Appendix in this notice.

D. Subpart D--Submission Requirements

    1. Submission requirements. HUD waives requirements associated 
with a comprehensive housing affordability strategy in sections 105 
(42 U.S.C. 12705), 106 (42 U.S.C. 12706), 107 (42 U.S.C. 12707), and 
216 (42 U.S.C. 12746) of NAHA and 24 CFR 92.150 and imposes the 
following alternative requirement:
    After the date of the HOME-ARP Notice, the participating 
jurisdiction may execute the HOME-ARP grant agreement with HUD to 
obligate the participating jurisdiction's HOME-ARP allocation. After 
obligation and prior to acceptance of a participating jurisdiction's 
HOME-ARP allocation plan by HUD, the participation jurisdiction may 
incur eligible administrative and planning costs in accordance with 
24 CFR 92.207, as revised by the Appendix in this notice and may 
expend up to 5 percent of its HOME-ARP funds for eligible 
administrative and planning costs.
    The participating jurisdiction must submit a HOME-ARP allocation 
plan and related documents in accordance with the HOME-ARP Notice, 
including the requirements for the content of the HOME-ARP 
allocation plan, the process of developing and submitting the plan, 
certifications, consultation, public participation, HUD review, 
identification of subrecipient or contractor administering all of a 
participating jurisdiction's HOME-ARP award and its 
responsibilities, if applicable, and amendments. After a 
participating jurisdiction's HOME-ARP allocation plan has been 
accepted by HUD, in accordance with the HOME-ARP Notice, a 
participating jurisdiction may use its HOME-ARP funds on all 
eligible costs, including eligible project costs.
    If the participating jurisdiction does not submit a HOME-ARP 
allocation plan or if the participating jurisdiction's plan is not 
accepted within a reasonable period of time, as determined by HUD, 
all HOME-ARP costs incurred by the participating jurisdiction (or 
its subrecipient or contractor) will be ineligible costs and any 
HOME-ARP funds expended by the participating jurisdiction must be 
repaid to the HOME Investment Trust Fund Treasury account, in 
accordance with guidance from HUD.

E. Subpart E--Program Requirements

    1. Distribution of assistance. The requirements in section 222 
of NAHA (42 U.S.C. 12752) and 24 CFR 92.201 are waived to the extent 
necessary to impose the following alternative requirements:
    a. Local. Each participating jurisdiction must, insofar as is 
feasible, distribute HOME-ARP funds geographically within its 
boundaries and among different categories of need of qualifying 
populations, according to the priorities identified in its approved 
HOME-ARP allocation plan. The participating jurisdiction may only 
invest its HOME-ARP funds in eligible projects within its 
boundaries, or in jointly funded projects within the boundaries of 
contiguous local jurisdictions which serve qualifying populations in 
both jurisdictions. For a HOME-ARP rental or non-congregate shelter 
project to be jointly funded, both jurisdictions must make a 
financial contribution to the project.
    b. State. Each State participating jurisdiction is responsible 
for distributing HOME-ARP funds throughout the State according to 
the State's assessment of the geographical distribution of the needs 
of the qualifying populations within the State, as identified in the 
State's approved HOME-ARP allocation plan. The State must distribute 
HOME-ARP funds to rural areas in amounts that take into account the 
non-metropolitan share of the State's total qualifying populations 
and objective measures of rural need, such as poverty and 
homelessness data, as set forth in the State's approved HOME-ARP 
allocation plan. To the extent the need is within the boundaries of 
a participating unit of general local government, the State and the 
unit of general local government shall coordinate activities to 
address that need. A State that uses State recipients to perform 
program functions shall require that the State recipients use HOME-
ARP funds in accordance with the HOME-ARP Notice and other 
applicable laws. A State may fund projects on Indian reservations 
located within the State provided that the State includes Indian 
reservations in its consolidated plan and HOME-ARP allocation plan.

Eligible and Prohibited Activities

    2. New Eligible Activities. In addition to the activities 
contained in 24 CFR 92.205 and the NAHA, section 3205(a)(1) of ARP 
has defined the following new eligible activities:
    (1) Supportive services to qualifying households that are not 
already receiving supportive services, including supportive services 
activities listed in section 401(29) of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11360(29)); housing counseling; and 
homeless prevention services; and
    (2) The acquisition and development of non-congregate shelter 
units.
    For purposes of implementing the new eligible activities under 
ARP, HUD has determined that the new eligible activities are not 
subject to the requirements in section

[[Page 56768]]

212 of NAHA (42 U.S.C. 12742) and imposes the requirements for the 
new eligible activities in the HOME-ARP Notice. As such, the waivers 
and alternative requirements in this Notice shall not apply to the 
above-activities unless specified in the HOME-ARP Notice.
    3. Eligible activities. HUD is providing a waiver of the 
requirements of section 212(a)(1) and (3) of NAHA (42 U.S.C. 
12742(a)(1) and (3)), section 215(b) of NAHA (42 U.S.C. 12745(b)), 
24 CFR 92.205(a)(1)-(4), (b)-(e), and 24 CFR 92.209 as follows:
    (1) Ineligible activities. Homeownership and owner-occupied 
activities, including assistance to homebuyers, development of 
affordable housing for homeownership, and homeowner rehabilitation, 
shall not be eligible activities in which HOME-ARP funds may be 
invested.
    (2) Costs associated with eligible activities. HUD is waiving 
and imposing an alternative requirement to 24 CFR 92.205(a)(1) 
because the regulation specifies that eligible costs are those set 
forth in 24 CFR 92.206 through 24 CFR 92.209. The alternative 
requirement is that eligible costs shall be those costs set forth in 
24 CFR 92.206 through 24 CFR 92.209, as modified by the waivers and 
alternative requirements in this notice.
    (3) Applicability of forms of assistance, minimum amount of 
assistance, multi-unit projects, and related limited waivers. As 
homeownership activities are not eligible activities for HOME-ARP 
funds, 24 CFR 92.205(b)-(d) are waived to the extent that they 
applied to assisting homebuyers, homeowners, or the development of 
housing for homeownership purposes.
    (4) Waiver and alternative requirement of regulations for 
terminated projects. As participating jurisdictions are required to 
have a HOME-ARP Investment Trust Fund Treasury account instead of 
the local HOME Investment Trust Fund, HUD is providing a limited 
waiver and alternative requirement of the requirements of 24 CFR 
92.205(e) to the extent that 24 CFR 92.252(e) specifies that funds 
must be paid into the participating jurisdiction's HOME Investment 
Trust Fund. HOME-ARP funds repaid pursuant to 24 CFR 92.252(e) and 
the HOME-ARP Notice shall be repaid to the participating 
jurisdiction's HOME-ARP Investment Trust Fund Treasury account.
    4. Eligible project costs. HUD waives 24 CFR 92.206 to the 
extent that it conflicts with the eligible costs for eligible 
activities identified in the HOME-ARP Notice. In addition, HUD 
waives 24 CFR 92.206(d)(5) and imposes the following alternative 
requirement:
    For new construction or rehabilitation of HOME-ARP rental 
housing for qualifying populations, the cost of funding operating 
cost assistance during the project's compliance period or a 
capitalized operating cost assistance reserve in accordance with 
requirements in section VI.B of the HOME-ARP Notice is an eligible 
cost.
    For new construction or rehabilitation of HOME-ARP rental 
housing units for low-income households, the cost of funding an 
initial operating deficit reserve, which is a reserve to meet any 
shortfall in project income during the period of project rent-up for 
HOME-ARP units for low-income households (not to exceed 12 months), 
is an eligible cost. An initial operating deficit reserve may only 
be used to pay the share of operating expenses, scheduled payments 
to a replacement reserve, and debt service of the HOME-ARP rental 
housing units for low-income households. The initial operating 
deficit reserve must be included in the project's underwriting and 
the participating jurisdiction must review and approve the initial 
operating deficit reserve amount in accordance with the 
participating jurisdiction's standardized underwriting guidelines.
    The initial operating deficit reserve must be based on a 
participating jurisdiction's analysis of projected operating 
deficits attributable to the HOME-ARP units for low-income 
households during the period of project rent-up (not to exceed 12 
months) and remaining after expected rental revenue and operating 
expenses are calculated according to the projected lease-up 
schedule. Any HOME-ARP funds placed in an initial operating deficit 
reserve that remain unexpended after the period of project rent-up 
may be retained for reserves for replacement for HOME-ARP units if 
permitted by the participating jurisdiction.
    HUD also waives Sec.  92.206(d)(6) to impose the following 
alternative requirement: Staff and overhead costs of the 
participating jurisdiction are those costs directly related to 
carrying out the project or activity, such as work specifications 
preparation, loan processing inspections, and other services related 
to assisting tenants and occupants. Although these project delivery 
costs may be charged as project costs, these costs cannot be charged 
to or paid by qualifying households or low-income families.
    5. Eligible administrative and planning costs. Section 
3205(a)(2) of ARP provides that notwithstanding sections 212(c) and 
(d)(1) of NAHA (42 U.S.C. 12742(c) and (d)(1)), a participating 
jurisdiction or insular area may use up to fifteen percent of its 
HOME-ARP allocation for payment of administrative and planning costs 
of the HOME-ARP program. Therefore, HUD waives sections 212(c) and 
(d)(1) of NAHA (42 U.S.C. 12742(c) and (d)(1)) and the requirements 
in 24 CFR 92.207 to the extent it conflicts with the following 
alternative requirement:
    A participating jurisdiction may incur and expend up to fifteen 
percent of its HOME-ARP allocation for eligible administrative and 
planning costs. From the obligation date of the participating 
jurisdiction's HOME-ARP award, as identified in the HOME-ARP Grant 
Agreement, until the date of HUD's acceptance of the participating 
jurisdiction's HOME-ARP allocation plan, a participating 
jurisdiction may incur and expend up to five percent of its HOME-ARP 
allocation for eligible administrative and planning costs, in 
accordance with the requirements in the HOME-ARP Notice.
    HOME-ARP funds for may not be used to pay costs attributable to 
the regular HOME Program, including administrative and planning 
costs.
    A participating jurisdiction may provide all or a portion of its 
HOME-ARP administrative and planning funds to subrecipients and 
contractors that are administering activities on behalf of the 
participating jurisdiction (e.g., CoC entity, other non-Federal 
entity), in accordance with the requirements in the HOME-ARP Notice. 
However, from the obligation date of the HOME-ARP funds in the HOME-
ARP Grant Agreement and prior to HUD's acceptance of the 
participating jurisdiction's HOME-ARP allocation plan, a 
subrecipient or contractor to the participating jurisdiction may 
only incur and expend HOME-ARP funds for eligible administrative and 
planning costs if the subrecipient or contractor is responsible for 
the participating jurisdiction's entire HOME-ARP award and has 
executed a HOME-ARP written agreement that complies with 24 CFR 
92.504, as revised by the Appendix in this notice. A participating 
jurisdiction must identify subrecipient or contractor that is 
responsible for the use of the participating jurisdiction's entire 
HOME-ARP award and describe the subrecipient or contractor's 
responsibilities in its HOME-ARP allocation plan, in accordance with 
the HOME-ARP Notice.
    All costs must comply with the Cost Principles contained in 
subpart E of the Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards at 2 CFR part 
200, as amended.
    If the participating jurisdiction does not submit a HOME-ARP 
allocation plan or if the participating jurisdiction's plan is not 
accepted within a reasonable period of time, as determined by HUD, 
all HOME-ARP costs incurred by the participating jurisdiction will 
be ineligible costs and any HOME-ARP funds expended by the 
participating jurisdiction must be repaid to the participating 
jurisdiction's HOME Investment Trust Fund Treasury account, in 
accordance with 24 CFR 92.503, as revised by the Appendix in this 
notice. Moreover, if the participating jurisdiction's HOME-ARP 
allocation plan does not identify or include a description of the 
responsibilities of the subrecipient or contractor that is 
responsible for the participating jurisdiction's entire HOME-ARP 
award, if applicable, the administrative and planning costs incurred 
or expended by the subrecipient or contractor will also be 
ineligible and any HOME-ARP funds expended by the participating 
jurisdiction or the contractor or subrecipient must be repaid to the 
participating jurisdiction's HOME Investment Trust Fund Treasury 
account.
    Reasonable administrative and planning costs for the HOME-ARP 
program include:
    a. General management, oversight, and coordination. Reasonable 
costs of overall HOME-ARP program management, coordination, 
monitoring, and evaluation. Such HOME-ARP costs include, but are not 
limited to, necessary expenditures for the following:
    1. Salaries, wages, and related costs of the participating 
jurisdiction's staff. If a participating jurisdiction charges costs 
to this category, the participating jurisdiction may either include 
the entire salary and related costs allocable to the HOME-ARP 
program of each person whose primary responsibilities with regard to 
the HOME-ARP program involves program administration

[[Page 56769]]

assignments, or the prorated share of the salary, wages, and related 
costs of each person whose job includes any HOME-ARP program 
administrative assignments. A participating jurisdiction may only 
use one of these two methods. HOME-ARP program administration 
includes:
    i. Developing systems and schedules for complying with HOME-ARP 
program requirements, including systems to prevent a duplication of 
benefits among beneficiaries of HOME-ARP activities;
    ii. Developing interagency agreements and agreements with 
entities receiving HOME-ARP funds;
    iii. Monitoring HOME-ARP activities for progress and compliance 
with HOME-ARP program requirements;
    iv. Preparing HOME-ARP reports and other documents related to 
the HOME-ARP program for submission to HUD;
    v. Coordinating the resolution of audit and monitoring findings 
on any HOME-ARP activities;
    vi. Evaluating HOME-ARP program results against stated 
objectives in the HOME-ARP allocation plan, and
    vii. Managing or supervising persons whose primary 
responsibilities with regard to the HOME-ARP program include such 
assignments as those described above.
    2. Travel costs incurred for official business in carrying out 
the HOME-ARP program.
    3. HOME-ARP administrative services performed under third party 
contracts or agreements, including such services as general legal 
services, accounting services, and audit services.
    4. Other costs for goods and services required for administering 
the HOME-ARP program, such as: Rental or purchase of equipment, 
insurance, information systems necessary to track and implement 
beneficiaries of HOME-ARP activities in accordance with the 
requirements of the HOME-ARP Notice, including the Appendix in this 
notice, utilities, office supplies, and rental and maintenance (but 
not purchase) of office space.
    5. Costs of administering HOME-ARP TBRA and HOME-ARP supportive 
services programs.
    b. Staff and overhead. Staff and overhead costs of the 
participating jurisdiction related to administering a HOME-ARP 
project or activity, such as work specifications preparation, loan 
processing, inspections, lead-based paint evaluations (visual 
assessments, inspections, and risk assessments) and other services 
related to assisting potential owners, tenants; and staff and 
overhead costs directly related to providing advisory and other 
relocation services to persons displaced by the project, including 
timely written notices to occupants, referrals to comparable and 
suitable replacement property, property inspections, counseling, and 
other assistance necessary to minimize hardship. These costs may be 
charged as administrative costs, at the discretion of the 
participating jurisdiction; however, these costs (except housing 
counseling) cannot be charged to or paid by qualifying or low-income 
individuals and families.
    c. Public information. The provision of information and other 
resources to residents and citizen organizations participating in 
the planning, implementation, or assessment of projects being 
assisted with HOME-ARP funds.
    d. Fair Housing. Activities to affirmatively further fair 
housing (AFFH) in accordance with 24 CFR 5.151 and the participating 
jurisdiction's certification in accordance with 24 CFR 5.152. (HUD's 
Interim Final Rule entitled, ``Restoring Affirmatively Furthering 
Fair Housing Definitions and Certifications,'' (86 FR 30779, issued 
on Jun. 10, 2021) as amended, established the AFFH definition at 24 
CFR 5.151 and the certification requirements in 24 CFR 5.152 and 
became effective on July 31, 2021). Available at https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-affirmatively-furthering-fair-housing-definitions-and-certifications.
    e. Indirect costs. Indirect costs may be charged to the HOME-ARP 
program under a cost allocation plan prepared in accordance with 2 
CFR part 200, subpart E, as amended.
    f. Preparation of HOME-ARP allocation plan. Preparation of the 
HOME-ARP allocation plan as required in the HOME-ARP Notice. 
Preparation includes the costs of public hearing, consultations, and 
publications.
    g. Other Federal requirements. Costs of complying with the 
applicable Federal requirements in 24 CFR part 92, subpart H. HOME-
ARP project-specific environmental review costs may be charged as 
administrative or project costs in accordance with 24 CFR 
92.206(d)(8) and is at the discretion of the participating 
jurisdiction.
    6. Eligible community housing development organization (CHDO) 
operating expense and capacity building costs. Section 3205(a)(3) of 
ARP provides that notwithstanding sections 212(a) and (g) of the Act 
(42 U.S.C. 12742(a) and (g)), a participating jurisdiction or 
insular area may use up to an additional five percent of its 
allocation for the payment of operating expenses of community 
housing development organizations and nonprofit organizations 
carrying out activities under the HOME-ARP Notice, but only if such 
funds are used to develop the capacity of the community housing 
development organization or nonprofit organization in the 
jurisdiction or insular area to carry out activities authorized 
under the HOME-ARP Notice; and the community housing development 
organization or nonprofit organization complies with the limitation 
on assistance in section 234(b) of NAHA (42 U.S.C. 12774(b)). 
Therefore, HUD waives sections 212(a) and (g) of the Act (42 U.S.C. 
12742(a) and (g)) and 24 CFR 92.208 to the extent they conflict with 
ARP and the requirements in the HOME-ARP Notice for Nonprofit 
Operating and Capacity Building Assistance and imposes the following 
alternative requirements:
    A participating jurisdiction may use up to 5 percent of its 
HOME-ARP allocation to pay operating expenses of community housing 
development organizations and other nonprofit organizations that 
will carry out activities with HOME-ARP funds. A participating 
jurisdiction may also use up to an additional 5 percent of its 
allocation to pay eligible costs related to developing the capacity 
of eligible nonprofit organizations to successfully carry out HOME-
ARP eligible activities. Participating jurisdictions may award 
operating expense assistance or capacity building assistance to a 
nonprofit organization if it reasonably expects to provide HOME-ARP 
funds to the organization for the eligible HOME-ARP activities of 
development and support of rental housing, tenant-based rental 
assistance, acquisition and development of non-congregate shelter, 
or supportive services within 24 months of the award.
    (1) Operating Expense Assistance: Operating expenses are defined 
as reasonable and necessary costs of operating the nonprofit 
organization. These costs include employee salaries, wages and other 
employee compensation and benefits; employee education, training, 
and travel; rent; utilities; communication costs; taxes; insurance; 
equipment, materials, and supplies. HOME-ARP funds used for 
operating expenses must be used for the general operating costs of 
the nonprofit organization. These operating costs must not have a 
particular final cost objective, such as a project or activity, or 
must not be directly assignable to a HOME-ARP activity or project.
    (2) Capacity Building Assistance: Capacity building expenses are 
defined as reasonable and necessary general operating costs that 
will result in expansion or improvement of an organization's ability 
to successfully carry out eligible HOME-ARP activities. Eligible 
costs include salaries for new hires including wages and other 
employee compensation and benefits; costs related to employee 
training or other staff development that enhances an employee's 
skill set and expertise; equipment (e.g., computer software or 
programs that improve organizational processes), upgrades to 
materials, and supplies; and contracts for technical assistance or 
for consultants with expertise related to the HOME-ARP qualifying 
populations.
    (3) Ineligible Costs:
    (a) No costs related to operating a non-congregate shelter 
(e.g., allocable overhead and staffing costs, insurance, utilities, 
etc.) are eligible costs under the HOME-ARP program.
    (b) The actual costs of implementing a specific activity or 
project, including staff costs of the community housing development 
organization or nonprofit organization to deliver supportive 
services or administer HOME-ARP tenant-based rental assistance, are 
considered HOME-ARP project delivery costs or project soft costs and 
are not eligible operating expense and capacity building costs.
    (4) Limitations on Assistance: In any fiscal year, operating 
assistance provided to a nonprofit organization may not exceed the 
greater of 50 percent of the general operating expenses of the 
organization, as described in the HOME-ARP Notice, for that fiscal 
year or $50,000. Likewise, in any fiscal year, capacity building 
assistance provided to a nonprofit organization may not exceed the 
greater of 50 percent of the general operating expenses of the 
organization, as described in

[[Page 56770]]

the HOME-ARP Notice for that fiscal year or $50,000. If an 
organization receives both operating assistance and capacity 
building assistance in any fiscal year, the aggregate total amount 
of assistance it may receive is the greater of 50 percent of the 
organization's total operating expenses for that fiscal year or 
$75,000.
    7. Troubled HOME-assisted rental housing projects. HUD waives 24 
CFR 92.210.
    8. Pre-award costs. The requirements in 24 CFR 92.212 are waived 
and HUD imposes the alternative requirement that HOME-ARP funds 
cannot be used for pre-award costs.
    9. HOME Funds and Public Housing. HUD is waiving 24 CFR 
92.213(d) to the extent that it requires that HOME funds must be 
used in accordance with 24 CFR part 92 and the rent requirements in 
24 CFR 92.252. Instead, as an alternative requirement, HOME funds 
must be used in accordance with 24 CFR part 92, as revised by the 
Appendix in this notice and the HOME-ARP Notice, including the rent 
requirements contained in each.
    10. HOME prohibited activities and fees. HUD is waiving 
provisions in 24 CFR 92.214 and providing alternative requirements 
related to prohibited activities and fees, as follows:
    (1) Operating Cost Assistance. 24 CFR 92.214(a)(6) is waived, 
and 24 CFR 92.214(a)(1) is waived to the extent that it conflicts 
with the following alternative requirements:
    a. A participating jurisdiction may pay ongoing operating 
assistance or capitalize an operating cost assistance reserve for 
HOME-ARP-assisted units restricted for occupancy by qualifying 
populations in a project where the participating jurisdiction 
determines in its underwriting that the reserve is necessary to 
maintain the HOME-ARP units' long-term operational feasibility. 
However, HOME-ARP funds cannot be used for both a capitalized 
operating cost assistance reserve and ongoing payments for operating 
cost assistance during the minimum compliance period. The allowable 
amount of the reserve shall not exceed the amount determined by the 
participating jurisdiction to be necessary to provide operating cost 
assistance for HOME-ARP units restricted for occupancy by qualifying 
populations for the 15-year HOME-ARP minimum compliance period.
    b. The operating cost assistance reserve for HOME-ARP units for 
qualifying households must be held by the project owner in a 
separate interest-bearing account and sized, based on an analysis of 
projected deficits remaining after the expected payments toward rent 
by qualifying households are applied to the units' share of 
operating costs. Funds in a capitalized operating cost assistance 
reserve can only be drawn to address operating deficits associated 
with HOME-ARP units restricted for occupancy by the qualifying 
populations. The participating jurisdiction must, no less than 
annually, review the operating cost assistance reserve account to 
determine that the account is appropriately sized based on the 
projected operating deficits of units restricted for occupancy by 
qualifying households. A participating jurisdiction must use the 
definition of operating costs in the HOME-ARP Notice in its 
calculation of operating deficits to determine the amount of HOME-
ARP funds needed for an operating cost assistance reserve or when 
providing operating cost assistance. The participating jurisdiction 
may require the project owner to enter into a deposit account 
control agreement for the operating cost assistance reserve where 
the participating jurisdiction must approve disbursements from the 
account.
    c. The participating jurisdiction must require the project owner 
to request written approval from the participating jurisdiction 
prior to disbursing funds from the project operating cost assistance 
reserve. The participating jurisdiction must review each requested 
distribution from the operating cost assistance reserve, including 
supporting documentation, to determine that the distribution is 
reasonable and necessary to cover the operating deficit associated 
with units occupied by qualifying households.
    d. A participating jurisdiction may provide operating cost 
assistance to a HOME-ARP rental project to cover an operating 
deficit associated with HOME-ARP units restricted for occupancy by 
qualifying households except for when an operating cost assistance 
reserve is already established for the project. Operating cost 
assistance reserve and operating cost assistance cannot be provided 
beyond the HOME-ARP budget period, as described in Section VIII.C.3 
of the HOME-ARP Notice. Unexpended operating cost assistance reserve 
amounts remaining at the end of the minimum compliance period of the 
HOME-ARP units must be returned in accordance with Section VI.B.23 
of the HOME-ARP Notice. During the HOME-ARP minimum compliance 
period and prior to the end of the HOME-ARP budget period, a 
participating jurisdiction may invest additional HOME-ARP funds to 
provide operating cost assistance but is prohibited from investing 
additional HOME-ARP funds for capital costs except within the 12 
months after project completion.
    (2) Eligible Costs for Operating Cost Assistance. 24 CFR 92.206 
and 24 CFR 92.214(a)(9) are waived to the extent that they conflict 
with the following alternative requirement:
    a. For purposes of the operating cost assistance, operating 
costs include costs for administrative expenses, property management 
fees, insurance, utilities, property taxes, and maintenance of a 
unit that is designated as a HOME-ARP-assisted unit and required to 
be occupied by a qualifying household. Operating costs must be 
reasonable and appropriate for the area, size, population(s) served, 
and type of project.
    b. Project administrative expenses include payroll costs, which 
are gross salaries and wages paid to employees assigned to the 
property, including payroll taxes, employee compensation, and 
employee benefits; employee education, training, and travel; 
advertising; and general administrative costs which are costs for 
goods and services required for administration of the housing, 
including rental or purchase of equipment, supplies, legal charges, 
bank charges, utilities, telephone/internet services, insurance, and 
other administrative costs that are reasonable and customary for the 
general administration of a rental unit occupied by qualifying 
populations. HOME-ARP permits the pro-rated staffing costs of a 
Resident Services Coordinator to be included in the operating costs 
allocated to a HOME-ARP unit for low-income or qualifying households 
if such costs are not already paid by another source. Typically, the 
role of a Resident Services Coordinator is to arrange community 
activities for residents and link residents to outside service 
agencies as needed.
    c. Property management fee includes the total fee paid to a 
management agent by the owner for the day-to-day management of a 
HOME-ARP rental unit restricted for occupancy by qualifying 
populations. A management agent must cover its costs of supervising 
and overseeing operations of a HOME-ARP unit out of the fee they 
receive.
    d. A reserve for replacement must be based on the useful life of 
each major system and expected replacement cost in a HOME-ARP 
project. Scheduled payments to a reserve for replacement of major 
systems included in the operating costs allocated to a HOME-ARP unit 
restricted for a qualifying household may be made from the operating 
cost assistance reserve. A reserve for replacement allocated to the 
HOME-ARP units may also be capitalized in the initial year of the 
minimum compliance period of the HOME-ARP units. HOME-ARP funds 
cannot be used to both capitalize a reserve for replacement and 
provide payments to the reserve for replacement from a capitalized 
operating reserve during the minimum compliance period.
    Supportive services costs are not eligible operating costs of 
HOME-ARP units, however, qualifying households occupying HOME-ARP 
rental units may receive supportive services through the HOME-ARP 
supportive services eligible activity.
    (3) Prohibited fees. 24 CFR 92.214(b) is waived only to the 
extent that it conflicts with the alternative requirement that a 
participating jurisdiction may allow such occupancy fees or charges 
that are customary and reasonable if such fees or charges comply 
with 24 CFR 578.77(b).
    11. Alternative requirements for Tenant-based rental assistance. 
The requirements of section 212(a)(3) (42 U.S.C. 12742(a)(3)), 24 
CFR 92.209, 24 CFR 92.252(d), and 24 CFR 92.504(c)(5) are waived. 
The following alternative requirements apply:
    (1) General Requirements. HOME-ARP funds may be used to provide 
tenant-based rental assistance to qualifying households (``HOME-ARP 
TBRA''). HOME-ARP TBRA is a form of rental assistance that is 
attached to the household and not a particular rental unit. 
Therefore, the HOME-ARP TBRA assisted household may choose to move 
to another unit with continued HOME-ARP TBRA as long as it continues 
to meet the program eligibility requirements. If a HOME-ARP TBRA 
assisted household chooses to move, the rental assistance contract 
terminates and a new rental assistance contract for the new unit 
will be executed according to HOME-ARP TBRA requirements. The HOME-
ARP TBRA assisted household must notify the

[[Page 56771]]

participating jurisdiction before moving in order to receive 
continued HOME-ARP TBRA.
    a. Tenant Selection. Only individuals and families in the 
qualifying populations are eligible to receive HOME-ARP TBRA 
assistance. Consistent with the alternative requirements listed 
below and Section IV.C of the HOME-ARP Notice, a participating 
jurisdiction may use a Continuum of Care's (CoC's) coordinated entry 
(CE) process, a CE process and other referral agencies, or a 
waitlist to select qualifying households for HOME-ARP TBRA. 
Participating jurisdictions may establish a system of preferences 
that includes a preference for one or more of the qualifying 
populations, such as homeless. Preferences for one or more of the 
qualifying populations must be disclosed in the HOME-ARP allocation 
plan, as required by the HOME-ARP Notice, including the Appendix in 
this notice. The participating jurisdiction must select qualifying 
households for HOME-ARP TBRA in accordance with written tenant 
selection policies and criteria that are based on local housing 
needs established in the HOME-ARP allocation plan. The participating 
jurisdiction must follow written tenant selection policies and 
criteria that:
    i. Limit eligibility to households that meet one of the HOME-ARP 
qualifying populations definitions in accordance with HOME-ARP 
requirements. Preferences for households in one or more of the HOME-
ARP qualifying populations, if any, must comply with the preferences 
and/or method of prioritization in the participating jurisdiction's 
HOME-ARP allocation plan and the participating jurisdiction's 
policies and procedures, if any, and must not violate 
nondiscrimination requirements in 24 CFR 92.350.
    ii. If the participating jurisdiction selects TBRA applicants 
off a waiting list, it must provide for the selection of households 
from a written waiting list in the chronological order of their 
application, insofar as is practicable.
    iii. Give prompt written notification to any rejected applicant 
of the grounds for any rejection, and
    iv. Comply with the VAWA requirements as described in 24 CFR 
92.359.
    v. Finally, the participating jurisdiction may offer, in 
conjunction with HOME-ARP TBRA assistance, a simultaneous award of 
services in accordance with Section VI.D of the HOME-ARP Notice, as 
well as provide particular types of other nonmandatory services that 
may be most appropriate for persons with a special need or a 
particular disability.
    (2) Tenant Protections. Participating jurisdictions must verify 
that there is an executed lease between the qualifying household 
that receives HOME-ARP TBRA and the owner of the rental unit or a 
between a qualifying household that receives HOME-ARP TBRA and a 
HOME-ARP sponsor with a sublease between the qualifying households 
and the HOME-ARP sponsor, in accordance with 24 CFR 92.253(a). A 
HOME-ARP sponsor is a nonprofit organization that provides housing 
or supportive services to qualifying households and facilitate the 
leasing of a HOME-ARP rental unit to a qualifying household or the 
use and maintenance of HOME-ARP tenant-based rental assistance by a 
qualifying household. Participating jurisdictions may permit a HOME-
ARP sponsor, as defined in Section VI.B.18 of the Notice, to execute 
a lease or master lease with a project owner. The HOME-ARP sponsor 
must then sublease a unit to a qualifying household. The lease 
between the qualifying household and the rental unit owner or the 
sublease between the HOME-ARP sponsor` and the qualifying household 
cannot contain any of the prohibited lease terms specified in 24 CFR 
92.253(b).
    (3) Eligible Costs. Eligible costs under HOME-ARP TBRA include 
rental assistance, security deposit payments, and utility deposit 
assistance to qualifying households. HOME-ARP funds may be used to 
pay for up to 100 percent of these eligible costs. A participating 
jurisdiction may use HOME-ARP TBRA funds to provide loans or grants 
to qualifying households for security deposits for rental units 
regardless of whether the participating jurisdiction provides any 
other HOME-ARP TBRA assistance. The amount of funds that may be 
provided for a security deposit may not exceed the equivalent of two 
months' rent for the unit. Utility deposit assistance is an eligible 
cost only if rental assistance or a security deposit payment is 
provided with HOME-ARP TBRA. Costs of inspecting the housing are 
also eligible as costs of HOME-ARP TBRA. Administration of HOME-ARP 
TBRA is eligible only under general management oversight and 
coordination at 24 CFR 92.207(a), except that the costs of 
inspecting the housing and determining the income eligibility of the 
family are eligible project costs under HOME tenant-based rental 
assistance.
    (4) Ineligible Costs. HOME-ARP TBRA may not be used to pay for 
the homebuyer program as defined at 24 CFR 92.209(c)(2)(iv).
    (5) Portability of Assistance. A participating jurisdiction may 
require the HOME-ARP TBRA assisted household to use HOME-ARP TBRA 
within the participating jurisdiction's boundaries or may permit the 
household to use the assistance outside its boundaries consistent 
with the requirements in 24 CFR 92.209(d).
    (6) Term of Rental Assistance Contract. The participating 
jurisdiction must determine the maximum term of the rental 
assistance contract. The rental assistance contract continues until 
the end of the rental assistance contract term, as determined by the 
participating jurisdiction, or until the lease or sublease is 
terminated, whichever occurs first. The term of the rental 
assistance contract may be renewed, subject to the availability of 
HOME-ARP funds. The term of the rental assistance contract must 
begin on the first day of the term of the lease or sublease.
    (7) Maximum Subsidy. The participating jurisdiction must 
establish policies for the allowable maximum subsidy, which may 
differ from the maximum subsidy requirements at 24 CFR 92.209(h). 
Participating jurisdictions may provide up to 100 percent subsidy 
for rent, security deposit payments, and utility bills. The 
participating jurisdiction must also establish policies for 
determining any household contribution to rent based on a 
determination of the qualifying household's income.
    (8) Rent Standard. Consistent with 24 CFR 92.209(h)(3), 
participating jurisdictions must also establish a rent standard for 
HOME-ARP TBRA by unit size that is based upon local market 
conditions or the Section 8 Housing Choice Voucher program under 24 
CFR part 982. The participating jurisdiction must determine whether 
the rent for a HOME-ARP TBRA household complies with the rent 
standard established by the participating jurisdiction for the HOME-
ARP program and must disapprove a lease if the rent does not meet 
the participating jurisdiction's rent standard for HOME-ARP TBRA.
    (9) Housing Quality Standards. Housing occupied by a household 
receiving HOME-ARP TBRA must comply with all housing quality 
standards required in 24 CFR 982.401 (or successor inspection 
standards issued by HUD) unless the tenant is residing in a HOME or 
HOME-ARP unit, in which case the participating jurisdiction may 
defer to initial and ongoing inspection standards.
    (10) Program Operation. The participating jurisdiction may 
operate HOME-ARP TBRA itself or may contract with a PHA or other 
entity with the capacity to operate a rental assistance program. In 
either case, the participating jurisdiction or entity operating the 
program must approve the lease. HOME-ARP TBRA may be provided 
through an assistance contract with (1) an owner that leases a unit 
to a qualifying household; (2) the qualifying household; or (3) an 
owner and the qualifying household in a tri-party contract. In the 
case of HOME-ARP TBRA provided in coordination with a HOME-ARP 
sponsor, as described below, the participating jurisdiction may 
require that payments are made directly to the HOME-ARP sponsor that 
will make rental payments to the owner on behalf of the qualifying 
household or require payments directly to the owner of the unit.
    (11) HOME-ARP TBRA with a HOME-ARP Sponsor. HOME ARP-TBRA may be 
provided in coordination with a HOME-ARP TBRA sponsor. A HOME-ARP 
TBRA sponsor is a nonprofit organization that provides housing or 
services to HOME-ARP TBRA qualifying households and facilitates the 
leasing of a HOME-ARP rental unit to a qualifying household or the 
use and maintenance of HOME-ARP TBRA on behalf of a qualifying 
household. A HOME-ARP sponsor may make rental subsidy payments and a 
security deposit payment on behalf of a qualifying household. Under 
HOME-ARP TBRA, a qualifying household may reside in housing leased 
by a HOME-ARP sponsor if there is a sublease that complies with 
HOME-ARP lease requirements between the HOME-ARP sponsor and the 
qualifying household.
    (12) Rental Assistance Contract. There must be a rental 
assistance contract between the participating jurisdiction and at 
least one of the following:
    i. HOME-ARP sponsor;
    ii. Qualifying household; or
    iii. Owner of the housing.
    Rental subsidy payments are made on behalf of the HOME ARP-TBRA 
household

[[Page 56772]]

pursuant to a rental assistance contract. The rental assistance 
contract continues until the lease is terminated. Regardless of the 
role of the sponsor, the household has the right to continued HOME 
ARP TBRA assistance if it chooses to move from the unit.
    The HOME-ARP sponsor may only receive the TBRA subsidy directly 
from the participating jurisdiction on behalf of the qualifying 
household if the rental assistance contract is between the HOME-ARP 
sponsor and the participating jurisdiction or the HOME-ARP sponsor 
and the participating jurisdiction have entered into a written 
agreement as outlined below. The HOME-ARP sponsor must make rental 
subsidy payments to the owner on behalf of the qualifying household 
per the terms and conditions of the HOME-ARP TBRA contract or 
written agreement with the participating jurisdiction. When the 
HOME-ARP TBRA qualifying household moves to a new rental unit, the 
HOME-ARP sponsor is not required to continue its sponsor 
relationship with the HOME-ARP TBRA-assisted household for the new 
rental unit but may do so with the consent of the HOME-ARP TBRA 
household.
    The participating jurisdiction must establish policies and 
procedures regarding termination of HOME-ARP TBRA assistance for 
qualifying households who are absent from the rental unit where a 
HOME-ARP sponsor is leasing the rental unit and subleasing to the 
qualifying household or providing HOME-ARP TBRA rental subsidy 
payments on behalf of the household.
    (13) Lease and Sublease. Participating jurisdictions must verify 
that each household that receives HOME-ARP TBRA assistance has an 
executed lease that complies with the tenant protection requirements 
of the HOME-ARP Notice. The lease agreement may be between the 
project owner and the HOME-ARP TBRA household, or participating 
jurisdictions may permit a HOME-ARP sponsor to execute a lease for 
an individual unit or a master lease with an owner for more than one 
unit restricted for occupancy by HOME-ARP TBRA households. If the 
lease agreement is between the HOME-ARP sponsor and owner, the HOME-
ARP sponsor must execute a sublease agreement with a HOME-ARP TBRA 
household. The sublease between the HOME-ARP sponsor and the HOME-
ARP TBRA household must meet the tenant protection requirements of 
the HOME-ARP Notice.
    (14) Written Agreement with HOME-ARP Sponsor. The participating 
jurisdiction must enter into a written agreement with the HOME-ARP 
sponsor if the HOME-ARP TBRA rental assistance contract is not with 
the HOME-ARP sponsor and the HOME-ARP sponsor will receive the HOME-
ARP TBRA subsidy directly from the participating jurisdiction on 
behalf of the qualifying household. The written agreement must 
specify the requirements for the HOME-ARP sponsor receiving the 
HOME-ARP TBRA subsidy on behalf of the qualifying household and the 
HOME-ARP sponsor's obligation to provide the HOME-ARP TBRA payment 
to the owner for the unit's required rent.

Income Targeting

    12. Alternative requirement to HOME rental income targeting 
requirements. HUD is waiving section 215(a)(1)(B) and (C) of NAHA 
(42 U.S.C. 12745(a)(1)(B) and (C)) and 24 CFR 92.216. For HOME-ARP 
rental units, the following alternative requirements shall apply:
    (1) 30 Percent Requirement. Not more than 30 percent of the 
total number of rental units assisted with HOME-ARP funds by the 
participating jurisdiction may be restricted to households that are 
low-income as defined in 24 CFR 92.2. These units may only be 
located in projects containing HOME-ARP units restricted for 
occupancy by qualifying households. The remainder of the total HOME-
ARP rental units assisted with HOME-ARP funds by the participating 
jurisdiction must be restricted for occupancy by qualifying 
households in accordance with the HOME-ARP Notice.
    (2) Low-Income Households. The HOME-ARP rental units occupied by 
low-income households must be occupied by low-income households and 
bear a rent no greater than the lesser of:
    a. The Fair Market Rent for existing housing for comparable 
units in the area, as established by HUD, or
    b. A rent equal to 30 percent of the income of a family at 65 
percent of median income for the area, as determined by HUD, with 
adjustments for the number of bedrooms in the unit.
    13. HOME tenant-based rental assistance income targeting 
requirements. HUD is waiving section 212(a)(3)(A)(ii) of NAHA (42 
U.S.C. 12742(a)(3)(A)(ii)) and 24 CFR 92.216 requirements for income 
targeting of HOME tenant-based rental assistance and imposing an 
alternative requirement that all persons assisted with HOME-ARP TBRA 
must be qualifying households upon admission.

F. Subpart F--Project Requirements

    1. Maximum per-unit subsidy amount and the waiver and 
alternative requirement for underwriting and subsidy layering. The 
requirements of 24 CFR 92.250(a) shall not apply to HOME-ARP funds 
because section 3205 (c)(1) of ARP states that the underlying 
statutory requirements for cost limits in section 212(e) of NAHA (42 
U.S.C. 12742(e)) do not apply to HOME-ARP funds. Additionally, the 
underwriting and subsidy layering requirements in 24 CFR 92.250(b) 
shall not apply to HOME-ARP rental project activities and are 
waived. Lastly, the requirements of section 212 of NAHA (42 U.S.C. 
12742) and 24 CFR 92.214(a) are waived to the extent that they 
conflict with the alternative requirements below. HUD is specifying 
the following alternative requirements:
    (1) Underwriting and Subsidy Layering Guidelines. Participating 
jurisdictions must develop standardized underwriting guidelines for 
HOME-ARP rental projects. These guidelines must provide for 
underwriting that accommodates and is appropriate for different 
types of projects. All participating jurisdictions are required to 
develop and implement standardized underwriting guidelines for HOME-
ARP that require the following:
    a. An examination of the sources and uses of funds for the 
project and a determination that costs are reasonable. In examining 
a project's proposed sources and uses, a participating jurisdiction 
must determine the amount of HOME-ARP development subsidy required 
to fill the gap between other committed funding sources and the cost 
to develop the project.
    b. An assessment of the current market demand for the proposed 
project. For HOME-ARP units for qualifying households, a market 
assessment is not required. Rather, the participating jurisdiction 
can demonstrate that there is unmet need among qualifying 
populations for the type of housing proposed through CoC data, 
public housing and affordable housing waiting lists, point-in-time 
surveys, housing inventory count, or other relevant data on the need 
for permanent housing for the qualifying populations. For projects 
containing units restricted for occupancy by low-income households 
or market-rate households, the participating jurisdiction must 
conduct a market assessment in accordance with 24 CFR 92.250(b)(2). 
A third-party market assessment completed by the developer or 
another funder meets this requirement, but the participating 
jurisdiction must review the assessment and acknowledge in writing 
that it accepts the assessment's findings and conclusions. The 
market assessment and the participating jurisdiction's written 
acknowledgement must be retained for recordkeeping purposes.
    c. Review of and determination that the developer's experience 
and financial capacity are satisfactory based on the size and 
complexity of the project. When assessing the developer, the 
participating jurisdiction must review, at minimum, prior experience 
with similar projects and the current capacity to develop the 
proposed project. When determining whether the developer has the 
financial capacity to undertake the project, the participating 
jurisdiction should examine financial statements and audits to 
determine the developer's net worth, portfolio risk, pre-development 
funding, and liquidity.
    d. Firm written financial commitments for the project.
    e. A careful review of the project's operating budget, including 
the assumptions, projections of a project's net operating income, 
and reasonably expected increases in revenue and expenses during the 
minimum compliance period, to determine if any HOME-ARP-funded 
operating cost assistance is necessary and if applicable, an 
operating cost assistance reserve is sized appropriately. Operating 
income of the project must be sufficient to cover operating expenses 
through the minimum compliance period. For HOME-ARP units for 
qualifying households, the proforma or projections should include 
any anticipated ongoing operating cost assistance or draws from an 
operating cost assistance reserve, if applicable, that will offset 
operating deficits associated with those units to demonstrate 
sufficient operating support. If project-based vouchers or project-
based rental assistance will be awarded, this analysis must include 
that rental assistance revenue because operating cost assistance 
cannot be used for

[[Page 56773]]

units for qualifying households with project-based vouchers or 
project-based rental assistance. A participating jurisdiction's 
underwriting standards may permit projects to generate reasonable 
net operating income throughout the minimum compliance period. 
However, HOME-ARP operating cost assistance may only be used to 
offset operating deficits, in accordance with the requirements of 
the HOME-ARP Notice. Net operating income resulting from HOME-ARP 
operating cost assistance is not permitted and must be prohibited in 
the written agreement between the participating jurisdiction and the 
owner.
    f. An assessment of the project's overall viability through the 
minimum compliance period based on the households (i.e., qualifying 
households, low-income households, market-rate households) it will 
serve.
    (2) Developer Fee. A developer fee is a permitted development 
cost under the HOME-ARP program, but the participating jurisdiction 
must review the fee and determine that it is reasonable. A 
participating jurisdiction may set limits on the developer fee and 
other fees (e.g., asset management fee, property management fee) to 
be paid by HOME-ARP funds that differ from other funding sources 
(e.g., Low-Income Housing Tax Credit underwriting standards).
    (3) Underwriting and Subsidy Layering Review Standards. Before 
the HOME-ARP funds can be committed to a HOME-ARP rental project, 
participating jurisdictions must evaluate the project to determine 
the amount of HOME-ARP capital subsidy and operating cost assistance 
necessary to provide quality affordable housing that meets the 
requirements of the HOME-ARP Notice and is financially viable for 
the minimum 15-year HOME-ARP compliance period. The participating 
jurisdiction must evaluate the project in accordance with 
underwriting and subsidy layering guidelines it has developed for 
HOME-ARP projects.
    (4) Underwriting and Subsidy Layering Commitment Requirements. 
The participating jurisdiction's project underwriting must include 
an in-depth review of underlying project assumptions, development 
sources and uses, and projected operating income and expenses, and 
the project's long-term financial viability to determine the 
project's need for HOME-ARP assistance while preventing over-
subsidization of the project. Participating jurisdictions must take 
a holistic approach to underwriting that examines the overall 
feasibility of the entire project to determine that the property 
will be financially sustainable for the duration of the 15-year 
HOME-ARP compliance period.
    For projects that will receive operating cost assistance through 
a capitalized operating cost assistance reserve or on-going 
operating cost assistance for a specific period, the on-going 
operating cost assistance or operating cost assistance reserve must 
be included in the underwriting. Unless placed into an operating 
cost assistance reserve, operating cost assistance committed to a 
project for a specific period cannot be provided beyond the budget 
period, as described in Section VIII.C.4 of the HOME-ARP Notice. 
HOME-ARP units that have commitments for project-based rental 
assistance must be underwritten with the projected rental assistance 
and not with operating cost assistance. An operating cost assistance 
reserve must be sized based on an analysis of projected operating 
deficits remaining after the expected payments toward rent by 
qualifying households are applied to the HOME-ARP unit's share of 
actual operating costs. However, the participating jurisdiction, 
through its underwriting, must also determine that the HOME-ARP 
capital and operating subsidies do not result in over-subsidization 
of the project.
    2. Property Standards. The property standards in 24 CFR 92.251 
shall apply to all HOME-ARP rental activities except that:
    The requirements in 24 CFR 92.251(c)(3) shall not apply and are 
waived because homeownership is not an eligible activity for HOME-
ARP funds.
    HOME-ARP rental units must comply with the ongoing property 
condition standards of 24 CFR 92.251(f) throughout the compliance 
period as demonstrated by an on-site inspection within 12 months of 
project completion and an on-site inspection at least once every 
three years thereafter as required by 24 CFR 92.504(d)(1)(ii).
    3. Lease-up of HOME-ARP rental units. The requirement in 24 CFR 
92.252 that states that HUD will require the participating 
jurisdiction to repay HOME funds invested in any housing unit that 
has not been rented to eligible tenants 18 months after the date of 
project completion is waived. Instead, as an alternative 
requirement, if the HOME-ARP units are not occupied by eligible 
qualifying households or low-income households, in accordance with 
the unit restrictions, within six months following project 
completion, the participating jurisdiction, as applicable, must 
submit to HUD information on its efforts to coordinate with a CoC, 
homeless service providers, social service and other public agencies 
to fill units for qualifying households or must submit marketing 
information and, if appropriate, a marketing plan to fill units for 
low-income households. The participating jurisdiction must repay any 
HOME-ARP funds invested in units that are not rented to eligible 
qualifying or low-income households within 12 months of project 
completion.
    4. Rent limitations, initial rent schedule, and utility 
allowances for HOME-ARP rental housing. The requirements in 24 CFR 
92.252(a)-(d) are waived and the following alternative requirements 
shall apply:
    (1) Rent limitations for units restricted for occupancy by 
Qualifying Households. In no case can the HOME-ARP rents exceed 30 
percent of the adjusted income of a household whose annual income is 
equal to or less than 50 percent of the median income for the area, 
as determined by HUD, with adjustments for number of bedrooms in the 
unit. HUD will publish the HOME-ARP rent limits on an annual basis.
    Notwithstanding the foregoing, a unit that receives a Federal or 
state project-based rental subsidy and is occupied by a very low-
income household that pays as a contribution to rent no more than 30 
percent of the household's adjusted income, may charge the rent 
allowable under the Federal or state project-based rental subsidy 
program (i.e., the tenant rental contribution plus the rental 
subsidy allowable under that program). If a household receives 
tenant-based rental assistance, the rent is the rent permissible 
under the applicable rental assistance program (i.e., the tenant 
rental contribution plus the rental subsidy allowable under that 
rental assistance program).
    The rent limits for HOME-ARP qualifying populations include the 
rent plus the utility allowance established pursuant to Section 
VI.B.13.d of the HOME-ARP Notice.
    (2) Rent limitations--low-income households. HOME-ARP rental 
units occupied by low-income households must comply with the rent 
limitations in 24 CFR 92.252(a) (i.e., the lesser of the Fair Market 
Rent for existing housing for comparable units in the area, as 
established by HUD, or a rent equal to 30 percent of the income of a 
family at 65 percent of median income for the area, as determined by 
HUD, with adjustments for number of bedrooms in the unit). 
Notwithstanding the foregoing, when a household receives assistance 
from a Federal tenant-based rental assistance (e.g., housing choice 
vouchers), the rent is the rent permissible under the applicable 
rental assistance program (i.e., the tenant rental contribution plus 
the rent subsidy allowable under the rental assistance program). The 
rent limits for low-income households apply to the rent plus the 
utility allowance established pursuant to Section VI.B.13.d of the 
HOME-ARP Notice.
    (3) Rent limitations--Single Room Occupancy (SRO) Units. A HOME-
ARP rental project may consist of SRO units. For the purposes of 
HOME-ARP rental activities, a SRO unit is defined as a unit that is 
the primary residence of the occupant(s) and must at least contain 
sanitary facilities but may also contain food preparation 
facilities. A project's designation as a SRO cannot be inconsistent 
with the building's zoning and building code classification. If the 
SRO units have both sanitary and food preparation facilities, the 
maximum HOME-ARP rent is based on the zero-bedroom fair market rent. 
If the SRO unit has only sanitary facilities, the maximum HOME-ARP 
rent is based on 75 percent of the zero-bedroom fair market rent. 
The rent limits for SRO units must also include the utility 
allowance established pursuant to Section VI.B.13.d of the HOME-ARP 
Notice.
    (4) Initial Rent Schedule and Utility Allowance. The 
participating jurisdiction must establish maximum allowances for 
utilities and services and update the allowances annually. The 
participating jurisdiction may adopt the utility allowance schedule 
of the PHA. The participating jurisdiction must review and approve 
the HOME-ARP rents proposed by the owner, subject to the HOME-ARP 
rent limitations. For HOME-ARP units where the tenant is paying 
utilities and services (e.g., trash collection), the participating 
jurisdiction must determine that the rent for the unit does not 
exceed the maximum rent minus the monthly allowance for utilities 
and services.

[[Page 56774]]

    5. Affordability requirements and limited waiver and alternative 
requirement to period of affordability requirements. The requirement 
that affordability restrictions must remain in place for the amount 
of time in the table specifying the minimum period of affordability 
in 24 CFR 92.252(e) is waived. HUD is specifying that as an 
alternative requirement, HOME-ARP-assisted rental units must comply 
with the requirements of the HOME-ARP Notice in serving the 
qualifying households and, to the extent applicable, low-income 
households, for a minimum period of 15 years, irrespective of the 
amount of HOME-ARP funds invested in the project or the development 
activity being undertaken. Additionally, HUD is specifying the 
following alternative requirements to the use restriction 
requirements in 24 CFR 92.252(e)(1):
    (1) Units restricted for occupancy by qualifying populations 
must be occupied by households that meet the definition of a 
qualifying population at the time of initial occupancy. The 
household's contribution toward rent during this period must be 
affordable in accordance with the HOME-ARP Notice. The rents for 
these units must comply with the rent limitations established in the 
HOME-ARP Notice, including the rent provisions specified in 24 CFR 
92.252(i)(2) for households whose income increases above 80 percent 
of area median income and whose contribution to rent complies with 
the requirements in Section VI.B.15 of the HOME-ARP Notice.
    (2) Units available for low-income households must be 
continuously occupied by households who are income eligible. The 
rents for these units must comply with the rent limitations 
established in the HOME-ARP Notice, including the rent provisions 
specified in 24 CFR 92.252(i)(2) for households whose income 
increases above 80 percent of area median income.
    (3) If a project-based rental assistance Housing Assistance 
Payments (HAP) contract is awarded to a HOME-ARP rental project, a 
participating jurisdiction must impose a minimum compliance period 
that is the greater of 15 years or the term of the HAP contract. 
Participating jurisdictions are also encouraged to extend 
restrictions for occupancy of the HOME-ARP units in accordance with 
the requirements in this section to match eligible HAP contract 
renewals.
    6. Adjustment of HOME rent limits for an existing project. The 
requirements of 24 CFR 92.252(g) are waived.
    7. Tenant income restrictions and tenant rental contribution 
requirements for HOME-ARP rental projects and limited waiver and 
alternative requirements. The requirements at 24 CFR 92.203 and 24 
CFR 92.252(h) and (i) shall apply except that they are waived to the 
extent that they differ from the following alternative requirements:
    (1) Household income at Initial Occupancy--Qualifying 
Households. The participating jurisdiction must require all HOME-ARP 
rental units be restricted for occupancy by eligible households 
throughout the minimum compliance period. Qualifying households are 
eligible for admission to HOME-ARP rental units solely by meeting 
the definition of one of the qualifying populations (i.e., HOME-ARP 
does not impose income restrictions on units restricted for 
qualifying populations). If there is no income requirement in the 
qualifying population's definition, a participating jurisdiction is 
not required to perform an initial determination of household income 
except as necessary to determine an affordable rental contribution 
by the qualifying household or to establish eligibility for another 
funding source in the unit that imposes income restrictions (e.g., 
LIHTC).
    (2) Household income in Subsequent Years--Qualifying Households. 
Each year during the compliance period, starting 1 year after 
initial occupancy, the participating jurisdiction must use the 
definition of annual income as defined in 24 CFR 5.609 to examine 
the income of qualifying households to determine the household's 
contribution to rent. For low-income households, the participating 
jurisdiction must use the definition of annual income as defined in 
24 CFR 5.609 to examine the household's income at initial occupancy 
and each subsequent year during the compliance period to determine 
the household's ongoing income eligibility and applicable rental 
contribution.
    a. Qualifying populations. For purposes of establishing the 
qualifying household's rental contribution after initial occupancy, 
a participating jurisdiction must examine a HOME-ARP qualifying 
household's income using 24 CFR 92.203(a)(1)(i) or (iii), starting 1 
year after initial occupancy. Each year during the minimum 
compliance period, the owner must examine the household's annual 
income in accordance with any one of the options in 24 CFR 
92.203(a)(1) specified by the participating jurisdiction. A project 
owner who re-examines household income through a statement and 
certification in accordance with 24 CFR 92.203(a)(1)(ii), must 
examine the income of each household, in accordance with 24 CFR 
92.203(a)(1)(i), every sixth year of the compliance period. 
Otherwise, an owner who accepts the household's statement and 
certification in accordance with 24 CFR 92.203(a)(1)(ii) is not 
required to examine the household's income unless there is evidence 
that the household's written statement failed to completely and 
accurately state information about the household's size or income.
    b. Over-income--Temporary noncompliance. HOME-ARP-assisted units 
restricted for low-income households continue to qualify as HOME-ARP 
rental housing despite a temporary noncompliance caused by increases 
in the incomes of existing households if actions satisfactory to HUD 
are taken so that all vacancies are filled in accordance with HOME-
ARP requirements until the noncompliance is corrected.
    c. Changes in income--Qualifying households. A household that 
met the definition of one of the HOME-ARP qualifying populations at 
initial occupancy and whose annual income at the time of income re-
certification is above 50 percent of median income for the area but 
at or below 80 percent of the median income for the area must pay 
the rent specified in 24 CFR 92.252(a).
    d. Changes in income--Low-income Households or Qualifying 
households. A household that is not low-income at the time of income 
re-certification (i.e., whose income is above 80 percent of the 
median income for the area) must pay rent that complies with the 
over income regulatory requirements at 24 CFR 92.252(i)(2).
    e. Household income--Low-income Households. In accordance with 
24 CFR 92.252(h), the income of each low-income household must be 
determined initially in accordance with 24 CFR 92.203(a)(1)(i), and 
each year following the initial determination during the minimum 
compliance period in accordance with any one of the options in 24 
CFR 92.203(a)(1) specified by the participating jurisdiction. An 
owner who re-examines household income through a statement and 
certification in accordance with 24 CFR 92.203(a)(1)(ii), must 
examine the income of each household, in accordance with 24 CFR 
92.203(a)(1)(i), every sixth year of the minimum compliance period. 
Otherwise, an owner who accepts the household's statement and 
certification in accordance with 24 CFR 92.203(a)(1)(ii) is not 
required to examine the household's income unless there is evidence 
that the household's written statement failed to completely and 
accurately state information about the household's size or income.
    f. Alternative Requirement for Households Assisted by Other 
Programs. Notwithstanding the alternative requirements specified 
above or the provisions of 24 CFR 92.203, if a family is applying 
for or living in a HOME-ARP-assisted rental unit, and the unit is 
assisted by a Federal or State project based rental subsidy then a 
participating jurisdiction must accept the public housing agency, 
section 8 project owner, or Continuum of Care recipient or 
subrecipient's determination of the family's annual income and 
adjusted income under that program's and does not need to obtain 
source documentation in accordance with 24 CFR 92.203(a)(1) or 
calculate the annual income of the family. If a family is applying 
for or living in a HOME-ARP-assisted rental unit, and the family is 
assisted by a Federal tenant-based rental assistance program (e.g., 
housing choice vouchers, etc.) then a participating jurisdiction may 
choose to accept the rental assistance provider's determination of 
the family's annual and adjusted income under that program's rules 
without need for review under 24 CFR 92.203(a)(1).
    8. Tenant selection in HOME-ARP rental housing projects. Except 
for affirmative marketing requirements in 24 CFR 92.351 and VAWA 
requirements, the requirements in 24 CFR 92.252(k) and 24 CFR 
92.253(d) are waived to the extent that they differ from the 
following alternative requirements:
    (1) Use of Coordinated Entry System or Project-Specific 
Waitlists. In accordance with Section IV.C of the HOME-ARP Notice, 
participating jurisdictions must determine whether an owner may use 
a CoC's CE, a CoC's CE and other referral sources, or a project-
specific waitlist to select qualifying households for HOME-ARP units 
restricted

[[Page 56775]]

for occupancy by qualifying populations in accordance with the HOME-
ARP Notice. The participating jurisdiction may also use a waiting 
list to receive referrals from a CoC CE and other referral agencies 
for a project or activity, where a CoC CE or other referral agency 
refers an applicant that is placed on the waiting list for that 
project or activity in chronological order. Participating 
jurisdictions will make this determination on a project-by-project 
basis. Regardless of which method is selected, in all cases, the 
participating jurisdiction must use a project-specific waitlist when 
selecting households to occupy units restricted for occupancy by 
low-income households. Any preferences among qualifying households 
must be disclosed in the HOME-ARP allocation plan through the 
participating jurisdiction's public participation process in 
accordance with Section V.C of the HOME-ARP Notice. The written 
agreement between the participating jurisdiction and the project 
owner must specify the method the owner must use for selecting 
qualifying households for admission to HOME-ARP units.
    The owner of a HOME-ARP rental project must adopt and follow 
written tenant selection policies and criteria for HOME-ARP units 
that:
    a. Limit eligibility to households that meet one of the HOME-ARP 
qualifying populations definitions or low-income households in 
accordance with HOME-ARP requirements. Preference for households 
must comply with the participating jurisdiction's preferences and 
the participating jurisdiction's policies and procedures for 
applying the preferences, if any, and must not violate 
nondiscrimination requirements in 24 CFR 92.350.
    b. Do not exclude an applicant with a voucher under the Section 
8 Housing Choice Voucher Program (24 CFR 982), or an applicant 
participating in a HOME, HOME-ARP or other Federal, state, or local 
tenant-based rental assistance program because of the status of the 
prospective tenant as a holder of such a certificate, voucher, or 
comparable tenant-based assistance document.
    c. Limit eligibility or gives a preference to a particular 
qualifying population or segment of the qualifying population if 
permitted in its written agreement with the participating 
jurisdiction (and only if the limitation or preference is described 
in the participating jurisdiction's HOME-ARP allocation plan). A 
preference for households in one or more of the HOME-ARP qualifying 
populations must comply with the participating jurisdiction's 
determined preference(s) and the participating jurisdiction's 
policies and procedures for applying the preference(s), if any;
    d. Any limitation or preference must not violate 
nondiscrimination requirements in 24 CFR 92.350. If the 
participating jurisdiction requires the use of a project-specific 
waitlist to select qualifying households and/or low-income 
households for occupancy of HOME-ARP units, provide for the 
selection of households from a written waiting list in the 
chronological order of their application, insofar as is practicable.
    e. Give prompt written notification to any rejected applicant of 
the grounds for any rejection, and
    f. Complies with the VAWA requirements as described in 24 CFR 
92.359.
    (2) Use of preferences for Qualifying Households. Any 
preferences for qualifying households must be disclosed in the HOME-
ARP allocation plan through the participating jurisdiction's public 
participation process. The written agreement between the 
participating jurisdiction and the project owner must specify the 
method the owner must use for prioritizing applicants for admission 
to HOME-ARP units.
    9. Tenant protections in HOME-ARP rental units. The requirements 
of Section 225 of NAHA (42 U.S.C. 12755) and 24 CFR 92.253(a)-(c) 
shall apply to HOME-ARP rental projects except to the extent that 
they differ from the following alternative requirements:
    (1) Use of Master Leases. Section 225 of NAHA (42 U.S.C. 12755) 
and 24 CFR 92.253(a) are waived to the extent that they are 
interpreted as barring an owner from leasing a unit to a nonprofit 
organization that would sublease that unit to a qualifying household 
or to the extent that it is interpreted as barring an owner of a 
HOME-ARP unit from executing a master lease with a nonprofit 
organization for HOME-ARP units restricted for occupancy by 
qualifying households. As an alternative requirement, an owner may 
execute a lease or master lease with a nonprofit organization, known 
as a HOME-ARP sponsor. A HOME-ARP sponsor is a nonprofit 
organization that provides housing or supportive services to 
qualifying households and facilitates the leasing of a HOME-ARP 
rental unit to a qualifying household or the use and maintenance of 
HOME-ARP TBRA by a qualifying household. Participating jurisdictions 
may permit a HOME-ARP sponsor to lease a HOME-ARP unit from an owner 
or execute a master lease with the owner of a HOME-ARP project for 
HOME-ARP units restricted for occupancy by qualifying households. 
The HOME-ARP sponsor may then sublease the HOME-ARP rental unit to 
the qualifying household. The sublease between the HOME-ARP sponsor 
and the qualifying household must comply with the rent limitations 
and tenant protection requirements of the HOME-ARP Notice, including 
the Appendix in this notice.
    (2) Termination of tenancy. HUD is applying the requirements of 
24 CFR 92.253(c) to termination of tenancy and, as an alternative 
requirement, also applying the protections of 24 CFR 92.253(c) to 
termination of Master Leases that effectuate the tenancy of 
qualifying households. HUD is also specifying the following 
alternative requirement for termination of tenancy for qualifying 
households in projects that capitalized operating cost assistance 
reserves or where there is a current contract for the participating 
jurisdiction to provide operating cost assistance to the project. In 
those cases, an owner may not terminate the tenancy or refuse to 
renew the lease of a qualifying household because of the household's 
inability to pay rent during the compliance period. A qualifying 
household's inability to pay rent shall mean that the qualifying 
household cannot pay more than 30 percent of the qualifying 
household's income toward rent, based on an income determination 
made by the participating jurisdiction in the last 30 days.
    To terminate or refuse to renew tenancy for any household 
occupying a HOME-ARP unit, the owner must serve written notice upon 
the tenant (and the HOME-ARP sponsor if the lease is between an 
owner and sponsor), specifying the grounds for the action at least 
30 days before termination of tenancy. In the case of a sublease, to 
terminate or refuse to renew tenancy of a qualifying household, the 
HOME-ARP sponsor, in accordance with the policy established by the 
participating jurisdiction, must notify the participating 
jurisdiction in advance of serving written notice to the qualifying 
household and must serve written notice upon the qualifying 
household at least 30 days before termination of tenancy, specifying 
the grounds for the action.
    (3) Prohibited Lease Terms. The requirements in 24 CFR 92.253(b) 
that prohibit owners from placing certain terms in their lease 
agreements shall continue to apply. HUD is also specifying an 
alternative requirement that the prohibited lease terms in 24 CFR 
92.253(b) may not be placed into a sublease between a HOME-ARP 
sponsor and a qualifying household.

G. Subpart G--Community Housing Development Organizations

    The requirements in sections 232, 233, 234(a) of NAHA (42 U.S.C. 
12772, 12773, 12774(a)) and 24 CFR 92.300, 92.301, 92.302, and 
92.303 are waived and do not apply to HOME-ARP.

H. Subpart H--Other Federal Requirements

    1. Nondiscrimination, affirmative marketing, and minority 
outreach program requirements. The requirements of 24 CFR 92.350 and 
24 CFR 92.351 shall apply to all HOME-ARP activities, including Non-
Congregate Shelter and Supportive Services activities. Section 3205, 
section 3205 (d)(4) of the ARP states that the Secretary may not 
waive or specify alternative requirements for any provision or 
regulation related to fair housing or nondiscrimination.
    2. Environmental review requirements and labor standards. The 
requirements of 24 CFR 92.352 and 24 CFR 92.354 shall apply to all 
eligible HOME-ARP activities, including Non-Congregate Shelter and 
Supportive Services activities. Section 3205 (d)(4) of ARP states 
that the Secretary may not waive or specify alternative requirements 
to labor standards and environment.
    3. Applicability of lead-based paint requirements. The Lead-
Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the 
Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 
4851-4856), and implementing regulations at 24 CFR part 35, subparts 
A, B, J, K, M, and R apply to HOME-ARP-assisted activities.
    For the HOME-ARP Non-Congregate Shelter activity, a project must 
comply with 24 CFR part 35, subpart K when the HOME-ARP activity is 
acquisition only. HOME-ARP NCS projects that involve rehabilitation 
of

[[Page 56776]]

pre-1978 facilities, whether the rehabilitation is funded with HOME-
ARP or other funds, must comply with the requirements of 24 CFR part 
35, subpart J.
    4. Conflicts of interest requirements. The requirements of 24 
CFR 92.356 shall apply to all participating jurisdictions, State 
recipients, and subrecipients engaging in any HOME-ARP activities. 
For purposes of implementing HOME-ARP provisions for Non-Congregate 
Shelters, owners and developers of HOME-ARP Non-Congregate Shelters 
shall be subject to 24 CFR 92.356(f). The following alternative 
requirements shall apply to all participating jurisdictions, State 
recipients, and subrecipients engaging in any HOME-ARP activities.
    (1) Written Standards of Conduct. Consistent with current 
regulations, participating jurisdictions, State recipients, and 
subrecipients must maintain written standards of conduct covering 
the conflicts of interest and organizational conflicts of interest 
requirements under the HOME-ARP Notice and 2 CFR 200.318. In 
addition to current regulatory requirements, HUD is requiring that 
all participating jurisdictions, State recipients and subrecipients 
maintain written standards of conduct that also provide for internal 
controls and procedures to ensure a fair and open selection process 
for awarding HOME-ARP funds pursuant to the HOME-ARP Notice. These 
standards must include provisions on if and how CoC board members 
may participate in and/or influence discussions or resulting 
decisions concerning the competition or selection of an award or 
other financial benefits made pursuant to the HOME-ARP Notice, 
including internal controls on when funds may be awarded to the 
organization that the member represents.
    (2) Organizational Conflicts of Interest. The provision of any 
type or amount of HOME-ARP TBRA or supportive services may not be 
conditioned on an individual's or family's acceptance or occupancy 
of a shelter or housing unit owned by the participating 
jurisdiction; State recipients; the subrecipient; or a parent, 
affiliate, or subsidiary of the subrecipient. No subrecipient may, 
with respect to individuals or families occupying housing owned by 
the subrecipient, or any parent, affiliate, or subsidiary of the 
subrecipient, administer financial assistance that includes rental 
payments, utility deposits, security deposits, and/or first and last 
month's rent pursuant to the HOME-ARP Notice. All contractors of the 
participating jurisdiction, State recipients, or subrecipient must 
comply with the same requirements that apply to subrecipients under 
this section.
    (3) Requesting Exceptions to Organizational Conflicts of 
Interest. Any request for an exception to the organizational 
conflicts of interest provisions in the HOME-ARP Notice shall be in 
writing and shall be considered by HUD only after the participating 
jurisdiction or State recipient has provided the following:
    a. A written disclosure of the nature of the conflict, 
accompanied by an assurance that there has been public disclosure of 
the conflict and a description of how the public disclosure was 
made; and
    b. An opinion of the participating jurisdiction's or State 
recipient's attorney that the interest for which the exception is 
sought would not violate State or local law.
    (4) Granting Exceptions to Organizational Conflicts of Interest. 
HUD shall determine whether to grant an exception to the 
organizational conflicts of interest on a case-by-case basis when it 
determines that the exception will serve to further the purposes of 
HOME-ARP. HUD shall consider the following factors, as applicable, 
in determining whether to grant such an exception:
    a. Whether the exception would provide a significant cost 
benefit or an essential degree of expertise to the program or 
project which would otherwise not be available;
    b. Whether undue hardship will result to the participating 
jurisdiction, State recipient, subrecipient or the person affected 
when weighed against the public interest served by avoiding the 
prohibited conflict;
    c. Whether conditioning approval on changes to the participating 
jurisdiction, State recipient, or subrecipient's policies or 
procedures can adequately address the organizational conflict of 
interest; and
    d. Any other factors relevant to HUD's determination, including 
the timing of the requested exception.
    5. Applicability of displacement, relocation, and acquisition 
requirements and waiver of one-for-one replacement requirements. The 
requirements of 24 CFR 92.353, which also implement the Uniform 
Relocation Assistance and Real Property Acquisition Act of 1970, as 
amended, (42 U.S.C. 4201 et seq.) (URA), the URA's implementing 
requirements at 49 CFR part 24, and section 104(d) of the Housing 
and Community Development Act of 1974, as amended (42 U.S.C. 5304) 
and its implementing regulations at 24 CFR part 42, shall apply to 
all projects receiving HOME-ARP funds except for the following 
waiver and alternative requirement. For purposes of the one-for-one 
replacement housing requirements of section 104(d)(2)(A)(i) and (ii) 
and (d)(3) (42 U.S.C. 5304(d)(2)(A)(i) and (ii) and 42 U.S.C. 
5304(d)(3)) and 24 CFR 42.375, lower-income dwelling units shall not 
include single-room occupancy (SRO) units or residential hotel or 
motel units in jurisdictions where those units are considered 
dwelling units under state or local law.
    6. Regulations on consultant activities. The requirements of 24 
CFR 92.358 are not waived.
    7. Violence Against Women Act Requirements. The requirements of 
24 CFR 92.359 are not waived.

I. Subpart I--Technical Assistance

    Applicability of requirements on provision of Technical 
Assistance in support of HOME-ARP activities. The requirements of 24 
CFR 92.400 are waived and shall not apply to the extent that they 
restrict the Department's ability to provide Technical Assistance 
funds allocated to the Department under section 3205(d)(2) of ARP 
without competition, and to the extent that their application of 
Subpart C of NAHA (42 U.S.C. 12781 et seq.) would restrict capacity 
building to affordable housing activities rather than the broader 
set of eligible HOME-ARP activities.

J. Subpart J--Reallocations

    Reallocation of HOME-ARP Funds. The requirements of section 216 
of NAHA (42 U.S.C. 12746), section 217 of NAHA (42 U.S.C. 12747), 24 
CFR 92.66, 24 CFR 92.107, 24 CFR 92.450, 24 CFR 92.451(a), 24 CFR 
92.452, 24 CFR 92.453 and 24 CFR 92.454 shall not apply to HOME-ARP 
funds and are waived to the extent they differ from the following 
alternative requirements for reallocations:
    (1) Participating Jurisdictions. For any participating 
jurisdiction that refuses to accept its allocation of HOME-ARP 
funds, does not have its HOME-ARP allocation plan accepted by HUD, 
or has its designation revoked during the period of availability of 
HOME-ARP funds, HUD shall reallocate the participating 
jurisdiction's unspent HOME-ARP funds to the State jurisdiction in 
accordance with 24 CFR 92.451(b) and (c).
    (2) State Jurisdictions. For any State jurisdiction that refuses 
to accept its allocation of HOME-ARP funds, does not have its HOME-
ARP allocation plan accepted by HUD, or has its designation revoked 
during the period of availability of HOME-ARP funds, HUD shall 
reallocate the State jurisdiction's unspent HOME-ARP funds in 
accordance with 24 CFR 92.451(b) and (c).
    Insular areas. For any insular area that refuses to accept its 
allocation of HOME-ARP funds, does not have its HOME-ARP allocation 
plan accepted by HUD, or has its designation revoked during the 
period of availability of HOME-ARP funds, HUD shall reallocate the 
insular area's unspent HOME-ARP funds proportionally to the 
remaining insular areas participating in the HOME-ARP program.
    (3) Annual Reallocation. Reallocations of funds pursuant to the 
above waivers and alternative requirements shall be performed 
annually, if practicable.

K. Subpart K--Program Administration

    1. The HOME Investment Trust Fund. The requirements in 24 CFR 
92.500 apply to HOME-ARP, except Sec.  92.500(b) is waived and the 
following alternative requirement is imposed:
    Treasury Account. The United States Treasury account of the HOME 
Investment Trust Fund includes funds allocated to the participating 
jurisdiction under HOME-ARP and funds reallocated to the 
participating jurisdiction under subpart J of 24 CFR part 92.
    The requirements in section 218(c)(2) of NAHA (42 U.S.C. 
12748(c)(2)), 24 CFR 92.500(c)(2), (d)(1)(i)-(iii), and (d)(2) are 
waived and do not apply to HOME-ARP.
    2. HOME Investment Partnership Agreement. The requirements in 24 
CFR 92.501 are waived and the following alternative requirements are 
imposed:
    Allocated and reallocated HOME-ARP funds will be made available 
pursuant to a HOME-ARP Grant Agreement. The agreement requires that 
HOME-ARP funds invested in HOME-ARP activities are repayable if the 
activity does not comply with the requirements in the HOME-ARP 
Notice and any subsequent amendments.

[[Page 56777]]

    After the date of the HOME-ARP Notice, the participating 
jurisdiction and HUD may enter into a HOME-ARP Grant Agreement for 
the use of its HOME-ARP allocation pursuant to the HOME-ARP Notice. 
After the obligation date identified in the HOME-ARP Grant 
Agreement, a participating jurisdiction may use up to 5 percent of 
its HOME-ARP award for eligible administrative and planning costs in 
24 CFR 92.207. The participating jurisdiction may not incur any 
costs or expend any funds for costs other than administrative and 
planning costs before the HOME-ARP allocation plan is accepted by 
HUD as described in the HOME-ARP Notice.
    If the participating jurisdiction does not submit a HOME-ARP 
allocation plan, if the participating jurisdiction's plan is not 
accepted within a reasonable period of time, as determined by HUD, 
or if the subrecipient or contractor administering a participating 
jurisdiction's entire HOME-ARP award is not included in the HOME-ARP 
allocation plan, in accordance with the HOME-ARP Notice, all HOME-
ARP costs incurred by the participating jurisdiction (or its 
subrecipient or contractor) are ineligible costs and any HOME-ARP 
funds expended by the participating jurisdiction must be repaid to 
the participating jurisdiction's HOME Investment Trust Fund Treasury 
account, in accordance with guidance from HUD.
    3. Program disbursement and information system. The requirements 
in 24 CFR 92.502(b) are waived to the extent they conflict with the 
alternative requirement that HOME-ARP investments for acquisition, 
new construction, or rehabilitation of housing or non-congregate 
shelter, the provision of tenant-based rental assistance, and the 
provision of supportive services must be set up as projects in the 
Integrated Disbursement and Information System. The requirements in 
24 CFR 92.502(c)(3) are waived and do not apply to HOME-ARP.
    4. Program income and repayments. A participating jurisdiction 
must comply with the requirements for program income and repayments 
in the HOME-ARP Notice. The requirements in 24 CFR 92.503 apply to 
the use of HOME-ARP funds, except that the requirements in Sec.  
92.503(a)(2), (b)(3), (c)(3), (c)(4), and (d) are waived and the 
following alternative requirements apply:
    (1) Program income. If a jurisdiction is not a participating 
jurisdiction in HOME or HOME-ARP when the HOME-ARP program income is 
received, the funds must be remitted to HUD and reallocated, in 
accordance with 24 CFR 92.454 and the HOME-ARP Notice.
    (2) Repayments. A participating jurisdiction must repay HOME-ARP 
funds to the HOME Investment Trust Fund Treasury account. If the 
jurisdiction is not a participating jurisdiction for HOME or HOME-
ARP at the time the repayment is made, the funds must be remitted to 
HUD and reallocated, in accordance with 24 CFR 92.454 and the HOME-
ARP Notice.
    5. Participating jurisdiction responsibilities; written 
agreements; on-site inspection. HUD waives 24 CFR 92.504, except for 
those provisions that reference the requirements of 24 CFR 92.350, 
24 CFR 92.351, and 24 CFR 92.359, and imposes the following 
alternative requirements for Sec.  92.504:
    (a) Responsibilities. The participating jurisdiction is 
responsible for managing the day-to-day operations of its HOME-ARP-
ARP program, ensuring that HOME-ARP funds are used in accordance 
with all program requirements and written agreements, and taking 
appropriate action when performance problems arise. The use of State 
recipients, subrecipients, or contractors does not relieve the 
participating jurisdiction of this responsibility. The performance 
and compliance of each contractor, State recipient, and subrecipient 
must be reviewed at least annually. The participating jurisdiction 
must have and follow written policies, procedures, and systems, 
including a system for assessing risk of activities and projects and 
a system for monitoring entities consistent with HOME-ARP Notice, to 
ensure that the requirements of this part are met.
    (b) Executing a written agreement. Before disbursing any HOME-
ARP funds to any entity, the participating jurisdiction must enter 
into a written agreement with that entity. Before disbursing any 
HOME-ARP funds to any entity, a State recipient, subrecipient, or 
contractor which is administering all or a part of the HOME-ARP 
program on behalf of the participating jurisdiction, must also enter 
into a written agreement with that entity. The written agreement 
must ensure compliance with the requirements of the HOME-ARP Notice.
    (c) Provisions in written agreements. The contents of the 
agreement may vary depending upon the role the entity is asked to 
assume or the type of project undertaken. The written agreement must 
contain the applicable minimum provisions for a written agreement in 
the HOME-ARP Notice based on the project or activity (e.g., HOME-ARP 
rental housing, non-congregate shelter, tenant-based rental 
assistance, or supportive services) and the basic requirements and 
minimum provisions by role described in this section.
    (1) State recipient. The provisions in the written agreement 
between the State and a State recipient will depend on the program 
functions that the State specifies the State recipient will carry 
out in accordance with 24 CFR 92.201(b). The written agreement must 
require the State recipient to comply with State's requirements, 
including underwriting, refinancing guidelines, and applicable 
requirements described in the HOME-ARP Notice.
    (i) Use of the HOME-ARP funds. The agreement with a State 
recipient must describe the amount and use of the HOME-ARP funds to 
administer one or more HOME-ARP programs, including the type and 
number of projects to be funded, tasks to be performed, a schedule 
for completing the tasks, duration of the agreement, and a budget 
for each program. These items must be in sufficient detail to 
provide a sound basis for the participating jurisdiction or State to 
effectively monitor performance under the agreement.
    (ii) Affordability. The agreement must require projects assisted 
with HOME-ARP funds to meet the requirements of the HOME-ARP Notice, 
as applicable, and must require repayment of the funds if the 
project does not meet the requirements for the specified time 
period.
    (iii) Program income. The agreement must state if program income 
is to be remitted to the State or to be retained by the State 
recipient for additional eligible activities.
    (iv) Uniform administrative requirements. The agreement must 
require the State recipient or subrecipient to comply with 
applicable uniform administrative requirements described in 24 CFR 
92.505, as revised by the Appendix to the HOME-ARP-ARP Notice.
    (v) Project requirement. The agreement must require compliance 
with requirements in the HOME-ARP Notice, in accordance with the 
type of project assisted. The agreement must state whether the State 
is permitting a preference for a qualifying population or segment of 
a qualifying population. The written agreement must contain 
provisions requiring the method of tenant selection to be used in 
accordance with the requirements of the HOME-ARP Notice.
    (vi) Other program requirements. The agreement must require the 
State recipient to carry out each activity in compliance with the 
HOME-ARP Notice and all Federal laws and regulations described in 
subpart H of 24 CFR part 92, except that the State recipient does 
not assume the State's responsibilities for release of funds under 
24 CFR 92.352 and the intergovernmental review process in 24 CFR 
92.357 does not apply to the State recipient. If HOME-ARP funds are 
provided, the agreement must set forth all obligations the State 
imposes on the State recipient in order to meet the VAWA 
requirements under 24 CFR 92.359, including notice obligations and 
any obligations with respect to the emergency transfer plan 
(including whether the State recipient must develop its own plan or 
follow the State's plan).
    (vii) Affirmative marketing. The agreement must specify the 
State recipient's affirmative marketing responsibilities in 
accordance with 24 CFR 92.351.
    (viii) Requests for disbursement of funds. The agreement must 
specify that the State recipient may not request disbursement of 
HOME-ARP funds under this agreement until the funds are needed for 
payment of eligible costs. The amount of each request must be 
limited to the amount needed. Program income must be disbursed 
before the State recipient requests funds from the State.
    (ix) Records and reports. The agreement must specify the 
particular records that must be maintained and the information or 
reports that must be submitted in order to assist the State in 
meeting its recordkeeping and reporting requirements.
    (x) Enforcement of the agreement. The agreement must provide for 
a means of enforcement of affordable housing or non-congregate 
shelter requirements by the State or the intended beneficiaries, if 
the State recipient will be the owner at project completion of the 
affordable housing or non-congregate shelter. The means of 
enforcement may include liens on real property, deed restrictions, 
or covenants running with the land. The applicable requirements as

[[Page 56778]]

described in the HOME-ARP Notice must be enforced by deed 
restriction. In addition, the agreement must specify remedies for 
breach of the HOME-ARP requirements. The agreement must specify 
that, in accordance with 2 CFR 200.338, suspension or termination 
may occur if the State recipient materially fails to comply with any 
term of the agreement. The State may permit the agreement to be 
terminated in whole or in part in accordance with 2 CFR 200.339.
    (xi) Written agreement. Before the State recipient provides 
funds to for-profit owners or developers, nonprofit owners or 
developers or sponsors, subrecipients, HOME-ARP owners, sponsors, or 
tenants (or landlords) receiving tenant-based rental assistance, or 
contractors who are providing services to the State recipient, the 
State recipient must have a written agreement with such entities 
that meets the requirements of this section and the HOME-ARP Notice.
    (xii) Duration of the agreement. The duration of the agreement 
will depend on which functions the State recipient performs (e.g., 
whether the State recipient or the State has responsibility for 
monitoring rental projects for the period of affordability) and 
which activities are funded under the agreement. The duration of the 
agreement must comply with the requirements of the HOME-ARP Notice.
    (xiii) Fees. The agreement must prohibit the State recipient and 
its subrecipients, community housing development organizations, and 
nonprofit organizations from charging servicing, origination, 
processing, inspection, or other fees for the costs of administering 
a HOME-ARP program, except as permitted by 24 CFR 92.214, as revised 
by the Appendix to the HOME-ARP Notice.
    (2) Subrecipient. A subrecipient is a public agency or nonprofit 
organization selected by the participating jurisdiction to 
administer all or some of the participating jurisdiction's HOME-ARP 
programs to produce affordable housing, non-congregate shelter, or 
provide tenant-based rental assistance or supportive services. The 
agreement must set forth and require the subrecipient to follow the 
participating jurisdiction's requirements, including requirements 
for underwriting, refinancing guidelines, and requirements described 
in the HOME-ARP Notice.
    The agreement between the participating jurisdiction and the 
subrecipient must include:
    (i) Use of the HOME-ARP funds. The agreement with a subrecipient 
must describe the amount and use of the HOME-ARP-ARP funds to 
administer one or more HOME-ARP-ARP programs, including the type and 
number of projects to be funded, tasks to be performed, a schedule 
for completing the tasks, duration of the agreement, and a budget 
for each program. These items must be in sufficient detail to 
provide a sound basis for the participating jurisdiction or State to 
effectively monitor performance under the agreement.
    (ii) Program income. The agreement must state if program income 
is to be remitted to the participating jurisdiction or to be 
retained by the subrecipient for additional eligible activities.
    (iii) Uniform administrative requirements. The agreement must 
require the State recipient or subrecipient to comply with 
applicable uniform administrative requirements described in 24 CFR 
92.505 as revised by the Appendix to the HOME-ARP Notice.
    (iv) Other program requirements. The agreement must require the 
subrecipient to carry out each activity in compliance with HOME-ARP 
Notice and all Federal laws and regulations described in subpart H 
of 24 CFR part 92, except that the subrecipient does not assume the 
participating jurisdiction's responsibilities for environmental 
review under 24 CFR 92.352 and the intergovernmental review process 
in 24 CFR 92.357 does not apply. The agreement must set forth the 
requirements the subrecipient must follow to enable the 
participating jurisdiction to carry environmental review 
responsibilities before HOME-ARP funds are committed to a project. 
If HOME-ARP funds are being provided, the agreement must set forth 
all obligations the participating jurisdiction imposes on the 
subrecipient in order to meet the VAWA requirements under 24 CFR 
92.359, including notice obligations and obligations under the 
emergency transfer plan.
    (v) Affirmative marketing. The agreement must specify the 
subrecipient's affirmative marketing responsibilities in accordance 
with 24 CFR 92.351.
    (vi) Requests for disbursement of funds. The agreement must 
specify that the subrecipient may not request disbursement of funds 
under the agreement until the funds are needed for payment of 
eligible costs. The amount of each request must be limited to the 
amount needed. Program income must be disbursed before the 
subrecipient requests funds from the participating jurisdiction.
    (vii) Reversion of assets. The agreement must specify that upon 
expiration of the agreement, the subrecipient must transfer to the 
participating jurisdiction any HOME-ARP funds on hand at the time of 
expiration and any accounts receivable attributable to the use of 
HOME-ARP funds.
    (viii) Records and reports. The agreement must specify the 
particular records that must be maintained and the information or 
reports that must be submitted in order to assist the participating 
jurisdiction in meeting its recordkeeping and reporting 
requirements.
    (ix) Enforcement of the agreement. The agreement must specify 
remedies for breach of the provisions of the agreement. The 
agreement must specify that, in accordance with 2 CFR 200.338, 
suspension or termination may occur if the subrecipient materially 
fails to comply with any term of the agreement. The participating 
jurisdiction may permit the agreement to be terminated in whole or 
in part in accordance with 2 CFR 200.339.
    (x) Written agreement. Before the subrecipient provides HOME-ARP 
funds to for-profit owners or developers, nonprofit owners or 
developers or sponsors, subrecipients, HOME-ARP owners, sponsors, 
tenants (or landlords) receiving tenant-based rental assistance, or 
contractors, the subrecipient must have a written agreement that 
meets the requirements of this section and the HOME-ARP Notice. The 
agreement must state if repayment of HOME-ARP funds or recaptured 
HOME-ARP funds must be remitted to the participating jurisdiction or 
retained by the subrecipient for additional eligible activities.
    (xi) Fees. The agreement must prohibit the subrecipient and any 
community housing development organizations from charging servicing, 
origination, or other fees for the costs of administering the HOME-
ARP program, except as permitted by 24 CFR 92.214, as revised by the 
Appendix to the HOME-ARP Notice.
    (3) For-profit or nonprofit housing owner, sponsor, or developer 
(other than single-family owner-occupant). The participating 
jurisdiction may preliminarily award HOME-ARP funds for a proposed 
project, contingent on conditions such as obtaining other financing 
for the project. This preliminary award is not a commitment to a 
project. The written agreement committing the HOME-ARP funds to the 
project must meet the requirements of ``commit to a specific local 
project'' in the definition of ``commitment'' in 24 CFR 92.2, as 
revised by the Appendix to the HOME-ARP Notice and contain the 
following:
    (i) Use of the HOME-ARP funds. The agreement between the 
participating jurisdiction and a for-profit or nonprofit housing 
owner, sponsor, or developer must describe the address of the 
project or the legal description of the property if a street address 
has not been assigned to the property, the use of the HOME-ARP funds 
and other funds for the project, including the tasks to be performed 
for the project, a schedule for completing the tasks and the 
project, and a complete budget. These items must be in sufficient 
detail to provide a sound basis for the participating jurisdiction 
to effectively monitor performance under the agreement to achieve 
project completion and compliance with the HOME-ARP requirements;
    (ii) Affordability. The agreement must require projects assisted 
with HOME-ARP funds to meet the requirements of the HOME-ARP Notice, 
as applicable, and must require repayment of the funds if the 
project does not meet the requirements for the specified time 
period;
    (iii) Project requirements. The agreement must require 
compliance with requirements in the HOME-ARP Notice, in accordance 
with the type of project assisted. The agreement must state whether 
the State is permitting a preference for a qualifying population or 
segment of a qualifying population. The written agreement must 
contain provisions requiring the method of tenant selection to be 
used in accordance with the requirements of the HOME-ARP Notice;
    (iv) Property standards. The agreement must require the housing 
or shelter to meet the property standards established in the HOME-
ARP Notice upon project completion. The agreement must also require 
owners of rental housing or shelter assisted with HOME-ARP funds to 
maintain the project in compliance with the HOME-ARP Notice for the 
duration of the affordability period;
    (v) Other program requirements. The agreement must require the 
owner or

[[Page 56779]]

developer to carry out each project in compliance with the following 
requirements of the HOME-ARP Notice:
    (A) The agreement must specify the owner or developer's 
affirmative marketing responsibilities as enumerated by the 
participating jurisdiction in accordance with 24 CFR 92.351.
    (B) The federal requirements and nondiscrimination established 
in 24 CFR 92.350.
    (C) Any displacement, relocation, and acquisition requirements 
imposed by the participating jurisdiction consistent with 24 CFR 
92.353 and the HOME-ARP Notice.
    (D) The labor requirements in 24 CFR 92.354.
    (E) The conflicts of interest provisions prescribed in the HOME-
ARP Notice.
    (F) If HOME-ARP funds are being provided, the agreement must set 
forth all obligations the participating jurisdiction imposes on the 
owner in order to meet the VAWA requirements under 24 CFR 92.359, 
including the owner's notice obligations and owner obligations under 
the emergency transfer plan.
    (vi) Records and reports. The agreement must specify the 
particular records that must be maintained and the information or 
reports that must be submitted in order to assist the participating 
jurisdiction in meeting its recordkeeping and reporting 
requirements;
    (vii) Enforcement of the agreement. The agreement must provide 
for a means of enforcement of the HOME-ARP rental housing or non-
congregate shelter requirements by the participating jurisdiction 
and the intended beneficiaries. This means of enforcement may 
include liens on real property, deed restrictions, or covenants 
running with the land. The applicable requirements in the HOME-ARP 
Notice must be imposed by deed restrictions, covenants running with 
the land, use restrictions, or other mechanisms approved by HUD 
under which the participating jurisdiction has the right to require 
specific performance. In addition, the agreement must specify 
remedies for breach of the provisions of the agreement;
    (viii) Requests for disbursement of funds. The agreement must 
specify that the developer may not request disbursement of funds 
under the agreement until the funds are needed for payment of 
eligible costs. The amount of each request must be limited to the 
amount needed;
    (ix) Omitted;
    (x) Duration of the agreement. The agreement must specify the 
duration of the agreement in accordance with the HOME-ARP Notice. If 
the project assisted under this agreement is rental housing, the 
agreement must be in effect through the compliance period required 
by the participating jurisdiction, but in no case less than the 
minimum compliance period in the HOME-ARP Notice;
    (xi) Fees. The agreement must prohibit project owners from 
charging fees that are not customarily charged in rental housing 
such as laundry room access fees, and other fees. However, rental 
project owners may charge reasonable application fees to prospective 
tenants may charge parking fees to tenants only if such fees are 
customary for rental housing projects in the neighborhood; and may 
charge fees for services such as bus transportation or meals, as 
long as such services are voluntary.
    (4) Contractor. The participating jurisdiction selects a 
contractor through applicable procurement procedures and 
requirements. The contractor provides goods or services in 
accordance with a written agreement (the contract). For contractors 
who are administering all or some of the participating 
jurisdiction's HOME-ARP programs or specific services for one or 
more programs, the contract must include at a minimum the following 
provisions:
    (i) Use of the HOME-ARP funds. The agreement must describe the 
use of the HOME-ARP funds, including the tasks to be performed, a 
schedule for completing the tasks, a budget, and the length of the 
agreement.
    (ii) Program requirements. The agreement must provide that the 
contractor is subject to the requirements in 24 CFR part 92 and the 
HOME-ARP Notice that are applicable to the participating 
jurisdiction, except 24 CFR 92.505 and 92.506 do not apply, and the 
contractor cannot assume the participating jurisdiction 
responsibilities for environmental review, decision making, and 
action under 24 CFR 92.352. Where the contractor is administering 
only a portion of the program, the agreement must list the 
requirements applicable to the activities the contractor is 
administering. If applicable to the work under the contract, the 
agreement must set forth all obligations the participating 
jurisdiction imposes on the contractor in order to meet the VAWA 
requirements under 24 CFR 92.359, including any notice obligations 
and any obligations under the emergency transfer plan.
    (iii) Duration of agreement. The agreement must specify the 
duration of the contract in accordance with the HOME-ARP Notice. 
Generally, the duration of a contract should not exceed two years.
    (5) HOME-ARP owner tenant receiving tenant-based rental or 
security deposit assistance. When a participating jurisdiction 
provides assistance to a HOME-ARP owner, sponsor, or tenant, the 
written agreement, including the rental assistance contract or 
security deposit contract, must comply with the HOME-ARP Notice.
    (6) Community housing development organization or nonprofit 
organization receiving assistance for operating expenses. The 
agreement must describe the use of HOME-ARP funds for operating 
expenses; e.g., salaries, wages, and other employee compensation and 
benefits; employee education, training, and travel; rent; utilities; 
communication costs; taxes; insurance; equipment; and materials and 
supplies. If the community housing development organization or 
nonprofit organization is not also receiving funds for a HOME-ARP 
project, the agreement must provide that the community housing 
development organization or nonprofit organization is expected to 
receive funds for a project within 24 months of the date of 
receiving the funds for operating expenses, and must specify the 
terms and conditions upon which this expectation is based and the 
consequences of failure to receive funding for a project.
    (7) waived and omitted.
    (8) Technical assistance provider to develop the capacity of 
community housing development organizations or nonprofit 
organizations in the jurisdiction. The agreement must identify the 
specific nonprofit organization(s) to receive capacity building 
assistance. The agreement must describe the amount and use (scope of 
work) of the HOME-ARP funds, including a budget, a period of 
performance, and a schedule for completion.
    (9) Supportive Services Providers. If participating 
jurisdictions are using a supportive services provider, 
participating jurisdictions must document in their written agreement 
with supportive service providers whether they are authorizing 
McKinney-Vento supportive services, homelessness prevention 
services, Housing Counseling services or some combination of the 
three. Only the supportive services that are authorized in the 
written agreement may be provided to program participants and only 
program participants that are eligible for those supportive services 
may be served. As such, supportive services providers must 
demonstrate through their documentation that the individuals served 
were eligible to receive the supportive services that were 
authorized under the written agreement in order for those costs to 
be eligible.
    While all qualifying households are eligible to receive 
supportive services under this activity, the participating 
jurisdiction must establish requirements for documenting eligible 
costs for an individual or family in a qualifying population (as 
defined in Section IV.A of the HOME-ARP Notice) as McKinney-Vento 
supportive services, homelessness prevention services, or Housing 
Counseling.
    If a person is homeless, then the person is eligible to be 
provided the supportive services as McKinney-Vento supportive 
services for the costs allowable in Section VI.D.4.c below. If a 
person is housed and the supportive services are intended to help 
the program participant regain stability in the program 
participant's current permanent housing or move into other permanent 
housing to achieve stability in that housing then the person is 
eligible for homelessness prevention services for the costs 
allowable in Section VI.D.4.c.i below. Housing Counseling services 
may be provided regardless of whether a person is homeless or 
currently housed.
    (d) On-site inspections and financial oversight.
    (1) Inspections. The participating jurisdiction must inspect 
each rental housing project at project completion and during the 
compliance period to determine that the project meets the property 
standards of 24 CFR 92.251. The participating jurisdiction must 
inspect each non-congregate shelter at project completion and as 
needed, during the restricted use period, to determine that the 
project meets the property standards, in accordance with the HOME-
ARP Notice.
    (i) Completion inspections. Before completing the project in the 
disbursement and information system established by HUD,

[[Page 56780]]

the participating jurisdiction must perform an on-site inspection of 
HOME-ARP rental housing or non-congregate shelter to determine that 
all contracted work has been completed and that the project complies 
with the property standards, as described in the HOME-ARP Notice.
    (ii) Ongoing periodic inspections of HOME-ARP-assisted rental 
housing. During the period of affordability, the participating 
jurisdiction must perform on-site inspections of HOME-ARP assisted 
rental housing to determine compliance with the property standards 
of 24 CFR 92.251 and to verify the information submitted by the 
owners in accordance with the requirements of 24 CFR 92.252, as 
revised by the Appendix to the HOME-ARP Notice. The inspections must 
be in accordance with the inspection procedures that the 
participating jurisdiction establishes to meet the inspection 
requirements of 24 CFR 92.251.
    (A) The on-site inspections must occur within 12 months after 
project completion and at least once every 3 years thereafter during 
the compliance period.
    (B) If there are observed deficiencies for any of the 
inspectable items in the property standards established by the 
participating jurisdiction, in accordance with the inspection 
requirements of 24 CFR 92.251, a follow-up on-site inspection to 
verify that deficiencies are corrected must occur within 12 months. 
The participating jurisdiction may establish a list of non-hazardous 
deficiencies for which correction can be verified by third party 
documentation (e.g., paid invoice for work order) rather than re-
inspection. Health and safety deficiencies must be corrected 
immediately, in accordance with 24 CFR 92.251. The participating 
jurisdiction must adopt a more frequent inspection schedule for 
properties that have been found to have health and safety 
deficiencies.
    (C) The property owner must annually certify to the 
participating jurisdiction that each building and all HOME-ARP-
assisted units in the project are suitable for occupancy, taking 
into account State and local health, safety, and other applicable 
codes, ordinances, and requirements, and the ongoing property 
standards established by the participating jurisdiction to meet the 
requirements of 24 CFR 92.251.
    (D) Inspections must be based on a statistically valid sample of 
units appropriate for the size of the HOME-ARP-assisted project, as 
set forth by HUD through notice. For projects with one-to-four HOME-
ARP-assisted units, participating jurisdiction must inspect 100 
percent of the HOME-ARP-assisted units and the inspectable items 
(site, building exterior, building systems, and common areas) for 
each building housing HOME-ARP-assisted units.
    (iii) Annual inspections. Tenant based rental assistance (TBRA). 
All housing occupied by tenants receiving HOME-ARP tenant-based 
rental assistance must meet the standards in 24 CFR 982.401 or the 
successor requirements as established by HUD. The participating 
jurisdiction must perform annual on-site inspections of rental 
housing occupied by tenants receiving HOME-ARP-assisted TBRA to 
determine compliance with these standards.
    (2) Financial oversight. During the period of affordability, the 
participating jurisdiction must examine at least annually the 
financial condition of HOME-ARP-assisted rental projects with 10 
units or more to determine the continued financial viability of the 
housing and must take actions to correct problems, to the extent 
feasible.
    6. Applicability of uniform administrative requirements. The 
requirements of 24 CFR 92.505 apply to the use of HOME-ARP funds, 
except HUD waives 24 CFR 92.505 to the extent that it conflicts with 
the following:
    The requirements of 2 CFR part 200, as amended, apply to 
participating jurisdictions, State recipients, and subrecipients 
receiving HOME-ARP funds, except for the following provisions: 24 
CFR 200.306, 200.307, 200.308 (not applicable to participating 
jurisdictions), 200.311 (except as provided in 24 CFR 92.257), 
200.312, 200.329, 200.333, and 200.334. The provisions of 2 CFR 
200.305 apply as modified by 24 CFR 92.502(c) and the HOME-ARP 
Notice. If there is a conflict between definitions in 2 CFR part 200 
and 24 CFR part 92, as revised by the HOME-ARP Notice, the 
definitions in 24 CFR part 92, as revised by the HOME-ARP Notice, 
govern. Moreover, if there is a conflict between the provisions of 2 
CFR part 200 and the provisions of the HOME-ARP Notice, the 
provisions of the HOME-ARP Notice govern.
    Where regulations in 24 CFR part 92 refer to specific 
regulations of 2 CFR part 200 that were or are renumbered or revised 
by amendments to 2 CFR part 200, the requirements that apply to the 
use of HOME-ARP funds are the applicable requirements in 2 CFR part 
200, as amended, notwithstanding the renumbered regulatory 
reference.
    7. Confidentiality. 24 CFR 92.504 and 24 CFR 92.508(a)(3) are 
waived only to the extent that they conflict with the following 
alternative requirements:
    Confidentiality Requirements. The participating jurisdiction, 
subrecipients, owners, contractors, must develop, implement, and 
maintain written procedures to require that:
    a. All records containing personally identifying information of 
any individual or family who applies for and/or receives HOME-ARP 
assistance will be kept secure and confidential;
    b. The address or location of any NCS or HOME-ARP rental housing 
exclusively for individuals fleeing or attempting to flee domestic 
violence, dating violence, sexual assault, stalking, or human 
trafficking will not be made public, except as necessary where 
making the address or location public does not identify occupancy of 
the NCS or HOME-ARP rental housing, when necessary to record use 
restrictions or restrictive covenants in accordance with Section 
VI.B or VI.E, or with written authorization of the person or entity 
responsible for the operation of the NCS or HOME-ARP rental housing; 
and
    c. The address or location of any program participant that is a 
fleeing or attempting to flee domestic violence, dating violence, 
sexual assault, stalking, or human trafficking will not be made 
public, except as provided under a privacy policy of the 
participating jurisdiction consistent with state and local laws and 
any other grant conditions from other federal grant programs 
regarding privacy and obligations of confidentiality.
    Documenting status of a qualifying population that is fleeing or 
attempting to flee domestic violence, dating violence, stalking, 
sexual assault, or human trafficking:
    i. If an individual or family qualifies because the individual 
or family is fleeing or attempting to flee domestic violence, dating 
violence, sexual assault, stalking, or human trafficking then 
acceptable evidence includes an oral or written statement by the 
qualifying individual or head of household seeking assistance that 
they are fleeing that situation. An oral statement may be documented 
by either: A written certification by the individual or head of 
household; or a written certification by a victim service provider, 
intake worker, social worker, legal assistance provider, health-care 
provider, law enforcement agency, legal assistance provider, 
pastoral counselor, or an intake worker in any other organization 
from whom the individual or family sought assistance.
    The written documentation need only include the minimum amount 
of information indicating that the individual or family is fleeing 
or attempting to flee domestic violence, dating violence, sexual 
assault, stalking, or human trafficking and need not include any 
additional details about the conditions that prompted the individual 
or family to seek assistance.
    All entities assisted by HOME-ARP funds must develop, implement, 
and maintain written procedures to require that:
    a. All records containing personally identifying information of 
any individual or family who applies for and/or receives HOME-ARP 
assistance will be kept secure and confidential;
    b. The address or location of any NCS or HOME-ARP rental housing 
exclusively for individuals fleeing or attempting to flee domestic 
violence, dating violence, sexual assault, stalking, or human 
trafficking will not be made public, except as necessary where 
making the address or location public does not identify occupancy of 
the NCS or HOME-ARP rental housing, when necessary to record use 
restrictions or restrictive covenants in accordance with Section 
VI.B or VI.E, or with written authorization of the person or entity 
responsible for the operation of the NCS or HOME-ARP rental housing; 
and
    c. The address or location of any program participant that is a 
fleeing or attempting to flee domestic violence, dating violence, 
sexual assault, stalking, or human trafficking will not be made 
public, except as provided under a privacy policy of the 
participating jurisdiction consistent with state and local laws and 
any other grant conditions from other federal grant programs 
regarding privacy and obligations of confidentiality.
    Documenting status of a qualifying population that is fleeing or 
attempting to flee domestic violence, dating violence, stalking, 
sexual assault, or human trafficking:
    a. If an individual or family qualifies because the individual 
or family is fleeing or attempting to flee domestic violence, dating 
violence, sexual assault, stalking, or human

[[Page 56781]]

trafficking then acceptable evidence includes an oral or written 
statement by the qualifying individual or head of household seeking 
assistance that they are fleeing that situation. An oral statement 
may be documented by either:
    i. A written certification by the individual or head of 
household; or
    ii. a written certification by a victim service provider, intake 
worker, social worker, legal assistance provider, health-care 
provider, law enforcement agency, legal assistance provider, 
pastoral counselor, or an intake worker in any other organization 
from whom the individual or family sought assistance.
    The written documentation need only include the minimum amount 
of information indicating that the individual or family is fleeing 
or attempting to flee domestic violence, dating violence, sexual 
assault, stalking, or human trafficking and need not include any 
additional details about the conditions that prompted the individual 
or family to seek assistance.
    8. Recordkeeping. Each participating jurisdiction must establish 
and maintain sufficient records to enable HUD to determine whether 
the participating jurisdiction has met the requirements of the HOME-
ARP Notice. The recordkeeping requirements in 24 CFR 92.508 apply to 
HOME-ARP, except Sec.  92.508(a)(2) for program records, (a)(3) for 
project records, (a)(4) for financial records, and Sec.  92.508(c) 
for period of record retention are waived and HUD imposes the 
following alternative requirements for program, project, financial, 
and period of record retention:
    (1) Program Records:
    a. Records evidencing that all HOME-ARP funds used by a 
participating jurisdiction for TBRA, supportive services, and 
acquisition and development of non-congregate shelter units benefit 
individuals and families in qualifying populations.
    b. Records evidencing that not less than 90 percent of 
affordable rental housing units acquired, rehabilitated, and/or 
constructed with HOME funds by a participating jurisdiction are 
occupied by households in the qualifying populations.
    c. Records documenting compliance with the 15 percent limitation 
on administrative and planning costs.
    d. Records documenting compliance with the 5 percent limitation 
on CHDO and non-profit operating and capacity building costs.
    e. The underwriting and subsidy layering guidelines adopted in 
accordance with Section VI.B.10 of the HOME-ARP Notice that support 
the participating jurisdiction's HOME-ARP allocation plan 
certification.
    f. If existing debt is refinanced for multifamily rehabilitation 
projects, the HOME-ARP refinancing guidelines established in the 
HOME-ARP Allocation Plan.
    g. If HOME-ARP funds are used for TBRA, records supporting the 
participating jurisdiction's written selection policies and 
criteria; supporting documentation for preferences for specific 
categories of individuals with disabilities; and records supporting 
the rent standard and minimum tenant contribution established in 
accordance with Section VI.C.7 and 8 of the HOME-ARP Notice.
    h. Confidentiality.
    i. The participating jurisdiction's written policies and 
procedures for maintaining confidentiality of qualifying households 
as individuals or families fleeing, or attempting to flee domestic 
violence, dating violence, sexual assault, stalking, or human 
trafficking in accordance with Section VIII.H
    ii. The participating jurisdiction's written policies and 
procedures for maintaining confidentiality in compliance with the 
VAWA protections contained in 24 CFR part 5, subpart L.
    (2) Project Records: Participating jurisdictions are required to 
retain the following records for HOME-ARP-assisted projects, as 
specified by activity type.
    a. A full description of each project assisted with HOME-ARP 
funds, including the location (address of project), form of HOME-ARP 
assistance, and the units, families, or qualifying households 
assisted with HOME-ARP funds, subject to the confidentiality 
requirements in the HOME-ARP Notice.
    b. The source and application of funds for each project, 
including supporting documentation in accordance with 2 CFR 200.302; 
and records to document the eligibility and permissibility of the 
project costs, including the documentation of the actual HOME-ARP-
eligible development costs of each HOME-ARP-assisted unit as defined 
in the HOME-ARP Notice.
    c. Records (i.e., written agreements) demonstrating compliance 
with the written agreement requirements in Section VIII.B. of the 
HOME-ARP Notice.
    d. Records (e.g., inspection reports) demonstrating that each 
HOME-ARP rental project meets the property standards in Section 
VI.B.11 of the HOME-ARP Notice at project completion and through the 
applicable minimum compliance period. In addition, during a HOME-ARP 
rental project's minimum compliance period, records demonstrating 
compliance with the property standards and financial oversight 
pursuant to 24 CFR 92.504(d) and the operating cost assistance 
reserve management and oversight required by Section VI.B.22 of the 
HOME-ARP Notice.
    e. Records (e.g., inspection reports) demonstrating that each 
unit occupied by a qualifying household receiving HOME-ARP TBRA, 
meets the housing quality standards of Section VI.C.9 of the HOME-
ARP Notice at initial occupancy and throughout the household's term 
of assistance.
    f. Records (e.g., inspection reports) demonstrating that each 
NCS project meets the property and habitability standards of 
SectionVI.E.7., of the HOME-ARP Notice at project completion and 
throughout the applicable restricted use period.
    g. Records demonstrating that each qualifying household is 
eligible for HOME-ARP assistance based on the requirements of the 
ARP and Section IV of the HOME-ARP Notice.
    h. Records demonstrating that each household qualifying as 
homeless, records that meet the requirements in 24 CFR 
576.500(b)(1), (2), (3), or (4), as applicable (except that youth 
aged 24 and under must not be required to provide third-party 
documentation to show they are homeless to receive any shelter, 
housing, or services for which ESG or CoC Program funds may be used 
to supplement the HOME-ARP assistance);
    i. Records demonstrating that each household qualifying as ``at 
risk of homelessness,'' records that meet the requirements in 24 CFR 
576.500(c)(1) or (2), as applicable, and include the following 
documentation of annual income:
    (i) Income evaluation form containing the minimum requirements 
specified by HUD and completed by the recipient or subrecipient; and
    (ii) Source documents for the assets held by the household and 
income received over the most recent period for which representative 
data is available before the date of the evaluation (e.g., wage 
statement, unemployment compensation statement, public benefits 
statement, bank statement);
    (iii) To the extent that source documents are unobtainable, a 
written statement by the relevant third party (e.g., employer, 
government benefits administrator) or the written certification by 
the recipient's or subrecipient's intake staff of the oral 
verification by the relevant third party of the income the household 
received over the most recent period for which representative data 
is available; or
    (iv) To the extent that source documents and third-party 
verification are unobtainable, the written certification by the 
household of the amount of income the household received for the 
most recent period representative of the income that the household 
is reasonably expected to receive over the 3-month period following 
the evaluation.
    j. Records demonstrating compliance with the household income 
requirements in accordance with Section VI.B.12 of the HOME-ARP 
Notice for each HOME-ARP rental project.
    k. Records demonstrating that each HOME-ARP rental and NCS 
project meets the minimum compliance period or restricted use period 
described in Sections VI.B.17 and VI.E.9 respectively, of the HOME-
ARP Notice.
    l. Records demonstrating that for each HOME-ARP rental housing 
unit or for each household receiving HOME-ARP TBRA, compliance with 
the tenant protection requirements of Sections VI.B.18 and VI.C. 2, 
respectively, of the HOME-ARP Notice. For HOME-ARP TBRA or rental 
projects under a master lease, the participating jurisdiction must 
retain records demonstrating that a master lease for housing leased 
by a HOME-ARP sponsor and each sublease between a qualifying 
household and HOME-ARP sponsor complies with the tenant and 
participant protections of 24 CFR 92.253 and the HOME-ARP Notice. 
Records must be kept for each household.
    m. Records demonstrating compliance with the return of the HOME-
ARP rental capitalized operating cost assistance reserve and/or the 
NCS replacement reserve at the end of the compliance or restricted 
use period in accordance with Sections VI.B.23

[[Page 56782]]

and VI.E.10 respectively, of the HOME-ARP Notice.
    n. Records demonstrating that each HOME-ARP rental and each NCS 
project meets the underwriting and subsidy layering or due diligence 
requirements of Section VI.B.10 or VI.E.6 of the HOME-ARP Notice.
    o. Records demonstrating that each HOME-ARP rental housing 
project meets the rent limitations of Sections VI.B.13 and VI.B.15 
of the HOME-ARP Notice for the 15-year minimum compliance period. 
Records must be kept for each household assisted.
    p. Records demonstrating that each multifamily HOME-ARP rental 
housing project involving rehabilitation with refinancing complies 
with the refinancing guidelines established in accordance with 24 
CFR 92.206(b).
    q. Records demonstrating that a site and neighborhood standards 
review was conducted for each HOME-ARP rental housing project 
involving new construction under Section VI.B. of the HOME-ARP 
Notice to determine that the site meets the requirements of 24 CFR 
983.57(e)(2) and (e)(3), in accordance with 24 CFR 92.202.
    r. Records demonstrating that any conversion of HOME-ARP NCS 
complies with the requirements established by Section VI.E. of the 
HOME-ARP Notice, including that conversion of NCS only occurred 
after the end of the applicable minimum use period defined in 
Section VI.E.11.
    s. For all HOME-ARP NCS projects the following documents must be 
maintained, as applicable:
    (i) Purchase contract, closing documents, settlement statement 
and title work for acquisitions.
    (ii) Appraisal or other estimation of value to justify 
acquisition expenditure.
    (iii) Architectural and engineering contracts and completed 
designs, plans, and specifications for rehabilitation and new 
construction activities.
    (iv) Invoices, pay requests, and proof of payment for all 
project expenditures.
    (v) Proof of insurance.
    (vi) Project and program audits.
    t. For all HOME-ARP Supportive Services projects pursuant to 
McKinney-Vento or Homelessness Prevention Supportive Services:
    (i) Records demonstrating which types of Supportive Services the 
participating jurisdiction is offering program participants.
    (ii) Records, where applicable, demonstrating compliance with 
the termination of assistance requirement as described in section 
VI.D.5. of the HOME-ARP Notice.
    (iii) Records of all solicitations of and agreements with 
subrecipients and contractors, records of all payment requests by 
and dates of payments made to subrecipients, and documentation of 
all monitoring and sanctions of subrecipients, as applicable 
including any findings and corrective actions required.
    (iv) Records of all procurement contracts and documentation of 
compliance with the procurement requirements in 2 CFR part 200, 
subpart D, and Section VIII.D of the HOME-ARP Notice.
    (v) Records evidencing the use of the written procedures 
required under Section VI.D.2 and records evidencing compliance with 
Section IV.C.2.
    (vi) Records of all leases, subleases, and financial assistance 
agreements for the provision of rental payments, documentation of 
payments made by the participating jurisdiction to owners, HOME-ARP 
sponsor, or qualifying households for the provision of financial 
assistance for rental payments, and supporting documentation for 
these payments, including dates of occupancy by qualifying 
individuals and families.
    (vii) Records that document the monthly allowance for utilities 
(excluding telephone) used to determine compliance with the rent 
restriction.
    (viii) Records of the types of services provided under the 
participating jurisdiction's program and the amounts spent on these 
services.
    (ix) Records demonstrating subrecipient compliance with the 
recordkeeping requirements in Section VIII.F. of the HOME-ARP 
Notice.
    u. For all HOME-ARP Housing Counseling Services projects as 
defined in 24 CFR part 5, each participating housing counseling 
agency must maintain a recordkeeping and reporting system in 
accordance with 24 CFR 214.315 and 24 CFR 214.317. The system must 
permit HUD to easily access all information needed for a performance 
review.
    v. For all HOME-ARP-assisted nonprofit operating expense and 
capacity building assistance activities:
    (i) Records concerning the use of funds for nonprofit operating 
expense and capacity building assistance must be maintained to 
enable HUD to determine whether the participating jurisdiction has 
met the requirements of Section VI.F. of the HOME-ARP Notice.
    (ii) Written agreements between the participating jurisdiction 
and the nonprofit organization providing nonprofit operating expense 
assistance or capacity building assistance must be retained for five 
years after the agreement terminates.
    (3) Financial records:
    a. Records, in accordance with 2 CFR 200.302, identifying the 
source and application of HOME-ARP funds. Identification must 
include, as applicable, the Assistance Listing program title and 
number (formerly Catalogue of Federal Domestic Assistance), Federal 
award identification number and year, name of the Federal agency, 
and name of the pass-through entity, if any.
    b. Records concerning the HOME Investment Trust Fund Treasury 
account and local account required to be established and maintained 
by the HOME-ARP Notice, including deposits, disbursements, balances, 
supporting documentation and any other information required by IDIS.
    c. Records identifying the source and application of program 
income and repayments.
    d. Records demonstrating adequate budget control and other 
records required by 2 CFR 200.302, including evidence of periodic 
account reconciliations.
    (4) Program administration records:
    a. Records demonstrating compliance with the written agreements 
required by Section VIII.B. of the HOME-ARP Notice.
    b. Records demonstrating compliance with the applicable uniform 
administrative requirements required by Section VIII.D. of the HOME-
ARP Notice.
    c. Records documenting required inspections, monitoring reviews 
and audits, and the resolution of any findings or concerns.
    (5) Records concerning other Federal requirements:
    a. Equal opportunity and fair housing records.
    (i) Data on the extent to which each racial and ethnic group, 
and single-headed households by gender of household head) have 
applied for, participated in, or benefited from, any program or 
activity funded in whole or in part with HOME-ARP funds.
    (ii) Documentation that the participating jurisdiction submitted 
a certification that it will affirmatively further fair housing 
consistent with 24 CFR 5.152 (HUD's Interim Final Rule entitled 
``Restoring Affirmatively Furthering Fair Housing Definitions and 
Certifications,'' (86 FR 30779, June 10, 2021), as amended 
established the AFFH definition, codified at 24 CFR 5.151 and the 
AFFH certification, codified at 24 CFR 5.152, available at: https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-affirmatively-furthering-fair-housing-definitions-and-certifications)
    (iii) Records demonstrating compliance with the 
nondiscrimination and equal opportunity requirements of 24 CFR 92, 
Subpart H.
    b. Affirmative marketing and MBE/WBE records.
    (i) Records demonstrating compliance with the affirmative 
marketing procedures and requirements of 24 CFR 92.351.
    (ii) Documentation and data on the steps taken to implement the 
jurisdiction's outreach programs to minority-owned (MBE) and female-
owned (WBE) businesses including data indicating the racial/ethnic 
or gender character of each business entity receiving a contract or 
subcontract of $25,000 or more paid, or to be paid, with HOME-ARP 
funds; the amount of the contract or subcontract, and documentation 
of participating jurisdiction's affirmative steps to assure that 
minority business and women's business enterprises have an equal 
opportunity to obtain or compete for contracts and subcontracts as 
sources of supplies, equipment, construction, and services.
    c. Records demonstrating compliance with the environmental 
review requirements of 24 CFR 92.352, 24 CFR part 58, and the HOME-
ARP Notice including flood insurance requirements.
    d. Records demonstrating compliance with the requirements of 24 
CFR 92.353 and the provisions of Section VII.F. of the HOME-ARP 
Notice regarding displacement, relocation, and real property 
acquisition, including but not limited to:
    (i) project occupancy lists identifying the name and address of 
all persons occupying the real property on the date described in 24 
CFR 92.353(c)(2)(i)(A), moving into the

[[Page 56783]]

property on or after the date described in 24 CFR 
92.353(c)(2)(i)(A), and occupying the property upon completion of 
the project;
    (ii) Lists of all individuals or families occupying hotels and 
motels and other nonresidential properties acquired, rehabilitated, 
and/or demolished and newly constructed to become HOME-ARP NCS or 
HOME-ARP rental housing that qualify for assistance under the HOME-
ARP Notice as members of a qualifying population, as well as records 
indicating whether such persons were assisted by the HOME-ARP 
program by the participating jurisdiction following the closure of 
the nonresidential properties because of HOME-ARP activities;
    (iii) Lists of all individuals or families occupying HOME-ARP 
NCS that were converted during the required use period that qualify 
for assistance under the HOME-ARP Notice, as well as records 
indicating whether moving costs or advisory services were provided 
as part of HOME-ARP administrative costs or under the HOME-ARP 
supportive services activity in Section VI.D of the HOME-ARP Notice, 
and records indicating whether such persons were assisted by the 
HOME-ARP program by the participating jurisdiction following the 
conversion of the HOME-ARP NCS units.
    (iv) Documentation that the participating jurisdiction has and 
followed a RARAP in accordance with 24 CFR 92.353 and 24 CFR 42.325.
    e. Records demonstrating compliance with the labor requirements 
of 24 CFR 92.354, including contract provisions and payroll records.
    f. Records demonstrating compliance with the lead-based paint 
requirements of 24 CFR part 35, subparts A, B, J, K, M and R, as 
applicable.
    g. Records supporting compliance with conflict of interest 
requirements in 24 CFR 92.356, as revised by Section VII.H. of the 
HOME-ARP Notice, as well as documentation of any exceptions granted 
by HUD or a state participating jurisdiction, as applicable, to the 
conflict of interest provisions in 24 CFR 92.356, as revised by 
Section VII.H. of the HOME-ARP Notice.
    h. Records demonstrating compliance with debarment and 
suspension requirements in 2 CFR part 2424.
    i. Records concerning intergovernmental review, as required by 
24 CFR 92.357.
    j. Records of emergency transfers requested under 24 CFR 
5.2005(e) and 24 CFR 92.359 pertaining to victims of domestic 
violence, dating violence, sexual assault, or stalking, including 
data on the outcomes of those requests.
    k. Documentation of actions undertaken to meet the requirements 
of 24 CFR part 75 which implements section 3 of the Housing 
Development Act of 1968, as amended (12 U.S.C. 1701u).
    (6) State Recipients and Subrecipients: A participating 
jurisdiction that distributes HOME-ARP funds to State recipients or 
subrecipients must require the State recipients or subrecipients to 
keep the records required by paragraphs 1. program records, 2. 
project records, 3. financial records, 4. program administration 
records, and 5. records concerning other federal requirements of 
this Section of the Notice, and such other records as the 
participating jurisdiction determines to be necessary to enable the 
participating jurisdiction to carry out its responsibilities under 
the HOME-ARP Notice. The participating jurisdiction need not 
duplicate the records kept by the State recipients or subrecipients. 
The participating jurisdiction must keep records concerning its 
annual review of the performance and compliance of each State 
recipient and subrecipient as required under 24 CFR 92.504(a).
    (7) Period of record retention: All records pertaining to HOME-
ARP funds must be retained for five years, except as provided below.
    a. For rental housing projects, records may be retained for five 
years after the project completion date; except that records of 
individual tenant income verifications, project rents and project 
inspections must be retained for the most recent five-year period, 
until five years after the affordability period terminates.
    b. For HOME-ARP TBRA projects, records must be retained for five 
years after the period of rental assistance terminates.
    c. Written agreements must be retained for five years after the 
agreement terminates.
    d. Records covering displacements and acquisition must be 
retained for five years after the date by which all persons 
displaced from the property and all persons whose property is 
acquired for the project have received the final payment to which 
they are entitled in accordance with 24 CFR 92.353.
    e. If any litigation, claim, negotiation, audit, monitoring, 
inspection, or other action has been started before the expiration 
of the required record retention period records must be retained 
until completion of the action and resolution of all issues which 
arise from it, or until the end of the required period, whichever is 
later.
    (8) Access to records: The participating jurisdiction must 
provide citizens, public agencies, and other interested parties with 
reasonable access to records, consistent with applicable state and 
local laws and any other applicable grant conditions from other 
federal grant programs regarding privacy and obligations of 
confidentiality.
    The participating jurisdiction, subrecipient, contractor, or 
owner may create a program participant identifier code or number 
that can be used on a file and maintained internally, in such a way 
that the number itself does not inadvertently identify the program 
participant, (i.e. no use of initials, date of birth, or other 
pieces of information that might suggest who the program participant 
is.) The ``key'' or ``cypher'' for the program participant 
identifier code would itself be confidential and would not leave the 
provider. In the circumstance of HUD programs, the Unique Personal 
Identification Number which is generated within the comparable 
database could be used with auditors to identify records of services 
to distinct individuals, subject to the below requirement.
    HUD and the Comptroller General of the United States, any of 
their representatives, have the right of access to any pertinent 
books, documents, papers or other records of the participating 
jurisdiction, state recipients, and subrecipients, in order to make 
audits, examinations, excerpts, and transcripts. If a provider of 
services or operator of an NCS is subject to state or local laws or 
other federal grant programs that require that HUD not be given 
access to records detailing PII of victims, then auditors or 
evaluators may be given access to representative files without any 
sharing of individual identifying information.
    (9) Performance reports. Requirements in 24 CFR 92.509 are 
waived and HUD imposes the requirements in the Reporting and 
Performance Reports section in the HOME-ARP Notice as an alternative 
requirement.
    The participating jurisdiction must submit reports in a format 
and at such time as prescribed by HUD. In addition, HUD and Office 
of the Inspector General (OIG) staff must be given access, upon 
reasonable notice, to all information related to the selection, 
award, and use of HOME-ARP funds.
    Each participating jurisdiction must enter the required HOME-ARP 
data elements timely in IDIS.
    1. For HOME-ARP rental activities, the participating 
jurisdiction must enter complete project completion information when 
it completes the activity in IDIS, except the assisted units can be 
marked vacant until they are occupied by eligible households.
    2. For HOME-ARP NCS activities, the participating jurisdiction 
must enter complete project completion information when it completes 
the activity in IDIS. In addition, the participating jurisdiction 
must report the disposition of any HOME-ARP-assisted NCS activity 
that is converted to another eligible use at the time of conversion.
    3. For HOME-ARP TBRA activities, the participating jurisdiction 
reports beneficiary information in IDIS at the time assistance is 
provided.
    4. For HOME-ARP Supportive Services activities, the 
participating jurisdiction must report in IDIS quarterly, by the 
30th day after the end of each calendar quarter, on the number of 
homeless and not homeless households assisted with supportive 
services and, housing counseling, and/or homelessness prevention 
including the race and ethnicity, household size, and household type 
of the households assisted.
    HUD will issue guidance about reporting on HOME-ARP activities 
in the participating jurisdiction's consolidated annual performance 
and evaluation report (CAPER) required under 24 CFR 91.520, at a 
later date.

L. Subpart L--Performance Reviews and Sanctions

    1. Performance reviews. HUD waives 24 CFR 92.550 and imposes the 
following alternative requirements:
    HUD will review the performance of each participating 
jurisdiction in carrying out its responsibilities for the use of 
HOME-ARP funds and its compliance with the requirements of the HOME-
ARP Notice. Such reviews may take the form of remote or on-site 
monitoring, review of IDIS data or reports, assessment of documents 
requested from the participating jurisdiction, subrecipient, or 
other entity carrying out

[[Page 56784]]

HOME-ARP activities, and inquiries resulting from external audit 
reports, media reports, citizen complaints, or other sources of 
relevant information.
    HUD may also review a participating jurisdiction's timely use of 
HOME-ARP funds for eligible activities, including the progress of 
expenditures for individual projects or activities, the requirement 
to place a project in service in accordance with requirements in the 
HOME-ARP Notice, and compliance of HOME-ARP rental housing and NCS 
with the 4-year deadline for completing projects.
    If HUD preliminarily determines that a participating 
jurisdiction has not met a requirement of the HOME-ARP Notice or an 
applicable requirement of the HOME regulations at 24 CFR part 92, 
HUD will communicate its determination in writing and provide the 
participating jurisdiction with the opportunity to demonstrate, 
based on substantial facts, documentation, and data, that it has 
done so. HUD may extend any time period it provided to the 
participating jurisdiction to demonstrate its compliance if upon 
request of the participating jurisdiction, HUD determines that it is 
infeasible for the participating jurisdiction to provide a full 
response within the prescribed period.
    If the participating jurisdiction fails to demonstrate to HUD's 
satisfaction that it has met the requirement, HUD will take 
corrective or remedial action in accordance with this section or 24 
CFR 92.552.
    2. Corrective and remedial actions. HUD waives 24 CFR 92.551 and 
imposes the following alternative requirements:
    Corrective or remedial actions for a performance deficiency 
(e.g., failure to meet a provision of the HOME-ARP Notice or an 
applicable provision of 24 CFR part 92) will be designed to prevent 
a continuation of the deficiency; mitigate, to the extent possible, 
its adverse effects or consequences; and prevent its recurrence. HUD 
may impose corrective or remedial actions including but not limited 
to the following:
    1. HUD may instruct the participating jurisdiction to submit and 
comply with proposals for action to correct, mitigate and prevent a 
performance deficiency, including:
    a. Preparing and following a schedule of actions for carrying 
out the affected activities, consisting of schedules, timetables, 
and milestones necessary to implement the affected activities;
    b. Establishing and following a management plan that assigns 
responsibilities for carrying out the remedial actions;
    c. Canceling or revising activities likely to be affected by the 
performance deficiency, before expending HOME-ARP funds for the 
activities;
    d. Reprogramming HOME-ARP funds that have not yet been expended 
from affected activities to other eligible activities;
    e. Reimbursing its HOME-ARP grant in any amount not used in 
accordance with the requirements of the HOME-ARP Notice;
    f. Suspending disbursement of HOME-ARP funds for affected 
activities; and
    g. Establishing procedures to ensure compliance with HOME-ARP 
requirements.
    2. HUD may also:
    a. Change the method of payment from an advance to a 
reimbursement basis and may require supporting documentation to be 
submitted for HUD review for each payment request before payment is 
made;
    b. Determine the participating jurisdiction to be high risk and 
impose special conditions or restrictions on the use of HOME-ARP 
funds in accordance with 2 CFR 200.208; and
    c. Take other remedies that may be legally available, including 
remedies under 2 CFR 200.339 and 200.340.
    3. The requirements in 24 CFR 92.551(c)(2) are also revised to 
the updated regulatory references to 2 CFR part 200, as amended, 
that have been renumbered.

M. Consolidated Submissions for Community Planning and Development 
Programs (24 CFR PART 91)

    1. Consultation requirements for HOME-ARP allocation plan. 24 
CFR 91.100 and 24 CFR 91.110 are waived and the following 
alternative requirements shall apply to HOME-ARP allocation plan 
submissions.
    (1) Before developing its HOME-ARP allocation plan, a 
participating jurisdiction must consult with agencies and service 
providers whose clientele include the HOME-ARP qualifying 
populations to identify unmet needs and gaps in housing or service 
delivery systems. In addition, a participating jurisdiction should 
use consultation to determine the HOME-ARP eligible activities 
currently taking place within its jurisdiction and potential 
collaborations for administering HOME-ARP. This consultation will 
provide a basis for the participating jurisdiction's strategy for 
distributing HOME-ARP funds for eligible activities to best meet the 
needs of qualifying populations.
    (2) At a minimum, a participating jurisdiction must consult with 
the CoC(s) serving the jurisdiction's geographic area, homeless and 
domestic violence service providers, public housing agencies (PHAs), 
public agencies that address the needs of the qualifying 
populations, and public or private organizations that address fair 
housing, civil rights, and the needs of persons with disabilities. 
State participating jurisdictions are not required to consult with 
every PHA or CoC within the state's boundaries; however, local 
participating jurisdictions must consult with all PHAs and CoCs 
within the jurisdiction's boundaries. In its plan, a participating 
jurisdiction must describe its consultation process, list the 
organizations consulted, and summarize the feedback received from 
these entities.
    2. Public participation requirements for HOME-ARP allocation 
plan. Section 105 of NAHA (42 U.S.C. 12705), section 107 of NAHA (42 
U.S.C. 12707), 24 CFR 91.105, 24 CFR 91.115, and 24 CFR 91.401 are 
waived and the following alternative requirements shall apply to 
HOME-ARP allocation plan submissions by participating jurisdictions.
    (1) Participating jurisdictions must provide for and encourage 
citizen participation in the development of the HOME-ARP allocation 
plan. Before submitting the HOME-ARP allocation plan to HUD, 
participating jurisdictions must provide residents with reasonable 
notice and an opportunity to comment on the proposed HOME-ARP 
allocation plan of no less than 15 calendar days. The participating 
jurisdiction must follow its adopted requirements for ``reasonable 
notice and an opportunity to comment'' for plan amendments in its 
current citizen participation plan except for where it conflicts 
with the requirements of the HOME-ARP Notice, including the Appendix 
in this notice. In addition, participating jurisdictions must hold 
at least one public hearing during the development of the HOME-ARP 
allocation plan prior to submitting the plan to HUD.
    (2) For the purposes of HOME-ARP, participating jurisdictions 
are required to make the following information available to the 
public:
    a. The amount of HOME-ARP funds the participating jurisdiction 
will receive, and
    b. The range of activities the participating jurisdiction may 
undertake.
    (3) A participating jurisdiction must consider any comments or 
views of residents received in writing, or orally at a public 
hearing, when preparing the HOME-ARP allocation plan. In its plan, a 
participating jurisdiction must describe its public participation 
process, including any efforts made to broaden public participation 
and summarize the comments or views received. In its plan, the 
participating jurisdiction must also include a summary of comments 
received through the public participation process and any comments 
or views not accepted and the reasons why.
    (4) Throughout the HOME-ARP allocation plan public participation 
process, the participating jurisdiction must follow its applicable 
requirements and procedures for effective communication, 
accessibility, and reasonable accommodation for persons with 
disabilities and providing meaningful access to participation by 
limited English proficient (LEP) residents that are in its current 
citizen participation plan.
    3. Alternative requirement to the Contents of the Consolidated 
Plan for Local Governments, States, Consortia, and Insular Areas. 
The requirements of section 105(a), (b), (d)-(g) of NAHA (42 U.S.C. 
12705(a), (b), (d)-(g)), section 107 of NAHA (42 U.S.C. 12707), 24 
CFR part 91, subparts C and D are waived for HOME-ARP allocation 
plan submissions except to the extent that such provisions allow for 
the submission of the HOME-ARP allocation plan as part of a 
participating jurisdiction's annual action plan submission for 
Fiscal Year 2021. 24 CFR 91.505 is also waived. 24 CFR 91.500 shall 
apply except as modified by alternative requirements stated below. 
The following alternative requirements shall apply to the contents, 
submission, and review of the HOME-ARP allocation plan.
    (1) General Requirement. The HOME-ARP allocation plan must 
describe the distribution of HOME-ARP funds and the process for 
soliciting applications and/or selecting eligible projects. The plan 
must also identify any preferences being established for eligible 
activities or projects. However, participating jurisdictions are not 
required to identify specific projects that will be funded in the 
HOME-ARP allocation plan.
    (2) Needs Assessment and Gaps Analysis. A participating 
jurisdiction must evaluate the

[[Page 56785]]

size and demographic composition of qualifying populations within 
its boundaries and assess the unmet needs of those populations. In 
addition, a participating jurisdiction must identify any gaps within 
its current shelter and housing inventory as well as the service 
delivery system. A participating jurisdiction should use current 
data including point in time count, housing inventory count, or 
other data available through CoCs, and consultations with service 
providers to quantify the individuals and families in the qualifying 
populations and their need for additional housing, shelter, or 
services. A participating jurisdiction should identify and consider 
the current resources available to assist qualifying populations, 
including congregate and non-congregate shelter units, supportive 
services, TBRA, and affordable and permanent supportive rental 
housing. A participating jurisdiction must consider the housing and 
service needs of qualifying populations, including but not limited 
to:
    1. Sheltered and unsheltered homeless populations;
    2. Those currently housed populations at risk of homelessness;
    3. Other families requiring services or housing assistance to 
prevent homelessness; and
    4. Those at greatest risk of housing instability or in unstable 
housing situations.
    A participating jurisdiction should include data in its HOME-ARP 
allocation plan that describes the qualifying populations. In 
addition, participating jurisdictions must include a narrative 
description that:
    a. Identifies the characteristics of housing associated with 
instability and an increased risk of homelessness if the 
participating jurisdiction will include such conditions under HUD's 
definition of ``other populations'' as established in Section 
IV.A.2.g. of the HOME-ARP Notice;
    b. Identifies the participating jurisdiction's priority needs 
for qualifying populations; and
    c. Explains how the participating jurisdiction determined the 
level of need and gaps in its shelter and housing inventory and 
service delivery systems.
    (3) HOME-ARP Activities. The HOME-ARP allocation plan must 
describe how a participating jurisdiction will distribute HOME-ARP 
funds in accordance with its priority needs. The plan must describe 
the participating jurisdiction's method for soliciting applications 
for funding and/or selecting developers, service providers and/or 
subrecipients and whether the participating jurisdiction will 
administer eligible activities directly. If the participating 
jurisdiction will provide any portion of its HOME-ARP administrative 
funds to a subrecipient or contractor prior to HUD's acceptance of 
the participating jurisdiction's HOME-ARP allocation plan because 
the subrecipient or contractor is responsible for the administration 
of the participating jurisdiction's entire HOME-ARP grant, the plan 
must identify the subrecipient or contractor and describe its role 
and responsibilities in administering all of the participating 
jurisdiction's HOME-ARP program.
    Participating jurisdictions must indicate in the HOME-ARP 
allocation plan the amount of HOME-ARP funding that is planned for 
each eligible HOME-ARP activity type, including administrative and 
planning activities. In addition, a participating jurisdiction must 
demonstrate that any planned funding for non-profit operating 
assistance, as described in Section VI.F of the HOME-ARP Notice, 
non-profit capacity building, and administrative costs is within 
statutory limits. A participating jurisdiction must also include a 
narrative description about how the characteristics of its shelter 
and housing inventory and service delivery system and the needs 
identified in the participating jurisdiction's gap analysis provided 
a rationale for its plan to fund eligible activities.
    (4) HOME-ARP Production Housing Goals. The HOME-ARP allocation 
plan must estimate the number of affordable rental housing units for 
qualifying populations that a participating jurisdiction will 
produce or support with its HOME-ARP allocation. The plan must also 
include a narrative about the specific affordable rental housing 
production goal that the participating jurisdiction hopes to achieve 
and describe how it will address the participating jurisdiction's 
priority needs.
    (5) Preferences. The HOME-ARP allocation plan must identify 
whether the participating jurisdiction intends to give preference to 
one or more qualifying populations or a subpopulation within one or 
more qualifying populations for any eligible activity or project. 
For example, participating jurisdictions may include a preference 
for:
    a. Homeless individuals and families as defined in the ESG and 
CoC Programs;
    b. Individuals with special needs or persons with disabilities 
among qualifying individuals and families; or
    c. A specific category of qualifying individuals and families 
(e.g., chronically homeless as defined in 24 CFR 91.5).
    Participating jurisdictions are not required to describe 
specific projects to which the preferences will apply in the HOME-
ARP allocation plan. However, a participating jurisdiction must 
explain how the use of a preference or method of prioritization will 
address the unmet need or gap in benefits and services received by 
individuals and families in the qualifying population or category of 
qualifying population, consistent with participating jurisdiction's 
needs assessment and gap analysis. The participating jurisdiction 
must also describe how it will still address the unmet needs or gaps 
in benefits and services of the other qualifying populations that 
are not included in a preference through the use of HOME-ARP funds.
    Preferences cannot violate any applicable fair housing, civil 
rights, and nondiscrimination requirements, including but not 
limited to those requirements listed in 24 CFR 5.105(a). The 
participating jurisdiction must comply with all applicable 
nondiscrimination and equal opportunity laws and requirements listed 
in 24 CFR 5.105(a) and any other applicable fair housing and civil 
rights laws and requirements when establishing preferences or 
methods of prioritization.
    (6) HOME-ARP Refinancing Guidelines. If a participating 
jurisdiction intends to use HOME-ARP funds to refinance existing 
debt secured by multifamily rental housing that is being 
rehabilitated with HOME-ARP funds, it must state its refinancing 
guidelines in accordance with 24 CFR 92.206(b)(2). The guidelines 
must describe the conditions under with the participating 
jurisdiction will refinance existing debt for a HOME-ARP rental 
project. At a minimum, the guidelines must:
    a. Establish a minimum level of rehabilitation per unit or a 
required ratio between rehabilitation and refinancing to demonstrate 
that rehabilitation of HOME-ARP rental housing is the primary 
eligible activity.
    b. Require a review of management practices to demonstrate that 
disinvestment in the property has not occurred; that the long-term 
needs of the project can be met; and that the feasibility of serving 
qualified populations for the minimum compliance period can be 
demonstrated.
    c. State whether the new investment is being made to maintain 
current affordable units, create additional affordable units, or 
both.
    d. Specify the required compliance period, whether it is the 
minimum 15 years or longer.
    e. State that HOME-ARP funds cannot be used to refinance 
multifamily loans made or insured by any federal program, including 
the Community Development Block Grant program.
    (7) Substantial Amendments to the HOME-ARP Allocation Plan. 
Participating jurisdictions must make a substantial amendment to the 
HOME-ARP allocation plan for changes in the method of distributing 
funds; to carry out an activity not previously described in the 
plan; or, to change the purpose, scope, location, or beneficiaries 
of an activity, including new preferences not previously described 
in the plan. In addition, the requirements for substantial 
amendments at 24 CFR 92.63 apply to the HOME-ARP allocation plan for 
insular areas.
    Participating jurisdictions are not required to make a 
substantial amendment to describe individual projects selected for 
funding if the eligible activity is included in the participating 
jurisdiction's plan. Participating jurisdictions must make the 
proposed substantial amendment public and provide for a 15-day 
public comment period prior to submission. Upon completion of the 
public comment period, participating jurisdictions must submit 
substantial amendments to HUD in accordance with the process for 
submitting the HOME-ARP allocation plan as described in Section V.D.
    (8) Certifications and SF-424. Participating jurisdictions must 
submit the required certifications in accordance with the 
requirements in the HOME-ARP Notice, including the following:
    1. Affirmatively Further Fair Housing;
    2. Uniform Relocation Act and Anti-displacement and Relocation 
Plan;
    3. Anti-Lobbying;
    4. Authority of Jurisdiction;
    5. Section 3; and,
    6. HOME-ARP specific certification that a participating 
jurisdiction will only use

[[Page 56786]]

HOME-ARP funds for eligible activities and eligible costs.
    Participating jurisdictions must also submit the SF-424, SF-424B 
and SF-424D with the HOME-ARP allocation plan.
    (9) HOME-ARP Submission and the eCon Planning Suite. Upon 
completion of the HOME-ARP allocation plan, a participating 
jurisdiction must submit the HOME-ARP allocation plan to HUD. To 
submit the HOME-ARP allocation plan, participating jurisdictions 
must follow the process to make an amendment to the Fiscal Year (FY) 
2021 annual action plan. Once the FY 2021 annual action plan is 
reopened, a participating jurisdiction must upload a Microsoft Word 
or PDF version of the plan as an attachment next to the ``HOME-ARP 
allocation plan'' option on the AD-26 screen (for participating 
jurisdictions FY 2021 annual action plan is a Year 2-5 annual action 
plan) or the AD-25 screen (for participating jurisdictions whose FY 
2021 annual action plan is a Year 1 annual action plan that is part 
of the 2021 consolidated plan), unless instructed by HUD to follow a 
different submission procedure. Participating jurisdictions are not 
required to make any other edits to the FY 2021 annual action plan 
or applicable consolidated plan screens in the eCon Planning Suite. 
For more information on how to upload an attachment in the eCon 
Planning Suite, participating jurisdictions can refer to the eCon 
Planning Suite Desk Guide.
    (10) HUD Review of the HOME-ARP Allocation Plan. The 
participating jurisdiction must submit its HOME-ARP allocation plan 
to HUD for review in accordance with 24 CFR 91.500, as revised by 
this alternative requirement. Unless instructed otherwise by HUD, 
the HOME-ARP allocation plan will be considered received by HUD when 
the SF-424 is submitted electronically, which means that it is 
uploaded in the eCon Planning Suite as an attachment on AD-25 or AD-
26 screen, as applicable, and the action plan status is changed to 
``Submitted for Review.'' HUD will review a participating 
jurisdiction's HOME-ARP allocation plan to determine that it is:
    1. Substantially complete, and
    2. Consistent with the purposes of ARP.
    HUD may disapprove a participating jurisdiction's HOME-ARP 
allocation plan in accordance with 24 CFR 91.500(b). HUD may also 
disapprove a HOME-ARP allocation plan or a portion of a plan if HUD 
determines that the plan is inconsistent with the purposes of ARP or 
substantially incomplete. A participating jurisdiction's plan is 
inconsistent with ARP if it includes allocates HOME-ARP funds for 
uses other than a HOME-ARP eligible activity, as described in the 
HOME-ARP Notice. A participating jurisdiction's plan is 
substantially incomplete if:
    a. The participating jurisdiction does not complete the required 
public participation or consultation or fails to describe those 
efforts in the plan;
    b. The participating jurisdiction fails to include the required 
elements outlined in the HOME-ARP Notice, including the amount of 
HOME-ARP funds for each eligible HOME-ARP activity type;
    c. The participating jurisdiction fails to identify and describe 
the responsibilities of the subrecipient or contractor administering 
all of its HOME-ARP award, if applicable; or,
    d. HUD rejects the participating jurisdiction's HOME-ARP 
certification as inaccurate.
    In accordance with Section 105(c) of NAHA (42 U.S.C. 12705(c)) 
and 24 CFR 91.500(a), if the participating jurisdiction's HOME-ARP 
allocation plan is not disapproved within 45 days, then the plan is 
deemed approved 45 days after HUD receives the plan, and HUD shall 
notify the participating jurisdiction that the plan is accepted.
    (11) Plan Disapproval. If HUD determines that the plan is 
substantially incomplete or that the plan is inconsistent with ARP, 
HUD will notify the participating jurisdiction in writing with the 
reasons for disapproval, in accordance with 24 CFR 91.500(c). If a 
participating jurisdiction's plan is disapproved, the participating 
jurisdiction may revise or resubmit the plan for HUD review within 
45 days after the first notification of disapproval. HUD will 
respond to accept or disapprove the resubmitted plan within 30 days 
of receiving the revisions or resubmission.
    (12) Making the HOME-ARP Allocation Plan Public. Once HUD 
notifies a participating jurisdiction that the plan is accepted, the 
participating jurisdiction must make the final HOME-ARP allocation 
plan available to the public in accordance with the same 
requirements in the participating jurisdiction's current citizen 
participation plan that are followed to make the participating 
jurisdiction's adopted consolidated plan and substantial amendments 
available to the public, including the availability of materials in 
a form accessible to persons with disabilities and translated 
materials in different languages to accommodate LEP persons, upon 
request.
    4. Tenant preferences in HOME-ARP. The requirements of Section 
225(d) of NAHA (42 U.S.C. 12755(d)), 24 CFR 91.220(l)(2)(vii), 24 
CFR 91.320(k)(2)(vii), 24 CFR 92.209(c), 24 CFR 92.252(k), 24 CFR 
92.253(d), and 24 CFR 92.504(c)(3)(iii) shall not apply to HOME-ARP 
projects where they conflict with the following alternative 
requirements:
    A participating jurisdiction may establish reasonable 
preferences among the qualifying populations to prioritize 
applicants for HOME-ARP projects or activities based on the 
participating jurisdiction's needs and priorities, as described in 
its HOME-ARP allocation plan.
    For example, a participating jurisdiction may set a preference 
among qualifying individuals and families for a HOME-ARP non-
congregate shelter for individuals and families who are homeless; 
fleeing or attempting to flee domestic violence, dating violence, 
sexual assault, stalking, or human trafficking; and veterans and 
families with a veteran family member that meet the criteria of one 
of these prior qualifying populations, consistent with its HOME-ARP 
allocation plan.
    The participating jurisdiction must comply with all applicable 
nondiscrimination and equal opportunity laws and requirements listed 
in 24 CFR 5.105(a) and any other applicable fair housing and civil 
rights laws and requirements when applying preferences through its 
referral methods. Persons who are eligible for a preference must 
have the opportunity to participate in all HOME-ARP activities of 
the participating jurisdiction in which they are eligible under the 
HOME-ARP Notice, including activities that are not separate or 
different, and cannot be excluded because of any protected 
characteristics or preferential status.
    Targeted assistance: If HOME-ARP funds are used for TBRA, the 
participating jurisdiction may establish a preference for 
individuals with special needs or persons with disabilities among 
the HOME-ARP qualifying populations. Within the qualifying 
populations, participation may be limited to persons with a specific 
disability, if necessary, to provide effective housing, aid, 
benefit, or services as those provided to others in accordance with 
24 CFR 8.4(b)(1)(iv). The participating jurisdiction may also 
provide a preference for a specific category of individuals with 
disabilities (e.g., persons with HIV/AIDS or chronic mental illness) 
within the qualifying populations if the specific category is 
identified in the participating jurisdiction's HOME-ARP allocation 
plan as having unmet need and the preference is needed to narrow the 
gap in benefits and services received by such persons.
    5. Referral Methods for Projects or Activities. A participating 
jurisdiction may use the referral methods described below to 
administer HOME-ARP assistance to qualifying individuals and 
families. Regardless of the referral method used by the 
participating jurisdiction, HUD holds the participating jurisdiction 
responsible for determining and documenting that beneficiaries meet 
the definition of a qualifying population or, for the portion of 
HOME-ARP rental units not restricted to qualifying populations, that 
beneficiaries are low-income.
    A participating jurisdiction may use the CE of a CoC for 
referrals for projects and activities as described below. Under 24 
CFR 578.3, a CE is a centralized or coordinated process designed to 
coordinate program participant intake assessment and provision of 
referrals within a defined area. HUD requires each CoC to establish 
and operate a CE with the goal of increasing the efficiency of local 
crisis response systems and improving fairness and ease of access to 
resources, including mainstream resources.
    A participating jurisdiction may permit a CoC CE to collect 
information and documentation required to determine whether an 
individual or family meets the criteria of a HOME-ARP qualifying 
population at any point in the CE process, (i.e., after or 
concurrently with the assessment and intake processes) as long as 
that information is not used to rank a person for HOME-ARP 
assistance other than as specified by the preferences or method of 
prioritization established by the participating jurisdiction, in 
accordance with HOME-ARP requirements. If the participating 
jurisdiction uses CE, the participating jurisdiction cannot

[[Page 56787]]

require HOME-ARP victim service providers to use the CE but may 
permit them to do so.
    (1) Use of Expanded CE in HOME-ARP.
    Under this referral method, a participating jurisdiction may use 
a CE established by a CoC operating within its boundaries for one or 
more projects or activities if the CE accepts all HOME-ARP 
qualifying populations eligible for those activities or projects, in 
accordance with the preferences and prioritization, if any, 
established or approved by the participating jurisdiction in its 
HOME-ARP allocation plan and imposed through the participating 
jurisdiction's written agreements.
    Before using a CoC's CE, participating jurisdictions should 
consider whether the CE covers the same service area as the HOME-ARP 
projects or activities that would use that CE. At a minimum, the 
participating jurisdiction must establish policies and procedures 
that describe the relationship of the geographic area(s) served by 
the project or activity to the geographic area(s) covered by the CoC 
CE and address how the CE will provide access and implement uniform 
referral processes in situations where a project's geographic 
area(s) is broader than the geographic area(s) covered by the CE.
    The participating jurisdiction must require a project or 
activity to use CE along with other referral methods (as provided in 
section b below) or to use only a project/activity waiting list (as 
provided in section c below) if:
    i. The CE does not have a sufficient number of qualifying 
individuals and families to refer to the participating jurisdiction 
for the project or activity;
    ii. The CE does not include all HOME-ARP qualifying populations; 
or,
    iii. The CE fails to provide access and implement uniform 
referral processes in situations where a project's geographic 
area(s) is broader than the geographic area(s) covered by the CE.
    (2) Use of CE with Other Referral Methods. The participating 
jurisdiction may use a CoC CE with additional referrals from outside 
organizations or project-specific waiting lists consistent with 
HOME-ARP requirements. If using this referral method, the 
participating jurisdiction must establish or approve any preferences 
or prioritization criteria applied by a CoC CE or other referral 
sources. The participating jurisdiction may also use a waiting list 
to receive referrals from a CoC CE and other referral agencies for a 
project or activity, where a CoC CE or referral agency refers an 
applicant that is placed on the waiting list in chronological order.
    If applicable, a participating jurisdiction must establish 
policies and procedures for applying a participating jurisdiction's 
established preferences and method of prioritization, if any, when 
accepting direct referrals from a CoC CE and other referral 
agencies, and must document that such the policies and procedures 
were followed for each applicant served.
    (3) Use of a Project/Activity Waiting List. The participating 
jurisdiction may establish a waiting list for each HOME-ARP project 
or activity. All qualifying individuals or families must have access 
to apply for placement on the waiting list for an activity or 
project. Qualifying individuals or families on a waiting list must 
be accepted in accordance with the participating jurisdiction's 
preferences, if any, consist with the HOME-ARP Notice or, if the 
participating jurisdiction did not establish preferences, in 
chronological order, insofar as practicable.
    6. Limiting Eligibility to Subpopulations. Participating 
jurisdictions must follow all applicable fair housing, civil rights, 
and nondiscrimination requirements, including but not limited to 
those requirements listed in 24 CFR 5.105(a). This includes, but is 
not limited to, the Fair Housing Act, Title VI of the Civil Rights 
Act, Section 504 of Rehabilitation Act, HUD's Equal Access Rule, and 
the Americans with Disabilities Act, as applicable.
    HOME-ARP rental housing or NCS may be limited to a specific 
subpopulation of a qualifying population identified in Section IV.A. 
of the HOME-ARP Notice, so long as admission does not discriminate 
against any protected class under federal nondiscrimination laws in 
24 CFR 5.105 (e.g., the housing may be limited to homeless 
households and at risk of homelessness households, veterans and 
their families, victims of domestic violence, dating violence, 
sexual assault, stalking or human trafficking and their families).
    Recipients may limit admission to or provide a preference for 
HOME-ARP rental housing or NCS to households who need the 
specialized supportive services that are provided (e.g., domestic 
violence services). However, no otherwise eligible individuals with 
disabilities or families including an individual with a disability 
who may benefit from the services provided may be excluded on the 
grounds that they do not have a particular disability.
    Consistent with the statutory authority under ARP, HOME-ARP NCS 
may be converted to permanent housing under the CoC program or used 
as shelters under the ESG program, when all program and fair housing 
and nondiscrimination requirements are met. As such, HOME-ARP NCS 
may need to limit eligibility to households that are homeless and/or 
at risk of homelessness if the shelter will be converted to 
permanent housing under the CoC program or used as an emergency 
shelter in the ESG program.

[FR Doc. 2021-22046 Filed 10-8-21; 8:45 am]
BILLING CODE 4210-67-P