[Title 24 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 1998 Edition]
[From the U.S. Government Printing Office]
[[Page 1]]
24
Housing and Urban Development
PARTS 700 TO 1699
Revised as of April 1, 1998
CONTAINING
A CODIFICATION OF DOCUMENTS
OF GENERAL APPLICABILITY
AND FUTURE EFFECT
AS OF APRIL 1, 1998
With Ancillaries
Published by
the Office of the Federal Register
National Archives and Records
Administration
as a Special Edition of
the Federal Register
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U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1998
For sale by U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328
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Table of Contents
Page
Explanation................................................. v
Title 24:
Subtitle B--Regulations Relating to Housing and Urban Development--Continued:
Chapter VII--Office of the Secretary, Department of
Housing and Urban Development (Housing Assistance
Programs and Public and Indian Housing Programs)...... 5
Chapter VIII--Office of the Assistant Secretary for
Housing--Federal Housing Commissioner, Department of
Housing and Urban Development (Section 8 Housing
Assistance Programs and Section 202 Direct Loan
Program).............................................. 37
Chapter IX--Office of Assistant Secretary for Public and
Indian Housing, Department of Housing and Urban
Development........................................... 271
Finding Aids:
Table of CFR Titles and Chapters.......................... 909
Alphabetical List of Agencies Appearing in the CFR........ 925
List of CFR Sections Affected............................. 935
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Cite this Code: CFR
To cite the regulations in this volume use title, part and
section number. Thus, 24 CFR 700.100 refers to title 24, part
700, section 100.
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EXPLANATION
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Title 1 through Title 16.................................as of January 1
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Title 42 through Title 50................................as of October 1
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Office of the Federal Register.
April 1, 1998.
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THIS TITLE
Title 24--Housing and Urban Development is composed of five volumes.
The first four volumes containing parts 0-199, parts 200-499, parts 500-
699, parts 700-1699, represent the regulations of the Department of
Housing and Urban Development. The fifth volume, containing part 1700 to
end continues with regulations of the Department of Housing and Urban
Development and also includes regulations of the Neighborhood
Reinvestment Corporation. The contents of these volumes represent all
current regulations codified under this title of the CFR as of April 1,
1998.
For this volume, Gwendolyn J. Henderson was Chief Editor. The Code
of Federal Regulations publication program is under the direction of
Frances D. McDonald, assisted by Alomha S. Morris.
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TITLE 24--HOUSING AND URBAN DEVELOPMENT
(This book contains parts 700 to 1699)
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Part
SUBTITLE B--Regulations Relating to Housing and Urban Development--Continued:
Chapter vii--Office of the Secretary, Department of Housing
and Urban Development (Housing Assistance Programs and
Public and Indian Housing Programs)....................... 700
Chapter viii--Office of the Assistant Secretary for
Housing--Federal Housing Commissioner, Department of
Housing and Urban Development (Section 8 Housing
Assistance Programs and Section 202 Direct Loan Program).. 811
Chapter ix--Office of Assistant Secretary for Public and
Indian Housing, Department of Housing and Urban
Development............................................... 901
Cross References: Office of Thrift Supervision, Department of the
Treasury, 12 CFR chapter V.
Department of Veterans Affairs regulations on assistance to certain
veterans in acquiring specially adapted housing and guaranty of loans on
homes: See Loan Guaranty, 38 CFR part 36.
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Subtitle B--Regulations Relating to Housing and Urban Development--
Continued
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CHAPTER VII--OFFICE OF THE SECRETARY, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HOUSING ASSISTANCE PROGRAMS AND PUBLIC AND INDIAN HOUSING PROGRAMS)
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Part Page
700 Congregate Housing Services Program......... 7
701-760
[Reserved]
761 Drug Elimination Programs................... 17
762-790
[Reserved]
791 Review of applications for housing
assistance and allocations of housing
assistance funds........................ 27
792 Housing agency section 8 fraud recoveries... 33
793-798
[Reserved]
Editorial Note: For nomenclature changes to chapter VII, see 59 FR
14090, Mar. 25, 1994.
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PART 700--CONGREGATE HOUSING SERVICES PROGRAM--Table of Contents
Sec.
700.100 Purpose.
700.105 Definitions.
700.110 Announcement of fund availability, application process and
selection.
700.115 Program costs.
700.120 Eligible supportive services.
700.125 Eligibility for services.
700.130 Service coordinator.
700.135 Professional assessment committee.
700.140 Participatory agreement.
700.145 Cost distribution.
700.150 Program participant fees.
700.155 Grant agreement and administration.
700.160 Eligibility and priority for 1978 Act recipients.
700.165 Evaluation of Congregate Housing Services Programs.
700.170 Reserve for supplemental adjustment.
700.175 Other Federal requirements.
Authority: 42 U.S.C. 3535(d) and 8011.
Source: 61 FR 42943, 42949, Aug. 19, 1996.
Sec. 700.100 Purpose.
The requirements of this part augment the requirements of section
802 of the National Affordable Housing Act of 1990 (approved November
28, 1990, Public Law 101-625) (42 U.S.C. 8011), (hereinafter, section
802), as amended by the Housing and Community Development Act of 1992
(Public Law 102-550, approved October 28, 1992), which authorizes the
Congregate Housing Services Program (hereinafter, CHSP or Program).
Sec. 700.105 Definitions.
In addition to the definitions in section 802(k), the following
definitions apply to CHSP:
Activity of Daily Living (ADL) means an activity regularly necessary
for personal care.
(1) The minimum requirements of ADLs include:
(i) Eating (may need assistance with cooking, preparing or serving
food, but must be able to feed self);
(ii) Dressing (must be able to dress self, but may need occasional
assistance);
(iii) Bathing (may need assistance in getting in and out of the
shower or tub, but must be able to wash self);
(iv) Grooming (may need assistance in washing hair, but must be able
to take care of personal appearance);
(v) Getting in and out of bed and chairs, walking, going outdoors,
using the toilet; and
(vi) Household management activities (may need assistance in doing
housework, grocery shopping or laundry, or getting to and from one
location to another for activities such as going to the doctor and
shopping, but must be mobile. The mobility requirement does not exclude
persons in wheelchairs or those requiring mobility devices.)
(2) Each of the Activities of Daily Living noted in paragraph (1) of
this definition includes a requirement that a person must be able to
perform at a specified minimal level (e.g., to satisfy the eating ADL,
the person must be able to feed himself or herself). The determination
of whether a person meets this minimal level of performance must include
consideration of those services that will be performed by a person's
spouse, relatives or other attendants to be provided by the individual.
For example, if a person requires assistance with cooking, preparing or
serving food plus assistance in feeding himself or herself, the
individual would meet the minimal performance level and thus satisfy the
eating ADL, if a spouse, relative or attendant provides assistance with
feeding the person. Should such assistance become unavailable at any
time, the owner is not obligated at any time to provide individualized
services beyond those offered to the resident population in general. The
Activities of Daily Living analysis is relevant only with regard to
determination of a person's eligibility to receive supportive services
paid for by CHSP and is not a determination of eligibility for
occupancy;
Adjusted income means adjusted income as defined in 24 CFR parts 813
or 913.
Applicant means a State, Indian tribe, unit of general local
government, public housing authority (PHA), Indian housing authority
(IHA) or local nonprofit housing sponsor. A State, Indian tribe, or unit
of general local government may apply on behalf of a local
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nonprofit housing sponsor or a for-profit owner of eligible housing for
the elderly.
Area agency on aging means the single agency designated by the State
Agency on Aging to administer the program described in Title III of the
Older Americans Act of 1965 (45 CFR chapter 13).
Assistant Secretary means the HUD Assistant Secretary for Housing-
Federal Housing Commissioner or the HUD Assistant Secretary for Public
and Indian Housing.
Case management means implementing the processes of: establishing
linkages with appropriate agencies and service providers in the general
community in order to tailor the needed services to the program
participant; linking program participants to providers of services that
the participant needs; making decisions about the way resources are
allocated to an individual on the basis of needs; developing and
monitoring of case plans in coordination with a formal assessment of
services needed; and educating participants on issues, including, but
not limited to, supportive service availability, application procedures
and client rights.
Eligible housing for the elderly means any eligible project
including any building within a mixed-use project that was designated
for occupancy by elderly persons, or persons with disabilities at its
inception or, although not so designated, for which the eligible owner
or grantee gives preference in tenant selection (with HUD approval) for
all units in the eligible project (or for a building within an eligible
mixed-use project) to eligible elderly persons, persons with
disabilities, or temporarily disabled individuals. For purposes of this
part, this term does not include projects assisted under the Low-Rent
Housing Homeownership Opportunity program (Turnkey III (24 CFR part 905,
subpart G)).
Eligible owner means an owner of an eligible housing project.
Excess residual receipts mean residual receipts of more than $500
per unit in the project which are available and not committed to other
uses at the time of application to HUD for CHSP. Such receipts may be
used as matching funds and may be spent down to a minimum of $500/unit.
For-profit owner of eligible housing for the elderly means an owner
of an eligible housing project in which some part of the project's
earnings lawfully inure to the benefit of any private shareholder or
individual.
Grantee or Grant recipient means the recipient of funding under
CHSP. Grantees under this Program may be states, units of general local
government, Indian tribes, PHAs, IHAs, and local nonprofit housing
sponsors.
Local nonprofit housing sponsor means an owner or borrower of
eligible housing for the elderly; no part of the net earnings of the
owning organization shall lawfully inure to the benefit of any
shareholder or individual.
Nonprofit includes a public housing agency as that term is defined
in section 3(b)(6) of the United States Housing Act of 1937.
Person with disabilities means a household composed of one or more
persons, at least one of whom is an adult who has a disability.
(1) A person shall be considered to have a disability if such person
is determined under regulations issued by the Secretary to have a
physical, mental, or emotional impairment which:
(i) Is expected to be of long-continued and indefinite duration;
(ii) Substantially impedes his or her ability to live independently;
and
(iii) Is of such a nature that the person's ability could be
improved by more suitable housing conditions.
(2) A person shall also be considered to have a disability if the
person has a developmental disability as defined in section 102(5) of
the Developmental Disabilities Assistance and Bill of Rights Act (42
U.S.C. 6001-7). Notwithstanding the preceding provisions of this
paragraph, the terms ``person with disabilities'' or ``temporarily
disabled'' include two or more persons with disabilities living
together, one or more such persons living with another person who is
determined (under regulations prescribed by the Secretary of HUD) to be
essential to their care or well-being, and the surviving member or
members of any household where at least one or more persons was an adult
with a disability who was living, in a
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unit assisted under this section, with the deceased member of the
household at the time of his or her death.
Program participant (participant) means any project resident as
defined in section 802(e)(1) who is formally accepted into CHSP,
receives CHSP services, and resides in the eligible housing project
served by CHSP grant.
Qualifying supportive services means those services described in
section 802(k)(16). Under this Program, ``health-related services'' mean
non-medical supervision, wellness programs, preventive health screening,
monitoring of medication consistent with state law, and non-medical
components of adult day care. The Secretary concerned may also approve
other requested supportive services essential for achieving and
maintaining independent living.
Rural Housing Service (RHS) means a credit agency for rural housing
and rural development in the U.S. Department of Agriculture (USDA).
Secretary concerned means (1) The Secretary of Housing and Urban
Development, with respect to eligible federally assisted housing
administered by HUD; and
(2) The Secretary of Agriculture with reference to programs
administered by the Administrator of the Rural Housing Service.
Service coordinator means CHSP staff person responsible for
coordinating Program services as described in section 700.130.
Service provider means a person or organization licensed or
otherwise approved in writing by a State or local agency (e.g.,
Department of Health, Department of Human Services or Welfare) to
provide supportive services.
State agency means the State or an agency or instrumentality of the
State.
State agency on aging means the single agency designated by the
Governor to administer the program described in Title III of the Older
Americans Act of 1965 (See 45 CFR part 13).
Sec. 700.110 Announcement of fund availability, application process and selection.
(a) Notice of funding availability. A Notice of Funding Availability
(NOFA) will be published periodically in the Federal Register by the
Secretary concerned containing the amounts of funds available,
allocation or distribution of funds available among eligible applicant
groups, where to obtain and submit applications, the deadline for
submissions, and further explanation of the selection criteria, review
and selection process. The Secretary concerned will designate the
maximum allowable size for grants.
(b) Selection criteria are set forth in section 802(h)(1) and shall
include additional criteria specified by the Secretary concerned.
Sec. 700.115 Program costs.
(a) Allowable costs. (1) Allowable costs for direct provision of
supportive services includes the provision of supportive services and
others approved by the Secretary concerned for:
(i) Direct hiring of staff, including a service coordinator;
(ii) Supportive service contracts with third parties;
(iii) Equipment and supplies (including food) necessary to provide
services;
(iv) Operational costs of a transportation service (e.g., mileage,
insurance, gasoline and maintenance, driver wages, taxi or bus
vouchers);
(v) Purchase or leasing of vehicles;
(vi) Direct and indirect administrative expenses for administrative
costs such as annual fiscal review and audit, telephones, postage,
travel, professional education, furniture and equipment, and costs
associated with self evaluation or assessment (not to exceed one percent
of the total budget for the activities approved); and
(vii) States, Indian tribes and units of general local government
with more than one project included in the grant may receive up to 1% of
the total cost of the grant for monitoring the projects.
(2) Allowable costs shall be reasonable, necessary and recognized as
expenditures in compliance with OMB Cost Policies, i.e., OMB Circular A-
87, 24 CFR 85.36, and OMB Circular A-128.
(b) Nonallowable costs. (1) CHSP funds may not be used to cover
expenses related to any grantee program, service, or activity existing
at the time of application to CHSP.
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(2) Examples of nonallowable costs under the program are:
(i) Capital funding (such as purchase of buildings, related
facilities or land and certain major kitchen items such as stoves,
refrigerators, freezers, dishwashers, trash compactors or sinks);
(ii) Administrative costs that represent a non-proportional share of
costs charged to the Congregate Housing Services Program for rent or
lease, utilities, staff time;
(iii) Cost of supportive services other than those approved by the
Secretary concerned;
(iv) Modernization, renovation or new construction of a building or
facility, including kitchens;
(v) Any costs related to the development of the application and plan
of operations before the effective date of CHSP grant award;
(vi) Emergency medical services and ongoing and regular care from
doctors and nurses, including but not limited to administering
medication, purchase of medical supplies, equipment and medications,
overnight nursing services, and other institutional forms of service,
care or support;
(vii) Occupational therapy and vocational rehabilitation services;
or
(viii) Other items defined as unallowable costs elsewhere in this
part, in CHSP grant agreement, and OMB Circular A-87 or 122.
(c) Administrative cost limitation. Grantees are subject to the
limitation in section 802(j)(4).
Sec. 700.120 Eligible supportive services.
(a) Supportive services or funding for such services may be provided
by state, local, public or private providers and CHSP funds. A CHSP
under this section shall provide meal and other qualifying services for
program participants (and other residents and nonresidents, as described
in Sec. 700.125(a)) that are coordinated on site.
(b) Qualifying supportive services are those listed in section
802(k)(16) and in section 700.105.
(c) Meal services shall meet the following guidelines:
(1) Type of service. At least one meal a day must be served in a
group setting for some or all of the participants; if more than one meal
a day is provided, a combination of a group setting and carry-out meals
may be utilized.
(2) Hot meals. At least one meal a day must be hot. A hot meal for
the purpose of this program is one in which the principal food item is
hot at the time of serving.
(3) Special menus. Grantees shall provide special menus as necessary
for meeting the dietary needs arising from the health requirements of
conditions such as diabetes and hypertension. Grantees should attempt to
meet the dietary needs of varying religious and ethnic backgrounds.
(4) Meal service standards. Grantees shall plan for and provide
meals which are wholesome, nutritious, and each of which meets a minimum
of one-third of the minimum daily dietary allowances as established by
the Food and Nutrition Board of the National Academy of Sciences-
National Research Council (or State or local standards, if these
standards are higher). Grantees must have an annual certification,
prepared and signed by a registered dietitian, which states that each
meal provided under CHSP meets the minimum daily dietary allowances.
(5) Food stamps and agricultural commodities. In providing meal
services grantees must apply for and use food stamps and agricultural
commodities as set forth in section 802(d)(2)(A).
(6) Preference for nutrition providers: In contracting for or
otherwise providing for meal services grantees must follow the
requirements of section 802(d)(2)(B). These requirements do not preclude
a grantee or owner from directly preparing and providing meals under its
own auspices.
Sec. 700.125 Eligibility for services.
(a) Participants, other residents, and nonresidents. Such
individuals are eligible either to participate in CHSP or to receive
CHSP services, if they qualify under section 802(e)(1), (4) and (5).
Under this paragraph, temporarily disabled persons are also eligible.
(b) Economic need. In providing services under CHSP, grantees shall
give priority to very low income individuals, and shall consider their
service needs in selecting program participants.
[[Page 11]]
Sec. 700.130 Service coordinator.
(a) Each grantee must have at least one service coordinator who
shall perform the responsibilities listed in section 802(d)(4).
(b) The service coordinator shall comply with the qualifications and
standards required by the Secretary concerned. The service coordinator
shall be trained in the subject areas set forth in section 802(d)(4),
and in any other areas required by the Secretary concerned.
(c) The service coordinator may be employed directly by the grantee,
or employed under a contract with a case management agency on a fee-for-
service basis, and may serve less than full-time. The service
coordinator or the case management agency providing service coordination
shall not provide supportive services under a CHSP grant or have a
financial interest in a service provider agency which intends to provide
services to the grantee for CHSP.
(d) The service coordinator shall:
(1) Provide general case management and referral services to all
potential participants in CHSP. This involves intake screening, upon
referral from the grantee of potential program participants, and
preliminary assessment of frailty or disability, using a commonly
accepted assessment tool. The service coordinator then will refer to the
professional assessment committee (PAC) those individuals who appear
eligible for CHSP;
(2) Establish professional relationships with all agencies and
service providers in the community, and develop a directory of providers
for use by program staff and program participants;
(3) Refer proposed participants to service providers in the
community, or those of the grantee;
(4) Serve as staff to the PAC;
(5) Complete, for the PAC, all paperwork necessary for the
assessment, referral, case monitoring and reassessment processes;
(6) Implement any case plan developed by the PAC and agreed to by
the program participant;
(7) Maintain necessary case files on each program participant,
containing such information and kept in such form as HUD and RHS shall
require;
(8) Provide the necessary case files to PAC members upon request, in
connection with PAC duties;
(9) Monitor the ongoing provision of services from community
agencies and keep the PAC and the agency providing the supportive
service informed of the progress of the participant;
(10) Educate grant recipient's program participants on such issues
as benefits application procedures (e.g. SSI, food stamps, Medicaid),
service availability, and program participant options and
responsibilities;
(11) Establish volunteer support programs with service organizations
in the community;
(12) Assist the grant recipient in building informal support
networks with neighbors, friends and family; and
(13) Educate other project management staff on issues related to
``aging-in-place'' and services coordination, to help them to work with
and assist other persons receiving housing assistance through the
grantee.
(e) The service coordinator shall tailor each participant's case
plan to the individual's particular needs. The service coordinator shall
work with community agencies, the grantee and third party service
providers to ensure that the services are provided on a regular,
ongoing, and satisfactory basis, in accordance with the case plan
approved by the PAC and the participant.
(f) Service coordinators shall not serve as members of the PAC.
Sec. 700.135 Professional assessment committee.
(a) General. (1) A professional assessment committee (PAC), as
described in this section, shall recommend services appropriate to the
functional abilities and needs of each eligible project resident. The
PAC shall be either a voluntary committee appointed by the project
management or an agency in the community which provides assessment
services and conforms to section 802(e)(3)(A) and (B). PAC members are
subject to the conflict of interest provisions in section 700.175(b).
(2) The PAC shall utilize procedures that ensure that the process of
determining eligibility of individuals for congregate services affords
individuals fair treatment, due process, and a right
[[Page 12]]
of appeal of the determination of eligibility, and shall ensure the
confidentiality of personal and medical records.
(3) The dollar value of PAC members' time spent on regular
assessments after initial approval of program participants may be
counted as match. If a community agency discharges the duties of the
PAC, staff time is counted as its imputed value, and if the members are
volunteers, their time is counted as volunteer time, according to
sections 700.145(c)(2) (ii) and (iv).
(b) Duties of the PAC. The PAC is required to:
(1) Perform a formal assessment of each potential elderly program
participant to determine if the individual is frail. To qualify as
frail, the PAC must determine if the elderly person is deficient in at
least three ADLs, as defined in section 700.105. This assessment shall
be based upon the screening done by the service coordinator, and shall
include a review of the adequacy of the informal support network (i.e.,
family and friends available to the potential participant to assist in
meeting the ADL needs of that individual), and may include a more in-
depth medical evaluation, if necessary;
(2) Determine if non-elderly disabled individuals qualify under the
definition of person with disabilities under section 700.105. If they do
qualify, this is the acceptance criterion for them for CHSP. Persons
with disabilities do not require an assessment by the PAC;
(3) Perform a regular assessment and updating of the case plan of
all participants;
(4) Obtain and retain information in participant files, containing
such information and maintained in such form, as HUD or RHS shall
require;
(5) Replace any members of the PAC within 30 days after a member
resigns. A PAC shall not do formal assessments if its membership drops
below three, or if the qualified medical professional leaves the PAC and
has not been replaced.
(6) Notify the grantee or eligible owner and the program
participants of any proposed modifications to PAC procedures, and
provide these parties with a process and reasonable time period in which
to review and comment, before adoption of a modification;
(7) Provide assurance of nondiscrimination in selection of CHSP
participants, with respect to race, religion, color, sex, national
origin, familial status or type of disability;
(8) Provide complete confidentiality of information related to any
individual examined, in accordance with the Privacy Act of 1974;
(9) Provide all formal information and reports in writing.
(c) Prohibitions relating to the PAC. (1) At least one PAC member
shall not have any direct or indirect relationship to the grantee.
(2) No PAC member may be affiliated with organizations providing
services under the grant.
(3) Individuals or staff of third party organizations that act as
PAC members may not be paid with CHSP grant funds.
(d) Eligibility and admissions. (1) Before selecting potential
program participants, each grantee (with PAC assistance) shall develop a
CHSP application form. The information in the individual's application
is crucial to the PAC's ability to determine the need for further
physical or psychological evaluation.
(2) The PAC, upon completion of a potential program participant's
initial assessment, must make a recommendation to the service
coordinator for that individual's acceptance or denial into CHSP.
(3) Once a program participant is accepted into CHSP, the PAC must
provide a supportive services case plan for each participant. In
developing this plan, the PAC must take into consideration the
participant's needs and wants. The case plan must provide the minimum
supportive services necessary to maintain independence.
(e) Transition-out procedures. The grantee or PAC must develop
procedures for providing for an individual's transition out of CHSP to
another setting. Transition out is based upon the degree of supportive
services needed by an individual to continue to live independently. If a
program participant leaves the program, but wishes to retain supportive
services, he or she may do so, as long as he or she continues to live in
an eligible project, pays the full
[[Page 13]]
cost of services provided, and management agrees (section 802(e)(4) and
(5)). A participant can be moved out of CHSP if he or she:
(1) Gains physical and mental health and is able to function without
supportive services, even if only for a short time (in which case
readmission, based upon reassessment to determine the degree of frailty
or the disability, is acceptable);
(2) Requires a higher level of care than that which can be provided
under CHSP; or
(3) Fails to pay services fees.
(f) Procedural rights of participants. (1) The PAC must provide an
informal process that recognizes the right to due process of individuals
receiving assistance. This process, at a minimum, must consist of:
(i) Serving the participant with a written notice containing a clear
statement of the reasons for termination;
(ii) A review of the decision, in which the participant is given the
opportunity to present written or oral objections before a person other
than the person (or a subordinate of that person) who made or approved
the termination decision; and
(iii) Prompt written notification of the final decision to the
participant.
(2) Procedures must ensure that any potential or current program
participant, at the time of initial or regular assessment, has the
option of refusing offered services and requesting other supportive
services as part of the case planning process.
(3) In situations where an individual requests additional services,
not initially recommended by the PAC, the PAC must make a determination
of whether the request is legitimately a needs-based service that can be
covered under CHSP subsidy. Individuals can pay for services other than
those recommended by the PAC as long as the additional services do not
interfere with the efficient operation of the program.
Sec. 700.140 Participatory agreement.
(a) Before actual acceptance into CHSP, potential participants must
work with the PAC and the service coordinator in developing supportive
services case plans. A participant has the option of accepting any of
the services under the case plan.
(b) Once the plan is approved by the PAC and the program
participant, the participant must sign a participatory agreement
governing the utilization of the plan's supportive services and the
payment of supportive services fees. The grantee annually must
renegotiate the agreement with the participant.
Sec. 700.145 Cost distribution.
(a) General. (1) Grantees, the Secretary concerned, and participants
shall all contribute to the cost of providing supportive services
according to section 802(i)(A)(i). Grantees must contribute at least 50
percent of program cost, participants must contribute fees that in total
are at least 10 percent of program cost, and the Secretary concerned
will provide funds in an amount not to exceed 40 percent.
(2) Section 802(i)(1)(B)(ii) creates a cost-sharing provision
between grantee and the Secretary concerned if total participant fees
collected over a year are less than 10 percent of total program cost.
This provision is subject to availability of appropriated grant funds.
If funds are not available, the grantee must assume the funding
shortfall.
(b) Prohibition on substitution of funds and maintenance of existing
supportive services. Grantees shall maintain existing funding for and
provision of supportive services prior to the application date, as set
forth in section 802(i)(1)(D). The grantee shall ensure that the
activities provided to the project under a CHSP grant will be in
addition to, and not in substitution for, these previously existing
services. The value of these services do not qualify as matching funds.
Such services must be maintained either for the time the participant
remains in CHSP, or for the duration of CHSP grant. The grantee shall
certify compliance with this paragraph to the Secretary concerned.
(c) Eligible matching funds. (1) All sources of matching funds must
be directly related to the types of supportive services prescribed by
the PAC or used for administration of CHSP.
(2) Matching funds may include:
[[Page 14]]
(i) Cash (which may include funds from Federal, State and local
governments, third party contributions, available payments authorized
under Medicaid for specific individuals in CHSP, Community Development
Block Grants or Community Services Block Grants, Older American Act
programs or excess residual funds with the approval of the Secretary
concerned),
(ii) The imputed dollar value of other agency or third party-
provided direct services or staff who will work with or provide services
to program participants; these services must be justified in the
application to assure that they are the new or expanded services of CHSP
necessary to keep the program participants independent. If services are
provided by the state, Indian tribe, unit of general local government,
or local nonprofit housing sponsor, IHA, PHA, or for-profit or not-for-
profit owner, any salary paid to staff from governmental sources to
carry out the program of the grantee and any funds paid to residents
employed by the Program (other than from amounts under a contract under
section 700.155) is allowable match.
(iii) In-kind items (these are limited to 10 percent of the 50
percent matching amount), such as the current market value of donated
common or office space, utility costs, furniture, material, supplies,
equipment and food used in direct provision of services. The applicant
must provide an explanation for the estimated donated value of any item
listed.
(iv) The value of services performed by volunteers to CHSP, at the
rate of $5.00 an hour.
(d) Limitation. (1) The following are not eligible for use as
matching funds:
(i) PHA operating funds;
(ii) CHSP funds;
(iii) Section 8 funds other than excess residual receipts;
(iv) Funds under section 14 of the U.S. Housing Act of 1937, unless
used for service coordination or case management; and
(v) Comprehensive grant funds unless used for service coordination
or case management;
(2) Local government contributions are limited by section
802(i)(1)(E).
(e) Annual review of match. The Secretary concerned will review the
infusion of matching funds annually, as part of the program or budget
review. If there are insufficient matching funds available to meet
program requirements at any point after grant start-up, or at any time
during the term of the grant (i.e., if matching funds from sources other
than program participant fees drop below 50 percent of total supportive
services cost), the Secretary concerned may decrease the federal grant
share of supportive services funds accordingly.
Sec. 700.150 Program participant fees.
(a) Eligible program participants. The grantee shall establish fees
consistent with section 700.145(a). Each program participant shall pay
CHSP fees as stated in paragraphs (d) and (e) of this section, up to a
maximum of 20 percent of the program participant's adjusted income.
Consistent with section 802(d)(7)(A), the Secretary concerned shall
provide for the waiver of fees for individuals who are without
sufficient income to provide for any payment.
(b) Fees shall include: (1) Cash contributions of the program
participant;
(2) Food Stamps; and
(3) Contributions or donations to other eligible programs acceptable
as matching funds under section 700.145(c).
(c) Older Americans Act programs. No fee may be charged for any
meals or supportive services under CHSP if that service is funded under
an Older Americans Act Program.
(d) Meals fees: (1) For full meal services, the fees for residents
receiving more than one meal per day, seven days per week, shall be
reasonable and shall equal between 10 and 20 percent of the adjusted
income of the project resident, or the cost of providing the services,
whichever is less.
(2) The fees for residents receiving meal services less frequently
than as described in paragraph (d)(1) of this section shall be in an
amount equal to 10 percent of the adjusted income of the project
resident, or the cost of providing the services, whichever is less.
(e) Other service fees. The grantee may also establish fees for
other supportive services so that the total fees collected
[[Page 15]]
from all participants for meals and other services is at least 10
percent of the total cost of CHSP. However, no program participants may
be required to pay more than 20 percent of their adjusted incomes for
any combination of services.
(f) Other residents and nonresidents. Fees shall be established for
residents of eligible housing projects (other than eligible project
residents) and for nonresidents who receive meals and other services
from CHSP under section 700.125(a). These fees shall be in an amount
equal to the cost of providing the services.
Sec. 700.155 Grant agreement and administration.
(a) General. HUD will enter into grant agreements with grantees, to
provide congregate services for program participants in eligible housing
projects, in order to meet the purposes of CHSP.
(b) Term of grant agreement and reservation of amount. A grant will
be for a term of five years and the Secretary concerned shall reserve a
sum equal to the total approved grant amount for each grantee. Grants
will be renewable at the expiration of a term, subject to the
availability of funds and conformance with the regulations in this part,
except as otherwise provided in section 700.160.
(c) Monitoring of project sites by governmental units. States,
Indian tribes, and units of general local government with a grant
covering multiple projects shall monitor, review, and evaluate Program
performance at each project site for compliance with CHSP regulations
and procedures, in such manner as prescribed by HUD or RHS.
(d) Reports. Each grantee shall submit program and fiscal reports
and program budgets to the Secretary concerned in such form and at such
times, as the Secretary concerned requires.
(e) Enforcement. The Secretary concerned will enforce the
obligations of the grantee under the agreement through such action as
may be necessary, including terminating grants, recapturing grant funds,
and imposing sanctions.
(1) These actions may be taken for:
(i) A grantee's non-compliance with the grant agreement or HUD or
RHS regulations;
(ii) Failure of the grantee to provide supportive services within 12
months of execution of the grant agreement.
(2) Sanctions include but are not limited to the following:
(i) Temporary withholding of reimbursements or extensions or
renewals under the grant agreement, pending correction of deficiencies
by the grantee;
(ii) Setting conditions in the contract;
(iii) Termination of the grant;
(iv) Substitution of grantee; and
(v) Any other action deemed necessary by the Secretary concerned.
(f) Renewal of grants. Subject to the availability of funding,
satisfactory performance, and compliance with the regulations in this
part:
(1) Grantees funded initially under this part shall be eligible to
receive continued, non-competitive renewals after the initial five-year
term of the grant.
(2) Grantees will receive priority funding and grants will be
renewed within time periods prescribed by the Secretary concerned.
(g) Use of Grant Funds. If during any year, grantees use less than
the annual amount of CHSP funds provided to them for that year, the
excess amount can be carried forward for use in later years.
Sec. 700.160 Eligibility and priority for 1978 Act recipients.
Grantees funded initially under 42 U.S.C. 8001 shall be eligible to
receive continued, non-competitive funding subject to its availability.
These grantees will be eligible to receive priority funding under this
part if they comply with the regulations in this part and with the
requirements of any NOFA issued in a particular fiscal year.
Sec. 700.165 Evaluation of Congregate Housing Services Programs.
(a) Grantees shall submit annually to the Secretary concerned, a
report evaluating the impact and effectiveness of CHSPs at the grant
sites, in such form as the Secretary concerned shall require.
[[Page 16]]
(b) The Secretaries concerned shall further review and evaluate the
performance of CHSPs at these sites and shall evaluate the Program as a
whole.
(c) Each grantee shall submit a certification with its application,
agreeing to cooperate with and to provide requested data to the entity
responsible for the Program's evaluation, if requested to do so by the
Secretary concerned.
Sec. 700.170 Reserve for supplemental adjustment.
The Secretary concerned may reserve funds subject to section 802(o).
Requests to utilize supplemental funds by the grantee shall be
transmitted to the Secretary concerned in such form as may be required.
Sec. 700.175 Other Federal requirements.
In addition to the Federal Requirements set forth in 24 CFR part 5,
the following requirements apply to grant recipient organizations in
this program:
(a) Office of Management and Budget (OMB) Circulars and
Administrative Requirements. The policies, guidelines, and requirements
of OMB Circular No. A-87 and 24 CFR part 85 apply to the acceptance and
use of assistance under this program by public body grantees. The
policies, guidelines, and requirements of OMB Circular No. A-122 apply
to the acceptance and use of assistance under this program by non-profit
grantees. Grantees are also subject to the audit requirements described
in 24 CFR part 44 (OMB Circular A-128).
(b) Conflict of interest. In addition to the conflict of interest
requirements in OMB Circular A-87 and 24 CFR part 85, no person who is
an employee, agent, consultant, officer, or elected or appointed
official of the applicant, and who exercises or has exercised any
function or responsibilities with respect to activities assisted with
CHSP grant funds, or who is in a position to participate in a decision-
making process or gain inside information with regard to such
activities, may obtain a personal or financial interest or benefit from
the activity, or have an interest in any contract, subcontract, or
agreement with respect thereto, or any proceeds thereunder, either for
himself or herself or for those with whom he or she has family or
business ties during his or her tenure, or for one year thereafter. CHSP
employees may receive reasonable salary and benefits.
(c) Disclosures required by Reform Act. Section 102(c) of the HUD
Reform Act of 1989 (42 U.S.C. 3545(c)) requires disclosure concerning
other government assistance to be made available with respect to the
Program and parties with a pecuniary interest in CHSP and submission of
a report on expected sources and uses of funds to be made available for
CHSP. Each applicant shall include information required by 24 CFR part
12 on form HUD-2880 ``Applicant/Recipient Disclosure/Update Report,'' as
required by the Federal Register Notice published on January 16, 1992,
at 57 FR 1942.
(d) Nondiscrimination and equal opportunity. (1) The fair housing
poster regulations (24 CFR part 110) and advertising guidelines (24 CFR
part 109);
(2) The Affirmative Fair Housing Marketing Program requirements of
24 CFR part 200, subpart M, and the implementing regulations at 24 CFR
part 108; and
(3) Racial and ethnic collection requirements--Recipients must
maintain current data on the race, ethnicity and gender of program
applicants and beneficiaries in accordance with section 562 of the
Housing and Community Development Act of 1987 and section 808(e)(6) of
the Fair Housing Act.
(e) Environmental requirements. Support services, including the
operating and administrative expenses described in section 700.115(a),
are categorically excluded from the requirements of the National
Environmental Policy Act (NEPA) of 1969. These actions, however, are not
excluded from individual compliance requirements of other environmental
statutes, Executive Orders, and agency regulations where appropriate.
When the responsible official determines that any action under this part
may have an environmental effect because of extraordinary circumstances,
the requirements of NEPA shall apply.
PARTS 701-760 [RESERVED]
[[Page 17]]
PART 761--DRUG ELIMINATION PROGRAMS--Table of Contents
Subpart A--General
Sec.
761.1 Purpose and scope.
761.5 Public and Indian housing; encouragement of resident
participation.
761.10 Definitions.
Subpart B--Use of Grant Funds
761.15 Applicants and activities.
Subpart C--Application and Selection
761.20 Application selection and requirements.
761.25 Resident comments on grant application.
Subpart D--Grant Administration
761.30 Grant administration.
761.35 Periodic grantee reports.
761.40 Other Federal requirements.
Authority: 42 U.S.C. 3535(d) and 11901 et seq.
Source: 61 FR 13987, Mar. 28, 1996, unless otherwise noted.
Subpart A--General
Sec. 761.1 Purpose and scope.
This part 761 contains the regulatory requirements for the Assisted
Housing Drug Elimination Program and the Public Housing Drug Elimination
Program. The purposes of these programs are to:
(a) Eliminate drug-related crime and problems associated with it in
and around the premises of Federally assisted low-income housing, and
public and Indian housing developments;
(b) Encourage owners of Federally assisted low-income housing,
public housing agencies and Indian housing authorities (collectively
referred to as HAs), and resident management corporations to develop a
plan that includes initiatives that can be sustained over a period of
several years for addressing drug-related crime and problems associated
with it in and around the premises of housing proposed for funding under
this part; and
(c) Make available Federal grants to help owners of Federally
assisted low-income housing, HAs, and RMCs carry out their plans.
Sec. 761.5 Public and Indian housing; encouragement of resident participation.
For the purposes of the Public Housing Drug Elimination Program, the
elimination of drug-related crime and problems associated with it within
public housing developments requires the active involvement and
commitment of public housing residents and their organizations. To
enhance the ability of HAs to combat drug-related crime and problems
associated with it within their developments, Resident Councils (RCs),
Resident Management Corporations (RMCs), and Resident Organizations
(ROs) will be permitted to undertake management functions specified in
this part, notwithstanding the otherwise applicable requirements of 24
CFR parts 950 and 964.
Sec. 761.10 Definitions.
The definitions Department, HUD, Indian, Indian Housing Authority
(IHA), and Public Housing Agency (PHA) are defined in 24 CFR part 5.
Controlled substance shall have the meaning provided in section 102
of the Controlled Substance Act (21 U.S.C. 802).
Drug intervention means a process to identify assisted housing or
public housing resident drug users, to assist them in modifying their
behavior, and/or to refer them to drug treatment to reduce or eliminate
drug abuse.
Drug prevention means a process to provide goods and services
designed to alter factors, including activities, environmental
influences, risks, and expectations, that lead to drug abuse.
Drug-related crime shall have the meaning provided in 42 U.S.C.
11905(2).
Drug treatment means a program for the residents of an applicant's
development that strives to end drug abuse and to eliminate its negative
effects through rehabilitation and relapse prevention.
Federally assisted low-income housing, or assisted housing, shall
have the meaning provided in 42 U.S.C. 11905(4). However, sections
221(d)(3) and 221(d)(4) market rate projects with tenant-based
assistance contracts and section 8 projects with tenant-based assistance
are not considered federally assisted
[[Page 18]]
low-income housing and are not eligible for funding under this part 761.
Governmental jurisdiction means the unit of general local
government, State, or area of operation of an Indian tribe in which the
housing development administered by the applicant is located.
In and around means within, or adjacent to, the physical boundaries
of a housing development.
Indian tribe means any tribe, band, pueblo, group, community, or
nation of Indians, or Alaska Natives.
Local law enforcement agency means a police department, sheriff's
office, or other entity of the governmental jurisdiction that has law
enforcement responsibilities for the community at large, including the
housing developments owned or administered by the applicant. In Indian
jurisdictions, this includes tribal prosecutors that assume law
enforcement functions analogous to a police department or the Bureau of
Indian Affairs (BIA). More than one law enforcement agency may have
these responsibilities for the jurisdiction that includes the
applicant's developments.
Problems associated with drug-related crime means the negative
physical, social, educational, and economic impact of drug-related crime
on assisted housing residents or public and Indian housing residents,
and the deterioration of the assisted housing or public and Indian
housing environment because of drug-related crime.
Program income means gross income received by a grantee and directly
generated from the use of program funds. When program income is
generated by an activity only partially assisted with program funds, the
income shall be prorated to reflect the percentage of program funds
used.
Resident council (RC), for purposes of the Public Housing Program,
means an incorporated or unincorporated nonprofit organization or
association that meets each of the following requirements:
(1) It must be representative of the residents it purports to
represent;
(2) It may represent residents in more than one development or in
all of the developments of a HA, but it must fairly represent residents
from each development that it represents;
(3) It must adopt written procedures providing for the election of
specific officers on a regular basis (but at least once every three
years); and
(4) It must have a democratically elected governing board. The
voting membership of the board must consist of residents of the
development or developments that the resident organization or resident
council represents.
Resident Management Corporation (RMC), for purposes of the Public
Housing Program, means the entity that proposes to enter into, or that
enters into, a management contract with a PHA under 24 CFR part 964 in
accordance with the requirements of that part, or with an IHA under 24
CFR part 950, or with an IHA in accordance with the requirements of this
part 761. The corporation must have each of the following
characteristics:
(1) It must be a nonprofit organization that is incorporated under
the laws of the State or the Indian tribe in which it is located;
(2) It may be established by more than one resident organization or
resident council, so long as each such organization or council:
(i) Approves the establishment of the corporation, and;
(ii) Has representation on the Board of Directors of the
corporation;
(3) It must have an elected Board of Directors;
(4) Its by-laws must require the Board of Directors to include
representatives of each resident organization or resident council
involved in establishing the corporation;
(5) Its voting members must be residents of the development or
developments it manages;
(6) It must be approved by the resident council or resident
organization. If there is no council or organization, a majority of the
households of the development must approve the establishment of such an
organization to determine the feasibility of establishing a corporation
to manage the development; and
(7) It may serve as both the resident management corporation and the
resident council or the resident organization, so long as the
corporation meets
[[Page 19]]
the requirements of part 964 of this chapter for a resident council or
the requirements of this part for a resident organization.
Resident organization (RO) shall have the same meaning as Resident
council (RC), as defined in this Sec. 761.10.
State means any of the several States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency or instrumentality of a
State exclusive of local governments. The term does not include any
public or Indian housing agency under the United States Housing Act of
1937 (42 U.S.C. 1437 note).
Unit of general local government means any city, county, town,
municipality, township, parish, village, local public authority
(including any public or Indian housing agency under the United States
Housing Act of 1937) or other general purpose political subdivision of a
State.
Subpart B--Use of Grant Funds
Sec. 761.15 Applicants and activities.
In any particular funding round, the separate Notices of Funding
Availability (NOFAs) published in the Federal Register will contain
specific information concerning eligible and ineligible applicants and
activities.
(a) Eligible applicants. (1) Under the Public Housing Drug
Elimination Program (PHDEP), specific information with regard to
eligible applicants will appear in the NOFA for each funding round.
(2) Under the Assisted Housing Program (AHDEP), eligible applicants
are owners of federally assisted low-income housing, as the term
``Federally assisted low-income housing'' is defined in Sec. 761.10.
(b) Eligible activities. An application for funding under the
Assisted Housing Program or the Public Housing Program may be for one or
more of the eligible activities described in 42 U.S.C. 11903, as further
explained or limited in paragraph (b) of this section and in the
separate annual Notices of Funding Availability (NOFAs) for each
program. All personnel funded by these programs in accordance with an
eligible activity must meet, and demonstrate compliance with, all
relevant Federal, State, tribal, or local government insurance,
licensing, certification, training, bonding, or other similar law
enforcement requirements.
(1) Employment of security personnel, as provided in 42 U.S.C.
11903(a)(1). For purposes of the Public Housing Program, the following
provisions in paragraphs (b)(1)(i) and (b)(1)(ii) of this section apply:
(i) Security guard personnel. (A) Contract security personnel funded
by this program must perform services not usually performed by local law
enforcement agencies on a routine basis.
(B) The applicant, the cooperating local law enforcement agency, and
the provider (contractor) of the security personnel are required, as a
part of the security personnel contract, to enter into and execute a
written agreement that describes the following:
(1) The activities to be performed by the security personnel, their
scope of authority, and how they will coordinate their activities with
the local law enforcement agency;
(2) The types of activities that the security personnel are
expressly prohibited from undertaking.
(ii) Employment of HA police. (A) If additional HA police are to be
employed for a service that is also provided by a local law enforcement
agency, the applicant must provide a cost analysis that demonstrates the
employment of HA police is more cost efficient than obtaining the
service from the local law enforcement agency.
(B) Additional HA police services to be funded under this program
must be over and above those that the existing HA police, if any,
provides, and the tribal, State or local government is contractually
obligated to provide under its Cooperation Agreement with the applying
HA (as required by the HA's Annual Contributions Contract). An applicant
seeking funding for this activity must first establish a baseline by
describing the current level of services provided by both the local law
enforcement agency and the HA police, if any (in terms of the kinds of
services provided, the number of officers and equipment and the actual
percent of their time assigned to the developments proposed for
funding), and then
[[Page 20]]
demonstrate to what extent the funded activity will represent an
increase over this baseline.
(C) The applicant and the cooperating local law enforcement agency
are required to enter into and execute a written agreement that
describes the following:
(1) The activities to be performed by the HA police, their scope of
authority, and how they will coordinate their activities with the local
law enforcement agency;
(2) The types of activities that the HA police are expressly
prohibited from undertaking.
(2) Reimbursement of local law enforcement agencies for additional
security and protective services, as provided in 42 U.S.C. 11903(a)(2).
For purposes of the Public Housing Program, the following provisions in
paragraphs (b)(2)(i) and (b)(2)(ii) of this section apply:
(i) Additional security and protective services to be funded must be
over and above those that the tribal, State, or local government is
contractually obligated to provide under its Cooperation Agreement with
the applying HA (as required by the HA's Annual Contributions Contract).
An application seeking funding for this activity must first establish a
baseline by describing the current level of services (in terms of the
kinds of services provided, the number of officers and equipment, and
the actual percent of their time assigned to the developments proposed
for funding) and then demonstrate to what extent the funded activity
will represent an increase over this baseline.
(ii) Communications and security equipment to improve the
collection, analysis, and use of information about drug-related criminal
activities in a public housing community may be eligible items if used
exclusively in connection with the establishment of a law enforcement
substation on the funded premises or scattered site developments of the
applicant. Funds for activities under this section may not be drawn
until the grantee has executed a contract for the additional law
enforcement services.
(3) Physical improvements to enhance security, as provided in 42
U.S.C. 11903(a)(3). For purposes of the Public Housing Program, the
following provisions in paragraphs (b)(3)(i) through (b)(3)(iv) of this
section apply:
(i) An activity that is funded under any other HUD program shall not
also be funded by this program.
(ii) Funding is not permitted for physical improvements that involve
the demolition of any units in a development.
(iii) Funding is not permitted for any physical improvements that
would result in the displacement of persons.
(iv) Funding is not permitted for the acquisition of real property.
(4) Employment of investigating individuals, as provided in 42
U.S.C. 11903(a)(4). For purposes of the Public Housing Program, the
following provisions in paragraphs (b)(4)(i) and (b)(4)(ii) of this
section apply:
(i) If one or more investigators are to be employed for a service
that is also provided by a local law enforcement agency, the applicant
must provide a cost analysis that demonstrates the employment of
investigators is more cost efficient than obtaining the service from the
local law enforcement agency.
(ii) The applicant, the cooperating local law enforcement agency,
and the investigator(s) are required, before any investigators are
employed, to enter into and execute a written agreement that describes
the following:
(A) The nature of the activities to be performed by the
investigators, their scope of authority, and how they will coordinate
their activities with the local law enforcement agency;
(B) The types of activities that the investigators are expressly
prohibited from undertaking.
(5) Voluntary tenant patrols, as provided in 42 U.S.C. 11903(a)(5).
For purposes of the Public Housing Program, the following provisions in
paragraphs (b)(5)(i) through (b)(5)(iv) of this section apply:
(i) The provision of training, communications equipment, and other
related equipment (including uniforms), for use by voluntary tenant
patrols acting in cooperation with officials of local law enforcement
agencies is permitted. Grantees are required to obtain liability
insurance to protect themselves
[[Page 21]]
and the members of the voluntary tenant patrol against potential
liability for the activities of the patrol. The cost of this insurance
will be considered an eligible program expense.
(ii) The applicant, the cooperating local law enforcement agency,
and the members of the tenant patrol are required, before putting the
tenant patrol into effect, to enter into and execute a written agreement
that describes the following:
(A) The nature of the activities to be performed by the tenant
patrol, the patrol's scope of authority, and how the patrol will
coordinate its activities with the local law enforcement agency;
(B) The types of activities that a tenant patrol is expressly
prohibited from undertaking, to include but not limited to, the carrying
or use of firearms or other weapons, nightsticks, clubs, handcuffs, or
mace in the course of their duties under this program;
(C) The type of initial tenant patrol training and continuing
training the members receive from the local law enforcement agency
(training by the local law enforcement agency is required before putting
the tenant patrol into effect).
(iii) Tenant patrol members must be advised that they may be subject
to individual or collective liability for any actions undertaken outside
the scope of their authority and that such acts are not covered under a
HA's or RMC's liability insurance.
(iv) Grant funds may not be used for any type of financial
compensation for voluntary tenant patrol participants. However, the use
of program funds for a grant coordinator for volunteer tenant foot
patrols is permitted.
(6) Drug prevention, intervention, and treatment programs, as
provided in 42 U.S.C. 11903(a)(6).
(7) Funding resident management corporations (RMCs), resident
councils (RCs), and resident organizations (ROs). For purposes of the
Public Housing Program, funding may be provided for HAs that receive
grants to contract with RMCs and incorporated RCs and ROs to develop
security and drug abuse prevention programs involving site residents, as
provided in 42 U.S.C. 11903(a)(7).
(8) Eliminating drug-related crime in HA-owned housing, under the
Public Housing Program, as provided in 42 U.S.C. 11903(b).
(c) Continuation of current program activities. For purposes of both
drug elimination programs, the Department will evaluate an applicant's
performance under any previous Drug Elimination Program grants within
the past five years. Subject to evaluation and review are the
applicant's financial and program performance; reporting and special
condition compliance; accomplishment of stated goals and objectives
under the previous grant; and program adjustments made in response to
previous ineffective performance. If the evaluation discloses a pattern
under past grants of ineffective performance with no corrective measures
attempted, it will result in a deduction of points from the current
application.
(d) Ineligible activities. For purposes of the Public Housing
Program, the following provisions in paragraph (d) of this section
apply:
(1) Joint applications are not eligible for funding under this
program.
(2) Funding is not permitted for costs incurred before the effective
date of the grant agreement, including, but not limited to, consultant
fees for surveys related to the application or the actual writing of the
application.
(3) Funding is not permitted for the costs related to screening or
evicting residents for drug-related crime. However, investigators funded
under this program may participate in judicial and administrative
proceedings.
Subpart C--Application and Selection
Sec. 761.20 Application selection and requirements.
(a) Selection criteria. HUD will review each application that it
determines meets the requirements of this part 761 and evaluate it by
assigning points in accordance with the selection criteria in 42 U.S.C.
11904 and in the separate NOFAs published for each program.
(b) Plan requirement. Each application must include a plan for
addressing the problem of drug-related crime and/or the problems
associated with it on the premises of the housing for which the
[[Page 22]]
application is being submitted. For applications that cover more than
one development, the plan does not have to address each development
separately if the same activities will apply to each development. The
plan must address each development separately only where program
activities will differ from one development to another.
(c) Notices of Funding Availability. HUD will publish specific
Notices of Funding Availability (NOFAs) in the Federal Register as
appropriate for each program to inform the public of the availability of
grant amounts under this part 761. The NOFAs will provide specific
guidance with respect to the grant process, including the deadlines for
the submission of grant applications; the limits (if any) on maximum
grant amounts; the information that must be submitted to permit HUD to
score each of the selection criteria; the maximum number of points to be
awarded for each selection criterion; the contents of the plan for
addressing drug-related crime and problems associated with it that must
be included with the application; the listing of any certifications and
assurances that must be submitted with the application; and the process
for ranking and selecting applicants. NOFAs will also include any
additional information, factors, and requirements that HUD has
determined to be necessary and appropriate to provide for the
implementation and administration of the program under this part 761.
(d) Environmental review. Grants under this part 761 are
categorically excluded from review under the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321), in accordance with 24 CFR
50.20(p). However, prior to an award of grant funds under this part, HUD
will perform an environmental review to the extent required by HUD's
environmental regulations in 24 CFR part 50, including the applicable
related authorities in 24 CFR 50.4.
Sec. 761.25 Resident comments on grant application.
The applicant must provide the residents of developments proposed
for funding under this part 761, as well as any RMCs, RCs, or ROs that
represent those residents (including any HA-wide RMC, RC, or RO), if
applicable, with a reasonable opportunity to comment on its application
for funding under these programs. The applicant must give these comments
careful consideration in developing its plan and application, as well as
in the implementation of funded programs. Grantees must maintain copies
of all written comments submitted for three years.
Subpart D--Grant Administration
Sec. 761.30 Grant administration.
(a) General. Each grantee is responsible for ensuring that grant
funds are administered in accordance with the requirements of this part
761, any specific Notices of Funding Availability (NOFAs) issued for
these programs, 24 CFR part 85 (as applicable), applicable laws and
regulations, applicable OMB circulars, HUD fiscal and audit controls,
grant agreements, grant special conditions, the grantee's approved
budget (SF-424A), budget narrative, plan, and activity timetable.
(b) Grant term extensions. (1) Grant term. Terms of the grant
agreement may not exceed 12 months for the Assisted Housing Program, and
24 months for the Public Housing Program, unless an extension is
approved by the local HUD Office or local HUD Office of Native American
Programs. Any funds not expended at the end of the grant term shall be
remitted to HUD.
(2) Extension. HUD may grant an extension of the grant term in
response to a written request for an extension stating the need for the
extension and indicating the additional time required. HUD will not
consider requests for retroactive extension of program periods. HUD will
permit only one extension. HUD will only consider extensions if the
grantee meets the extension criteria of paragraph (b)(5) of this section
at the time the grantee submits for approval the request for the
extension.
(3) Receipt. The request must be received by the local HUD Office or
local HUD Office of Native American Programs prior to the termination of
the grant, and requires approval by the local HUD Office or local HUD
Office of
[[Page 23]]
Native American Programs with jurisdiction over the grantee.
(4) Term. The maximum extension allowable for any program period is
6 months.
(5) Extension criteria. The following criteria must be met by the
grantee when submitting a request to extend the expenditure deadline for
a program or set of programs.
(i) Financial status reports. There must be on file with the local
HUD Office or local HUD Office of Native American Programs current and
acceptable Financial Status Reports, SF-269As.
(ii) Grant agreement special conditions. The grantee must have
satisfied all grant agreement special conditions except those conditions
that the grantee must fulfill in the remaining period of the grant. This
also includes the performance and resolution of audit findings in a
timely manner.
(iii) Justification. The grantee must submit a narrative
justification with the program extension request. The justification must
provide complete details, including the circumstances that require the
proposed extension, and an explanation of the impact of denying the
request.
(6) HUD action. The local HUD Office or local HUD Office of Native
American Programs will attempt to take action on any proposed extension
request within 15 days after receipt of the request.
(c) Duplication of funds. To prevent duplicate funding of any
activity, the grantee must establish controls to assure that an activity
or program that is funded by other HUD programs, or programs of other
Federal agencies, shall not also be funded by the Drug Elimination
Program. The grantee must establish an auditable system to provide
adequate accountability for funds that it has been awarded. The grantee
is responsible for ensuring that there is no duplication of funds.
(d) Insurance. Each grantee shall obtain adequate insurance coverage
to protect itself against any potential liability arising out of the
eligible activities under this part. In particular, applicants shall
assess their potential liability arising out of the employment or
contracting of security personnel, law enforcement personnel,
investigators, and drug treatment providers, and the establishment of
voluntary tenant patrols; evaluate the qualifications and training of
the individuals or firms undertaking these functions; and consider any
limitations on liability under tribal, State, or local law. Grantees
shall obtain liability insurance to protect the members of the voluntary
tenant patrol against potential liability as a result of the patrol's
activities under Sec. 761.15(b)(5). Voluntary tenant patrol liability
insurance costs are eligible program expenses. Subgrantees shall obtain
their own liability insurance.
(e) Failure to implement program. If the grant plan, approved
budget, and timetable, as described in the approved application, are not
operational within 60 days of the grant agreement date, the grantee must
report by letter to the local HUD Office or the local HUD Office of
Native American Programs the steps being taken to initiate the plan and
timetable, the reason for the delay, and the expected starting date. Any
timetable revisions that resulted from the delay must be included. The
local HUD Office or local HUD Office of Native American Programs will
determine if the delay is acceptable, approve/disapprove the revised
plan and timetable, and take any additional appropriate action.
(f) Sanctions. (1) HUD may impose sanctions if the grantee:
(i) Is not complying with the requirements of this part 761, or of
other applicable Federal law;
(ii) Fails to make satisfactory progress toward its drug elimination
goals, as specified in its plan and as reflected in its performance and
financial status reports;
(iii) Does not establish procedures that will minimize the time
elapsing between drawdowns and disbursements;
(iv) Does not adhere to grant agreement requirements or special
conditions;
(v) Proposes substantial plan changes to the extent that, if
originally submitted, the applications would not have been selected for
funding;
(vi) Engages in the improper award or administration of grant
subcontracts;
(vii) Does not submit reports; or
[[Page 24]]
(viii) Files a false certification.
(2) HUD may impose the following sanctions:
(i) Temporarily withhold cash payments pending correction of the
deficiency by the grantee or subgrantee;
(ii) Disallow all or part of the cost of the activity or action not
in compliance;
(iii) Wholly or partly suspend or terminate the current award for
the grantee's or subgrantee's program;
(iv) Require that some or all of the grant amounts be remitted to
HUD;
(v) Condition a future grant and elect not to provide future grant
funds to the grantee until appropriate actions are taken to ensure
compliance;
(vi) Withhold further awards for the program; or
(vii) Take other remedies that may be legally available.
Sec. 761.35 Periodic grantee reports.
Grantees are responsible for managing the day-to-day operations of
grant and subgrant supported activities. Grantees must monitor grant and
subgrant supported activities to assure compliance with applicable
Federal requirements and that performance goals are being achieved.
Grantee monitoring must cover each program, function or activity of the
grant.
(a) Semi-annual (nonconstruction) performance reports. For purposes
of the Public Housing Program only, the following provisions in
paragraph (a) of this section apply:
(1) In accordance with 24 CFR 85.40(b)(1)(2) and 85.50(b), grantees
are required to provide the local HUD Office or the local HUD Office of
Native American Programs with a semi-annual performance report that
evaluates the grantee's performance against its plan. These reports
shall include (but are not limited to) the following in summary form:
(i) Any change or lack of change in crime statistics or other
indicators drawn from the applicant's plan assessment and an explanation
of any difference;
(ii) Successful completion of any of the strategy components
identified in the applicant's plan;
(iii) A discussion of any problems encountered in implementing the
plan and how they were addressed;
(iv) An evaluation of whether the rate of progress meets
expectations;
(v) A discussion of the grantee's efforts in encouraging resident
participation; and
(vi) A description of any other programs that may have been
initiated, expanded, or deleted as a result of the plan, with an
identification of the resources and the number of people involved in the
programs and their relation to the plan.
(2) Reporting period. Semi-annual performance reports (for periods
ending June 30 and December 31) are due to the local HUD Office or the
local HUD Office of Native American Programs on July 30 and January 31
of each year. If the reports are not received by the local HUD Office or
the local HUD Office of Native American Programs on or before the due
date, grant funds will not be advanced until the reports are received.
(b) Final performance report. For purposes of both the Assisted
Housing Program and the Public Housing Program, the following provisions
in paragraph (b) of this section apply:
(1) Evaluation. Grantees are required to provide the local HUD
Office or the local HUD Office of Native American Programs, as
applicable, with a final cumulative performance report that evaluates
the grantee's overall performance against its plan. This report shall
include (but is not limited to) the information listed in paragraphs
(a)(1)(i) through (a)(1)(vi) of this section, in summary form.
(2) Reporting period. The final performance report shall cover the
period from the date of the grant agreement to the termination date of
the grant agreement. The report is due to the local HUD Office or the
local HUD Office of Native American Programs, as applicable, within 90
days after termination of the grant agreement.
(c) Semi-annual financial status reporting requirements. For
purposes of both the Assisted Housing Program and the Public Housing
Program, the following provisions in paragraph (c) of this section
apply, as specified below:
[[Page 25]]
(1) Forms. The grantee shall provide a semi-annual financial status
report. For purposes of the Public Housing Program, this report shall be
in accordance with 24 CFR 85.41 (b) and (c). For both the Assisted
Housing and Public Housing Programs, the grantee shall use the form SF-
269A, Financial Status Report-Long Form, to report the status of funds
for nonconstruction programs. The grantee shall use SF-269A, block 12,
``Remarks,'' to report on the status of programs, functions, or
activities within the program.
(2) Reporting period. Semi-annual financial status reports (SF-269A)
must be submitted as follows:
(i) For purposes of the Assisted Housing Program, semi-annual
financial status reports covering the first 180 days of funded
activities must be submitted to the local HUD Office between 190 and 210
days after the date of the grant agreement. If the SF-269A is not
received on or before the due date (210 days after the date of the grant
agreement) by the local HUD Office, grant funds will not be advanced
until the reports are received.
(ii) For purposes of the Public Housing Program, semi-annual
financial status reports (for periods ending June 30 and December 31)
must be submitted to the local HUD Office or the local Office of Indian
Programs, as applicable, by July 30 and January 31 of each year. If the
local HUD Office or the local HUD Office of Native American Programs, as
applicable, does not receive the SF-269A on or before the due date, the
grant funds will not be advanced until the reports are received.
(d) Final financial status report (SF-269A). For purposes of both
the Assisted Housing Program and the Public Housing Program, the
following provisions in paragraph (d) of this section apply:
(1) Cumulative summary. The final report will be a cumulative
summary of expenditures to date and must indicate the exact balance of
unexpended funds. The grantee shall remit all Drug Elimination Program
funds owed to HUD, including any unexpended funds, as follows:
(i) For purposes of the Assisted Housing Program, the grantee must
remit such funds to HUD within 90 days after the termination of the
grant agreement.
(ii) For purposes of the Public Housing Program, the local HUD
Office or the local HUD Office of Native American Programs shall notify
the grantee, in writing, of the requirement to remit such funds to HUD.
The grantee shall remit such funds prior to or upon receipt of the
notice.
(2) Reporting period. The final financial status report shall cover
the period from the date of the grant agreement to the termination date
of the grant agreement. The report is due to the local HUD Office or the
local HUD Office of Native American Programs, as applicable, within 90
days after the termination of the grant agreement.
Sec. 761.40 Other Federal requirements.
In addition to the nondiscrimination and equal opportunity
requirements set forth in 24 CFR part 5, subpart A, use of grant funds
requires compliance with the following Federal requirements:
(a) Labor standards. (1) When grant funds are used to undertake
physical improvements to increase security under Sec. 761.15(b)(3), the
following labor standards apply:
(i) The grantee and its contractors and subcontractors must pay the
following prevailing wage rates, and must comply with all related rules,
regulations and requirements:
(A) For laborers and mechanics employed in the program, the wage
rate determined by the Secretary of Labor pursuant to the Davis-Bacon
Act (40 U.S.C. 276a et seq.) to be prevailing in the locality with
respect to such trades;
(B) For laborers and mechanics employed in carrying out nonroutine
maintenance in the program, the HUD-determined prevailing wage rate. As
used in paragraph (a) of this section, nonroutine maintenance means work
items that ordinarily would be performed on a regular basis in the
course of upkeep of a property, but have become substantial in scope
because they have been put off, and that involve expenditures that would
otherwise materially distort the level trend of maintenance expenses.
Nonroutine maintenance may include replacement of
[[Page 26]]
equipment and materials rendered unsatisfactory because of normal wear
and tear by items of substantially the same kind. Work that constitutes
reconstruction, a substantial improvement in the quality or kind of
original equipment and materials, or remodeling that alters the nature
or type of housing units is not nonroutine maintenance.
(ii) The employment of laborers and mechanics is subject to the
provisions of the Contract Work Hours and Safety Standards Act (40
U.S.C. 327-333).
(2) The provisions of paragraph (a)(1) of this section shall not
apply to labor contributed under the following circumstances:
(i) Upon the request of any resident management corporation, HUD
may, subject to applicable collective bargaining agreements, permit
residents (for purposes of the Public Housing Program, residents of a
program managed by the resident management corporation) to volunteer a
portion of their labor.
(ii) An individual may volunteer to perform services if:
(A) The individual does not receive compensation for the voluntary
services, or is paid expenses, reasonable benefits, or a nominal fee for
voluntary services; and
(B) Is not otherwise employed at any time in the work subject to
paragraphs (a)(1)(i)(A) or (a)(1)(i)(B) of this section.
(b) Flood insurance. Grants will not be awarded for proposed
activities that involve acquisition, construction, reconstruction,
repair or improvement of a building or mobile home located in an area
that has been identified by the Federal Emergency Management Agency
(FEMA) as having special flood hazards unless:
(1) The community in which the area is situated is participating in
the National Flood Insurance Program in accordance with 44 CFR parts 59
through 79; or
(2) Less than a year has passed since FEMA notification to the
community regarding such hazards; and
(3) Flood insurance on the structure is obtained in accordance with
section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4001).
(c) Lead-based paint. The provisions of section 302 of the Lead-
Based Paint Poisoning Prevention Act, 42 U.S.C. 4821-4846, and
implementing regulations in 24 CFR part 965, subpart H apply to
activities under these programs as set out in this paragraph (c).
Paragraph (c) of this section is promulgated pursuant to the authority
granted in 24 CFR 35.24(b)(4) and supersedes, with respect to all
housing to which it applies, the requirements (not including
definitions) prescribed by subpart C of 24 CFR part 35.
(1) Applicability. The provisions of paragraph (c) of this section
shall apply to all developments constructed or substantially
rehabilitated before January 1, 1978, and for which assistance under
this part is being used for physical improvements to enhance security
under Sec. 761.15(b)(3).
(2) Definitions. The term applicable surfaces means all intact and
nonintact interior and exterior painted surfaces of a residential
structure.
(3) Exceptions. The following activities are not covered by this
section:
(i) Installation of security devices;
(ii) Other similar types of single-purpose programs that do not
involve physical repairs or remodeling of applicable surfaces of
residential structures; or
(iii) Any non-single-purpose rehabilitation that does not involve
applicable surfaces and that does not exceed $3,000 per unit.
(d) Conflicts of interest. In addition to the conflict of interest
requirements in 24 CFR part 85 for the Public Housing Program, no
person, as described in paragraphs (d)(1) and (d)(2) of this section,
may obtain a personal or financial interest or benefit from an activity
funded under these drug elimination programs, or have an interest in any
contract, subcontract, or agreement with respect thereto, or the
proceeds thereunder, either for him or herself or for those with whom he
or she has family or business ties, during his or her tenure, or for one
year thereafter:
(1) Who is an employee, agent, consultant, officer, or elected or
appointed official of the grantee, that receives assistance under the
program and who
[[Page 27]]
exercises or has exercised any functions or responsibilities with
respect to assisted activities; or
(2) Who is in a position to participate in a decisionmaking process
or gain inside information with regard to such activities.
(e) For IHAs, Sec. 950.115 of this title, ``Applicability of civil
rights requirements,'' and Sec. 950.120 of this title, ``Compliance with
other Federal requirements,'' apply and control to the extent they may
differ from other requirements of this section;
(f) Indian preference. For purposes of the Public Housing Program,
applicants are subject to the Indian Civil Rights Act (24 U.S.C. 1301),
the provisions of section 7(b) of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450e(b)), and the Indian preference
rules in the IHA procurement regulations at 24 CFR 950, subpart B. These
provisions require that, to the greatest extent feasible, preference and
opportunities for training and employment be given to Indians, and that
preference in the award of subcontracts and subgrants be given to Indian
Organizations and Indian Owned Economic Enterprises.
(g) Intergovernmental Review. The requirements of Executive Order
12372 (3 CFR, 1982 Comp., p. 197) and the regulations issued under the
Order in 24 CFR part 52, to the extent provided by Federal Register
notice in accordance with 24 CFR 52.3, apply to these programs.
PARTS 762-790 [RESERVED]
PART 791--REVIEW OF APPLICATIONS FOR HOUSING ASSISTANCE AND ALLOCATIONS OF HOUSING ASSISTANCE FUNDS--Table of Contents
Subpart A--General Provisions
Sec.
791.101 Applicability and scope.
791.102 Definitions.
Subpart B--[Reserved]
Subpart C--Applications for Housing Assistance
791.301 General.
791.302 Finding of need for housing assistance.
791.303 Notification of local government.
791.304 Review and comment period.
791.305 HUD review of applications for housing assistance.
Subpart D--Allocation of Budget Authority for Housing Assistance
791.401 General.
791.402 Determination of low-income housing needs.
791.403 Allocation of housing assistance.
791.404 Field Office allocation planning.
791.405 Reallocations of budget authority.
791.406 Competition.
791.407 Headquarters Reserve.
Authority: 42 U.S.C. 1439 and 3535(d).
Source: 61 FR 10849, Mar. 15, 1996, unless otherwise noted.
Subpart A--General Provisions
Sec. 791.101 Applicability and scope.
This part describes the roles and responsibilities of HUD and local
governments under section 213 of the Housing and Community Development
Act of 1974 (42 U.S.C. 1437). It applies to the allocation of budget
authority, and the review and approval of applications for housing
assistance under the United States Housing Act of 1937 (42 U.S.C. 1437-
1437q), section 101 of the Housing and Urban Development Act of 1965 (12
U.S.C. 1701s), and with respect to subpart D only, section 202 of the
Housing Act of 1959 (12 U.S.C. 1710q), except as follows:
(a) This part does not apply to programs for public housing
operating subsidy, public housing modernization, or rental
rehabilitation grant assistance under section 9, 14, or 17 of the United
States Housing Act of 1937; and
(b) Subpart D of this part does not apply to the allocation of
budget authority for housing development grant assistance under section
17 of the U.S. Housing Act of 1937.
Sec. 791.102 Definitions.
Act. The Housing and Community Development Act of 1974 (42 U.S.D.
1437), as amended.
Allocation area. A municipality, county, or group of municipalities
or counties or Indian areas identified by the HUD field office for the
purpose of allocating housing assistance.
[[Page 28]]
Application for housing assistance. The first submission to HUD for
housing assistance under one of the programs identified in
Sec. 791.101(a). For the purposes of this part, the term includes an
application, a preliminary proposal, or a proposal, so long as it meets
the applicable program regulations. For the public housing program, the
first application identifying a project site will be considered the
application for housing assistance.
Assistant Secretary. The Assistant Secretary for Housing or the
Assistant Secretary for Public and Indian Housing, as appropriate to the
housing assistance under consideration.
Budget authority. The maximum amount authorized by the Congress for
payments over the term of assistance contracts.
Chief executive officer. The elected official or legally designated
official who has the primary responsibility for conducting the
governmental affairs of a unit of general local government. Examples of
the ``chief executive officer'' include: the elected mayor of a
municipality; the elected county executive of a county; the presiding
officer of a county commission or board in a county that has no elected
county executive; the official designated by the governing body of the
local government pursuant to law (e.g., the city manager or city
administrator); and the chairman, governor, chief or president of an
Indian tribe or Alaskan native village.
Fiscal year. The official operating period of the Federal
government, beginning on October 1 and ending on September 30.
Household type. The three household types are: elderly, small
family, and large family. References to household type shall mean the
household type within the appropriate tenure type.
Housing type. The three housing types are:
(1) New construction;
(2) Rehabilitation; and
(3) Existing housing.
Local government. Any city, county, town, township, parish, village
or other unit of general local government which is a general purpose
political subdivision of a State or the Commonwealth of Puerto Rico;
Guam, the Commonwealth of the Northern Marianas, the Virgin Islands and
American Samoa, or a general purpose political subdivision thereof; a
combination of such political subdivisions recognized by the Secretary
of HUD: the District of Columbia; the former Trust Territories of the
Pacific Islands, as applicable ; Indian tribes, bands, groups and
nations, including Alaska Indians, Aleuts and Eskimos; and any Alaskan
native village of the United States. The term also includes a State or
local public body or agency, community association, or other entity
which is approved by HUD to provide public facilities or services to a
new community meeting the requirements of Title IV of the Housing and
Urban Development Act of 1968 (42 U.S.C. 3901) or Title VII of the
Housing and Urban Development Act of 1970 (42 U.S.C. 4501).
Metropolitan area. See MSA.
MSA. A metropolitan statistical area established by the Office of
Management and Budget. The term also includes primary metropolitan
statistical areas (PMSAs), which are the component parts of larger
urbanized areas designated as consolidated metropolitan statistical
areas (CMSAs). Where an MSA is divided among two or more field offices,
references to an MSA mean the portion of the MSA within the State/Area
Office jurisdiction.
Public housing agency. Any State, county, municipality, or other
governmental entity or public body (or agency or instrumentality
thereof) which is authorized to engage in or assist in the development
or operation of housing for low-income families.
Tenure type. The two tenure types are owners and renters.
Urban county. Any county within a metropolitan area which is
authorized under State law to undertake essential community development
and housing assistance activities in its unincorporated areas, and which
meets the other requirements of 24 CFR 570.307 for qualification as an
urban county.
[[Page 29]]
Subpart B--[Reserved]
Subpart C--Applications for Housing Assistance
Sec. 791.301 General.
This subpart C establishes the policies and procedures governing
reviews and determinations, pursuant to section 213(c) of the Act, with
respect to applications for housing assistance, under the programs
identified in Sec. 791.101(a).
Sec. 791.302 Finding of need for housing assistance.
With respect to each application for housing assistance, the field
office is required to make a determination as to whether there is a need
for such housing and whether the public facilities and services
available in the area will be adequate to serve the proposed housing.
(a) The initial determination of need for housing assistance within
an allocation area is made as part of the allocation process in
Sec. 791.404. In making this determination, the field office shall give
consideration to the contents of any applicable State or areawide
housing plan proposing housing assistance in the area, as well as
generally available data on population, poverty, housing overcrowding,
housing vacancies, amount of substandard housing, or other objectively
measurable conditions pertaining to low-income housing needs.
(b) Prior to making a determination with regard to a specific
application, the field office shall give the local government in which
the proposed assistance is to be provided an opportunity to provide
comments, during a 30-calendar-day period, concerning the need for
housing assistance and the adequacy of public facilities and services.
If the local government finding is negative, it must be accompanied by
supporting evidence.
Sec. 791.303 Notification of local government.
(a) The field office shall notify the chief executive officer no
later than 10 working days after receipt (or completion of any
preliminary review and determination that the application is acceptable
for further processing) that an application for housing assistance to be
provided in that jurisdiction has been received and is under
consideration.
(1) When the application is for housing assistance in newly
constructed or rehabilitated housing within the overlapping
jurisdictions of more than one local government (e.g., a municipality
which is also within a county), the field office shall notify the chief
executive officer of each local government.
(2) When the application is for housing assistance in newly
constructed or rehabilitated housing within several nonoverlapping
political jurisdictions (e.g., a scattered site project), the field
office shall notify the chief executive officer of each local government
where housing assistance is proposed.
(3) For a Section 8 existing housing, moderate rehabilitation, or
housing voucher application submitted in accordance with 24 CFR part
982, the field office shall notify the chief executive officers of the
localities that are identified in the application as:
(i) Primary areas from which households to be assisted under the
existing housing program will be drawn; or
(ii) Primary areas in which units will be rehabilitated under the
moderate rehabilitation program.
(b) The notification to the chief executive officer shall:
(1) Indicate that the field office has received and is considering
an application for housing assistance, and identify the housing program,
the housing type, the number of units by bedroom size and household
type, and the proposed location(s).
(2) Invite the submission, within a period of 30 calendar days from
the date of the field office letter, of a statement on behalf of the
local government concerning the need for housing assistance and the
adequacy of public facilities and services and any other comments which
are relevant to a determination by the field office concerning the
proposed housing assistance (e.g., comments on the site; whether the
project is approvable under local codes and zoning ordinances).
[[Page 30]]
Sec. 791.304 Review and comment period.
The chief executive officer shall have a 30-calendar day comment
period, beginning on the date of the notification letter described in
Sec. 791.303, to submit written comments relevant to a determination by
the field office concerning the approval of an application for housing
assistance. The field office shall consider the comment period closed
when the written comments are received. In no case shall the Program
Office Director in the field office be obligated to consider subsequent
or revised comments unless the initial response indicated that
additional comments would be provided and such comments are received
prior to the expiration of the 30-day comment period. As an alternative
to this process, the chief executive officer may submit any comments on
the application with the application at the time it is submitted to HUD.
Such early comment shall state whether such comment is intended to be
the final comment, notwithstanding the 30-day period otherwise provided
under this paragraph.
Sec. 791.305 HUD review of applications for housing assistance.
(a) The field office shall not approve an application for housing
assistance prior to either:
(1) Receipt of comments pursuant to Sec. 791.304; or
(2) Expiration of the 30-day comment period, whichever occurs
earlier.
(b) In determining whether an application will be approved, the
field office shall consider the comments provided by the local
government including comments submitted by the chief executive officer
on behalf of the local government. The field office shall make an
independent determination as to whether there is a need for housing
assistance and whether facilities and services are adequate before
approving the application.
(c) The field office shall promptly notify both the chief executive
officer and the applicant of the HUD determination with respect to the
approval or disapproval of the application for housing assistance.
Subpart D--Allocation of Budget Authority for Housing Assistance
Sec. 791.401 General.
This subpart D establishes the procedures for allocating budget
authority under section 213(d) of the Act for the programs identified in
Sec. 791.101(a). It describes the allocation of budget authority by the
appropriate Assistant Secretary to the applicable Program Office
Director in the HUD field office, and by the Program Office Director to
allocation areas within their jurisdiction.
Sec. 791.402 Determination of low-income housing needs.
(a) Before budget authority is allocated, the Assistant Secretary
for Policy Development and Research shall determine the relative need
for low-income housing assistance in each HUD field office jurisdiction.
This determination shall be based upon data from the most recent,
available decennial census and, where appropriate, upon more recent data
from the Bureau of the Census or other Federal agencies, or from the
American Housing Survey.
(b) Except for paragraph (c) of this section, the factors used to
determine the relative need for assistance shall be based upon the
following criteria:
(1) Population. The renter population;
(2) Poverty. The number of renter households with annual incomes at
or below the poverty level, as defined by the Bureau of the Census;
(3) Housing overcrowding. The number of renter-occupied housing
units with an occupancy ratio of 1.01 or more persons per room;
(4) Housing vacancies. The number of renter housing units that would
be required to maintain vacancies at levels typical of balanced market
conditions;
(5) Substandard housing. The number of housing units built before
1940 and occupied by renter households with annual incomes at or below
the poverty level, as defined by the Bureau of the Census; and
(6) Other objectively measurable conditions. Data indicating
potential need for rental housing assistance, such as the number of
renter households with incomes below specified levels and paying a gross
rent of more than 30 percent of household income.
[[Page 31]]
(c)(1) For the section 202 elderly program, the data used shall
reflect relevant characteristics of the elderly population. The data
shall use the criteria specified in paragraph (b)(1) and (6) of this
section, as modified to apply specifically to the needs of the elderly
population.
(2) Budget authority for the Indian housing program under 24 CFR
part 905 shall be allocated on the basis of the relative housing needs
of the Indian tribal population, as measured by the Bureau of Indian
Affairs, and by data for non-BIA recognized groups served by the Indian
housing program.
(d) Based on the criteria in paragraphs (b) and (c)(1) of this
section, the Assistant Secretary for Policy Development and Research
shall establish housing needs factors for each county and independent
city in the field office jurisdiction, and shall aggregate the factors
into metropolitan and nonmetropolitan totals for the field office. The
field office total for each metropolitan and nonmetropolitan factor is
then divided by the respective national total for that factor. The
resulting housing needs ratios under paragraph (b) of this section are
then weighted to provide metropolitan and nonmetropolitan housing needs
percentages for each field office, using the following weights:
Population, 20 percent; poverty, 20 percent; housing overcrowding, 10
percent; housing vacancies, 10 percent; substandard housing, 20 percent;
other objectively measurable conditions, 20 percent. For the section 202
elderly program, the two criteria described in paragraph (c)(1) of this
section are weighted equally.
(e) The Assistant Secretary for Policy Development and Research
shall adjust the housing needs percentages derived in paragraph (d) of
this section to reflect the relative cost of providing housing among the
field office jurisdictions.
Sec. 791.403 Allocation of housing assistance.
(a) The total budget authority available for any fiscal year shall
be determined by adding any available, unreserved budget authority from
prior fiscal years to any newly appropriated budget authority for each
housing program. On a nationwide basis, at least 20 percent, but not
more than 25 percent, of the total budget authority available for any
fiscal year, which is allocated pursuant to paragraph (b)(2) of this
section and any amounts which are retained pursuant to Sec. 791.407,
shall be allocated for use in nonmetropolitan areas.
(b) Budget authority available for the fiscal year, except for that
retained pursuant to Sec. 791.407, shall be allocated to the field
offices as follows:
(1) Budget authority shall be allocated as needed for uses that the
Secretary determines are incapable of geographic allocation by formula,
including--
(i) Amendments of existing contracts, renewal of assistance
contracts, assistance to families that would otherwise lose assistance
due to the decision of the project owner to prepay the project mortgage
or not to renew the assistance contract, assistance to prevent
displacement or to provide replacement housing in connection with the
demolition or disposition of public and Indian housing, assistance in
support of the property disposition and loan management functions of the
Secretary;
(ii) Assistance which is--
(A) The subject of a line item identification in the HUD
appropriations law, or in the table customarily included in the
Conference Report on the appropriation for the Fiscal Year in which the
funds are to be allocated;
(B) Reported in the Operating Plan submitted by HUD to the
Committees on Appropriations; or
(C) Included in an authorization statute where the nature of the
assistance, such as a prescribed set-aside, is, in the determination of
the Secretary, incapable of geographic allocation by formula,
(iii) Assistance determined by the Secretary to be necessary in
carrying out the following programs authorized by the Cranston-Gonzalez
National Affordable Housing Act: the Homeownership and Opportunity
Through HOPE Act under title IV and HOPE for Elderly Independence under
section 803.
(2) Budget authority remaining after carrying out allocation steps
outlined in paragraph (b)(1) of this section shall
[[Page 32]]
be allocated in accordance with the housing needs percentages calculated
under paragraphs (b), (c), (d), and (e) of Sec. 791.402. HUD may
allocate assistance under this paragraph in such a manner that each
State shall receive not less than one-half of one percent of the amount
of funds available for each program referred to in Sec. 791.101(a) in
each fiscal year. If the budget authority for a particular program is
insufficient to fund feasible projects, or to promote meaningful
competition, at the field office level, budget authority may be
allocated among the ten geographic areas of the country. The funds so
allocated will be assigned by Headquarters to the field office(s) with
the highest ranked applications within the ten geographic areas.
(c) At least annually HUD will publish a notice in the Federal
Register informing the public of all allocations under
Sec. 791.403(b)(2).
Sec. 791.404 Field Office allocation planning.
(a) General objective. The allocation planning process should
provide for the equitable distribution of available budget authority,
consistent with the relative housing needs of each allocation area
within the field office jurisdiction.
(b) Establishing allocation areas. Allocation areas, consisting of
one or more counties or independent cities, shall be established by the
field office in accordance with the following criteria:
(1) Each allocation shall be to the smallest practicable area, but
of sufficient size so that at least three eligible entities are viable
competitors for funds in the allocation area, and so that all applicable
statutory requirements can be met. (It is expected that in many
instances individual MSAs will be established as metropolitan allocation
areas.) For the section 202 program for the elderly, the allocation area
must include sufficient units to promote a meaningful competition among
disparate types of providers of such housing (e.g., local as well as
national sponsors, minority as well as non-minority sponsors). The
preceding sentence shall not apply to projects acquired from the
Resolution Trust Corporation under section 21A(c) of the Federal Home
Loan Bank Act.
(2) Each allocation area shall also be of sufficient size, in terms
of population and housing need, that the amount of budget authority
being allocated to the area will support at least one feasible program
or project.
(3) In establishing allocation areas, counties and independent
cities within MSAs should not be combined with counties that are not in
MSAs.
(c) Determining the amount of budget authority. Where the field
office establishes more than one allocation area, it shall determine the
amount of budget authority to be allocated to each allocation area,
based upon a housing needs percentage which represents the needs of that
area relative to the needs of the metropolitan or nonmetropolitan
portion of the field office jurisdiction, whichever is appropriate. For
each program, a composite housing needs percentage developed under
Sec. 791.402 for those counties and independent cities comprising the
allocation area shall be aggregated into allocation area totals.
(d) Planning for the allocation. The field office should develop an
allocation plan which reflects the amount of budget authority determined
for each allocation area in paragraph (c). The plan should include a map
or maps clearly showing the allocation areas within the field office
jurisdiction. The relative share of budget authority by individual
program type need not be the same for each allocation area, so long as
the total amount of budget authority made available to the allocation
area is not significantly reduced.
Sec. 791.405 Reallocations of budget authority.
(a) The field office shall make every reasonable effort to use the
budget authority made available for each allocation area within such
area. If the Program Office Director determines that not all of the
budget authority allocated for a particular allocation area is likely to
be used during the fiscal year, the remaining authority may be allocated
to other allocation areas where it is likely to be used during that
fiscal year.
[[Page 33]]
(b) If the Assistant Secretary determines that not all of the budget
authority allocated to a field office is likely to be used during the
fiscal year, the remaining authority may be reallocated to another field
office where it is likely to be used during that fiscal year.
(c) Any reallocations of budget authority among allocation areas or
field offices shall be consistent with the assignment of budget
authority for the specific program type and established set-asides.
(d) Notwithstanding the requirements of paragraphs (a) through (c)
of this section, budget authority shall not be reallocated for use in
another State unless the Program Office Director or the Assistant
Secretary has determined that other allocation areas within the same
State cannot use the available authority during the fiscal year.
Sec. 791.406 Competition.
(a) All budget authority allocated pursuant to Sec. 791.403(b)(2)
shall be reserved and obligated pursuant to a competition. Any such
competition shall be conducted pursuant to specific criteria for the
selection of recipients of assistance. These criteria shall be contained
in a regulation promulgated after notice and public comment or, to the
extent authorized by law, a notice published in the Federal Register.
(b) This section shall not apply to assistance referred to in
Secs. 791.403(b)(1) and 791.407.
Sec. 791.407 Headquarters Reserve.
(a) A portion of the budget authority available for the housing
programs listed in Sec. 791.101(a), not to exceed an amount equal to
five percent of the total amount of budget authority available for the
fiscal year for programs under the United States Housing Act of 1937
listed in Sec. 791.101(a), may be retained by the Assistant Secretary
for subsequent allocation to specific areas and communities, and may
only be used for:
(1) Unforeseen housing needs resulting from natural and other
disasters, including hurricanes, tornadoes, storms, high water, wind
driven water, tidal waves, tsunamis, earthquakes, volcanic eruptions,
landslides, mudslides, snowstorms, drought, fires, floods, or
explosions, which in the determination of the Secretary cause damage of
sufficient severity and magnitude to warrant Federal housing assistance;
(2) Housing needs resulting from emergencies, as certified by the
Secretary, other than disasters described in paragraph (a)(1) of this
section. Emergency housing needs that can be certified are only those
that result from unpredictable and sudden circumstances causing housing
deprivation (such as physical displacement, loss of Federal rental
assistance, or substandard housing conditions) or causing an unforeseen
and significant increase in low-income housing demand in a housing
market (such as influx of refugees or plant closings);
(3) Housing needs resulting from the settlement of litigation; and
(4) Housing in support of desegregation efforts.
(b) Applications for funds retained under paragraph (a) of this
section shall be made to the field office, which will make
recommendations to Headquarters for approval or rejection of the
application. Applications generally will be considered for funding on a
first-come, first-served basis. Specific instructions governing access
to the Headquarters Reserve shall be published by notice in the Federal
Register, as necessary.
(c) Any amounts retained in any fiscal year under paragraph (a) of
this section that are not reserved by the end of such fiscal year shall
remain available for the following fiscal year in the program under
Sec. 791.101(a) from which the amount was retained. Such amounts shall
be allocated pursuant to Sec. 791.403(b)(2).
PART 792--HOUSING AGENCY SECTION 8 FRAUD RECOVERIES--Table of Contents
Subpart A--General Provisions
Sec.
792.101 Purpose.
792.102 Applicability.
792.103 Definitions.
Subpart B--Recovery of Section 8 Funds
792.201 Conduct of litigation.
[[Page 34]]
792.202 HA retention of proceeds.
792.203 Application of amounts recovered.
792.204 Recordkeeping and reporting.
Authority: 42 U.S.C. 1437f note and 3535(d).
Source: 59 FR 9409, Feb. 28, 1994, unless otherwise noted.
Subpart A--General Provisions
Sec. 792.101 Purpose.
The purpose of this part is to encourage public housing agencies and
Indian housing authorities (HAs) to investigate and pursue instances of
tenant and owner fraud and abuse in the operation of the section 8
housing assistance payments programs.
Sec. 792.102 Applicability.
(a) This part applies to an HA acting as a contract administrator
under an annual contributions contract with HUD in any section 8 housing
assistance payments program. To be eligible to retain section 8 tenant
or owner fraud recoveries, the HA must be the principal party initiating
or sustaining an action to recover amounts from families.
(b) This part applies only to those instances when a tenant or owner
committed fraud, and the fraud recoveries are obtained through
litigation brought by the HA (including settlement of the lawsuit), a
court-ordered restitution pursuant to a criminal proceeding, or an
administrative repayment agreement with the family or owner as a result
of an HA administrative grievance procedure pursuant to, or
incorporating the requirements of, Sec. 882.216 or 887.405. This part
does not apply to cases of owner fraud in HA-owned or controlled units,
or where incorrect payments were made or benefits received because of
calculation errors instead of willful fraudulent activities.
(c) This part applies to all tenant and owner fraud recoveries
resulting from litigation brought by the HA (including settlement of the
lawsuit), or a court-ordered restitution pursuant to a criminal
proceeding obtained on or after October 8, 1986, and to all tenant and
owner fraud recoveries obtained through administrative repayment
agreements signed on or after October 28, 1992.
Sec. 792.103 Definitions.
Fraud and abuse. Fraud and abuse means a single act or pattern of
actions:
(1) That constitutes false statement, omission, or concealment of a
substantive fact, made with intent to deceive or mislead; and
(2) That results in payment of section 8 program funds in violation
of section 8 program requirements.
HA (Housing Agency) is the collective term for Public Housing
Agencies and Indian Housing Authorities. The terms Public Housing Agency
(PHA) and Indian Housing Authority (IHA) are defined in 24 CFR part 5.
Judgment. Judgment means a provision for recovery of section 8
program funds obtained through fraud and abuse, by order of a court in
litigation or by a settlement of a claim in litigation, whether or not
stated in a court order.
Litigation. A lawsuit brought by a HA to recover section 8 program
funds obtained as a result of fraud and abuse.
Principal party in initiating or sustaining an action to recover.
Principal party in initiating or sustaining an action to recover means
the party that incurs more than half the costs incurred in:
(1) Recertifying tenants who fraudulently obtained section 8 rental
assistance;
(2) Recomputing the correct amounts owed by tenants; and
(3) Taking needed actions to recoup the excess benefits received,
such as initiating litigation.
Costs incurred to detect potential excessive benefits in the routine
day-to-day operations of the program are excluded in determining the
principal party in initiating or sustaining an action to recover. For
example, the cost of income verification during an annual
recertification would not be counted in determining the principal party
in initiating or sustaining an action to recover.
Repayment agreement. Repayment agreement means a formal document
signed by a tenant or owner and provided to an HA in which a tenant or
[[Page 35]]
owner acknowledges a debt, in a specific amount, and agrees to repay the
amount due at specific time period(s).
[59 FR 9409, Feb. 28, 1994, as amended at 61 FR 5212, Feb. 9, 1996]
Subpart B--Recovery of Section 8 Funds
Sec. 792.201 Conduct of litigation.
The HA must obtain HUD approval before initiating litigation in
which the HA is requesting HUD assistance or participation.
Sec. 792.202 HA retention of proceeds.
(a) Where the HA is the principal party initiating or sustaining an
action to recover amounts from tenants that are due as a result of fraud
and abuse, the HA may retain, the greater of:
(1) Fifty percent of the amount it actually collects from a
judgment, litigation (including settlement of lawsuit) or an
administrative repayment agreement pursuant to, or incorporating the
requirements of, Sec. 882.216 or Sec. 887.405; or
(2) Reasonable and necessary costs that the HA incurs related to the
collection from a judgment, litigation (including settlement of lawsuit)
or an administrative repayment agreement pursuant to, or incorporating
the requirements of, Sec. 882.216 or Sec. 887.405. Reasonable and
necessary costs include the costs of the investigation, legal fees and
collection agency fees.
(b) If HUD incurs costs on behalf of the HA in obtaining the
judgment, these costs must be deducted from the amount to be retained by
the HA.
Sec. 792.203 Application of amounts recovered.
(a) The HA may only use the amount of the recovery it is authorized
to retain in support of the section 8 program in which the fraud
occurred.
(b) The remaining balance of the recovery proceeds (i.e., the
portion of recovery the HA is not authorized to retain) must be applied
as directed by HUD.
Sec. 792.204 Recordkeeping and reporting.
To permit HUD to audit amounts retained under this part, an HA must
maintain all records required by HUD, including:
(a) Amounts recovered on any judgment or repayment agreement;
(b) The nature of the judgment or repayment agreement; and
(c) The amount of the legal fees and expenses incurred in obtaining
the judgment or repayment agreement and recovery.
(Approved by the Office of Management and Budget under Control Number
2577-0053)
PARTS 793-798 [RESERVED]
[[Page 37]]
CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (SECTION 8 HOUSING ASSISTANCE PROGRAMS AND SECTION 202 DIRECT LOAN PROGRAM)
--------------------------------------------------------------------
Part Page
800-810
[Reserved]
811 Tax exemption of obligations of public
housing agencies and related amendments. 39
850 Housing development grants.................. 45
880 Section 8 housing assistance payments
program for new construction............ 48
881 Section 8 housing assistance payments
program for substantial rehabilitation.. 69
882 Section 8 Certificate and Moderate
Rehabilitation Programs................. 76
883 Section 8 housing assistance payments
program--State housing agencies......... 129
884 Section 8 housing assistance payments
program, new construction set-aside for
Section 515 rural rental housing
projects................................ 140
886 Section 8 housing assistance payments
program--special allocations............ 160
887 Housing vouchers............................ 202
888 Section 8 housing assistance payments
program--fair market rents and contract
rent annual adjustment factors.......... 214
891 Supportive housing for the elderly and
persons with disabilities............... 223
Editorial Note: For nomenclature changes to chapter VIII, see 59 FR
14090, Mar. 25, 1994.
[[Page 39]]
PARTS 800--810 [RESERVED]
PART 811--TAX EXEMPTION OF OBLIGATIONS OF PUBLIC HOUSING AGENCIES AND RELATED AMENDMENTS--Table of Contents
Sec.
811.101 Purpose and scope.
811.102 Definitions.
811.103 General.
811.104 Approval of Public Housing Agencies (other than agency or
instrumentality PHAS).
811.105 Approval of agency or instrumentality PHA.
811.106 Default under the contract.
811.107 Financing documents and data.
811.108 Debt service reserve.
811.109 Trust indenture provisions.
811.110 Refunding of obligations issued to finance Section 8 projects.
Authority: Sec. 7(d), Dept. of HUD Act (42 U.S.C. 3535(d)); secs.
3(6), 5(b), 8, 11(b) of the U.S. Housing Act of 1937 (42 U.S.C. 1437a,
1437c, 1437f, and 1437).
Source: 44 FR 12360, Mar. 6, 1979, unless otherwise noted.
Sec. 811.101 Purpose and scope.
(a) The purpose of this part is to provide a basis for determining
tax exemption of obligations issued by public housing agencies pursuant
to Section 11(b) of the United States Housing Act of 1937 (42 U.S.C.
1437i) to refund bonds for Section 8 new construction or substantial
rehabilitation projects.
(b) This part does not apply to tax exemption pursuant to Section
11(b) for low-income housing projects developed pursuant to 24 CFR parts
950 and 941.
[61 FR 14460, Apr. 1, 1996]
Sec. 811.102 Definitions.
The terms HUD and Public Housing Agency (PHA) are defined in 24 CFR
part 5.
Act. The United States Housing Act of 1937 (42 U.S.C. 1437, et
seq.).
Agency or Instrumentality PHA. A not-for-profit private or public
organization that is authorized to engage in or assist in the
development or operation of low-income housing and that has the
relationship to a parent entity PHA required by this subpart.
Agreement. An Agreement to Enter Into Housing Assistance Payments
Contract as defined in the applicable Section 8 regulations. The form of
agreement for projects financed with tax-exempt obligations shall be
amended in accordance with this subpart.
Annual Contributions Contract (ACC). An Annual Contributions
Contract as defined in the applicable Section 8 regulations. The form of
ACC for projects financed with tax-exempt obligations shall be amended
in accordance with this subpart.
Applicable Section 8 Regulations. The provisions of 24 CFR parts
880, 881, or 883 that apply to the project.
Contract. A Housing Assistance Payments Contract as defined in the
applicable Section 8 regulations. The form of contract for projects
financed with tax-exempt obligations shall be amended in accordance with
this subpart.
Cost of issuance. Ordinary, necessary, and reasonable costs in
connection with the issuance of obligations. These costs shall include
attorney fees, rating agency fees, trustee fees, printing costs, bond
counsel fees, feasibility studies (for non-FHA-insured projects only),
consultant fees and other fees or expenses approved by HUD.
Debt service reserve. A fund maintained by the trustee as a
supplemental source of money for the payment of debt service on the
obligations.
Financing Agency. The PHA (parent entity PHA or agency or
instrumentality PHA) that issues the tax-exempt obligations for
financing of the project.
Low-income Housing Project. Housing for families and persons of low-
income developed, acquired or assisted by a PHA under Section 8 of the
Act and the improvement of any such housing.
Obligations. Bonds or other evidence of indebtedness that are issued
to provide permanent financing of a low-income housing project. Pursuant
to Section 319(b) of the Housing and Community Development Act of 1974,
the term obligation shall not include any obligation secured by a
mortgage insured under Section 221(d)(3) of the National Housing Act (12
U.S.C. 1715l) and issued by a public agency as mortgagor in connection
with the financing of a project assisted under Section 8 of the Act.
This exclusion does not apply to a public agency as mortgagee.
[[Page 40]]
Owner. An owner as defined in the applicable Section 8 regulations.
Parent Entity PHA. Any state, county, municipality or other
governmental entity or public body that is authorized to engage in or
assist in the development or operation of low-income housing and that
has the relationship to an agency or instrumentality PHA required by
this subpart.
Servicing fees. The annual costs of servicing the obligations
(including any debt service reserve), including trustee fees, mortgage
servicing fees, PHA expenses in connection with annual reviews,
maintenance of books and accounts, audit expenses, agent fees and other
costs of servicing the obligations.
Trust indenture. A contract setting forth the rights and obligations
of the issuer, bondholders, owner and trustee in connection with the
tax-exempt obligations. The trust indenture may also include provisions
regarding the loan to the owner or these may be set forth in a separate
mortgage.
Trustee. The entity that has legal responsibility under the trust
indenture for disposition of the proceeds of a bond issuance and
servicing of the debt represented by the obligations. The trustee must
be a bank or other financial institution that is legally qualified and
experienced in performing fiduciary responsibilities with respect to the
care and investment of funds of a magnitude comparable to those involved
in the financing.
Yield. That percentage rate at which the present worth of all
payments of principal and interest to be paid on the obligations is
equal to the purchase price.
[44 FR 12360, Mar. 6, 1979, as amended at 61 FR 5212, Feb. 9, 1996; 61
FR 14460, Apr. 1, 1996]
Sec. 811.103 General.
(a) In order for obligations to be tax-exempt under this subpart the
obligations must be issued by a PHA in connection with a low-income
housing project approved by HUD under the Act and the applicable Section
8 regulations.
(1) Except as needed for a resident manager or similar requirement,
all dwelling units in a low-income housing project that is to be
financed with obligations issued pursuant to this subpart must be
Section 8 contract units.
(2) A low-income housing project that is to be financed with
obligations issued pursuant to this subpart may include necessary
appurtenances. Such appurtenances may include commerical space not to
exceed 10% of the total net rentable area.
(b) Where the parent entity PHA is not the owner of the project, the
parent entity PHA or other PHA approvable under Sec. 811.104 must agree
to administer the contract pursuant to an ACC with HUD, and such a PHA
must agree that in the event there is a default under the contract it
will pursue all available remedies to achieve correction of the default,
including operation and possession of the project, if called upon by HUD
to do so. If the field office finds that the PHA does not have the
capacity to perform these functions, the Assistant Secretary may approve
alternative contractual arrangements for performing these functions.
Sec. 811.104 Approval of Public Housing Agencies (other than agency or instrumentality PHAS).
(a)(1) An application to the field office for approval as a Public
Housing Agency, other than an agency or instrumentality PHA, for
purposes of this subpart shall be supported by evidence satisfactory to
HUD to establish that:
(i) The applicant is a PHA as defined in this subpart, and has the
legal authority to meet the requirements of this subpart and applicable
Section 8 regulations, as described in its application. This evidence
shall be supported by the opinion of counsel for the applicant.
(ii) The applicant has or will have the administrative capability to
carry out the responsibilities described in its application.
(2) The evidence shall include any facts or documents relevant to
the determinations required by paragraph (a)(1) of this section,
including identification of any pending application the applicant has
submitted under the Act. In the absence of evidence indicating the
applicant may not be qualified, the
[[Page 41]]
field office may accept as satisfactory evidence:
(i) Identification of any previous HUD approval of the applicant as
a PHA pursuant to this section;
(ii) Identification of any prior ACC with the applicant under the
Act; or
(iii) A statement, where applicable, that the applicant is an
approved participating agency under 24 CFR Part 883 (State Housing
Finance and Development Agencies).
(b) The applicant shall receive no compensation in connection with
the financing of a project, except for its expenses. Such expenses shall
be subject to approval by HUD in determining the development cost, cost
of issuance and servicing fee, as appropriate. Should the applicant
receive any compensation in excess of such expenses, the excess is to be
placed in the debt service reserve.
(c) Where the applicant acts as the financing agency, the applicant
shall be required to furnish to HUD an audit by an independent public
accountant of its books and records in connection with the financing of
the project within 90 days after the execution of the contract or final
endorsement and at least biennially thereafter.
(d) Any subsequent amendments to the documents submitted to HUD
pursuant to this section must be approved by HUD.
Sec. 811.105 Approval of agency or instrumentality PHA.
(a) An application to the field office for approval as an agency or
instrumentality PHA for purposes of this subpart shall:
(1) Identify the parent entity PHA.
(2) Establish by evidence satisfactory to HUD that:
(i) The parent entity PHA meets the requirements of Sec. 811.104.
(ii) The applicant was properly created pursuant to state law as a
not-for-profit entity; is an agency or instrumentality PHA, as defined
in this subpart; has the legal authority to meet the requirements of
this subpart and applicable Section 8 regulations, as described in its
application; and the actions required to establish the legal
relationship with the parent entity PHA prescribed by paragraph (c) of
this section have been taken and are not prohibited by State law. This
evidence shall be supported by the opinion of counsel for the applicant
and counsel for the parent entity PHA.
(iii) The applicant has, or will have, the administrative capability
to carry out the responsibilities described in its application.
(b) The charter or other organic document establishing the applicant
shall limit the activities to be performed by the applicant, and funds
and assets connected therewith, to carrying out or assisting in carrying
out Section 8 projects and other low-income housing projects approved by
the Secretary. Such organic documents shall provide that the applicant
shall receive no compensation in connection with the financing of a
project, except for its expenses. Such expenses shall be subject to
approval by HUD in determining the development cost, cost of issuance
and servicing fee, as appropriate. Should the applicant receive any
compensation in excess of such expenses, the excess is to be placed in
the debt service reserve.
(c) The documents submitted by the applicant shall include the
following with respect to the relationship between the parent entity PHA
and the agency or instrumentality PHA:
(1) Provisions requiring approval by the parent entity PHA of the
charter or other organic instrument and of the bylaws of the applicant,
which organic instrument and bylaws shall specify that any amendments
are subject to approval by the parent entity PHA and by HUD.
(2) Provisions requiring approval by the parent entity PHA of each
project and of the program and expenditures of the applicant.
(3) Provisions requiring approval by the parent entity PHA of each
issue of obligations by the applicant not more than 60 days prior to the
date of issue and approval of any substantive changes to the terms and
conditions of the issuance prior to date of issue.
(4) Provisions requiring the applicant to furnish an audit of all
its books and records by an independent public accountant to the parent
entity PHA within 90 days after execution of the contract or final
endorsement and at
[[Page 42]]
least bennially thereafter; and provisions requiring the parent entity
PHA to perform an annual review of the applicant's performance and to
provide HUD with a copy of such review together with any audits
performed during the reporting period.
(5) Provisions giving the parent entity PHA right of access at any
time to all books and records of the applicant.
(6) Provisions that upon dissolution of the applicant, title to or
other interest in any real or personal property that is owned by such
applicant at the time of dissolution shall be transferred to the parent
entity PHA or to another PHA or to another not-for-profit entity as
determined by the parent entity PHA and approved by HUD, to be used only
for purposes approved by HUD.
(7) Evidence of agreement by the parent entity PHA, or other entity
as may be provided for in alternative contractual arrangements pursuant
to Sec. 811.103(b), to accept title to any real or personal property
pursuant to paragraph (c)(6) of this section.
(d) Any subsequent amendments to the documents submitted to HUD
pursuant to this section must be approved by HUD.
(e) Members, officers, or employees of the parent entity PHA may be
directors or officers of the applicant unless this is contrary to state
law.
[44 FR 12360, Mar. 6, 1979, as amended at 61 FR 14461, Apr. 1, 1996]
Sec. 811.106 Default under the contract.
If HUD finds there is a default under the Contract, the field office
shall so notify the trustee and give the trustee a specified reasonable
time to take action to require the owner to correct such default prior
to any suspension or termination of payments under the contract. In the
event of a default under the contract, HUD may terminate or suspend
payments under the contract, may seek specific performance of the
contract and may pursue other remedies.
[44 FR 12360, Mar. 6, 1979, as amended at 61 FR 14461, Apr. 1, 1996]
Sec. 811.107 Financing documents and data.
(a) The financing agency shall assure that any official statement or
prospectus or other disclosure statement prepared in connection with the
financing shall state on the first page that:
(1) In addition to any security cited in the statement, the bonds
may be secured by a pledge of an Annual Contributions Contract and a
Housing Assistance Payments Contract, executed by HUD;
(2) The faith of the United States is solemnly pledged to the
payment of annual contributions pursuant to the Annual Contributions
Contact or to the payment of housing assistance payments pursuant to the
Housing Assistance Payments Contract, and funds have been obligated by
HUD for such payments;
(3) Except as provided in any contract of mortgage insurance, the
bonds are not insured by HUD;
(4) The bonds are not to be construed as a debt or indebtedness of
HUD or the United States, and payment of the bonds is not guaranteed by
the United States;
(5) Nothing in the text of a disclosure statement is to be
interpreted to conflict with the above; and
(6) HUD has not reviewed or approved and bears no responsibility for
the content of disclosure statements.
(b) The financing agency shall retain in its files the documentation
relating to the financing. A copy of this documentation shall be
furnished to HUD upon request.
[61 FR 14461, Apr. 1, 1996]
Sec. 811.108 Debt service reserve.
(a) FHA-Insured projects. (1) The debt service reserve shall be
invested and the income used to pay principal and interest on that
portion of the obligations which is attributable to the funding of the
debt service reserve. Any excess investment income shall be added to the
debt service reserve. In the event such investment income is
insufficient, surplus cash or residual receipts, to the extent approved
by the field office, may be used to pay such principal and interest
costs.
[[Page 43]]
(2) The debt service reserve and its investment income shall be
available only for the purpose of paying principal or interest on the
obligations. The use of the debt service reserve for this purpose shall
not be a cure for any failure by the owner to make required payments.
(3) Upon full payment of the principal and interest on the
obligations (including that portion of the obligations attributable to
the funding of the debt service reserve), any funds remaining in the
debt service reserve shall be remitted to HUD.
(b) Non-FHA-insured projects. (1) Investment income from the debt
service reserve, up to the amount required for debt service on the bonds
attributable to the debt service reserve, shall be credited toward the
owner's debt service payment. Any excess investment income shall be
added to and become part of the debt service reserve.
(2) The debt service reserve and investment income thereon shall be
available only for the purpose of paying principal or interest on the
obligations. The use of the debt service reserve for this purpose shall
not be a cure for any failure by the owner to make required payments.
(3) Upon full payment of the principal and interest on the
obligations (including that portion of the obligations attributable to
the funding of the debt service reserve), any funds remaining in the
debt service reserve shall be remitted to HUD.
[61 FR 14461, Apr. 1, 1996]
Sec. 811.109 Trust indenture provisions.
Obligations shall be prepaid only under such conditions as HUD shall
require, including reduction of contract rents and continued operation
of the project for the housing of low-income families.
[44 FR 12360, Mar. 6, 1979. Redesignated at 61 FR 14461, Apr. 1, 1996]
Sec. 811.110 Refunding of obligations issued to finance Section 8 projects.
(a) This section states the terms and conditions under which HUD
will approve refunding or defeasance of certain outstanding debt
obligations which financed new construction or substantial
rehabilitation of Section 8 projects, including fully and partially
assisted projects.
(b) In the case of bonds issued by State Agencies qualified under 24
CFR part 883 to refund bonds which financed projects assisted pursuant
to 24 CFR part 883, HUD requires compliance with the prohibition on
duplicative fees contained in 24 CFR part 883 and with paragraphs (f)
and (h) of this section, as applicable to the projects to be refunded.
(c) No agency shall issue obligations to refund outstanding 11(b)
obligations until the Office of the Assistant Secretary for Housing
sends the financing agency a Notification of Tax Exemption based on
approval of the proposed refunding's terms and conditions as conforming
to this part's requirements, including continued operation of the
project as housing for low-income families, and where possible,
reduction of Section 8 assistance payments through lower contract rents
or an equivalent cash rebate to the U.S. Treasury (i.e. Trustee Sweep).
The agency shall submit such documentation as HUD determines is
necessary for review and approval of the refunding transaction. Upon
conclusion of the closing of refunding bonds, written confirmation must
be sent to the Office of Multifamily Housing by bond counsel, or other
acceptable closing participant, including a schedule of the specific
amount of savings in Section 8 assistance where applicable, CUSIP number
information, and a final statement of Sources and Uses.
(d)(1) HUD approval of the terms and conditions of a Section 8
refunding proposal requires evaluation by HUD's Office of Multifamily
Housing of the reasonableness of the terms of the Agency's proposed
financing plan, including projected reductions in project debt service
where warranted by market conditions and bond yields. This evaluation
shall determine that the proposed amount of refunding obligations is the
amount needed to: pay off outstanding bonds; fund a debt service reserve
to the extent required by credit enhancers or bond rating agencies, or
bond underwriters in the case of unrated refunding bonds; pay credit
enhancement fees acceptable to HUD; and
[[Page 44]]
pay transaction costs as approved by HUD according to a sliding scale
ceiling based on par amount of refunding bond principal. Exceptions may
be approved by HUD, if consistent with applicable statutes, in the event
that an additional issue amount is required for project purposes.
(2) The stated maturity of the refunding bonds may not exceed by
more than one year the remaining term of the project mortgage, or in the
case of an uninsured loan, the later of expiration date of the Housing
Assistance Payments Contract (the ``HAPC'') or final maturity of the
refunded bonds.
(3) The bond yield may not exceed by more than 75 basis points the
20 Bond General Obligation Index published by the Daily Bond Buyer for
the week immediately preceding the sale of the bonds, except as
otherwise approved by HUD. An amount not to exceed one-fourth of one
percent annually of the bonds' outstanding principal balance may be
allowed for servicing and trustee fees.
(e) For projects for which the Agreement to enter into the HAPC was
executed between January 1, 1979, and December 31, 1984 (otherwise known
as ``McKinney Act Projects''), for which a State or local agency
initiates a refunding, the Secretary shall make available to an eligible
issuing agency 50 percent of the Section 8 savings of a refunding, as
determined by HUD on a project-by-project basis, to be used by the
agency in accordance with the terms of a Refunding Agreement executed by
the Agency and HUD which incorporates the Agency's Housing Plan for use
of savings to provide decent, safe, and sanitary housing for very low-
income households. In determining the amount of savings recaptured on a
project-by-project basis, as authorized by section 1012(b) of the
McKinney Act, HUD will take into account the physical condition of the
projects participating in the refunding which generate the McKinney Act
savings and, if necessary, HUD will finance in refunding bond debt
service correction of existing deficiencies which cannot be funded
completely by existing project replacement reserves or by a portion of
reserves released from the refunded bond's indenture. For McKinney Act
refundings of projects which did not receive a Financing Adjustment
Factor (``FAF''), HUD will allow up to 50 percent of debt service
savings to be allocated to the project account; in which case, the
remainder will be shared equally by the Agency and the U.S. Treasury.
(f) For refundings of Section 8 projects other than McKinney Act
Projects, and for all transactions which substitute collateral for, but
do not redeem, outstanding obligations, and for which a HUD approval is
needed (such as assignment of a HAPC or insured mortgage note), the
Office of Multifamily Housing in consultation with HUD Field Office
Counsel will review the HAPC, the Trust Indenture for the outstanding
obligations, applicable HUD regulations, and reasonableness of proposed
financing terms. In particular, HUD review should be obtained for the
release of reserves from the trust indenture of the outstanding 11(b)
bonds that are being refunded, defeased, or pre-paid. A proposal to
distribute to a non-Federal entity the benefits of a refinancing, such
as debt service savings and/or balances in reserves held under the
original Trust Indenture, should be referred to the Office of
Multifamily Housing for further review. In proposals submitted for HUD
approval, HUD will consent to release reserves, as provided by the Trust
Indenture, in an amount remaining after correction of project physical
deficiencies and/or replenishment of replacement reserves, where needed.
In the case of a refunding of 11(b) bonds by a public agency issuer
which is the owner of the project and is entitled to reserves held under
the Trust Indenture, HUD requires execution by the project owner of a
use agreement, and amendment of a regulatory agreement, if applicable,
to extend low-income tenant occupancy for ten years after expiration of
the original HAPC term. In the case of HAP contracts with renewable 5-
year terms, the Use Agreement shall extend for 10 years after the
project owners first opt-out date. The Use Agreement may also be
required of private entity owners, unless the refunding is incidental to
a transfer of project ownership or a transaction which provides a
substantial public benefit, as determined by
[[Page 45]]
the Office of Multifamily Housing. Proposed use of benefits shall be
consistent with applicable appropriations law, the HAPC, and other
requirements applicable to the original project financing, and the
proposed financing terms must be reasonable in relation to bond market
yields and transaction fees, as approved by the HUD Office of
Multifamily Housing.
(g) Agencies shall have wide latitude in the design of specific
delivery vehicles for use of McKinney Act savings, subject to HUD audit
of each Agency's performance in serving the targeted income eligible
population. Savings may be used for shelter costs of providing housing,
rental, or owner-occupied, to very low-income households through new
construction, rehabilitation, repairs, and acquisition with or without
rehab, including assistance to very low-income units in mixed-income
developments. These include programs designed to assist in obtaining
shelter, such as rent or homeownership subsidies. Self-sufficiency
services in support of very low-income housing are also eligible, and
may include, but are not limited to, homeownership counseling,
additional security measures in high-crime areas, construction job
training for residents' repair of housing units occupied by very low-
income families, and empowerment activities designed to support
formation and growth of resident entities. Except for the cost of
providing third-party program audit reports to HUD, eligible costs
exclude consultant fees or reimbursement of Agency staff expenses, but
may include fees for professional services required in the Agency's
McKinney Act programs of assistance to very low-income families. Unless
otherwise specified by HUD in a McKinney Agreement, savings shall be
subject to the above use requirements for 10 years from the date of
receipt of the savings.
(h) Refunding bonds, including interest thereon, approved under this
Section shall be exempt from all taxation now or hereafter imposed by
the United States, and the notification of approval of tax exemption
shall not be subject to revocation by HUD. Whether refunding bonds
approved under this section meet the requirements of Section 103 or any
other provisions of the Internal Revenue Code is not within the
responsibilities of HUD to determine. Such bonds shall be prepaid during
the HAPC term only under such conditions as HUD shall require.
[61 FR 14461, Apr. 1, 1996]
PART 850--HOUSING DEVELOPMENT GRANTS--Table of Contents
Subpart A--General Provisions
Sec.
850.1 Applicability and savings clause.
Subparts B-E [Reserved]
Subpart F--Project Management
850.151 Project restrictions.
850.153 Rent control.
850.155 Securing owner's responsibilities.
Authority: 42 U.S.C. 1437o, 3535(d).
Source: 49 FR 24641, June 14, 1984, unless otherwise noted.
Subpart A--General Provisions
Sec. 850.1 Applicability and savings clause.
(a) Applicability. This part implements the Housing Development
Grant Program contained in section 17 of the United States Housing Act
of 1937 (42 U.S.C. 1437o). The Program authorized the Secretary to make
housing development grants to support the new construction or
substantial rehabilitation of real property to be used primarily for
residential rental purposes. Section 289(b)(1) of the Cranston-Gonzalez
National Affordable Housing Act (42 U.S.C. 12839) repealed section 17
effective October 1, 1991. Section 289(a) prohibited new grants under
the Housing Development Grant Program except for projects for which
binding commitments had been entered into prior to October 1, 1991.
(b) Savings clause. Any grant made pursuant to a binding commitment
entered into before October 1, 1991 will continue to be governed by
subparts A through E of this part in effect immediately before April 1,
1996, and by subpart F of this part as currently in effect.
[61 FR 7944, Feb. 29, 1996]
[[Page 46]]
Subparts B-E [Reserved]
Subpart A--Project Management
Sec. 850.151 Project restrictions.
(a) Owner-grantee agreement. The grantee and the owner must enter
into an agreement that requires the owner (including its successors in
interest) to carry out the requirements of this section and of the grant
agreement, as appropriate. The grantee-owner agreement must require the
grantee to monitor (where required) and to take appropriate legal action
to enforce compliance with the owner's responsibilities thereunder. The
owner's compliance with its obligations under this section must be
secured by a mortgage or other security instrument meeting the
requirements of Sec. 850.155. Nothing in this section shall preclude
enforcement by the Federal government of grant agreement provisions,
civil rights statutes, or other provisions of law that apply to the
Housing Development Grant Program.
(b) Restriction on conversion. The owner shall not convert the units
in the project to condominium ownership or to a form of cooperative
ownership that is not eligible to receive a housing development grant,
during the 20-year period from the date on which the units in the
project are available for occupancy.
(c) Tenant selection. The owner shall determine the eligibility of
applicants for lower income units in accordance with the requirements of
24 CFR parts 812 and 813, including the provisions of these parts
concerning citizenship or eligible immigration status and income limits,
and certain assistance to mixed families (families whose members include
those with eligible immigration status, and those without eligible
immigration status.). The owner shall not, during the 20-year period
from the date on which the units in the project are available for
occupancy, discriminate against prospective tenants on the basis of
their receipt of, or eligibility for, housing assistance under any
Federal, State, or local housing assistance program or, except for an
elderly housing project, on the basis that they have a minor child or
children who will be living with them.
(d) Restriction on leasing assisted units. The owner shall assure
that the percentage of low-income units specified in the grant agreement
is occupied, or is available for occupancy, by low-income households
during the period beginning on the date on which the units in the
project are available for occupancy through 20 years from the date on
which 50 percent of the units are occupied. The owner may lease a low-
income unit only to a tenant that is a low-income household at the time
of its initial occupancy. An owner may continue to lease a low-income
unit to a tenant that ceases to qualify as a low-income household only
as provided in paragraph (f) of this section.
(e) Low-income unit rent. (1) Section 17(d)(8)(A) of the U.S.
Housing Act of 1937 prohibits the rents for low-income units from
exceeding ``30 per centum of the adjusted income of a family whose
income equals 50 per centum of the median income for the area, as
determined by the Secretary with adjustments for smaller and larger
families.'' This paragraph describes how these maximum rent
determinations are made.
(2) The maximum rents that may be charged for low-income units are
based on the size of the unit by number of bedrooms, and are calculated
in accordance with the following procedure. For each unit size, HUD will
provide the Section 8 very low-income limits. HUD will also provide
income adjustments for each unit size, consistent with 24 CFR part 813.
An adjusted income amount for each unit size is calculated by the owner
or grantee by subtracting the income adjustment from the Section 8
limit. The adjusted income amount is multiplied by 30 percent and
divided by 12 to obtain the maximum monthly gross rent for each low-
income unit. A monthly allowance for the utilities and services
(excluding telephone) to be paid by the tenant is subtracted from the
maximum monthly gross rent to obtain the maximum monthly rent that may
be charged for low-income units. Information to be provided by HUD will
be available from the responsible HUD Field Office.
(3) The initial monthly allowance for utilities and services to be
paid by the
[[Page 47]]
tenant must be approved by HUD. Subsequent calculations of this
allowance must be approved by the grantee in connection with its review
and approval of rent schedules under paragraph (e)(4) of this section.
The maximum monthly rent must be recalculated annually, and may change
as changes in the Section 8 very low-income limit, the income
adjustments, or the monthly allowance for utilities and services
warrant.
(4) The grantee must review and approve any schedule of rents
proposed by the owner for low-income units. Any schedule submitted by an
owner within the permissible maximum will be deemed approved, unless the
grantee informs the owner, within 60 days after receiving the schedule,
that it is disapproved.
(5) Any increase in rents for low-income units is subject to the
provisions of outstanding leases, in any event, the owner must provide
tenants of those units not less than 30 days prior written notice before
implementing any increase in rents.
(f) Reexamination of tenant income and composition. (1) The owner
shall reexamine the income of each tenant household living in low-income
units at least once a year. At the first regular reexamination after
June 19, 1995 the owner shall follow the requirements of 24 CFR part 812
concerning obtaining and processing evidence of citizenship or eligible
immigration status of all family members. Thereafter, at each regular
reexamination, the owner shall follow the requirements of 24 CFR part
812 concerning verification of the immigration status of any new family
member.
(2) If this reexamination indicates that the tenant no longer
qualifies as a low-income household, the owner must take one of the
following actions, as appropriate: (i) If the unit occupied by the
tenant must be leased to a low- income household to maintain the
percentage of low-income units specified in the grant agreement, the
owner must notify the tenant that it must move when the current lease
expires or six months after the date of the notification, whichever is
later; (ii) If the owner can meet this percentage without the unit
occupied by the tenant (for example, by designating another comparable
unit as a low-income unit), the owner may continue to lease to that
tenant, but is free to renegotiate the rent at the expiration of the
current lease.
(3) For provisions related to termination of assistance for failure
to establish citizenship or eligible immigration status, see 24 CFR
812.9, and also 24 CFR 812.10 for provisions related to certain
assistance to mixed families (families whose members include those with
eligible immigration status, and those without eligible immigration
status) in lieu of termination of assistance, and for provisions related
to deferral of termination of assistance.
(g) Affirmative fair housing marketing. Marketing must be done in
accordance with the HUD-approved Affirmative Fair Housing Marketing
Plan, Form HUD-935.2, and all fair housing and equal opportunity
requirements. The purpose of the Plan and the requirements is to provide
for affirmative marketing through the provision of information regarding
the availability of units in projects assisted. Affirmative marketing
steps consist of good faith efforts to provide information and otherwise
attract eligible persons from all racial, ethnic and gender groups in
the housing market area to the available housing.
(h) Management and maintenance functions. The owner must perform all
management and maintenance functions in compliance with equal
opportunity requirements. These functions include selection of tenants,
reexamination of family income, evictions and other terminations of
tenancy, and all ordinary and extraordinary maintenance and repairs,
including replacement of capital items.
(i) Residency preferences. Local residency requirements are
prohibited. Local residency preferences may be applied in selecting
tenants only to the extent that they are not inconsistent with
affirmative fair housing marketing objectives and the owner's HUD-
approved AFHM Plan. With respect to any residency preference, persons
expected to reside in the community as a
[[Page 48]]
result of current or planned employment will be treated as residents.
[49 FR 24641, June 14, 1984, as amended at 60 FR 14841, Mar. 20, 1995]
Sec. 850.153 Rent control.
A project constructed or substantially rehabilitated with a housing
development grant is not subject to State or local rent control unless
the rent control requirements or agreements (a) (1) were entered into
under a State law or local ordinance of general applicability that was
enacted and in effect in the jurisdiction before November 30, 1983 and
(2) apply generally to rental housing projects not assisted under the
Housing Development Grant Program, or (b) are imposed under this
subpart. State and local rent controls expressly preempted by this
section include, but are not limited to, rent laws or ordinances, rent
regulating agreements, rent regulations, occupancy agreements, or
financial penalties for failure to achieve certain occupancy or rent
projections.
Sec. 850.155 Securing owner's responsibilities.
Assistance provided under this part shall constitute a debt of the
owner (including its successors in interest) to the grantee, and shall
be secured by a mortgage or other security instrument. The debt shall be
repayable in the event of a substantive, uncorrected violation by an
owner of the obligations contained in paragraphs (b), (c), (d) and (e)
of Sec. 850.151. The instruments securing this debt shall provide for
repayment to the grantee in an amount equal to the total amount of
housing development grant assistance outstanding, plus interest which is
determined by the Secretary by adding two percent to the average yield
on outstanding marketable long-term obligations of the United States
during the month preceding the date on which assistance was made
available. The amount to be repaid shall be reduced by 10 percent for
each full year in excess of 10 years that intervened between the
beginning of the term of the owner-grantee agreement and the violation.
PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW CONSTRUCTION--Table of Contents
Subpart A--Summary and Applicability
Sec.
880.101 General.
880.104 Applicability of part 880 in effect as of November 5, 1979.
880.105 Applicability to proposals and projects under 24 CFR part 811.
Subpart B--Definitions and Other Requirements
880.201 Definitions.
880.205 Limitation on distributions.
880.207 Property standards.
880.208 Financing.
880.211 Audit.
Subparts C-D [Reserved]
Subpart E--Housing Assistance Payments Contract
880.501 The contract.
880.502 Term of contract.
880.503 Maximum annual commitment and project account.
880.504 Leasing to eligible families.
880.505 Contract administration and conversions.
880.506 Default by owner (private-owner/HUD and PHA-owner/HUD
projects).
880.507 Default by PHA and/or owner (private-owner/PHA projects).
880.508 Notice upon contract expiration.
Subpart F--Management
880.601 Responsibilities of owner.
880.602 Replacement reserve.
880.603 Selection and admission of assisted tenants.
880.604 Tenant rent.
880.605 Overcrowded and underoccupied units.
880.606 Lease requirements.
880.607 Termination of tenancy and modification of lease.
880.608 Security deposits.
880.609 Adjustment of contract rents.
880.610 Adjustment of utility allowances.
880.611 Conditions for receipt of vacancy payments.
880.612 Reviews during management period.
880.612a Preference for occupancy by elderly families.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
Source: 44 FR 59410, Oct. 15, 1979, unless otherwise noted.
[[Page 49]]
Subpart A--Summary and Applicability
Sec. 880.101 General.
(a) The purpose of the Section 8 program is to provide low-income
families with decent, safe and sanitary rental housing through the use
of a system of housing assistance payments. This part contains the
policies and procedures applicable to the Section 8 new construction
program. The assistance may be provided to public housing agency owners
or to private owners either directly from HUD or through public housing
agencies.
(b) This part does not apply to projects developed under other
Section 8 program regulations, including 24 CFR parts 881, 882, 883,
884, and 885, except to the extent specifically stated in those parts.
Portions of subparts E and F of this part 880 have been cross-referenced
in 24 CFR parts 881 and 883.
[61 FR 13587, Mar. 27, 1996]
Sec. 880.104 Applicability of part 880 in effect as of November 5, 1979.
(a) Part 880, in effect as of November 5, 1979, applies to all
proposals for which a notification of selection was not issued before
the November 5, 1979 effective date of part 880. (See 24 CFR part 880,
revised as of April 1, 1980.) Where a notification of selection was
issued for a proposal before the November 5, 1979 effective date, part
880, in effect as of November 5, 1979, applies if the owner notified HUD
within 60 calendar days that the owner wished the provisions of part
880, effective November 5, 1979, to apply and promptly brought the
proposal into conformance.
(b) Subparts E (Housing Assistance Payments Contract) and F
(Management) of this part apply to all projects for which an Agreement
was not executed before the November 5, 1979, effective date of part
880. Where an Agreement was so executed:
(1) The owner and HUD may agree to make the revised subpart E of
this part applicable and to execute appropriate amendments to the
Agreement and/or Contract.
(2) The owner and HUD may agree to make the revised subpart F of
this part applicable (with or without the limitation on distributions)
and to execute appropriate amendments to the Agreement and/or Contract.
(c) Section 880.607, Termination of Tenancy and Modification of
Leases, applies to new families who begin occupancy or execute a lease
on or after 30 days after the November 5, 1979, effective date of part
880. This section also applies to families not covered by the preceding
sentence, including existing families under lease, with respect to all
leases in which a renewal becomes effective on or after the 60th day
following the November 5, 1979 effective date of part 880. A lease is
considered to be renewed where both the landlord and the family fail to
terminate a tenancy under a lease permitting either party to terminate.
(d) Notwithstanding the provisions of paragraph (b) of this section,
the provisions of 24 CFR part 5 (concerning preferences for selection of
applicants) apply to all projects, regardless of when an Agreement was
executed.
[61 FR 13587, Mar. 27, 1996]
Sec. 880.105 Applicability to proposals and projects under 24 CFR part 811.
Where proposals and projects are financed with tax-exempt
obligations under 24 CFR part 811, the provisions of part 811 will be
complied with in addition to all requirements of this part. In the event
of any conflict between this part and part 811, part 811 will control.
Subpart B--Definitions and Other Requirements
Sec. 880.201 Definitions.
The terms Fair Market Rent (FMR), HUD, NOFA, and Public Housing
Agency (PHA) are defined in 24 CFR part 5.
ACC. (Annual Contributions Contract) For a private-owner/PHA
project, for which the Contract is administered by a PHA, the ACC is the
contract between the PHA (as contract administrator) and HUD. Under the
ACC, HUD commits to provide the PHA with the funds needed to make
housing assistance payments to the owner and to pay the PHA for HUD-
approved administrative fees, and the PHA agrees to perform the duties
of a contract administrator.
[[Page 50]]
Agency. As defined in 24 CFR part 883.
Agreement. (Agreement to Enter into Housing Assistance Payments
Contract) The Agreement between the owner and the contract administrator
which provides that, upon satisfactory completion of the project in
accordance with the HUD-approved final proposal, the administrator will
enter into the Contract with the owner.
Annual income. As defined in part 813 of this chapter.
Assisted unit. A dwelling unit eligible for assistance under a
Contract.
Contract. (Housing Assistance Payments Contract) The Contract
entered into by the owner and the contract administrator upon
satisfactory completion of the project, which sets forth the rights and
duties of the parties with respect to the project and the payments under
the Contract.
Contract Administrator. The entity which enters into the Contract
with the owner and is responsible for monitoring performance by the
owner. The contract administrator is a PHA in the case of private-owner/
PHA projects, and HUD in private-owner/HUD and PHA-owner/HUD projects.
Contract Rent. The total amount of rent specified in the Contract as
payable by HUD and the tenant to the owner for an assisted unit. In the
case of the rental of only a manufactured home space, ``contract rent''
is the total rent specified in the Contract as payable by HUD and the
tenant to the owner for rental of the space, including fees or charges
for management and maintenance services with respect to the space, but
excluding utility charges for the manufactured home.
Decent, safe and sanitary. Housing is decent, safe and sanitary at
project completion if the dwelling units and related facilities are
accepted by HUD as meeting the requirements of the Agreement. Housing
continues to be decent, safe and sanitary if it is maintained in a
condition substantially the same as at the time of acceptance.
Drug-related criminal activity. The illegal manufacture, sale,
distribution, use or possession with the intent to manufacture, sell,
distribute, or use, of a controlled substance as defined in section 102
of the Controlled Substances Act, 21 U.S.C. 802.
Elderly Family. As defined in parts 812 and 813 of this chapter.
Family (eligible family). As defined in part 812 of this chapter.
Final proposal. The detailed description of a proposed project to be
assisted under this part, which an owner submits after selection of the
preliminary proposal, except where a preliminary proposal is not
required under Sec. 880.303(c). (The final proposal becomes an exhibit
to the Agreement and is the standard by which HUD judges acceptable
construction of the project.)
Gross Rent. As defined in part 813 of this chapter.
Household type. The three household types are (1) elderly and
handicapped, (2) family, and (3) large family.
Housing Assistance Payment. The payment made by the contract
administrator to the Owner of an assisted unit as provided in the
Contract. Where the unit is leased to an eligible Family, the payment is
the difference between the Contract Rent and the Tenant Rent. An
additional payment is made to the Family when the Utility Allowance is
greater than the Total Tenant Payment. In the case of a Family renting
only a manufactured home space as provided in Sec. 880.202(j), the
Housing Assistance Payment is the difference between the Gross Rent and
the Total Tenant Payment, but such payment may not exceed the Contract
Rent for the space, and no additional payment is made to the Family. A
Housing Assistance Payment, known as a ``vacancy payment'', may be made
to the Owner when an assisted unit is vacant, in accordance with the
terms of the Contract.
Housing Assistance Plan. A housing plan which is submitted by a unit
of general local government and approved by HUD as being acceptable
under the standards of 24 CFR, part 570.
Housing type. The three housing types are new construction,
rehabilitation, and existing housing.
Independent Public Accountant. A Certified Public Accountant or a
licensed or registered public accountant, having no business
relationship with the owner except for the performance of audit, systems
work and tax preparation. If not certified, the Independent
[[Page 51]]
Public Accountant must have been licensed or registered by a regulatory
authority of a State or other political subdivision of the United States
on or before December 31, 1970. In States that do not regulate the use
of the title ``public accountant,'' only Certified Public Accountants
may be used.
Low-Income Family. As defined in part 813 of this chapter.
Owner. Any private person or entity (including a cooperative) or a
public entity which qualifies as a PHA, having the legal right to lease
or sublease newly constructed dwelling units assisted under this part.
The term owner also includes the person or entity submitting a proposal
under this part.
Partially-assisted Project. A project for non-elderly families under
this part which includes more than 50 units of which 20 percent or fewer
are assisted.
PHA-Owner/HUD Project. A project under this part which is owned by a
PHA. For this type of project, the Agreement and the Contract are
entered into by the PHA, as owner, and HUD, as contract administrator.
Private-Owner/HUD Project. A project under this part which is owned
by a private owner. For this type of project, the Agreement and Contract
are entered into by the private owner, as owner, and HUD, as contract
administrator.
Private-Owner/PHA Project. A project under this part which is owned
by a private owner. For this type of project, the Agreement and Contract
are entered into by the private owner, as owner, and the PHA, as
contract administrator, pursuant to an ACC between the PHA and HUD. The
term also covers the situation where the ACC is with one PHA and the
owner is another PHA.
Project Account. A specifically identified and segregated account
for each project which is established in accordance with Sec. 880.503(b)
out of the amounts by which the maximum annual commitment exceeds the
amount actually paid out under the Contract or ACC, as applicable, each
year.
Rent. In the case of an assisted unit in a cooperative project, rent
means the carrying charges payable to the cooperative with respect to
occupancy of the unit.
Replacement cost. The estimated construction cost of the project
when the proposed improvements are completed. The replacement cost may
include the land, the physical improvements, utilities within the
boundaries of the land, architect's fees, and miscellaneous charges
incident to construction as approved by the Assistant Secretary.
Secretary. The Secretary of Housing and Urban Development (or
designee).
Small Project. A project for non-elderly families under this part
which includes a total of 50 or fewer (assisted and unassisted) units.
Tenant Rent. The monthly amount defined in, and determined in
accordance with part 813 of this chapter.
Total Tenant Payment. The monthly amount defined in, and determined
in accordance with part 813 of this chapter.
Utility allowance As defined in part 813 of this chapter, made or
approved by HUD.
Utility reimbursement. As defined in part 813 of this chapter.
Vacancy payment. The housing assistance payment made to the owner by
the contract administrator for a vacant assisted unit if certain
conditions are fulfilled as provided in the Contract. The amount of the
vacancy payment varies with the length of the vacancy period and is less
after the first 60 days of any vacancy.
Very Low-income Family. As defined in part 813 of this chapter.
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 18923, Mar. 24, 1980;
48 FR 12703, Mar. 28, 1983; 49 FR 6714, Feb. 23, 1984; 49 FR 17449, Apr.
24, 1984; 49 FR 19943, May 10, 1984; 61 FR 5212, Feb. 9, 1996; 61 FR
13587, Mar. 27, 1996; 61 FR 47382, Sept. 6, 1996]
Sec. 880.205 Limitation on distributions.
(a) Non-profit owners are not entitled to distributions of project
funds.
(b) For the life of the Contract, project funds may only be
distributed to profit-motivated owners at the end of each fiscal year of
project operation following the effective date of the Contract after all
project expenses have been paid, or funds have been set aside for
payment, and all reserve requirements have been met. The first year's
distribution may not be made until cost certification, where applicable,
is
[[Page 52]]
completed. Distributions may not exceed the following maximum returns:
(1) For projects for elderly families, the first year's distribution
will be limited to 6 percent on equity. The Assistant Secretary may
provide for increases in subsequent years' distributions on an annual or
other basis so that the permitted return reflects a 6 percent return on
the value in subsequent years, as determined by HUD, of the approved
initial equity. Any such adjustment will be made by Notice in the
Federal Register.
(2) For projects for non-elderly families, the first year's
distribution will be limited to 10 percent on equity. The Assistant
Secretary may provide for increases in subsequent years' distributions
on an annual or other basis so that the permitted return reflects a 10
percent return on the value in subsequent years, as determined by HUD,
of the approved initial equity. Any such adjustment will be made by
Notice in the Federal Register.
(c) For the purpose of determining the allowable distribution, an
owner's equity investment in a project is deemed to be 10 percent of the
replacement cost of the part of the project attributable to dwelling use
accepted by HUD at cost certification (see Sec. 880.405) unless the
owner justifies a higher equity contribution by cost certification
documentation in accordance with HUD mortgage insurance procedures.
(d) Any short-fall in return may be made up from surplus project
funds in future years.
(e) If HUD determines at any time that project funds are more than
the amount needed for project operations, reserve requirements and
permitted distribution, HUD may require the excess to be placed in an
account to be used to reduce housing assistance payments or for other
project purposes. Upon termination of the Contract, any excess funds
must be remitted to HUD.
(f) Owners of small projects or partially-assisted projects are
exempt from the limitation on distributions contained in paragraphs (b)
through (d) of this section.
(g) In the case of HUD-insured projects, the provisions of this
section will apply instead of the otherwise applicable mortgage
insurance program provisions.
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 18923, Mar. 24, 1980;
49 FR 6714, Feb. 23, 1984; 61 FR 5212, Feb. 9, 1996]
Sec. 880.207 Property standards.
Projects must comply with:
(a) HUD Minimum Property Standards;
(b) In the case of manufactured homes, the Federal Manufactured Home
Construction and Safety Standards, pursuant to Title VI of the Housing
and Community Development Act of 1974, and 24 CFR part 3280;
(c) In the case of congregate or single room occupant housing, the
appropriate HUD guidelines and standards;
(d) HUD requirements pursuant to section 209 of the Housing and
Community Development Act of 1974 for projects for the elderly or
handicapped;
(e) HUD requirements pertaining to noise abatement and control; and
(f) Applicable State and local laws, codes, ordinances and
regulations.
(g) Smoke detectors. (1) Performance requirement. After October 30,
1992, each dwelling unit must include at least one battery-operated or
hard-wired smoke detector, in proper working condition, on each level of
the unit. If the unit is occupied by hearing-impaired persons, smoke
detectors must have an alarm system, designed for hearing-impaired
persons, in each bedroom occupied by a hearing-impaired person.
(2) Acceptability criteria. The smoke detector must be located, to
the extent practicable, in a hallway adjacent to a bedroom, unless the
unit is occupied by a hearing-impaired person, in which case each
bedroom occupied by a hearing-impaired person must have an alarm system
connected to the smoke detector installed in the hallway.
[44 FR 59410, Oct. 15, 1979, as amended at 50 FR 9269, Mar. 7, 1985; 57
FR 33851, July 30, 1992]
Sec. 880.208 Financing.
(a) Types of financing. Any type of construction financing and long-
term financing may be used, including:
(1) Conventional loans from commercial banks, savings banks, savings
and
[[Page 53]]
loan associations, pension funds, insurance companies or other financial
institutions;
(2) Mortgage insurance programs under the National Housing Act;
(3) Mortgage and loan programs of the Farmers' Home Administration
of the Department of Agriculture compatible with the Section 8 program;
and
(4) Financing by tax-exempt bonds or other obligations.
(b) HUD approval. HUD must approve the terms and conditions of the
financing to determine consistency with these regulations and to assure
they do not purport to pledge or give greater rights or funds to any
party than are provided under the Agreement, Contract, and/or ACC. Where
the project is financed with tax-exempt obligations, the terms and
conditions will be approved in accordance with the following:
(1) An issuer of obligations that are tax-exempt under any provision
of Federal law or regulation, the proceeds of the sale of which are to
be used to purchase GNMA mortgage-backed securities issued by the
mortgagee of the Section 8 project, will be subject to 24 CFR part 811,
subpart B.
(2) Issuers of obligations that are tax-exempt under Section 11(b)
of the U.S. Housing Act of 1937 will be subject to 24 CFR part 811,
subpart A if paragraph (b)(1) of this section is not applicable.
(3) Issuers of obligations that are tax-exempt under any provision
of Federal law or regulation other than section 11(b) of the U.S.
Housing Act of 1937 will be subject to 24 CFR part 811, subpart A if
paragraph (b)(1) of this section is not applicable, except that such
issuers that are State Agencies qualified under 24 CFR part 883 are not
subject to 24 CFR part 811 subpart A and are subject solely to the
requirements of 24 CFR part 883 with regard to the approval of tax-
exempt financing.
(c) Pledge of Contracts. An owner may pledge, or offer as security
for any loan or obligation, an Agreement, Contract or ACC entered into
pursuant to this part: Provided, however, That such financing is in
connection with a project constructed pursuant to this part and approved
by HUD. Any pledge of the Agreement, Contract, or ACC, or payments
thereunder, will be limited to the amounts payable under the Contract or
ACC in accordance with its terms. If the pledge or other document
provides that all payments will be paid directly to the mortgagee or the
trustee for bondholders, the mortgagee or trustee will make all payments
or deposits required under the mortgage or trust indenture or HUD
regulations and remit any excess to the owner.
(d) Foreclosure and other transfers. In the event of foreclosure,
assignment or sale approved by HUD in lieu of foreclosure, or other
assignment or sale approved by HUD:
(1) The Agreement, the Contract and the ACC, if applicable, will
continue in effect, and
(2) Housing assistance payments will continue in accordance with the
terms of the Contract.
(e) Financing of manufactured home parks. In the case of a newly
constructed manufactured home park, the principal amount of any mortgage
attributable to the rental spaces in the park may not exceed an amount
per space determined in accordance with Sec. 207.33(b) of this title.
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 62797, Sept. 22, 1980;
48 FR 12704, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984]
Sec. 880.211 Audit.
(a) Where a State or local government is the eligible owner of a
project or a contract administrator under Sec. 880.505 receiving
financial assistance under this part, the audit requirements in 24 CFR
part 44 shall apply.
(b) Where a nonprofit organization is the eligible owner of a
project, receiving financial assistance under this part, the audit
requirements in 24 CFR part 45 shall apply.
[50 FR 39091, Sept. 27, 1985; 51 FR 30480, Aug. 27, 1986; 57 FR 33256,
July 27, 1992]
Subparts C-D [Reserved]
Subpart E--Housing Assistance Payments Contract
Sec. 880.501 The contract.
(a) Contract. The Housing Assistance Payments Contract sets forth
rights and duties of the owner and the contract administrator with
respect to the
[[Page 54]]
project and the housing assistance payments. The owner and contract
administrator execute the Contract in the form prescribed by HUD upon
satisfactory completion of the project.
(b) [Reserved]
(c) Housing Assistance Payments to Owners under the Contract. The
housing assistance payments made under the Contract are:
(1) Payments to the owner to assist eligible families leasing
assisted units, and
(2) Payments to the owner for vacant assisted units (``vacancy
payments'') if the conditions specified in Sec. 880.610 are satisfied.
The housing assistance payments are made monthly by the contract
administrator upon proper requisition by the owner, except payments for
vacancies of more than 60 days, which are made semi-annually by the
contract administrator upon requisition by the owner.
(d) Amount of Housing Assistance Payments to Owner. (1) The amount
of the housing assistance payment made to the owner of a unit being
leased by an eligible family is the difference between the contract rent
for the unit and the tenant rent payable by the family.
(2) A housing assistance payment will be made to the owner for a
vacant assisted unit in an amount equal to 80 percent of the contract
rent for the first 60 days of vacancy, subject to the conditions in
Sec. 880.611. If the owner collects any tenant rent or other amount for
this period which, when added to this vacancy payment, exceeds the
contract rent, the excess must be repaid as HUD directs.
(3) For a vacancy that exceeds 60 days, a housing assistance payment
for the vacant unit will be made, subject to the conditions in
Sec. 880.611, in an amount equal to the principal and interest payments
required to amortize that portion of the debt attributable to the vacant
unit for up to 12 additional months.
(e) Payment of Utility Reimbursement. Where applicable, the Utility
Reimbursement will be paid to the Family as an additional Housing
Assistance Payment. The Contract will provide that the Owner will make
this payment on behalf of the contract administrator. Funds will be paid
to the Owner in trust solely for the purpose of making the additional
payment. If the Family and the utility company consent, the Owner may
pay the Utility Reimbursement jointly to the Family and the utility
company or directly to the utility company.
[44 FR 59410, Oct. 15, 1979, as amended at 49 FR 19943, May 10, 1984; 61
FR 13587, Mar. 27, 1996]
Sec. 880.502 Term of contract.
(a) Term (except for Manufactured Home Parks). The term of the
contract will be as follows:
(1) For assisted units in a project financed with the aid of a loan
insured or co-insured by the Federal government or a loan made,
guaranteed or intended for purchase by the Federal government, the term
will be 20 years.
(2) For assisted units in a project financed other than as described
in paragraph (a)(1) of this section, the term will be the lesser of (i)
the term of the project's financing (but not less than 20 years), or
(ii) 30 years, or 40 years if (A) the project is owned or financed by a
loan or loan guarantee from a state or local agency, (B) the project is
intended for occupancy by non-elderly families and (C) the project is
located in an area designated by HUD as one requiring special financing
assistance.
(b) Term for Manufactured Home Parks. For manufactured home units or
spaces in newly constructed manufactured home parks, the term of the
Contract will be 20 years.
(c) Staged Projects. If the project is completed in stages, the term
of the Contract must relate separately to the units in each stage. The
total Contract term for the units in all stages, beginning with the
effective date of the Contract for the first stage, may not exceed the
overall maximum term allowable for any one unit under this section, plus
two years.
[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 18924, Mar. 24, 1980;
48 FR 12705, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984]
Sec. 880.503 Maximum annual commitment and project account.
(a) Maximum Annual Commitment. Where HUD is the contract
administrator, the maximum annual amount
[[Page 55]]
that may be committed under the Contract is the total of the contract
rents and utility allowances for all assisted units in the project.
Where the PHA is the contract administrator, the maximum annual
contribution that may be contracted for in the ACC is the total of the
contract rents and utility allowances for all assisted units plus an
administrative fee for the PHA as approved by HUD.
(b) Project Account. (1) A project account will be established and
maintained by HUD as a specifically identified and segregated account
for each project. The account will be established out of the amounts by
which the maximum annual commitment exceeds the amount actually paid out
under the Contract or ACC each year. Payments will be made from this
account for housing assistance payments (and fees for PHA
administration, if appropriate) when needed to cover increases in
contract rents or decreases in tenant rents and for other cost
specifically approved by the Secretary.
(2) Whenever a HUD-approved estimate of required annual payments
under the Contract or ACC for a fiscal year exceeds the maximum annual
commitment and would cause the amount in the project account to be less
than 40 percent of the maximum, HUD will, within a reasonable period of
time, take such additional steps authorized by Section 8(c)(6) of the
U.S. Housing Act of 1937, as may be necessary, to assure that payments
under the Contract or ACC will be adequate to cover increases in
Contract rents and decreases in tenant rents.
Sec. 880.504 Leasing to eligible families.
(a) Availability of units for occupancy by Eligible Families. During
the term of the Contract, an owner shall make available for occupancy by
eligible families the total number of units for which assistance is
committed under the Contract. For purposes of this section, making units
available for occupancy by eligible families means that the owner: (1)
Is conducting marketing in accordance with Sec. 880.601(a); (2) has
leased or is making good faith efforts to lease the units to eligible
and otherwise acceptable families, including taking all feasible actions
to fill vacancies by renting to such families; and (3) has not rejected
any such applicant family except for reasons acceptable to the contract
administrator. If the owner is temporarily unable to lease all units for
which assistance is committed under the Contract to eligible families,
one or more units may be leased to ineligible families with the prior
approval of the contract administrator in accordance with HUD
guidelines. Failure on the part of the owner to comply with these
requirements is a violation of the Contract and grounds for all
available legal remedies, including specific performance of the
Contract, suspension or debarment from HUD programs, and reduction of
the number of units under the Contract as set forth in paragraph (b) of
this section.
(b) Reduction of number of units covered by Contract. (1) Part 880
and 24 CFR part 881 projects. HUD (or the PHA at the direction of HUD,
as appropriate) may reduce the number of units covered by the Contract
to the number of units available for occupancy by eligible families if:
(i) The owner fails to comply with the requirements of paragraph (a)
of this section; or
(ii) Notwithstanding any prior approval by the contract
administrator to lease such units to ineligible families, HUD (or the
PHA at the direction of HUD, as appropriate) determines that the
inability to lease units to eligible families is not a temporary
problem.
(2) For 24 CFR part 883 projects. HUD and the Agency may reduce the
number of units covered by the Contract to the number of units available
for occupancy by eligible families if:
(i) The owner fails to comply with the requirements of paragraph (a)
of this section; or
(ii) Notwithstanding any prior approval by the Agency to lease such
units to ineligible families, HUD and the Agency determine that the
inability to lease units to eligible families is not a temporary
problem.
(c) Restoration. For this part 880 and 24 CFR part 881 projects, HUD
will agree to an amendment of the ACC or the Contract, as appropriate,
to provide for subsequent restoration of any
[[Page 56]]
reduction made pursuant to paragraph (b) of this section, and for 24 CFR
part 883 projects, HUD will agree to an amendment of the ACC and the
Agency may agree to an amendment to the Contract to provide for
subsequent restoration of any reduction made pursuant to paragraph (b)
of this section, if:
(1) HUD determines (for 24 CFR part 883 projects, HUD and the Agency
determine) that the restoration is justified by demand,
(2) The owner otherwise has a record of compliance with his
obligations under the Contract, and
(3) Contract and budget authority is available.
(d) Applicability. In accordance with section 555 of the Cranston-
Gonzalez National Affordable Housing Act of 1990, paragraphs (a) and (b)
of this section apply to all Contracts. An owner who had leased an
assisted unit to an ineligible family consistent with the regulations in
effect at the time will continue to lease the unit to that family.
However, the owner must make the unit available for occupancy by an
eligible family when the ineligible family vacates the unit.
(e) Termination of assistance for failure to submit evidence of
citizenship or eligible immigration status. If an owner who is subject
to paragraphs (a) and (b) of this section is required to terminate
housing assistance payments for the family in accordance with 24 CFR
part 5 because the owner determines that the entire family does not have
U.S. citizenship or eligible immigration status, the owner may allow
continued occupancy of the unit by the family without Section 8
assistance following the termination of assistance, or if the family
constitutes a mixed family, as defined in 24 CFR part 5, the owner shall
comply with the provisions of 24 CFR part 5 concerning assistance to
mixed families, and deferral of termination of assistance.
[44 FR 59410, Oct. 15, 1979, as amended at 49 FR 31397, Aug. 7, 1984; 51
FR 11224, Apr. 1, 1986; 53 FR 846, Jan. 13, 1988; 53 FR 6601, Mar. 2,
1988; 59 FR 13652, Mar. 23, 1994; 60 FR 14841, Mar. 20, 1995; 61 FR
13587, Mar. 27, 1996]
Sec. 880.505 Contract administration and conversions.
(a) Contract administration. For private-owner/PHA projects, the PHA
is primarily responsible for administration of the Contract, subject to
review and audit by HUD. For private-owner/HUD and PHA-owner/HUD
projects, HUD is responsible for administration of the Contract.The PHA
or HUD may contract with another entity for the performance of some or
all of its contract administration functions.
(b) PHA fee for Contract administration. A PHA will be entitled to a
reasonable fee, determined by HUD, for administering a Contract except
under certain circumstances (see 24 CFR part 883) where a state housing
finance agency is the PHA and finances the project.
(c) Conversion of Projects from one Ownership/Contractual
arrangement to another. Any project may be converted from one ownership/
contractual arrangement to another (for example, from a private-owner/
HUD to a private-owner/PHA project) if:
(1) The owner, the PHA and HUD agree,
(2) HUD determines that conversion would be in the best interest of
the project, and
(3) In the case of conversion from a private-owner/HUD to a private-
owner/PHA project, contract authority is available to cover the PHA fee
for administering the Contract.
Sec. 880.506 Default by owner (private-owner/HUD and PHA-owner/HUD projects).
The Contract will provide:
(a) That if HUD determines that the owner is in default under the
Contract, HUD will notify the owner and the lender of the actions
required to be taken to cure the default and of the remedies to be
applied by HUD including specific performance under the Contract,
reduction or suspension of housing assistance payments and recovery of
overpayments, where appropriate; and
(b) That if the owner fails to cure the default, HUD has the right
to terminate the Contract or to take other corrective action.
[[Page 57]]
Sec. 880.507 Default by PHA and/or owner (private-owner/PHA projects).
(a) Rights of Owner if PHA defaults under Agreement or Contract. The
ACC, the Agreement and the Contract will provide that, in the event of
failure of the PHA to comply with the Agreement or Contract with the
owner, the owner will have the right, if he is not in default, to demand
that HUD investigate. HUD will first give the PHA a reasonable
opportunity to take corrective action. If HUD determines that a
substantial default exists, HUD will assume the PHA's rights and
obligations under the Agreement or Contract and meet the obligations of
the PHA under the Agreement or Contract including the obligations to
enter into the Contract.
(b) Rights of HUD if PHA defaults under ACC. The ACC will provide
that, if the PHA fails to comply with any of its obligations, HUD may
determine that there is a substantial default and require the PHA to
assign to HUD all of its rights and interests under the Contract;
however, HUD will continue to pay annual contributions in accordance
with the terms of the ACC and the Contract. Before determining that a
PHA is in substantial default, HUD will give the PHA a reasonable
opportunity to take corrective action.
(c) Rights of PHA and HUD if Owner defaults under Contract. (1) The
Contract will provide that if the PHA determines that the owner is in
default under the Contract, the PHA will notify the owner and lender,
with a copy to HUD, (i) of the actions required to be taken to cure the
default, (ii) of the remedies to be applied by the PHA including
specific performance under the Contract, abatement of housing assistance
payments and recovery of overpayments, where appropriate, and (iii) that
if he fails to cure the default, the PHA has the right to terminate the
Contract or to take other corrective action, in its discretion or as
directed by HUD.
(2) If the PHA is the lender, the Contract will also provide that
HUD has an independent right to determine whether the owner is in
default and to take corrective action and apply appropriate remedies,
except that HUD will not have the right to terminate the Contract
without proceeding in accordance with paragraph (b) of this section.
Sec. 880.508 Notice upon contract expiration.
(a) The Contract will provide that the owner will notify each
assisted family, at least 90 days before the end of the Contract term,
of any increase in the amount the family will be required to pay as rent
which may occur as a result of its expiration. If the Contract is to be
renewed but with a reduction in the number of units covered by it, this
notice shall be given to each family who will no longer be assisted
under the Contract.
(b) The notice provided for in paragraph (a) of this section shall
be accomplished by: (1) Sending a letter by first class mail, properly
stamped and addressed, to the family at its address at the project, with
a proper return address; and (2) serving a copy of the notice on any
adult person answering the door at the leased dwelling unit, or if no
adult responds, by placing the notice under or through the door, if
possible, or else by affixing the notice to the door. Service shall not
considered to be effective until both required notices have been
accomplished. The date on which the notice shall be considered to be
received by the family shall be the date on which the owner mails the
first class letter provided for in this paragraph, or the date on which
the notice provided for in this paragraph is properly given, whichever
is later.
(c) The notice shall advise each affected family that, after the
expiration date of the Contract, the family will be required to bear the
entire cost of the rent and that the owner will be free (to the extent
the project is not otherwise regulated by HUD) to alter the rent without
HUD approval, but subject to any applicable requirements or restrictions
under the lease or under State or local law. The notice shall also
state: (1) The actual (if known) or the estimated rent which will be
charged following the expiration of the Contract; (2) the difference
between the rent and the Total Tenant Payment toward rent under the
Contract; and (3) the date the Contract will expire.
[[Page 58]]
(d) The owner shall give HUD a certification that families have been
notified in accordance with this section with an example of the text of
the notice attached.
(e) This section applies to all Contracts entered into pursuant to
an Agreement executed on or after October 1, 1981, or entered into
pursuant to an Agreement executed before October 1, 1981, but renewed or
amended on or after October 1, 1984.
[49 FR 31283, Aug. 6, 1984]
Subpart F--Management
Sec. 880.601 Responsibilities of owner.
(a) Marketing. (1) The owner must commence diligent marketing
activities in accordance with the Agreement not later than 90 days prior
to the anticipated date of availability for occupancy of the first unit
of the project.
(2) Marketing must be done in accordance with the HUD-approved
Affirmative Fair Housing Marketing Plan and all Fair Housing and Equal
Opportunity requirements. The purpose of the Plan and requirements is to
assure that eligible families of similar income in the same housing
market area have an equal opportunity to apply and be selected for a
unit in projects assisted under this part regardless of their race,
color, creed, religion, sex or national origin.
(3) With respect to non-elderly family units, the owner must
undertake marketing activities in advance of marketing to other
prospective tenants in order to provide opportunities to reside in the
project to non-elderly families who are least likely to apply, as
determined in the Affirmative Fair Housing Marketing Plan, and to non-
elderly families expected to reside in the community by reason of
current or planned employment.
(4) At the time of Contract execution, the owner must submit a list
of leased and unleased units, with justification for the unleased units,
in order to qualify for vacancy payments for the unleased units.
(b) Management and maintenance. The owner is responsible for all
management functions, including determining eligibility of applicants in
accordance with 24 CFR parts 5 and 24 CFR part 813, provision of Federal
selection preferences in accordance with 24 CFR part 5, selection of
tenants, obtaining and verifying Social Security Numbers submitted by
families (as provided by 24 CFR part 5), obtaining signed consent forms
from families for the obtaining of wage and claim information from State
Wage Information Collection Agencies (as provided by 24 CFR part 5),
reexamination of family income, evictions and other terminations of
tenancy, and collection of rents, and all repair and maintenance
functions (including ordinary and extraordinary maintenance and
replacement of capital items). All these functions shall be performed in
compliance with applicable Equal Opportunity requirements.
(c) Contracting for services. (1) For this part 880 and 24 CFR part
881 projects, with HUD approval, the owner may contract with a private
or public entity (except the contract administrator) for performance of
the services or duties required in paragraphs (a) and (b) of this
section.
(2) For 24 CFR part 883 projects, with approval of the Agency, the
owner may contract with a private or public entity (but not with the
Agency unless temporarily necessary for the Agency to protect its
financial interest and to uphold its program responsibilities where no
alternative management agent is immediately available) for performance
of the services or duties required in paragraphs (a) and (b) of this
section.
(3) However, such an arrangement does not relieve the owner of
responsibility for these services and duties.
(d) Submission of financial and operating statements. After
execution of the Contract, the owner must submit to the contract
adminstrator:
(1) Within 60 days after the end of each fiscal year of the project,
financial statements for the project audited by an Independent Public
Accountant in the form required by HUD, and
(2) Other statements as to project operation, financial conditions
and occupancy as HUD may require pertinent to administration of the
Contract and monitoring of project operations.
(e) Use of project funds. (1) Project funds must be used for the
benefit of the project, to make required deposits
[[Page 59]]
to the replacement reserve in accordance with Sec. 880.602 and to
provide distributions to the owner as provided in Sec. 880.205,
Sec. 881.205 of this chapter, or Sec. 883.306 of this chapter, as
appropriate.
(2) For this part 880 and 24 CFR part 881 projects:
(i) Any remaining project funds must be deposited with the mortgagee
or other HUD-approved depository in an interest-bearing residual
receipts account. Withdrawals from this account will be made only for
project purposes and with the approval of HUD.
(ii) Partially-assisted projects are exempt from the provisions of
this section.
(iii) In the case of HUD-insured projects, the provisions of this
paragraph (e) will apply instead of the otherwise applicable mortgage
insurance provisions.
(3) For 24 CFR part 883 projects:
(i) Any remaining project funds must be deposited with the Agency,
other mortgagee or other Agency-approved depository in an interest-
bearing account. Withdrawals from this account may be made only for
project purposes and with the approval of the Agency.
(ii) In the case of HUD-insured projects, the provisions of this
paragraph will apply instead of the otherwise applicable mortgage
insurance provisions, except in the case of partially-assisted projects
which are subject to the applicable mortgage insurance provisions.
(Approved by the Office of Management and Budget under control number
2502-0204)
[44 FR 59410, Oct 15, 1979, as amended at 45 FR 18924, Mar. 24, 1980; 51
FR 11224, Apr. 1, 1986; 53 FR 846, Jan. 13, 1988; 53 FR 1145, Jan. 15,
1988; 53 FR 6601, Mar. 2, 1988; 54 FR 39702, Sept. 27, 1989; 56 FR 7536,
Feb. 22, 1991; 60 FR 14841, Mar. 20, 1995; 61 FR 13588, Mar. 27, 1996]
Sec. 880.602 Replacement reserve.
(a) A replacement reserve must be established and maintained in an
interest-bearing account to aid in funding extraordinary maintenance and
repair and replacement of capital items.
(1) Part 880 and 24 CFR part 881 projects. (i) For this part 880 and
24 CFR part 811 projects, an amount equivalent to .006 of the cost of
total structures, including main buildings, accessory buildings, garages
and other buildings, or any higher rate as required by HUD from time to
time, will be deposited in the replacement reserve annually. This amount
will be adjusted each year by the amount of the automatic annual
adjustment factor.
(ii) The reserve must be built up to and maintained at a level
determined by HUD to be sufficient to meet projected requirements.
Should the reserve achieve that level, the rate of deposit to the
reserve may be reduced with the approval of HUD.
(iii) All earnings including interest on the reserve must be added
to the reserve.
(iv) Funds will be held by the mortgagee or trustee for bondholders,
and may be drawn from the reserve and used only in accordance with HUD
guidelines and with the approval of, or as directed by, HUD.
(v) Partially-assisted part 880 and 24 CFR part 881 projects are
exempt from the provisions of this section.
(2) Part 883 of this chapter projects. (i) For 24 CFR part 883
projects, an amount equivalent to at least .006 of the cost of total
structures, including main buildings, accessory buildings, garages and
other buildings, or any higher rate as required from time to time by:
(A) The Agency, in the case of projects approved under 24 CFR part
883, subpart D; or
(B) HUD, in the case of all other projects, will be deposited in the
replacement reserve annually. For projects approved under 24 CFR part
883, subpart D, this amount may be adjusted each year by up to the
amount of the automatic annual adjustment factor. For all projects not
approved under 24 CFR part 883, subpart D, this amount must be adjusted
each year by the amount of the automatic annual adjustment factor.
(ii) The reserve must be built up to and maintained at a level
determined to be sufficient by the Agency to meet projected
requirements. Should the reserve achieve that level, the rate of deposit
to the reserve may be reduced with the approval of the Agency.
(iii) All earnings, including interest on the reserve, must be added
to the reserve.
[[Page 60]]
(iv) Funds will be held by the Agency, other mortgagee or trustee
for bondholders, as determined by the Agency, and may be drawn from the
reserve and used only in accordance with Agency guidelines and with the
approval of, or as directed by, the Agency.
(v) The Agency may exempt partially-assisted projects approved under
24 CFR part 883, subpart D, from the provisions of this section. All
partially-assisted projects not approved under the Fast Track Procedures
formerly in 24 CFR part 883, subpart D, are exempt from the provisions
of this section.
(b) In the case of HUD-insured projects, the provisions of this
section will apply instead of the otherwise applicable mortgage
insurance provisions, except in the case of partially-assisted insured
projects which are subject to the applicable mortgage insurance
provisions.
[61 FR 13588, Mar. 27, 1996]
Sec. 880.603 Selection and admission of assisted tenants.
(a) Application. The owner must accept applications for admission to
the project in the form prescribed by HUD. Both the owner (or designee)
and the applicant must complete and sign the application. For this part
880 and 24 CFR part 881 projects, on request, the owner must furnish
copies of all applications to HUD and the PHA, if applicable. For 24 CFR
part 883 projects, on request, the owner must furnish to the Agency or
HUD copies of all applications received.
(b) Determination of eligibility and selection of tenants. The owner
is responsible for obtaining and verifying information related to income
in accordance with 24 CFR part 813, and evidence related to citizenship
and eligible immigration status in accordance with 24 CFR part 5, to
determine whether the applicant is eligible for assistance in accordance
with the requirements of 24 CFR part 5, and 24 CFR part 813, and to
select families for admission to the program, which includes giving
selection preferences in accordance with 24 CFR part 5, subpart D.
(1) If the owner determines that the family is eligible and is
otherwise acceptable and units are available, the owner will assign the
family a unit of the appropriate size in accordance with HUD standards.
If no suitable unit is available, the owner will place the family on a
waiting list for the project and notify the family of when a suitable
unit may become available. If the waiting list is so long that the
applicant would not be likely to be admitted for the next 12 months, the
owner may advise the applicant that no additional applications are being
accepted for that reason, provided the owner complies with the
procedures for informing applicants about admission preferences as
provided in 24 CFR part 5, subpart D.
(2) If the owner determines that an applicant is ineligible on the
basis of income or family composition, or because of failure to meet the
disclosure and verification requirements for Social Security Numbers (as
provided by 24 CFR part 5), or because of failure by an applicant to
sign and submit consent forms for the obtaining of wage and claim
information from State Wage Information Collection Agencies (as provided
by 24 CFR parts 5 and 813), or that the owner is not selecting the
applicant for other reasons, the owner will promptly notify the
applicant in writing of the determination and its reasons, and that the
applicant has the right to meet with the owner or managing agent in
accordance with HUD requirements. Where the owner is a PHA, the
applicant may request an informal hearing. If the PHA determines that
the applicant is not eligible, the PHA will notify the applicant and
inform the applicant that he or she has the right to request HUD review
of the PHA's determination. The applicant may also exercise other rights
if the applicant believes that he or she is being discriminated against
on the basis of race, color, creed, religion, sex, or national origin.
See 24 CFR part 5 for the informal review provisions for the denial of a
Federal preference or the failure to establish citizenship or eligible
immigration status and for notice requirements where assistance is
terminated, denied, suspended, or reduced based on wage and claim
information obtained by HUD from a State Wage Information Collection
Agency.
(3) Records on applicants and approved eligible families, which
provide
[[Page 61]]
racial, ethnic, gender and place of previous residency data required by
HUD, must be maintained and retained for three years.
(c) Reexamination of family income and composition--(1) Regular
reexaminations. The owner must reexamine the income and composition of
all families at least every 12 months. After consultation with the
family and upon verification of the information, the owner must make
appropriate adjustments in the Total Tenant Payment in accordance with
24 CFR part 813 and determine whether the family's unit size is still
appropriate. The owner must adjust Tenant Rent and the Housing
Assistance Payment to reflect any change in Total Tenant Payment and
must carry out any unit transfer required by HUD. At the time of the
annual reexamination of family income and composition, the owner must
require the family to disclose the verify Social Security Numbers, as
provided by 24 CFR part 5. For requirements regarding the signing and
submitting of consent forms by families for the obtaining of wage and
claim information from State Wage Information Collection Agencies, see
24 CFR part 5. At the first regular reexamination after June 19, 1995,
the owner shall follow the requirements of 24 CFR part 5 concerning
obtaining and processing evidence of citizenship or eligible immigration
status of all family members. Thereafter, at each regular reexamination,
the owner shall follow the requirements of 24 CFR part 5 and verify the
immigration status of any new family member.
(2) Interim reexaminations. The family must comply with provisions
in its lease regarding interim reporting of changes in income. If the
owner receives information concerning a change in the family's income or
other circumstances between regularly scheduled reexaminations, the
owner must consult with the family and make any adjustments determined
to be appropriate. Any change in the family's income or other
circumstances that results in an adjustment in the Total Tenant Payment,
Tenant Rent and Housing Assistance Payment must be verified. See 24 CFR
part 5 for the requirements for the disclosure and verification of
Social Security Numbers at interim reexaminations involving new family
members. For requirements regarding the signing and submitting of
consent forms for the obtaining of wage and claim information from State
Wage Information Collection Agencies, see 24 CFR part 5. At any interim
reexamination after June 19, 1995, when a new family member has been
added, the owner shall follow the requirements of 24 CFR part 5
concerning obtaining and processing evidence of the citizenship or
eligible immigration status of any new family member.
(3) Continuation of housing assistance payments. A family's
eligibility for Housing Assistance Payments continues until the Total
Tenant Payment equals the Gross Rent. The termination of eligibility at
such point will not affect the family's other rights under its lease,
nor will such termination preclude the resumption of payments as a
result of later changes in income, rents, or other relevant
circumstances during the term of the Contract. However, eligibility also
may be terminated in accordance with HUD requirements, for such reasons
as failure to submit requested verification information, including
failure to meet the disclosure and verification requirements for Social
Security Numbers, as provided by 24 CFR part 5, or failure to sign and
submit consent forms for the obtaining wage and claim information from
State Wage Information Collection Agencies, as provided by 24 CFR part
5. See 24 CFR part 5 for provisions requiring termination of assistance
for failure to establish citizenship or eligible immigration status and
also for provisions concerning certain assistance for mixed families
(families whose members include those with eligible immigration status,
and those without eligible immigration status) in lieu of termination of
assistance, and for provisions concerning deferral of termination of
assistance.
(Approved by the Office of Management and Budget under control number
2502-0204.)
[61 FR 13589, Mar. 27, 1996]
Sec. 880.604 Tenant rent.
The eligible Family pays the Tenant Rent directly to the Owner.
[49 FR 19943, May 10, 1984]
[[Page 62]]
Sec. 880.605 Overcrowded and underoccupied units.
If the contract administrator determines that because of change in
family size an assisted unit is smaller than appropriate for the
eligible family to which it is leased, or that the unit is larger than
appropriate, housing assistance payments with respect to the unit will
not be reduced or terminated until the eligible family has been
relocated to an appropriate alternative unit. If possible, the owner
will, as promptly as possible, offer the family an appropriate unit. The
owner may receive vacancy payments for the vacated unit if he complies
with the requirements of Sec. 880.611.
Sec. 880.606 Lease requirements.
(a) Term of Lease. The term of the lease will be for not less than
one year. The lease may, or in the case of a lease for a term of more
than one year must, contain a provision permitting termination on 30
days advance written notice by the family.
(b) Form. (1) Part 880 and 24 CFR part 881 projects. For this part
880 and 24 CFR part 881 projects, the form of lease must contain all
required provisions, and none of the prohibited provisions specified in
the developer's packet, and must conform to the form of lease included
in the approved final proposal.
(2) 24 CFR part 883 projects. For 24 CFR part 883 projects, the form
of lease must contain all required provisions, and none of the
prohibited provisions specified below.
(i) Required provisions (Addendum to lease).
Addendum to Lease
The following additional Lease provisions are incorporated in full
in the Lease between ____ (Landlord) and ____ (Tenant) for the following
dwelling unit: ____. In case of any conflict between these and any other
provisions of the Lease, these provisions will prevail.
a. The total rent will be $____ per month.
b. Of the total rent, $____ will be payable by the State Agency
(Agency) as housing assistance payments on behalf of the Tenant and
$____ will be payable by the Tenant. These amounts will be subject to
change by reason of changes in the Tenant's family income, family
composition, or extent of exceptional medical or other unusual expenses,
in accordance with HUD-established schedules and criteria; or by reason
of adjustment by the Agency of any applicable Utility Allowance; or by
reasons of changes in program rules. Any such change will be effective
as of the date stated in a notification to the Tenant.
c. The Landlord will not discriminate against the Tenant in the
provision of services, or in any other manner, on the grounds of race,
color, creed, religion, sex, or national origin.
d. The Landlord will provide the following services and maintenance:
____________
e. A violation of the Tenant's responsibilities under the Section 8
Program, as determined by the Agency, is also a violation of the lease.
Landlord_______________________________________________________________
By_____________________________________________________________________
Date___________________________________________________________________
Tenant_________________________________________________________________
Date___________________________________________________________________
[End of addendum]
(ii) Prohibited provisions. Lease clauses which fall within the
classifications listed below must not be included in any Lease.
Lease Clauses
a. Confession of Judgment. Consent by the tenant to be sued, to
admit guilt, or to accept without question any judgment favoring the
landlord in a lawsuit brought in connection with the lease.
b. Seize or Hold Property for Rent or Other Charges. Authorization
to the landlord to take property of the tenant and/or hold it until the
tenant meets any obligation which the landlord has determined the tenant
has failed to perform.
c. Exculpatory Clause. Prior agreement by the tenant not to hold the
landlord or landlord's agents legally responsible for acts done
improperly or for failure to act when the landlord or landlord's agent
was required to do so.
d. Waiver of Legal Notice. Agreement by the tenant that the landlord
need not give any notices in connection with (1) a lawsuit against the
tenant for eviction, money damages, or other purposes, or (2) any other
action affecting the tenant's rights under the lease.
e. Waiver of Legal Proceeding. Agreement by the tenant to allow
eviction without a court determination.
f. Waiver of Jury Trial. Authorization to the landlord's lawyer to
give up the tenant's right to trial by jury.
g. Waiver of Right to Appeal Court Decision. Authorization to the
landlord's lawyer to give up the tenant's right to appeal a decision on
the ground of judicial error or to give
[[Page 63]]
up the tenant's right to sue to prevent a judgment being put into
effect.
h. Tenant Chargeable with Cost of Legal Actions Regardless of
Outcome of Lawsuit. Agreement by the tenant to pay lawyer's fees or
other legal costs whenever the landlord decides to sue the tenant
whether or not the tenant wins. (Omission of such a clause does not mean
that the tenant, as a party to a lawsuit, may not have to pay lawyer's
fees or other costs if the court so orders.)
[End of clauses]
[44 FR 59410, Oct. 15, 1979, as amended at 61 FR 13590, Mar. 27, 1996]
Sec. 880.607 Termination of tenancy and modification of lease.
(a) Applicability. The provisions of this section apply to all
decisions by an owner to terminate the tenancy of a family residing in a
unit under Contract during or at the end of the family's lease term.
(b) Entitlement of Families to occupancy--(1) Grounds. The owner may
not terminate any tenancy except upon the following grounds:
(i) Material noncompliance with the lease;
(ii) Material failure to carry out obligations under any State
landlord and tenant act;
(iii) Any criminal activity that threatens the health, safety, or
right to peaceful enjoyment of the premises by other residents; any
criminal activity that threatens the health, safety, or right to
peaceful enjoyment of their residences by persons residing in the
immediate vicinity of the premises; any criminal activity that threatens
the health, or safety of any on-site property management staff
responsible for managing the premises; or any drug-related criminal
activity on or near such premises, engaged in by a resident, any member
of the resident's household, or any guest or other person under the
resident's control shall be grounds for termination of tenancy.
(iv) Other good cause, which may include the refusal of a family to
accept an approved modified lease form (see paragraph (d) of this
section). No termination by an owner will be valid to the extent it is
based upon a lease or a provisions of State law permitting termination
of a tenancy solely because of expiration of an initial or subsequent
renewal term. All terminations must also be in accordance with the
provisions of any State and local landlord tenant law and paragraph (c)
of this section.
(2) Notice of good cause. The conduct of a tenant cannot be deemed
``other good cause'' under paragraph (b)(1)(iv) of this section unless
the owner has given the family prior notice that the grounds constitute
a basis for termination of tenancy. The notice must be served on the
family in the same manner as that provided for termination notices under
paragraph (c) of this section and State and local law.
(3) Material noncompliance. (i) Material noncompliance with the
lease includes:
(A) One or more substantial violations of the lease; or
(B) Repeated minor violations of the lease that disrupt the
livability of the building; adversely affect the health or safety of any
person or the right of any tenant to the quiet enjoyment of the leased
premises and related facilities; interfere with the management of the
building or have an adverse financial effect on the building.
(ii) Failure of the family to timely submit all required information
on family income and composition, including failure to submit required
evidence of citizenship or eligible immigration status (as provided by
24 CFR part 5), failure to disclose and verify Social Security Numbers
(as provided by 24 CFR part 5), failure to sign and submit consent forms
(as provided by 24 CFR part 5), or knowingly providing incomplete or
inaccurate information, shall constitute a substantial violation of the
lease.
(c) Termination notice. (1) The owner must give the family a written
notice of any proposed termination of tenancy, stating the grounds and
that the tenancy is terminated on a specified date and advising the
family that it has an opportunity to respond to the owner.
(2) When a termination notice is issued for other good cause
(paragraph (b)(1)(iv) of this section), the notice will be effective,
and it will so state, at the end of a term and in accordance with the
termination provisions of the lease, but in no case earlier than 30 days
after receipt by the family of the
[[Page 64]]
notice. Where the termination notice is based on material noncompliance
with the lease or material failure to carry out obligations under a
State landlord and tenant act pursuant to paragraph (b)(1)(i) or
(b)(1)(ii) of this section, the time of service must be in accord with
the lease and State law.
(3) In any judicial action instituted to evict the family, the owner
may not rely on any grounds which are different from the reasons set
forth in the notice.
(4) See 24 CFR part 5 for provisions related to termination of
assistance because of failure to establish citizenship or eligible
immigration status, including informal hearing procedures and also for
provisions concerning certain assistance for mixed families (families
whose members include those with eligible immigration status, and those
without eligible immigration status) in lieu of termination of
assistance, and for provisions concerning deferral of termination of
assistance.
(d) Modification of Lease form. The owner, with the prior approval
of HUD or, for a 24 CFR part 883 project, the Agency, may modify the
terms and conditions of the lease form effective at the end of the
initial term or a successive term, by serving an appropriate notice on
the family, together with the offer of a revised lease or an addendum
revising the existing lease. This notice and offer must be received by
the family at least 30 days prior to the last date on which the family
has the right to terminate the tenancy without being bound by the
modified terms and conditions. The family may accept the modified terms
and conditions by executing the offered revised lease or addendum, or
may reject the modified terms and conditions by giving the owner written
notice in accordance with the lease that the family intends to terminate
the tenancy. Any increase in rent must in all cases be governed by
Sec. 880.609 and other applicable HUD regulations.
(Approved by the Office of Management and Budget under control number
2502-0204)
[44 FR 59410, Oct. 15, 1979, as amended at 51 FR 11225, Apr. 1, 1986; 53
FR 846, Jan. 13, 1988; 53 FR 6601, Mar. 2, 1988; 54 FR 39703, Sept. 27,
1989; 56 FR 7537, Feb. 22, 1991; 60 FR 14842, Mar. 20, 1995; 61 FR
13590, Mar. 27, 1996; 61 FR 47382, Sept. 6, 1996]
Sec. 880.608 Security deposits.
(a) At the time of the initial execution of the lease, the owner
will require each family to pay a security deposit in an amount equal to
one month's Total Tenant Payment or $50, whichever is greater. The
family is expected to pay the security deposit from its own resources
and/or other public sources. The owner may collect the security deposit
on an installment basis.
(b) The owner must place the security deposits in a segregated,
interest-bearing account. The balance of this account must at all times
be equal to the total amount collected from the families then in
occupancy, plus any accrued interest. The owner must comply with any
applicable State and local laws concerning interest payments on security
deposits.
(c) In order to be considered for the return of the security
deposit, a family which vacates its unit will provide the owner with its
forwarding address or arrange to pick up the refund.
(d) The owner, subject to State and local law and the requirements
of this paragraph, may use the security deposit, plus any accrued
interest, as reimbursement for any unpaid family contribution or other
amount which the family owes under the lease. Within 30 days (or shorter
time if required by State, or local law) after receiving notification of
the family's forwarding address, the owner must:
(1) Refund to a family owing no rent or other amount under the lease
the full amount of the security deposit, plus accrued interest;
[[Page 65]]
(2) Provide to a family owing rent or other amount under the lease a
list itemizing any unpaid rent, damages to the unit, and estimated costs
for repair, along with a statement of the family's rights under State
and local law. If the amount which the owner claims is owed by the
family is less than the amount of the security deposit, plus accrued
interest, the owner must refund the unused balance to the family. If the
owner fails to provide the list, the family will be entitled to the
refund of the full amount of the security deposit plus accrued interest.
(e) In the event a disagreement arises concerning reimbursement of
the security deposit, the family will have the right to present
objections to the owner in an informal meeting. The owner must keep a
record of any disagreements and meetings in a tenant file for inspection
by the contract administrator. The procedures of this paragraph do not
preclude the family from exercising its rights under State and local
law.
(f) If the security deposit, including any accrued interest, is
insufficient to reimburse the owner for any unpaid tenant rent or other
amount which the family owes under the lease, and the owner has provided
the family with the list required by paragraph (d)(2) of this section,
the owner may claim reimbursement from the contract administrator, as
appropriate, for an amount not to exceed the lesser of:
(1) The amount owed the owner, or
(2) One month's contract rent, minus the amount of the security
deposit plus accrued interest. Any reimbursement under this section will
be applied first toward any unpaid tenant rent due under the lease. No
reimbursement may be claimed for unpaid rent for the period after
termination of the tenancy.
[44 FR 59410, Oct. 15, 1979, as amended at 49 FR 19943, May 10, 1984; 61
FR 13591, Mar. 27, 1996]
Sec. 880.609 Adjustment of contract rents.
(a) Automatic annual adjustment of Contract Rents. Upon request from
the owner to the contract administrator, contract rents will be adjusted
on the anniversary date of the contract in accordance with 24 CFR part
888.
(b) Special additional adjustments. For all projects, special
additional adjustments will be granted, to the extent determined
necessary by HUD (for 24 CFR part 883 projects, by the Agency and HUD),
to reflect increases in the actual and necessary expenses of owning and
maintaining the assisted units which have resulted from substantial
general increases in real property taxes, assessments, utility rates,
and utilities not covered by regulated rates, and which are not
adequately compensated for by annual adjustments under paragraph (a) of
this section. The owner must submit to the contract administrator
required supporting data, financial statements and certifications.
(c) Overall limitation. Any adjustments of contract rents for a unit
after Contract execution or cost certification, where applicable, must
not result in material differences between the rents charged for
assisted units and comparable unassisted units except to the extent that
the differences existed with respect to the contract rents set at
Contract execution or cost certification, where applicable.
[44 FR 59410, Oct. 15, 1979, as amended at 59 FR 22755, May 3, 1994; 61
FR 13591, Mar. 27, 1996]
Sec. 880.610 Adjustment of utility allowances.
In connection with annual and special adjustments of contract rents,
the owner must submit an analysis of the project's Utility Allowances.
Such data as changes in utility rates and other facts affecting utility
consumption should be provided as part of this analysis to permit
appropriate adjustments in the Utility Allowances. In addition, when
approval of a utility rate change would result in a cumulative increase
of 10 percent or more in the most recently approved Utility Allowances,
the project owner must advise the contract administrator and request
approval of new Utility Allowances. Whenever a Utility Allowance for a
unit is adjusted, the owner will promptly notify affected families and
make a corresponding adjustment of the tenant rent and the amount of the
[[Page 66]]
housing assistance payment for the unit.
(Approved by the Office of Management and Budget under control number
2502-0161)
[50 FR 39097, Sept. 27, 1985]
Sec. 880.611 Conditions for receipt of vacancy payments.
(a) General. Vacancy payments under the Contract will not be made
unless the conditions for receipt of these housing assistance payments
set forth in this section are fulfilled.
(b) Vacancies during Rent-up. For each assisted unit that is not
leased as of the effective date of the Contract, the owner is entitled
to vacancy payments in the amount of 80 percent of the contract rent for
the first 60 days of vacancy if the owner:
(1) Conducted marketing in accordance with Sec. 880.601(a) and
otherwise complied with Sec. 880.601;
(2) Has taken and continues to take all feasible actions to fill the
vacancy; and
(3) Has not rejected any eligible applicant except for good cause
acceptable to the contract administrator.
(c) Vacancies after Rent-Up. If an eligible family vacates a unit,
the owner is entitled to vacancy payments in the amount of 80 percent of
the contract rent for the first 60 days of vacancy if the owner:
(1) Certifies that he did not cause the vacancy by violating the
lease, the Contract or any applicable law;
(2) Notified the contract administrator of the vacancy or
prospective vacancy and the reasons for the vacancy immediately upon
learning of the vacancy or prospective vacancy;
(3) Has fulfilled and continues to fulfill the requirements
specified in Sec. 880.601(a) (2) and (3) and paragraph (b) (2) and (3)
of this section; and
(4) For any vacancy resulting from the owner's eviction of an
eligible family, certifies that he has complied with Sec. 880.607.
(d) Vacancies for longer than 60 days. If an assisted unit continues
to be vacant after the 60-day period specified in paragraph (b) or (c)
of this section, the owner may apply to receive additional vacancy
payments in an amount equal to the principal and interest payments
required to amortize that portion of the debt service attributable to
the vacant unit for up to 12 additional months for the unit if:
(1) The unit was in decent, safe and sanitary condition during the
vacancy period for which payments are claimed;
(2) The owner has fulfilled and continues to fulfill the
requirements specified in paragraph (b) or (c) of this section, as
appropriate; and
(3) The owner has (for 24 CFR part 883 projects, the owner and the
Agency have) demonstrated to the satisfaction of HUD that:
(i) For the period of vacancy, the project is not providing the
owner with revenues at least equal to project expenses (exclusive of
depreciation), and the amount of payments requested is not more than the
portion of the deficiency attributable to the vacant unit, and
(ii) The project can achieve financial soundness within a reasonable
time.
(e) Prohibition of double compensation for vacancies. The owner is
not entitled to vacancy payments for vacant units to the extent he can
collect for the vacancy from other sources (such as security deposits,
payments under Sec. 880.608(f), and governmental payments under other
programs).
[44 FR 59410, Oct. 15, 1979, as amended at 61 FR 13591, Mar. 27, 1996]
Sec. 880.612 Reviews during management period.
(a) After the effective date of the Contract, the contract
administrator will inspect the project and review its operation at least
annually to determine whether the owner is in compliance with the
Contract and the assisted units are in decent, safe and sanitary
condition.
(b) In addition:
(1)(i) For this part 880 and 24 CFR part 881 private-owner/PHA
projects, HUD will review the PHA's administration of the Contract at
least annually to determine whether the PHA is in compliance with the
ACC; and
(ii) For 24 CFR part 883 projects, HUD will periodically review the
Agency's administration of the Contract to determine whether it is in
compliance with the Contract.
[[Page 67]]
(2) HUD may independently inspect project operations and units at
any time.
(c) Equal Opportunity reviews may be conducted by HUD at any time.
[44 FR 59410, Oct. 15, 1979, as amended at 61 FR 13591, Mar. 27, 1996]
Sec. 880.612a Preference for occupancy by elderly families.
(a) Election of preference for occupancy by elderly families--(1)
Election by owners of eligible projects. (i) An owner of a project
assisted under this part (including a partially assisted project) that
was originally designed primarily for occupancy by elderly families (an
``eligible project'') may, at any time, elect to give preference to
elderly families in selecting tenants for assisted, vacant units in the
project, subject to the requirements of this section.
(ii) For purposes of this section, a project eligible for the
preference provided by this section, and for which the owner makes an
election to give preference in occupancy to elderly families is referred
to as an ``elderly project.'' ``Elderly families'' refers to families
whose heads of household, their spouses or sole members are 62 years or
older.
(iii) An owner who elects to provide a preference to elderly
families in accordance with this section is required to notify families
on the waiting list who are not elderly that the election has been made
and how the election may affect them if:
(A) The percentage of disabled families currently residing in the
project who are neither elderly nor near-elderly (hereafter,
collectively referred to as ``non-elderly disabled families'') is equal
to or exceeds the minimum required percentage of units established for
the elderly project in accordance with paragraph (c)(1) of this section,
and therefore non-elderly families on the waiting list (including non-
elderly disabled families) may be passed over for covered section 8
units; or
(B) The project, after making the calculation set forth in paragraph
(c)(1) of this section, will have no units set aside for non-elderly
disabled families.
(iv) An owner who elects to give a preference for elderly families
in accordance with this section shall not remove an applicant from the
project's waiting list on the basis of having made the election.
(2) HUD approval of election not required. (i) An owner is not
required to solicit or obtain the approval of HUD before exercising the
election of preference for occupancy provided in paragraph (a)(1) of
this section. The owner, however, if challenged on the issue of
eligibility of the project for the election provided in paragraph (a)(1)
of this section must be able to support the project's eligibility
through the production of all relevant documentation in the possession
of the owner that pertains to the original design of the project.
(ii) The Department reserves the right at any time to review and
make determinations regarding the accuracy of the identification of the
project as an elderly project. The Department can make such
determinations as a result of ongoing monitoring activities, or the
conduct of complaint investigations under the Fair Housing Act (42
U.S.C. 3601 through 3619), or compliance reviews and complaint
investigations under section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794) and other applicable statutes.
(b) Determining projects eligible for preference for occupancy by
elderly families--(1) Evidence supporting project eligibility. Evidence
that a project assisted under this part (or portion of a project) was
originally designed primarily for occupancy by elderly families, and is
therefore eligible for the election of occupancy preference provided by
this section, shall consist of at least one item from the sources
(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or
at least two items from the sources (``secondary'' sources) listed in
paragraph (b)(1)(ii) of this section:
(i) Primary sources. Identification of the project (or portion of a
project) as serving elderly (seniors) families in at least one primary
source such as: The application in response to the notice of funding
availability; the terms of the notice of funding availability under
which the application was solicited; the regulatory agreement; the loan
commitment; the bid invitation; the
[[Page 68]]
owner's management plan, or any underwriting or financial document
collected at or before loan closing; or
(ii) Secondary sources. Two or more sources of evidence such as:
lease records from the earliest two years of occupancy for which records
are available showing that occupancy has been restricted primarily to
households where the head, spouse or sole member is 62 years of age or
older; evidence that services for elderly persons have been provided,
such as services funded by the Older Americans Act, transportation to
senior citizen centers, or programs coordinated with the Area Agency on
Aging; project unit mix with more than fifty percent of efficiency and
one-bedroom units [a secondary source particularly relevant to
distinguishing elderly projects under the previous section 3(b)
definition (in which disabled families were included in the definition
of ``elderly families'') from non-elderly projects and which in
combination with other factors (such as the number of accessible units)
may be useful in distinguishing projects for seniors from those serving
the broader definition of ``elderly families'' which includes disabled
families]; or any other relevant type of historical data, unless clearly
contradicted by other comparable evidence.
(2) Sources in conflict. If a primary source establishes a design
contrary to that established by the primary source upon which the owner
would base support that the project is an eligible project (as defined
in this section), the owner cannot make the election of preferences for
elderly families as provided by this section based upon primary sources
alone. In any case where primary sources do not provide clear evidence
of original design of the project for occupancy primarily by elderly
families, including those cases where primary sources conflict,
secondary sources may be used to establish the use for which the project
was originally designed.
(c) Reservation of units in elderly projects for non-elderly
disabled families. The owner of an elderly project is required to
reserve, at a minimum, the number of units specified in paragraph (c)(1)
of this section for occupancy by non-elderly disabled families.
(1) Minimum number of units to be reserved for non-elderly disabled
families. The number of units in an elderly project required to be
reserved for occupancy by non-elderly disabled families, shall be, at a
minimum, the lesser of:
(i) The number of units equivalent to the higher of--
(A) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families on October
28, 1992; and
(B) The percentage of units assisted under this part in the elderly
project that were occupied by non-elderly disabled families upon January
1, 1992; or
(ii) 10 percent of the number of units assisted under this part in
the eligible project.
(2) Option to reserve greater number of units for non-elderly
disabled families. The owner, at the owner's option, and at any time,
may reserve a greater number of units for non-elderly disabled families
than that provided for in paragraph (c)(1) of this section. The option
to provide a greater number of units to non-elderly disabled families
will not obligate the owner to always provide that greater number to
non-elderly disabled families. The number of units required to be
provided to non-elderly disabled families at any time in an elderly
project is that number determined under paragraph (c)(1) of this
section.
(d) Secondary preferences. An owner of an elderly project also may
elect to establish secondary preferences in accordance with the
provisions of paragraph (d) of this section.
(1) Preference for near-elderly disabled families in units reserved
for elderly families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of elderly families who have applied for occupancy
to fill all the vacant units in the elderly project reserved for elderly
families (that is, all units except those reserved for the non-elderly
disabled families as provided in paragraph (c) of this section), the
owner may give preference for occupancy of such units to disabled
families who are near-elderly families.
(2) Preference for near-elderly disabled families in units reserved
for non-elderly
[[Page 69]]
disabled families. If the owner of an elderly project determines, in
accordance with paragraph (f) of this section, that there are an
insufficient number of non-elderly disabled families to fill all the
vacant units in the elderly project reserved for non-elderly disabled
families as provided in paragraph (c) of this section, the owner may
give preference for occupancy of these units to disabled families who
are near-elderly families.
(e) Availability of units to families without regard to preference.
An owner shall make vacant units in an elderly project generally
available to otherwise eligible families who apply for housing, without
regard to the preferences and reservation of units provided in this
section if either:
(1) The owner has adopted the secondary preferences and there are an
insufficient number of families for whom elderly preference, reserve
preference, and secondary preference has been given, to fill all the
vacant units; or
(2) The owner has not adopted the secondary preferences and there
are an insufficient number of families for whom elderly preference, and
reserve preference has been given to fill all the vacant units.
(f) Determination of insufficient number of applicants qualifying
for preference. To make a determination that there are an insufficient
number of applicants who qualify for the preferences, including
secondary preferences, provided by this section, the owner must:
(1) Conduct marketing in accordance with Sec. 880.601(a) to attract
applicants qualifying for the preferences and reservation of units set
forth in this section; and
(2) Make a good faith effort to lease to applicants who qualify for
the preferences provided in this section, including taking all feasible
actions to fill vacancies by renting to such families.
(g) Federal preferences. An owner that gives preferences to elderly
families and reserves units for non-elderly disabled families in
accordance with this section also shall select applicants among each
respective group in accordance with the Federal preferences contained in
24 CFR part 5. Projects under National Housing Act programs and
receiving section 8 assistance may be subject to preferences in addition
to those contained in 24 CFR part 5 which also must be applied in
selecting applicants among each respective group.
(h) Prohibition of evictions. An owner may not evict a tenant
without good cause, or require that a tenant vacate a unit, in whole or
in part because of any reservation or preference provided in this
section, or because of any action taken by the Secretary pursuant to
subtitle D (sections 651 through 661) of title VI of the Housing and
Community Development Act of 1992 (42 U.S.C. 13611 through 13620).
[59 FR 65850, Dec. 21, 1994, as amended at 61 FR 9046, Mar. 6, 1996]
PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR SUBSTANTIAL REHABILITATION--Table of Contents
Subpart A--Summary and Applicability
Sec.
881.101 General.
881.104 Applicability of part 881 in effect as of February 20, 1980.
881.105 Applicability to proposals and projects under 24 CFR part 811.
Subpart B--Definitions and Other Requirements
881.201 Definitions.
881.205 Limitation on distributions.
881.207 Property standards.
881.208 Financing.
881.211 Audit.
Subparts C-D [Reserved]
Subpart E--Housing Assistance Payments Contract
881.501 The contract.
881.502 Term of contract.
881.503 Cross-reference.
Subpart F--Management
881.601 Cross-reference.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
Source: 45 FR 7085, Jan. 31, 1980, unless otherwise noted.
[[Page 70]]
Subpart A--Summary and Applicability
Sec. 881.101 General.
(a) The purpose of the Section 8 program is to provide low-income
families with decent, safe and sanitary rental housing through the use
of a system of housing assistance payments. This part contains the
policies and procedures applicable to the Section 8 substantial
rehabilitation program. The assistance may be provided to public housing
agency owners or to private owners either directly from HUD or through
public housing agencies.
(b) This part does not apply to projects developed under other
Section 8 program regulations, including 24 CFR parts 880, 882, 883,
884, and 885, except to the extent specifically stated in those parts.
[61 FR 13591, Mar. 27, 1996]
Sec. 881.104 Applicability of part 881 in effect as of February 20, 1980.
(a) Part 881, in effect as of February 20, 1980, applies to all
proposals for which a notification of selection was not issued before
the February 20, 1980 effective date of part 881. (See 24 CFR part 881,
revised as of April 1, 1980). Where a notification of selection was
issued for a proposal before the February 20, 1980, effective date, part
881 in effect as of February 20, 1980 applies if the owner notified HUD
within 60 calendar days that the owner wished the provisions of part
881, effective February 20, 1980, to apply and promptly brought the
proposal into conformance.
(b) Subparts E (Housing Assistance Payments Contract) and F
(Management) of this part apply to all projects for which an Agreement
was not executed before the February 20, 1980, effective date of part
881. Where an Agreement was so executed:
(1) The owner and HUD may agree to make the revised subpart E of
this part applicable and to execute appropriate amendments to the
Agreement and/or Contract.
(2) The owner and HUD may agree to make the revised subpart F of
this part applicable (with or without the limitation on distributions)
and to execute appropriate amendments to the Agreement and/or Contract.
(c) Section 880.607 of this chapter, Termination of Tenancy and
Modification of Leases, applies to new families who begin occupancy or
execute a lease on or after 30 days after the February 20, 1980,
effective date of part 881. This section also applies to families not
covered by the preceding sentence, including existing families under
lease, with respect to all leases in which a renewal becomes effective
on or after the 60th day following the February 20, 1980 effective date
of part 881. A lease is considered to be renewed where both the landlord
and the family fail to terminate a tenancy under a lease permitting
either party to terminate.
(d) Notwithstanding the provisions of paragraph (b) of this section,
the provisions of 24 CFR part 5 (concerning preferences for selection of
applicants) apply to all projects, regardless of when an Agreement was
executed.
[61 FR 13591, Mar. 27, 1996]
Sec. 881.105 Applicability to proposals and projects under 24 CFR part 811.
Where proposals and projects are financed with tax-exempt
obligations under 24 CFR part 811, the provisions of part 811 will be
complied with in addition to all requirements of this part. In the event
of any conflict between this part and part 811, part 811 will control.
Subpart B--Definitions and Other Requirements
Sec. 881.201 Definitions.
The terms Fair Market Rent (FMR), HUD, NOFA, and Public Housing
Agency (PHA) are defined in 24 CFR part 5.
ACC. (Annual Contributions Contract) For a private-owner/PHA
project, for which the Contract is administered by a PHA, the ACC is the
contract between the PHA (as contract administrator) and HUD. Under the
ACC, HUD commits to provide the PHA with the funds needed to make
housing assistance payments to the owner and to pay the PHA for HUD-
approved administrative fees, and the PHA agrees to perform the duties
of a contract administrator.
[[Page 71]]
Agreement. (Agreement to Enter into Housing Assistance Payments
Contract) The Agreement between the owner and the contract administrator
which provides that, upon satisfactory completion of the project in
accordance with the HUD-approved final proposal, the administrator will
enter into the Contract with the owner.
Annual income. As defined in part 813 of this chapter.
Assisted unit. A dwelling unit eligible for assistance under a
Contract.
Contract. (Housing Assistance Payments Contract) The Contract
entered into by the owner and the contract administrator upon
satisfactory completion of the project, which sets forth the rights and
duties of the parties with respect to the project and the payments under
the Contract.
Contract Administrator. The entity which enters into the Contract
with the owner and is responsible for monitoring performance by the
owner. The contract administrator is a PHA in the case of private-owner/
PHA projects, and HUD is private-owner/HUD and PHA-owner/HUD projects.
Contract Rent. The total amount of rent specified in the Contract as
payable by HUD and the tenant to the owner for an assisted unit. In the
case of the rental of only a manufactured home space, ``contract rent''
is the total rent specified in the Contract as payable by HUD and the
tenant to the owner for rental of the space, including fees or charges
for management and maintenance services with respect to the space, but
excluding utility charges for the manufactured home.
Decent, safe and sanitary. Housing is decent, safe and sanitary at
project completion if the dwelling units and related facilities are
accepted by HUD as meeting the requirements of the Agreement. Housing
continues to be decent, safe and sanitary if it is maintained in a
condition substantially the same as at the time of acceptance.
Elderly Family. As defined in parts 812 and 813 of this chapter.
Family (eligible family). As defined in part 812 of this chapter.
Final proposal. The detailed description of a proposed project to be
assisted under this part, which an owner submits after selection of the
preliminary proposal, except where a preliminary proposal is not
required under Sec. 881.303(c). The final proposal becomes an exhibit to
the Agreement and is the standard by which HUD judges acceptable
construction of the project.
Gross rent. As defined in part 813 of this chapter.
Household type. The three household types are (1) elderly and
handicapped, (2) family, and (3) large family.
Housing Assistance Payment. The payment made by the PHA to the Owner
of a unit as provided in the Contract. The payment is the difference
between the Contract Rent and the Tenant Rent. An additional payment is
made to the Family when the Utility Allowance is greater than the Total
Tenant Payment. In the case of a Family renting only a manufactured home
space, as provided in Sec. 881.202(i), the Housing Assistance Payment is
the difference between the Gross Rent and the Total Tenant Payment, but
such payment may not exceed the Contract Rent for the space. A Housing
Assistance Payment, known as a ``vacancy payment'', may be made to the
Owner when an assisted unit is vacant, in accordance with the terms of
the Contract.
Housing Assistance Plan. A housing plan which is submitted by a unit
of general local government and approved by HUD as being acceptable
under the standards of 24 CFR part 570.
Housing type. The three housing types are new construction,
rehabilitation, and existing housing.
Independent Public Accountant. A Certified Public Accountant or a
licensed or registered public accountant, having no business
relationship with the owner except for the performance of audit, systems
work and tax preparation. If not certified, the Independent Public
Accountant must have been licensed or registered by a regulatory
authority of a State or other political subdivision of the United States
on or before December 31, 1970. In States that do not regulate the use
of the title ``public accountant,'' only Certified Public Accountants
may be used.
Low-Income Family. As defined in part 813 of this chapter.
Owner. Any private person or entity (including a cooperative) or a
public
[[Page 72]]
entity which qualifies as a PHA, having the legal right to lease or
sublease substantially rehabilitated dwelling units assisted under this
part. The term owner also includes the person or entity submitting a
proposal under this part.
Partially-assisted Project. A project for non-elderly families under
this part which includes more than 50 units of which 20 percent or fewer
are assisted.
PHA-Owner/HUD Project. A project under this part which is owned by a
PHA. For this type of project, the Agreement and the Contract are
entered into by the PHA, as owner, and HUD, as contract administrator.
Private-Owner/HUD Project. A project under this part which is owned
by a private owner. For this type of project, the Agreement and Contract
are entered into by the private owner, as owner, and HUD, as contract
administrator.
Private-Owner/PHA Project. A project under this part which is owned
by a private owner. For this type of project, the Agreement and Contract
are entered into by the private owner, as owner, and the PHA, as
contract administrator, pursuant to an ACC between the PHA and HUD. The
term also covers the situation where the ACC is with one PHA and the
owner is another PHA.
Project Account. A specifically identified and segregated account
for each project which is established in accordance with Sec. 881.503(b)
out of the amounts by which the maximum annual commitment exceeds the
amount actually paid out under the Contract or ACC, as applicable, each
year.
Rent. In the case of an assisted unit in a cooperative project, rent
means the carrying charges payable to the cooperative with respect to
occupancy of the unit.
Replacement cost. The sum of the ``as is'' value before
rehabilitation of the property as determined by HUD and the estimated
cost of rehabilitation, including carrying and finance charges.
Secretary. The Secretary of Housing and Urban Development (or
designee).
Single Room Occupancy (SRO) Housing. A unit for occupancy by a
single eligible individual capable of independent living, which does not
contain food preparation and/or sanitary facilities and is located
within a multifamily structure consisting of more than 12 units.
Small project. A project for non-elderly families under this part
which includes a total of 50 or fewer (assisted and unassisted) units.
Substantial rehabilitation. (a) The improvement of a property to
decent, safe and sanitary condition in accordance with the standards of
this part from a condition below those standards. Substantial
rehabilitation may vary in degree from gutting and extensive
reconstruction to the cure of substantial accumulation of deferred
maintenance. Cosmetic improvements alone do not qualify as substantial
rehabilitation under this definition.
(b) Substantial rehabilitation may also include renovation,
alteration or remodeling for the conversion or adaptation of
structurally sound property to the design and condition required for use
under this part or the repair or replacement of major building systems
or components in danger of failure.
Tenant Rent. The monthly amount defined in, and determined in
accordance with part 813 of this chapter.
Total Tenant Payment. The monthly amount defined in, and determined
in accordance with part 813 of this chapter.
Utility allowance. As defined in part 813 of this chapter, made or
approved by HUD.
Utility reimbursement. As defined in part 813 of this chapter.
Vacancy payment. The housing assistance payment made to the owner by
the contract administrator for a vacant assisted unit if certain
conditions are fulfilled as provided in the Contract. The amount of the
vacancy payment varies with the length of the vacancy period and is less
after the first 60 days of any vacancy.
Very Low-income Family. As defined in part 813 of this chapter.
[45 FR 7085, Jan. 31, 1980, as amended at 48 FR 12705, Mar. 28, 1983; 49
FR 17449, Apr. 24, 1984; 49 FR 19944, May 10, 1984; 61 FR 5212, Feb. 9,
1996; 61 FR 13591, Mar. 27, 1996]
Sec. 881.205 Limitation on distributions.
(a) Non-profit owners are not entitled to distributions of project
funds.
[[Page 73]]
(b) For the life of the Contract, project funds may only be
distributed to profit-motivated owners at the end of each fiscal year of
project operation following the effective date of the Contract after all
project expenses have been paid, or funds have been set aside for
payment, and all reserve requirements have been met. The first year's
distribution may not be made until cost certification, where applicable,
is completed. Distributions may not exceed the following maximum
returns:
(1) For projects for elderly families, the first year's distribution
will be limited to 6 percent on equity. The Assistant Secretary may
provide for increases in subsequent years' distributions on an annual or
other basis so that the permitted return reflects a 6 percent return on
the value in subsequent years, as determined by HUD, of the approved
initial equity. Any such adjustment will be made by Notice in the
Federal Register.
(2) For projects for non-elderly families, the first year's
distribution will be limited to 10 percent on equity. The Assistant
Secretary may provide for increases in subsequent years' distributions
on an annual or other basis so that the permitted return reflects a 10
percent return on the value in subsequent years, as determined by HUD,
of the approved initial equity. Any such adjustment will be made by
Notice in the Federal Register.
(c) For the purpose of determining the allowable distribution, an
owner's equity investment in a project is deemed to be 10 percent of the
replacement cost of the part of the project attributable to dwelling use
accepted by HUD at cost certification (see Sec. 881.405), unless the
owner justifies a higher equity contribution by cost certification
documentation in accordance with HUD mortgage insurance procedures.
(d) Any short-fall in return may be made up from surplus project
funds in future years.
(e) If HUD determines at any time that project funds are more than
the amount needed for project operations, reserve requirements and
permitted distribution, HUD may require the excess to be placed in an
account to be used to reduce housing assistance payments or for other
project purposes. Upon termination of the Contract, any excess funds
must be remitted to HUD.
(f) Owners of small projects or partially-assisted projects are
exempt from the limitation on distributions contained in paragraphs (b)
through (d) of this section.
(g) In the case of HUD-insured projects, the provisions of this
section will apply instead of the otherwise applicable mortgage
insurance program provisions.
Sec. 881.207 Property standards.
Projects must comply with:
(a) HUD Minimum Design Standards for Rehabilitation for Residential
Properties (HUD Handbook 4940.4);
(b) In the case of congregate or single room occupant housing, the
appropriate HUD guidelines and standards;
(c) HUD requirements pursuant to section 209 of the Housing and
Community Development Act of 1974 for projects for the elderly or
handicapped;
(d) HUD requirements pertaining to noise abatement and control;
(e) The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), 24 CFR part 35 and 24 CFR part 200, subpart O; and
(f) Applicable State and local laws, codes, ordinances and
regulations.
(g) Smoke detectors. (1) Performance requirement. After October 30,
1992, each dwelling unit must include at least one battery-operated or
hard-wired smoke detector, in proper working condition, on each level of
the unit. If the unit is occupied by hearing-impaired persons, smoke
detectors must have an alarm system, designed for hearing-impaired
persons, in each bedroom occupied by a hearing-impaired person.
(2) Acceptability criteria. The smoke detector must be located, to
the extent practicable, in a hallway adjacent to a bedroom, unless the
unit is occupied by a hearing-impaired person, in which case each
bedroom occupied by a hearing-impaired person must have an alarm system
connected to the smoke detector installed in the hallway.
[45 FR 7085, Jan. 31, 1980, as amended at 52 FR 1893, Jan. 15, 1987; 57
FR 33851, July 30, 1992]
[[Page 74]]
Sec. 881.208 Financing.
(a) Types of financing. Any type of construction financing and long-
term financing may be used, including:
(1) Conventional loans from commercial banks, savings banks, savings
and loan associations, pension funds, insurance companies or other
financial institutions;
(2) Mortgage insurance programs under the National Housing Act; and
(3) Financing by tax-exmpt bonds or other obligations.
(b) HUD approval. HUD must approve the terms and conditions of the
financing to determine consistency with these regulations and to assure
they do not purport to pledge or give greater rights or funds to any
party than are provided under the Agreement, Contract, and/or ACC. Where
the project is financed with tax-exempt obligations, the terms and
conditions will be approved in accordance with the following:
(1) An issuer of obligations that are tax-exempt under any provision
of Federal law or regulation, the proceeds of the sale of which are to
be used to purchase GNMA mortgage-backed securities issued by the
mortgagee of the Section 8 project, will be subject to 24 CFR part 811,
subpart B.
(2) Issuers of obligations that are tax-exempt under Section 11(b)
of the U.S. Housing Act of 1937 will be subject to 24 CFR part 811,
subpart A if paragraph (b)(1) of this section is not applicable.
(3) Issuers of obligations that are tax-exempt under any provision
of Federal law or regulation other than Section 11(b) of the U.S.
Housing Act of 1937 will be subject to 24 CFR 811, subpart A if
paragraph (b)(1) of this section is not applicable, except that such
issuers that are State Agencies qualified under 24 CFR part 883 are not
subject to 24 CFR part 811, subpart A and are subject solely to the
requirements of 24 CFR part 883 with regard to the approval of tax-
exempt financing.
(c) Pledge of contracts. An owner may pledge, or offer as security
for any loan or obligation, an Agreement, Contract or ACC entered into
pursuant to this part: Provided, however, That such financing is in
connection with a project constructed pursuant to this part and approved
by HUD. Any pledge of the Agreement, Contract, or ACC, or payments
thereunder, will be limited to the amounts payable under the Contract or
ACC in accordance with its terms. If the pledge or other document
provides that all payments will be paid directly to the mortgagee or the
trustee for bondholders, the mortgagee or trustee will make all payments
or deposits required under the mortgage, trust indenture of HUD
regulations and remit any excess to the owner.
(d) Foreclosure and other transfers. In the event of foreclosure,
assignment or sale approved by HUD in lieu of foreclosure, or other
assignment or sale approved by HUD:
(1) The Agreement, the Contract and the ACC, if applicable, will
continue in effect, and
(2) Housing assistance payments will continue in accordance with the
terms of the Contract.
(e) Financing of manufactured home parks. In the case of a
substantially rehabilitated manufactured home park, the principal amount
of any mortgage attributable to the rental spaces in the park may not
exceed an amount per space determined in accordance with Sec. 207.33(b)
of this Title.
[45 FR 7085, Jan. 31, 1980, as amended at 45 FR 62797, Sept. 22, 1980;
48 FR 12706, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984]
Sec. 881.211 Audit.
(a) Where a State or local government is the eligible owner of a
project or a contract administrator under Sec. 881.505 receiving
financial assistance under this part, the audit requirements in 24 CFR
part 44 shall apply.
(b) Where a nonprofit organization is the eligible owner of a
project, receiving financial assistance under this part, the audit
requirements in 24 CFR part 45 shall apply.
[50 FR 39091, Sept. 27, 1985; 51 FR 30480, Aug. 27, 1986, as amended at
57 FR 33257, July 27, 1992; 59 FR 2738, Jan. 19, 1994]
[[Page 75]]
Subparts C-D [Reserved]
Subpart E--Housing Assistance Payments Contract
Sec. 881.501 The contract.
(a) Contract. The Housing Assistance Payments Contract sets forth
rights and duties of the owner and the contract administrator with
respect to the project and the housing assistance payments. The owner
and contract administrator execute the Contract in the form prescribed
by HUD upon satisfactory completion of the project.
(b) [Reserved]
(c) Housing assistance payments to owners under the contract. The
housing assistance payments made under the Contract are:
(1) Payments to the owner to assist eligible families leasing
assisted units, and
(2) Payments to the owner for vacant assisted units (``vacancy
payments'') if the conditions specified in Sec. 881.611 are satisfied.
The housing assistance payments are made monthly by the contract
administrator upon proper requisition by the owner, except payments for
vacancies of more than 60 days, which are made semi-annually by the
contract administrator upon requisition by the owner.
(d) Amount of housing assistance payments to owner. (1) The amount
of the housing assistance payment made to the owner of a unit being
leased by an eligible family is the difference between the contract rent
for the unit and the tenant rent payable by the family.
(2) A housing assistance payment will be made to the owner for a
vacant assisted unit in an amount equal to 80 percent of the contract
rent for the first 60 days of vacancy, subject to the conditions in
Sec. 881.611. If the owner collects any tenant rent or other amount for
this period which, when added to this vacancy payment, exceeds the
contract rent, the excess must be repaid as HUD directs.
(3) For a vacancy that exceeds 60 days, a housing assistance payment
for the vacant unit will be made, subject to the conditions in
Sec. 881.611, in an amount equal to the principal and interest payments
required to amortize that portion of the debt attributable to the vacant
unit for up to 12 additional months.
(e) Payment of utility reimbursement. Where applicable, the Utility
Reimbursement will be paid to the Family as an additional Housing
Assistance Payment. The Contract will provide that the Owner will make
this payment on behalf of the contract administrator. Funds for this
purpose will be paid to the Owner in trust solely for the purpose of
making the additional payment. If the Family and the utility company
consent, the Owner may pay the Utility Reimbursement jointly to the
Family and the utility company or directly to the utility company.
[45 FR 7085, Jan. 31, 1980, as amended at 49 FR 19944, May 10, 1984; 61
FR 13591, Mar. 27, 1996]
Sec. 881.502 Term of contract.
(a) Term (except for Manufactured Home Parks). The term of the
Contract will be as follows:
(1) Where the estimated cost of the rehabilitation is less than 25
percent of the estimated value of the project after completion of the
rehabilitation, the contract will be for a term of 20 years for any
dwelling unit.
(2) Where the estimated cost of rehabilitation is 25 percent or more
of the estimated value of the project after completion of
rehabilitation, the contract may be for a term which:
(i) Will cover the longest term, but not less than 20 years, of a
single credit instrument covering:
(A) The cost of rehabilitation, or
(B) The existing indebtedness, or
(C) The cost of rehabilitation and the refinancing of the existing
indebtedness, or
(D) The cost of rehabilitation and the acquisition of the property;
and
(ii) For assisted units in a project financed with the aid of a loan
insured or co-insured by the Federal government or a loan made,
guaranteed or intended for purchase by the Federal government, will be
20 years for any dwelling unit; or
(iii) For units in a project financed other than as described in
paragraph (a)(2)(ii) of this section will not exceed 30 years for any
dwelling unit except
[[Page 76]]
that this limit will be 40 years if (A) the project is owned or financed
by a loan or loan guarantee from a state or local agency, (B) the
project is intended for occupancy by non-elderly families and (C) the
project is located in an area designated by HUD as one requiring special
financing assistance.
(b) Term for manufactured home parks. For manufactured home units or
spaces in substantially rehabilitated manufactured home parks, the term
of the Contract will be 20 years.
(c) Staged projects. If the project is completed in stages, the term
of the Contract must relate separately to the units in each stage. The
total Contract term for the units in all stages, beginning with the
effective date of the Contract for the first stage, may not exceed the
overall maximum term allowable for any one unit under this section, plus
two years.
[48 FR 12707, Mar. 28, 1983, and 49 FR 17449, Apr. 24, 1984]
Sec. 881.503 Cross-reference.
All of the provisions of Secs. 880.503, 880.504, 880.505, 880.506,
880.507, and 880.508 of this chapter apply to projects assisted under
this part, subject to the requirements of Sec. 881.104.
[61 FR 13592, Mar. 27, 1996]
Subpart F--Management
Sec. 881.601 Cross-reference.
All of the provisions of part 880, subpart F, of this chapter apply
to projects assisted under this part, subject to the requirements of
Sec. 881.104.
[61 FR 13592, Mar. 27, 1996]
PART 882--SECTION 8 CERTIFICATE AND MODERATE REHABILITATION PROGRAMS--Table of Contents
Subpart A--Applicability, Scope and Basic Policies
Sec.
882.101 Applicability and scope.
882.102 Definitions.
882.103-882.105 [Reserved]
882.106 Contract rents.
882.107 [Reserved]
882.108 Rent adjustments.
882.109 Housing quality standards.
882.110 Types of housing.
882.111 Equal opportunity requirements.
882.112 Security and utility deposits.
882.113-882.117 [Reserved]
882.118 Obligations of the Family.
882.119-882.122 [Reserved]
882.123 Conversion of Section 23 Units to Section 8 and Section 23
monitoring.
882.124 Audit.
Subpart B--Program Development and Operation
882.201-882.211 [Reserved]
882.212 Reexamination of family income and composition.
882.213 [Reserved]
882.214 Adjustment of allowance for utilities and other services.
882.215-882.216 [Reserved]
882.217 HUD review of contract compliance.
882.218 PHA reporting requirements. [Reserved]
882.219 [Reserved]
Subpart C--Shared Housing in the Certificate Program
882.301 Applicability, scope, and purpose.
882.302 Definitions.
882.305 Types of shared housing and applicable requirements.
882.310 PHA administration of shared housing.
882.315 Occupancy of a shared housing unit.
882.320 Initial contract rent.
882.325 Contract rent adjustments.
882.330 Tenant rent and total tenant payment.
882.335 Special requirements for related lease shared housing.
Subpart D--Special Procedures for Moderate Rehabilitation--Basic
Policies
882.401 Applicability, scope and purpose.
882.402 Definitions.
882.403 ACC, housing assistance payments contract, and lease.
882.404 Housing quality standards.
882.405 Financing.
882.406 Displacement, relocation, and acquisition.
882.407 Other Federal requirements.
882.408 Initial contract rents.
882.409 Contract rents at end of rehabilitation loan term.
882.410 Rent adjustments.
882.411 Payments for vacancies.
882.412 Subcontracting of owner services.
882.413 Responsibility of the Family.
Subpart E--Special Procedures for Moderate Rehabilitation--Program
Development and Operation
882.501 Distribution of funds and processing of PHA applications.
[[Page 77]]
882.502 Schedule of rehabilitation and leasing.
882.503 Obtaining proposals from owners.
882.504 Assistance to owners and selection of units.
882.505 Agreement to enter into housing assistance payments contract.
882.506 Rehabilitation period.
882.507 Completion of rehabilitation.
882.508 Execution of housing assistance payments contract.
882.509 Overcrowded and under occupied units.
882.510 Adjustment of utility allowance.
882.511 Termination of tenancy.
882.512 Reduction of number of units covered by contract.
882.513 Public notice to low-income families; waiting list.
882.514 Family participation.
882.515 Reexamination of family income and composition.
882.516 Maintenance, operation and inspections.
Subpart F--Special Assistance on Behalf of Manufactured Home Owners
882.601 Applicability and scope.
882.602 Definitions for this subpart.
882.603 Certificate of family participation for manufactured home
owner.
882.604 Assistance payments.
882.605 Maximum contract rent.
882.606 Schedule of utility allowances.
Subpart G--Section 8 Certificate Program Assistance Attached to Units
(Project-Based Certificate Assistance)
General
882.701 Purpose and applicability.
882.702-882.713 [Reserved]
882.714 Initial Contract Rents.
882.715 Contract Rent adjustments.
Subpart H--Section 8 Moderate Rehabilitation Single Room Occupancy
Program for Homeless Individuals
Sec.
882.801 Purpose.
882.802 Definitions.
882.803 Project eligibility and other requirements.
882.804 Other Federal requirements.
882.805 HA application process, ACC execution, and pre-rehabilitation
activities.
882.806 Agreement to enter into housing assistance payments.
882.807 Housing assistance payments contract.
882.808 Management.
882.809 Waivers.
882.810 Displacement, relocation, and acquisition.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, and 3535(d).
Source: 43 FR 61246, Dec. 29, 1978, unless otherwise noted.
Subpart A--Applicability, Scope and Basic Policies
Sec. 882.101 Applicability and scope.
(a) The policies and procedures contained herein are applicable to
the making of Housing Assistance Payments on Behalf of Eligible Families
leasing Existing Housing pursuant to the provisions of section 8 of the
U.S. Housing Act of 1937 (``Act'').
(b) Existing Housing means housing that is in Decent, Safe, and
Sanitary condition. Existing Housing does not include public housing.
(c) Certificate program. (1) Program regulations for the Section 8
tenant-based certificate and voucher programs are located at 24 CFR part
982. Program regulations for the Section 8 project-based certificate
program are located at 24 CFR part 983.
(2) The following provisions of subpart A of this part are
applicable to the Section 8 certificate program: Secs. 882.101, 882.106,
882.108, 882.110, and paragraphs (m), (n), (o), (p) and (q) of
Sec. 882.109.
(3) In applying provisions of subpart A of this part, the
definitions in Sec. 882.102 are applicable to the Section 8 certificate
program.
(4) Subparts C and F of this part are applicable to the Section 8
certificate program.
(5) Subpart G of this part is applicable to the Section 8 project-
based certificate program.
(d) Moderate rehabilitation programs. (1) Subparts D and E of this
part are applicable to the Section 8 Moderate Rehabilitation Program.
For applicability of other part 882 provisions to this program, see
Sec. 882.401(d).
(2) Subpart H of this part is applicable to the Section 8 Moderate
Rehabilitation Single Room Occupancy Program for Homeless Individuals.
For applicability of other part 882 provisions to this program, see
references in subpart H of this part.
[43 FR 61246, Dec. 29, 1978, as amended at 49 FR 12237, Mar. 29, 1984;
60 FR 34694, July 3, 1995]
[[Page 78]]
Sec. 882.102 Definitions.
The terms Fair Market Rent (FMR), HUD, Public Housing Agency (PHA),
and Secretary are defined in 24 CFR part 5.
ACC Reserve Account. The account established and maintained in
accordance with Sec. 882.104.
Annual Contributions Contract (``ACC''). A written agreement between
HUD and a PHA to provide annual contributions to the PHA to cover
housing assistance payments and other expenses pursuant to the Act.
Annual income. As defined in part 813 of this chapter.
Assisted Lease (or ``Lease''). A written agreement between an Owner
and a Family for the leasing of a unit by the Owner to the Family with
assistance payments under a Housing Assistance Payments Contract between
the Owner and the PHA.
Certificate of Family Participation (``Certificate''). A certificate
issued by the PHA declaring a Family to be eligible for participation in
this program and stating the terms and conditions for such
participation.
Common space. As defined in subpart C of this part.
Congregate housing. See Sec. 882.109(m).
Contract. See definition of Housing Assistance Payments Contract.
Contract rent. As defined in part 813 of this chapter.
Decent, safe, and sanitary. Housing is Decent, Safe, and Sanitary if
the requirements of Sec. 882.109 are met.
Existing housing. See Sec. 882.101(b).
Family (eligible family). As defined in part 812 of this chapter.
Gross Rent. As defined in part 813 of this chapter.
HCD Act. The Housing and Community Development Act of 1974.
Housing Assistance Payment. The payment made by the PHA to the Owner
of a unit under lease by an eligible Family, as provided in the
Contract. The payment is the difference between the Contract Rent and
the Tenant Rent. An additional payment is made by the PHA to the Family
when the Utility Allowance is greater than the Total Tenant Payment. In
the case of a Family renting only a manufactured home space as provided
in subpart F of this part, the Housing Assistance Payment is determined
in accordance with Sec. 882.604. A Housing Assistance Payment, known as
a ``vacancy payment'', may be made to the Owner when a unit is vacant,
in accordance with 882.105.
Housing Assistance Payments Contract (``Contract''). A written
contract between a PHA and an Owner for the purpose of providing housing
assistance payments to the Owner on behalf of an Eligible Family.
Housing Assistance Plan. (a) A Housing Assistance Plan submitted by
a local government participating in the Community Development Block
Grant Program as part of the block grant application, in accordance with
the requirements of Sec. 570.303(c) of the Community Development Block
Grant regulations (24 CFR part 570), and approved by HUD;
(b) A Housing Assistance Plan meeting the requirements of
Sec. 570.303(c), submitted by a local government not participating in
the Community Development Block Grant Program and approved by HUD.
Independent Group Residence. A dwelling unit for the exclusive
residential use of two to twelve elderly, handicapped or disabled
individuals (excluding live-in Resident Assistant(s) if any) who are not
capable of living completely independently and require a planned program
of continual supportive services. (See Sec. 882.109(n)(6).) Individuals
residing in an Independent Group Residence and receiving Section 8
assistance shall not require continual medical or nursing care and shall
be ambulatory or not confined to a bed continuously and capable of
taking appropriate actions for their own safety under emergency
conditions.
Lease. See Assisted Lease.
Low-Income Family. As defined in part 813 of this chapter.
Manufactured home. A structure, with or without a permanent
foundation, which is built on a permanent chassis, is designed for use
as a principle place of residence, and meets the Housing Quality
Standards set forth in Sec. 882.109.
Occupancy standards. Standards that the PHA establishes for
determining the number of bedrooms for Families of different sizes and
composition.
Owner. Any person or entity, including a cooperative, having the
legal
[[Page 79]]
right to lease or sublease Existing Housing.
Private space. As defined in subpart C of this part.
Related lease shared housing. As defined in subpart C of this part.
Resident Assistant. A person who lives in an Independent Group
Residence and provides on a daily basis some or all of the necessary
support services to elderly, handicapped and disabled individuals
receiving Section 8 housing assistance and who is essential to these
individuals' care or well being. A Resident Assistant shall not be
related by blood, marriage or operation of law to the individuals
receiving Section 8 housing assistance nor contribute a portion of his
or her income or resources towards the expenses of these individuals.
(See Secs. 882.106(d) and 882.109(n).)
Service Agency. A public or private non-profit organization which is
recognized by the State as qualified to determine the supportive service
needs of individuals who will reside in Independent Group Residences.
The service agency may perform outreach to potential residents of
Independent Group Residences and assist these individuals in applying
for housing assistance, provide all or a portion of the supportive
services and may identify and coordinate appropriate local, public or
private resources to furnish these services. The Service Agency may own
or sublease an Independent Group Residence.
Service agreement. A written agreement approved by the State between
the Owner (including an entity with the right to sublease) of an
Independent Group Residence and the Service Agency and/or other entities
providing the supportive services to the occupants of Independent Group
Residences. The agreement shall specify the type and frequency of the
supportive services to be furnished. (See Secs. 882.109(n)(6) and
882.209(j)(2)).
Shared housing. As defined in part 813 of this chapter.
Single Room Occupancy (SRO) Housing. A unit which contains no
sanitary facilities or food preparation facilities, or which contains
one but not both types of facilities (as those facilities are defined in
Sec. 882.109 (a) and (b)), and which is suitable for occupancy by a
single eligible individual capable of independent living.
Tenant Rent. The monthly amount defined in, and determined in
accordance with part 813 of this chapter.
Total Tenant Payment (``Gross Family Contribution''). The monthly
amount defined in, and determined in accordance with part 813 of this
chapter.
Utility allowance. As defined in part 813 of this chapter, approved
by a PHA.
Utility reimbursement. As defined in part 813 of this chapter. It is
inapplicable to a Family renting only a manufactured home space.
Very Low-income Family. As defined in part 813 of this chapter.
[43 FR 61246, Dec. 29, 1978, as amended at 44 FR 65364, Nov. 9, 1979; 47
FR 33500, Aug. 3, 1982; 48 FR 43582, Sept. 23, 1983; 49 FR 12237, Mar.
29, 1984; 49 FR 19945, May 10, 1984; 49 FR 26576, June 28, 1984; 50 FR
9269, Mar. 7, 1985; 50 FR 38794, Sept. 25, 1985; 51 FR 21308, 21309,
June 11, 1986; 53 FR 4388, Feb. 16, 1988; 53 FR 7734, Mar. 10, 1988; 61
FR 5212, Feb. 9, 1996]
Secs. 882.103-882.105 [Reserved]
Sec. 882.106 Contract rents.
(a) Fair Market Rent limitation. (1) The Gross Rent for any existing
housing unit approved pursuant to Sec. 882.209(f) shall not exceed the
Fair Market Rent applicable to such unit on the date of Lease approval,
except as provided in this paragraph (a).
(2) The PHA may approve, on a unit-by-unit basis, initial Gross
Rents that exceed the applicable Fair Market Rents by up to 10 percent.
The total number of units with such rents approved under this paragraph
(a)(2) and under paragraph (b)(2)(i) of Sec. 882.714, Initial Contract
Rents, may not exceed 20 percent of the number of units under ACC for
the PHA's Certificate Program. The PHA, however, may also exercise such
authority with respect to more than 20 percent of the units under ACC if
HUD approves such extension of the PHA's authority. In considering
whether to grant such approval, HUD will review the appropriateness of
the applicable Fair Market Rents and the relationship of estimated
program costs to program objectives.
(3) HUD may approve, upon request from a PHA, maximum Gross Rents
for all units of a given size or type (elevator/nonelevator) of up to 20
percent
[[Page 80]]
above the applicable Fair Market Rents within a designated municipality,
county or similar locality. Any such request must be supported by a
statement of the special circumstances warranting such increase in
maximum Gross Rents, including whether such higher rents are necessary
to implement a Housing Assistance Plan. In considering whether to grant
such approval, HUD will review the appropriateness of the applicable
Fair Market Rents and the relationship of estimated program costs to
program objectives. In no event shall a maximum Gross Rent, as approved
under this paragraph, exceed the rent, including Allowances for
Utilities and Other Services, determined by HUD to be the average rent
currently being charged for available standard units of similar size or
type in the applicable municipality or county.
(4) On the basis of a showing by the PHA that (i) special
circumstances apply to units of a given size or type limited to a
specified neighborhood, (ii) by reason of these circumstances the
reasonable Gross Rents for such units are as high as 20 percent above
the applicable Fair Market Rents, and (iii) the units cannot be rented
for less, HUD may authorize the PHA to approve Gross Rents for such
units up to 20 percent above the applicable Fair Market Rents. On the
basis of a showing by the PHA that (iv) the leasing of a certain unit is
necessary to meet the unique needs of a particular Family, (v) the
reasonable Gross Rent for the unit is as high as 20 percent above the
applicable Fair Market Rent, and (vi) the unit cannot be rented for
less, HUD may authorize the PHA to approve a Gross Rent for that unit up
to 20 percent above the applicable Fair Market Rent. Authorization under
this paragraph (a)(4) shall be based upon substantially the same
criteria as under paragraph (a)(3) of this section except for the last
sentence thereof.
(b) Rent reasonableness limitation. (1) The PHA shall certify for
each unit for which it approves a lease that the Contract Rent for such
unit is:
(i) Reasonable in relation to rents currently being charged for
comparable units in the private unassisted market, taking into account
the location, size, type, quality, amenities, facilities and management
and maintenance service of such unit, and
(ii) Not in excess of rents currently being charged by the Owner for
comparable unassisted units.
(2) For an assisted unit that is subject to local rent control,
comparable units are rent controlled units. However, for an assisted
unit that is not subject to local rent control while it is assisted
(regardless of whether the unit would be subject to such control if it
were not assisted), comparable units are units that are not subject to
local rent control.
(3) The PHA shall maintain for three years all certifications and
relevant documentation under this paragraph (b) for inspection by HUD.
(c) Congregate Housing. (1) The Fair Market Rent for each congregate
housing unit shall be the same as for 0-bedroom units, except that, if
the unit consists of two or more private rooms, the Fair Market Rent
shall be the same as for a 1-bedroom unit.
(2) In determining the reasonableness of the rents, consideration
shall be given to the presence or absence of common rather than private
cooking, dining and sanitary facilities and the provision of special
amenities or maintenance and/or management services.
(d) Independent Group Residences. (1)(i) The Fair Market Rent for an
Independent Group Residence shall be the Fair Market Rent applicable to
the unit size being leased, for example, a 4-bedroom unit if the
residence contains 4 bedrooms.
(ii) The PHA shall issue a Certificate of Family Participation to
each eligible Family which will reside in an Independent Group
Residence. A separate Lease and Contract shall be executed for each such
Family. A Resident Assistant who lives in the unit may be counted as a
Family member in determining the appropriate number of bedrooms.
However, the Resident Assistant's income shall be disregarded in
determining the Total Tenant Payment, the Tenant Rent or the Family's
income eligibility.
(2) For purposes of determining the housing assistance payment for
each individual participating in the Section
[[Page 81]]
8 Existing Program, the PHA shall allocate the Gross Rent, which is
subject to paragraphs (a) and (b) of this section, among the total
number of occupants in the Independent Group Residence in an equitable
manner which ensures that the Gross Rents of occupants (other than the
resident Assistant(s), if any, occupying no more than 1-bedroom) not
receiving Section 8 assistance are not subsidized.
To determine the portion of the Gross Rent to be allocated to each
individual receiving Section 8 assistance, the Gross Rent is divided by
the total number of occupants in the Independent Group Residence other
than the Resident Assistant(s), if any, who will occupy no more than 1-
bedroom. For example, if three Section 8 recipients and a Resident
Assistant reside in a 4-bedroom unit, the housing assistance payment for
each of the Section 8 recipients would be based on \1/3\ of the Gross
Rent. Likewise, if two Section 8 recipients, a Resident Assistant and a
person not receiving Section 8 assistance reside in a 4-bedroom unit,
the housing assistance payments for each of the Section 8 recipients
would be based on \1/3\ of the Gross Rent; the person not receiving
Section 8 assistance would pay \1/3\ of the Gross Rent. However, if a
Section 8 recipient, a person not receiving Section 8 assistance, and
two Resident Assistants each occupy a bedroom in a 4-bedroom unit, the
housing assistance payment for the Section 8 recipient would be based on
\1/3\ of the Gross Rent and one of the Resident Assistants would be
considered a person not receiving Section 8 assistance since this
section prohibits Section 8 assistance being contributed toward more
than 1-bedroom for the housing costs of the Resident Assistant(s). In
all of these examples the Fair Market Rent for the Independent Group
Residence would be that of a 4-bedroom unit.
(3) In determining the reasonableness of the rents, consideration
shall be given to the presence or absence of common (rather than
private) cooking, dining and sanitary facilities, and to the provision
of special amenities or of maintenance or management services.
(e) Single Room Occupancy Units. (1) The Fair Market Rent for each
SRO unit shall be equal to 75 percent of the 0-bedroom Fair Market Rent.
(2) In areas where HUD has approved the use of exception rents for
0-bedroom units under paragraph (a)(3) or (a)(4) of this section, the
SRO exception rent will be 75 percent of the exception rent which
applies to the Existing Housing 0-bedroom unit. Further, a SRO unit may
be granted an exception rent for its own specified unit size. In no case
may the authorized rent for the SRO unit exceed 75 percent of 120
percent of the 0-bedroom unit FMR.
(3) In determining the reasonableness of the rents, consideration
will be given to the presence or absence of sanitary or kitchen
facilities.
(f) Shared Housing. See Sec. 882.320.
(g) Other services--exclusion from Contract Rent. The Contract Rent
may not include the cost of providing supportive services, housekeeping
or laundry services, furniture, food, or the cost of serving food.
[43 FR 61246, Dec. 29, 1978, as amended at 49 FR 12237, Mar. 29, 1984;
50 FR 38794, Sept. 25, 1985; 51 FR 21309, June 11, 1986; 53 FR 4388,
Feb. 16, 1988; 53 FR 7734, Mar. 10, 1988; 54 FR 237, Jan. 4, 1989; 55 FR
9257, Mar. 12, 1990]
Sec. 882.107 [Reserved]
Sec. 882.108 Rent adjustments.
(a) Contract Rents shall be adjusted as provided in paragraphs (a)
(1) and (2) of this section upon request to the PHA by the owner.
However, the unit must be in Decent, Safe and Sanitary condition and the
owner must otherwise be in compliance with the terms of the lease and
the Contract. Subject to the foregoing and Sec. 882.106(b) (the rent
reasonableness limitations) adjustments to Contract Rents shall be as
follows:
(1) Annual adjustments. (i) Annual adjustments as of any anniversary
date shall be determined by using the applicable Section 8 Annual
Adjustment Factor (24 CFR part 888) most recently published by HUD in
the Federal Register.
(ii) Contract Rents may be adjusted upward or downward, as may be
appropriate. However, in no case shall the adjusted rent be less than
the Contract Rent on the effective date of the Contract.
[[Page 82]]
(2) Special adjustments. A special adjustment, subject to HUD
approval, to reflect increases in the actual and necessary expenses of
owning and maintaining the unit which have resulted from substantial
general increases in real property taxes, utility rates or similar costs
(i.e., assessments, and utilities not covered by regulated rates), but
only if and to the extent that the Owner clearly demonstrates that such
general increases have caused increases in the Owner's operating costs
which are not adequately compensated for by the annual adjustments
provided for in paragraph (a)(1) of this section. The Owner shall submit
financial statements to the PHA which clearly support the increase.
(b) Overall Limitation. Notwithstanding any other provisions of this
part, adjustments as provided in this section shall not result in
material differences between the rents charged for assisted and
comparable (as defined in Sec. 882.106(b)) unassisted units, as
determined by the PHA (and approved by HUD in the case of adjustments
under paragraph (a)(2) of this section).
[43 FR 61246, Dec. 29, 1978, as amended at 44 FR 43903, July 26, 1979;
47 FR 4252, Jan. 29, 1982; 47 FR 33500, Aug. 3, 1982; 49 FR 12237, Mar.
29, 1984]
Sec. 882.109 Housing quality standards.
Housing used in this program shall meet the Performance Requirements
set forth in this section. In addition, the housing shall meet the
Acceptability Criteria set forth in this section except for such
variations as are proposed by the PHA and approved by HUD. Local
climatic or geological conditions or local codes are examples which may
justify such variations.
(a) Sanitary facilities--(1) Performance requirement. The dwelling
unit shall include its own sanitary facilities which are in proper
operating condition, can be used in privacy, and are adequate for
personal cleanliness and the disposal of human waste.
(2) Acceptability criteria. A flush toilet in a separate, private
room, a fixed basin with hot and cold running water, and a shower or tub
with hot and cold running water shall be present in the dwelling unit,
all in proper operating condition. These facilities shall utilize an
approved public or private disposal system.
(b) Food preparation and refuse disposal--(1) Performance
requirement. The dwelling unit shall contain suitable space and
equipment to store, prepare, and serve foods in a sanitary manner. There
shall be adequate facilities and services for the sanitary disposal of
food wastes and refuse, including facilities for temporary storage where
necessary (e.g., garbage cans).
(2) Acceptability criteria. The unit shall contain the following
equipment in proper operating condition: cooking stove or range and a
refrigerator of appropriate size for the unit, supplied by either the
Owner or the Family, and a kitchen sink with hot and cold running water.
The sink shall drain into an approved public or private system. Adequate
space for the storage, preparation and serving of food shall be
provided.
(c) Space and security--(1) Performance Requirement. The dwelling
unit shall afford the Family adequate space and security.
(2) Acceptability criteria. The dwelling unit shall contain a living
room, kitchen area, and bathroom. The dwelling unit shall contain at
least one bedroom or living/sleeping room of appropriate size for each
two persons. Persons of opposite sex, other than husband and wife or
very young children, shall not be required to occupy the same bedroom or
living/sleeping room. Exterior doors and windows accessible from outside
the unit shall be lockable.
(d) Thermal environment--(1) Performance requirement. The dwelling
unit shall have and be capable of maintaining a thermal environment
healthy for the human body.
(2) Acceptability criteria. The dwelling unit shall contain safe
heating and/or cooling facilities which are in proper operating
condition and can provide adequate heat and/or cooling to each room in
the dwelling unit appropriate for the climate to assure a healthy living
environment. Unvented room heaters which burn gas, oil or kerosene are
unacceptable.
(e) Illumination and electricity--(1) Performance requirement. Each
room shall
[[Page 83]]
have adequate natural or artificial illumination to permit normal indoor
activities and to support the health and safety of occupants. Sufficient
electrical sources shall be provided to permit use of essential
electrical appliances while assuring safety from fire.
(2) Acceptability criteria. Living and sleeping rooms shall include
at least one window. A ceiling or wall type light fixture shall be
present and working in the bathroom and kitchen area. At least two
electric outlets one of which may be an overhead light, shall be present
and operable in the living area, kitchen area, and each bedroom area.
(f) Structure and materials--(1) Performance requirement. The
dwelling unit shall be structurally sound so as not to pose any threat
to the health and safety of the occupants and so as to protect the
occupants from the environment.
(2) Acceptability criteria. Ceilings, walls, and floors shall not
have any serious defects such as severe bulging or leaning, large holes,
loose surface materials, severe buckling or noticeable movement under
walking stress, missing parts or other serious damage. The roof
structure shall be firm and the roof shall be weathertight. The exterior
wall structure and exterior wall surface shall not have any serious
defects such as serious leaning, buckling, sagging, cracks or holes,
loose siding, or other serious damage. The condition and equipment of
interior and exterior stairways, halls, porches, walkways, etc., shall
be such as not to present a danger of tripping or falling. Elevators
shall be maintained in safe and operating condition.
(g) Interior air quality--(1) Performance requirement. The dwelling
unit shall be free of pollutants in the air at levels which threaten the
health of the occupants.
(2) Acceptability criteria. The dwelling unit shall be free from
dangerous levels of air pollution from carbon monoxide, sewer gas, fuel
gas, dust, and other harmful air pollutants. Air circulation shall be
adequate throughout the unit. Bathroom areas shall have at least one
openable window or other adequate exhaust ventilation.
(h) Water supply--(1) Performance requirement. The water supply
shall be free from contamination.
(2) Acceptability criteria. The unit shall be served by an approved
public or private sanitary water supply.
(i) Lead-based paint--(1) Purpose and applicablity. The purpose of
this paragraph is to implement the provisions of section 302 of the
Lead-Based Paint Poisoning Prevention Act, 42 U.S.C. 4822, by
establishing procedures to eliminate as far as practicable the hazards
of lead-based paint poisoning with respect to existing housing units for
which Requests For Lease Approval are made under this part. This
paragraph is promulgated under the authorization granted in 24 CFR
35.24(b)(4) and supersedes, with respect to all housing to which it
applies, the requirements prescribed by subpart C of 24 CFR part 35. The
requirements of paragraph (i)(4) of this section are applicable to units
for which initial inspection under Sec. 882.209(h)(1) or periodic
inspection under Sec. 882.211(b) is made on or after May 1, 1987. The
requirements of this paragraph do not apply to 0-bedroom units. The
requirements of subpart A of 24 CFR part 35 apply to all units
constructed prior to 1978 covered by a Housing Assistance Payments
Contract under this subpart.
(2) Definitions--Applicable surface. All intact and nonintact
interior and exterior painted surfaces of a residential structure.
Chewable surface. All chewable protruding painted surfaces up to
five feet from the floor or ground, which are readily accessible to
children under seven years of age, e.g., protruding corners, windowsills
and frames, doors and frames, and other protruding woodworks.
Defective paint surface. Paint on applicable surfaces that is
cracking, scaling, chipping, peeling or loose.
Elevated blood lead level or EBL. Excessive absorption of lead, that
is, a confirmed concentration of lead in whole blood of 25 ug/dl
(micrograms of lead per deciliter of whole blood) or greater.
Lead-based paint. A paint surface, whether or not defective,
identified as having a lead content greater than or equal to 1 mg/cm\2\.
[[Page 84]]
(3) Defective paint. In the case of a unit, for a Family which
includes a child under the age of seven years, which was constructed
prior to 1978, the initial inspection under Sec. 882.209(h)(1), and each
periodic inspection under Sec. 882.211(b), shall include an inspection
for defective paint surfaces. If defective paint surfaces are found,
treatment as required by 24 CFR 35.24(b)(2)(ii) shall be required in
accordance with Sec. 882.209(h) or Sec. 882.211(b)-(c), as appropriate.
Correction of defective paint conditions discovered at periodic
inspection shall be completed within 30 days of PHA notification to the
Owner. When weather conditions prevent completion of repainting of
exterior surfaces within the 30 day period, repainting may be delayed,
but covering or removal of the defective paint must be completed within
the prescribed period.
(4) Chewable surfaces. In the case of a unit constructed prior to
1978, for a Family which includes a child under the age of seven years
with an identified EBL condition, the initial inspection under
Sec. 882.209(h)(1), or a periodic inspection under Sec. 882.211(b),
shall include a test for lead-based paint on chewable surfaces. Testing
shall be conducted by a State or local health or housing agency, an
inspector certified or regulated by a State or local health or housing
agency or an organization recognized by HUD. Lead content shall be
tested by using an X-ray fluorescence analyzer (XRF) or other method
approved by HUD. Test readings of 1 mg/cm2 or higher using an
XRF shall be considered positive for presence of lead-based paint. Where
lead-based paint on chewable surfaces is identified, covering or removal
of the paint surface in accordance with 24 CFR 35.24(b)(2)(ii) shall be
required in accordance with Sec. 882.209(h) or Sec. 882.211 (b) and (c),
as appropriate, and correction shall be completed within the time limits
set forth in paragraph (i)(3) of this section.
(5) Abatement without testing. In lieu of the procedures set forth
in (4) above, the PHA may at its discretion, forego testing and require
the owner to abate all interior and exterior chewable surfaces in
accordance with the method set out at 25 CFR 35.24(b)(2)(ii).
(6) Tenant protection. the owner shall take appropriate action to
protect tenants from hazards associated with abatement procedures.
(7) Records. The PHA shall keep a copy of each inspection report for
at least three years. If a unit requires testing or if the unit requires
treatment of chewable surfaces based on the testing, the PHA shall keep
indefinitely the test results and, if applicable, the owner
certification of treatment. The records shall indicate which chewable
surfaces in units have been tested and which chewable surfaces in the
units have been treated. If records establish that certain chewable
surfaces were tested or tested and treated in accordance with the
standards prescribed in this section, such chewable surfaces do not have
to be tested or treated at any subsequent time.
(j) Access--(1) Performance requirement. The dwelling unit shall be
useable and capable of being maintained without unauthorized use of
other private properites, and the building shall provide an alternate
means of egress in case of fire.
(2) Acceptability criteria. The dwelling unit shall be useable and
capable of being maintained without unauthorized use of other private
properties. The building shall provide an alternate means of egress in
case of fire (such as fire stairs or egress through windows).
(k) Site and neighborhood--(1) Performance requirement. The site and
neighborhood shall be reasonably free from disturbing noises and
reverberations and other hazards to the health, safety, and general
welfare of the occupants.
(2) Acceptability criteria. The site and neighborhood shall not be
subject to serious adverse environmental conditions, natural or manmade,
such as dangerous walks, steps, instability, flooding, poor drainage,
septic tank back-ups, sewage hazards or mudslides; abnormal air
pollution, smoke or dust; excessive noise, vibration or vehicular
traffic; excessive accumulations of trash; vermin or rodent infestation;
or fire hazards.
(l) Sanitary condition--(1) Performance requirement. The unit and
its equipment shall be in sanitary condition.
[[Page 85]]
(2) Acceptability criteria. The units and its equipment shall be
free of vermin and rodent infestation.
(m) Congregate Housing--Performance requirement. The foregoing
standards shall apply except for paragraph (b) of this section and the
requirement in paragraph (c)(2) of this section for a kitchen area. In
addition, the following standards shall apply:
(1) The unit shall contain a refrigerator of appropriate size.
(2) The sanitary facilities described in paragraph (a) of this
section shall be contained within the unit.
(3) The central dining facility and central kitchen shall be located
within the building or housing complex and be accessible to the
occupants of the congregate units, and shall contain suitable space and
equipment to store, prepare and serve food in a sanitary manner by a
food service or persons other than the occupants and shall be for the
primary use of occupants of the congregate units and be sufficient in
size to accommodate the occupants. There shall be adequate facilities
and services for the sanitary disposal of food wastes and refuse,
including facilities for temporary storage where necessary (e.g.,
garbage cans).
(n) Independent Group Residence--Performance requirement. The
foregoing standards shall apply except for paragraphs (a), (b), (c),
(f), (k), and (m) of this section. In addition, the following standards
shall apply: (1) The unit shall contain and have ready access to a flush
toilet which can be used in privacy, a fixed basin with hot and cold
running water, and a shower and/or tub equipped with hot and cold
running water all in proper operating condition and adequate for
personal cleanliness and the disposal of human wastes. These facilities
shall utilize an approved public or private disposal system, and shall
be sufficient in number so that they need not be shared by more than
four occupants. Those units accommodating physically handicapped
occupants with wheelchairs or other special equipment shall provide
access to all sanitary facilities, and shall provide, as appropriate to
needs of the occupants, basins and toilets of appropriate height; grab
bars to toilets, showers and/or bathtubs; shower seats; and adequate
space for movement.
(2) The unit shall contain suitable space to store, prepare and
serve foods in a sanitary manner. A cooking stove or range, a
refrigerator(s) of appropriate size and in sufficient quantity for the
number of occupants, and a kitchen sink with hot and cold running water
shall be present in proper operating condition. The sink shall drain
into an approved private or public system. Adequate space for the
storage, preparation and serving of food shall be provided. There shall
be adequate facilities and services for the sanitary disposal of food
wastes and refuse, including facilities for temporary storage where
necessary (e.g., garbage cans).
(3) The dwelling unit shall afford the Family adequate space and
security. A living room, kitchen, dining area, bathroom, and other
appropriate social, recreational or community space shall be within the
unit, and the unit shall contain at least one bedroom of appropriate
size for each two persons. Exterior doors and windows accessible from
outside each unit shall be capable of being locked. An emergency exit
plan shall be developed and occupants shall be apprised of the details
of the plan. All emergency and safety features and procedures shall meet
applicable State and local standards.
(4) The unit shall be structurally sound so as not to pose any
threat to the health and safety of the occupants and so as to protect
the occupants from the environment. Ceilings, walls and floors shall not
have any serious defects such as severe bulging or leaning, large holes,
loose surface materials, severe buckling or noticeable movement under
walking stress, missing parts or other serious damage. The roof
structure shall be firm and the roof shall be weathertight. The exterior
wall structure and exterior wall surface shall not have any serious
defects such as serious leaning, buckling, sagging, cracks or holes,
loose siding, or other serious damage. The condition and equipment of
interior and exterior stairways, halls, porches, walkways, etc., shall
be such as not to present a danger of tripping or falling. Elevators
shall be
[[Page 86]]
maintained in safe and operating condition. Units accommodating
physically handicapped occupants with wheelchairs and other special
equipment shall not contain architectural barriers which impede access
or use, and handrails and ramps shall be provided as appropriate.
(5) The site and neighborhood shall be reasonably free from
disturbing noises and reverberations and other hazards to the health,
safety, and general welfare of the occupants, and shall not be subject
to serious adverse environmental conditions, natural or manmade, such as
dangerous walks, steps, instability, flooding, poor drainage, septic
tank back-ups, sewage hazards or mudslides; abnormal air pollution,
smoke or dust; excessive noise, vibrations or vehicular traffic;
excessive accumulations of trash; vermin or rodent infestation; or fire
hazards. The unit shall be located in a residential setting and be
similar in size and appearance to housing generally found in the
neighborhood, and be within walking distance or accessible via public or
available private transportation to medical and other appropriate
commercial and community service facilities.
(6) Supportive services. (i) A planned program of adequate
supportive services appropriate to the needs of the occupants shall be
provided on a continual basis by a qualified Resident Assistant(s)
residing in the unit, or other qualified person(s) not residing in the
unit, who will provide such services on a continual, planned basis.
Supportive services which are provided within the unit may include the
following types of services: Counseling; social services which promote
physical activity, intellectual stimulation and/or social motivation;
training or assistance with activities of daily living including
housekeeping, dressing, personal hygiene and/or grooming; provision of
basic first aid skills in case of emergencies; supervision of self-
administration of medications, diet and nutrition; and assurance that
occupants obtain incidental medical care, as needed, by facilitating the
making of appointments at, and transportation to, medical facilities.
Supportive services provided within the unit shall not include the
provision of continual nursing, medical or psychiatric care.
(ii) The provision and quality of the planned program of supportive
services, including the minimal qualifications, quantity and working
hours of the Resident Assistant(s) living in the unit or other person(s)
providing continual supportive services, shall be initially determined
by the Service Agency in accordance with the standards established by
the State. Compliance with these standards by the Service Agency shall
be regularly monitored throughout the term of the Contract by the PHA
and the State (e.g., Department of Human Resources, Mental Health,
Mental Retardation, Social Services, etc.), or a local authority (other
than the Service Agency providing services) designated by the State to
establish, maintain and enforce such standards.
(iii) A written Service Agreement, approved by the State and in
effect between the Owner and the Service Agency and/or the entities
which provide the necessary supportive service, shall be submitted to
the PHA with the request for Lease approval. The Lease between the
eligible individual and the Owner shall set forth the Owner's obligation
for and means of providing these services. If the lessor provides the
supportive services, a Service Agreement is not required and the
provision of these services shall be incorporated into the Lease and
shall be approved by the State. (See Sec. 882.209(j) (2).)
(7) State approval. Independent Group Residences shall be licensed,
certified or otherwise approved in writing by the State (e.g.,
Departments of Human Resources, Mental Health, Retardation, Social
Services, etc.) prior to the execution of the initial Contract. This
approval shall be reexamined periodically based on a schedule
established by the State.
To assure that facilities and the supportive services are appropriate to
the needs of the occupants, the State shall also approve the written
Service Agreement (or Leases, if the provider of services is the lessor)
for each Independent Group Residence. (See Sec. 882.209(j)(2).)
(o) Manufactured Home--(1) Performance requirement. A Manufactured
Home unit, whether owner or renter
[[Page 87]]
occupied, shall comply with the foregoing standards except for paragraph
(m) of this section, Congregate Housing, and paragraph (n) of this
section, Independent Group Residences. In addition, a Manufactured Home
unit shall:
(a) Meet the definition of a Manufactured Home set forth in
Sec. 882.102,
(b) Be equipped with at least one smoke detector in working
condition, and
(c) Must be placed on the site in a stable manner and be free from
hazards such as sliding or wind damage.
(2) Acceptability criteria. A Manufactured Home must be securely
anchored by a tie-down device which distributes and transforms the loads
imposed by the unit to appropriate ground anchors to resist wind
overturning and sliding.
(p) Single Room Occupancy (SRO) Unit--Performance requirements. (1)
The foregoing standards shall apply except for paragraphs (a), (b), (c),
(m), (n), and (o).
(2) Each SRO unit shall be occupied by no more than one person.
(3) Exterior doors and windows accessible from outside the SRO unit
must be able to be locked.
(4) Sanitary facilities, space and security shall meet local code
standards for single room occupancy housing. In the absence of
applicable local code standards, the requirements for habitable rooms
used for living and sleeping purposes contained in the American Public
Health Association's Recommended Housing Maintenance and Occupancy
Ordinance shall be used.
(q) Shared Housing--(1) Applicability of housing quality standards
to entire unit. The entire unit must comply with the Performance
Requirements and Acceptability Criteria, as provided in paragraphs (a)
and (b) of this section and in paragraphs (d) through (l) of this
section.
(2) Facilities available for Family. The facilities available for
the use of each assisted Family in Shared Housing under the Family's
Lease must include (whether in the Family's Private Space or in the
Common Space) a living room, sanitary facilities in accordance with
paragraph (a), and food preparation and refuse disposal facilities in
accordance with paragraph (b).
(3) Space and security--(i) Inapplicability of paragraph (c).
Paragraph (c) of this section does not apply to Shared Housing.
(ii) Performance requirement. The entire unit must provide adequate
space and security for all its occupants (whether assisted or
unassisted). The total number of occupants in the unit may not exceed 12
persons. Each unit must contain Private Space containing at least one
bedroom for each assisted Family, plus Common Space for shared use by
the occupants of the unit. The Private Space for each assisted Family
must contain at least one bedroom for each two persons in the Family.
(The two preceding sentences do not apply to the case of two individuals
sharing a one-bedroom unit. However, in that situation, no other persons
may occupy the unit.) Common Space must be appropriate for shared use by
the occupants. If any members of the Family are physically handicapped
(as of the time of lease approval), the unit's Common Space and the
Family's Private Space must be accessible and usable by them.
(iii) Acceptability criteria. The unit must contain a living room, a
kitchen, bathroom(s), and bedroom(s). Persons of opposite sex, other
than husband and wife or very young children, may not be required to
occupy the same bedroom. Exterior doors and windows accessible from
outside the unit must be lockable.
(r) Smoke detectors--(1) Performance requirement. After October 30,
1992, each dwelling unit must include at least one battery-operated or
hard-wired smoke detector, in proper working condition, on each level of
the unit. If the unit is occupied by hearing-impaired persons, smoke
detectors must have an alarm system, designed for hearing-impaired
persons, in each bedroom occupied by a hearing-impaired person.
(2) Acceptability criteria. The smoke detector must be located, to
the extent practicable, in a hallway adjacent to a bedroom, unless the
unit is occupied by a hearing-impaired person, in which case each
bedroom occupied by a hearing-impaired person must have an
[[Page 88]]
alarm system connected to the smoke detector installed in the hallway.
[43 FR 61246, Dec. 29, 1978, as amended at 44 FR 21630, Apr. 11, 1979;
44 FR 65364, Nov. 9, 1979; 49 FR 12237, Mar. 29, 1984; 50 FR 9269, Mar.
7, 1985; 50 FR 38794, Sept. 25, 1985; 51 FR 21309, June 11, 1986; 51 FR
24324, July 3, 1986; 52 FR 1893, Jan. 15, 1987; 52 FR 9828, Mar. 27,
1987; 53 FR 4388, Feb. 16, 1988; 53 FR 7734, Mar. 10, 1988; 53 FR 20801,
June 6, 1988; 57 FR 33851, July 30, 1992]
Sec. 882.110 Types of housing.
(a) Any type of Existing Housing meeting the housing quality
standards may be utilized under this part, except nursing homes, units
within the grounds of penal, reformatory, medical, mental and similar
public or private institutions, and facilities providing continual
psychiatric, medical or nursing services. Examples of Existing Housing
which may be utilized include, but are not limited to, privately owned
apartments, houses and congregate housing units; existing FHA insured.
Section 202 direct loan. Farmers Home Administration (FmHA) insured or
direct loan, or VA guaranteed properties; properties held by the
Secretary, or properties sold by the Secretary on which the Secretary
has taken back a purchase money mortgage. Eligible types of Independent
Group Residences include, but are not limited to, self-contained
apartments and houses: Provided, They meet the requirements of
Sec. 882.109(n).
(b) Congregate housing may be utilized for eligible elderly,
handicapped, disabled or displaced families or individuals. Independent
Group Residences shall be utilized for eligible elderly, handicapped or
disabled Families or individuals which require a planned program of
continual supportive services.
(c) SRO Housing may be utilized if:
(1) The property is located in an area in which there is a
significant demand for SRO units, as determined by the HUD Field Office;
(2) The PHA and the unit of general local government in which the
property is located approve the use of SRO units for such purpose; and
(3) The unit of general local government and local PHA certify to
HUD that the property meets applicable local health and safety
standards.
(d) In any Section 221(d)(3) below market interest rate (BMIR) or
market interest rate (MIR), Section 202, Section 236 (insured or non-
insured), FmHA Section 515 interest credit project: (1) Units receiving
assistance under the Section 23 or rent supplement programs may continue
to receive such assistance or, upon conversion of the Section 23 units
to Section 8, the occupants may receive assistance under Section 8, and
(2) the occupants of units not receiving such assistance may receive
Section 8 assistance, provided that the total number of units in the
project covered by Housing Assistance Payments Contracts under Section 8
or receiving Section 23 rental assistance, rent supplement assistance,
Section 236 ``deep subsidy'' rental assistance payments, or State or
local subsidy (other than property tax exemption or abatement) does not
exceed 40 percent of the total number of units in the project. Upon
request, this limitation may be exceeded for the purpose of relieving
hardship of a particular Family or Families only with the approval of
the Field Office Manager. Prior to granting such an approval, the Field
Office Manager will review the request to determine whether assistance
under part 886, subpart A, ``Additional Assistance Program for Projects
with HUD-insured and HUD-held Mortgages'' is more appropriate and
whether such assistance can be scheduled.
(e) For any Section 221(d)(3) BMIR, Section 202, Section 236
(insured or noninsured), or FmHA Section 515 interest credit unit or any
State or locally subsidized unit, the housing assistance payment shall
be the amount by which the rent payable by the Eligible Family under
Section 23 or Section 8 is less than the subsidized rent (which subsidy
shall not be reduced on account of any Section 23 or Section 8
assistance).
(f) In no event may any occupant receive the benefit of more than
one of the following: rent supplement, Section 23 housing assistance,
Section 8 housing assistance, or Section 236 ``deep subsidy'' rental
assistance payments.
(g)(1) Housing assistance may not be provided on behalf of a housing
Owner. However, assistance may be provided on behalf of a member of a
cooperative.
[[Page 89]]
(2) An Owner of housing assisted under the Section 8 Certificate
program may not be an occupant of an assisted dwelling unit, except for
assistance on behalf of a member of a cooperative or as provided in
Sec. 882.315(a)(2) (unassisted occupancy by an Owner of Shared Housing).
[43 FR 61246, Dec. 29, 1978, as amended at 44 FR 65364, Nov. 9, 1979; 50
FR 38795, Sept. 25, 1985; 51 FR 21309, June 11, 1986; 53 FR 4388, Feb.
16, 1988; 53 FR 7734, Mar. 10, 1988]
Sec. 882.111 Equal opportunity requirements.
Participation in this program requires compliance with Title VI of
the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of
1968, Executive Order 11063 and all rules, regulations, and requirements
issued pursuant thereto. The PHA shall comply with Section 3 of the
Housing and Urban Development Act of 1968 and all rules, regulations and
requirements issued pursuant thereto.
Sec. 882.112 Security and utility deposits.
(a) If at the time of the initial execution of the Lease the Owner
wishes to collect a security deposit, the maximum amount shall be the
greater of one month's Total Tenant Payment or $50. However, this amount
shall not exceed the maximum amount allowable under State or local law.
For units leased in place, security deposits collected prior to the
execution of a Contract which are in excess of this maximum amount do
not have to be refunded until the Family vacates the unit subject to the
lease terms. The Family is expected to pay security deposits and utility
deposits from its resources and/or other public or private sources.
(b) If a Family vacates the unit, the Owner, subject to State and
local law, may use the security deposit as reimbursement for any unpaid
Tenant Rent or other amount which the Family owes under the Lease. If a
Family vacates the unit owing no rent or other amount under the Lease
consistent with State or local law or if such amount is less than the
amount of the security deposit, the Owner shall refund the full amount
or the unused balance to the Family.
(c) In those jurisdictions where interest is payable by the Owner on
security deposits, the refunded amount shall include the amount of
interest payable. The Owner shall comply with all State and local laws
regarding interest payments on security deposits.
(d) If the security deposit is insufficient to reimburse the Owner
for the unpaid Tenant Rent or other amounts which the Family owes under
the Lease, or if the Owner did not collect a security deposit, the Owner
may claim reimbursement from the PHA for an amount not to exceed the
lesser of:
(1) The amount owed the Owner, or
(2) Two month's Contract Rent; minus, in either case, the greater of
the security deposit actually collected or the amount of security
deposit the Owner could have collected under the program (pursuant to
paragraph (a) of this section). Any reimbursement under this section
must be applied first toward any unpaid Tenant Rent due under the Lease
and then to any other amounts owed. No reimbursement may be claimed for
unpaid rent for the period after the Family vacates.
[43 FR 61246, Dec. 29, 1978, as amended at 44 FR 31176, May 31, 1979; 49
FR 19945, May 10, 1984]
Secs. 882.113--882.117 [Reserved]
Sec. 882.118 Obligations of the Family.
(a) The family must:
(1) Supply such certification, release, information or documentation
as the PHA or HUD determine to be necessary, including submission of
required evidence of citizenship or eligible immigration status (as
provided by 24 CFR part 5), submission of Social Security Numbers and
verifying documentation (as provided by 24 CFR part 5), submission of
signed consent forms for the obtaining of wage and claim information
from State Wage Information Collection Agencies (as provided by 24 CFR
part 5), and submissions required for an annual or interim reexamination
of family income and composition.
(2) Allow the PHA to inspect the dwelling unit at reasonable times
and after reasonable notice.
(3) Notify the PHA before vacating the dwelling unit.
[[Page 90]]
(4) In Related Lease Shared Housing, notify the Owner and PHA when
one Family learns of the other Family's vacancy or prospective vacancy,
in accordance with Sec. 882.335(c)(1)(i).
(5) Use the dwelling unit (or, in the case of Shared Housing, the
portion thereof) solely for residence by the Family, and as the Family's
principal place of residence; and shall not assign the Lease or transfer
the unit.
(b) The Family shall not:
(1) Own or have any interest in the dwelling unit (other than in a
manufactured home assisted under subpart F of this part). If the Owner
is a cooperative, the Family may be a member of the cooperative.
(2) Commit any fraud in connection with the Section 8 Existing
Housing Program.
(3) Receive assistance under the Section 8 Existing Housing Program
while occupying, or receiving assistance for occupancy of, any other
unit assisted under any Federal housing assistance program (including
any section 8 program).
(4) Engage in drug-related criminal activity or violent criminal
activity, including criminal activity by any Family member. For the
purposes of this section--(i) Drug-related criminal activity means one
of the following:
(A) The felonious manufacture, sale, or distribution, or the
possession with intent to manufacture, sell, or distribute, a controlled
substance (as defined in section 102 of the Controlled Substances Act
(21 U.S.C. 802));
(B) The felonious use or possession (other than with intent to
manufacture, sell or distribute), of a controlled substance, except that
such felonious use or possession must have occurred within one year
before the date that the PHA provides notice to an applicant under
Sec. 882.216(a)(1), or to a participant under Sec. 882.216(b)(3)(i) of
the PHA's determination to deny admission or terminate assistance. Drug-
related criminal activity does not include this use or possession, if
the Family member can demonstrate that he or she:
(1) Has an addiction to a controlled substance, has a record of such
an impairment, or is regarded as having such an impairment; and
(2) Has recovered from such addiction and does not currently use or
possess controlled substances.
(ii) Violent criminal activity includes any felonious criminal
activity that has as one of its elements the use, attempted use, or
threatened use of physical force against the person or property of
another.
(iii) Felonious means that the criminal activity is classed as a
felony under Federal, State, or local law.
(Approved by the Office of Management and Budget under control number
2577-0083)
[49 FR 12238, Mar. 29, 1984, as amended at 51 FR 11225, Apr. 1, 1986; 51
FR 21309, June 11, 1986; 53 FR 847, Jan. 13, 1988; 53 FR 6601, Mar. 2,
1988; 53 FR 7734, Mar. 10, 1988; 54 FR 39704, Sept. 27, 1989; 55 FR
28546, July 11, 1990; 56 FR 7538, Feb. 22, 1991; 60 FR 14843, Mar. 20,
1995; 61 FR 13625, Mar. 27, 1996]
Secs. 882.119-882.122 [Reserved]
Sec. 882.123 Conversion of Section 23 Units to Section 8 and Section 23 monitoring.
(a)--(d) [Reserved]
(e) Section 23 policies for units planned for conversion on or
before September 30, 1981. (1) PHAs shall not enter into new leases with
owners for additional units nor shall they renew or extend leases with
owners except consistent with the conversion schedules.
(2) Subject to the rights of families under existing leases, PHAs
may continue to lease units to families under Section 23 only on a
month-to-month basis.
(3) PHAs shall conduct annual inspections of all units to determine
whether the units are decent, safe and sanitary.
(4) PHAs shall certify with their requisitions to HUD for payments
under the ACC that the units are decent, safe and sanitary, or the PHA
shall furnish HUD with a report of the nature of the deficiencies of the
units which are not so certified. If an owner's units are not decent,
safe and sanitary.
(i) Where the owner is responsible under the terms of the lease for
correcting the deficiencies, the PHA shall send the owner written
notification requiring the owner to take specified corrective action
within a specified time. The notification shall also state that,
[[Page 91]]
if the owner fails to comply, rent payments will be suspended. If the
owner fails to comply with the first notification, he shall be notified
by the PHA of the noncompliance and rent payments shall be suspended
immediately. In the event of such suspension of rent payments, the PHA
shall requisition a correspondingly lower ACC payment.
(ii) Where the PHA is responsible under the terms of the lease for
correcting the deficiencies, the Field Office shall send written
notification requiring the PHA to take specified corrective action
within a specified time. The notification shall also state that, if the
PHA fails to comply, HUD will make reduced payments to the PHA only in
the amount of the rent due the owner. If the PHA fails to comply with
the first notification, the PHA shall be notified of the noncompliance,
and the PHA shall not receive any fees for performing management
functions until the PHA has complied with the Field Office request and
has corrected the noted deficiencies.
(f) [Reserved]
(g) Section 23 policies for units not planned to be converted. (1)
PHAs shall not enter into new leases with owners for additional units
nor shall they renew or extend leases with owners for more than one
year.
(2) The provisions contained in paragraphs (e) (3) and (4) of this
section shall apply.
(h) Request for rent increases. An owner may submit to the PHA a
request for rent increase because of increases in operating cost, when
the rents to the owner, after adjustments based on provisions in the
lease, are insufficient to provide decent, safe and sanitary housing.
Such a request shall be supported by an audited financial statement, and
the data shall clearly show that failure to obtain additional revenue
will result in deterioriation of units and loss of decent, safe and
sanitary housing for low-income families. The PHA shall inspect the
units to determine whether the units are decent, safe and sanitary.
Where the need for an adjustment under this paragraph is shown:
(1) Subject to available contract authority and prior approval by
the HUD Field Office, the PHA may grant an adjustment to the extent
documented and justified for those items of expenses (excluding debt
service) for which the owner is responsible under the lease.
(2) The amount of the adjustment must be reasonable when compared
with similar items under the Section 8 Existing Housing program.
(3) The adjusted amount for expenses shall not exceed the result of
applying the appropriate Section 8 Existing Housing Annual Adjustment
Factor (24 CFR part 888) most recently published by HUD in the Federal
Register to the appropriate expense base in effect under the lease prior
to this adjustment.
(4) The adjustment shall not be retroactive to pay for costs that
the owner had previously incurred.
(5) The adjustment shall be effective for a period not to exceed one
year.
[44 FR 28276, Nov. 14, 1979, as amended at 60 FR 34694, July 3, 1995]
Sec. 882.124 Audit.
PHAs receiving financial assistance under this part are subject to
audit requirements in 24 CFR part 44.
[50 FR 39091, Sept. 27, 1985; 51 FR 30480, Aug. 27, 1986]
Subpart B--Program Development and Operation
Secs. 882.201-882.211 [Reserved]
Sec. 882.212 Reexamination of family income and composition.
(a) Regular reexaminations. The PHA must reexamine the income and
compositon of all families at least once every 12 months. After
consultation with the family and upon verification of the information,
the PHA must make appropriate adjustments in the Total Tenant Payment in
accordance with part 813 of this chapter and determine whether the
family's unit size is still appropriate (see Sec. 882.213). The PHA must
adjust Tenant Rent and the Housing Assistance Payment to reflect any
change in Total Tenant Payment. At the time of the annual reexamination
of family income and composition, the PHA shall require the family to
submit any certification, release, information, or documentation as the
PHA
[[Page 92]]
or HUD determines to be necessary (see parts 5, subpart B, and 813 of
this title). At the first regular reexamination after June 19, 1995 the
PHA shall follow the requirements of 24 CFR part 5 concerning obtaining
and processing evidence of citizenship or eligible immigration status of
all family members. Thereafter, at each regular reexamination, the PHA
shall follow the requirements of 24 CFR part 5 concerning verification
of the immigration status of any new family member.
(b) Interim reexaminations. The family must comply with provisions
in Sec. 882.118 regarding interim reporting of changes in income. If the
PHA receives information concerning a change in the family's income or
other circumstances between regularly scheduled reexaminations, the PHA
must consult with the family and make any adjustments determined to be
appropriate. Any change in the family's income or other circumstances
that results in an adjustment in the Total Tenant Payment, Tenant Rent,
and Housing Assistance Payment must be verified. See part 5, subpart B,
of this title for the requirements for the disclosure and verification
of Social Security Numbers at interim reexaminations involving new
family members. For requirements regarding the signing and submitting of
consent forms by families for the obtaining of wage and claim
information from State Wage Information Collection Agencies, see part 5,
subpart B, of this title. At any interim reexamination after June 19,
1995 when there is a new family member, the PHA shall follow the
requirements of 24 CFR part 5, subpart E concerning obtaining and
processing evidence of citizenship or eligible immigration status of the
new family member.
(c) Continuation of housing assistance payments. A family's
eligibility for Housing Assistance Payments shall continue until the
Total Tenant Payment equals the Gross Rent. The termination of
eligibility at such point will not affect the family's other rights
under its lease, nor will such termination preclude the resumption of
payments as a result of later changes in income, rents or other relevant
circumstances during the term of the Contract. However, eligibility also
may be terminated in accordance with HUD requirements for such reasons
as failure to submit requested verification information, including
failure to meet the disclosure and verification requirements for Social
Security Numbers, as provided by part 5, subpart B, of this title, or
failure to sign and submit consent forms for the obtaining of wage and
claim information from State Wage Information Agencies, as provided by
part 5, subpart B, of this title. For provisions requiring termination
of housing assistance payments when the PHA determines that a member is
not a U.S. citizen or does not have eligible immigration status, see 24
CFR parts 5 and 982 for provisions concerning certain assistance for
mixed families (families whose members include those with eligible
immigration status, and those without eligible immigration status) in
lieu of termination of assistance, and for provisions concerning
deferral of termination of assistance.
(d) Termination of Contract. If one year has elapsed since the date
of the last Housing Assistance Payment, the Contract shall be
terminated.
(Approved by the Office of Management and Budget under control number
2577-0083)
[49 FR 19945, May 10, 1984, as amended at 51 FR 11226, Apr. 1, 1986; 53
FR 847, Jan. 13, 1988; 53 FR 6601, Mar. 2, 1988; 54 FR 39705, Sept. 27,
1989; 56 FR 7538, Feb. 22, 1991; 60 FR 14843, Mar. 20, 1995; 61 FR
11118, Mar. 18, 1996; 61 FR 13625, Mar. 27, 1996]
Sec. 882.213 [Reserved]
Sec. 882.214 Adjustment of allowance for utilities and other services.
(a) Annual review. At least annually, the PHA shall determine
whether there has been a substantial change in utility rates or other
charge of general applicability, and whether an adjustment is required
in the Allowance of Utilities and Other Services by reason of such
changes or because of errors in the original determination. If the PHA
determines that an adjustment should be made, the PHA shall establish a
schedule of adjustments taking into account size and type of dwelling
units and other pertinent factors and shall furnish HUD with a copy of
the adjusted schedule.
[[Page 93]]
(b) Adjustments in payments under Contracts in effect. The PHA shall
the determine the amounts of adjustments to be made in the amount of
rent to be paid by affected Families and the amount of housing
assistance payments and shall notify the Owners and Families
accordingly.
(c) Effect on Fair Market Rents. If the PHA finds that utility cost
changes are causing substantial difficulties in leasing Decent, Safe and
Sanitary housing within the existing Fair Market Rent limitations, the
PHA shall furnish appropriate documentation to HUD with a request for
consideration of the need for a change in the Fair Market Rents.
Secs. 882.215-882.216 [Reserved]
Sec. 882.217 HUD review of contract compliance.
HUD will review program operations at such intervals as it deems
necessary to ensure that the Owner and the PHA are in full compliance
with the terms and conditions of the Contract and the ACC. Equal
Opportunity review may be conducted with the scheduled HUD review or at
any time deemed appropriate by HUD.
Sec. 882.218 PHA reporting requirements. [Reserved]
Sec. 882.219 [Reserved]
Subpart C--Shared Housing in the Certificate Program
Source: 51 FR 21310, June 11, 1986; 53 FR 7734, Mar. 10, 1988,
unless otherwise noted.
Sec. 882.301 Applicability, scope, and purpose.
(a) General. (1) This subpart C contains special requirements for
Shared Housing in the Section 8 Certificate program. In Shared Housing,
an assisted Family shares a housing unit (such as a house or an
apartment) with the other resident or residents of the unit. Shared
Housing is designed to provide additional choices in living arrangements
for assisted Families. This subpart gives a PHA discretion to determine
whether to include Shared Housing in its Certificate program and to
design the Shared Housing component to meet local needs and
circumstances. This subpart provides procedures to be followed by PHAs
that choose to permit assistance in Shared Housing, and by Owners and
Families that participate in these arrangements.
(2) Subpart C implements section 211 of the Housing and Urban-Rural
Recovery Act of 1983, Pub. L. 98-181, as it pertains to the Section 8
Certificate program. Section 211 amended section 8 of the U.S. Housing
Act of 1937, by requiring HUD to permit assistance in shared housing
arrangements in the Section 8 Existing Housing and Moderate
Rehabilitation programs for eligible Elderly Families. That provision
also directed HUD to issue minimum habitability standards to ensure that
shared housing is decent, safe, and sanitary, taking into account the
special circumstances of this type of housing. As a matter of
discretion, HUD has expanded the scope of Shared Housing to permit all
eligible Families, not just Elderly Families, to participate in Shared
Housing, and thus benefit from this type of living arrangement.
(b) Eligible units. Units in structures of various types may be used
for Shared Housing, including single family houses and multifamily
buildings. The unit must satisfy the housing quality standards in
Sec. 882.109. Manufactured homes for which assistance is provided under
subpart F are not eligible for Shared Housing.
Sec. 882.302 Definitions.
In addition to the definitions set forth in Secs. 812.2, 813.102 and
882.102, the following apply:
Common space. Space available for use by the assisted Family(ies)
and other occupants of the unit. (See the housing quality standards in
Sec. 882.109(q).)
Individual lease shared housing. The type of Shared Housing in which
the PHA enters into a separate HAP Contract for each assisted Family
residing in a Shared Housing unit.
Private space. The portion of the dwelling unit that is for the
exclusive use of an assisted Family. (See the housing quality standards
in Sec. 882.109(q).)
Related lease shared housing. The type of Shared Housing in which
the PHA enters into a single HAP Contract for
[[Page 94]]
two assisted Families residing in a Shared Housing unit.
Shared housing. As defined in Part 813 of this chapter. Shared
Housing must meet the housing quality standards in Sec. 882.109(q).
Sharing family. In Related Lease Shared Housing, one of the two
Families assisted under the HAP Contract.
Sec. 882.305 Types of shared housing and applicable requirements.
(a) Shared Housing types. There are two types of Shared Housing
authorized under this subpart C: Individual Lease Shared Housing and
Related Lease Shared Housing. Sections 882.310 through 882.330 govern
both types of Shared Housing. Section 882.335 contains special
requirements for Related Lease Shared Housing.
(b) Applicable requirements. Except as modified by this subpart C,
the requirements of subpart A and B of this part apply to Shared
Housing.
Sec. 882.310 PHA administration of shared housing.
(a) PHA election. A PHA is not required to permit use of Shared
Housing in its Section 8 Certificate program. If the PHA decides to
permit Shared Housing, it may elect to permit use of Individual Lease
Shared Housing or Related Lease Shared Housing, or both. At any time, a
PHA may change a decision to include Shared Housing in its program, or
change the type(s) of Shared Housing included in its program. However,
the PHA must continue to administer, in accordance with applicable
requirements, any Shared Housing Contracts that it has executed.
(b) Administrative plan. (1) If the PHA decides to permit Shared
Housing in its program, or to change or discontinue Shared Housing, it
must submit an amendment to its administrative plan for HUD approval.
(2) The administrative plan must state the type(s) of Shared Housing
included in the PHA's program and the PHA's policies for operating
Shared Housing. The plan may contain policies providing for special
treatment in the issuance and use of Certificates to facilitate, in the
case of Related Lease Shared Housing, the initial pairing of Families
for assistance or the replacement of a Shared Family that has left the
unit (see Sec. 882.335(a)). The plan may not contain policies providing
for special treatment in the issuance and use of Certificates in
Individual Lease Shared Housing. Except for restrictions on the initial
use of Certificates in the case of Related Lease Shared Housing (see
Sec. 882.335(a)(2)(i), the plan may not set aside Certificates for, or
otherwise restrict the use of Certificates to, Shared Housing.
(The information collection requirements contained in paragraph (b) have
been approved by the Office of Management and Budget under control
number 2502-0123)
Sec. 882.315 Occupancy of a shared housing unit.
(a) Who may share a unit. (1) Persons who are not assisted under the
Section 8 Certificate program may reside in a Shared Housing unit.
(2) Except for a one-bedroom unit, an Owner of a Shared Housing unit
may reside in the unit, and a resident Owner may enter into a Contract
with the PHA. However, housing assistance may not be provided on behalf
of the Owner. An assisted person may not be related to a resident Owner.
(3) One or more Families assisted under Individual Lease Shared
Housing may reside in a Shared Housing unit, if the unit meets the
housing quality standards contained in Sec. 882.109(q).
(4) Only two Families may be assisted in a unit under Related Lease
Shared Housing.
(5) A PHA may not execute Contracts for Individual Lease Shared
Housing and for Related Lease Shared Housing with respect to the same
unit.
(b) Size of unit and Family space. (1) The number of bedrooms in the
Private Space of an assisted Family initially must be the same as the
number stated on the Family's Certificate, except in the case of two
individuals sharing a one bedroom unit. The PHA may not approve a Lease
or execute a Contract for Shared Housing unless the unit, and the
portion of the unit available for use by the assisted Family under its
Lease, meet the housing quality standards under Sec. 882.109.
(2) Residents of the unit may share its Common Space. However,
persons
[[Page 95]]
other than members of the assisted Family may not use the Family's
Private Space.
(3) The PHA must issue a participant Family a new Certificate,
assist the Family in locating another unit, and terminate the Contract
in accordance with its terms, if the portion of the unit available for
use by the assisted Family under its Lease, is not Decent, Safe, and
Sanitary because of an increase in Family size, or a change in Family
composition after PHA approval of the Lease.
(4) The PHA must issue a participant Family a new Certificate,
assist the Family in locating another unit, and terminate the Contract
in accordance with its terms, if all of the following apply:
(i) The number of bedrooms in the Family's Private Space is larger
than appropriate under the Occupancy Standards in effect when the PHA
approved the Lease (or the current Occupancy Standards, if higher). (The
PHA must notify the family that exceptions to the Occupancy Standards
may be granted and of the circumstances in which the PHA will grant an
exception.);
(ii) The current Fair Market Rent (or higher rent approved by the
PHA in accordance with Sec. 882.106(a) (3) or (4)) for a unit with the
number of bedrooms appropriate for the Family under the Occupancy
Standards in effect when the PHA approved the Lease (or the current
Occupancy Standards, if higher), is less than the Family's Gross Rent;
and
(iii) An acceptable unit is found that is available for the Family's
occupancy.
(5) Sections 882.209(i) and 882.213 do not apply to Shared Housing.
[51 FR 21310, June 11, 1986, and 53 FR 4388, Feb. 16, 1988, as amended
at 53 FR 4390, Feb. 16 1988; 53 FR 7734, Mar. 10, 1988]
Sec. 882.320 Initial contract rent.
(a) General. The maximum initial Gross Rent and Contract Rent for
Shared Housing will be determined in accordance with Sec. 882.106, as
modified by this section.
(b) Fair Market Rent limitation. The PHA applies the Fair Market
Rent limitation in Sec. 882.106(a) by not permitting the initial Gross
Rent for a Family to exceed the Pro Rata Portion of the published Fair
Market Rent or of a higher rent, as approved by the PHA in accordance
with Sec. 882.106(a), for the entire unit.
(c) Rent reasonableness limitation. The PHA applies the rent
reasonableness limitation in Sec. 882.106(b), by taking the following
actions for determining rent under each Shared Housing Contract:
(1) Certifying that the Contract Rent for a Family does not exceed
the Pro Rata Portion of a reasonable rent for the entire unit, as
determined under the standards in Sec. 882.106(b)(1)(i);
(2) Certifying that the Contract Rent for a Family does not exceed
rents currently being charged by the Owner for comparable unassisted
units; and
(3) Following the requirements of Secs. 882.106 (b)(2) and (b)(3).
(d) [Reserved]
(e) Proration. For purposes of this section, the ``Pro Rata
Portion'' is calculated by multiplying the amounts specified in
paragraphs (b) and (c) of this section by a ratio derived by dividing
the number of bedrooms in the Private Space available for occupancy by
an assisted Family by the total number of bedrooms in the unit. For
example, for an assisted Family entitled to occupy three bedrooms of a
five-bedroom unit, the ratio would be \3/5\. In the special case of two
individuals sharing a one-bedroom unit, the ratio for the assisted
Family is \1/2\.
[51 FR 21310, June 11, 1986; 51 FR 29464, Aug. 18, 1986, and 53 FR 4388,
Feb. 16, 1988, as amended at 53 FR 4390, Feb. 16, 1988; 53 FR 7734, Mar.
10, 1988]
Sec. 882.325 Contract rent adjustments.
The Contract Rent for a Family will be adjusted in accordance with
Sec. 882.108(a), using the annual adjustment factor for the rent for the
entire unit. The adjustment may not result in an adjusted Contract Rent
under a Shared Housing Contract that exceeds the rent reasonableness
limitation applied in accordance with Sec. 882.320(c) at the time of
adjustment.
[[Page 96]]
Sec. 882.330 Tenant rent and total tenant payment.
The Total Tenant Payment and Tenant Rent for each Family are
determined in accordance with part 813 of this chapter, based on the
Family's Income.
Sec. 882.335 Special requirements for related lease shared housing.
(a) Administrative plan. (1) In the case of Related Lease Shared
Housing, the administrative plan may contain policies providing for
special treatment in the issuance and use of Certificates to facilitate
the initial pairing of Families for assistance or the replacement of a
Sharing Family that has vacated the unit.
(2) The administrative plan may permit a Certificate-holder, or a
Sharing Family that is seeking to replace a Sharing Family that has
vacated the unit, to locate a Family with which to share a unit from
among applicants on the waiting list, who will then be issued a
Certificate. The PHA may prescribe procedures for the use of the waiting
list for this purpose, including limits on the number of applicants the
Family may review and their place on the list.
(i) The PHA must require an applicant Family that is issued a
Certificate on the basis of its willingness to share a unit with a
particular Family to use the Certificate for occupancy of a unit with
that Family under a Contract for Related Lease Shared Housing. However,
if the Family later wants to move to another dwelling unit with
continued participation in the PHA's program, the Family may select a
dwelling unit in any area where the PHA is not legally barred from
entering into Contracts.
(ii) If an applicant Family is intially issued a Certificate on the
basis of its willingness to share a unit with a Family under a Contract
for Related Lease Shared Housing, the PHA may not issue a new
Certificate under Sec. 882.209(m)(1) to the Family within 12 months of
issuance of the initial Certificate, and the PHA must return the Family
to the waiting list. The PHA may, at its discretion, deny such a
Family's request for a new Certificate made 12 months or later after the
issuance of the initial Certificate, and return the Family to the
waiting list as an applicant for participation in the program. Under
either of these circumstances, the position on the waiting list to which
the Family is to be returned, is the place the Family would have had if
it had not been given the initial Certificate.
(b) Procedure to Establish Related Lease Shared Housing. (1) To
establish Related Lease Shared Housing, the two Families to be assisted
must jointly request PHA approval of the proposed Leases, in accordance
with Sec. 882.209(e)(2).
(2) The request for PHA approval of the Leases must specify the
proposed initial Contract Rent for occupancy by each Family. The PHA may
not approve the Leases or enter into a Contract with the Owner, unless
the proposed Contract Rent and Gross Rent for each Family is approvable
(see Sec. 882.320).
(3) The PHA may not approve Leases for Shared Housing unless it has
first inspected the unit and determined that the housing complies with
housing quality standards for Shared Housing, as established by the PHA
in accordance with Sec. 882.109 (see Sec. 882.209(h)).
(4)(i) The Leases for each of the Sharing Families must be approved
by the PHA, and must be in accordance with the requirements of Sec.
882.209(j)(1) and this section. The PHA may specify provisions (in
addition to, and consistent with, provisions required by HUD) for
inclusion in Shared Housing Leases.
(ii) The Leases must provide that if one Sharing Family vacates the
unit the remaining Family must promptly locate another Family that wants
to occupy the unit as a Sharing Family and that is acceptable to the
Owner. Failure to comply with this requirement constitutes a serious
violation of the Lease.
(iii) The Lease for a successor Sharing Family must be approved by
the PHA, and must be in accordance with the requirements of this
paragraph.
(5) After the PHA approves the Leases for the initial Sharing
Families and copies of both executed Leases have been furnished to the
PHA, the PHA will execute a single Contract for the two Families. The
Contract must
[[Page 97]]
be in the form that HUD prescribes for Related Lease Shared Housing.
(For provisions on approval or disapproval of Leases and execution of
required documents, see Sec. 882.209 (k) and (l).) A new Contract will
not be entered into when a successor Sharing Family executes a Lease.
(6) The Contract must specify the beginning date of the Contract
term, and the Leases for the initial Sharing Families assisted under the
Contract will both begin on that date.
(c) Vacancies. (1)(i) A Sharing Family must immediately notify the
Owner and the PHA when it learns that the other Sharing Family plans to
vacate, or has vacated, the unit.
(ii) The Owner must immediately notify the PHA upon learning that a
Sharing Family plans to vacate, or has vacated, the unit.
(2) If one of the Sharing Families vacates the unit, but the other
Family remains in occupancy, the following requirements apply:
(i) If the remaining Sharing Family wants to continue to receive
assistance under the Contract, it must try to find a successor Sharing
Family acceptable to the Owner. The PHA will approve the Lease between
the Owner and the successor Sharing Family, in accordance with paragraph
(b) of this section. The PHA may not approve the Lease of a successor
Sharing Family, unless the remaining Sharing Family agrees to occupancy
by the successor Family.
(ii) The Contract will automatically terminate at the end of the
calendar month after the calendar month in which the Sharing Family
vacated the unit, unless the Owner and a successor Sharing Family
execute a Lease approved by the PHA for a term beginning not later than
the first day after the Contract would otherwise have terminated.
(iii) If there is a successor Sharing Family, the Contract Rent for
the successor Sharing Family will be the same as the Contract Rent that
would have been payable for the Family it is replacing. If the successor
Sharing Family is not in occupancy for a full calendar month at the
beginning of its occupancy, the Contract Rent for the month must be
prorated in accordance with HUD requirements.
(iv) The PHA will issue the remaining Sharing Family a new
Certificate, upon request, in accordance with Sec. 882.209(m)(1),
consistent with paragraph (a)(2) of this section.
(3) If a Sharing Family vacates the unit, the Owner will receive the
housing assistance payments due under the Contract for the Family for
that part of the month in which the Family vacates the unit as the
Family's portion of the unit is vacant. For the next month, if the
Family's portion of the unit continues to remain vacant, the Owner will
receive a housing assistance payment equal to 80 percent of the Contract
Rent for the Family that vacated the unit. However, if the Owner
collects any of the Family's share of the rent for this period, the
payment must be reduced to an amount which when added to the Family's
payment, does not exceed 80 pecent of the Contract Rent for the Family.
Any excess must be reimbursed to the PHA.
(d) Termination of assistance for Sharing Family. The Contract will
terminate if the PHA terminates assistance to either Sharing Family as
provided by Sec. 882.210, including termination for failure of a Sharing
Family to submit required evidence of citizenship or eligible alien
status in accordance with Sec. 812.5. The PHA must notify the Owner of
Contract termination, and the Contract will terminate at the end of the
calendar month after the calendar month in which the PHA gives the
notice to the Owner. The PHA will issue the remaining Sharing Family
another Certificate in accordance with Sec. 882.209(m)(1), consistent
with paragraph (a)(2) of this section.
(The information collection requirements contained in paragraph (a) were
approved by the Office of Management and Budget under control number
2502-0123)
[51 FR 21310, June 11, 1986, as amended at 59 FR 36682, July 18, 1994]
Subpart D--Special Procedures for Moderate Rehabilitation--Basic
Policies
Source: 47 FR 34379, Aug. 9, 1982, unless otherwise noted.
[[Page 98]]
Sec. 882.401 Applicability, scope and purpose.
(a) General. This subpart D and subpart E set forth the policies and
procedures to be used by PHAs in initiating and administering a Moderate
Rehabilitation Program. The purpose of the Moderate Rehabilitation
Program is to upgrade substandard rental housing and to provide rental
subsidies for low-income Families. Further, PHAs may use the program to
achieve local objectives such as deconcentration of assisted housing,
revitalization of targeted neighborhoods or minimization of
displacement.
(b) Eligible applicants. PHAs, including State Housing Finance and
Development Agencies authorized to participate under 24 CFR part 883,
eligible to participate in the Program are those who (1) have the
ability to operate a rehabilitation program, or (2) will contract with a
qualified agency or entity, or (3) will develop the capability to
operate a rehabilitation program.
(c) Eligible and ineligible properties. (1) Except as provided in
paragraphs (c) (2) through (7) of this section, housing suitable for
moderate rehabilitation as defined in Sec. 882.402 is eligible for
inclusion under the Moderate Rehabilitation Program. Existing structures
of various types may be appropriate for this Program including single-
family houses, multi-family structures and Independent Group Residences.
(2) Housing (i) which is, or has been within twelve months prior to
the Owner's submittal to the PHA of a proposal, subsidized under any
federal housing program, except housing assisted under subparts A and B
of this Part which meets the Performance Criteria of the Housing Quality
Standards but has a major building system or component in danger of
failure (provided that the Existing Housing Contract is terminated
before the Moderate Rehabilitation Contract takes effect), or (ii) which
is owned by the PHA administering the ACC under this Program, or (iii)
which is a project with a HUD-held mortgage or is a HUD-owned project
and is not eligible for assistance under this Program.
(3) Nursing homes, units within the grounds of penal, reformatory,
medical, mental and similar public or private institutions, and
facilities providing continual psychiatric, medical or nursing services
are not eligible for assistance under the Moderate Rehabilitation
Program.
(4) Housing owned by a State or unit of general local government is
not eligible for assistance under this Program unless:
(i) HUD has reviewed and approved the site prior to the execution of
an Agreement, and
(ii) The State or unit of a general local government sells the
property to another Owner prior to execution of an Agreement.
(5) High rise elevator projects for Families with children may not
be utilized unless HUD determines there is no practical alternative.
(HUD may make this determination for a locality's Moderate
Rehabilitation Program in whole or in part and need not review each
building on a case-by-case basis.)
(6) Single room occupancy (SRO) housing may not be utilized unless:
(i) The property is located in an area in which there is a
significant demand for such units, as determined by the HUD Field
Office, and
(ii) The PHA and the unit of general local government in which the
property is located approve of such units being utilized for such
purpose.
(7) No Section 8 assistance may be provided with respect to any unit
occupied by an Owner; however, cooperatives will be considered as rental
housing for purposes of this Program.
(d) Applicability of subparts A, B, and F. Sections 882.102
(Definitions), 882.109 (Housing Quality Standards), and 882.112
(Security and Utility Deposits) of subpart A and Sec. 882.217 (HUD
Review of Contract Compliance) of subpart B are applicable to the
Moderate Rehabilitation Program. Other sections which have been modified
for this Program are repeated or referenced in subparts D and E with
appropriate amendments. Subpart F, Special Provisions for Manufactured
Home Owners, does not apply to subparts D and E.
[47 FR 34379, Aug. 9, 1982, as amended at 50 FR 9269, Mar. 7, 1985]
[[Page 99]]
Sec. 882.402 Definitions.
In addition to the definitions set forth in Sec. 882.102, the
following will apply:
Agreement to enter into Housing Assistance Payments Contract
(``Agreement''). A written agreement between the Owner and the PHA that,
upon satisfactory completion of the rehabilitation in accordance with
requirements specified in the Agreement, the PHA will enter into a
Housing Assistance Payments Contract with the Owner.
Eligible Family (``Family''). A family as defined in Sec. 882.102,
including all low-income single persons in occupancy prior to execution
of the Agreement. (Units occupied by low-income single persons, even if
not elderly or handicapped, may be determined eligible in order to
prevent displacement.)
Moderate rehabilitation. Rehabilitation involving a minimum
expenditure of $1,000 for a unit, including its prorated share of work
to be accomplished on common areas or systems, to:
(a) Upgrade to Decent, Safe and Sanitary condition to comply with
the Housing Quality Standards or other standards approved by HUD, from a
condition below those standards (improvements being of a modest nature
and other than routine maintenance); or
(b) Repair or replace major building systems or components in danger
of failure.
Single Room Occupancy (SRO) Housing: A unit for occupancy by a
single eligible individual capable of independent living which does not
contain food preparation and/or sanitary facilities in accordance with
Sec. 882.109, and is located within a multifamily structure consisting
of more than 12 units.
Statement of Family responsibility. An agreement, in the form
prescribed by HUD, between the PHA and a Family to be assisted under the
Program, stating the obligations and responsibilities of the two
parties.
Sec. 882.403 ACC, housing assistance payments contract, and lease.
(a) Maximum Total ACC Commitments. The maximum total annual
contribution that may be contracted for is the total of the Moderate
Rehabilitation Fair Market Rents for all the units. The fee for the
costs of PHA administration is payable out of the annual contribution.
(b) Project account. (1) A project account will be established and
maintained by HUD as a specifically identified and segregated account
for each project. The account will contain the sum of the amounts by
which the maximum annual commitment exceeds the amount actually paid out
for the project under the ACC each year. Payments will be made from this
account when needed to cover increases in Contract Rents or decreases in
Gross Family Contributions for (i) housing assistance (including
vacancy) payments, (ii) the amount of the fee for PHA costs of
administration, and (iii) other costs specifically approved by the
Secretary.
(2) When a HUD-approved estimate of required payments under the ACC
for a fiscal year exceeds the maximum annual commitment, and would cause
the amount in the project account to be less than 40 percent of the
maximum, HUD will, within a reasonable period of time, take such
additional steps authorized by Section 8(c)(6) of the U.S. Housing Act
of 1937, as may be necessary, to assure that payments under the ACC will
be adequate to cover increases in Contract Rents and decreases in Gross
Family Contributions.
(c) Term of Housing Assistance Payments Contract. The Contract for
any unit rehabilitated in accordance with the Program must be for a term
of 15 years.
(d) Term of Lease. The initial Lease between the Family and Owner
must be for at least one year. Any renewal or extension of the Lease
term for any unit must in no case extend beyond the remaining term of
the Contract.
Sec. 882.404 Housing quality standards.
In addition to the standards set forth in Sec. 882.109, the
following will apply:
(a) Energy efficiency-performance requirement. Caulking and
weatherstripping are required as energy conserving improvements. Other
appropriate energy conserving improvements such as insulation and storm
windows must be accomplished by the Owner as part of the rehabilitation
under this Program, to the extent that the PHA determines these
improvements to be practicable,
[[Page 100]]
cost effective and financially feasible. Also, installation of cost-
effective and economically feasible solar energy systems is encouraged.
(b) Site and neighborhood-performance requirement. In addition to
meeting the standards required in Sec. 882.109(k), the site must:
(1) Be adequate in size, exposure and contour to accommodate the
number and type of units proposed; adequate utilities and streets must
be available to service the site. (The existence of a private disposal
system and private sanitary water supply for the site, approved in
accordance with local law, may be considered adequate utilities.)
(2) Be suitable from the standpoint of facilitating and furthering
full compliance with the applicable provisions of Title VI of the Civil
Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, E.O.
11063, and HUD regulations issued pursuant thereto.
(3) Promote greater choice of housing opportunities and avoid undue
concentration of assited persons in areas containing a high proportion
of low-income persons.
(4) Be accessible to social, recreational, educational, commercial,
and health facilities and services, and other municipal facilities and
services that are at least equivalent to those typically found in
neighborhoods consisting largely of unassisted, standard housing of
similar market rents.
(5) Be so located that travel time and cost via public
transportation or private automobile, from the neighborhood to places of
employment providing a range of jobs for low-income workers, is not
excessive. (While it is important that housing for the elderly not be
totally isolated from employment opportunities, this requirement need
not be adhered to rigidly for such projects.)
(c) Lead-based paint--(1) Purpose and applicability. The purpose of
this paragraph is to implement the provisions of section 302 of the
Lead-Based Paint Poisoning Prevention Act, 42 U.S.C. 4822, by
establishing procedures to eliminate as far as practicable the hazards
of lead-based paint poisoning with respect to existing housing units for
which proposals are made for assistance under the Section 8 Moderate
Rehabilitation Program. This paragraph is promulgated under the
authorization granted in 24 CFR 35.24(b)(4) and supersedes, with respect
to all housing to which it applies, the requirements prescribed by
subpart C of 24 CFR part 35. The requirements of paragraph (c)(4) of
this section are applicable to proposals for which initial inspection
under Sec. 882.504(a) or periodic inspection under Sec. 882.516 (b) is
made on or after May 1, 1987. The requirements of this paragraph do not
apply to 0-bedroom units. The requirements of subpart A of 24 CFR part
35 apply to all units constructed prior to 1978 covered by a Housing
Assistance Payments Contract under this subpart. This section does not
apply to projects for the elderly or handicapped (except for units
housing children under seven years of age).
(2) Definitions--Applicable surface. All intact and nonintact
interior and exterior painted surfaces of a residential structure.
Chewable surface. All chewable protruding painted surfaces up to
five feet from the floor or ground, which are readily accessible to
children under seven years of age, e.g., protruding corners, windowsills
and frames, doors and frames and other protruding woodwork.
Defective paint suface. Paint on applicable surfaces that is
cracking, scaling, chipping, peeling or loose.
Elevated blood lead level or EBL. Excessive absorption of lead, that
is, a confirmed concentration of lead in whole blood of 25 ug/dl
(micrograms of lead per deciliter of whole blood) or greater.
Lead-based paint. A paint surface, whether or not defective,
identified as having a lead content greater than or equal to 1 mg/cm
\2\.
(3) Defective paint. In the case of a unit, for a Family which
includes a child under the age of seven years, which was constructed
prior to 1978, the initial inspection under Sec. 882.504(a), and each
periodic inspection under Sec. 882.516(b), shall include an inspection
for defective paint surfaces. If defective paint surfaces are found,
treatment as required by 24 CFR 35.24(b)(2)(ii) shall be included in the
specific work items referred to in Sec. 882.504(a) or required as
corrective action pursuant to
[[Page 101]]
Sec. 882.516(c), as appropriate. Correction of defective paint surfaces
discovered at periodic inspection must be completed within 30 days of
PHA notification to the Owner. When weather conditions prevent
completion of repainting of exterior surfaces within the 30 day period,
repainting may be delayed, but covering or removal of the defective
paint must be completed within the prescribed period.
(4) Chewable surfaces. If a proposal is submitted with respect to a
unit constructed prior to 1978, occupied by a Family which includes a
child under the age of seven years with an identified EBL condition, the
PHA shall cause the unit to be tested for lead-based paint on chewable
surfaces. Testing shall be conducted by a State or local health or
housing agency, an inspector certified or regulated by a State or local
health or housing agency, or an organization recognized by HUD. Lead
content shall be tested by using an X-ray fluorescence analyzer (XRF) or
other method approved by HUD. Test readings of 1 mg/cm\2\ or higher
using an XRF shall be considered positive for presence of lead-based
paint. Where lead-based paint on chewable surfaces is indentified at
initial inspection, covering or removal of the paint surface in
accordance with 24 CFR 35.24(b)(2)(ii) shall be included in the specific
work items referred to in Sec. 882.504(a). Where lead-based paint on
chewable surfaces is discovered at periodic inspection, covering or
removal of the paint surface in accordance with 24 CFR 35.24(b)(2)(ii)
shall be completed within the time limits set forth in paragraph (c)(3)
of this section.
(5) Abatement without testing. In lieu of the procedures set forth
in Paragraph (c) of this section (4) above the PHA may, at its
discretion, forgo testing and require the abatement of all interior and
exterior chewable surfaces in accordance with 24 CFR 35.24(b)(2)(ii).
(6) Tenant protection. The owner shall take appropriate action to
protect tenants from hazards associated with abatement procedures.
(7) Records. The PHA shall keep a copy of each inspection report for
at least three years. If a unit requires testing or if the unit requires
treatment of chewable surfaces based on the testing, the PHA shall keep
indefinitely the test results and, if applicable, the owner
certification of treatment. The records shall indicate which chewable
surfaces in units have been tested and which chewable surfaces in the
units have been treated. If records establish that certain chewable
surfaces were tested or tested and treated in accordance with the
standards prescribed in this section, such chewable surfaces do not have
to be tested or treated at any subsequent time.
[47 FR 34379, Aug. 9, 1982, as amended at 50 FR 38795, Sept. 27, 1985;
52 FR 1894, Jan. 15, 1987; 52 FR 9828, Mar. 27, 1987; 53 FR 20801, June
6, 1988; 58 FR 4270, Jan. 13, 1993]
Sec. 882.405 Financing.
(a) Types. Any type of public or private financing may be utilized
with the exception of the rehabilitation loan program under Section 312
of the Housing Act of 1964.
(b) Use of Contract as security for financing. An Owner may pledge,
or offer as security for any loan or obligation, an Agreement or
Contract entered into pursuant to this Program, Provided That (1) such
security is in connection with a unit(s) rehabilitated pursuant to this
Program and (2) the terms of the financing or any refinancing must be
approved by the PHA in accordance with standards provided by HUD. Any
pledge of the Agreement or Contract, or payments thereunder, will be
limited to the amounts payable under the Contract in accordance with its
terms.
Sec. 882.406 Displacement, relocation, and acquisition.
(a) Minimizing displacement. (1) Consistent with the other goals and
objectives of this part, owners must assure that they have taken all
reasonable steps to minimize the displacement of persons (households,
businesses, nonprofit organizations, and farms) as a result of a project
assisted under this part. To the extent feasible, residential tenants
must be provided a reasonable opportunity to lease and occupy a
suitable, decent, safe, sanitary, and affordable dwelling unit in the
project upon its completion.
(2) Whenever a building/complex is rehabilitated, and some but not
all of
[[Page 102]]
the rehabilitated units will be assisted upon completion of the
rehabilitation, the relocation requirements described in this section
apply to the occupants of each rehabilitated unit, whether or not
Section 8 assistance will be provided for the unit.
(b) Temporary relocation. The following policies cover residential
tenants who will not be required to move permanently but who must
relocate temporarily for the project. Such tenants must be provided:
(1) Reimbursement for all reasonable out-of-pocket expenses incurred
in connection with the temporary relocation;
(2) Appropriate advisory services, including reasonable advance
written notice of:
(i) The date and approximate duration of the temporary relocation;
(ii) The location of the suitable, decent, safe, and sanitary
dwelling to be made available for the temporary period;
(iii) The terms and conditions under which the tenant may lease and
occupy a suitable, decent, safe, and sanitary dwelling in the project
upon completion; and
(iv) The assistance required under paragraph (b)(1) of this section.
(c) Relocation assistance for displaced persons. A ``displaced
person'' (defined in paragraph (g) of this section) must be provided
relocation assistance at the levels described in, and in accordance with
the requirements of, the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as amended (URA) (42 U.S.C. 4601-4655)
and implementing regulations in 49 CFR part 24. A displaced person must
be advised of his or her rights under the Fair Housing Act (42 U.S.C.
3601-19) and, if the comparable replacement dwelling used to establish
the amount of the replacement housing payment to be provided to a
minority is located in an area of minority concentration, such person
also must be given, if possible, referrals to comparable and suitable,
decent, safe, and sanitary replacement dwellings not located in such
areas.
(d) Real property acquisition requirements. The acquisition of real
property for a project is subject to the URA and the requirements
described in 49 CFR part 24, subpart B.
(e) Appeals. A person who disagrees with the HA's determination
concerning whether the person qualifies as a displaced person, or the
amount of relocation assistance for which the person is eligible, may
file a written appeal of that determination with the HA. A person who is
dissatisfied with the HA's determination on his or her appeal may submit
a written request for review of that determination to the HUD field
office.
(f) Responsibility of HA. (1) The HA must certify (i.e., provide
assurance of compliance as required by 49 CFR part 24) that it will
comply with the URA, the regulations in 49 CFR part 24, and the
requirements of this section, and must ensure such compliance
notwithstanding any third party's contractual obligation to the HA to
comply with these provisions.
(2) The cost of required relocation assistance is an eligible
project cost in the same manner and to the same extent as other project
costs. Such costs may be paid for with local public funds or funds
available from other sources. The cost of HA advisory services for
temporary relocation of tenants to be assisted under the program also
may be paid from preliminary administrative funds.
(3) The HA must maintain records in sufficient detail to demonstrate
compliance with the provisions of this section. The HA must maintain
data on the racial, ethnic, gender, and disability status of displaced
persons.
(g) Definition of displaced person. (1) For purposes of this
section, the term displaced person means a person (household, business,
nonprofit organization, or farm) that moves from real property, or moves
personal property from real property, permanently, as a direct result of
acquisition, rehabilitation, or demolition for a project assisted under
this part. The term displaced person includes, but may not be limited
to:
(i) A person who moves permanently from the real property after
receiving notice requiring such move, if the move occurs on or after the
date the owner submits to the HA the owner proposal that is later
approved;
[[Page 103]]
(ii) A person, including a person who moves from the property before
the date the owner submits the proposal to the HA, if the HA or HUD
determines that the displacement resulted directly from acquisition,
rehabilitation, or demolition for the assisted project; or
(iii) A tenant-occupant of a dwelling unit who moves from the
building/complex permanently after the execution of the Agreement
between the owner and the HA (or, for projects assisted under subpart H
of this part, after the ``initiation of negotiations'' (see paragraph
(h) of this section)), if the move occurs before the tenant is provided
a written notice offering him or her the opportunity to lease and occupy
a suitable, decent, safe, and sanitary dwelling in the same building/
complex, under reasonable terms and conditions, upon its completion.
Such reasonable terms and conditions must include a monthly rent and
estimated average monthly utility costs that do not exceed the greater
of:
(A) The tenant's monthly rent before the execution of the agreement
and estimated average monthly utility costs; or
(B) Thirty percent of gross household income.
(C) For projects assisted under subpart H of this part, the amount
cannot exceed the greater of the tenant's monthly rent before the
``initiation of negotiations'' and estimated average monthly utility
costs; or (if the tenant is low-income) the total tenant payment, as
determined under 24 CFR 813.107, or (if the tenant is not low-income) 30
percent of gross household income; or
(iv) A tenant-occupant of a dwelling, who is required to relocate
temporarily, but does not return to the building/complex, if either:
(A) The tenant is not offered payment for all reasonable out-of-
pocket expenses incurred in connection with the temporary relocation; or
(B) Other conditions of the temporary relocation are not reasonable;
or
(v) A tenant-occupant of a dwelling who moves from the building/
complex permanently after he or she has been required to move to another
dwelling unit in the building/complex, if either:
(A) The tenant is not offered reimbursement for all reasonable out-
of-pocket expenses incurred in connection with the move; or
(B) Other conditions of the move are not reasonable.
(2) Notwithstanding the provisions of paragraph (g)(1) of this
section, a person does not qualify as a displaced person (and is not
eligible for relocation assistance under the URA or this section), if:
(i) The person has been evicted for serious or repeated violation of
the terms and conditions of the lease or occupancy agreement, violation
of applicable Federal, State, or local law, or other good cause, and the
HA determines that the eviction was not undertaken for the purpose of
evading the obligation to provide relocation assistance;
(ii) The person moved into the property after the submission of the
preliminary proposal (or application, if there is no preliminary
proposal), and before signing a lease and commencing occupancy, received
written notice of the project and its possible impact on the person
(e.g., the person may be displaced, temporarily relocated, or suffer a
rent increase) and the fact that the person would not qualify as a
displaced person (or for any assistance provided under this section) as
a result of the project;
(iii) The person is ineligible under 49 CFR 24.2(g)(2); or
(iv) HUD determines that the person was not displaced as a direct
result of acquisition, rehabilitation, or demolition for the project.
(3) The HA may request, at any time, HUD's determination of whether
a displacement is or would be covered by this section.
(h) Definition of initiation of negotiations. For purposes of
determining the formula for computing the replacement housing assistance
to be provided to a residential tenant displaced as a direct result of
private-owner rehabilitation or demolition of the real property, the
term initiation of negotiations means the
[[Page 104]]
execution of the Agreement between the owner and the HA.
(Approved by Office of Management and Budget under OMB control number
2506-0121).
[61 FR 48056, Sept. 11, 1996]
Sec. 882.407 Other Federal requirements.
(a) Participation in this Program requires compliance with the Equal
Opportunity requirements specified in Sec. 882.111 and the Age
Discrimination Act of 1975. Also, the PHA must comply with HUD's equal
opportunity application and operation requirements.
(b) Additionally, in selecting among proposals the PHA must take
into consideration compliance with the following:
(1) Executive Order 11988, Floodplains Management;
(2) Executive Order 11990, Protection of Wetlands;
(3) National Historic Preservation Act (Pub. L. 89-665);
(4) Archeological and Historic Preservation Act of 1974; and
(5) Executive Order 11593 on Protection and Enhancement of the
Cultural Environment.
If the PHA proposes to select a building which is on or eligible for the
National Register of Historic Places, the PHA must contact the HUD Field
Office prior to approval to assure compliance with paragraphs (b) (3),
(4), and (5) of this section.
(c) The PHA and Owner must agree to comply with the requirements of
the following, where applicable:
(1) Clean Air Act and Federal Water Pollution Control Act;
(2) Flood Disaster Protection Act of 1973;
(3) Section 504 of the Rehabilitation Act of 1973 (as implemented in
24 CFR part 8),
(4) Executive Order 11246, Equal Employment Opportunity (for all
construction contracts of over $10,000);
(5) Executive Order 11625, Prescribing Additional Arrangements for
Developing and Coordinating a National Program for Minority Business
Enterprise; and
(6) The following labor standards provisions (for Agreements
covering 9 or more assisted units):
(i) Provisions of section 12 of the United States Housing Act of
1937 requiring payment of not less than the wages prevailing in the
locality, as predetermined by the Secretary of Labor pursuant to the
Davis-Bacon Act, to all laborers and mechanics (other than volunteers
under the conditions set out in 24 CFR part 70) who are employed in the
rehabilitation of the project;
(ii) Contract Work Hours and Safety Standards Act;
(iii) Copeland Act; and
(iv) Department of Labor regulations in 29 CFR part 5 and other
implementing regulations.
[47 FR 34379, Aug. 9, 1982, as amended at 57 FR 14759, Apr. 22, 1992]
Sec. 882.408 Initial contract rents.
(a) Fair Market Rent limitation. The Fair Market Rent Schedule for
Moderate Rehabilitation is 120 percent of the Existing Housing Fair
Market Rent Schedule, except that the Fair Market Rent limitation
applicable to single room occupancy housing is 75 percent of the
Moderate Rehabilitation Fair Market Rent for a 0-bedroom unit. The
initial Gross Rent for any Moderate Rehabilitation unit must not exceed
the Moderate Rehabilitation Fair Market Rent applicable to the unit on
the date that the Agreement is executed except by up to 10 percent as
provided in paragraph (b) of this section. Additionally, to the extent
provided in paragraph (d) of this section, the PHA may approve changes
in the Contract Rent subsequent to execution of the Agreement which
result in an initial Gross Rent which exceeds the Moderate
Rehabilitation Fair Market Rent applicable to the unit by up to 20
percent.
(b) Exception rents. With HUD Field Office approval, the PHA may
approve initial Gross Rents which exceed the applicable Moderate
Rehabilitation Fair Market Rents by up to 10 percent for all units of a
given size in specified areas where HUD has determined that the rents
for standard units suitable for the Existing Housing Program are more
than 10 percent higher than the Existing Housing Fair Market Rents. The
PHA must submit documentation demonstrating the necessity for such
exception rents in the area to the HUD Field Office. In areas where HUD
has
[[Page 105]]
approved the use of exception rents for 0-bedroom units, the single room
occupancy housing exception rent will be 75 percent of the exception
rent applicable to Moderate Rehabilitation 0-bedroom units.
(c) Determination Initial Contract Rents. (1) The initial Contract
Rent and base rent for each unit must be computed in accordance with HUD
requirements. These amounts may be determined in accordance with
paragraph (c)(2), or in accordance with an alternative method prescribed
by HUD. However, the initial Contract Rent may in no event be more
than--
(i) The Moderate Rehabilitation Fair Market Rent or exception rent
applicable to the unit on the date that the Agreement is executed, minus
(ii) Any applicable allowance for utilities and other services
attributable to the unit.
(2) When the initial Contract Rent is computed under this paragraph,
the rent will be equal to the base rent plus the monthly cost of a
rehabilitation loan (but not more than the maximum stated in paragraph
(c)(1)). The base rent must be calculated using the rent charged for the
unit or the estimated costs to the Owner of owning, managing and
maintaining the rehabilitated unit. The monthly cost of a rehabilitation
loan must be calculated using:
(i) The actual interest rate on the portion of the rehabilitation
costs borrowed by the Owner,
(ii) The HUD-FHA maximum interest rate for multifamily housing (or
another rate prescribed by HUD) for rehabilitation costs paid by the
Owner out of nonborrowed funds, and
(iii) At least a 15 year loan term, except that if the total amount
of rehabilitation is less than $15,000, the actual loan term will be
used for the portion of the rehabilitation costs borrowed by the Owner.
(HUD Field Offices may authorize loan terms which differ from the above
in accordance with HUD requirements.)
(d) Changes in Initial Contract Rents during rehabilitation. (1) The
initial Contract Rents established pursuant to paragraph (c) of this
section will be the Contract Rents on the effective date of the Contract
except under the following circumstances:
(i) When, during rehabilitation, work items (including substantial
and necessary design changes) which (A) could not reasonably have been
anticipated or are necessitated by a change in local codes or
ordinances, and (B) were not listed in the work write-up prepared or
approved by the PHA, are subsequently required and approved by the PHA.
(ii) When the actual cost of the rehabilitation performed is less
than that estimated in the calculation of Contract Rents for the
Agreement or the actual, certified costs are more than estimated due to
unforeseen factors beyond the owner's control (e.g., strikes, weather
delays or unexpected delays caused by local governments).
(iii) When the PHA (or HUD) approves changes in financing.
(iv) When the actual relocation payments made by the Owner to
temporarily relocated Families varies from the cost estimated in the
calculation of Contract Rents for the Agreement.
(v) When necessary to correct errors in computation of the base and
Contract Rents to comply with the HUD requirements.
(2) Should changes occur as specified in paragraph (d)(1) (either an
increase or decrease), the PHA will approve any necessary change in work
and amendment of the work write-up and cost estimate, recalculate the
initial Contract Rents in accordance with paragraph (d)(3) of this
section, and amend the Contract or Agreement, as appropriate, to reflect
the revised rents.
(3) In establishing the revised Contract Rents, the PHA must
determine that the resulting Gross Rents do not exceed the Moderate
Rehabilitation Fair Market Rent or the exception rent in effect at the
time of execution of the Agreement. The Fair Market Rent or exception
rent, as appropriate, may only be exceeded when the PHA determines in
accordance with paragraph (d)(1) of this section that it will be
necessary for the revised Gross Rent to exceed the Moderate
Rehabilitation Fair Market Rent or exception rent. Should this
determination be made, the PHA may not execute a revised Agreement or
Contract for Gross Rents exceeding the Fair Market Rents by more than 10
percent until it receives HUD Field Office approval. The HUD Field
Office
[[Page 106]]
may approve revised Gross Rents which exceed the Fair Market Rents by up
to 20 percent for reasons specified in paragraph (d)(1) of this section
upon proper justification by the PHA of the necessity for the increase.
[47 FR 34379, Aug. 9, 1982, as amended at 52 FR 19725, May 27, 1987]
Sec. 882.409 Contract rents at end of rehabilitation loan term.
For a Contract where the initial Contract Rent was based upon a loan
term shorter than 15 years, the Contract must provide for reduction of
the Contract Rent effective with the rent for the month following the
end of the term of the rehabilitation loan. The amount of the reduction
will be the monthly cost of amortization of the rehabilitation loan.
This reduction should result in a new Contract Rent equal to the base
rent established pursuant to Sec. 882.408(c) plus all subsequent
adjustments.
Sec. 882.410 Rent adjustments.
(a) Annual and special adjustments. Contract Rents will be adjusted
as provided in paragraphs (a) (1) and (2) of this section upon submittal
to the PHA by the Owner of a revised schedule of Contract Rents,
provided that the unit is in decent, safe, and sanitary condition and
that the Owner is otherwise in compliance with the terms of the Lease
and Contract. Subject to the foregoing, adjustments of Contract Rents
will be as follows:
(1) The Annual Adjustment Factors which are published annually by
HUD (see Schedule C, 24 CFR part 888) will be utilized. On or after each
annual anniversary date of the Contract, the Contract Rents may be
adjusted in accordance with HUD procedures, effective for the month
following the submittal by the Owner of a revised schedule of Contract
Rents. The changes in rent as a result of the adjustment cannot exceed
the amount established by multiplying the Annual Adjustment Factor by
the base rents. However, if the amounts borrowed to finance the
rehabilitation costs or to finance purchase of the property are subject
to a variable rate or are otherwise renegotiable, Contract Rents may be
adjusted in accordance with other procedures as prescribed by HUD, and
specified in the Contract, provided that the adjusted Contract Rents
cannot exceed the rents established by multiplying the Annual Adjustment
Factor by the Contract Rents. Adjusted Contract Rents must then be
examined in accordance with paragraph (b) of this section and may be
adjusted accordingly. Contract Rents may be adjusted upward or downward,
as may be appropriate.
(2) Special Adjustments. (i) A special adjustment, to the extent
determined by HUD to reflect increases in the actual and necessary
expenses of owning and maintaining the unit which have resulted from
substantial general increases in real property taxes, assessments,
utility rates and utilities not covered by regulated rates, may be
recommended by the PHA for approval by HUD. Subject to appropriations, a
special adjustment may also be recommended by the PHA for approval by
HUD when HUD determines that a project is located in a community where
drug-related criminal activity is generally prevalent, and not specific
to a particular project, and the project's operating, maintenance, and
capital repair expenses have substantially increased primarily as a
result of the prevalence of such drug-related activity. HUD may, on a
project-by-project basis, provide adjustments to the maximum monthly
rents, to a level no greater than 120 percent of the current gross rents
for each unit size under a Housing Assistance Payments Contract, to
cover the costs of maintenance, security, capital repairs and reserves
required for the Owner to carry out a strategy acceptable to HUD for
addressing the problem of drug-related criminal activity. Prior to
approval of a special adjustment to cover the cost of physical
improvements, HUD will perform an environmental review to the extent
required by HUD's environmental regulations at 24 CFR part 50, including
the applicable related authorities at 24 CFR 50.4.
(ii) The aforementioned special rent adjustments will only be
approved if and to the extent the Owner clearly demonstrates that these
general increases have caused increases in the owners operating costs
which are not
[[Page 107]]
adequately compensated for by annual adjustments.
(iii) The Owner must submit financial information to the PHA which
clearly supports the increase. For Contracts of more than twenty units,
the Owner must submit audited financial information.
(b) Overall limitation. Notwithstanding any other provisions of this
part, adjustments as provided in this section must not result in
material differences between the rents charged for assisted and
comparable unassisted units, as determined by the PHA (and approved by
HUD in the case of adjustments under paragraph (a)(2) of this section).
However, unless the rents have been adjusted in accordance with
Sec. 882.409, this limitation should not be construed to prohibit
differences in rents between assisted and comparable unassisted units to
the extent that differences existed with respect to the initial Contract
Rents.
(Approved by the Office of Management and Budget under OMB approval
number 2577-0196)
[47 FR 34379, Aug. 9, 1982, as amended at 59 FR 47773, Sept. 16, 1994]
Sec. 882.411 Payments for vacancies.
(a) Vacancies from execution of Contract to initial occupancy. If a
Contract unit which has been rehabilitated in accordance with this
Program is not leased within 15 days of the effective date of the
Contract, the Owner will be entitled to housing assistance payments in
the amount of 80 percent of the Contract Rent for the unit for a vacancy
period not exceeding 60 days from the effective date of the Contract,
provided that the Owner (1) has complied with Secs. 882.506(d) and
882.508(c); (2) has taken and continues to take all feasible actions to
fill the vacancy; and (3) has not rejected any eligible applicant except
for good cause acceptable to the PHA.
(b) Vacancies after initial occupancy. (1) If an Eligible Family
vacates its unit (other than as a result of action by the Owner which is
in violation of the Lease or the Contract or any applicable law), the
Owner may receive the housing assistance payments due under the Contract
for so much of the month in which the Family vacates the unit as the
unit remains vacant. Should the unit continue to remain vacant, the
Owner may receive from the PHA a housing assistance payment in the
amount of 80 percent of the Contract Rent for a vacancy period not
exceeding an additional month. However, if the Owner collects any of the
Family's share of the rent for this period, the payment must be reduced
to an amount which, when added to the Family's payment, does not exceed
80 percent of the Contract Rent. Any such excess must be reimbursed by
the Owner to the PHA. The Owner will not be entitled to any payment
under this paragraph (b)(1) of this section unless the Owner:
(i) Immediately upon learning of the vacancy, has notified the PHA
of the vacancy or prospective vacancy, and
(ii) has taken and continues to take all feasible actions specified
in paragraphs (a) (2) and (3) of this section.
(2) If the Owner evicts an Eligible Family, the Owner will not be
entitled to any payment under paragraph (b)(1) of this section unless
the PHA determines that the Owner complied with all requirements of the
Contract.
(c) Prohibition of double compensation for vacancies. The Owner will
not be entitled to housing assistance payments with respect to vacant
units under this section if the Owner is entitled to payments from other
sources (for example, payments for losses of rental income incurred for
holding units vacant for relocatees pursuant to Title I of the HCD Act
of 1974 or payments for unpaid rent under Sec. 882.112 (Security and
Utility Deposits)).
Sec. 882.412 Subcontracting of owner services.
(a) General. Any Owner may contract with any private or public
entity to perform for a fee the services required by the Agreement,
Contract or Lease, provided that such contract may not shift any of the
Owner's responsibilities or obligations.
(b) PHA management. If the Owner and a PHA wish to enter into a
management contract, they may do so provided that:
(1) The Housing Assistance Payments Contract with respect to the
housing
[[Page 108]]
involved is administered by another PHA, or
(2) Should another PHA not be available and willing to administer
the Housing Assistance Payments Contract and no other management
alternative exists, the HUD Field Office may authorize PHA management of
units administered by the PHA in accordance with specified criteria.
(3) Notwithstanding the provisions of Sec. 882.408 (b) and (c), a
PHA may not approve, without prior HUD approval, rents which exceed the
appropriate Moderate Rehabilitation Fair Market Rent for a unit for
which it provides the management functions under this section.
Sec. 882.413 Responsibility of the Family.
(a) A family receiving housing assistance under this Program must
fulfill all of its obligations under the Lease and Statement of Family
Responsibility.
(b) No family member may engage in drug-related criminal activity or
violent criminal activity. Failure of the Family to meet its
responsibilities under the Lease, the Statement of Family
Responsibility, or this section shall constitute rounds for termination
of assistance by the PHA. Should the PHA determine to terminate
assistance to the Family, the provisions of Sec. 882.514(f) must be
followed.
(c) For the purposes of this sec- tion--(1) Drug-related criminal
activity means one of the following:
(i) The felonious manufacture, sale, or distribution, or the
possession with intent to manufacture, sell, or distribute, of a
controlled substance (as defined in section 102 of the Controlled
Substances Act (21 U.S.C. 802));
(ii) The felonious use, or possession (other than with intent to
manufacture, sell, or distribute), of a controlled substance, except
that such use or possession must have occurred within one year before
the date that the PHA provides notice to an applicant or participant
Family of the PHA's determination to deny admission or terminate
assistance. Drug-related criminal activity does not include this use or
possession, if the Family member can demonstrate that he or she:
(A) Has an addiction to a controlled substance, has a record of such
an impairment, or is regarded as having such an impairment; and
(B) Has recovered from such addiction and does not currently use or
possess controlled substances.
(2) Violent criminal activity includes any felonious criminal
activity that has as one of its elements the use, attempted use, or
threatened use of physical force against the person or property of
another.
(3) Felonious means that the criminal activity is classed as a
felony under Federal, State, or local law.
[55 FR 28546, July 11, 1990]
Subpart E--Special Procedures for Moderate Rehabilitation--Program
Development and Operation
Source: 47 FR 34383, Aug. 9, 1982, unless otherwise noted.
Sec. 882.501 Distribution of funds and processing of PHA applications.
(a) Distribution of funds. Contract and budget authority will be
assigned to each HUD Field Office pursuant to 24 CFR part 791. The HUD
Field Office will invite applications for the Moderate Rehabilitation
Program from PHAs from areas where the Field Office has determined that
the Moderate Rehabilitation Program would be appropriate.
(b) Processing of PHA applications. PHAs will submit an application
for the Moderate Rehabilitation Program to the HUD Field Office. The
application must contain all the information and documentation required
by HUD. Should the available contract authority not be sufficient to
fund all approvable applications, HUD will rank the applications based
on its assessment of which applications have the best combination of the
following:
(1) The demonstrated capacity of the PHA or its contractor(s) to
provide the rehabilitation technical assistance to Owners required under
the Program;
(2) The availability of financing resources, both assisted and
unassisted, as demonstrated through statements from financing agencies
(for example,
[[Page 109]]
local Community Development or State agency rehabilitation loan
programs);
(3) The PHA's experience with the Section 8 Existing Housing Program
or the PHA's overall administrative capability;
(4) The potential of achieving, as expeditiously as possible, the
rehabilitation and leasing of housing units under this Subpart; and
(5) The overall feasibility of the proposed program.
Sec. 882.502 Schedule of rehabilitation and leasing.
All units in a Section 8 Moderate Rehabilitation project must be
under an Agreement, rehabilitated, and under Contract within 24 months
of execution of the ACC for that project, unless this schedule is
extended by HUD. HUD may modify the unit mix or reduce the number of
units or the amount of the annual contributions commitment if, in the
determination of HUD, the PHA fails to demonstrate a good faith effort
to adhere to this schedule or if other reasons justify a reduction in
the number of units or change in the unit mix.
Sec. 882.503 Obtaining proposals from owners.
(a) Public notice to owners. Promptly after receiving the executed
ACC, and thereafter as may be necessary, the PHA must make known to the
public, through publication in a newspaper of general circulation as
well as through minority media and other suitable means, the
availability and nature of the Program. The notice must inform Owners
where they may apply for the Program and must be made in accordance with
the HUD guidelines for fair housing requiring the use of the equal
housing opportunity logotype, statement and slogan.
(b) Owner proposals. The PHA must develop a proposal format for
Owners wishing to apply for participation in the Program which will
require, at a minimum, the following information:
(1) Owner and building identification,
(2) Number and bedroom size of unit(s) to be rehabilitated,
(3) Rent history by bedroom size,
(4) Proposed rehabilitation work,
(5) Tenant information and whether the Owner anticipates that
permanent displacement or temporary relocation of tenants will be
necessary,
(6) The prior participation of the Owner in HUD Programs, and
(7) The Owner's plans for managing and maintaining the unit(s) under
the proposal.
Sec. 882.504 Assistance to owners and selection of units.
(a) Initial inspection. For all proposals selected for further
processing, the PHA must inspect the property. A determination must be
made by the PHA as to the specific work items which need to be
accomplished to bring the unit(s) to be assisted up to the Housing
Quality Standards specified in Secs. 882.109 and 882.404 (or other
standards as approved in the PHA's application) or to repair or replace
major building systems or components in danger of failing.
(b) Preliminary feasibility analysis. A rough cost estimate and cash
flow analysis of the property following rehabilitation must be made by
the PHA. A determination of the necessity for any permanent displacement
and/or temporary relocation and a preliminary estimate of the cost of
any temporary relocation must be made by the PHA. If the proposal is
determined to be feasible, analysis of additional energy conserving
improvements which may be cost effective and which may be accomplished
within the Fair Market Rent limitations of the Program must be made. The
Owner must be required to provide energy conserving improvements in
accordance with Sec. 882.404(a). A preliminary estimate of Gross Rents
should be made based upon the estimates of rehabilitation, temporary
relocation and energy conserving improvements costs.
(c) Selection of Proposals. After the initial inspection and
preliminary feasibility analysis, the PHA should select among Owner
proposals those proposals which it will approve. The PHA must establish
a method of selecting among Owner proposals and must make this method
known to any Owner submitting or planning to submit a proposal.
Proposals must be approved in accordance with criteria established by
the
[[Page 110]]
PHA and approved by HUD, and in accordance with the following
requirements:
(1) No proposal found infeasible by the PHA in the preliminary
feasibility analysis may be approved unless the Owner can demonstrate
that the allowable rent will be sufficient to rehabilitate, manage and
maintain the unit(s) adequately;
(2) If, during the preliminary feasibility analysis, it is
determined by the PHA that the work necessary to bring a unit(s) to the
Housing Quality Standards, or other standards approved for the Program,
or to repair or replace major systems is not sufficient to meet the
$1000 per unit minimum amount of rehabilitation requirement, that
unit(s) may not be assisted under the Program.
(3) If a unit(s) does not meet the requirement of paragraph (c)(2)
but the Owner is proposing to accomplish at least $1000 per unit of
rehabilitation by including work to make the unit(s) accessible to a
handicapped or disabled individual occupying the unit(s) or expected to
occupy the unit(s), the PHA may approve such units not to exceed 5
percent of the units under its Program, provided that accessible units
are necessary to meet the requirements of 24 CFR part 8, which
implements Section 504 of the Rehabilitation Act of 1973. The
rehabilitation must make the unit(s), and access and egress to the
unit(s), barrier-free with respect to the handicap or disability of the
individual in residence or expected to be in residence.
(4) A preference must be provided to those proposals which indicate
in the preliminary feasibility analysis the greatest dollar amount of
necessary rehabilitation per unit.
(5) Prior to the approval of any unit(s) owned by a State or unit of
general local government, the PHA must contact HUD and request HUD
review of the site. The PHA may not enter into an Agreement on any such
unit(s) until HUD approval of the site is obtained and the State or unit
of general local government has sold the unit(s) to another Owner.
(d) Notification of Owners. When the PHA has selected the proposals
which it plans to approve, the PHA must notify all Owners specifying:
(1) Whether their proposal has been rejected or approved;
(2) If the proposal was rejected, the reason(s) for rejection and
the Owner's right to appeal to the PHA the PHA's basis for rejection;
(3) The tentative number of units to be assisted; and
(4) That the Owner should request all tenants residing in units
tentatively selected for participation in the Program to contact the PHA
to submit an application.
(e) Selection of units. The PHA must take the applications and
determine the eligibility of all tenants residing in approved units who
wish to apply for the Program. After eligibility of all tenants has been
determined, the Owner must be informed of any adjustment in the number
of units to be assisted. In order to make the most efficient use of
housing assistance funds, an Agreement may not be entered into covering
any unit occupied by a family which is not eligible to receive housing
assistance payments. Therefore, the number of units approved by the PHA
for a particular proposal must be adjusted to exclude any unit(s)
determined by the PHA to be occupied by a family not eligible to receive
housing assistance payments. Eligible Families must also be briefed at
this stage as to their rights and responsibilities under the Program.
(f) Work write-ups and cost estimates. Should the Owner agree with
the assessment of the PHA as to the work that must be accomplished, the
preliminary feasibility of the proposal, and the number of units to be
assisted, the Owner, with the assistance of the PHA where necessary,
must prepare detailed work write-ups including specifications and plans
(where necessary) so that a cost estimate may be prepared. The work
write-up will describe how the deficiencies eligible for amortization
through the Contract Rents are to be corrected including minimum
acceptable levels of workmanship and materials. From this work write-up,
the Owner, with the assistance of the PHA, must prepare a cost estimate
for the accomplishment of all items specified in this section.
[[Page 111]]
(g) Selection of Contractor. The Owner is responsible for selecting
a competent contractor to undertake the rehabilitation. The PHA must
promote opportunities for minority contractors to participate in the
Program.
(h) Feasibility analysis. After a firm price has been secured from
the contractor selected by the Owner, a feasibility analysis of the
proposal must be conducted by the PHA and the Owner.
(i) Financing. The PHA must discuss with the Owner the various
financing options available. The terms of the financing must be approved
by the PHA in accordance with standards provided by HUD.
(j) The Lease between the Owner and the Family must be in accordance
with Sec. 882.511 and any other applicable HUD regulations and
requirements. The Lease must include all provisions required by HUD, and
must not include any of the prohibited provisions in appendix I.
[47 FR 34383, Aug. 9, 1982, as amended at 49 FR 12243, Mar. 29, 1984]
Sec. 882.505 Agreement to enter into housing assistance payments contract.
Prior to the commencement of any rehabilitation under this part, the
PHA must enter into an Agreement with the Owner in the form prescribed
by HUD.
Sec. 882.506 Rehabilitation period.
(a) Timely performance of work. After execution of the Agreement,
the Owner must promptly proceed with the rehabilitation work as provided
in the Agreement. In the event the work is not so commenced, diligently
continued, or completed, the PHA will have the right to rescind the
Agreement, or take other appropriate action.
(b) Inspections. The PHA must inspect, as appropriate, during
rehabilitation to ensure that work is proceeding on schedule and is
being accomplished in accordance with the terms of the Agreement,
particularly that the work meets the acceptable levels of workmanship
and materials specified in the work write-up.
(c) Changes. (1) The Owner must submit to the PHA for approval any
changes from the work specified in the Agreement which would alter the
design or the quality of the required rehabilitation. The PHA may
condition its approval of such changes on a reduction of the Contract
Rents. If changes are made without prior PHA approval, the PHA may
determine that Contract Rents must be reduced or that the Owner must
remedy any deficiency as a condition for acceptance of the unit(s).
(2) Contract Rents may not be increased except in accordance with
provisions of Sec. 882.408(d).
(d) List of vacancies. in order that the unit(s) might be promptly
occupied, 60 days prior to the scheduled completion of the
rehabilitation, the Owner must notify the PHA of any unit(s) which will
be vacant on the anticipated effective date of the Contract. The PHA
will notify Families of the appropriate size on its waiting list of the
availability of the unit.
Sec. 882.507 Completion of rehabilitation.
(a) Notification of completion. The Owner must notify the PHA when
the work is completed and submit to the PHA the evidence of completion
and certifications described in paragraphs (b) and (c) of this section.
(b) Evidence of completion. Completion of the unit(s) must be
evidenced by furnishing the PHA with the following:
(1) A certificate of occupancy and/or other official approvals as
required by the locality.
(2) A certification by the Owner that:
(i) The unit(s) has been completed in accordance with the
requirements of the Agreement;
(ii) The unit(s) is in good and tenantable condition;
(iii) The unit(s) has been rehabilitated in accordance with the
applicable zoning, building, housing and other codes, ordinances or
regulations, as modified by any waivers obtained from the appropriate
officials;
(iv) Any unit(s) built prior to 1973 are in compliance with
Sec. 882.404(c)(3) and Sec. 882.404(c)(4).
(v) If applicable, the Owner has complied with the provisions of the
Agreement relating to the payment of not less than prevailing wage rates
and that to the best of the Owner's knowledge and belief there are no
claims of
[[Page 112]]
underpayment concerning alleged violations of said provisions of the
Agreement. In the event there are any such pending claims to the
knowledge of the Owner, PHA or HUD, the Owner will be required to place
sufficient amount in escrow, as determined by the PHA or HUD, to assure
such payments.
(c) Actual cost and rehabilitation loan certifications. The Owner
must provide the PHA with a certification of the costs incurred for the
rehabilitation and any temporary relocation as well as the interest rate
and term of any rehabilitation loan. The Owner must certify that these
are the actual costs, interest rate, and term.
The PHA must review for completeness and accuracy and accept these
certifications subject to the right of post audit. The PHA must then
establish the Contract Rents as provided in Sec. 882.408 which will be
subject to reduction based on a post audit.
(d) Review and inspections. The PHA must review the evidence of
completion for compliance with paragraph (b) of this section. The PHA
also must inspect the unit(s) to be assisted to determine that the
unit(s) has been completed in accordance with the Agreement and meets
the Housing Quality Standards or other standards approved by HUD for the
Program. If the inspection discloses defects or deficiencies, the
inspector must report these in detail.
(e) Acceptance. (1) If the PHA determines from the review and
inspection that the unit(s) has been completed in accordance with the
Agreement, the unit(s) will be accepted.
(2) If there are any items of delayed completion which are minor
items or which are incomplete because of weather conditions, and in any
case which do not preclude or affect occupancy, and all other
requirements of the Agreement have been met, the unit(s) must be
accepted. An escrow fund determined by the PHA to be sufficient to
assure completion for items of delayed completion must be required, as
well as a written agreement between the PHA and the Owner, to be
included as an exhibit to the Contract, specifying the schedule for
completion. If the items are not completed within the agreed time
period, the PHA may terminate the Contract or exercise other rights
under the Contract.
(3) If other deficiencies exist, the PHA must determine whether and
to what extent the deficiencies are correctable, and whether the
Contract Rents should be reduced. The Owner must be notified of the
PHA's decision. If the corrections required by the PHA are possible, the
PHA and the Owner must enter into an agreement for the correction of the
deficiencies within a specified time. If the deficiencies are corrected
within the agreed period of time, the PHA must accept the unit(s).
(4) Otherwise, the unit(s) may not be accepted, and the Owner must
be notified with a statement of the reasons for nonacceptance.
[47 FR 34383, Aug. 9, 1982, as amended at 52 FR 1895, Jan. 15, 1987]
Sec. 882.508 Execution of housing assistance payments contract.
(a) Time of execution. Upon PHA acceptance of the unit(s) and
certifications pursuant to Sec. 882.507, the Contract will be executed
by the Owner and the PHA. The effective date must be no earlier than the
PHA inspection which provides the basis for acceptance as specified in
Sec. 882.507(e).
(b) Changes from Agreement. The Contract Rents may be higher or
lower than those specified in the Agreement in accordance with
requirements of Sec. 882.408(d).
(c) Unleased unit(s). At the time of execution of the Contract, the
Owner will be required to submit a list of dwelling unit(s) leased and
not leased as of the effective date of the Contract. (See
Sec. 882.411(a).)
Sec. 882.509 Overcrowded and under occupied units.
If the PHA determines that a Contract unit is not decent, safe, and
sanitary by reason of increase in Family size, or that a Contract unit
is larger than appropriate for the size of the Family in occupancy,
housing assistance payments with respect to the unit will not be abated;
However, the Owner must offer the Family a suitable alternative unit
should one be available and the Family will be required to move. If the
Owner does not have a suitable available unit, the PHA must assist the
[[Page 113]]
Family in locating other standard housing in the locality within the
Family's ability to pay and require the Family to move to such a unit as
soon as possible. In no case will a Family be forced to move nor will
housing assistance payments under the Contract be terminated unless the
Family rejects without good reason the offer of a unit which the PHA
judges to be acceptable.
Sec. 882.510 Adjustment of utility allowance.
The PHA must determine, at least annually, whether an adjustment is
required in the Utility Allowance applicable to the dwelling units in
the Program, on grounds of changes in utility rates or other change of
general applicability to all units in the Program. The PHA may also
establish a separate schedule of allowances for each building of 20 or
more assisted units, based upon at least one year's actual utility
consumption data following rehabilitation under the Program. If the PHA
determines that an adjustment should be made in its Schedule of
Allowances or if it establishes a separate schedule for a building which
will change the allowance, the PHA must then determine the amounts of
adjustments to be made in the amount of rent to be paid by affected
Families and the amount of housing assistance payments and must notify
the Owners and Families accordingly. Any adjustment to the Allowance
must be implemented no later than at the Family's next reexamination or
at lease renewal, whichever is earlier.
[47 FR 34383, Aug. 9, 1982, as amended at 49 FR 19946, May 10, 1984]
Sec. 882.511 Termination of tenancy.
(a) Applicability. The provisions of this section apply to decisions
by an Owner to terminate the tenancy of a Family during or at the end of
the Family's lease term.
(b) Grounds for termination of or refusal to renew the lease. The
Owner must not terminate or refuse to renew the lease except upon the
following grounds:
(1) Serious or repeated violation of the terms and conditions of the
lease.
(2) Violation of applicable Federal, State or local law.
(3) Other good cause.
(c) Notice of termination of tenancy. (1) The Owner must serve a
written notice of termination of tenancy on the Family which states the
date the tenancy shall terminate. Such date must be in accordance with
the following:
(i) When termination is based on failure to pay rent, the date of
termination must be not less than five working days after the Family's
receipt of the notice.
(ii) When termination is based on serious or repeated violation of
the terms and conditions of the lease or on violation of applicable
Federal, State or local law, the date of termination must be in
accordance with State and local law.
(iii) When termination is based on other good cause, the date of
termination must be no earlier than 30 days after the notice is served
on the Family.
(2) The notice of termination must:
(i) State the reasons for such termination with enough specificity
to enable the Family to prepare a defense.
(ii) Advise the Family that if a judicial proceeding for eviction is
instituted, the tenant may present a defense in that proceeding.
(iii) Be served on the Family by sending a prepaid first class
properly addressed letter (return receipt requested) to the tenant at
the dwelling unit or by delivering a copy of the notice to the dwelling
unit.
(3) Substitution of State and local requirements. In the case of
failure to pay rent, a notice of termination which is issued pursuant to
State or local law or is common practice in the locality and which
satisfies paragraph (c)(2) may be substituted for or run concurrently
with the notice required herein.
(d) Eviction. All evictions must be carried out through judical
process under State and local law. ``Eviction'' means the dispossession
of the Family from the dwelling unit pursuant to State or local court
action.
(e) Lease. The requirements of this section shall be incorporated
into the dwelling lease between the Owner and the Family.
[[Page 114]]
Sec. 882.512 Reduction of number of units covered by contract.
(a) Limitation on leasing to ineligible Families. Owners must lease
all assisted units under Contract to Eligible Families. Leasing of
vacant, assisted units to ineligible tenants is a violation of the
Contract and grounds for all available legal remedies, including
suspension or debarment from HUD programs and reduction of the number of
units under the Contract, as set forth in paragraph (b) of this section.
Once the PHA has determined that a violation exists, the PHA must notify
HUD of its determination and the suggested remedies. At the direction of
HUD, the PHA must take the appropriate action.
(b) Reduction for failure to lease to Eligible Families. If, at any
time beginning six months after the effective date of the Contract, the
Owner fails for a period of six continuous months to have at least 90
percent of the assisted units leased or available for leasing by
Eligible Families (because families initially eligible have become
ineligible), the PHA may, on at least 30 days' notice, reduce the number
of units covered by the Contract. The PHA may reduce the number of units
to the number of units actually leased or available for leasing by
Eligible Families plus 10 percent (rounded up). If the Owner has only
one unit under Contract and if one year has elapsed since the date of
the last housing assistance payment, the Contract may be terminated with
the consent of the Owner.
(c) Restoration. The PHA will agree to an amendment of the Contract,
to provide for subsequent restoration of any reduction made pursuant to
paragraph (b) if:
(1) The PHA determines that the restoration is justified by demand,
(2) The Owner otherwise has a record of compliance with obligations
under the Contract, and
(3) Contract authority is available.
Sec. 882.513 Public notice to low-income families; waiting list.
(a) Public notice to low-income Families. (1) If the PHA does not
have a waiting list which is sufficient to provide applicants for the
units under the Moderate Rehabilitation Program, the PHA must, promptly
after receiving the executed ACC, make known to the public the
availability of the Program.
(i) The notice must state that assistance under this Program will be
available only in specified units which have been rehabilitated under
the Program.
(ii) The notice must be made in accordance with the PHA's HUD-
approved application and with the HUD guidelines for fair housing
requiring the use of the equal housing opportunity logotype, statement
and slogan.
(b) Waiting list. The PHA must maintain a waiting list for
applicants for the Moderate Rehabilitation Program. This requirement may
be met through the use of waiting lists for other subsidized housing
programs such as the Existing Housing Program.
Sec. 882.514 Family participation.
(a) Initial determination of family eligibility. (1) The PHA is
responsible for receipt and review of applications, and determination of
family eligibility for participation in accordance with HUD regulations
(see parts 812 and 813 of this chapter, and 24 CFR parts 5, 750 and
760). The PHA is responsible for verifying the sources and amount of the
family's income and other information necessary for determining income
eligibility and the amount of the assistance payments.
(2) A PHA may determine that an applicant Family is ineligible for
participation because one or more Family members have engaged in drug-
related criminal activity or violent criminal activity, as defined in
Sec. 882.413(b).
(3) PHA records on applicants and Families selected to participate
must be maintained so as to provide HUD with racial, gender, and ethnic
data.
(b) Selection of Families for participation. When vacancies occur,
the PHA will refer to the Owner one or more appropriate size Families on
its waiting list. The PHA must select Families for participation in
accordance with the provisions of the Program and in accordance with the
PHA's application, including any PHA requirement or preferences as
approved by HUD. The PHA must select Families eligible for housing
assistance payments currently residing in units that are designated for
rehabilitation under the Program without requiring that these Families
[[Page 115]]
be placed on the waiting list. Notwithstanding the fact that the PHA may
not be accepting additional applications for participation because of
the length of the waiting list, the PHA may not refuse to place an
applicant on the waiting list if the applicant is otherwise eligible for
partcipation and claims that he or she qualifies for a Federal
preference as provided in 24 CFR part 5, unless the PHA determines, on
the basis of the number of applicants who are already on the waiting
list and who claim a Federal preference, and the anticipated number of
admissions under this part, that--
(1) There is an adequate pool of applicants who are likely to
qualify for a Federal preference and
(2) It is unlikely that, on the basis of the PHA's system for
applying the Federal preferences, the preference or preferences that the
applicant claims, and the preferences claimed by applicants on the
waiting list, the applicant would qualify for assistance before other
applicants on the waiting list.
(c) Owner selection of Families. All vacant units under Contract
must be rented to Eligible Families referred by the PHA from its waiting
list. However, if the PHA is unable to refer a sufficient number of
interested applicants on the waiting list to the Owner within 30 days of
the Owner's notification to the PHA of a vacancy, the Owner may
advertise or solicit applications from Low-Income Families and refer
such Families to the PHA to determine eligibility. Since the Owner is
responsible for tenant selection, the Owner may refuse any Family
provided that the Owner does not unlawfully discriminate. Should the
Owner reject a Family, and should the Family believe that the Owner's
rejection was the result of unlawful discrimination, the Family may
request the assistance of the PHA in resolving the issue. If the issue
cannot be resolved promptly, the Family may file a complaint with HUD,
and the PHA may refer the Family to the next available Moderate
Rehabilitation unit.
(d) Briefing of Families. (1) When a Family is initially determined
to be eligible for housing assistance payments (Sec. 882.504(e)) or is
selected for participation in accordance with this section, the PHA must
provide the Family with information as to the Tenant Rent and the PHA's
schedule of Utility Allowances. Each Family must also, either in group
or individual sessions, be provided with a full explanation of the
following:
(i) Family and Owner responsibilities under the Lease and Contract;
(ii) Significant aspects of the applicable State and local laws;
(iii) Significant aspects of Federal, State and local fair housing
laws;
(iv) The fact that the subsidy is tied to the unit and the Family
must occupy a unit rehabilitated under the Program; and
(v) The Family's options under the Program should the Family be
required to move due to an increase or decrease in Family size.
(2) For all Families to be temporarily relocated, the briefing must
include a discussion of the relocation policies.
(vi) The advisability and availability of blood lead level screening
for children under seven years of age and HUD's requirements for
inspecting, testing and, in certain circumstances, abating lead-based
paint.
(e) Continued participation of Family when Contract is terminated.
Should an Owner evict an assisted Family in violation of the Contract or
otherwise breach the Contract and the Contract for the unit is
terminated, and if the Family was not at fault and is eligible for
continued assistance, the Family may continue to receive housing
assistance through the conversion of the Moderate Rehabilitation unit
allocation to an Existing Housing unit. The Family must then be treated
as any certified Family under subparts A and B and must be issued a
Certificate of Family Participation and assisted by the PHA in finding a
suitable replacement unit. The unit will then be considered an Existing
Housing unit and all requirements of subparts A and B will be applicable
except that the term of any Existing Housing Contract may not extend
beyond the term of the initial Moderate Rehabilitation Contract. If the
family is determined ineligible for continued assistance, the
Certificate may be offered to the next Family on the PHA's waiting list.
The units
[[Page 116]]
will remain under the Moderate Rehabilitation ACC which provides for
such a conversion of units; therefore, no amendment to the ACC will be
necessary to convert to Existing Housing units.
(f) Families determined by the PHA to be ineligible. If a Family is
determined to be ineligible in accordance with the PHA's HUD-approved
application, either at the application stage or after assistance has
been provided on behalf of the Family, the PHA shall promptly notify the
Family by letter of the determination and the reasons for it and the
letter shall state that the Family has the right within a reasonable
time (specified in the letter) to request an informal hearing. If, after
conducting such an informal hearing, the PHA determines, based on a
preponderance of the evidence, that the Family is ineligible, it shall
notify the Family in writing. The procedures of this paragraph do not
preclude the Family from exercising its other rights if it believes it
is being discriminated against on the basis of race, color, religion,
sex, age, handicap, familial status, or national origin. The informal
review provisions for the denial of a Federal selection preference under
Sec. 882.517 are contained in paragraph (k) of that section. The
informal hearing requirements for denial and termination of assistance
on the basis of ineligible immigration status are contained in 24 CFR
part 5.
(g) Considerations in certain denials and terminations. In
determining whether to deny or terminate assistance based on drug-
related criminal activity or violent criminal activity:
(1) A PHA may deny or terminate assistance if the preponderance of
evidence indicates that a Family member has engaged in such activity,
regardless of whether the Family member has been arrested or convicted;
(2) A PHA shall have discretion to consider all of the circumstances
in each case, including the seriousness of the offense, the extent of
participation by Family members, and the effects that denial or
termination would have on Family members not involved in the proscribed
activity. PHAs, in appropriate cases, may permit the remaining members
of the Family to continue receiving assistance and may impose a
condition that Family members determined to have engaged in the
proscribed activities will not reside in the unit. A PHA may require a
Family member that has engaged in the illegal use of drugs to submit
evidence of successful completion of a treatment program as a condition
to being allowed to reside in the unit.
(Approved by the Office of Management and Budget under control number
2502-0123)
[47 FR 34383, Aug. 9, 1982, as amended at 49 FR 19945, May 10, 1984; 51
FR 11226, Apr. 1, 1986; 52 FR 1895, Jan. 15, 1987; 53 FR 847, Jan. 13,
1988; 53 FR 1155, Jan. 15, 1988; 53 FR 6601, Mar. 2, 1988; 54 FR 39705,
Sept. 27, 1989; 55 FR 28547, July 11, 1990; 56 FR 7539, Feb. 22, 1991;
60 FR 14844, Mar. 20, 1995; 61 FR 9046, Mar. 6, 1996; 61 FR 13625, Mar.
27, 1996]
Sec. 882.515 Reexamination of family income and composition.
(a) Regular reexaminations. The PHA must reexamine the income and
composition of all families at least once every 12 months. After
consultation with the family and upon verification of the information,
the PHA must make appropriate adjustments in the Total Tenant Payment in
accordance with part 813 of this chapter and determine whether the
family's unit size is still appropriate (see Sec. 882.213). The PHA must
adjust Tenant Rent and the Housing Assistance Payment to reflect any
change in Total Tenant Payment. At the time of the annual reexamination
of family income and composition, the PHA must require the family to
disclose and verify Social Security Numbers. For requirements regarding
the signing and submitting of consent forms by families for the
obtaining of wage and claim information from State Wage Information
Collection Agencies, see part 5, subpart B, of this title. At the first
regular reexamination after June 19, 1995, the PHA shall follow the
requirements of 24 CFR part 5 concerning obtaining and processing
evidence of citizenship or eligible immigration status of all family
members. Thereafter, at each regular reexamination, the PHA shall follow
the requirements of 24 CFR part 5 concerning verification of immigration
status of any new family member.
(b) Interim reexaminations. The family must comply with provisions
in
[[Page 117]]
Sec. 882.118 regarding interim reporting of changes in income. If the
PHA receives information concerning a change in the family's income or
other circumstances between regularly scheduled reexaminations, the PHA
must consult with the family and make any adjustments determined to be
appropriate. Any change in the family's income or other circumstances
that results in an adjustment in the Total Tenant Payment, Tenant Rent,
and Housing Assistance Payment must be verified. See part 5, subpart B,
of this title for the requirements for the disclosure and verification
of Social Security Numbers at interim reexaminations involving new
family members. For requirements regarding the signing and submitting of
consent forms by families for the obtaining of wage and claim
information from State Wage Information Collection Agencies, see part 5,
subpart B, of this title. At any interim reexamination after June 19,
1995 when there is a new family member, the PHA shall follow the
requirements of 24 CFR part 5 concerning obtaining and processing
evidence of citizenship or eligible immigration status of the new family
member.
(c) Continuation of housing assistance payments. A family's
eligibility for Housing Assistance Payments shall continue until the
Total Tenant Payment equals the Gross Rent. The termination of
eligibility at such point will not affect the family's other rights
under its lease, nor will such termination preclude the resumption of
payments as a result of later changes in income, rents or other relevant
circumstances during the term of the Contract. However, eligibility also
may be terminated in accordance with HUD requirements for such reasons
as failure to submit requested verification information, including
failure to meet the disclosure and verification requirements for Social
Security Numbers, as provided by part 5, subpart B, of this title, or
failure to sign and submit consent forms for the obtaining of wage and
claim information from State Wage Information Collection Agencies, as
provided by part 5, subpart B, of this title. For provisions requiring
termination of assistance when the PHA determines that a family member
is not a U.S. citizen or does not have eligible immigration status, see
24 CFR parts 5 and 982 for provisions concerning certain assistance for
mixed families (families whose members include those with eligible
immigration status, and those without eligible immigration status) in
lieu of termination of assistance, and for provisions concerning
deferral of termination of assistance.
[56 FR 7539, Feb. 22, 1991, as amended at 60 FR 14844, Mar. 20, 1995; 61
FR 11118, Mar. 18, 1996; 61 FR 13625, Mar. 27, 1996]
Sec. 882.516 Maintenance, operation and inspections.
(a) Maintenance and operation. The Owner must provide all the
services, maintenance and utilities as agreed to under the Contract,
subject to abatement of housing assistance payments or other applicable
remedies if the Owner fails to meet these obligations.
(b) Periodic inspection. In addition to the inspections required
prior to execution of the Contract, the PHA must inspect or cause to be
inspected each dwelling unit under Contract at least annually and at
such other times as may be necessary to assure that the Owner is meeting
the obligations to maintain the unit in decent, safe and sanitary
condition and to provide the agreed upon utilities and other services.
The PHA must take into account complaints and any other information
coming to its attention in scheduling inspections.
(c) Units not decent, safe and sanitary. If the PHA notifies the
Owner that the unit(s) under Contract are not being maintained in
decent, safe and sanitary condition and the Owner fails to take
corrective action (including corrective action with respect to the
Family where the condition of the unit is the fault of the Family)
within the time prescribed in the notice, the PHA may exercise any of
its rights or remedies under the Contract, including abatement of
housing assistance payments (even if the Family continues in occupancy),
termination of the Contract on the affected unit(s) and assistance to
the Family in accordance with Sec. 882.514(e).
(d) PHA management. Where the PHA is managing units on which it is
also administering the Housing Assistance
[[Page 118]]
Payments Contract pursuant to a management contract approved by HUD in
accordance with Sec. 882.412, HUD will make reviews of project
operations, including inspections, in addition to required PHA reviews.
These HUD reviews will be sufficient to assure that the Owner and the
PHA are in full compliance with the terms and conditions of the Contract
and the ACC. Should HUD determine that there are deficiencies, it may
exercise any rights or remedies specified for the PHA under the Contract
or reserved for HUD in the ACC, require termination of the management
contract, or take other appropriate action.
(e) Periodic PHA audits must be conducted as required by HUD, in
accordance with guidelines prescribed by 24 CFR part 44.
[47 FR 34383, Aug. 9, 1982, as amended at 53 FR 8065, Mar. 11, 1988]
Subpart F--Special Assistance on Behalf of Manufactured Home Owners
Source: 44 FR 65364, Nov. 9, 1979, unless otherwise noted.
Sec. 882.601 Applicability and scope.
This subpart provides for the making of housing assistance payments
on behalf of low-income Manufactured Home Owners to assist them in
leasing Manufactured Home Spaces. The PHA executes Contracts with the
owners of spaces on which the Manufactured Homes are located. The
Manufactured Homes must be used by low-income Families as their
principal places of residence. Except as indicated by this subpart, part
882, subparts A and B shall apply. References made in part 882 to
dwelling units shall, for purposes of this subpart F, be read as
referring to Manufactured Home Spaces. Subparts D and E, Special
Procedures for Moderate Rehabilitation Program, do not apply because
moderate rehabilitation of Manufactured Homes is excluded under this
rule.
[44 FR 65364, Nov. 9, 1979, as amended at 50 FR 9269, Mar. 7, 1985]
Sec. 882.602 Definitions for this subpart.
The definitions in Sec. 882.102 shall apply except for Contract
Rent, Fair Market Rent, Recently Completed Housing and Rent Reduction
Incentive.
Assisted Family. A Family which qualifies as an eligible low-income
Family pursuant to part 812, occupies its Manufactured Home as its
principal place of residence, is issued a Certificate of Family
Participation, leases but does not own the Manufactured Home Space and
is assisted under this subpart. A Family's income for eligibility shall
be determined in accordance with part 813 of this chapter except that
the value of equity in a Manufactured Home owned by an Assisted Family
shall not be counted as a Family asset.
Contract Rent. The monthly rent which an Owner is entitled to
receive for the leasing of a Manufactured Home Space to an Assisted
Family, including any separate fees or charges. This rent includes the
maintenance and management services described in the definition of
Manufactured Home Space, but excludes ongoing utility charges. Separate
fees or charges for services or facilities not included in the
definition of Manufactured Home Space shall be included in the Contract
Rent only if their payment is required as a condition of the leasing of
the Manufactured Home Space. In the case of a cooperative Manufactured
Home park, ``Contract Rent'' means the charges under the occupancy
agreements between the members and the cooperative.
Fair Market Rent. The rent which would be required to be paid in
order to obtain a privately owned, decent, safe and sanitary
Manufactured Home Space of a modest nature. This rent includes
maintenance and management services described in the definition of
Manufactured Home Space for single-wide and double-wide Manufactured
Home Spaces. Rents for double-wide spaces will be permitted for Assisted
Families of five or more persons so long as the Manufactured Home meets
the minimum occupancy standards for families in accordance with
Sec. 882.209(b)(2). Fair Market Rents will be established by HUD and
will be published in the Federal Register in accordance with part 888 of
this chapter.
[[Page 119]]
Manufactured Home Space. The space, leased by an Owner to an
Assisted Family, on which the Manufactured Home owned and occupied by
the Family is located. The space shall include all maintenance and
management services necessary for decent, safe and sanitary housing,
such as maintenance of utility lines, garbage and trash collection, and
maintenance of roads, walkways and other common areas and facilities.
Owner. The Owner of the Manufactured Home Space is any person or
entity including a cooperative, having the legal right to lease or
sublease Manufactured Home Spaces.
Set-up charges. Charges payable by an Assisted Family for
assembling, skirting and anchoring the unit.
Utility hook-up charges. Costs payable by an Assisted Family for
connecting its Manufactured Home to utilities such as water, gas,
electrical and sewer lines.
[44 FR 65364, Nov. 9, 1979, as amended at 49 FR 19946, May 10, 1984; 50
FR 9269, Mar. 7, 1985; 50 FR 38795, Sept. 25, 1985]
Sec. 882.603 Certificate of family participation for manufactured home owner.
The provisions of Sec. 882.209, Certificate of Family Participation,
shall apply except for paragraphs (b) (3), (6), (7), (8) and (c)(2).
Instead the following new paragraph (g) shall apply:
(g) Certificate of Family Participation for Manufactured Home
Owners: In issuing the Certificate of Family Participation for
Manufactured Home Owners, the PHA shall enter on the Certificate the
number of bedrooms appropriate for the Family size, in accordance with
Sec. 882.209, for the purpose of determining the Family's appropriate
utility allowance.
[44 FR 65364, Nov. 9, 1979, as amended at 50 FR 9269, Mar. 7, 1985]
Sec. 882.604 Assistance payments.
The provisions of Sec. 882.105, Housing Assistance Payments to
Owners, shall apply except for paragraph (a) of that section. Instead of
Sec. 882.105(a), the following shall apply: Assistance payments to the
Owner will cover the difference between the Tenant Rent and the Gross
Rent. However, the assistance payment may not exceed the Contract Rent.
Amortization payments included in Gross Rent may include costs other
than furniture included in the purchase price of the Manufactured Home;
the portion of the amortization costs covering principal and interest
shall be reduced by 15 percent to exclude the cost of furniture unless
there is evidence that furniture was not included in the purchase price.
Principal and interest payments are those established at time of
application; any increase in principal and interest due to later
refinancing must not be allowed. Set-Up Charges incurred by an Assisted
Family that relocates its home may be included in the monthly
amortization payments made by the Family; in addition, Set-Up Charges
incurred before the Family became an Assisted Family may be included to
the extent that monthly payments are still being made to amortize them.
[49 FR 19946, May 10, 1984, as amended at 50 FR 9269, Mar. 7, 1985]
Sec. 882.605 Maximum contract rent.
(a) The provisions of Secs. 882.106(a) (3) and (4) and 882.106(c)
and (d) shall not apply.
(b) The provisions of Sec. 882.120, concerning Recently Completed
Housing, shall not apply.
(c) The Contract Rent for any Manufactured Home Space leased under
this subpart shall not exceed the applicable Fair Market Rent by more
than ten percent, nor shall it exceed the rent reasonableness limitation
specified in Sec. 882.106(b).
[44 FR 65364, Nov. 9, 1979, as amended at 50 FR 9269, Mar. 7, 1985; 51
FR 21312, June 11, 1986; 53 FR 6601, Mar. 2, 1988; 53 FR 7734, Mar. 10,
1988]
Sec. 882.606 Schedule of utility allowances.
The provisions of Secs. 882.116 and 882.219 relative to PHAs
establishing and adjusting a Schedule of Utility Allowances shall apply.
Utility allowances shall be established for Manufactured Home Owners
assisted under this subpart and shall be in amounts appropriate for
bedroom size as stated on the Certificate. Allowances shall include a
reasonable amount, for the first twelve months, to
[[Page 120]]
assist the Family in defraying its payable Utility Hook-Up Charges in
those instances where the Family actually incurs the expenses, by reason
of a move. Allowances for Utility Hook-Up Charges shall not be
applicable to families leasing the Manufactured Home Space in place. The
assistance payment shall automatically be reduced by the amount of those
charges at the end of the twelve months. Allowances for Manufactured
Home Spaces shall not cover costs payable by an Assisted Family to cover
the digging of a well or installation of a septic system.
[44 FR 65364, Nov. 9, 1979, as amended at 49 FR 19946, May 10, 1984; 50
FR 9269, Mar. 7, 1985]
Subpart G--Section 8 Certificate Program Assistance Attached to Units
(Project-Based Certificate Assistance)
Source: 55 FR 9257, Mar. 12, 1990, unless otherwise noted.
General
Sec. 882.701 Purpose and applicability.
Subpart G of this part states requirements concerning initial and
adjusted Contract Rents in the Section 8 project-based certificate
program. Other program regulations for the Section 8 project-based
certificate program are located at 24 CFR part 983.
[60 FR 34694, July 3, 1995]
Secs. 882.702-882.713 [Reserved]
Sec. 882.714 Initial Contract Rents.
(a) General. Section 882.106, Contract Rents, does not apply. HUD
approves the initial Contract Rents for all units to which assistance is
to be attached under this subpart G.
(b) Fair Market Rent limitation--(1) General. The initial Gross Rent
(initial Contract Rent plus any applicable Utility Allowance) for any
unit approved under this subpart G shall not exceed the published
Section 8 Existing Housing Fair Market Rent in effect for the unit on
the date the Agreement is executed, except as provided in paragraph
(b)(2) of this section.
(See also Sec. 882.730(b), Contract Rents in Agreement)
(2) Exception rents. (i) Upon request from a PHA, HUD may approve,
on a unit-by-unit basis, initial Gross Rents that exceed the applicable
Fair Market Rents by up to 10 percent. The total number of units with
such rents approved by HUD under this paragraph (b)(2)(i) and by the PHA
under paragraph (a)(2) of Sec. 882.106, Contract Rents, may not exceed
20 percent of the number of units under ACC for the PHA's Certificate
Program, unless HUD approves a higher percentage. In considering whether
to grant such approval, HUD will review the appropriateness of the
applicable Fair Market Rents and the relationship of estimated program
costs to program objectives.
(ii) HUD may approve, upon request from a PHA, maximum initial Gross
Rents for all units of a given size of up to 20 percent above the
applicable Fair Market Rents within a designated municipality, county,
or similar locality. Any such request must be supported by rental
housing survey data that is statistically representative of rent levels
for the area. In considering whether to grant such approval, HUD will
review the appropriateness of the applicable Fair Market Rents and the
relationship of estimated program costs to program objectives, and
evidence of a market where the housing supply exceeds demand and a high
rate of vacancies exists (soft market). HUD will not approve requests
under this paragraph (b)(2)(ii) for units in a soft market. In no event
shall a maximum Gross Rent, as approved under this paragraph, exceed the
rent, including Allowances for Utilities and Other Services, determined
by HUD to be the average rent currently being charged for available
standard units of similar size or type in the applicable municipality or
county.
(iii) On the basis of a showing by the PHA that special
circumstances apply to units of a given size limited to a specific
neighborhood, and by reason of these circumstances the reasonable Gross
Rents for such units are as high as 20 percent above the applicable Fair
Market Rents, and the units cannot be rented for less, HUD may approve
Gross Rents for such units up to 20 percent above the applicable Fair
Market
[[Page 121]]
Rents. Approval under this paragraph (b)(2)(iii) shall be based upon
substantially the same criteria as under paragraph (b)(2)(ii) of this
section, except for the last sentence of that paragraph. Approval under
this paragraph (b)(2)(iii) will not be granted for a neighborhood that
is located in a soft market.
(c) Rent reasonableness limitation. (1) The initial Contract Rent
must be:
(i) Reasonable in relation to rents currently being charged for
units in the private unassisted market that are comparable to the newly
constructed units or to the units after they are rehabilitated, taking
into account the location, size, structure type, quality, amenities,
facilities, and management and maintenance service of the unit; and
(ii) Not in excess of rents charged by the Owner for comparable
unassisted units.
(2) For an assisted unit that is subject to local rent control,
comparable units are rent-controlled units. However, for an assisted
unit that is not subject to local rent control while it is assisted
(regardless of whether the unit would be subject to such control if it
were not assisted), comparable units are units that are not subject to
rent-control.
(3) If a project is financed with a HUD insured or coinsured
multifamily mortgage, then, in addition to meeting the other
requirements of this paragraph (c), the initial Contract Rent for each
assisted unit shall not exceed an amount determined by HUD to be
necessary to amortize the insured or coinsured mortgage.
(4) The initial Contract rent may not be more than HUD determines
necessary to make the project feasible after taking account of other
government assistance, in accordance with 24 CFR 12.52.
(d) Congregate housing. (1) The Fair Market Rent for each congregate
housing unit shall be the same as for a 0-bedroom unit, except that if
the unit consists of two or more private rooms, the Fair Market Rent
shall be the same as for a 1-bedroom unit.
(2) In determining the reasonableness of the rents, consideration
shall be given to the presence or absence of common rather than private
cooking, dining, and sanitary facilities and the provision of special
amenities, maintenance or management services, or a combination of both.
(e) Independent Group Residences. (1) The Fair Market Rent for an
Independent Group Residence shall be the Fair Market Rent applicable to
the unit size being leased; for example, a 4-bedroom unit if the
residence contains 4 bedrooms.
(2) One Contract shall be executed for each Independent Group
Residence. A separate Lease shall be executed for each Family that
resides in an Independent Group Residence. A Resident Assistant who
lives in the unit may be counted as a Family member in determining the
appropriate number of bedrooms. However, the Resident Assistant's income
shall be disregarded in determining the Total Tenant Payment, the Tenant
Rent, or the Family's income eligibility.
(3) For purposes of determining the housing assistance payment for
each Family, HUD shall allocate the Gross Rent, which is subject to
paragraphs (b) and (c) of this section, among the total number of
Families in the Independent Group Residence. To determine the portion of
the Gross Rent to be allocated to each individual receiving Section 8
assistance, the Gross Rent is divided by the total number of occupants
in the Independent Group Residence other than the Resident Assistant(s),
if any, who may occupy no more than one bedroom. For example, if three
Section 8 recipients and a Resident Assistant reside in a 4-bedroom
unit, the housing assistance payment for each Section 8 recipient would
be based on \1/3\ of the Gross Rent.
(4) In determining the reasonableness of the rents, consideration
shall be given to the presence or absence of common (rather than
private) cooking, dining and sanitary facilities, and to the provision
of special amenities or of maintenance or management services.
(f) Single room occupancy units. (1) The Fair Market Rent for each
SRO unit shall be equal to 75 percent of the 0-bedroom Fair Market Rent.
(2) In areas where HUD has approved the use of exception rents for
0-bedroom units under paragraphs (b)(2)(ii)
[[Page 122]]
or (b)(2)(iii) of this section, the SRO exception rent shall be 75
percent of the exception rent that applies to the Existing Housing 0-
bedroom unit. Further, a SRO unit may be granted an exception rent for
its own specified unit size. In no case may the initial rent exceed 75
percent of 120 percent (i.e., 90 percent) of the 0-bedroom unit FMR.
(3) In determining the reasonableness of the rents, consideration
will be given to the presence or absence of sanitary or kitchen
facilities.
(g) Other services--exclusion from Contract Rent. The Contract Rent
may not include the cost of providing supportive services, housekeeping
or laundry services, furniture, food, or the cost of serving food.
(Information collection requirements contained in this section have been
approved by the Office of Management and Budget under control number
2502-0388)
[55 FR 9257, Mar. 12, 1990, as amended at 56 FR 11051, Mar. 14, 1991]
Sec. 882.715 Contract Rent adjustments.
(a) Contract Rents shall be adjusted as provided in paragraphs
(a)(1) and (a)(2) of this section, upon request of the Owner. The unit,
however, must be in Decent, Safe, and Sanitary condition, and the Owner
must otherwise be in compliance with the terms of the Lease and the
Contract. Subject to Sec. 882.714(c) (the rent reasonableness
limitation), adjustments to Contract Rents shall be as follows:
(1) Annual adjustments. (i) Annual adjustments as of any anniversary
date shall be determined by using the applicable Section 8 Annual
Adjustment Factor (part 888 of this chapter) most recently published by
HUD in the Federal Register.
(ii) Contract Rents are subject to post-audit change in accordance
with HUD requirements, including the correction of errors in
establishing the initial Contract Rents or in adjusting the Contract
Rents.
(2) Special adjustments. A PHA may make a special adjustment,
subject to HUD approval, to reflect increases in actual and necessary
expenses of owning and maintaining the unit that have resulted from
substantial general increases in real property taxes, utility rates, or
similar costs (i.e., assessments and utilities not covered by regulated
rates), but only if and to the extent that the Owner clearly
demonstrates that such general increases have caused increases in the
Owner's operating costs which are not adequately compensated for by the
annual adjustments provided in paragraph (a)(1) of this section. The
Owner must submit financial statements to the PHA which clearly support
the increase.
(b) Overall limitation. Notwithstanding any other provisions of this
part, adjustments as provided in this section shall not result in
material differences between the rents charged for assisted and
comparable (as defined in Sec. 882.714(c)) unassisted units, as
determined by the PHA (and approved by HUD in the case of adjustments
under paragraph (a)(2) of this section).
(c) During the period when assistance is being provided under the
Contract, the PHA must, in accordance with HUD requirements, adjust the
amount of the assistance, as provided by 24 CFR 12.52.
(Information collection requirements contained in this section have been
approved by the Office of Management and Budget under control number
2502-0388)
[55 FR 9257, Mar. 12, 1990, as amended at 56 FR 11051, Mar. 14, 1991]
Subpart H--Section 8 Moderate Rehabilitation Single Room Occupancy
Program for Homeless Individuals
Source: 61 FR 48057, Sept. 11, 1996, unless otherwise noted.
Sec. 882.801 Purpose.
The purpose of the Section 8 Moderate Rehabilitation Program for
Single Room Occupancy (SRO) Dwellings for Homeless Individuals is to
provide rental assistance for homeless individuals in rehabilitated SRO
housing. The Section 8 assistance is in the form of rental assistance
payments. These payments equal the rent for the unit, including
utilities, minus the portion of the rent payable by the tenant under the
U.S. Housing Act of 1937 (42 U.S.C. 1437 et seq.).
[[Page 123]]
Sec. 882.802 Definitions.
In addition to the definitions set forth in 24 CFR part 5 and
Sec. 882.102 (except for the definition of ``Single Room Occupancy (SRO)
Housing'' therein) the following will apply:
Agreement to enter into housing assistance payments contract
(Agreement). A written agreement between the owner and the HA that, upon
satisfactory completion of the rehabilitation in accordance with
requirements specified in the Agreement, the HA will enter into a
housing assistance payments contract with the owner.
Applicant. A public housing agency or Indian housing authority
(collectively referred to as HAs), or a private nonprofit organization
that applies for assistance under this program. HUD will require private
nonprofit applicants to subcontract with public housing agencies to
administer their rental assistance.
Eligible individual (individual). An individual who, taking into
account the supportive services available to the individual, is capable
of independent living and is authorized for admission to assisted
housing under subparts D and E of 24 CFR part 5, and 24 CFR part 813.
Homeless individual. An individual as described in section 103 of
the McKinney Act (42 U.S.C. 11302).
McKinney Act. The Stewart B. McKinney Homeless Assistance Act (42
U.S.C. 11301 et seq.).
Moderate rehabilitation. Rehabilitation involving a minimum
expenditure of $3,000 for a unit, including its prorated share of work
to be accomplished on common areas or systems, to upgrade to decent,
safe, and sanitary condition to comply with the Housing Quality
Standards or other standards approved by HUD, from a condition below
those standards (improvements being of a modest nature and other than
routine maintenance).
Private nonprofit organization. An organization, no part of the net
earnings of which inures to the benefit of any member, founder,
contributor, or individual. The organization must:
(1) Have a voluntary board;
(2) Have a functioning accounting system that is operated in
accordance with generally accepted accounting principles, or designate
an entity that will maintain a functioning accounting system for the
organization in accordance with generally accepted accounting
principles; and
(3) Practice nondiscrimination in the provision of assistance.
Single room occupancy (SRO) housing. A unit for occupancy by one
person, which need not but may contain food preparation, sanitary
facilities, or both.
Statement of individual responsibility. An agreement, in the form
prescribed by HUD, between the HA and an individual to be assisted under
the program, stating the obligations and responsibilities of the two
parties.
Sec. 882.803 Project eligibility and other requirements.
(a) Eligible and ineligible properties. (1) Except as otherwise
provided in paragraph (a) of this section, housing suitable for moderate
rehabilitation is eligible for inclusion under this program. Existing
structures of various types may be appropriate for this program,
including single family houses and multifamily structures.
(2) Housing is not eligible for assistance under this program if it
is receiving Federal funding for rental assistance or operating costs
under other HUD programs.
(3) Nursing homes and related facilities such as intermediate care
or board and care homes; units within the grounds of penal, reformatory,
medical, mental, and similar public or private institutions; and
facilities providing continual psychiatric, medical, or nursing services
are not eligible for assistance under this program.
(4) No Section 8 assistance may be provided with respect to any unit
occupied by an owner.
(5) Housing located in the Coastal Barrier Resources System
designated under the Coastal Barriers Resources Act is not eligible.
(6) Single-sex facilities are allowable under this program, provided
that the HA determines that because of the physical limitations or
configuration of the facility, considerations of personal privacy
require that the facility (or parts of the facility) be available only
to members of a single sex.
[[Page 124]]
(b) Housing quality standards. Section 882.404 (including its
incorporation by reference of Sec. 882.109) applies to this program,
except as follows:
(1) The housing quality standards in Secs. 882.109(i) and 882.404(c)
concerning lead-based paint do not apply to this program, since these
SRO units will not house children.
(2) In addition to the performance requirements contained in
Sec. 882.109(p) concerning SRO units, a sprinkler system that protects
all major spaces, hard wired smoke detectors, and such other fire and
safety improvements as State or local law may require must be installed
in each building. The term ``major spaces'' means hallways, large common
areas, and other areas specified in local fire, building, or safety
codes.
(3) Section 882.109(q), concerning shared housing, does not apply to
this program.
(4) Section 882.404(b), concerning site and neighborhood standards,
does not apply to this program, except that Sec. 882.404(b) (1) and (2)
applies. In addition, the site must be accessible to social,
recreational, educational, commercial, and health facilities, and other
appropriate municipal facilities and services.
(c) Financing. Section 882.405 applies to this program.
(d) Relocation. Section 882.406 applies to a project assisted under
this program.
(e) HA-owned housing. (1) A unit that is owned by the HA that
administers the assistance under the ACC (including a unit owned by an
entity substantially controlled by the HA) may only be assisted if:
(i) The unit is not ineligible under Sec. 882.803(a); and
(ii) HUD approves the base and contract rent calculations prior to
execution of the Agreement and prior to execution of the HAP contract.
(2) The HA as owner is subject to the same program requirements that
apply to other owners in the program.
Sec. 882.804 Other Federal requirements.
(a) Participation in this program requires compliance with the
Federal requirements set forth in 24 CFR 5.105, and with the Americans
with Disabilities Act (42 U.S.C. 12101 et seq.).
(b) For agreements covering nine or more assisted units, the
following requirements for labor standards apply:
(1) Not less than the wages prevailing in the locality, as
determined by the Secretary of Labor under the Davis-Bacon Act (40
U.S.C. 276a through 276a-5), must be paid to all laborers and mechanics
employed in the development of the project, other than volunteers under
the conditions set out in 24 CFR part 70;
(2) The employment of laborers and mechanics is subject to the
provisions of the Contract Work Hours and Safety Standards Act (40
U.S.C. 327-333); and
(3) HAs, owners, contractors, and subcontractors must comply with
all related rules, regulations, and requirements.
(c) The environmental review requirements of 24 CFR part 58,
implementing the National Environmental Policy Act and related
environmental laws and authorities, apply to this program.
Sec. 882.805 HA application process, ACC execution, and pre-rehabilitation activities.
(a) Review. When funds are made available for assistance, HUD will
publish a notice of funding availability (NOFA) in the Federal Register
in accordance with the requirements of 24 CFR part 4. HUD will review
and screen applications in accordance with the guidelines, rating
criteria, and procedures published in the NOFA.
(b) ACC Execution. (1) Before execution of the annual contributions
contract (ACC), the HA must submit to the appropriate HUD field office
the following:
(i) Estimates of Required Annual Contributions, Forms HUD-52672 and
HUD-52673;
(ii) Administrative Plan, which should include:
(A) Procedures for tenant outreach;
(B) A policy governing temporary relocation; and
(C) A mechanism to monitor the provision of supportive services.
(iii) Proposed Schedule of Allowances for Tenant-Furnished Utilities
and Other Services, Form HUD-52667, with
[[Page 125]]
a justification of the amounts proposed;
(iv) If applicable, proposed variations to the acceptability
criteria of the Housing Quality Standards (see Sec. 882.803(b)); and
(v) The fire and building code applicable to each structure.
(2) After HUD has approved the HA's application, the review and
comment requirements of 24 CFR part 791 have been complied with, and the
HA has submitted (and HUD has approved) the items required by paragraph
(b)(1) of this section, HUD and the HA must execute the ACC in the form
prescribed by HUD. The initial term of the ACC must be 11 years. This
term allows one year to rehabilitate the units and place them under a
10-year HAP contract. The ACC must give HUD the option to renew the ACC
for an additional 10 years.
(3) Section 882.403(a) (Maximum Total ACC Commitments) applies to
this program.
(4) Section 882.403(b) (Project account) applies to this program.
(c) Project development. Before execution of the Agreement, the HA
must:
(1)(i) Inspect the structure to determine the specific work items
that need to be accomplished to bring the units to be assisted up to the
Housing Quality Standards (see Sec. 882.803(b)) or other standards
approved by HUD;
(ii) Conduct a feasibility analysis, and determine whether cost-
effective energy conserving improvements can be added;
(iii) Ensure that the owner prepares the work write-ups and cost
estimates required by Sec. 882.504(f); and
(iv) Determine initial base rents and contract rents;
(2) Assure that the owner has selected a contractor in accordance
with Sec. 882.504(g);
(3) After the financing and a contractor are obtained, determine
whether the costs can be covered by initial contract rents, computed in
accordance with paragraph (d) of this section; and, if a structure
contains more than 50 units to be assisted, submit the base rent and
contract rent calculations to the appropriate HUD field office for
review and approval in sufficient time for execution of the Agreement in
a timely manner;
(4) Obtain firm commitments to provide necessary supportive
services;
(5) Obtain firm commitments for other resources to be provided;
(6) Determine that the $3,000 minimum amount of work requirement and
other requirements in Sec. 882.504(c)(2) and (3) are met;
(7) Determine eligibility of current tenants, and select the units
to be assisted, in accordance with Sec. 882.504(e);
(8) Comply with the financing requirements in Sec. 882.504(i);
(9) Assure compliance with all other applicable requirements of this
subpart; and
(10) In the event that the HA determines that any structure proposed
in its application is infeasible, or the HA proposes to select a
different structure for any other reason, the HA must submit information
for the proposed alternative structure to HUD for review and approval.
HUD will rate the proposed structure in accordance with procedures in
the applicable notice of funding availability. The HA may not proceed
with processing for the proposed structure or execute an Agreement until
HUD notifies the HA that HUD has approved the proposed alternative
structure and that all requirements have been met.
(d) Initial contract rents. Section 882.408 (Initial contract
rents), including the establishment of fair market rents for SRO units
at 75 percent of the O-bedroom Moderate Rehabilitation Fair Market Rent,
applies to this program, except as follows:
(1)(i) In determining the monthly cost of a rehabilitation loan, in
accordance with Sec. 882.408(c)(2), a loan term of a least 10 years
(instead of 15 years) may be used. The exception in
Sec. 882.408(c)(2)(iii) for using the actual loan term if the total
amount of the rehabilitation is less than $15,000 continues to apply. In
addition, the cost of the rehabilitation that may be included for the
purpose of calculating the amount of the initial contract rent for any
unit must not exceed the lower of:
(A) The projected cost of rehabilitation; or
[[Page 126]]
(B) The per unit cost limitation that is established by Federal
Register notice, plus the cost of the fire and safety improvements
required by Sec. 882.803(b)(2). HUD may, however, increase the
limitation in paragraph (d)(1)(i)(B) of this section by an amount HUD
determines is reasonable and necessary to accommodate special local
conditions, including high construction costs or stringent fire or
building codes. HUD will publish future cost limitation changes in the
Federal Register in the Notice of Funding Availability issued each year.
(ii) If the Federal Housing Administration (FHA) believes that high
construction costs warrant an increase in the per unit cost limitation
in paragraph (d)(1)(i)(B) of this section, the HA must demonstrate to
HUD's satisfaction that a higher average per unit amount is necessary to
conduct this program, and that every appropriate step has been taken to
contain the amount of the rehabilitation within the published per unit
cost limitation established at that time, plus the cost of the required
fire and safety improvements. These higher amounts will be determined as
follows:
(A) HUD may approve a higher per unit amount up to, but not to
exceed, an amount computed by multiplying the HUD-approved High Cost
Percentage for Base Cities (used for computing FHA high cost area
adjustments) for the area, by the current published cost limitation plus
the cost of the required fire and safety improvements.
(B) HUD may, on a structure-by-structure basis, increase the level
approved in paragraph (d)(1)(i) of this section to up to an amount
computed by multiplying 2.4 by the current published cost limitation
plus the cost of the required fire and safety improvements.
(2) In approving changes to initial contract rents during
rehabilitation in accordance with Sec. 882.408(d), the revised initial
contract rents may not reflect an average per unit rehabilitation cost
that exceeds the limitation specified in paragraph (d)(1) of this
section.
(3) If the structure contains four or fewer SRO units, the Fair
Market Rent for that size structure (the Fair Market Rent for a 1-, 2-,
3-, or 4-bedroom unit, as applicable) must be used to determine the Fair
Market Rent limitation instead of using the separate Fair Market Rent
for each SRO unit. To determine the Fair Market Rent limitation for each
SRO unit, the Fair Market Rent for the structure must be apportioned
equally to each SRO unit.
(4) Contract rents must not include the costs of providing
supportive services, transportation, furniture, or other nonhousing
costs, as determined by HUD. SRO program assistance may be used for
efficiency units selected for rehabilitation under this program, but the
gross rent (contract rent plus any Utility Allowance) for these units
will be no higher than for SRO units (i.e., 75 percent of the 0-bedroom
Moderate Rehabilitation Fair Market Rent).
(Approved by the Office of Management and Budget under control number
2506-0131)
Sec. 882.806 Agreement to enter into housing assistance payments.
(a) Rehabilitation period. (1) Agreement. Before the owner begins
any rehabilitation, the HA must enter into an Agreement with the owner
in the form prescribed by HUD.
(2) Timely performance of work. Section 882.506(a) applies to this
program. In addition, the Agreement must provide that the work must be
completed and the contract executed within 12 months of execution of the
ACC. HUD may reduce the number of units or the amount of the annual
contribution commitment if, in HUD's determination, the HA fails to
demonstrate a good faith effort to adhere to this schedule or if other
reasons justify reducing the number of units.
(3) Inspections. Section 882.506(b) applies to this program.
(4) Changes. Section 882.506(c)(1) applies to this program. Contract
rents may not be increased except in accordance with Secs. 882.408(d)
and 882.805(d)(2).
(b) Completion of rehabilitation. (1) Notification of completion.
Section 882.507(a) applies to this program.
(2) Evidence of completion. Section 882.507(b) applies to this
program, except that Sec. 882.507(b)(2)(iv), concerning lead-based paint
requirements, does not apply.
[[Page 127]]
(3) Actual cost and rehabilitation loan certifications. Section
882.507(c) applies to this program, except that contract rents must be
established in accordance with Sec. 882.805(d).
(4) Review and inspections. Section 882.507(d) applies to this
program.
(5) Acceptance. Section 882.507(e) applies to this program.
(Approved by the Office of Management and Budget under control number
2502-0367)
Sec. 882.807 Housing assistance payments contract.
(a) Time of execution of contract. Section 882.508(a) applies to
this program.
(b) Term of contract. The contract for any unit rehabilitated in
accordance with this program must be for a term of 10 years. The
contract must give the HA the option to renew the contract for an
additional 10 years.
(c) Changes in contract rents from agreement. The contract rents may
be higher or lower than those specified in the Agreement, in accordance
with Sec. 882.805(d).
(d) Unleased units. Section 882.508(c) applies to this program.
(e) Contract rents at end of rehabilitation loan term. For a
contract in which the initial contract rent was based upon a loan term
shorter than 10 years, the contract must provide for reduction of the
contract rent effective with the rent for the month following the end of
the term of the rehabilitation loan. The amount of the reduction will be
the monthly cost of amortization of the rehabilitation loan. This
reduction should result in a new contract rent equal to the base rent
plus all subsequent adjustments.
(Approved by the Office of Management and Budget under control number
2502-0367)
Sec. 882.808 Management.
(a) Outreach to homeless individuals and appropriate organizations.
(1) The HA or the owner must undertake outreach efforts to homeless
individuals so that they may be brought into the program. The outreach
effort should include notification to emergency shelter providers and
other organizations that could provide referrals of homeless
individuals. If the owner conducts the outreach effort, the owner must
notify the HA so that it may provide referrals of homeless individuals.
(2) Additional outreach concerns. If the procedures that the HA or
owner intends to use to publicize the availability of this program are
unlikely to reach persons of any particular race, color, religion, sex,
age, national origin, or mental or physical disability who may qualify
for admission to the program, the HA or owner must establish additional
procedures that will ensure that such persons are made aware of the
availability of the program. The HA or owner must also adopt and
implement procedures to ensure that interested persons can obtain
information concerning the existence and location of services and
facilities that are accessible to persons with disabilities.
(3) First priority for homeless individuals. Homeless individuals
must have the first priority for occupancy of housing rehabilitated
under this program.
(b) Individual participation. (1) Initial determination of
individual eligibility. Section 882.514(a) applies to this program.
(2) Owner selection of individuals. The owner must rent all vacant
units under contract to homeless individuals located through HA or owner
outreach efforts and determined by the HA to be eligible. The owner is
responsible for tenant selection and may refuse any individual, provided
the owner does not unlawfully discriminate. If the owner rejects an
individual, and the individual believes that the owner's rejection was
the result of unlawful discrimination, the individual may request the
assistance of the HA in resolving the issue and may also file a
complaint with HUD's Office of Fair Housing and Equal Opportunity in
accordance with 24 CFR 103.25. If the individual requests the assistance
of the HA, and if the HA cannot resolve the complaint promptly, the HA
should advise the individual that he or she may file a complaint with
HUD, and provide the individual with the address of the nearest HUD
Office of Fair Housing and Equal Opportunity.
(3) Briefing of individuals. Section 882.514(d) applies to this
program, except that Sec. 882.514(d)(1)(vi) does not apply.
[[Page 128]]
(4) Continued participation of individual when contract is
terminated. Section 882.514(e) applies to this program, except that the
HA may issue a Housing Voucher instead of a Certificate.
(5) Individuals determined by the HA to be ineligible. Section
882.514(f) applies to this program. In addition, individuals are not
precluded from exercising other rights if they believe they have been
discriminated against on the basis of age.
(c) Lease. (1) Contents of lease. Section 882.504(j) applies to this
program. In addition, the lease must limit occupancy to one eligible
individual.
(2) Term of lease. Section 882.403(d) applies to this program.
(d) Security and utility deposits. Section 882.112 applies to this
program.
(e) Rent adjustments. Section 882.410 applies to this program.
(f) Payments for vacancies. Section 882.411 applies to this program.
(g) Subcontracting of owner services. Section 882.412 applies to
this program.
(h) Responsibility of the individual. Section 882.413 applies to
this program.
(i) Reexamination of individual income. (1) Regular reexaminations.
The HA must reexamine the income of all individuals at least once every
12 months. After consultation with the individual and upon verification
of the information, the HA must make appropriate adjustments in the
Total Tenant Payment in accordance with 24 CFR part 813, and verify that
only one individual is occupying the unit. The HA must adjust Tenant
Rent and the Housing Assistance Payment to reflect any change in Total
Tenant Payment. At each regular reexamination, the HA must follow the
requirements of 24 CFR part 5, subpart E concerning verification of
immigration status of any new family member.
(2) Interim reexaminations. The individual must supply such
certification, release, information, or documentation as the HA or HUD
determines to be necessary, including submissions required for interim
reexaminations of individual income and determinations as to whether
only one person is occupying the unit. In addition, the second and third
sentences of Sec. 882.515(b) apply. At any interim reexamination when
there is a new family member, the HA must follow the requirements of 24
CFR part 5, subpart E concerning obtaining and processing evidence of
citizenship or eligible immigration status of the new family member.
(3) Continuation of Housing Assistance Payments. Section 882.515(c)
applies to this program.
(j) Overcrowded units. If the HA determines that anyone other than,
or in addition to, the eligible individual is occupying an SRO unit
assisted under this program, the HA must take all necessary action, as
soon as reasonably feasible, to ensure that the unit is occupied by only
one eligible individual.
(k) Adjustment of utility allowance. Section 882.510 applies to this
program.
(l) Termination of tenancy. Section 882.511 applies to this program.
For provisions requiring termination of assistance when the HA
determines that a family member is not a U.S. citizen or does not have
eligible immigration status, see 24 CFR part 5, subpart E for provisions
concerning certain assistance for mixed families (families whose members
include those with eligible immigration status, and those without
eligible immigration status) in lieu of termination of assistance, or
for provisions concerning deferral of termination of assistance.
(m) Reduction of number of units covered by contract. Section
882.512 applies to this program.
(n) Maintenance, operation, and inspections. Section 882.516 applies
to this program.
(o) HUD review of contract compliance. Section 882.217 applies to
this program.
(p) Records and reports. Each recipient of assistance under this
subpart must keep any records and make any reports that HUD may require
within the timeframe required.
(q) Participation of homeless individuals. (1) Each approved
applicant receiving assistance under this program, except HAs, must
provide for the participation of not less than one homeless individual
or formerly homeless individual on the board of directors or other
equivalent policymaking entity of such applicant, to the extent that the
entity considers and makes policies and decisions regarding the
rehabilitation of any housing with assistance under this subpart. This
requirement is
[[Page 129]]
waived if the applicant is unable to meet this requirement and presents
a plan that HUD approves to consult with homeless or formerly homeless
individuals in considering and making such policies and decisions.
(2) To the maximum extent practicable, each approved applicant must
involve homeless individuals and families, through employment, volunteer
services, or otherwise, in rehabilitating and operating facilities
assisted under this subpart, and in providing services for occupants of
such facilities.
(Approved by the Office of Management and Budget under control number
2506-0131)
Sec. 882.809 Waivers.
Section 5.405(b) of this title does not apply to this program.
Sec. 882.810 Displacement, relocation, and acquisition.
Section 882.406 applies to this program.
PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE HOUSING AGENCIES--Table of Contents
Subpart A--Summary and Guide
Sec.
883.101 General.
883.105 Applicability of part 883 in effect as of February 29, 1980.
883.106 Applicability and relationships between HUD and State agencies.
Subpart B [Reserved]
Subpart C--Definitions and Other Requirements
883.301 Applicability.
883.302 Definitions.
883.306 Limitation on distributions.
883.307 Financing.
883.308 Adjustments to reflect changes in terms of financing.
883.310 Property standards.
883.313 Audit.
Subparts D-E [Reserved]
Subpart F--Housing Assistance Payments Contract
883.601 Applicability.
883.602 The contract.
883.603 Term of contract.
883.604 Maximum annual commitment and project account.
883.605 Leasing to eligible families.
883.606 Administration fee.
883.607 Default by owner and/or agency.
883.608 Notice upon contract expiration.
Subpart G--Management
883.701 Cross-reference.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-13619.
Source: 45 FR 6889, Jan. 30, 1980, unless otherwise noted.