42 U.S.C. 1452b and 3535(d).
(a) In cases in which a corporation is a borrower on a section 312 loan, theAssistant Secretary for CPD or his designee may require an officer of thecorporation or a principal stockholder to personally guarantee the section 312loan or to cosign the loan note as a borrower, where necessary to make thefinding of acceptable risk required for assumption of the loan.
(b) All partners of any partnership which is a borrower on a section 312 loanshall be personally liable for repayment of the section 312 loan. Limitedpartners shall assume personal liability by co-signing the loan note as aborrower or by personally guaranteeing the loan.
(c) Any personal guarantee or endorsement shall not relieve the partnershipor corporate borrower from securing the section 312 loan by a mortgage or deedof trust on the property to be rehabilitated.
42 U.S.C. 1437o and 3535(d).
(a) This part implements the Rental Rehabilitation Program (RRP) contained insection 17 of the United States Housing Act of 1937, as amended (the“Act”). As more fully described in this part, the Act authorizes theSecetary of Housing and Urban Development to make rental rehabilitation
(b) The purpose of the Program is to help provide affordable, standardpermanent housing for low-income families and to increase the availability ofhousing units for use by housing voucher and certificate holders under section 8of the United States Housing Act of 1937. Subject to rules for the tenant-basedCertificate Program (24 CFR part 882) and for the Housing Voucher Program (24CFR part 887), certificates and housing vouchers must be allocated to ensurethat sufficient resources are available for families in Rental Rehabilitationprojects who are required to move out of their units because of the physicalrehabilitation activities or because of overcrowding; and at the PHA'sdiscretion, to assist eligible families whose post-rehabilitation rents would begreater than 30 percent of their adjusted incomes.
The terms
(a) For a project which is privately owned when the commitment is made, awritten legally binding agreement between a grantee (or in the case of a Statedistributing rental rehabilitation grant amounts to units of general localgovernment, a State recipient) and the project owner under which the grantee orState recipient agrees to provide rental rehabilitation grant amounts to theowner for an identifiable rehabilitation project that can reasonably be expectedto start construction within 90 days of the agreement and in which the owneragrees to start construction within that period; or
(b) For a project that is publicly owned when the commitment is made, thePre-Rehabilitation Report submitted under the C/MI System which identifies aspecific rehabilitation project that will start rehabilitation within 90 days ofreceipt of the Pre-Rehabilitation Report. Under both paragraphs (a) and (b) ofthis definition, the date HUD enters into the C/MI System an acceptable Pre-Rehabilitation Report for a project is deemed to be the date of projectcommitment.
(a) Any city, urban county, or approved consortium receiving a grant on thebasis of the formula contained in subpart D of this part;
(b) Any State administering a rental rehabilitation program, as provided in§ 511.51; and
(c) Any unit of general local government receiving a rental rehabilitationgrant from HUD, as provided in § 511.52.
A rental rehabilitation program shall comply with the following requirements:
(a)
(2)
(i) The reduction is necessary to meet one or both of the followingobjectives:
(A) To minimize the displacement of tenants in projects to be rehabilitated;or
(B) To provide a reasonable margin for error due to unforeseen, suddenchanges in neighborhood rent or for other reasonable contingencies;
(ii) A rental rehabilitation program that meets the 100 percent benefitstandard cannot be developed; and
(iii) The public has been consulted regarding this inability.
(3)
(4)
(b)
(2) If a unit of general local government has an ordinance which requiresrehabilitation to meet seismic standards, the grantee may use up to the fullamount of its annual rental rehabilitation grant for Federal Fiscal Year 1988and later years (including reallocations under § 511.33(b) of fundsfor the same fiscal year) without regard to the requirements of paragraph (b)(1)of this section, but only to the extent it uses such grant amounts torehabilitate projects to meet the seismic standards required by the localordinance and to the extent these units in the rehabilitated project areinitially occupied after rehabilitation by very low income
(i) Calculate the maximum rental rehabilitation grant amount permissibleunder § 511.11(e)(2)(i) for the project(s) rehabilitated to meetseismic standards;
(ii) Calculate the maximum permissible rental rehabilitation grant amount forthe 0 to 1 bedroom units in such project(s) initially occupied by very lowincome families after rehabilitation;
(iii) Divide the amount calculated in § 511.10(b)(2)(ii) by theamount calculated in § 511.10(b)(2)(i);
(iv) Multiply the quotient in § 511.10(b)(2)(iii) by the actualrental rehabilitation grant amount expended for the project; and
(v) Deduct the product in § 511.10(b)(iv) from the amount of thegrantee's annual rental rehabilitation grant. The grantee will be required tomeet the 70 percent, or other approved level, under this § 511.10(b)only as to the amount of its annual grant remaining after making the foregoingdeduction.
(c)
(2)
(i) The rents for standard units are generally affordable to low-incomefamilies at the time of the selection of the neighborhood; and
(ii) The character of the neighborhood indicates that the rents are notlikely to increase at a rate significantly greater than the rate for rentincreases that can reasonably be anticipated to occur in the market area for the5-year period following the selection of the neighborhood.
(d) [Reserved]
(e)
(f)
(1) The actual rehabilitation costs necessary to:
(i) Correct substandard conditions, as reasonably defined by the grantee inits rehabilitation standards adopted under § 511.10(e);
(ii) Make essential improvements, as reasonably defined by the grantee orState recipient in its rehabilitation standards adopted under§ 511.10(e), including energy-related repairs, improvements necessaryto permit the use of rehabilitated projects by handicapped persons, andactivities of lead
(iii) Repair major housing systems in danger of failure, as reasonablydefined by the grantee or State recipient in its rehabilitation standards under§ 511.10(e); and
(2) Other costs (soft costs) that are associated with the rehabilitation orrehabilitation financing; are not for services provided or costs incurred by thegrantee, State recipient, or the PHA; and are not paid for as administrativecosts under § 511.71. Such costs may include (but are not limitedto):
(i) Architectural, engineering or related professional services required inthe preparation of rehabilitation plans and drawings or writeups;
(ii) Costs of processing and settling the financing for a project, such asprivate lender origination fees, credit reports, fees for title evidence, feesfor recordation and filing of legal documents, building permits, attorneys'fees, private appraisal fees and fees for an independent rehabilitation costestimate;
(iii) Relocation payments made to tenants who are displaced by therehabilitation activities; and
(iv) Costs for the owner to provide information services to tenants asrequired by §§ 511.13(b), 511.14 (a)(3) and (a)(4), and511.15(b).
(3)(i) Rehabilitation eligible under § 511.10(f)(1) is limited towork done after the commitment to the project (as defined in § 511.2)is made, except to the extent that such costs also meet all of the followingconditions:
(A) Prior to undertaking any rehabilitation before the project is committedin the C/MI System (hereafter called “precommitmentrehabilitation”), the owner and grantee or State recipient agree inwriting to include such rehabilitation costs in the project cost, if and whenthe payment is approved for assistance under this part;
(B) The precommitment rehabilitation costs meet all other requirements ofthis part, including compliance with the other Federal requirements cited in§ 511.16, where applicable. In particular, HUD approval of thegrantee's certification of completion of environmental responsibilities, whenrequired under 24 CFR part 58, must occur prior to execution of the writtenagreements to include the costs; and
(C) The precommitment rehabilitation costs were incurred by the owner afterthe date of the Appropriation Act which made available the grant amounts for theproject in question.
(ii) Other project-related costs eligible under § 511.10(f)(2) arealso limited to those costs incurred after the commitment to the project is madeby the grantee or State recipient and the project is set up in the C/MI System,except to the extent such costs also meet all of the following conditions:
(A) The grantee or State recipient and the owner agreed in writing before thecosts were incurred that such costs could be included in the project cost, ifand when the project was approved for assistance under this part, or the granteespecifically agrees in writing to include such costs in the project cost on orbefore the date the project is set up in the C/MI System;
(B) The costs also meet the conditions stated in§ 511.10(f)(3)(i)(B) and § 511.10(f)(3)(i)(C).
(4) For projects where the owner or other individuals are performing some orall of the rehabilitation work without compensation (to the extent permitted by§ 511.16(a)):
(i) If the owner is not a practicing, licensed contractor, rehabilitationcosts eligible under § 511.10(f)(1) are limited to the cost ofmaterials purchased by the owner and used on the project and the cost of othereligible work performed by practicing, licensed contractors, subcontractors ortradesmen on the project.
(ii) If the owner is a practicing, licensed contractor, then eligible projectcosts may include an amount, in addition to that permitted under paragraph(f)(4)(i) of this section, for the contractor's paid labor, overhead and profit,similar in amount to what these items would be if the work were being performedon a project that was not owned by the contractor.
(iii) Under either paragraph (f)(4)(i) or (f)(4)(ii) of this section, donatedlabor or work is not part of eligible project cost.
(g)
(2)
(a)
(b)
(c)
(2)
(i)(A) For a publicly owned project where the commitment to a specific localproject occurs on or after December 22, 1989, the grantee or Staterecipient—taking into consideration: the size of the project; thecomplexity of the rehabilitation; the anticipated time necessary to identify,and transfer to, an eligible private owner; and other relevantfactors—must determine that it will commence rehabilitation within 90 daysof commitment under the C/MI System, and that rehabilitation will be completedand the project transferred to an eligible private owner within the two yearsand 90 days from the date of commitment in the C/MI system or the time remainingunder § 511.33(c) for expenditure of the rental rehabilitation grantamounts committed to the project, whichever is shorter. The Project CompletionReport under the C/MI system identifying the private entity to which ownershiphas been transferred shall be submitted within 90 days of the final draw, butnot later than two years and 90 days after the date of commitment.
(B) For a publicly owned project where the commitment to a specific localproject occurred before December 22, 1989, the grantee or Staterecipient—taking into consideration: the size of the project; thecomplexity of the rehabilitation; the anticipated time necessary to identify,and transfer to, an eligible private owner; and other relevantfactors—must determine that the rehabilitation will be completed
(ii) If the grants or State recipient fails to complete the rehabilitation,transfer the property to an eligible private owner (which includes obtaining theagreements from the new owner required by this part, including§ 511.11(d)), and submit the Project Completion Report within theallowable period, then HUD will suspend the grantee's and/or the Staterecipient's authority to set up any new projects in the C/MI System and mayrequire the grantee to repay to its grant account in the C/MI System all rentalrehabilitation grant amounts drawn down with respect to the project. If paymentis not received, HUD may proceed to deobligate up to the full amount of thegrantee's remaining uncommitted rental rehabilitation grant amounts, whether ornot such grant amounts otherwise are available for deobligation under§ 511.33(c). A suspension of set-up authority shall terminate whenthe grantee or State recipient has transferred the project to private ownership,as required by this part, and has submitted a Project Completion Report underthe C/MI System identifying the private owner, or repays its grant account asrequired by this paragraph, or HUD lifts the suspension at its discretion.
(iii) After the grantee has repaid the grant amounts to its grant account asprovided in § 511.11(c)(2)(ii), the grant amounts may be committedand expended by the grantee for new projects within the periods originallyallowed for these grant amounts, or deobligated by HUD under § 511.33or § 511.82 to the same extent as any other grant amounts subject tothis part.
(3)
(4)
(i) The unit is on a permanent foundation;
(ii) The utility hook-ups are permanent;
(iii) The unit is designed for use as a permanent residence;
(iv) The unit also meets the Section 8 Housing Quality Standards forManufactured Homes set forth in 24 CFR 882.109(o).
(5)
(i) Title to the property to be rehabilitated must be transferred to a whollysecular entity prior to commitment, and this entity shall comply with allobligations of a project owner under this part. The entity may be an existing ornewly established entity (which may be an entity established, but notcontrolled, by the religious organization); and
(ii) The completed project must be used exclusively by the owner entity forsecular purposes, available to all persons regardless of religion, for theperiod and subject to the obligations described in § 511.11(d). Inparticular, there must be no religious or membership criteria for tenants of theproperty.
(d)
(i) The project shall remain in private ownership and in primarilyresidential rental use for the required period, unless the project is sold toanother private owner who agrees to continue to manage the property inaccordance with Rental Rehabilitation Program requirements for the remainder ofthe required period, or a hardship exception is approved by the grantee forreasons that occur after completion of the rehabilitation.
(ii) The owner shall not convert the units in the project to condominiumownership or any form of cooperative ownership not eligible for assistance underthis part for the required period.
(iii) The owner shall not discriminate against prospective tenants on thebasis of their receipt of, or eligibility for, housing assistance under anyFederal, State or local housing assistance program or, except for a housingproject for elderly persons, on the basis that the tenants have a minor child orchildren who will be residing with them, for the required period.
(iv) The owner shall comply with the nondiscrimination and equal opportunityrequirements and with the affirmative marketing requirements and proceduresadopted under § 511.13, for the required period.
(2)(i) With respect to projects which are privately owned when the commitmentto a specific local project is made, the obligations required under§ 511.10 (d)(1) and (d)(3) shall be included in the written, legallybinding commitment or project agreement between the owner and the grantee orState recipient which is executed on or before the date the project iscommitted.
(ii) With respect to projects which are publicly owned when the commitment ismade, these obligations shall be included in a written agreement between thegrantee or State recipient and the private owner, executed on or beforecompletion of rehabilitation.
(iii) By drawing down rental rehabilitation grant amounts for a project whichis publicly owned when the commitment is made, the public owner itself acceptsthe obligations of this part, including § 511.11(d)(1)(i) (except forprivate ownership before completion of rehabilitation), (d)(1)(ii), (d)(1)(iii)and (d)(1)((iv) and agrees to include these obligations in the agreement withthe private owner required by § 511.11(d)(2)(ii).
(3) The grantee or State recipient shall ensure that the written agreementswith private owners required by § 511.11 (d)(1) and (d)(2) arelegally enforceable, are recorded against the project in the local land records(or in the case of a manufactured housing unit, against the unit in the mannerappropriate for such real or personal property under State and local law), andthat the agreements contain remedies adequate to enforce their provisions. Aremedy will be deemed adequate for purposes of this paragraph if it requires theentire amount of the rental rehabilitation grant assistance for the project tobe a secondary lien secured by the property, repayable by the owner, or anysubsequent transferee, upon a prohibited conversion, sale or use in an amountequal to the entire amount of such assistance, less 10 percent for each fullyear after completion of the project up to the time the prohibited conversion,sale or use occurs, except in the case of projects of 25 units or more. Forprojects of 25 units or more the entire amount of such assistance shall berepaid if the project is converted, sold or used in violation of this sectionduring the 10-year period. Such lien may not be subordinate to a lien in favorof the grantee, State recipient or any person with whom the owner has businessor family ties, except as may be necessary to secure federally tax exemptfinancing for the project.
(e)
(i)(A) Rehabilitation of the project is important to the overall stability of
(B) The project has special costs to facilitate use by the elderly orhandicapped; and
(ii) The refinancing and the higher grant amount are necessary to make theproject feasible.
(2)
(A) $5,000 per unit for units with no bedrooms;
(B) $6,500 per unit for units with one bedroom;
(C) $7,500 per unit for units with two bedrooms; and
(D) $8,500 per unit for units with three or more bedrooms.
(ii) HUD may approve higher rental rehabilitation grant amounts for projectsin areas of high material and labor costs where the grantee demonstrates toHUD's satisfaction that a higher amount is necessary to conduct a rentalrehabilitation program in the area and that it has taken every appropriate stepto contain the amount of the rental rehabilitation grant within the dollarlimits specified in paragraph (e)(2)(i) of this section. These higher amountswill be determined as follows:
(A) HUD may approve higher per unit amounts for a unit of general localgovernment's entire rental rehabilitation program up to, but not to exceed, anamount derived by applying the HUD-approved High Cost Percentage for Base Citiesfor the area to the applicable per unit dollar limits;
(B) HUD may, on a project-by-project basis, increase the level permittedunder § 511.11(e)(2)(i) by multiplying the original limits by up to amaximum of 140 percent and then adding the product to the original limits.Therefore, the maximum high cost grant amount per project that may be approvedis 240 percent of the original per unit limits.
(f)
(i) Were entered into under a State law or local ordinance of generalapplicability that was enacted and in effect in the jurisdiction before November30, 1983 and
(ii) Apply generally to projects not assisted under the Rental RehabilitationProgram.
(2) State and local rent controls expressly preempted by paragraph (f) ofthis section include, but are not limited to, rent laws or ordinances, rentregulating agreements, rent regulations, low income occupancy agreementsextending beyond one year from the date of completion of rehabilitation of aproject, financial penalties for failure to achieve certain low income occupancyor rent projections, or restrictions on return on investment or other similarpolicies that prevent an owner, whether for-profit or non-profit, frommaximizing return or setting rent levels as the owner chooses. Grantees or Staterecipients shall not include any preempted rent or occupancy restrictions in anycommitments or project agreements with the owners of Rental Rehabilitationprojects.
(g) [Reserved]
(a) No person who is an employee, agent, consultant, officer, or elected orappointed official of the grantee or State recipient (or of any public agencythat performs administrative functions in the RRP) that receives rentalrehabilitation grant amounts and who exercises or has exercised any functions orresponsibilities with respect to assisted rehabilitation activities, or who isin a position to participate in a decision-making process or gain inside
(b) The appropriate HUD Field Office may grant an exception to the exclusionin paragraph (a) of the section on a case-by-case basis when it determines thatsuch an exception will serve to further the purposes of the RentalRehabilitation Program and the effective and efficient administration of thelocal rental rehabilitation program or the project. An exception may beconsidered only after the grantee or State recipient has provided a disclosureof the nature of the conflict, accompanied by an assurance that there has beenpublic disclosure of the conflict and a description of how the public disclosurewas made and an opinion of the grantee's or State recipient's attorney that theinterest for which the exception is sought would not violate State or locallaws. In determining whether to grant a requested exception, HUD shall considerthe cumulative effect of the following factors, where applicable:
(1) Whether the exception would provide a significant cost benefit or anessential degree of expertise to the local rental rehabilitation program or theproject that would otherwise not be available;
(2) Whether an opportunity was provided for open competitive bidding ornegotiation;
(3) Whether the person affected is a member of a group or class intended tobe the beneficiaries of the rehabilitation activity, and the exception willpermit such person to receive generally the same interests or benefits as arebeing made available or provided to the group or class;
(4) Whether the affected person has withdrawn from his or her functions orresponsibilities, or the decisionmaking process, with respect to the specificrehabilitation activity in question;
(5) Whether the interest or benefit was present before the affected personwas in a position as described in this paragraph;
(6) Whether undue hardship will result either to the grantee, State recipientor the person affected when weighed against the public interest served byavoiding the prohibited conflict; and
(7) Any other relevant considerations.
In addition to the nondiscrimination and equal opportunity requirements setforth in 24 CFR part 5, the following requirements apply:
(a)
(1) For each grantee, the affirmative marketing requirements and proceduresadopted must include:
(i) Methods for how the grantee will inform the public, owners and potentialtenants about Federal fair housing laws and the grantee's affirmative marketingpolicy (such as the use of the Equal Housing Opportunity logotype or
(ii) Requirements and practices each owner (including the grantee or anyother public owner) must adhere to in order to carry out the grantee'saffirmative marketing procedures and requirements (
(iii) Procedures to be used by owners (including the grantee or any otherpublic owner) to inform and solicit applications from persons in the housingmarket area who are not likely to apply for the housing without special outreach(
(iv) Records that will be kept describing efforts taken by the grantee and bythe owners (including the grantee or any other public owner) to affirmativelymarket units and records to assess the results of these actions;
(v) A description of how the grantee will assess the affirmative marketingefforts of owners (including the grantee or any other public owner), and theresults of those efforts, and what corrective actions will be taken where anowner fails to follow these affirmative marketing requirements.
(2) For States distributing rental rehabilitation grant amounts to units ofgeneral local government, the affirmative marketing procedures and requirementsshall also set out the actions that State recipients must take to meet theobjectives set out in § 511.13(b), the record keeping and reportingrequirements such State will require of State recipients, and the proceduresthat such State will follow to determine what action has been taken by Staterecipients to assess the results of these affirmative marketing efforts.
(3) The grantee or State recipient shall require compliance with theconditions of its affirmative marketing requirements and procedures adoptedunder paragraph (b) of this section by means of an agreement with the owner thatshall be applicable for a period of ten years beginning on the date ofcompletion of rehabilitation, as defined in § 511.2.
(b) [Reserved]
(a)
(1) Ensure that the rehabilitation will not cause the displacement of anyvery low income family by a family that is not a very low income family.
(2) Consistent with the other goals and objectives of this part, minimizedisplacement. To the extent feasible, residential occupants shall be provided areasonable opportunity to lease and occupy a suitable, decent, safe, sanitaryand affordable dwelling unit in the project (see paragraph (g)(1)(iii) of thissection).
(3) Administer all phases of the RRP, including the selection of units to berehabilitated and the provision of notices, counseling, referrals, otheradvisory services and relocation payments, in a manner that does not result indiscrimination because of race, color, religion, sex, age, handicap, familialstatus or national origin.
(4) Adopt and make public a written tenant assistance policy (TAP) thatdescribes the assistance that will be provided to tenants who reside in theproject and which includes a statement of nondiscrimination policy consistentwith paragraph (a)(3) of this section. The TAP shall comply with the provisionsof this section. Each tenant in the project shall be provided a copy of the TAPand advised of the impact of the project on him or her. For privately ownedprojects, such notice shall be given immediately after submission of theapplication by the owner of a property, or earlier. For publicly owned projects,such notice shall be given immediately after the commitment (defined in§ 511.2), or earlier.
(b)
(1) For a privately owned project, execution of the legally binding agreementbetween the grantee or State recipient and the project owner under which thegrantee or State recipient agrees to provide rental rehabilitation grant amountsfor the project.
(2) For a publicly owned project, the commitment as defined in§ 511.2 or such earlier notice as the grantee or State recipientdetermines to be appropriate.
(c)
(d)
(e)
(f)
(2) The cost of required assistance may be paid from local public funds,funds available under the rules of this part, or funds available from othersources.
(3) The grantee or State recipient must maintain records in sufficient detailto demonstrate compliance with the provisions of this section.
(g)
(i) After notice by the property owner, grantee, or State recipient to movepermanently from the property, if the move occurs on or after the followingdate:
(A) If the notice is provided by the property owner, the date that the owner(or person in control of the site) submits a request for assistance under thispart that is later approved and funded.
(B) If the notice is provided by the grantee or State recipient, the date ofthe commitment to a specific local project.
(ii) Before the date described in paragraph (g)(1)(i) of this section, ifeither the grantee or HUD determines that the displacement resulted directlyfrom rehabilitation, acquisition or demolition for the project;
(iii) By a tenant-occupant of a dwelling unit after the initiation ofnegotiations, if:
(A) The tenant has not been provided a reasonable opportunity to lease andoccupy a suitable, decent, safe and sanitary dwelling in the project followingthe completion of the project at a rent, including estimated average utilitycosts, that does not exceed the greater of:
(
(
(B) The tenant has been required to relocate temporarily, but:
(
(
(C) The tenant is required to move to another unit within the project but isnot offered reimbursement for all reasonable out-of-pocket expenses incurred inconnection with the move or other conditions of the move are not reasonable.
(2) A person does not qualify as a displaced person, if:
(i) The person has been evicted for cause based upon a serious or repeatedviolation of material terms of the lease or occupancy agreement, and the granteeor State recipient determines that the eviction was not undertaken for thepurpose of evading the obligation to provide relocation assistance; or
(ii) The person moved into the property after the owner's submission of therequest for assistance but, before commencing occupancy, received written noticeof the owner's intent to terminate the person's occupancy for the project; or
(iii) The person is ineligible under 49 CFR 24.2(g)(2); or
(iv) The grantee or State recipient determines that the person was notdisplaced as a direct result of rehabilitation, acquisition or demolition of theproject, and the HUD Field Office concurs in that determination.
(3) The grantee may, at any time, ask HUD to determine whether a specificdisplacement is or would be covered by these rules.
The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846),the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C.4851-4856), and implementing regulations at part 35, subparts A, B, J, K,and R of this title apply to activities under these programs.
In addition to the Federal requirements set forth in 24 CFR part 5, Granteesand, where applicable, State recipients shall comply with the followingrequirements:
(a)
(b)
(c)
(d)
(i) The community in which the area is situated is participating in theNational Flood Insurance Program (see 44 CFR parts 59 through 79), or less thana year has passed since FEMA notification regarding such hazards; and
(ii) Flood insurance is obtained as a condition of approval of thecommitment.
(2) Grantees with projects located in an area identified by FEMA as havingspecial flood hazards are responsible for assuring that flood insurance underthe National Flood Insurance Program is obtained and maintained.
(3) This paragraph § 511.16(g) does not apply in the case ofallocations administered by a State under § 511.51(a).
(a) Before deobligating grant amounts, HUD will consult with the affectedgrantee and take into account factors such as timing of the grantee's programyear; the timing of State distributions to State recipients, if applicable; thetiming of expected project approvals for projects in the grantee's pipeline;climatic or other considerations affecting rehabilitation work schedules; andother relevant considerations. In addition to any remedial deobligation under§ 511.82, HUD may deobligate any rental rehabilitation grant amountsthat are not:
(1) Committed to specific local projects within 3 years of the date ofobligation of the grant under § 511.21(d) (4 years in the case of aState that distributes rental rehabilitation grant amounts to State recipients);or
(2) Expended for eligible costs within 5 years of such date of obligation (6years in the case of a State that distributes rental rehabilitation grantamounts to State recipients).
(b) After such consultation, the HUD field office may direct the grantee toproceed with program closeout and may deobligate remaining unexpended grantamounts if the field office determines that any uncommitted funds will not becommitted within a reasonable time, only small amounts of funds remainunexpended, or completion of uncompleted projects appears infeasible within areasonable time. None of the time periods referred to in this section areextended by any suspensions of
(a) State allocations may be used to carry out eligible rehabilitationactivities in accordance with the requirements of this part in units of generallocal government that do not receive allocations under subpart D and in citiesand urban counties whose allocations are below the minimum amount specified in§ 511.31, but may not be used in areas that are eligible forassistance under title V of the Housing Act of 1949, except as specified inparagraph (b) of this section.
(b) For Fiscal Years 1988 through 1991, uncommitted prior year funds may beused by State grantees, by units of general local government receiving fundsfrom State grantees and by units of general local government participating in aHUD-administered State Program in areas eligible for assistance under title V ofthe Housing Act of 1949. This authority to enter into commitments with ownersfor projects in title V-eligible areas expires on September 30, 1991.
(a)
(1) To carry out its own Rental Rehabilitation Program without the activeparticipation of units of general local government;
(2) To distribute grant amounts to State recipients which independentlyselect, enter into commitments with owners for, and manage projects; or
(3) To carry out mixed programs in which both the State and all or some unitsof general local government each perform specified program functions.
(b)
(c)
(1) Ensure that units of general local government carry out their RentalRehabilitation Program in accordance with requirements of this part and otherapplicable laws. States shall include in their agreements with their units ofgeneral local government such additional provisions as may be appropriate toensure such compliance and to enable the State to carry out its responsibilitiesunder this part, including the withdrawal and reallocation of rentalrehabilitation grant amounts based on unit of general local governmentnoncompliance (including State recipient failure to meet the schedule submittedby the State under § 511.20(b)(8)); and
(2) Conduct such reviews and audits of their units of general localgovernment as may be appropriate to determine whether units of general localgovernment, including State recipients, have carried out their programs inaccordance with the requirements of this part, whether they have done so in atimely manner, and whether they have a continuing capacity to do so in a timelymanner.
Grantees are responsible for ensuring that rental rehabilitation grants areadministered in accordance with the requirements of this part and otherapplicable laws. A grantee may enter into a written agreement with another unitof State or local government or with a non-governmental entity to administerspecified functions under its Rental Rehabilitation Program to the extent notprohibited by HUD. If the grantee is contracting with a non-governmental entityto administer its program or to provide other services, such as cash managementresponsibilities, the grantee shall follow the procurement standards of 24 CFR85.36. The use of other governmental units or private contractors does notrelieve the grantee of its responsibility for ensuring compliance with this partand other applicable laws.
(a)
(b)
(c)
(d)
Grantees, State recipients and their contractors shall comply with therequirements and standards of OMB Circular No. A-87, “Principles forDetermining Costs Applicable to Grants and Contracts with State, Local andFederally recognized Indian Tribal Governments,”
(a)
(1) Records required to comply with § 511.75;
(2) Data on the racial, ethnic, gender, and income level characteristics of
(i) Tenants occupying units before rehabilitation;
(ii) Tenants moving from and (initially after rehabilitation) into projectsassisted under this part;
(iii) Applicants for tenancy within 90 days following completion ofrehabilitation assisted under this part; and
(iv) Owners of the projects rehabilitated; and
(3) Data indicating the race and ethnicity of households displaced as aresult of program activities, and, if available, the address and census tract ofthe housing units to which each displaced household relocated.
(b)
(c)
(d)
The financial management systems used by grantees and, where applicable,State recipients shall provide for audits in accordance with 24 CFR part 44.
(a)
(b)
(2) Beginning in Fiscal Year 1991, if Pre-Rehabilitation Reports are notreceived within 20 days of the project set-up call, the project will becancelled automatically by the C/MI System. In addition, projects which havebeen committed in the C/MI System for 6 months without an initial disbursementof funds will be automatically cancelled by the C/MI System.
(c)
(d)
(e)
(a)
(b)
(1) Repayments of principal (whether in installments or a lump-sum) and anyinterest or penalty assessment, under the terms of the loan commitment or otherproject assistance agreement between the owner and the grantee or Staterecipient, including repayments, pursuant to § 511.11(d)(3), of therental rehabilitation grant assistance by the owner after completion ofrehabilitation; and
(2) Interest earned on program income pending its disposition. Grantees orState recipients are not authorized to deduct costs incident to the generationor management of income from gross income for purposes of determining programincome. Governmental fees and taxes, including income taxes, property taxes,special assessments, transfer taxes, recording fees and other normalgovernmental revenues, do not constitute program income if they are imposed bygenerally applicable law, regulation, or ordinance and are not imposed inconsideration of the project's receipt of assistance under this part. Programincome also does not include grant amounts required to be returned to HUD as aresult of cancellation of a project before completion, or interest on thosegrant amounts, or any interest earned by the grantee or State recipient or grantfunds after drawdown and before disbursement for eligible costs. (Fordisposition of such interest, see 24 CFR 85.21(i).)
(c)
(1) Program income may be used for any activity which is eligible under thispart, except that program income may not be used to pay for administrativecosts, as described at § 511.71. In particular, the total of rentalrehabilitation grant amounts and Rental Rehabilitation Program income used forany project (except under § 511.76(c)(2)) may not exceed the amountper unit allowed under § 511.11(e)(2) or 50 percent of the totaleligible project costs (except as noted in § 511.11(e)(1)).
(2) Program income may also be used to provide rental assistance to lowerincome tenants in properties rehabilitated through the RRP. This includes theuse of program income to pay for administrative costs associated with theprovision of rental assistance but not to exceed the amount allowed foradministrative fees in the Housing Voucher Program authorized under section 8(o)of the United States Housing Act of 1937, 42 U.S.C. 1437f. In order to useprogram income for rental assistance, the grantee or State recipient must—
(i) Use the funds to assist low-income tenants who initially occupyproperties rehabilitated with rental rehabilitation grant amounts or rentalrehabilitation program income;
(ii) Have a written policy which is available to the public stating thatprogram income will be so used and specifying who is eligible to receive suchassistance; and
(iii) Have an agreement with the PHA stating that the PHA will utilize theprogram income to provide rental assistance in accordance with the writtenpolicy.
(d)
(e)
(f)
(g)
(h)
(1) Before program closeout, program income shall be used for activitieseligible under § 511.76(c); and
(2) Program income on hand at the time of program closeout or earned afterprogram closeout may be contributed to HOME or HOPE program grantees as a cashmatching contribution in accordance with applicable HOME or HOPE program rules,or may be used for activities that would be eligible under other affordablehousing activities, as determined by the recipient.
(a) Each individual fiscal year rental rehabilitation grant will be closedout when all grant amounts for the grant to be closed out have been drawn downand expended for completed projects and/or administrative costs, or grantamounts not drawn down and expended have been deobligated by HUD.
(b) Project Completion Reports for all projects utilizing grant amounts fromthe fiscal year grant(s) to be closed out have been submitted and entered intothe C/MI System.
(c) The required reviews and audits to determine whether grantees havesatisfied the terms of their grant agreement have been made. Closeout iscontingent upon the receipt of the grantee's most recent audit report and auditreports of State recipients, where applicable. For closeout of the grant toproceed, the most recent audit report(s) must be free of any outstandingfindings related to the RRP grant to be closed. The audit(s) of the grantee andState recipients, where applicable, should cover all grant amounts from allfiscal years which are to be closed out except as noted in paragraph (c)(2) ofthis section.
(1) The Single Audit Act prohibits requiring a grantee or State recipient toobtain an audit at its expense covering
(2) When the previous audit(s) fail to cover all grant amounts under theGrant Agreement, the program may still be closed out, provided the granteeagrees in writing to remit to HUD any costs questioned by a subsequent auditthat are disallowed by HUD. This procedure is expected to be used in those caseswhen both the grantee and HUD want to proceed with the closeout before the nextperiodic single audit is conducted covering the remaining grant amounts notalready audited.
(d) With respect to monitoring the grantee, either:
(1) The HUD Field Office has conducted an on-site monitoring of the granteeand has determined that the grantee's performance, with respect to any grant tobe closed out, is satisfactory and is in compliance with Rental Rehabilitationprogram statutory and regulatory requirements, including § 511.10(a)and § 511.10(b); or
(2) A grant may be closed before on-site monitoring has been conducted,provided:
(i) The Cash and Management Information reports indicate the grantee'sperformance is satisfactory and is in compliance with Rental Rehabilitationprogram statutory and regulatory requirements;
(ii) There are no outstanding monitoring findings; and
(iii) The grantee agrees in writing to pay back the amount of any costs thatare later found by HUD to be ineligible based on a subsequent on-site monitoringreview or audit.
(a)
(b)
(1) For grantees that are units of general local government or Statesadministering their own rental rehabilitation grant programs, whether thegrantee:
(i) Has carried out its activities in a timely manner, including thecommitment of rental rehabilitation grant amounts to specific local projects inaccordance with the schedule contained in its Program Description, as providedin § 511.20(b)(8), and the completion of projects in accordance with§ 511.11(a);
(ii) Has carried out its activities in accordance with the requirements ofthis part; and
(iii) Has a continuing capacity to carry out its activities in accordancewith this part and in a timely and cost-effective manner; or
(2) For grantees that are States distributing rental rehabilitation grant
(i) Has distributed these grant amounts in a timely manner and in accordancewith the requirements of this part; and
(ii) Has made such reviews and audits of its recipients as may be appropriateto determine whether they have satisfied the requirements of paragraph (b)(1)(i)through (b)(1)(iii) of this section.
(a)
(b) [Reserved]
(a)
(b)
(2) If the grantee fails to demonstrate to HUD's satisfaction that it has metthe performance review standards in § 511.80, HUD will takeappropriate corrective or remedial action in accordance with this section.
(c)
(1) HUD may request the grantee to submit and comply with proposals foraction to correct, mitigate and prevent performance deficiencies, including:
(i) Preparing and following a schedule of actions for carrying out theaffected rental rehabilitation activities, consisting of schedules, timetablesand milestones necessary to implement the affected activities;
(ii) Establishing and following a management plan that assignsresponsibilities for carrying out the remedial actions;
(iii) Cancelling or revising activities likely to be affected by aperformance deficiency, before expending grant amounts for the activities;
(iv) Reprogramming rental rehabilitation grant amounts that have not yet beenexpended from affected activities to other eligible activities; and
(v) Suspending disbursement of grant amounts for affected activities for aperiod of not more than 60 days.
(2) [Reserved]
(3) When HUD determines that a grantee has failed to meet one or more of therequirements of this part, HUD may reduce or withdraw rental rehabilitationgrant amounts, or take other action as appropriate, except that rentalrehabilitation grant amounts already expended on eligible activities will not berecaptured from existing grant allocations or obligations or deducted fromfuture grants made available to the grantee. For purposes of paragraph (c)(3) ofthis section—
(i)
(ii)
(4) Where HUD makes a final determination that it has a judiciallyenforceable claim for money against the grantee in a situation where rentalrehabilitation grant amounts have been disbursed to the grantee or Staterecipient for ineligible costs under this part, HUD will follow the proceduresdescribed in the Federal Claims Collection Standards (4 CFR parts 101-105)in order to:
(i) Demand in writing that the grantee or State recipient reimburse HUD inthe amount of the ineligible costs, using funds from non-federally derivedsources; and
(ii) Initiate affirmative litigation to recover the amount of the ineligiblecosts, if necessary for collection. HUD's final determination to seek recoveryof grant amounts expended on ineligible costs under paragraph (c)(4) of thissection shall constitute a claim within the meaning of 31 U.S.C. 3711,
(d) Amounts recovered under paragraph (c)(4) of this section are not rentalrehabilitation grant amounts and shall be deposited in the U.S. Treasury'smiscellaneous receipts account.
42 U.S.C. 3535(d) and 5301-5320.
(a) This part describes policies and procedures applicable to the followingprograms authorized under title I of the Housing and Community Development Actof 1974, as amended:
(1) Entitlement grants program (subpart D);
(2) Nonentitlement Funds: HUD-administered Small Cities and Insular Areaprograms (subpart F);
(3) State program: State-administered CDBG nonentitlement funds (subpart I);
(4) Special Purpose Grants (subpart E);
(5) Urban Development Action Grant program (subpart G); and
(6) Loan Guarantees (subpart M).
(b) Subparts A, C, J, K, and O apply to all programs in paragraph (a) exceptas modified or limited under the provisions of these subparts or the applicableprogram regulations. In the application of the subparts to Special PurposeGrants or the Urban Development Action Grant program, the reference to funds inthe form of grants in the term
(c) The primary objective of the programs authorized under title I of theHousing and Community Development Act of 1974, as amended, is described insection 101(c) of the Act (42 U.S.C. 5301(c)).
The terms
(1) For purposes of Entitlement Community Development Block Grant and UrbanDevelopment Action Grant eligibility:
(i) Any unit of general local government that is classified as a municipalityby the United States Bureau of the Census, or
(ii) Any other unit of general local government that is a town or townshipand that, in the determination of the Secretary:
(A) Possesses powers and performs functions comparable to those associatedwith municipalities;
(B) Is closely settled (except that the Secretary may reduce or waive thisrequirement on a case by case basis for the purposes of the Action Grantprogram); and
(C) Contains within its boundaries no incorporated places as defined by theUnited States Bureau of the Census that have not entered into cooperationagreements with the town or township for a period covering at least 3 years toundertake or assist in the undertaking of essential community development andhousing assistance activities. The determination of eligibility of a town ortownship to qualify as a city will be based on information available from theUnited States Bureau of the Census and information provided by the town ortownship and its included units of general local government.
(2) For purposes of Urban Development Action Grant eligibility only, Guam,the Virgin Islands, American Samoa, the Commonwealth of the Northern MarianaIslands, the counties of Kauai, Maui, and Hawaii in the State of Hawaii, andIndian tribes that are eligible recipients under the State and Local GovernmentFiscal Assistance Act of 1972 and located on reservations in Oklahoma asdetermined by the Secretary of the Interior or in Alaskan Native Villages.
(1)(i) “Annual income” as defined under the Section 8 HousingAssistance Payments program at 24 CFR 813.106 (except that if the CDBGassistance being provided is homeowner rehabilitation under§ 570.202, the value of the homeowner's primary residence may beexcluded from any calculation of Net Family Assets); or
(ii) Annual income as reported under the Census long-form for the most recentavailable decennial Census. This definition includes:
(A) Wages, salaries, tips, commissions, etc.;
(B) Self-employment income from own nonfarm business, includingproprietorships and partnerships;
(C) Farm self-employment income;
(D) Interest, dividends, net rental income, or income from estates or trusts;
(E) Social Security or railroad retirement;
(F) Supplemental Security Income, Aid to Families with Dependent Children, orother public assistance or public welfare programs;
(G) Retirement, survivor, or disability pensions; and
(H) Any other sources of income received regularly, including Veterans' (VA)payments, unemployment compensation, and alimony; or
(iii) Adjusted gross income as defined for purposes of reporting underInternal Revenue Service (IRS) Form 1040 for individual Federal annual incometax purposes.
(2) Estimate the annual income of a family or household by projecting theprevailing rate of income of each person at the time assistance is provided forthe individual, family, or household (as applicable). Estimated annual incomeshall include income from all family or household members, as applicable. Incomeor asset enhancement derived from the CDBG-assisted activity shall not beconsidered in calculating estimated annual income.
(a) The determination of eligibility of units of general local government toreceive entitlement grants, the entitlement amounts, the allocation ofappropriated funds to States for use in nonentitlement areas, the reallocationof funds, the allocation of appropriated funds to insular areas, and theallocation of appropriated funds for discretionary grants under the Secretary'sFund shall be governed by the policies and procedures described in sections 106and 107 of the Act, as appropriate.
(b) The definitions in § 570.3 shall govern in applying thepolicies and procedures described in sections 106 and 107 of the Act.
(c) In determining eligibility for entitlement and in allocating funds undersection 106 of the Act for any federal fiscal year, HUD will recognize corporatestatus and geographical boundaries and the status of metropolitan areas andprincipal cities effective as of July 1 preceding such federal fiscal year,subject to the following limitations:
(1) With respect to corporate status as certified by the applicable State andavailable for processing by the Census Bureau as of such date;
(2) With respect to boundary changes or annexations, as are used by theCensus Bureau in preparing population estimates for all general purposegovernmental units and are available for processing by the Census Bureau as ofsuch date, except that any such boundary changes or annexations which result inthe population of a unit of general local government reaching or exceeding50,000 shall be recognized for this purpose whether or not such changes are usedby the Census Bureau in preparing such population estimates; and
(3) With respect to the status of Metropolitan Statistical Areas andprincipal cities, as officially designated by the Office of Management andBudget as of such date.
(d) In determining whether a county qualifies as an urban county, and incomputing entitlement amounts for urban counties, the demographic values ofpopulation, poverty, housing overcrowding, and age of housing of any Indiantribes located within the county shall be excluded. In allocating amounts toStates for use in nonentitlement areas, the demographic values of population,poverty, housing overcrowding and age of housing of all Indian tribes located inall nonentitled areas shall be excluded. It is recognized that all such data onIndian tribes are not generally available from the United States Bureau of theCensus and that missing portions of data will have to be estimated. Inaccomplishing any such estimates the Secretary may use such other relatedinformation available from reputable sources as may seem appropriate, regardlessof the data's point or period of time and shall use the best judgement possiblein adjusting such data to reflect the same point or period of time as theoverall data from which the Indian tribes are being deducted, so that suchdeduction shall not create an imbalance with those overall data.
(e) Amounts remaining after closeout of a grant which are required to bereturned to HUD under the provisions of § 570.509, Grant closeoutprocedures, shall be considered as funds available for reallocation unless theappropriation under which the funds were provided to the Department has lapsed.
HUD's authority for the waiver of regulations and for the suspension ofrequirements to address damage in a Presidentially declared disaster area isdescribed in 24 CFR part 5 and in section 122 of the Act, respectively.
(a)
(1)
(2)
(3)
(i) Cost of administration and planning eligible under § 570.205and § 570.206 will be assumed to benefit low and moderate incomepersons in the same proportion as the remainder of the CDBG funds and,accordingly shall be excluded from the calculation;
(ii) Funds deducted by HUD for repayment of urban renewal temporary loanspursuant to § 570.802(b) shall be excluded;
(iii) Funds expended for the repayment of loans guaranteed under theprovisions of subpart M shall also be excluded;
(iv) Funds expended for the acquisition, new construction or rehabilitationof property for housing that qualifies under § 570.208(a)(3) shall becounted for this purpose but shall be limited to an amount determined bymultiplying the total cost (including CDBG and non-CDBG costs) of theacquisition, construction or rehabilitation by the percent of units in suchhousing to be occupied by low and moderate income persons.
(v) Funds expended for any other activities qualifying under§ 570.208(a) shall be counted for this purpose in their entirety.
(4)
(5)
(i) Depreciation methods for fixed assets shall not be changed without HUD'sspecific approval or, if charged through a cost allocation plan, the Federalcognizant agency.
(ii) Fines and penalties (including punitive damages) are unallowable coststo the CDBG program.
(iii) Pre-award costs are limited to those authorized under paragraph (h) ofthis section.
(b)
(1)
(i) The facility which is otherwise eligible and proposed for assistance willoccupy a designated and discrete area within the larger facility; and
(ii) The recipient can determine the costs attributable to the facilityproposed for assistance as separate and distinct from the overall costs of themultiple-use building and/or facility.
(2)
(c)
(1)
(2)
(i) Special assessments to recover the CDBG funds may be made only againstproperties owned and occupied by persons not of low and moderate income. Suchassessments constitute program income.
(ii) Special assessments to recover the non-CDBG portion may be made providedthat CDBG funds are used to pay the special assessment in behalf of allproperties owned and occupied by low and moderate income persons; except thatCDBG funds need not be used to pay the special assessments in behalf ofproperties owned and occupied by moderate income persons if the grant recipientcertifies that it does not have sufficient CDBG funds to pay the assessments inbehalf of all of the low and moderate income owner-occupant persons. Fundscollected through such special assessments are not program income.
(3)
(i) The installation of the public improvements was carried out in compliancewith requirements applicable to activities assisted under this part includingenvironmental, citizen participation and Davis-Bacon requirements;
(ii) The installation of the public improvement meets a criterion fornational objectives in § 570.208(a)(1), (b), or (c); and
(iii) The requirements of § 570.200(c)(2)(ii) are met.
(d)
(1)
(2)
(e)
(f)
(i) By the recipient through:
(A) Its employees, or
(B) Procurement contracts governed by the requirements of 24 CFR 85.36; or
(ii) Through loans or grants under agreements with subrecipients, as definedat § 570.500(c); or
(iii) By one or more public agencies, including existing local publicagencies, that are designated by the chief executive officer of the recipient.
(2) Activities made eligible under § 570.204(a) may only beundertaken by entities specified in that section.
(g)
(h)
(1) Prior to the effective date of the grant agreement, a recipient may incurcosts or may authorize a subrecipient to incur costs, and then after theeffective date of the grant agreement pay for those costs using its CDBG funds,provided that:
(i) The activity for which the costs are being incurred is included, prior to
(ii) Citizens are advised of the extent to which these pre-award costs willaffect future grants;
(iii) The costs and activities funded are in compliance with the requirementsof this part and with the Environmental Review Procedures stated in 24 CFR part58;
(iv) The activity for which payment is being made complies with the statutoryand regulatory provisions in effect at the time the costs are paid for with CDBGfunds;
(v) CDBG payment will be made during a time no longer than the next twoprogram years following the effective date of the grant agreement or amendmentin which the activity is first included; and
(vi) The total amount of pre-award costs to be paid during any program yearpursuant to this provision is no more than the greater of 25 percent of theamount of the grant made for that year or $300,000.
(2) Upon the written request of the recipient, HUD may authorize payment ofpre-award costs for activities that do not meet the criteria at paragraph(h)(1)(v) or (h)(1)(vi) of this section, if HUD determines, in writing, thatthere is good cause for granting an exception upon consideration of thefollowing factors, as applicable:
(i) Whether granting the authority would result in a significant contributionto the goals and purposes of the CDBG program;
(ii) Whether failure to grant the authority would result in undue hardship tothe recipient or beneficiaries of the activity;
(iii) Whether granting the authority would not result in a violation of astatutory provision or any other regulatory provision;
(iv) Whether circumstances are clearly beyond the recipient's control; or
(v) Any other relevant considerations.
(i)
(1) Activities eligible for assistance under this subpart; and
(2) Notwithstanding the provisions of § 570.207, such otheractivities as the Secretary may determine to be consistent with the purposes ofthe Urban Development Action Grant program.
(j)
(2) Organizations that are directly funded under the CDBG program may notengage in inherently religious activities, such as worship, religiousinstruction, or proselytization, as part of the programs or services fundedunder this part. If an organization conducts such activities, the activitiesmust be offered separately, in time or location, from the programs or servicesfunded under this part, and participation must be voluntary for thebeneficiaries of the HUD-funded programs or services.
(3) A religious organization that participates in the CDBG program willretain its independence from Federal, State, and local governments, and maycontinue to carry out its mission, including the definition, practice, andexpression of its religious beliefs, provided that it does not use direct CDBGfunds to support any inherently religious activities, such as worship, religiousinstruction, or proselytization. Among other things, faith-based organizationsmay use space in their facilities to provide CDBG-funded services, withoutremoving religious art, icons, scriptures, or other religious symbols. Inaddition, a CDBG-funded religious organization retains its authority over
(4) An organization that participates in the CDBG program shall not, inproviding program assistance, discriminate against a program beneficiary orprospective program beneficiary on the basis of religion or religious belief.
(5) CDBG funds may not be used for the acquisition, construction, orrehabilitation of structures to the extent that those structures are used forinherently religious activities. CDBG funds may be used for the acquisition,construction, or rehabilitation of structures only to the extent that thosestructures are used for conducting eligible activities under this part. Where astructure is used for both eligible and inherently religious activities, CDBGfunds may not exceed the cost of those portions of the acquisition,construction, or rehabilitation that are attributable to eligible activities inaccordance with the cost accounting requirements applicable to CDBG funds inthis part. Sanctuaries, chapels, or other rooms that a CDBG-funded religiouscongregation uses as its principal place of worship, however, are ineligible forCDBG-funded improvements. Disposition of real property after the term of thegrant, or any change in use of the property during the term of the grant, issubject to government-wide regulations governing real property disposition (
(6) If a State or local government voluntarily contributes its own funds tosupplement federally funded activities, the State or local government has theoption to segregate the Federal funds or commingle them. However, if the fundsare commingled, this section applies to all of the commingled funds.
CDBG funds may be used for the following activities:
(a)
(b)
(c)
(d)
(e)
(1) The amount of CDBG funds used for public services shall not exceed 15percent of each grant, except that for entitlement grants made under subpart Dof this part, the amount shall not exceed 15 percent of the grant plus 15percent of program income, as defined in § 570.500(a). Forentitlement grants under subpart D of this part, compliance is based on limitingthe amount of CDBG funds obligated for public service activities in each programyear to an amount no greater than 15 percent of the entitlement grant made forthat program year plus 15 percent of the program income received during thegrantee's immediately preceding program year.
(2) A recipient which obligated more CDBG funds for public services than 15percent of its grant funded from Federal fiscal year 1982 or 1983 appropriations(excluding program income and any assistance received under Public Law98-8), may obligate more CDBG funds than allowable under paragraph (e)(1)of this section, so long as the total amount obligated in any program year doesnot exceed:
(i) For an entitlement grantee, 15% of the program income it received duringthe preceding program year; plus
(ii) A portion of the grant received for the program year which is thehighest of the following amounts:
(A) The amount determined by applying the percentage of the grant itobligated for public services in the 1982 program year against the grant for itscurrent program year;
(B) The amount determined by applying the percentage of the grant itobligated for public services in the 1983 program year against the grant for itscurrent program year;
(C) The amount of funds it obligated for public services in the 1982 programyear; or,
(D) The amount of funds it obligated for public services in the 1983 programyear.
(f)
(i) The repairing of streets, sidewalks, parks, playgrounds, publicly ownedutilities, and public buildings; and
(ii) The execution of special garbage, trash, and debris removal, includingneighborhood cleanup campaigns, but not the regular curbside collection ofgarbage or trash in an area.
(2) In order to alleviate emergency conditions threatening the public healthand safety in areas where the chief executive officer of the recipientdetermines that such an emergency condition exists and requires immediateresolution, CDBG funds may be used for:
(i) The activities specified in paragraph (f)(1) of this section, except forthe repair of parks and playgrounds;
(ii) The clearance of streets, including snow removal and similar activities,and
(iii) The improvement of private properties.
(3) All activities authorized under paragraph (f)(2) of this section arelimited to the extent necessary to alleviate emergency conditions.
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)(1) The provision of assistance either through the recipient directly orthrough public and private organizations, agencies, and other subrecipients(including nonprofit and for-profit subrecipients) to facilitate economicdevelopment by:
(i) Providing credit, including, but not limited to, grants, loans, loanguarantees, and other forms of financial support, for the establishment,stabilization, and expansion of microenterprises;
(ii) Providing technical assistance, advice, and business support services toowners of microenterprises and persons developing microenterprises; and
(iii) Providing general support, including, but not limited to, peer supportprograms, counseling, child care, transportation, and other similar services, toowners of microenterprises and persons developing microenterprises.
(2) Services provided this paragraph (o) shall not be subject to therestrictions on public services contained in paragraph (e) of this section.
(3) For purposes of this paragraph (o), “persons developingmicroenterprises” means such persons who have expressed interest and whoare, or after an initial screening process are expected to be, actively workingtoward developing businesses, each of which is expected to be a microenterpriseat the time it is formed.
(4) Assistance under this paragraph (o) may also include training, technicalassistance, or other support services to increase the capacity of the recipientor subrecipient to carry out the activities under this paragraph (o).
(p)
(q)
(a)
(1) Privately owned buildings and improvements for residential purposes;improvements to a single-family residential property which is also used as aplace of business, which are required in order to operate the business, need notbe considered to be rehabilitation of a commercial or industrial building, ifthe improvements also provide general benefit to the residential occupants ofthe building;
(2) Low-income public housing and other publicly owned residential buildingsand improvements;
(3) Publicly or privately owned commercial or industrial buildings, exceptthat the rehabilitation of such buildings owned by a private for-profit businessis limited to improvement to the exterior of the building, abatement of asbestoshazards, lead-based paint hazard evaluation and reduction, and the correction ofcode violations;
(4) Nonprofit-owned nonresidential buildings and improvements not eligibleunder § 570.201(c); and
(5) Manufactured housing when such housing constitutes part of thecommunity's permanent housing stock.
(b)
(1) Assistance to private individuals and entities, including profit makingand nonprofit organizations, to acquire for the purpose of rehabilitation, andto rehabilitate properties, for use or resale for residential purposes;
(2) Labor, materials, and other costs of rehabilitation of properties,including repair directed toward an accumulation of deferred maintenance,replacement of principal fixtures and components of existing structures,installation of security devices, including smoke detectors and dead bolt locks,and renovation through alterations, additions to, or enhancement of existingstructures and improvements, abatement of asbestos hazards (and othercontaminants) in buildings and improvements that may be undertaken singly, or incombination;
(3) Loans for refinancing existing indebtedness secured by a property beingrehabilitated with CDBG funds if such financing is determined by the recipientto be necessary or appropriate to achieve the locality's community developmentobjectives;
(4) Improvements to increase the efficient use of energy in structuresthrough such means as installation of storm windows and doors, siding, wall andattic insulation, and conversion, modification, or replacement of heating andcooling equipment, including the use of solar energy equipment;
(5) Improvements to increase the efficient use of water through such means aswater savings faucets and shower heads and repair of water leaks;
(6) Connection of residential structures to water distribution lines or localsewer collection lines;
(7) For rehabilitation carried out with CDBG funds, costs of:
(i) Initial homeowner warranty premiums;
(ii) Hazard insurance premiums, except where assistance is provided in theform of a grant; and
(iii) Flood insurance premiums for properties covered by the Flood DisasterProtection Act of 1973, pursuant to § 570.605.
(8) Costs of acquiring tools to be lent to owners, tenants, and others whowill use such tools to carry out rehabilitation;
(9) Rehabilitation services, such as rehabilitation counseling, energyauditing, preparation of work specifications, loan processing, inspections, andother services related to assisting owners, tenants, contractors, and otherentities, participating or seeking to participate in rehabilitation activitiesauthorized under this section, under section 312 of the Housing Act of 1964, asamended, under section 810 of the Act, or under section 17 of the United StatesHousing Act of 1937;
(10) Assistance for the rehabilitation of housing under section 17 of theUnited States Housing Act of 1937; and
(11) Improvements designed to remove material and architectural barriers thatrestrict the mobility and accessibility of elderly or severely disabled personsto buildings and improvements eligible for assistance under paragraph (a) ofthis section.
(c)
(d)
(e)
(f)
A recipient may use CDBG funds for special economic development activities inaddition to other activities authorized in this subpart that may be carried outas part of an economic development project. Guidelines for selecting activitiesto assist under this paragraph are provided at § 570.209. Therecipient must ensure that the appropriate level of public benefit will bederived pursuant to those guidelines before obligating funds under thisauthority. Special activities authorized under this section do not includeassistance for the construction of new housing. Activities eligible under thissection may include costs associated with project-specific assessment orremediation of known or suspected environmental contamination. Special economicdevelopment activities include:
(a) The acquisition, construction, reconstruction, rehabilitation orinstallation of commercial or industrial buildings, structures, and other realproperty equipment and improvements, including railroad spurs or similarextensions. Such activities may be carried out by the recipient or public orprivate nonprofit subrecipients.
(b) The provision of assistance to a private for-profit business, including,but not limited to, grants, loans, loan guarantees, interest supplements,technical assistance, and other forms of support, for any activity where theassistance is appropriate to carry out an economic development project,excluding those described as ineligible in § 570.207(a). In selectingbusinesses to assist under this authority, the recipient shall minimize, to theextent practicable, displacement of existing businesses and jobs inneighborhoods.
(c) Economic development services in connection with activities eligibleunder this section, including, but not limited to, outreach efforts to marketavailable forms of assistance; screening of applicants; reviewing andunderwriting applications for assistance; preparation of all necessaryagreements; management of assisted activities; and the screening, referral, andplacement of applicants for employment opportunities generated by CDBG-eligibleeconomic development activities, including the costs of providing necessarytraining for persons filling those positions.
(a)
(1) Neighborhood revitalization project includes activities of sufficientsize and scope to have an impact on the decline of a geographic location withinthe jurisdiction of a unit of general local government (but not the entirejurisdiction) designated in comprehensive plans, ordinances, or other localdocuments as a neighborhood, village, or similar geographical designation; orthe entire jurisdiction of a unit of general local government which is under25,000 population;
(2) Community economic development project includes activities that increaseeconomic opportunity, principally for persons of low- and moderate-income, orthat stimulate or retain businesses or permanent jobs, including projects thatinclude one or more such activities that are clearly needed to address a lack ofaffordable housing accessible to existing or planned jobs and those activitiesspecified at 24 CFR 91.1(a)(1)(iii); activities under this paragraph may includecosts associated with project-specific assessment or remediation of known orsuspected environmental contamination;
(3) Energy conservation project includes activities that address energyconservation, principally for the benefit of the residents of the recipient'sjurisdiction; and
(4) To carry out a project means that the CBDO undertakes the fundedactivities directly or through contract with an entity other than the grantee,or through the provision of financial assistance for activities in which itretains a direct and controlling involvement and responsibilities.
(b)
(1) Carrying out an activity described as ineligible in§ 570.207(a);
(2) Carrying out public services that do not meet the requirements of§ 570.201(e), except that:
(i) Services carried out under this section that are specifically designed toincrease economic opportunities through job training and placement and otheremployment support services, including, but not limited to, peer supportprograms, counseling, child care, transportation, and other similar services;and
(ii) Services of any type carried out under this section pursuant to astrategy approved by HUD under the provisions of 24 CFR 91.215(e) shall not besubject to the limitations in § 570.201(e)(1) or (2), as applicable;
(3) Providing assistance to activities that would otherwise be eligible under§ 570.203 that do not meet the requirements of § 570.209;or
(4) Carrying out an activity that would otherwise be eligible under§ 570.205 or § 570.206, but that would result in therecipient's exceeding the spending limitation in § 570.200(g).
(c)
(i) Is an association or corporation organized under State or local law toengage in community development activities (which may include housing andeconomic development activities) primarily within an identified geographic areaof operation within the jurisdiction of the recipient, or in the case of anurban county, the jurisdiction of the county; and
(ii) Has as its primary purpose the improvement of the physical, economic orsocial environment of its geographic area of operation by addressing one or morecritical problems of the area, with particular attention to the needs of personsof low and moderate income; and
(iii) May be either non-profit or for-profit, provided any monetary profitsto its shareholders or members must be only incidental to its operations; and
(iv) Maintains at least 51 percent of its governing body's membership forlow- and moderate-income residents of its geographic area of operation, ownersor senior officers of private establishments and other institutions located inand serving its geographic area of operation, or representatives of low- andmoderate-income neighborhood organizations located in its geographic area ofoperation; and
(v) Is not an agency or instrumentality of the recipient and does not permitmore than one-third of the membership of its governing body to be appointed by,or to consist of, elected or other public officials or employees or officials ofan ineligible entity (even though such persons may be otherwise qualified underparagraph (c)(1)(iv) of this section); and
(vi) Except as otherwise authorized in paragraph (c)(1)(v) of this section,requires the members of its governing body to be nominated and approved by thegeneral membership of the organization, or by its permanent governing body; and
(vii) Is not subject to requirements under which its assets revert to therecipient upon dissolution; and
(viii) Is free to contract for goods and services from vendors of its ownchoosing.
(2) A CBDO that does not meet the criteria in paragraph (c)(1) of thissection may also qualify as an eligible entity under this section if it meetsone of the following requirements:
(i) Is an entity organized pursuant to section 301(d) of the Small BusinessInvestment Act of 1958 (15 U.S.C. 681(d)), including those which are profitmaking; or
(ii) Is an SBA approved Section 501 State Development Company or Section 502Local Development Company, or an SBA Certified Section 503 Company under theSmall Business Investment Act of 1958, as amended; or
(iii) Is a Community Housing Development Organization (CHDO) under 24 CFR92.2, designated as a CHDO by the HOME Investment Partnerships programparticipating jurisdiction, with a geographic area of operation of no more thanone neighborhood, and has received HOME funds under 24 CFR 92.300 or is expectedto receive HOME funds as described in and documented in accordance with 24 CFR92.300(e).
(3) A CBDO that does not qualify under paragraph (c)(1) or (2) of thissection may also be determined to qualify as an eligible entity under thissection if the recipient demonstrates to the
(a) Planning activities which consist of all costs of data gathering,studies, analysis, and preparation of plans and the identification of actionsthat will implement such plans, including, but not limited to:
(1) Comprehensive plans;
(2) Community development plans;
(3) Functional plans, in areas such as:
(i) Housing, including the development of a consolidated plan;
(ii) Land use and urban environmental design;
(iii) Economic development;
(iv) Open space and recreation;
(v) Energy use and conservation;
(vi) Floodplain and wetlands management in accordance with the requirementsof Executive Orders 11988 and 11990;
(vii) Transportation;
(viii) Utilities; and
(ix) Historic preservation.
(4) Other plans and studies such as:
(i) Small area and neighborhood plans;
(ii) Capital improvements programs;
(iii) Individual project plans (but excluding engineering and design costsrelated to a specific activity which are eligible as part of the cost of suchactivity under §§ 570.201-570.204);
(iv) The reasonable costs of general environmental, urban environmentaldesign and historic preservation studies; and general environmental assessment-and remediation-oriented planning related to properties with known or suspectedenvironmental contamination. However, costs necessary to comply with 24 CFR part58, including project specific environmental assessments and clearances foractivities eligible for assistance under this part, are eligible as part of thecost of such activities under §§ 570.201-570.204. Costsfor such specific assessments and clearances may also be incurred under thisparagraph but would then be considered planning costs for the purposes of§ 570.200(g);
(v) Strategies and action programs to implement plans, including thedevelopment of codes, ordinances and regulations;
(vi) Support of clearinghouse functions, such as those specified in ExecutiveOrder 12372; and
(vii) Analysis of impediments to fair housing choice.
(viii) Developing an inventory of properties with known or suspectedenvironmental contamination.
(6) Policy—planning—management—capacity building activitieswhich will enable the recipient to:
(1) Determine its needs;
(2) Set long-term goals and short-term objectives, including those related tourban environmental design;
(3) Devise programs and activities to meet these goals and objectives;
(4) Evaluate the progress of such programs and activities in accomplishingthese goals and objectives; and
(5) Carry out management, coordination and monitoring of activities necessaryfor effective planning implementation, but excluding the costs necessary toimplement such plans.
Payment of reasonable administrative costs and carrying charges related tothe planning and execution of community development activities assisted in wholeor in part with funds provided under this part and, where applicable, housingactivities (described in paragraph (g) of this section) covered in therecipient's housing assistance plan. This does not include staff and overheadcosts directly related to carrying out activities eligible under§ 570.201 through § 570.204, since those costs areeligible as part of such activities.
(a)
(1) Salaries, wages, and related costs of the recipient's staff, the staff oflocal public agencies, or other staff engaged in program administration. Incharging costs to this category the recipient may either include the entiresalary, wages, and related costs allocable to the program of each person whose
(i) Providing local officials and citizens with information about theprogram;
(ii) Preparing program budgets and schedules, and amendments thereto;
(iii) Developing systems for assuring compliance with program requirements;
(iv) Developing interagency agreements and agreements with subrecipients andcontractors to carry out program activities;
(v) Monitoring program activities for progress and compliance with programrequirements;
(vi) Preparing reports and other documents related to the program forsubmission to HUD;
(vii) Coordinating the resolution of audit and monitoring findings;
(viii) Evaluating program results against stated objectives; and
(ix) Managing or supervising persons whose primary responsibilities withregard to the program include such assignments as those described in paragraph(a)(1)(i) through (viii) of this section.
(2) Travel costs incurred for official business in carrying out the program;
(3) Administrative services performed under third party contracts oragreements, including such services as general legal services, accountingservices, and audit services; and
(4) Other costs for goods and services required for administration of theprogram, including such goods and services as rental or purchase of equipment,insurance, utilities, office supplies, and rental and maintenance (but notpurchase) of office space.
(b)
(c)
(d) [Reserved]
(e)
(f)
(g)
(1) The cost of conducting preliminary surveys and analysis of market needs;
(2) Site and utility plans, narrative descriptions of the proposedconstruction, preliminary cost estimates, urban design documentation, and“sketch drawings,” but excluding architectural, engineering, andother details ordinarily required for construction purposes, such as structural,electrical, plumbing, and mechanical details;
(3) Reasonable costs associated with development of applications for mortgageand insured loan commitments, including commitment fees, and of applications andproposals under the Section 8 Housing Assistance Payments Program pursuant to 24CFR parts 880-883;
(4) Fees associated with processing of applications for mortgage or insuredloan commitments under programs including those administered by HUD, FarmersHome Administration (FmHA), Federal National Mortgage Association (FNMA), andthe Government National Mortgage Association (GNMA);
(5) The cost of issuance and administration of mortgage revenue bonds used tofinance the acquisition, rehabilitation or construction of housing, butexcluding costs associated with the payment or guarantee of the principal orinterest on such bonds; and
(6) Special outreach activities which result in greater landlordparticipation in Section 8 Housing Assistance Payments Program-Existing Housingor similar programs for low and moderate income persons.
(h)
(i) Whether or not such activities are otherwise assisted by funds providedunder this part, reasonable costs equivalent to those described in paragraphs(a), (b), (e), and (f) of this section for overall program management of:
(1) A Federally designated Empowerment Zone or Enterprise Community; and
(2) The HOME program under title II of the Cranston-Gonzalez NationalAffordable Housing Act (42 U.S.C. 12701 note).
The general rule is that any activity that is not authorized under theprovisions of §§ 570.201-570.206 is ineligible to beassisted with CDBG funds. This section identifies specific activities that areineligible and provides guidance in determining the eligibility of otheractivities frequently associated with housing and community development.
(a) The following activities may not be assisted with CDBG funds:
(1)
(2)
(3)
(b) The following activities may not be assisted with CDBG funds unlessauthorized under provisions of § 570.203 or as otherwise specificallynoted herein or when carried out by an entity under the provisions of§ 570.204.
(1)
(i)
(ii)
(iii)
(2)
(i) Maintenance and repair of publicly owned streets, parks, playgrounds,water and sewer facilities, neighborhood facilities, senior centers, centers forpersons with a disabilities, parking and other public facilities andimprovements. Examples of maintenance and repair activities for which CDBG fundsmay not be used include the filling of pot holes in streets, repairing of cracksin sidewalks, the mowing of recreational areas, and the replacement of expendedstreet light bulbs; and
(ii) Payment of salaries for staff, utility costs and similar expensesnecessary for the operation of public works and facilities.
(3)
(i) As provided under the last resort housing provisions set forth in 24 CFRpart 42;
(ii) As authorized under § 570.201(m) or (n);
(iii) When carried out by an entity pursuant to § 570.204(a);
(4)
The following criteria shall be used to determine whether a CDBG-assistedactivity complies with one or more of the national objectives as required under§ 570.200(a)(2):
(a)
(1)
(ii) For metropolitan cities and urban counties, an activity that wouldotherwise qualify under § 570.208(a)(1)(i) except that the areaserved contains less than 51 percent low and moderate income residents will alsobe considered to meet the objective of benefiting low and moderate incomepersons where the proportion of low and moderate income persons in the area iswithin the highest quartile of all areas in the recipient's jurisdiction interms of the degree of concentration of such persons. In applying thisexception, HUD will determine the lowest proportion a recipient may use toqualify an area for this purpose as follows:
(A) All census block groups in the recipient's jurisdiction shall be rankordered from the block group of highest proportion of low and moderate incomepersons to the block group with the lowest. For urban counties, the rankordering shall cover the entire area constituting the urban county and shall notbe done separately for each participating unit of general local government.
(B) In any case where the total number of a recipient's block groups does notdivide evenly by four, the block group which would be fractionally dividedbetween the highest and second quartiles shall be considered to be part of thehighest quartile.
(C) The proportion of low and moderate income persons in the last censusblock group in the highest quartile shall be identified. Any service arealocated within the recipient's jurisdiction and having a proportion of low andmoderate income persons at or above this level shall be considered to be withinthe highest quartile.
(D) If block group data are not available for the entire jurisdiction, otherdata acceptable to the Secretary may be used in the above calculations.
(iii) An activity to develop, establish, and operate for up to two yearsafter the establishment of, a uniform emergency telephone number system servingan area having less than the percentage of low- and moderate-income residentsrequired under paragraph (a)(1)(i) of this section or (as applicable) paragraph(a)(1)(ii) of this section, provided the recipient obtains prior HUD approval.To obtain such approval, the recipient must:
(A) Demonstrate that the system will contribute significantly to the safetyof the residents of the area. The request for approval must include a list ofthe emergency services that will participate in the emergency telephone numbersystem;
(B) Submit information that serves as a basis for HUD to determine whether atleast 51 percent of the use of the system will be by low- and moderate-incomepersons. As available, the recipient must provide information that identifiesthe total number of calls actually received over the preceding 12-month periodfor each of the emergency services to be covered by the emergency telephonenumber system and relates those calls to the geographic segment (expressed asnearly as possible in terms of census tracts, block numbering areas, blockgroups, or combinations thereof that are contained within the segment) of theservice area from which the calls were generated. In analyzing this data to meetthe requirements of this section, HUD will assume that the distribution ofincome among the callers generally reflects the income characteristics of thegeneral population residing in the same geographic area where the callersreside. If HUD can conclude that the users have primarily consisted of low- andmoderate-income persons, no further submission is needed by the recipient. If arecipient plans to make other submissions for this purpose, it may request thatHUD review its planned methodology before expending the effort to acquire theinformation it expects to use to make its case;
(C) Demonstrate that other Federal funds received by the recipient areinsufficient or unavailable for a uniform emergency telephone number system. Forthis purpose, the recipient must submit a statement explaining whether the lackof funds is due to the insufficiency of the amount of the available funds,restrictions on the use of such funds, or the prior commitment of funds by therecipient for other purposes; and
(D) Demonstrate that the percentage of the total costs of the system paid forby CDBG funds does not exceed the percentage of low- and moderate-income personsin the service area of the system. For this purpose, the recipient must includea description of the boundaries of the service area of the emergency telephonenumber system, the census divisions that fall within the boundaries of theservice area (census tracts or block numbering areas), the total number ofpersons and the total number of low- and moderate-income persons within eachcensus division, the percentage of low- and moderate-income persons within theservice area, and the total cost of the system.
(iv) An activity for which the assistance to a public improvement thatprovides benefits to all the residents of an area is limited to paying specialassessments (as defined in § 570.200(c)) levied against residentialproperties owned and occupied by persons of low and moderate income.
(v) For purposes of determining qualification under this criterion,activities of the same type that serve different areas will be consideredseparately on the basis of their individual service area.
(vi) In determining whether there is a sufficiently large percentage of low-and moderate-income persons residing in the area served by an activity toqualify under paragraph (a)(1) (i), (ii), or (vii) of this section, the mostrecently available decennial census information must be used to the fullestextent feasible, together with the section 8 income limits that would haveapplied at the time the income information was collected by the Census Bureau.Recipients that believe that the census data does not reflect current relativeincome levels in an area, or where census boundaries do not coincidesufficiently well with the service area of an activity, may conduct (or haveconducted) a current survey of the residents of the area to determine thepercent of such persons that are low and moderate income. HUD will acceptinformation obtained through such surveys, to be used in lieu of the decennialcensus data, where it determines that the survey was conducted in such a mannerthat the results meet standards of statistical reliability that are comparableto that of the decennial census data for areas of similar size. Where there issubstantial evidence that provides a clear basis to believe that the use of thedecennial census data would substantially overstate the proportion of personsresiding there that are low and moderate income, HUD may require that therecipient
(vii) Activities meeting the requirements of paragraph (d)(5)(i) of thissection may be considered to qualify under this paragraph, provided that thearea covered by the strategy is either a Federally-designated Empowerment Zoneor Enterprise Community or primarily residential and contains a percentage oflow- and moderate-income residents that is no less than the percentage computedby HUD pursuant to paragraph (a)(1)(ii) of this section or 70 percent, whicheveris less, but in no event less than 51 percent. Activities meeting therequirements of paragraph (d)(6)(i) of this section may also be considered toqualify under paragraph (a)(1) of this section.
(2)
(A) Benefit a clientele who are generally presumed to be principally low andmoderate income persons. Activities that exclusively serve a group of persons inany one or a combination of the following categories may be presumed to benefitpersons, 51 percent of whom are low- and moderate-income: abused children,battered spouses, elderly persons, adults meeting the Bureau of the Census'Current Population Reports definition of “severely disabled,”homeless persons, illiterate adults, persons living with AIDS, and migrant farmworkers; or
(B) Require information on family size and income so that it is evident thatat least 51 percent of the clientele are persons whose family income does notexceed the low and moderate income limit; or
(C) Have income eligibility requirements which limit the activity exclusivelyto low and moderate income persons; or
(D) Be of such nature and be in such location that it may be concluded thatthe activity's clientele will primarily be low and moderate income persons.
(ii) An activity that serves to remove material or architectural barriers tothe mobility or accessibility of elderly persons or of adults meeting the Bureauof the Census' Current Population Reports definition of “severelydisabled” will be presumed to qualify under this criterion if it isrestricted, to the extent practicable, to the removal of such barriers byassisting:
(A) The reconstruction of a public facility or improvement, or portionthereof, that does not qualify under paragraph (a)(1) of this section;
(B) The rehabilitation of a privately owned nonresidential building orimprovement that does not qualify under paragraph (a)(1) or (4) of this section;or
(C) The rehabilitation of the common areas of a residential structure thatcontains more than one dwelling unit and that does not qualify under paragraph(a)(3) of this section.
(iii) A microenterprise assistance activity carried out in accordance withthe provisions of § 570.201(o) with respect to those owners ofmicroenterprises and persons developing microenterprises assisted under theactivity during each program year who are low- and moderate-income persons. Forpurposes of this paragraph, persons determined to be low and moderate income maybe presumed to continue to qualify as such for up to a three-year period.
(iv) An activity designed to provide job training and placement and/or otheremployment support services, including, but not limited to, peer supportprograms, counseling, child care, transportation, and other similar services, inwhich the percentage of low- and moderate-income persons assisted is less than51 percent may qualify under this paragraph in the following limitedcircumstance:
(A) In such cases where such training or provision of supportive servicesassists business(es), the only use of CDBG assistance for the project is toprovide the job training and/or supportive services; and
(B) The proportion of the total cost of the project borne by CDBG funds is nogreater than the proportion of the total number of persons assisted who are lowor moderate income.
(3)
(i) When less than 51 percent of the units in a structure will be occupied bylow and moderate income households, CDBG assistance may be provided in thefollowing limited circumstances:
(A) The assistance is for an eligible activity to reduce the development costof the new construction of a multifamily, non-elderly rental housing project;
(B) Not less than 20 percent of the units will be occupied by low andmoderate income households at affordable rents; and
(C) The proportion of the total cost of developing the project to be borne byCDBG funds is no greater than the proportion of units in the project that willbe occupied by low and moderate income households.
(ii) When CDBG funds are used to assist rehabilitation eligible under§ 570.202(b)(9) or (10) in direct support of the recipient's RentalRehabilitation program authorized under 24 CFR part 511, such funds shall beconsidered to benefit low and moderate income persons where not less than 51percent of the units assisted, or to be assisted, by the recipient's RentalRehabilitation program overall are for low and moderate income persons.
(iii) When CDBG funds are used for housing services eligible under§ 570.201(k), such funds shall be considered to benefit low- andmoderate-income persons if the housing units for which the services are providedare HOME-assisted and the requirements at 24 CFR 92.252 or 92.254 are met.
(4)
(i) For an activity that creates jobs, the recipient must document that atleast 51 percent of the jobs will be held by, or will be available to, low- andmoderate-income persons.
(ii) For an activity that retains jobs, the recipient must document that thejobs would actually be lost without the CDBG assistance and that either or bothof the following conditions apply with respect to at least 51 percent of thejobs at the time the CDBG assistance is provided:
(A) The job is known to be held by a low- or moderate-income person; or
(B) The job can reasonably be expected to turn over within the following twoyears and that steps will be taken to ensure that it will be filled by, or madeavailable to, a low- or
(iii) Jobs that are not held or filled by a low- or moderate-income personmay be considered to be available to low- and moderate-income persons for thesepurposes only if:
(A) Special skills that can only be acquired with substantial training orwork experience or education beyond high school are not a prerequisite to fillsuch jobs, or the business agrees to hire unqualified persons and providetraining; and
(B) The recipient and the assisted business take actions to ensure that low-and moderate-income persons receive first consideration for filling such jobs.
(iv) For purposes of determining whether a job is held by or made availableto a low- or moderate-income person, the person may be presumed to be a low- ormoderate-income person if:
(A) He/she resides within a census tract (or block numbering area) thateither:
(
(
(B) The assisted business is located within a census tract (or blocknumbering area) that meets the requirements of paragraph (a)(4)(v) of thissection and the job under consideration is to be located within that censustract.
(v) A census tract (or block numbering area) qualifies for the presumptionspermitted under paragraphs (a)(4)(iv)(A)(
(A) It has a poverty rate of at least 20 percent as determined by the mostrecently available decennial census information;
(B) It does not include any portion of a central business district, as thisterm is used in the most recent Census of Retail Trade, unless the tract has apoverty rate of at least 30 percent as determined by the most recently availabledecennial census information; and
(C) It evidences pervasive poverty and general distress by meeting at leastone of the following standards:
(
(
(
(vi) As a general rule, each assisted business shall be considered to be aseparate activity for purposes of determining whether the activity qualifiesunder this paragraph, except:
(A) In certain cases such as where CDBG funds are used to acquire, develop orimprove a real property (e.g., a business incubator or an industrial park) therequirement may be met by measuring jobs in the aggregate for all the businesseswhich locate on the property, provided such businesses are not otherwiseassisted by CDBG funds.
(B) Where CDBG funds are used to pay for the staff and overhead costs of anentity making loans to businesses exclusively from non-CDBG funds, thisrequirement may be met by aggregating the jobs created by all of the businessesreceiving loans during each program year.
(C) Where CDBG funds are used by a recipient or subrecipient to providetechnical assistance to businesses, this requirement may be met by aggregatingthe jobs created or retained by all of the businesses receiving technicalassistance during each program year.
(D) Where CDBG funds are used for activities meeting the criteria listed at§ 570.209(b)(2)(v), this requirement may be met by aggregating thejobs created or retained by all businesses for which CDBG assistance isobligated for such activities during the program year, except as provided atparagraph (d)(7) of this section.
(E) Where CDBG funds are used by a Community Development FinancialInstitution to carry out activities for the purpose of creating or retainingjobs, this requirement may be met by aggregating the jobs created or retained byall businesses for which CDBG assistance is obligated for such activities duringthe program year, except as provided at paragraph (d)(7) of this section.
(F) Where CDBG funds are used for public facilities or improvements whichwill result in the creation or retention of jobs by more than one business, thisrequirement may be met by aggregating the jobs created or retained by all suchbusinesses as a result of the public facility or improvement.
(
(
(b)
(1)
(i) The area, delineated by the recipient, meets a definition of a slum,blighted, deteriorated or deteriorating area under State or local law;
(ii) The area also meets the conditions in either paragraph (A) or (B):
(A) At least 25 percent of properties throughout the area experience one ormore of the following conditions:
(
(
(
(
(
(B) The public improvements throughout the area are in a general state ofdeterioration.
(iii) Documentation is to be maintained by the recipient on the boundaries ofthe area and the conditions and standards used that qualified the area at thetime of its designation. The recipient shall establish definitions of theconditions listed at § 570.208(b)(1)(ii)(A), and maintain records tosubstantiate how the area met the slums or blighted criteria. The designation ofan area as slum or blighted under this section is required to be redeterminedevery 10 years for continued qualification. Documentation must be retainedpursuant to the recordkeeping requirements contained at § 570.506(b)(8)(ii).
(iv) The assisted activity addresses one or more of the conditions whichcontributed to the deterioration of the area. Rehabilitation of residentialbuildings carried out in an area meeting the above requirements will beconsidered to address the area's deterioration only where each such buildingrehabilitated is considered substandard
(2)
(3)
(i) Located within an urban renewal project area or Neighborhood DevelopmentProgram (NDP) action area; i.e., an area in which funded activities wereauthorized under an urban renewal Loan and Grant Agreement or an annual NDPFunding Agreement, pursuant to title I of the Housing Act of 1949; and
(ii) Necessary to complete the urban renewal plan, as then in effect,including
Despite the restrictions in (b) (1) and (2) of this section,any rehabilitation activity which benefits low and moderate income personspursuant to paragraph (a)(3) of this section can be undertaken without regard tothe area in which it is located or the extent or nature of rehabilitationassisted.
(c)
(d)
(2) Where the assisted activity is relocation assistance that the recipientis required to provide, such relocation assistance shall be considered toaddress the same national objective as is addressed by the displacing activity.Where the relocation assistance is voluntary on the part of the grantee therecipient may qualify the assistance either on the basis of the nationalobjective addressed by the displacing activity or on the basis that therecipients of the relocation assistance are low and moderate income persons.
(3) In any case where the activity undertaken for the purpose of creating orretaining jobs is a public improvement and the area served is primarilyresidential, the activity must meet the requirements of paragraph (a)(1) of thissection as well as those of paragraph (a)(4) of this section in order to qualify
(4) CDBG funds expended for planning and administrative costs under§ 570.205 and § 570.206 will be considered to address thenational objectives.
(5) Where the grantee has elected to prepare an area revitalization strategypursuant to the authority of § 91.215(e) of this title and HUD hasapproved the strategy, the grantee may also elect the following options:
(i) Activities undertaken pursuant to the strategy for the purpose ofcreating or retaining jobs may, at the option of the grantee, be considered tomeet the requirements of this paragraph under the criteria at paragraph(a)(1)(vii) of this section in lieu of the criteria at paragraph (a)(4) of thissection; and
(ii) All housing activities in the area for which, pursuant to the strategy,CDBG assistance is obligated during the program year may be considered to be asingle structure for purposes of applying the criteria at paragraph (a)(3) ofthis section.
(6) Where CDBG-assisted activities are carried out by a Community DevelopmentFinancial Institution whose charter limits its investment area to a primarilyresidential area consisting of at least 51 percent low- and moderate-incomepersons, the grantee may also elect the following options:
(i) Activities carried out by the Community Development Financial Institutionfor the purpose of creating or retaining jobs may, at the option of the grantee,be considered to meet the requirements of this paragraph under the criteria atparagraph (a)(1)(vii) of this section in lieu of the criteria at paragraph(a)(4) of this section; and
(ii) All housing activities for which the Community Development FinancialInstitution obligates CDBG assistance during the program year may be consideredto be a single structure for purposes of applying the criteria at paragraph(a)(3) of this section.
(7) Where an activity meeting the criteria at § 570.209(b)(2)(v)may also meet the requirements of either paragraph (d)(5)(i) or (d)(6)(i) ofthis section, the grantee may elect to qualify the activity under either thearea benefit criteria at paragraph (a)(1)(vii) of this section or the jobaggregation criteria at paragraph (a)(4)(vi)(D) of this section, but not both.Where an activity may meet the job aggregation criteria at both paragraphs(a)(4)(vi)(D) and (E) of this section, the grantee may elect to qualify theactivity under either criterion, but not both.
The following guidelines are provided to assist the recipient to evaluate andselect activities to be carried out for economic development purposes.Specifically, these guidelines are applicable to activities that are eligiblefor CDBG assistance under § 570.203. These guidelines also apply toactivities carried out under the authority of § 570.204 that wouldotherwise be eligible under § 570.203, were it not for theinvolvement of a Community-Based Development Organization (CBDO). (This wouldinclude activities where a CBDO makes loans to for-profit businesses.) Theseguidelines are composed of two components: guidelines for evaluating projectcosts and financial requirements; and standards for evaluating public benefit.The standards for evaluating public benefit are
(a)
(1) That project costs are reasonable;
(2) That all sources of project financing are committed;
(3) That to the extent practicable, CDBG funds are not substituted for non-Federal financial support;
(4) That the project is financially feasible;
(5) That to the extent practicable, the return on the owner's equityinvestment will not be unreasonably high; and
(6) That to the extent practicable, CDBG funds are disbursed on a pro ratabasis with other finances provided to the project.
(b)
(1)
(i) Create or retain at least one full-time equivalent, permanent job per$35,000 of CDBG funds used; or
(ii) Provide goods or services to residents of an area, such that the numberof low- and moderate-income persons residing in the areas served by the assistedbusinesses amounts to at least one low- and moderate-income person per $350 ofCDBG funds used.
(2)
(ii) The grantee shall apply the aggregate standards to the number of jobs tobe created/retained, or to the number of persons residing in the area served (asapplicable), as determined at the time funds are obligated to activities.
(iii) Where an activity is expected both to create or retain jobs and toprovide goods or services to residents of an area, the grantee may elect tocount the activity under either the jobs standard or the area residentsstandard, but not both.
(iv) Where CDBG assistance for an activity is limited to job training andplacement and/or other employment support services, the jobs assisted with CDBGfunds shall be considered to be created or retained jobs for the purposes ofapplying the aggregate standards.
(v) Any activity subject to these guidelines which meets one or more of
(A) Provides jobs exclusively for unemployed persons or participants in oneor more of the following programs:
(
(
(
(B) Provides jobs predominantly for residents of Public and Indian Housingunits;
(C) Provides jobs predominantly for homeless persons;
(D) Provides jobs predominantly for low-skilled, low- and moderate-incomepersons, where the business agrees to provide clear opportunities for promotionand economic advancement, such as through the provision of training;
(E) Provides jobs predominantly for persons residing within a census tract(or block numbering area) that has at least 20 percent of its residents who arein poverty;
(F) Provides assistance to business(es) that operate(s) within a census tract(or block numbering area) that has at least 20 percent of its residents who arein poverty;
(G) Stabilizes or revitalizes a neighborhood that has at least 70 percent ofits residents who are low- and moderate-income;
(H) Provides assistance to a Community Development Financial Institution thatserve an area that is predominantly low- and moderate-income persons;
(I) Provides assistance to a Community-Based Development Organization servinga neighborhood that has at least 70 percent of its residents who are low- andmoderate-income;
(J) Provides employment opportunities that are an integral component of aproject designed to promote spatial deconcentration of low- and moderate-incomeand minority persons;
(K) With prior HUD approval, provides substantial benefit to low-incomepersons through other innovative approaches;
(L) Provides services to the residents of an area pursuant to a strategyapproved by HUD under the provisions of § 91.215(e) of this title;
(M) Creates or retains jobs through businesses assisted in an area pursuantto a strategy approved by HUD under the provisions of § 91.215(e) ofthis title.
(N) Directly involves the economic development or redevelopment ofenvironmentally contaminated properties.
(3)
(i) The amount of CDBG assistance exceeds either of the following, asapplicable:
(A) $50,000 per full-time equivalent, permanent job created or retained; or
(B) $1,000 per low- and moderate-income person to which goods or services areprovided by the activity.
(ii) The activity consists of or includes any of the following:
(A) General promotion of the community as a whole (as opposed to thepromotion of specific areas and programs);
(B) Assistance to professional sports teams;
(C) Assistance to privately-owned recreational facilities that serve apredominantly higher-income clientele, where the recreational benefit to usersor members clearly outweighs employment or other benefits to low- and moderate-income persons;
(D) Acquisition of land for which the specific proposed use has not yet beenidentified; and
(E) Assistance to a for-profit business while that business or any otherbusiness owned by the same person(s) or entity(ies) is the subject of unresolvedfindings of noncompliance relating to previous CDBG assistance provided by therecipient.
(4)
(ii) The individual activity standards in paragraph (b)(3)(i) of this sectionshall be applied to the number of jobs to be created or retained, or to thenumber of persons residing in the area served (as applicable), as determined atthe time funds are obligated to activities.
(iii) Where CDBG assistance for an activity is limited to job training andplacement and/or other employment support services, the jobs assisted with CDBGfunds shall be considered to be created or retained jobs for the purposes ofapplying the individual activity standards in paragraph (b)(3)(i) of thissection.
(c)
(d)
At 72 FR 12535, Mar. 15, 2007,§ 570.209 was amended by revising paragraph (b)(2)(i), effectiveApril 16, 2007. For the convenience of the user, the revised text is set forthas follows:
(b) * * *
(2)
(a)
(b)
(1)
(i) § 570.203(b); or
(ii) §§ 570.201(a)—(d), 570.201(l), 570.203(a), or§ 570.204 when the grantee, subrecipient, or, in the case of anactivity carried out pursuant to § 570.204, a Community BasedDevelopment Organization (CDBO) enters into an agreement with a business toundertake one or more of these activities as a condition of the businessrelocating a facility, plant, or operation to the grantee's LMA. Provision ofpublic facilities and indirect assistance that will provide benefit to multiplebusinesses does not fall under the definition of “directly assist,”unless it includes the provision of infrastructure to aid a specific businessthat is the subject of an agreement with the specific assisted business.
(2)
(3)
(4)
(ii) A job is considered to be lost due to the provision of CDBG assistanceif the job is relocated within three years of the provision of assistance to thebusiness; or the time period within which jobs are to be created as specified bythe agreement between the business and the recipient if it is longer than threeyears.
(c)
(1)
(2)
(3)
(d)
(1)
(2)
(3)
This subpart describes the policies and procedures governing the making ofcommunity development block grants to entitlement communities. The policies andprocedures set forth in subparts A, C, J, K, and O of this part also apply toentitlement grantees.
The consolidated plan, action plan, and amendment submission requirementsreferred to in this section are those in 24 CFR part 91.
(a) For activities for which the grantee has not yet decided on a specificlocation, such as when the grantee is allocating an amount of funds to be usedfor making loans or grants to businesses or for residential rehabilitation, thedescription in the action plan or any amendment shall identify who may apply forthe assistance, the process by which the grantee expects to select who willreceive the assistance (including selection criteria), and how much and underwhat terms the assistance will be provided, or in the case of a planned publicfacility or improvement, how it expects to determine its location.
(b)
(1) Each float-funded activity must be individually listed and described assuch in the action plan.
(2)(i) The expected time period between obligation of assistance for a float-funded activity and receipt of program income in an amount at least equal to thefull amount drawn from the float to fund the activity may not exceed 2.5 years.An activity from which program income sufficient to recover the full amount ofthe float assistance is expected to be generated more than 2.5 years afterobligation may not be funded from the float, but may be included in an actionplan if it is funded from CDBG funds other than the float (e.g., grant funds orproceeds from an approved Section 108 loan guarantee).
(ii) Any extension of the repayment period for a float-funded activity shallbe considered to be a new float-funded activity for these purposes and may beimplemented by the grantee only if the extension is made subject to the same
(3) Unlike other projected program income, the full amount of income expectedto be generated by a float-funded activity must be shown as a source of programincome in the action plan containing the activity, whether or not some or all ofthe income is expected to be received in a future program year (in accordancewith 24 CFR 91.220(g)(1)(ii)(D)).
(4) The recipient must also clearly declare in the action plan thatidentifies the float-funded activity the recipient's commitment to undertake oneof the following options:
(i) Amend or delete activities in an amount equal to any default or failureto produce sufficient income in a timely manner. If the recipient makes thischoice, it must include a description of the process it will use to select theactivities to be amended or deleted and how it will involve citizens in thatprocess; and it must amend the applicable statement(s) or action plan(s) showingthose amendments or deletions promptly upon determining that the float-fundedactivity will not generate sufficient or timely program income;
(ii) Obtain an irrevocable line of credit from a commercial lender for thefull amount of the float-funded activity and describe the lender and terms ofsuch line of credit in the action plan that identifies the float-fundedactivity. To qualify for this purpose, such line of credit must beunconditionally available to the recipient in the amount of any shortfall within30 days of the date that the float-funded activity fails to generate theprojected amount of program income on schedule;
(iii) Transfer general local government funds in the full amount of anydefault or shortfall to the CDBG line of credit within 30 days of the float-funded activity's failure to generate the projected amount of the program incomeon schedule; or
(iv) A method approved in writing by HUD for securing timely return of theamount of the float funding. Such method must ensure that funds are available tomeet any default or shortfall within 30 days of the float-funded activity'sfailure to generate the projected amount of the program income on schedule.
(5) When preparing an action plan for a year in which program income isexpected to be received from a float-funded activity, and such program incomehas been shown in a prior statement or action plan, the current action planshall identify the expected income and explain that the planned use of theincome has already been described in prior statements or action plans, and shallidentify the statements or action plans in which such descriptions may be found.
In order to receive its annual CDBG entitlement grant, a grantee must submita consolidated plan in accordance with 24 CFR part 91. That part includesrequirements for the content of the consolidated plan, for the process ofdeveloping the consolidated plan, including citizen participation provisions,for the submission date, for HUD approval, and for the amendment process.
The jurisdiction must make the certifications that are set forth in 24 CFRpart 91 as part of the consolidated plan.
(a)
(b)
(c)
(1) Either the consolidated plan is not received by August 16 of the federalfiscal year for which funds are appropriated or the consolidated plan is notapproved under 24 CFR part 91, subpart F—in which case, the grantee willforfeit the entire entitlement amount; or
(2) The grantee's performance does not meet the performance requirements orcriteria prescribed in subpart O and the grant amount is reduced.
(a)
(b)
(2) At the time of urban county qualification, HUD may refuse to recognizethe cooperation agreement of a unit of general local government in an urbancounty where, based on past performance and other available information, thereis substantial evidence that such unit does not cooperate in the implementationof the essential community development or housing assistance activities or wherelegal impediments to such implementation exist, or where participation by a unitof general local government in noncompliance with the applicable law in subpartK would constitute noncompliance by the urban county. In such a case, the unitof general local government will not be permitted to participate in the urbancounty, and its population or other needs characteristics will not be consideredin the determination of whether the county qualifies as an urban county or indetermining the amount of funds to which the urban county may be entitled. HUDwill not take this action unless the unit of general local government and thecounty have been given an opportunity to challenge HUD's determination and toinformally consult with HUD concerning the proposed action.
(c)
(d)
(2) During the period of qualification, no included unit of general localgovernment may withdraw from nor be removed from the urban county for HUD'sgrant computation purposes.
(3) If some portion of an urban county's unincorporated area becomesincorporated during the urban county qualification period, the newlyincorporated unit of general local government shall not be excluded from theurban county nor shall it be eligible for a separate grant under subpart D, F,or I until the end of the urban county's current qualification period, unlessthe urban county fails to receive a grant for any year during that qualificationperiod.
(e)
(2) An included unit of general local government which is part of an urbancounty shall be ineligible to apply for grants under subpart F, or to be arecipient of assistance under subpart I, during the entire period of urbancounty qualification.
(f)
(g)
(a)
(2) Each metropolitan city and urban county submitting a joint request shallsubmit an executed cooperation agreement to undertake or to assist in theundertaking of essential community development and housing assistanceactivities, as defined in § 570.307(c).
(b)
(c)
(d)
CDBG funds may assist an activity outside the jurisdiction of the granteeonly if the grantee determines that such an activity is necessary to further thepurposes of the Act and the recipient's community development objectives, andthat reasonable benefits from the activity will accrue to residents within thejurisdiction of the grantee. The grantee shall document the basis for suchdetermination prior to providing CDBG funds for the activity.
(a)
(b)
(c)
(i) The application is postmarked or received on or before any final dateestablished by HUD;
(ii) The application is complete;
(iii) Required certifications have been included in the application; and
(iv) The application meets the specific program requirements listed in the
(2)
(3)
(d)
(2) Any program amendments, whether or not they require HUD approval, must befully documented in the recipient's records.
(e)
(f)
(g)
(h)
(a)
(2)
(i) The proposed or actual establishment, realignment, or closure of amilitary installation;
(ii) The cancellation or termination of a DoD contract or the failure toproceed with an approved major weapon system program;
(iii) A publicly announced planned major reduction in DoD spending that woulddirectly and adversely affect a unit of general local government and result inthe loss of 1,000 or more full-time DoD and contractor employee positions over afive-year period in the unit of general local government and the surroundingarea; or
(iv) The Secretary of HUD (in consultation with the Secretary of DoD)determines that an action described in paragraphs (a)(2)(i)-(iii) of thissection is likely to have a direct and significant adverse consequence on theunit of general local government.
(3)
(4)
(b)
(1)
(2)
(3)
(ii) Any subcontract that is entered into in connection with a contract(without regard to the effective date of the subcontract) and involves not lessthan $500,000.
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(i) Includes all or part of the applicant's jurisdictions; and
(ii) Includes additional areas outside the jurisdiction.
(c)
(d)
(1) Initial assessments and quick studies of physical, social, economic, andfiscal impacts on the community;
(2) Preliminary identification of potential public and private sector actionsneeded for the community to initiate its response;
(3) If timely, modification of the applicant's current comprehensive plan orany functional plan, such as for housing, including shelter for the homeless, orfor transportation or other physical infrastructure;
(4) If timely, modification of the applicant's current economic plans andprograms, such as for business development, job training, or industrial orcommercial development;
(5) Preparation for and conduct of initial community outreach activities tobegin involving local citizens and the private sector in planning for adjustmentand diversification;
(6) Environmental reviews related to DoD-related impacts;
(7) Initial identification of and coordination with Federal, State and localentities that may be expected to assist in the community's adjustment andeconomic development; and with State-designated enterprise zones, and Federalempowerment zones and enterprise communities when selected and announced.
(8) Any other planning activity that may enable the community to organizeitself, establish a start-up capacity to plan, propose specific plans andprograms, coordinate with appropriate public or private entities, or qualifymore quickly for the more substantial planning assistance available from DoD.
(e)
(1) Base re-use planning.
(2) Site planning, architectural and engineering studies, feasibility andcost analyses and similar planning for specific projects to implement communityadjustment or economic diversification, unless as last resort funding for thoseapplicants which are unable to obtain planning assistance from other sources.
(3) Planning by communities which are encroaching on military installations.
(4) Demonstration planning activities intended to evolve new planningtechniques for impacted communities.
(5) Any planning activity proposed to supplement or replace planning that hasbeen or is being assisted by the DoD Sec. 2391(b) adjustment planning program.
(6) Any other planning activity the purpose of which is not demonstrably indirect response to a DOD-related impact triggered by one or more of the fourcriteria specified in paragraph (a)(2) of this section.
(f)
(1) Verification by HUD that the applicant is a unit of general government ina nonentitlement area.
(2) Verification by HUD and DoD that a triggering event described inparagraph (a)(2) of this section has occurred or will occur.
(3) With respect to communities affected by the 49 base closings and 28realignments listed by the 1991 Base Closure and Realignment Commission,verification by DoD that it has provided no prior funding and that the applicantmay benefit from start-up planning assistance from HUD.
(4) Determination by HUD that the proposed planning activities are eligible.
(5) Determination by HUD that the submission requirements in paragraph (h) ofthis section have been satisfied.
(g)
(1) The adequacy of the applicant's initial assessment of actual or probableimpacts on the community and the surrounding area;
(2) The adequacy and appropriateness of the start-up planning envisioned bythe applicant in response to the impacts;
(3) The type, extent, and adequacy of coordination that the applicant hasachieved, or plans to achieve, in order to undertake planning for communityadjustment and economic diversification.
(4) The cost-effectiveness of the proposed budget to carry out the planningwork envisioned by the applicant;
(5) The capability of the organization the applicant proposes to do theplanning;
(6) The credentials and experience of the key staff the applicant proposes todo the planning;
(7) The presence of significant private sector impact, as measured by theextent to which the DoD-generated impact is projected to decrease or increasethe employment base by 10% or more;
(8) The presence of significant public sector impact, as measured by theextent to which the DoD-generated impact is projected to decrease or increasethe applicant's capital and operating budgets for the next fiscal year by 10% ormore;
(9) The degree of urgency, to the extent that a suddenly announced action,e.g. a plant closing, is officially scheduled to occur within a year of the dateof application.
(h)
(1) The Standard Form SF-424 as a face sheet, signed and dated by aperson authorized to represent and contractually or otherwise commit theapplicant;
(2) A concise title and brief abstract of the proposed planning work,including the total cost;
(3) A narrative that:
(i) Documents one or more of the triggering events described in paragraph(a)(2) of this section that qualifies the applicant to apply for planningassistance for community adjustments and economic diversification;
(ii) Provides an initial assessment of actual or probable impacts on theapplicant community and the surrounding area;
(iii) Provides an initial assessment of the type and extent of start-upplanning envisioned by the applicant in response to the DoD-generated impact;and
(iv) Describes the measures by which the applicant has already coordinated,or plans to coordinate, with the DoD Office of Economic Assistance, the EconomicDevelopment Administration of the Department of Commerce, the Department ofLabor, any military department, or any other appropriate Federal agency;appropriate State agencies, specifically including the agency administering theSmall Cities CDBG Program; appropriate State-designated enterprise zones;appropriate Federal empowerment zones and enterprise communities, when selectedand announced; appropriate other units of general local government in thenonentitlement area; appropriate businesses, corporations, and defensefacilities concerned with impacts on the applicant community; and homelessnonprofit organizations, with respect to title V of the Stewart B. McKinney Act(42 U.S.C. 11411-11412), requiring the Federal property be considered foruse in assisting the homeless.
(4) A Statement of Work describing the specific project tasks proposed to beundertaken in order to plan for community adjustment and economicdiversification activities;
(5) A proposed budget showing the estimated costs and person-days of effortfor each task, by cost categories, with supporting documentation of costs and ajustification of the person-days of effort;
(6) A description of the qualifications of the proposed technical staff,including their names and resumes;
(7) A work plan that describes the schedule for accomplishing the tasksdescribed in the Statement of Work, the time needed to do each task, and theelapsed time needed for all the tasks; and
(8) Other materials, as prescribed in the application kit; these materialswill include required certifications dealing with: Drug-Free WorkplaceRequirements; Disclosure Regarding Payments to Influence Certain FederalTransactions; and Prohibition Regarding Excessive Force.
(i)
(2)
(3)
(4)
(i) Subpart A, § 570.5;
(ii) Subpart E, §§ 570.400(d), (e), (f), and (g);
(iii) Subpart J, §§ 570.500(c), 570.501, 570.502, 570.503,and 570.509;
(iv) Subpart K, §§ 570.601, 570.602, 570.609, 570.610, and570.611.
(a)
(2) Funding under this section is awarded for the provision of technicalexpertise in planning, managing or carrying out such programs including theactivities being or to be assisted thereunder and other actions being or to beundertaken for the purpose of the program, such as increasing the effectivenessof public service and other activities in addressing identified needs, meetingapplicable program requirements (e.g., citizen participation, nondiscrimination,OMB Circulars), increasing program management or capacity building skills,attracting business or industry to CDBG assisted economic development sites orprojects, assisting eligible CDBG subrecipients such as neighborhood nonprofitsor small cities in how to obtain CDBG funding from cities and States. Theprovision of technical expertise in other areas which may have some tangentialbenefit or effect on a program is insufficient to qualify for funding.
(3) Awards may be made pursuant to HUD solicitations for assistanceapplications or procurement contract proposals issued in the form of a publiclyavailable document which invites the submission of applications or proposalswithin a prescribed period of time. HUD may also enter into agreements withother Federal agencies for awarding the technical assistance funds:
(i) Where the Secretary determines that such funding procedures will achievea particular technical assistance objective more effectively and the criteriafor making the awards will be consistent with this section, or
(ii) The transfer of funds to the other Federal agency for use under theterms of the agreement is specifically authorized by law. The Department willnot accept or fund unsolicited proposals.
(b)
(2)
(c)
(1) States, units of general local government, APOs, and Indian Tribes; and
(2) Public and private non-profit or for-profit groups, including educationalinstitutions, qualified to provide technical assistance to assist suchgovernmental units to carry out the title I or Urban Homesteading programs. Anapplicant group must be designated as a technical assistance provider to a unitof government's title I program or Urban Homesteading program by the chiefexecutive officer of each unit to be assisted, unless the assistance is
(d)
(1) The provision of technical or advisory services;
(2) The design and operation of training projects, such as workshops,seminars, or conferences;
(3) The development and distribution of technical materials and information;and
(4) Other methods of demonstrating and making available skills, informationand knowledge to assist States, units of general local government, or IndianTribes in planning, developing, administering or assessing assistance undertitle I and Urban Homesteading programs in which they are participating orseeking to participate.
(e)
(1) In the case of technical assistance for States, the cost of carrying outthe administration of the State CDBG program for non-entitlement communities;
(2) The cost of carrying out the activities authorized under the title I andUrban Homesteading programs, such as the provision of public services,construction, rehabilitation, planning and administration, for which thetechnical assistance is to be provided;
(3) The cost of acquiring or developing the specialized skills or knowledgeto be provided by a group funded under this section;
(4) Research activities;
(5) The cost of identifying units of governments needing assistance (exceptthat the cost of selecting recipients of technical assistance under theprovisions of paragraph (k) is eligible); or
(6) Activities designed primarily to benefit HUD, or to assist HUD incarrying out the Department's responsibilities; such as research, policyanalysis of proposed legislation, training or travel of HUD staff, ordevelopment and review of reports to the Congress.
(f)
(1)
(i) Evaluation criteria: These criteria will be used to rank applicationsaccording to weights which may vary with each competition:
(A) Probable effectiveness of the application in meeting needs of localitiesand accomplishing project objectives;
(B) Soundness and cost-effectiveness of the proposed approach;
(C) Capacity of the applicant to carry out the proposed activities in atimely and effective fashion;
(D) The extent to which the results may be transferable or applicable toother title I or Urban Homesteading program participants.
(ii) Program policy criteria: These factors may be used by the selectingofficial to select a range of projects that would best serve program objectivesfor a particular competition:
(A) Geographic distribution;
(B) Diversity of types and sizes of applicant entities; and
(C) Diversity of methods, approaches, or kinds of projects.
(2)
(g)
(h)
(2)
(3)
(ii) When HUD's primary purpose is the transfer of technical assistance toassist the recipients in support of the title I or Section 810 programs, anassistance instrument (grant or cooperative agreement) will be used. A grantinstrument will be used when substantial Federal involvement is not anticipated.A cooperative agreement will be used when substantial Federal involvement isanticipated. When a cooperative agreement is selected, the agreement willspecify the nature of HUD's anticipated involvement in the project.
(iii) A contract will be used when HUD's primary purpose is to obtain aprovider of technical assistance to act on the Department's behalf. In suchcases the Department will define the specific tasks to be performed. However,nothing in this section shall preclude the Department from awarding aprocurement contract in any other case when it is determined to be in theDepartment's best interests.
(4)
(i)
(j)
The regulations for New Communities grants in this section, that wereeffective immediately before April 19, 1996, will continue to govern the rightsand obligations of recipients and HUD with respect to grants under the NewCommunities program.
(a)
(b)
(c)
(d)
(e)
(1) The extent to which the applicant addresses the objectives published inthe NOFA and the RFA.
(2) The extent to which the applicant demonstrates to HUD that the proposedactivities will have a substantial impact in achieving the stated objectives.
(3) The special needs of the applicant or locality to be met in carrying outthe proposed activities, particularly with respect to benefiting low- andmoderate-income persons.
(4) The feasibility of the proposed activities,
(5) The capability of the applicant to carry out satisfactorily the proposedactivities in a timely fashion, including satisfactory performance in carryingout any previous HUD-assisted projects or activities.
(6) In the case of proposals/projects of approximately equal merit, HUDretains the right to exercise discretion in selecting projects in a manner thatwould best serve the program objectives, with consideration given to the needsof localities, types of activities proposed, an equitable geographicaldistribution, and program balance.
(f)
(2) In the absence of independent evidence which tends to challenge in asubstantial manner the certifications made by the applicant, the requiredcertifications will be accepted by HUD. If independent evidence is available toHUD, however, HUD may require further information or assurances to be submittedin order to determine whether the applicant's certifications are satisfactory.
(g)
(2) Awards will be made on the basis of a 12-month period of performance.Once a recipient has been selected for a multi-year award, that recipient wouldnot be required to compete in a competition for the subsequent funding yearscovered by the multi-year funding commitment. Recipients performingsatisfactorily will be invited to submit applications for subsequent fundingyears in accordance with requirements outlined in the Notice of FundingAvailability and Request for Grant Application. Subject to the availability ofappropriations, subsequent-year funding will be determined by the following:
(i) The recipient has submitted all reports required for the previous year oryears in a timely, complete and satisfactory manner in accordance with the termsand conditions of the grant.
(ii) The recipient has submitted sufficient evidence to demonstratesuccessful completion of the tasks and deliverables of the grant. Adetermination of satisfactory performance will be made by HUD based uponevidence of task completions provided by the recipient, along with data fromclient feedback and site evaluations.
(iii) The recipient has submitted the next annual application.
(iv) The subsequent year's application is consistent with that described inthe original application.
(3) Recipients participating in multi-year funding projects are not eligibleto apply for additional grants for the same project or activity subject area forwhich they are receiving funds. Recipients are, however, eligible to compete forgrants for other project or activity areas.
(h)
(i)
(a)
(b)
(c)
(d)
(e)
(1) Applicants must submit applications within 90 days of the notification ofthe grant amount from HUD.
(2) Applicants shall prepare and publish or post a proposed application inaccordance with the citizen participation requirements of paragraph (h) of thissection.
(3) Applicants shall submit to HUD a final application containing itscommunity development objectives and activities. This application shall besubmitted to the appropriate HUD office, together with the requiredcertifications, in a form prescribed by HUD.
(4) Grant recipients must submit to HUD an annual performance report onprogress achieved on previously funded grants. Grant recipients must submit thereport at a time and in a format determined by HUD. The report should be madeavailable to citizens in accordance with the requirements of paragraph(h)(1)(iv) of this section.
(f)
(2) Normally, HUD will not reimburse or recognize costs incurred before HUDapproval of the application for funding. However, under unusual circumstances,the Field office manager may consider and conditionally approve written requeststo recognize and reimburse costs that will be incurred after submission of theapplication but before it is approved where failure to do so would impose undueor unreasonable hardship on the applicant. Conditional approvals will be madeonly before the costs are incurred and where the conditions for release of fundshave been met in accordance with 24 CFR 58.22, and with the understanding thatHUD has no obligation whatsoever to approve the application or to reimburse theapplicant should the application be disapproved.
(g)
(1) When local environmental reviews under 24 CFR part 58 have not yet beencompleted;
(2) To ensure that actual provision of other resources required to completethe proposed activities will be available within a reasonable period of time;
(3) To ensure that a project can be completed within its estimated costs;
(4) Where the grantee is required to satisfy an outstanding debt due to HUDunder a payment plan executed between the grantee and the Department;
(5) Pending resolution of problems related to specific projects or thecapability of the grantee to obtain resources needed to carry out, operate ormaintain the project; or
(6) Pending approval of site and neighborhood standards for proposed housingprojects.
(h)
(i) Furnish citizens with information concerning the amount of fundsavailable for community development and housing activities and the range ofactivities that may be undertaken, including the estimated amount proposed to beused for activities that will benefit persons of low and moderate income, andthe plans of the grantee for minimizing displacement of persons as a result ofactivities assisted with such funds and to assist persons actually displaced;
(ii) Hold one or more public hearings (scheduled at convenient times andplaces) to obtain the views of citizens on community development and housingneeds;
(iii) Develop and publish or post the community development statement in sucha manner as to afford affected citizens an opportunity to examine its contentsand to submit comments;
(iv) Afford citizens an opportunity to review and comment on the applicant'sperformance under any community development block grant.
(2) Before submitting the application to HUD, the applicant shall certifythat it has:
(i) Met the requirements of paragraph (h)(1) of this section;
(ii) Considered any comments and views expressed by citizens; and
(iii) If appropriate, modified the application accordingly and made themodified application available to citizens.
At 61 FR 32269, June 21, 1996,§ 570.405(e)(4) was revised. This section contains informationcollection and recordkeeping requirements and will not become effective untilapproval has been given by the Office of Management and Budget.
(a)
(b)
(c)
(d)
(a)
(b)
(c)
(2) The amount of funds awarded to a unit of general local government underthis section that may be used for public service activities is limited. Theapplicant may use whichever of the following methods of calculation yields thehighest amount:
(i) Fifteen percent of the special projects grant;
(ii) An amount equal to 15 percent of the sum of special project grant fundsplus grant funds received for the same federal fiscal year under the Entitlementor State program, less the amount of the Entitlement or State program grantfunds which will be used for other public service activities; or
(iii) In the case of an applicant that is an Entitlement grantee subject tothe exception in § 570.201(e)(3), an amount equal to the amount ofthe Entitlement grant funds received for the same federal fiscal year that maybe used for public service activities, less the amount of the Entitlement grantfunds which will be used for other public service activities.
(d)
(1) Three (3) copies of a proposal must be sent to the address stated in (3),below. Each proposal submitted pursuant to this section shall be evaluated byHUD using the following criteria:
(i) The extent to which the proposal satisfies purposes of this title andaddresses a special community development need.
(ii) The eligibility of proposed activities.
(iii) The feasibility of the project; i.e., its technical and financialfeasibility for achieving the goals stated in the proposal.
(iv) The capacity of the proposer to carry out satisfactorily the proposedproject activities.
(2) If the proposal is submitted jointly by, or on behalf of, more than oneeligible applicant, the proposal must:
(i) Contain a cooperation agreement signed by the Chief Executive Officer ofeach participating jurisdiction which specifies concurrence with the purpose andintent of the proposal and intent to comply with grant requirements;
(ii) Address problems faced by all jurisdictions listed in the proposal; and,
(iii) Be submitted by the lead jurisdiction. The lead jurisdiction shall beresponsible for overall coordination and administration of the project.
(3) Unsolicited proposals may be submitted any time during the year. However,if there are no funds available for such proposals, they will be returnedwithout review. Proposals shall contain a Standard Form 424 signed by the ChiefExecutive Officer of the State or unit of general local government. They shallbe sent to: Department of Housing and Urban Development, Office of CommunityPlanning and Development, 451 Seventh Street, SW., Washington, DC 20410,Attention: Director, Office of Program Policy Development, CPP.
(e)
(f)
(g)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(2) Where a State is the joint applicant and it proposes to carry out anactivity within the jurisdiction of one or more units of general localgovernment, then each such unit must approve the activity and state that theactivity is consistent with its Consolidated Plan.
(3) These approvals and findings must accompany each application and may takethe form of a letter by the chief executive officer of each unit of generallocal government affected or a resolution of the legislative body of each suchunit of general local government.
(h)
(i)
(1) The extent to which the applicant addresses the objectives published inthe NOFA and demonstrates how the proposed activities will have a substantialimpact in achieving the objectives.
(2) The extent of the needs to be addressed by the proposed activities,particularly with respect to benefiting low- and moderate-income persons andresidents of colonias, where applicable.
(3) The feasibility of the proposed activities, i.e., their technical andfinancial feasibility, for achieving the stated objectives.
(4) The capability of the applicant to carry out satisfactorily the proposedactivities in a timely fashion, including satisfactory performance in carryingout any previous HUD-assisted projects or activities.
(5) The extent of commitment to fair housing and equal opportunity, asindicated by such factors as previous HUD monitoring/compliance activity,actions to promote minority- and women-owned business enterprise, affirmativelyfurthering fair housing issues, and nondiscriminatory delivery of services.
(j)
(k)
(2) In the absence of independent evidence which tends to challenge in asubstantial manner the certifications made by the applicant, the requiredcertifications will be accepted by HUD. However, if independent evidence isavailable, HUD may require further information or assurances to be submitted inorder to determine whether the applicant's certifications are satisfactory.
(l)
(m)
(n)
(a)
(b)
(c)
(i)
(A)
(B)
(ii)
(2)
(d)
(A)
(B)
(ii) To be eligible in future funding competitions for CDWSP, recipients arerequired to maintain a 50-percent rate of graduation from a CDWSP-fundedacademic program.
(iii) If an institution of higher education that submits an individualapplication is also included in the application of an APO or State, then theseparate individual application of the institution of higher education will bedisregarded. Additionally, if an institution of higher education is included inthe application of both an APO and a State, then the references to theinstitution in the application of the State will be stricken. The State'sapplication will then be ineligible if fewer than two institutions of highereducation remain as participants in the State's application.
(2)
(A) Recruit and select students for participation in CDWSP. The recipientshall establish recruitment procedures that identify economically disadvantagedand minority students pursuing careers in community building, and make suchstudents aware of the availability of assistance opportunities. Students must beselected before the beginning of the semester for which funding has beenprovided.
(B) Recruit and select work placement agencies, and negotiate and executeagreements covering each work placement assignment.
(C) Refer participating students to work placement agencies and assiststudents in the selection of work placement assignments.
(D) Assign sufficient staff to administer and supervise the program on a day-to-day basis, and, where the recipient is an APO or State, to monitor theactivities of the work study coordinating committee.
(E) Encourage participating students to obtain employment for a minimum oftwo years after graduation with a unit of State or local government, Indiantribe or nonprofit organization engaged in community building.
(F) Maintain records by racial and ethnic categories for each economicallydisadvantaged student enrolled in the CDWSP.
(G) Keep records and make such reports as HUD may require.
(H) Comply with all other applicable Federal requirements.
(ii) If the recipient is an APO or State, the recipient must also:
(A) Establish a committee to coordinate activities between programparticipants, to advise the recipient on policy matters, to assist the recipientin ranking and selection of participating students, and to review disputesconcerning compliance with program agreements and performance. The committeeshall be chaired by a representative of the recipient, and shall includerepresentatives of the participating institutions of higher education, workplacement agencies, students, and HUD.
(B) Allocate the assistance awarded under the program to the participatinginstitutions of higher education. APOs and States may not make fractional awardsto institutions. (E.g., awards to institutions must assist a fixed number ofstudents and not, for example, 6.5 students.)
(e)
(f)
(2)
(i) Provide practical experience and training in community building.
(ii) Consult with the institution of higher education (and the APO or State,where an APO or State is the recipient) to ensure that the student's workplacement assignment provides the requisite experience and training to meet therequired number of work hours specified in the student work placement agreement.
(iii) Provide a sufficient number of work placement assignments to provideparticipating students with a wide choice of work experience.
(iv) Require each student to devote 12-20 hours per week during theregular school year, or 35-40 hours a week during the summer, to the workplacement assignment. Work placement agencies may provide flexibility in thework period, if such a schedule is consistent with the requirements of thestudent's academic program. However, a participating student may receive stipendpayment only during the period that the student is placed with the workplacement agency.
(v) Comply with all other applicable Federal requirements.
(vi) Maintain such records as HUD may require.
(g)
(1)
(i) Must satisfy all applicable guidelines established at the participatinginstitution of higher education to measure financial need for academicscholarship or loan assistance.
(ii) Must be a full-time student enrolled in the first year of graduate studyin a community building academic program at the participating institution ofhigher education. Individuals enrolled in doctoral programs are ineligible.
(iii) Must demonstrate an ability to maintain a satisfactory level ofperformance in the community building academic program and in work placementassignments, and to comply with
(iv) May not have previously participated in CDWSP.
(v) Must provide appropriate written evidence that he or she is lawfullyadmitted for permanent residence in the United States, if the individual is nota citizen.
(2)
(i) Financial need under the applicable financial need guidelines establishedat the institution of higher education;
(ii) An interest in, and commitment to, a professional career in communitybuilding;
(iii) The ability satisfactorily to complete academic and work placementresponsibilities under CDWSP.
(3)
(i) Enroll in a two-year program. A student's academic and work placementresponsibilities include: Full-time enrollment in an approved academic program;maintenance of a satisfactory level of performance in the community buildingacademic program and in work placement assignments; and compliance with theprofessional conduct standards set by the recipient and the work placementagency. A satisfactory level of academic performance consists of maintaining a Baverage. A student's participation in CDWSP shall be terminated for failure tomeet these responsibilities and standards. If a student's participation isterminated, the student is ineligible for further CDWSP assistance.
(ii) Agree to make a good-faith effort to obtain employment in communitybuilding with a unit of State or local government, an Indian tribe, or anonprofit organization. The term of employment should be for at least twoconsecutive years following graduation from the academic program. If the studentdoes not obtain such employment, the student is not required to repay theassistance received.
(h)
(1) Explain how application packages (requests for grant applications)providing specific application requirements and guidance may be obtained;
(2) Specify the place for filing completed applications, and the date bywhich the applications must be physically received at that location;
(3) State the amount of funding available under the notice;
(4) Provide other appropriate program information and guidance.
(i)
(1)
(i) The application must be filed in the application form prescribed by HUD,and within the required time periods;
(ii) The applicant must demonstrate that it is eligible to participate;
(iii) The applicant must demonstrate that each institution of highereducation participating in the program as a recipient has the required academicprograms and faculty to carry out its activities under CDWSP. Each workplacement agency must have the required staff and community building work studyprogram to carry out its activities under CDWSP.
(2)
(i)
(A) Quality of course offerings;
(B) Appropriateness of course offerings for preparing students for careers incommunity building; and
(C) Qualifications of faculty and percentage of their time devoted toteaching and research in community building.
(ii)
(iii)
(iv)
(v)
(A) The past success of the institution of higher education in placing itsgraduates (particularly CDWSP-funded and similar program graduates whereapplicable) in permanent employment in community building; and
(B) The amount of faculty and staff time and institutional resources devotedto assisting students (particularly students in CDWSP-funded and similarprograms where applicable) in finding permanent employment in communitybuilding.
(vi)
(A) The strength and clarity of the applicant's plan for placing CDWSPstudents on rotating work placement assignments and monitoring CDWSP students'progress both academically and in their work placement assignments;
(B) The degree to which the individual who will coordinate and administer theprogram has clear responsibility, ample available time, and sufficient authorityto do so; and
(C) The effectiveness of the applicant's prior coordination andadministration of a CDWSP-funded program, where applicable (including thetimeliness and completeness of the applicant's compliance with CDWSP reportingrequirements).
(vii)
(3)
(j)
(2)
(3)
(4)
(k)
(2)
(3)
(ii) If a student's participation in CDWSP is terminated before thecompletion of the two-year term of the student's program, the recipient maysubstitute another student to complete the two-year term of a student whoseparticipation has terminated. The substituted student must have a sufficientnumber of academic credits to complete the degree program within the remainingportion of the terminated student's two-year term. With respect to any CDWSPgrant, there is no requirement, regardless of the date of grant award, forstudents who are terminated from the CDWSP to repay tuition and additionalassistance or for the grant recipient to repay such funds to HUD. Funds muststill be otherwise expended consistent with CDWSP regulations and the grantagreement, or repayment may be required under paragraph (k)(3)(iii) of thissection.
(iii) Consistent with OMB Circulars No. A-101 and A-110, HUD, inthe grant agreement, will set forth in detail other circumstances under whichfunds may be deobligated, recipients may be liable for repayment, or othersanctions may be imposed.
(l)
(2)
(a)
(b)
(c)
(2)
(3)
(i)
(ii)
(iii)
(4)
(5)
(d)
(2)
(i) Recruit students for participation in HSI-WSP. The recipient shallestablish recruitment procedures that identify eligible economicallydisadvantaged and minority students pursuing careers in community building, andmake them aware of the availability of assistance opportunities. While theprogram is restricted to HSIs, the recipient may neither restrict the program toany particular minority group or groups, nor provide any preferential treatmentin the selection process based on race or ethnicity. Only economicallydisadvantaged students, as defined herein, may be assisted.
(ii) Select students for participation in HSI-WSP. In selecting among theeligible students, the recipient must consider the extent to which each studenthas demonstrated financial need under the applicable guidelines established atthe institution of higher education; an interest in, and commitment to, a careerin community building; and the ability to satisfactorily complete the academicand work placement responsibilities under HSI-WSP. Students must be selectedbefore the beginning of the semester for which funding is being provided. If astudent's participation terminates, the student may not be replaced; the grantwill be reduced by the amount of unused funds allotted for that student.
(iii) Provide the educational component for participating students.
(iv) Recruit and select work placement agencies, and negotiate and execute anagreement covering each work placement assignment.
(v) Refer participating students to work placement agencies and assiststudents in the selection of work placement assignments.
(vi) Assign sufficient staff to administer and supervise the program on aday-to-day basis.
(vii) Encourage participating students to either: obtain post-graduationemployment with a unit of State or local government, an areawide planningorganization (APO), Indian tribe or nonprofit organization engaged in communitybuilding; or transfer to a four-year institution of higher education to obtain abachelor's degree in a community building academic discipline.
(viii) Maintain records by racial and ethnic categories for each economicallydisadvantaged and minority student participating in HSI-WSP.
(ix) Keep records and make such reports as HUD may require.
(x) Comply with all other applicable Federal requirements.
(e)
(2)
(i) Provide practical experience and training in the community building fieldto participating students through work placement assignments.
(ii) Consult with the institution of higher education to ensure that thestudent's work placement assignment provides the requisite experience andtraining to meet the required number of work hours specified in the student workplacement agreement.
(iii) Provide a sufficient number and variety of work assignments to provideparticipating students with a wide choice of work experience.
(iv) Require each student to devote 12-20 hours per week during theregular school year, and 35-40 hours a week during the summer, to the workplacement assignment. Work placement agencies may provide flexibility in thework period, if such a schedule is consistent with the requirements of thestudent's academic program. However, a participating student may receive astipend payment only during the period when the student is placed with the workplacement agency.
(v) Comply with all other applicable Federal requirements.
(vi) Maintain such records as HUD may require.
(f)
(1)
(i) Must satisfy all applicable guidelines established at the participatinginstitution of higher education to measure financial need for academicscholarship or loan assistance.
(ii) Must be a full-time student enrolled in a community building associatedegree program at the participating institution of higher education. The studentmust have attained no more than 50 percent of the credits required for his/herdegree at the time the student first receives assistance under this program.
(iii) Must demonstrate an ability to maintain a satisfactory level ofperformance in community building academic program (i.e., maintain a B average,as defined by the institution) and in work placement assignments, and complywith the professional standards set by the recipient and the work placementagencies.
(iv) May not have previously participated in HSI-WSP.
(2)
(i) Enroll or be enrolled in a two-year community building associate degreeprogram. A student's academic and work placement responsibilities include: Full-time enrollment in an approved academic program; maintenance of a satisfactorylevel of performance in the community building academic program and in workplacement assignments; and compliance with the professional conduct standardsset by the recipient and by the work placement agency. A satisfactory level ofacademic performance consists of maintaining a B average, as defined by theinstitution. A student's participation in HSI-WSP shall be terminated forfailure to meet these responsibilities and standards. If the student'sparticipation is terminated, the student is ineligible for further HSI-WSPassistance.
(ii) Devote 12-20 hours per week during the regular school year, and35-40 hours a week during the summer, to the work placement assignment.Work placement agencies may provide flexibility in the work period, if such aschedule is consistent with the requirements of the student's academic program.However, a participating student may receive a stipend payment only during theperiod when the student is placed with the work placement agency.
(iii) Agree to make a good-faith effort to either: obtain employment incommunity building with a unit of State or local government, an APO, an Indiantribe, or a non-profit organization; or to transfer to a four-year institutionof higher education to obtain a bachelor's degree in a community buildingacademic discipline. However, if the student does not obtain such employment ortransfer to a four-year institution, the student is not required to repay theassistance received.
(g)
(1) Explain how application kits providing specific application requirementsand guidance may be obtained;
(2) Specify the place for filing completed applications, and the date bywhich applications must be physically received at that location;
(3) State the amount of funding available under the notice, which may includefunds recaptured from previously awarded grants;
(4) Provide other appropriate program information and guidance.
(h)
(2)
(3)
(i)
(2)
(3)
(j)
(2)
(a)
(2)
(b)
(2) This subpart also describes the policies and procedures governingcommunity development block grants to insular areas under section 106 of theAct. Sections 570.440 and 570.441 identify procedures applicable to the InsularAreas program under section 106 of the Act. Fund reservations for insular areasunder section 107 of the Act shall remain governed by the policies andprocedures described in section 107(a)(1)(A) of the Act and§§ 570.400 and 570.405 of this part.
(3) The policies and procedures set forth in the following identifiedsubparts of this part apply to the HUD-administered Small Cities and InsularAreas programs, except as modified or limited under the provisions thereof orthis subpart:
(i) Subpart A—General Provisions;
(ii) Subpart C—Eligible Activities;
(iii) Subpart J—Grant Administration;
(iv) Subpart K—Other Program Requirements;
(v) Subpart M—Loan Guarantees; and
(vi) Subpart O—Performance Reviews.
(c)
(2) The Hawaii HUD-administered Small Cities program is not subject tosection 102 because the funds are not distributed by HUD on a competitive basis.
(3) The Insular Areas program under section 106 of the Act is not subject tosection 102 because the funds are not distributed by HUD on a competitive basis.
(d)
(e)
(i) Benefit low- and moderate-income families;
(ii) Aid in the prevention or elimination of slums or blight; or
(iii) Be an activity that the grantee certifies is designed to meet othercommunity development needs having a particular urgency because existingconditions pose a serious and immediate threat to the health or welfare of thecommunity and other financial resources are not available to meet such needs.
(2) In addition to the objectives described in paragraph (e)(1) of thissection, with respect to grants made through the Small Cities program, not lessthan 70 percent of the total of grant funds from each grant and Section 108 loanguarantee funds received under subpart M of this part within a fiscal year mustbe expended for activities which benefit low- and moderate-income persons underthe criteria of § 570.208(a) or of § 570.208(d)(5) or (6).In the case of multiyear plans in New York State approved in response to NOFAspublished prior to calendar year 1997, not less than 70 percent of the totalfunding for grants approved pursuant to a multiyear plan for a time
(3) In addition to the objectives described in paragraph (e)(1) of thissection, grants made through the Insular Areas program shall also comply withthe primary objective of 70 percent benefit to low- and moderate-income persons.Insular area recipients must meet this requirement for each separate grant undersection 107 of the Act. For grants made under section 106 of the Act, insulararea recipients must ensure that over a period of time specified in theircertifications not to exceed three years, not less than 70 percent of theaggregate of CDBG fund expenditures shall be for low- and moderate-incomeactivities meeting the criteria under § 570.208(a) or under§ 570.208(d)(5) or (6). See also § 570.200(a)(3) forfurther discussion of the primary objective.
(f)
(2)
(a)
(i) Need-absolute number of persons in poverty as further explained in theNOFA;
(ii) Need-percent of persons in poverty as further explained in the NOFA;
(iii) Program Impact; and
(iv) Fair Housing and Equal Opportunity, which may include the applicant'sSection 3 plan and implementation efforts with respect to actions toaffirmatively further fair housing. The NOFA described in paragraph (b) of thissection will contain a more detailed description of these factors, and therelative weight that each factor will be given.
(2) In addition HUD reserves the right to establish minimal thresholds forselection factors and otherwise select grants in accordance with§ 570.425 and the applicable NOFA.
(3)
(4)
(5)
(b)
(c)
(2) Counties, cities, towns, and villages may apply and receive funding forseparate projects to be done in the same jurisdiction. Only one grant will bemade under each funding round for the same type of project to be located withinthe jurisdiction of a unit of general local government (e.g., both the countyand village cannot receive funding for a sewer system to be located in the samevillage, but the county can receive funding for a sewer system that is locatedin the same village as a rehabilitation project for which the village receivesfunding). The NOFA will contain additional information on applicant eligibility.
(3) Counties may apply on behalf of units of general local government locatedwithin their jurisdiction when the unit of general local government hasauthorized the county to apply. At the time that the county submits itsapplication for funding, it must submit a resolution by the governing body ofthe unit of local government that authorizes the county to submit an applicationon behalf of the unit of general local government. The county will be consideredthe grantee and will be responsible for executing all grant documents. Thecounty is responsible for ensuring compliance with all laws, regulations, andExecutive Orders applicable to the CDBG Program. HUD will deal exclusively withthe county with respect to issues of program administration and performance,including remedial actions. The unit of general local government will beconsidered the grantee for the purpose of determining grant limits. The unit ofgeneral local government's statistics will be used for purposes of the selectionfactors referred to in § 570.421(a).
(d)
(e)
(f)
(g)
(a) The provisions of § 570.504(b) apply to all program incomegenerated by a specific grant and received prior to grant closeout.
(b) If the unit of general local government has another ongoing CDBG grant atthe time of closeout, the program income will be considered to be program incomeof the ongoing grant. The grantee can choose which grant to credit the programincome to if it has multiple open CDBG grants.
(c) If the unit of general local government has no open ongoing CDBG grant atthe time of closeout, program income of the unit of general local government orits subrecipients which amounts to less than $25,000 per year will not beconsidered to be program income unless needed to repay a Section 108 guaranteedloan. When more than $25,000 of program income is generated from one or moreclosed out grants in a year after closeout, the entire amount of the programincome is subject to the requirements of this part. This will be a subject ofthe closeout agreement described in § 570.509(c).
(a)
(1) Programs or projects that include new or significantly altered activitiesare rated in accordance with the criteria for selection applicable at the timethe original preapplication or application (whichever is applicable) was rated.The rating of the program or projects proposed which include the new or alteredactivities proposed by the amendment must be equal to or greater than the lowestrating received by a funded project or program during that cycle of ratings.
(2) Consideration shall be given to whether any new activity proposed can becompleted promptly.
(3) If the grant was received on a noncompetitive basis, the proposed amendedproject must be able to be completed promptly, and must meet all of thethreshold requirements that were required for the original project. If theproposal is to amend the project to a type of project that was ratedcompetitively in the fiscal year that the noncompetitive project was funded, thenew or altered activities proposed by the amendment must receive a rating equalto or greater than the lowest rating received by a funded project or programduring that cycle of ratings.
(b)
(c)
(a)
(b)
(c)
(i) The population of that eligible unit of general local government and thepopulation of all eligible units of general local government in thenonentitlement areas of the State;
(ii) The extent of poverty in that eligible unit of general local governmentand the extent of poverty in all the eligible units of general local governmentin the nonentitlement areas of the State; and
(iii) The extent of housing overcrowding in that eligible unit of generallocal government and the extent of housing overcrowding in all the eligibleunits of general local government in the nonentitlement areas of the State.
(2) In determining the average of the ratios under this paragraph (c), theratio involving the extent of poverty shall be counted twice and each of theother ratios shall be counted once. (0.25 + 0.50 + 0.25 = 1.00).
(d)
(1) Capacity to utilize the grant amount effectively and efficiently;
(2) Compliance with the requirements of § 570.902(a) for timelyexpenditure of funds beginning with grants made in FY 1996. In making thiscalculation, all outstanding grants will be considered. For the FY 1995 grantthe requirement is substantial compliance with the applicant's schedule orschedules submitted in each previously funded application;
(3) Compliance with other program requirements based on monitoring visits andaudits.
(e)
(2) Any formula grant amounts reserved for an applicant that chooses not tosubmit an application shall be reallocated to any remaining eligible applicantson a pro rata basis.
(3) No amounts shall be reallocated under paragraph (e) of this section inany fiscal year to any applicant whose grant amount was adjusted under paragraph(d) of this section or reduced under subpart O of this part.
(f)
(g)
(h)
(i)
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(b)
(1) Giving citizens timely notice of local meetings and reasonable and timelyaccess to local meetings, information, and records relating to the grantee'sproposed and actual use of CDBG funds including, but not limited to:
(i) The amount of CDBG funds expected to be made available for the comingyear, including the grant and anticipated program income;
(ii) The range of activities that may be undertaken with those funds;
(iii) The estimated amount of those funds proposed to be used for activitiesthat will benefit low- and moderate-income persons;
(iv) The proposed CDBG activities likely to result in displacement and theapplicant's plans, consistent with the policies developed under§ 570.606(b), for minimizing displacement of persons as a result ofits proposed activities; and
(v) The types and levels of assistance the applicant plans to make available(or to require others to make available) to persons displaced by CDBG-fundedactivities, even if the applicant expects no displacement to occur;
(2) Providing technical assistance to groups representative of persons oflow- and moderate-income that request assistance in developing proposals. Thelevel and type of assistance to be provided is at the discretion of theapplicant. The assistance need not include the provision of funds to the groups;
(3) Holding a minimum of two public hearings, for the purpose of obtainingcitizens' views and formulating or responding to proposals and questions. Eachpublic hearing must be conducted at a different stage of the CDBG program.Together, the hearings must address community development and housing needs,development of proposed activities and review of program performance. There mustbe reasonable notice of the hearings and the hearings must be held at times andaccessible locations convenient to potential or actual beneficiaries, withreasonable accommodations including material in accessible formats for personswith disabilities. The applicant must specify in its plan how it will meet therequirement for hearings at times and locations convenient to potential oractual beneficiaries;
(4) Meeting the needs of non-English speaking residents in the case of publichearings where a significant number of non-English speaking residents canreasonably be expected to participate;
(5) Responding to citizen complaints and grievances, including the proceduresthat citizens must follow when submitting complaints and grievances. Theapplicant's policies and procedures must provide for timely written answers towritten complaints and grievances within 15 working days of the receipt of thecomplaint, where practicable; and
(6) Encouraging citizen participation, particularly by low- and moderate-income persons who reside in slum or blighted areas, and in other areas in whichCDBG funds are proposed to be used.
(c)
(i) Examine the application's contents to determine the degree to which theymay be affected;
(ii) Submit comments on the proposed application; and
(iii) Submit comments on the performance of the applicant.
(2) The requirement for publishing in paragraph (c)(1) of this section may bemet by publishing a summary of the proposed application in one or morenewspapers of general circulation, and by making copies of the proposedapplication available at libraries, government offices, and public places. Thesummary must describe the contents and purpose of the proposed application, andmust include a list of the locations where copies of the entire proposedapplication may be examined.
(d)
(e)
(1) Furnish citizens information concerning the amendment;
(2) Hold one or more public hearings to obtain the views of citizens on theproposed amendment;
(3) Develop and publish the proposed amendment in such a manner as to affordaffected citizens an opportunity to examine the contents, and to submit commentson the proposed amendment;
(4) Consider any comments and views expressed by citizens on the proposedamendment and, if the grantee finds it appropriate, modify the final amendmentaccordingly; and
(5) Make the final amendment to the community development program availableto the public before its submission to HUD.
Notwithstanding any other provision of this subpart, a unit of general localgovernment in a nonentitlement area where the State has not elected toadminister the CDBG program shall be eligible for Small Cities Grant assistancehereunder for the sole purpose of paying any amounts due on debt obligationsissued by such unit of general local government (or its designated publicagency) and guaranteed by the Secretary pursuant to section 108 of the Act (seesubpart M of this part). The award of grant assistance for such purpose shall beconsistent with section 106(d)(3)(B) of the Act, in such amount, and subject tosuch conditions as the Secretary may determine. Since guaranteed loan funds (asdefined in § 570.701) are required to be used in accordance withnational and primary objective requirements, and other applicable requirementsof this part, any grant made to make payments on the debt obligations evidencingthe guaranteed loan shall be presumed to meet such requirements, unless HUDdetermines that the guaranteed loan funds were not used in accordance with suchrequirements. Any such determination by HUD shall not prevent the making of thegrant in the amount of the payment due, but it may be grounds for HUD to takeappropriate action under subpart O of this part based on the originalnoncompliance.
(a)
(1) The abbreviated consolidated plan procedures described in this subpartand in 24 CFR 91.235; or
(2) The complete consolidated plan procedures applicable to localgovernments, discussed at 24 CFR 91.200 through 91.230.
(b)
(c)
(d)
(e)
(1) The following general certifications described at § 91.225(a)of this title: Affirmatively furthering fair housing; anti-displacement andrelocation plan; drug-free workplace; anti-lobbying; authority of jurisdiction;consistency with plan; acquisition and relocation; and Section 3.
(2) The following CDBG certifications described at § 91.225(b) ofthis title: Citizen participation; community development plan; following a plan;use of funds; excessive force; compliance with anti-discrimination laws;compliance with lead-based paint procedures; and compliance with laws.
(f)
(g)
(h)
(i)
(2) The citizen participation plan must provide citizens with reasonablenotice and an opportunity to comment on substantial amendments. The citizenparticipation plan must state how reasonable notice and an opportunity tocomment will be given, as well as provide a period of not less than 30 days toreceive comments on the substantial amendment before the amendment isimplemented.
(3) The citizen participation plan shall require the jurisdiction to considercomments or views of citizens received in writing, or orally at public hearings,if any, in preparing the substantial amendment of its statement. A summary ofcomments or views not accepted and the reasons for non-acceptance shall beattached to the substantial amendment.
(4) Any program amendment, regardless of whether it is considered to besubstantial, must be fully documented in the jurisdiction's records.
(j)
(a)
(b)
(1) Giving citizens timely notice of local meetings and reasonable and timelyaccess to local meetings, information, and records relating to the grantee'sproposed and actual use of CDBG funds including, but not limited to:
(i) The amount of CDBG funds expected to be made available for the comingyear, including the grant and anticipated program income;
(ii) The range of activities that may be undertaken with those funds;
(iii) The estimated amount of those funds proposed to be used for activitiesthat will benefit low- and moderate-income persons;
(iv) The proposed CDBG activities likely to result in displacement and thejurisdiction's plans, consistent with the policies developed under§ 570.606(b), for minimizing displacement of persons as a result ofits proposed activities; and
(v) The types and levels of assistance the jurisdiction plans to makeavailable (or to require others to make available) to persons displaced by CDBG-funded activities, even if the jurisdiction expects no displacement to occur;
(2) Providing technical assistance to groups representative of persons oflow- and moderate-income that request assistance in developing proposals. Thelevel and type of assistance to be provided is at the discretion of thejurisdiction. The assistance need not include the provision of funds to thegroups;
(3) Holding a minimum of two public hearings for the purpose of obtainingcitizens' views and formulating or responding to proposals and questions. Eachpublic hearing must be conducted at a different stage of the CDBG program.Together, the hearings must address community development and housing needs,development of proposed activities, and review of program performance. Theremust be reasonable notice of the hearings, and the hearings must be held attimes and accessible locations convenient to potential or actual beneficiaries,with reasonable accommodations including material in accessible formats forpersons with disabilities. The jurisdiction must specify in its plan how it willmeet the requirement for hearings at times and locations convenient to potentialor actual beneficiaries;
(4) Meeting the needs of non-English speaking residents in the case of publichearings where a significant number of non-English speaking residents canreasonably be expected to participate;
(5) Responding to citizen complaints and grievances, including the proceduresthat citizens must follow when submitting complaints and grievances. Thejurisdiction's policies and procedures must provide for timely written answersto written complaints and grievances within 15 working days after the receipt ofthe complaint, where practicable; and
(6) Encouraging citizen participation, particularly by low- and moderate-income persons who reside in areas in which CDBG funds are proposed to be used.
(c)
(i) Examine the statement's contents to determine the degree to which theymay be affected;
(ii) Submit comments on the proposed statement; and
(iii) Submit comments on the performance of the jurisdiction.
(2) The requirement for publishing in paragraph (c)(1) of this section may bemet by publishing a summary of the proposed statement in one or more newspapersof general circulation and by making copies of the proposed statement availableat libraries, government offices, and public places. The summary must describethe contents and purpose of the proposed statement and must include a list ofthe locations where copies of the entire proposed statement may be examined.
(d)
(e)
(1) Furnish citizens information concerning the amendment;
(2) Hold one or more public hearings to obtain the views of citizens on theproposed amendment;
(3) Develop and publish the proposed amendment in such a manner as to affordaffected citizens an opportunity to examine the contents, and to submit commentson the proposed amendment;
(4) Consider any comments and views expressed by citizens on the proposedamendment and, if the grantee finds it appropriate, modify the final amendmentaccordingly; and
(5) Make the final amendment to the community development program availableto the public before its submission to HUD.
(f)
(2) The citizen participation plan shall require the jurisdiction to considercomments or views of citizens received in writing or orally at public hearingsin preparing the performance report. A summary of these comments or views shallbe attached to the performance report.
(g)
(a) Any Insular Area funds that become available as a result of reductionsunder subpart O of this part, shall be reallocated in the same or future
(b) Any Insular Area grant funds for a fiscal year reserved for an applicantthat chooses not to submit a final statement in accordance with§ 570.440 to receive such funds, shall be reallocated in the same orfuture fiscal year to any remaining eligible Insular Area grantees pro rataaccording to population.
(c) No amounts shall be reallocated under this section in any fiscal year toany applicant whose grant amount in such fiscal year was reduced under subpart Oof this part or who did not submit a final statement in accordance with§ 570.440 for that fiscal year.
(d) Insular Area grantees receiving additional funds under this section willbe evaluated for timeliness under § 570.902 based upon the originalgrant amount plus the additional funds received. Accordingly, references in§ 570.902 to an Insular Area's grant amount for its current programyear include such additional funds, and references to unexpended or undisbursedfunds include such additional funds.
At 72 FR 12536, Mar. 15, 2007,§ 570.442 was added, effective April 16, 2007.
The purpose of urban development action grants is to assist cities and urbancounties that are experiencing severe economic distress to help stimulateeconomic development activity needed to aid in economic recovery. This subpart Gcontains those regulations that are essential for the continued operation ofthis grant program.
(a) Large cities and urban counties may not use assistance under this subpartfor planning the project or developing the application. However, they may useentitlement community development block grant funds for this purpose, providedthat the UDAG project meets the eligibility test of this part. Any small citywhich submits a project application which is selected for preliminary approvaland for which legally binding grant agreement and for which a release of fundspursuant to 24 CFR part 58 has been issued may devote up to three (3) percent ofthe approved amount of its action grant to defray its actual costs in planningthe project and preparing its application.
(b) Assistance under this subpart may not be used for public services asdescribed in § 570.201(e).
(c)(1) No assistance may be provided under this subpart for speculativeprojects intended to facilitate the relocation of industrial or commercialplants or facilities from one area to another. The provisions of this paragraph(c)(1) shall not apply to a relocation of any such plant or facility within ametropolitan area.
(i) HUD will presume that a proposed project which includes speculativecommercial or industrial space is intended to facilitate the relocation of aplant or facility from one area to another, if it is demonstrated to HUD'ssatisfaction that:
(A) The proposed project is reasonably proximate (i.e., within 50 miles) toan area from which there has been a significant current pattern of movement, toareas reasonably proximate, of jobs of the category for which such space isappropriate; and
(B) There is a likelihood of continuation of the pattern, based on measurablecomparisons between the area from which the movement has been occurring and thearea of the proposed project in terms of tax rates, energy costs, and similarrelevant factors.
(ii) The restrictions established in this paragraph (c)(1) shall not apply ifthe Secretary determines that the relocation does not significantly andadversely affect the employment or economic base of the area from which theindustrial or commercial plant or facility is to be relocated. However, theSecretary will not be required to make a determination whether there is asignificant and adverse effect. If such a
(iii) The presumptions established in accordance with this paragraph (c)(1)are rebuttable by the applicant. However, the burden of overcoming thepresumptions will be on the applicant.
(iv) The presumptions established in this paragraph (c)(1) will not apply ifthe speculative space contained in a commercial or industrial plant or facilityincluded in a project constitutes a lesser percentage of the total spacecontained in that plant or facility than the threshold amounts specified below:
(2)
(i) A relocation of any operation of an industrial or commercial plant orfacility or other business establishment from any UDAG eligible jurisdiction; or
(ii) An expansion of any operation of an industrial or commercial plant orfacility or other business establishment that results in a substantial reductionof any such operation in any UDAG eligible jurisdiction. The provisions of thisparagraph (c)(2) shall not apply to a relocation of an operation or to anexpansion of an operation within a metropolitan area. The provisions of thisparagraph (c)(2) shall apply only to projects that do not have speculativespace, or to projects that include both identified intended occupant space andspeculative space.
(iii)
(A) Whether it is reasonable to anticipate that there will be a significantnet loss of jobs in the plant or facility being abandoned; and
(B) Whether an equivalent productive use will be made of the plant orfacility being abandoned by the relocating or expanding operation, thus creatingno deterioration of economic base.
(3) Within 90 days following notice of intent to withhold, deny or cancelassistance under paragraph (c) (1) or (2) of this section, the applicant mayappeal in writing to the Secretary the withholding, denial or cancellation ofassistance. The applicant will be notified and given an opportunity within aprescribed time for an informal consultation regarding the action.
(4)
(ii)(A) Any amount made available under this paragraph shall be used by thegrantee to assist individuals who were employed by the operation involved beforethe relocation or reduction and whose employment or terms of employment wereadversely affected by the relocation or reduction. The assistance shall includejob training, job retraining, and job placement.
(B) If any amount made available to a grantee under this paragraph (c)(4) ismore than is required to provide the assistance described in paragraph
(iii)(A) The provisions of this paragraph (c)(4) shall be applicable to anyamount withdrawn by, recaptured by, or paid to the Secretary under this section,including any amount withdrawn, recaptured, or paid before the effective date ofthis paragraph.
(B) Grants may be made under this paragraph (c)(4) only to the extent ofamounts provided in appropriation Acts.
(5) For purposes of this section, the following definitions apply:
(i) “Operation” means any plant, equipment, facility, substantialnumber of positions, substantial employment opportunities, production capacity,or product line.
(ii) “Metropolitan area” means a metropolitan area as defined in§ 570.3 and which consists of either a freestanding metropolitan areaor a primary metropolitan statistical area where both primary and consolidatedareas exist.
(iii) “Likely” means probably or reasonably to be expected, asdetermined by firm evidence such as resolutions of a corporation to close aplant or facility, notifications of closure to collective bargaining units,correspondence and notifications of corporate officials relative to a closure,and supportive evidence, such as newspaper articles and notices to employeesregarding closure of a plant or facility. Consultant studies and marketingstudies may be submitted as supportive evidence, but by themselves are not firmevidence.
(iv) “UDAG eligible jurisdiction” means a distressed community, aPocket of Poverty, a Pocket of Poverty community, or an identifiable communitydescribed in section 119(p) of the Housing and Community Development Act of1974.
(6) Notwithstanding any other provision of this subpart, nothing in thissubpart may be construed to permit an inference or conclusion that the policy ofthe urban development action grant program is to facilitate the relocation ofbusinesses from one area to another.
The displacement, relocation, acquisition, and replacement of housingrequirements of § 570.606 apply to applicants under this subpart G.
The recipient may receive preliminary approval prior to the accomplishment oflead-based paint activities conducted pursuant to part 35, subparts A, B, J, K,and R of this title, but no funds will be released until such actions arecomplete and evidence of compliance is submitted to HUD.
(a)
(b)
(1) New or significantly altered activities must meet the criteria forselection applicable at the time of receipt of the program amendment.
(2) The recipient must have complied with all requirements of this subpart.
(3) The recipient may make amendments other than those requiring prior HUDapproval as defined in paragraph (b) of this section but each recipient mustnotify both the Area and Central Offices of such changes.
HUD will advise the recipient to initiate closeout procedures when HUDdetermines, in consultation with the recipient, that there are not impedimentsto closeout. Closeout shall be carried out in accordance with§ 570.509 and applicable HUD guidelines.
The provisions of subparts A, B, C, J, K, and O of this part 570 shall applyto this subpart except to the extent that they are modified or augmented by thissubpart.
Applicants for Action Grants under the Pockets of Poverty provision mustdescribe the number and, to the extent possible, the types of new jobs(construction and permanent) that will be provided to the low- and moderate-income residents of the Pocket of Poverty as a direct result of the proposedproject. If the application calls for job training programs (such as thoserelated to the CETA program) or job recruiting services for the pocket'sresidents, then such proposed activities must be clearly and fully explained.HUD requires applicants to ensure that at least 75 percent of whatever permanentjobs initially result from the project are provided to low- and moderate-incomepersons and that at least 51 percent of whatever permanent jobs initially resultfrom the project are provided to low- and moderate-income residents from thepocket. HUD encourages applicants to ensure that at least 20 percent of allpermanent jobs are filled by persons from the pocket qualified to participate inthe CETA program on a continuous basis. HUD requires all applicants tocontinuously use best efforts to ensure that at least 75 percent of allpermanent jobs resulting from any Action Grant-assisted project are provided tolow- and moderate-income persons and that at least 51 percent of all permanentjobs resulting from any Action Grant-assisted project are provided to low- andmoderate-income residents from the pocket. The application should clearlydescribe how the applicant intends to meet initial and continuous jobrequirements. Private participating parties must meet these employmentrequirements in the aggregate. To enable the private participants to do so,lease agreements executed by a private participating party shall include:
(a) Provisions requiring lessees to follow hiring practices that the privateparticipating party has determined will enable it to meet these requirements inthe aggregate; and
(b) Provisions that will enable the private participating party to declare adefault under the lease agreement if the lessees do not follow such practices.
(a) This subpart describes policies and procedures applicable to states thatelect to receive Community Development Block Grant funds for distribution tounits of general local government in the state's nonentitlement areas under theHousing and Community Development Act of 1974. Other subparts of part 570 arenot applicable to the State CDBG Program, except as expressly providedotherwise.
(b) HUD's authority for the waiver of regulations and for the suspension ofrequirements to address damage in a Presidentially-declared disaster area isdescribed in 24 CFR part 5 and in section 122 of the Act, respectively.
(c) In exercising the Secretary's obligation and responsibility to review astate's performance, the Secretary will give maximum feasible deference to thestate's interpretation of the statutory requirements and the requirements ofthis regulation, provided that these interpretations are not plainlyinconsistent with the Act and the Secretary's obligation to enforce compliancewith the intent of the Congress as declared in the Act. The Secretary will notdetermine that a state has failed to carry out its certifications in compliancewith requirements of the Act (and this regulation) unless the Secretary findsthat procedures and requirements adopted by the state are insufficient to affordreasonable assurance that activities undertaken by units of general localgovernment were not plainly inappropriate to meeting the primary objectives ofthe Act, this regulation, and the state's community development objectives.
(d) Administrative action taken by the Secretary that is not explicitly andfully part of this regulation shall only apply to a specific case or issue at aspecific time, and shall not be generally applicable to the state-administeredCDBG program.
(e) Religious organizations are eligible to participate under the State CDBGProgram as provided in § 570.200(j).
(a) Except for terms defined in applicable statutes or this subpart, theSecretary will defer to a state's definitions, provided that these definitionsare explicit, reasonable and not plainly inconsistent with the Act. As used inthis subpart, the following terms shall have the meaning indicated:
(1)
(2)
(b) [Reserved]
(a)
(b)
(1)
(i) Special assessments to recover the
(ii) Special assessments to recover the
(2)
(i) The installation of the public improvements was carried out in compliancewith requirements applicable to activities assisted under this subpart,including labor, environmental and citizen participation requirements;
(ii) The installation of the public improvement meets a criterion fornational objectives. (See § 570.483(b)(1), (c), and (d).)
(iii) The requirements of § 570.482(b)(1)(ii) are met.
(c)
(2)
(i) Support services provided under section 105(a)(23) of the Act, andparagraph (c) of this section;
(ii) Services carried out under the provisions of section 105(a)(15) of theAct, that are specifically designed to increase economic opportunities throughjob training and placement and other employment support services, including, butnot limited to, peer support programs, counseling, child care, transportation,and other similar services; and
(iii) Services of any type carried out under the provisions of section105(a)(15) of the Act pursuant to a strategy approved by a state under theprovisions of § 91.315(e)(2) of this title.
(3) Environmental cleanup and economic development or redevelopment ofcontaminated properties. Remediation of known or suspected environmentalcontamination may be undertaken under the authority of section 205 of Public Law105-276 and section 105(a)(4) of the Act. Economic development activitiescarried out under sections 105(a)(14), (a)(15), or (a)(17) of the Act mayinclude costs associated with project-specific assessment or remediation ofknown or suspected environmental contamination.
(d) [Reserved]
(e)
(2)
(i) That project costs are reasonable;
(ii) That all sources of project financing are committed;
(iii) That to the extent practicable, CDBG funds are not substituted for non-Federal financial support;
(iv) That the project is financially feasible;
(v) That to the extent practicable, the return on the owner's equityinvestment will not be unreasonably high; and
(vi) That to the extent practicable, CDBG funds are disbursed on a pro ratabasis with other finances provided to the project.
(f)
(2)
(i) Create or retain at least one full-time equivalent, permanent job per$35,000 of CDBG funds used; or
(ii) Provide goods or services to residents of an area, such that the numberof low- and moderate-income persons residing in the areas served by the assistedbusinesses amounts to at least one low- and moderate-income person per $350 ofCDBG funds used.
(3)
(ii) The grantee shall apply the aggregate standards to the number of jobs tobe created/retained, or to the number of persons residing in the area served (asapplicable), as determined at the time funds are obligated to activities.
(iii) Where an activity is expected both to create or retain jobs and toprovide goods or services to residents of an area, the grantee may elect tocount the activity under either the jobs standard or the area residentsstandard, but not both.
(iv) Where CDBG assistance for an activity is limited to job training andplacement and/or other employment support services, the jobs assisted with CDBGfunds shall be considered to be created or retained jobs for the purposes ofapplying the aggregate standards.
(v) Any activity subject to these standards which meets one or more of thefollowing criteria may, at the grantee's option, be excluded from the aggregatestandards described in paragraph (f)(2) of this section:
(A) Provides jobs exclusively for unemployed persons or participants in oneor more of the following programs:
(
(
(
(B) Provides jobs predominantly for residents of Public and Indian Housingunits;
(C) Provides jobs predominantly for homeless persons;
(D) Provides jobs predominantly for low-skilled, low- and moderate-incomepersons, where the business agrees to provide clear opportunities for promotionand economic advancement, such as through the provision of training;
(E) Provides jobs predominantly for persons residing within a census tract(or block numbering area) that has at least 20 percent of its residents who arein poverty;
(F) Provides assistance to business(es) that operate(s) within a census tract(or block numbering area) that has at least 20 percent of its residents who arein poverty;
(G) Stabilizes or revitalizes a neighborhood income that has at least 70percent of its residents who are low- and moderate-income;
(H) Provides assistance to a Community Development Financial Institution (asdefined in the Community Development Banking and Financial Institutions Act of1994, (12 U.S.C. 4701 note)) serving an area that has at least 70 percent of itsresidents who are low- and moderate-income;
(I) Provides assistance to an organization eligible to carry out activitiesunder section 105(a)(15) of the Act serving an area that has at least 70 percentof its residents who are low- and moderate-income;
(J) Provides employment opportunities that are an integral component of aproject designed to promote spatial deconcentration of low- and moderate-incomeand minority persons;
(K) With prior HUD approval, provides substantial benefit to low-incomepersons through other innovative approaches;
(L) Provides services to the residents of an area pursuant to a strategyapproved by the State under the provisions of § 91.315(e)(2) of thistitle;
(M) Creates or retains jobs through businesses assisted in an area pursuantto a strategy approved by the State under the provisions of§ 91.315(e)(2) of this title.
(N) Directly involves the economic development or redevelopment ofenvironmentally contaminated properties.
(4)
(i) The amount of CDBG assistance exceeds either of the following, asapplicable:
(A) $50,000 per full-time equivalent, permanent job created or retained; or
(B) $1,000 per low- and moderate-income person to which goods or services areprovided by the activity.
(ii) The activity consists of or includes any of the following:
(A) General promotion of the community as a whole (as opposed to thepromotion of specific areas and programs);
(B) Assistance to professional sports teams;
(C) Assistance to privately-owned recreational facilities that serve apredominantly higher-income clientele, where the recreational benefit to usersor members clearly outweighs employment or other benefits to low- and moderate-income persons;
(D) Acquisition of land for which the specific proposed use has not yet beenidentified; and
(E) Assistance to a for-profit business while that business or any otherbusiness owned by the same person(s) or entity(ies) is the subject of unresolvedfindings of noncompliance relating to previous CDBG assistance provided by therecipient.
(5)
(ii) The individual activity tests in paragraph (f)(4)(i) of this sectionshall be applied to the number of jobs to be created or retained, or to thenumber of persons residing in the area served (as applicable), as determined atthe time funds are obligated to activities.
(iii) Where CDBG assistance for an activity is limited to job training andplacement and/or other employment support services, the jobs assisted with
(6)
(g)
(h)
(2)
(i)
(ii)
(iii)
(iv)
(B) A job is considered to be lost due to the provision of CDBG assistance ifthe job is relocated within three years from the date the assistance is providedto the business or the time period within which jobs are to be created asspecified by the agreement among the business, the recipient, and the state (asapplicable) if it is longer than three years.
(3)
(i)
(ii)
(iii)
(4)
(i)
(ii)
(iii)
(a)
(b)
(1)
(ii) An activity, where the assistance is to a public improvement thatprovides benefits to all the residents of an area, that is limited to payingspecial assessments levied against residential properties owned and occupied bypersons of low and moderate income.
(iii)(A) An activity to develop, establish and operate (not to exceed twoyears after establishment), a uniform emergency telephone number system servingan area having less than 51 percent of low and moderate income residents, whenthe system has not been made operational before the receipt of CDBG funds,provided a prior written determination is obtained from HUD. HUD's determinationwill be based upon certifications by the State that:
(
(
(
(
(B) The certifications of the state must be submitted along with a briefstatement describing the factual basis upon which the certifications were made.
(iv) Activities meeting the requirements of paragraph (e)(4)(i) of thissection may be considered to qualify under paragraph (b)(1) of this section.
(v) HUD will consider activities meeting the requirements of paragraph(e)(5)(i) of this section to qualify under paragraph (b)(1) of this section,provided that the area covered by the strategy meets one of the followingcriteria:
(A) The area is in a Federally-designated Empowerment Zone or EnterpriseCommunity;
(B) The area is primarily residential and contains a percentage of low andmoderate income residents that is no less than 70 percent;
(C) All of the census tracts (or block numbering areas) in the area havepoverty rates of at least 20 percent, at least 90 percent of the census tracts(or block numbering areas) in the area have poverty rates of at least 25percent, and the area is primarily residential. (If only part of a census tractor block numbering area is included in a strategy area, the poverty rate shallbe computed for those block groups (or any part thereof) which are included inthe strategy area.)
(D) Upon request by the State, HUD may grant exceptions to the 70 percent lowand moderate income or 25 percent poverty minimum thresholds on a case-by-casebasis. In no case, however, may a strategy area have both a percentage of lowand moderate income residents less than 51 percent and a poverty rate less than20 percent.
(2)
(A) Activities, the benefits of which are available to all the residents ofan area;
(B) Activities involving the acquisition, construction or rehabilitation ofproperty for housing; or
(C) Activities where the benefit to low- and moderate-income persons to beconsidered is the creation or retention of jobs, except as provided in paragraph(b)(2)(v) of this section.
(ii) To qualify under paragraph (b)(2) of this section, the activity mustmeet one or the following tests:
(A) It must benefit a clientele who are generally presumed to be principallylow and moderate income persons. Activities that exclusively serve a group ofpersons in any one or a combination of the following categories may be presumedto benefit persons, 51 percent of whom are low and moderate income: abusedchildren, battered spouses, elderly persons, adults meeting the Bureau of theCensus' Current Population Reports definition of “severelydisabled,” homeless persons, illiterate adults, persons living with AIDS,and migrant farm workers; or
(B) It must require information on family size and income so that it isevident that at least 51 percent of the clientele are persons whose familyincome does not exceed the low and moderate income limit; or
(C) It must have income eligibility requirements which limit the activityexclusively to low and moderate income persons; or
(D) It must be of such a nature, and be in such a location, that it may beconcluded that the activity's clientele will primarily be low and moderateincome persons.
(iii) An activity that serves to remove material or architectural barriers tothe mobility or accessibility of elderly persons or of adults meeting the Bureauof the Census' Current Population Reports definition of “severelydisabled” will be presumed to qualify under this criterion if it isrestricted,
(A) The reconstruction of a public facility or improvement, or portionthereof, that does not qualify under § 570.483(b)(1);
(B) The rehabilitation of a privately owned nonresidential building orimprovement that does not qualify under § 570.483(b) (1) or (4); or
(C) The rehabilitation of the common areas of a residential structure thatcontains more than one dwelling unit and that does not qualify under§ 570.483(b)(3).
(iv) A microenterprise assistance activity (carried out in accordance withthe provisions of section 105(a)(23) of the Act or § 570.482(c) andlimited to microenterprises) with respect to those owners of microenterprisesand persons developing microenterprises assisted under the activity who are low-and moderate-income persons. For purposes of this paragraph, persons determinedto be low and moderate income may be presumed to continue to qualify as such forup to a three-year period.
(v) An activity designed to provide job training and placement and/or otheremployment support services, including, but not limited to, peer supportprograms, counseling, child care, transportation, and other similar services, inwhich the percentage of low- and moderate-income persons assisted is less than51 percent may qualify under this paragraph in the following limitedcircumstances:
(A) In such cases where such training or provision of supportive services isan integrally-related component of a larger project, the only use of CDBGassistance for the project is to provide the job training and/or supportiveservices; and
(B) The proportion of the total cost of the project borne by CDBG funds is nogreater than the proportion of the total number of persons assisted who are lowor moderate income.
(3)
(i) When less than 51 percent of the units in a structure will be occupied bylow and moderate income households, CDBG assistance may be provided in thefollowing limited circumstances:
(A) The assistance is for an eligible activity to reduce the development costof the new construction of a multifamily, non-elderly rental housing project;and
(B) Not less than 20 percent of the units will be occupied by low andmoderate income households at affordable rents; and
(C) The proportion of the total cost of developing the project to be borne byCDBG funds is no greater than the proportion of units in the project that willbe occupied by low and moderate income households.
(ii) Where CDBG funds are used to assist rehabilitation delivery services orin direct support of the unit of general local government's RentalRehabilitation Program authorized under 24 CFR part 511, the funds shall beconsidered
(iii) When CDBG funds are used for housing services eligible under section105(a)(21) of the Act, such funds shall be considered to benefit low andmoderate income persons if the housing units for which the services are providedare HOME-assisted and the requirements of § 92.252 or§ 92.254 of this title are met.
(4)
(ii) For an activity that retains jobs, the unit of general local governmentmust document that the jobs would actually be lost without the CDBG assistanceand that either or both of the following conditions apply with respect to atleast 51 percent of the jobs at the time the CDBG assistance is provided: Thejob is known to be held by a low or moderate income person; or the job canreasonably be expected to turn over within the following two years and that itwill be filled by, or that steps will be taken to ensure that it is madeavailable to, a low or moderate income person upon turnover.
(iii) Jobs will be considered to be available to low and moderate incomepersons for these purposes only if:
(A) Special skills that can only be acquired with substantial training orwork experience or education beyond high school are not a prerequisite to fillsuch jobs, or the business agrees to hire unqualified persons and providetraining; and
(B) The unit of general local government and the assisted business takeactions to ensure that low and moderate income persons receive firstconsideration for filling such jobs.
(iv) For purposes of determining whether a job is held by or made availableto a low- or moderate-income person, the person may be presumed to be a low- ormoderate-income person if:
(A) He/she resides within a census tract (or block numbering area) thateither:
(
(
(B) The assisted business is located within a census tract (or blocknumbering area) that meets the requirements of paragraph (b)(4)(v) of thissection and the job under consideration is to be located within that censustract.
(v) A census tract (or block numbering area) qualifies for the presumptionspermitted under paragraphs (b)(4)(iv) (A)(
(A) It has a poverty rate of at least 20 percent as determined by the mostrecently available decennial census information;
(B) It does not include any portion of a central business district, as thisterm is used in the most recent Census of Retail Trade, unless the tract has apoverty rate of at least 30 percent as determined by the most recently availabledecennial census information; and
(C) It evidences pervasive poverty and general distress by meeting at leastone of the following standards:
(
(
(
(vi) As a general rule, each assisted business shall be considered to be aseparate activity for purposes of determining whether the activity qualifiesunder this paragraph, except:
(A) In certain cases such as where CDBG funds are used to acquire, develop orimprove a real property (e.g., a business incubator or an industrial park) therequirement may be met by measuring jobs in the aggregate for all the businessesthat locate on the property, provided the businesses are not otherwise assistedby CDBG funds.
(B) Where CDBG funds are used to pay for the staff and overhead costs of anentity specified in section 105(a)(15) of the Act making loans to businessesexclusively from non-CDBG funds, this requirement may be met by aggregating thejobs created by all of the businesses receiving loans during any one-yearperiod.
(C) Where CDBG funds are used by a recipient or subrecipient to providetechnical assistance to businesses, this requirement may be met by aggregatingthe jobs created or retained by all of the businesses receiving technicalassistance during any one-year period.
(D) Where CDBG funds are used for activities meeting the criteria listed at§ 570.482(f)(3)(v), this requirement may be met by aggregating thejobs created or retained by all businesses for which CDBG assistance isobligated for such activities during any one-year period, except as provided atparagraph (e)(6) of this section.
(E) Where CDBG funds are used by a Community Development FinancialInstitution to carry out activities for the purpose of creating or retainingjobs, this requirement may be met by aggregating the jobs created or retained byall businesses for which CDBG assistance is obligated for such activities duringany one-year period, except as provided at paragraph (e)(6) of this section.
(F) Where CDBG funds are used for public facilities or improvements whichwill result in the creation or retention of jobs by more than one business, thisrequirement may be met by aggregating the jobs created or retained by all suchbusinesses as a result of the public facility or improvement.
(
(
(5)
(c)
(1)
(i) The area, delineated by the unit of general local government, meets adefinition of a slum, blighted, deteriorated or deteriorating area under stateor local law;
(ii) The area also meets the conditions in either paragraph (c)(1)(ii)(A)or(c)(1)(ii)(B) of this section.
(A) At least 25 percent of properties throughout the area experience one ormore of the following conditions:
(
(
(
(
(
(B) The public improvements throughout the area are in a general state ofdeterioration.
(iii) The assisted activity addresses one or more of the conditions whichcontributed to the deterioration of the area. Rehabilitation of residentialbuildings carried out in an area meeting the above requirements will beconsidered to address the area's deterioration only where each such buildingrehabilitated is considered substandard before rehabilitation, and alldeficiencies making a building substandard have been eliminated if less criticalwork on the building is also undertaken. The State shall ensure that the unit ofgeneral local government has developed minimum standards for building qualitywhich may take into account local conditions.
(iv) The state keeps records sufficient to document its findings that aproject meets the national objective of prevention or elimination of slums andblight. The state must establish definitions of the conditions listed at§ 570.483(c)(1)(ii)(A) and maintain records to substantiate how thearea met the slums or blighted criteria. The designation of an area as slum orblighted under this section is required to be redetermined every 10 years forcontinued qualification. Documentation must be retained pursuant to therecordkeeping requirements contained at § 570.490.
(2)
(3)
(d)
(e)
(2) Where the assisted activity is acquisition of real property, apreliminary determination of whether the activity addresses a national objectivemay be based on the planned use of the property after acquisition. A finaldetermination shall be based on the actual use of the property, excluding anyshort-term, temporary use. Where the acquisition is for the purpose of clearancewhich will eliminate specific conditions of blight or physical decay, theclearance activity shall be considered the actual use of the property. However,any subsequent use or disposition of the cleared property shall be treated as a“change of use” under § 570.489(j).
(3) Where the assisted activity is relocation assistance that the unit ofgeneral local government is required to provide, the relocation assistance shallbe considered to address the same national objective as is addressed by thedisplacing activity. Where the relocation assistance is voluntary, the unit ofgeneral local government may qualify the assistance either on the basis of thenational objective addressed by the displacing activity or, if the relocationassistance is to low and moderate income persons, on the basis of the nationalobjective of benefiting low and moderate income persons.
(4) Where CDBG-assisted activities are carried out by a Community DevelopmentFinancial Institution whose charter limits its investment area to a primarilyresidential area consisting of at least 51 percent low- and moderate-incomepersons, the unit of general local government may also elect the followingoptions:
(i) Activities carried out by the Community Development Financial Institutionfor the purpose of creating or retaining jobs may, at the option of the unit ofgeneral local government, be considered to meet the requirements of thisparagraph under the criteria at paragraph (b)(1)(iv) of this section in lieu ofthe criteria at paragraph (b)(4) of this section; and
(ii) All housing activities for which the Community Development FinancialInstitution obligates CDBG assistance during any one-year period may beconsidered to be a single structure for purposes of applying the criteria atparagraph (b)(3) of this section.
(5) If the unit of general local government has elected to prepare acommunity revitalization strategy pursuant to the authority of§ 91.315(e)(2) of this title, and the State has approved thestrategy, the unit of general local government may also elect the followingoptions:
(i) Activities undertaken pursuant to the strategy for the purpose ofcreating or retaining jobs may, at the option of the grantee, be considered tomeet the requirements of paragraph (b) of this section under the criteria at§ 570.483(b)(1)(v) instead of the criteria at§ 570.483(b)(4); and
(ii) All housing activities in the area undertaken pursuant to the strategymay be considered to be a single structure for purposes of applying the criteriaat paragraph (b)(3) of this section.
(6) If an activity meeting the criteria in § 570.482(f)(3)(v) alsomeets the requirements of either paragraph (e)(4)(i) or (e)(5)(i) of thissection, the unit of general local government may elect to qualify the activityeither under the area benefit criteria at paragraph (b)(1)(iv) or (v) of thissection or under the job aggregation criteria at paragraph (b)(4)(vi)(D) of thissection, but not under both. Where an activity may meet the job aggregationcriteria at both paragraphs (b)(4)(vi)(D) and (E) of this section, the unit ofgeneral local government may elect to qualify the activity under eithercriterion, but not both.
(f)
(a)
(b)
(1) All CDBG funds included in the period selected and certified to by thestate shall be accounted for, except for funds used by the State, or by theunits of general local government, for program administration, or for planningactivities other than those which must meet a national objective under§ 570.483 (b)(5) or (c)(3).
(2) Any funds expended by a state for the purpose of repayment of loansguaranteed under the provisions of subpart M of this part shall be excepted frominclusion in this calculation.
(3) Except as provided in paragraph (b)(4) of this section, CDBG fundsexpended for an eligible activity meeting the criteria for activities benefitinglow and moderate income persons shall count in their entirety towards meetingthe 70 percent benefit to persons of low and moderate income requirement.
(4) Funds expended for the acquisition, new construction or rehabilitation ofproperty for housing that qualifies under § 570.483(b)(3) shall becounted for this purpose, but shall be limited to an amount determined bymultiplying the total cost (including CDBG and non-CDBG costs) of theacquisition, construction or rehabilitation by the percent of units in suchhousing to be occupied by low and moderate income persons, except that theamount counted shall not exceed the amount of CDBG funds provided.
(a)
(b)
(1) Administered by HUD pursuant to subpart F of this part if the state hasnot administered the program in any previous fiscal year; or
(2) Reallocated to all states in the succeeding fiscal year according to theformula of section 106(d) of the Act, if the state administered the program inany previous year.
(c)
(a)
(1) Provide for and encourage citizen participation, particularly by low andmoderate income persons who reside in slum or blighted areas and areas in whichCDBG funds are proposed to be used;
(2) Ensure that citizens will be given reasonable and timely access to localmeetings, information, and records relating to the unit of local government'sproposed and actual use of CDBG funds;
(3) Furnish citizens information, including but not limited to:
(i) The amount of CDBG funds expected to be made available for the currentfiscal year (including the grant and anticipated program income);
(ii) The range of activities that may be undertaken with the CDBG funds;
(iii) The estimated amount of the CDBG funds proposed to be used foractivities that will meet the national objective of benefit to low and moderateincome persons; and
(iv) The proposed CDBG activities likely to result in displacement and theunit of general local government's antidisplacement and relocation plansrequired under § 570.488.
(4) Provide technical assistance to groups representative of persons of lowand moderate income that request assistance in developing proposals inaccordance with the procedures developed by the state. Such assistance need notinclude providing funds to such groups;
(5) Provide for a minimum of two public hearings, each at a different stageof the program, for the purpose of obtaining citizens' views and responding toproposals and questions. Together the hearings must cover community developmentand housing needs, development of proposed activities and a review of programperformance. The public hearings to cover community development and housingneeds must be held before submission of an application to the state. There mustbe reasonable notice of the hearings and they must be held at times andlocations convenient to potential or actual beneficiaries, with accommodationsfor the handicapped. Public hearings shall be conducted in a manner to meet theneeds of non-English speaking residents where a significant number of non-English speaking residents can reasonably be expected to participate;
(6) Provide citizens with reasonable advance notice of, and opportunity tocomment on, proposed activities in an application to the state and, for grantsalready made, activities which are proposed to be added, deleted orsubstantially changed from the unit of general local government's application tothe state. Substantially changed means changes made in terms of purpose, scope,location or beneficiaries as defined by criteria established by the state.
(7) Provide citizens the address, phone number, and times for submittingcomplaints and grievances, and provide timely written answers to writtencomplaints and grievances, within 15 working days where practicable.
(b)
(a)
(b)
(1) Conducting an analysis to identify impediments to fair housing choicewithin the State;
(2) Taking appropriate actions to overcome the effects of any impedimentsidentified through that analysis;
(3) Maintaining records reflecting the analysis and actions in this regard;and
(4) Assuring that units of local government funded by the State comply withtheir certifications to affirmatively further fair housing.
(c)
(d) States shall comply with section 3 of the Housing and Urban DevelopmentAct of 1968 (12 U.S.C. 1701u) and the implementing regulations in 24 CFR part135. Section 3 requires that employment and other economic opportunities arisingin connection with housing rehabilitation, housing construction, or other publicconstruction projects shall, to the greatest extent feasible, and consistentwith existing Federal, State, and local laws and regulations, be given to low-and very low-income persons.
(e)
The requirements for States and state recipients with regard to thedisplacement, relocation, acquisition, and
(a)
(ii) For determining the amount of CDBG funds available in past years foradministrative costs incurred by the state, the following schedule applies:
(A) $100,000 per annual grant beginning with FY 1984 allocations;
(B) Two percent of program income returned by units of general localgovernment to the State after August 21, 1985; and
(C) Two percent of program income received by units of general localgovernment after February 11, 1991.
(iii) The state has the option of selecting its approach for demonstratingcompliance with this requirement. Regardless of the approach selected by thestate, the state will be required to pay its 50 percent of administrative costsin excess of $100,000 in the same amount and at the same time at which it drawsCDBG funds for such costs after the expenditure of the $100,000. Any state forwhich it is determined that matching costs contributions are in arrears on theuse of CDBG funds for administrative costs will be required to bring matchingcost expenditures up to the level of CDBG expenditures for such costs within oneyear of the effective date of this subpart. A state grant may not be closed outif the state's matching cost contribution is not at least equal to the amount ofCDBG funds in excess of $100,000 expended for administration. Funds from anyyear's grant may be used to pay administrative costs associated with any otheryear's grant. The two approaches are:
(A) Cumulative accounting of administrative costs incurred by the state sinceits assumption of the Program. Under this approach, the state will identify, foreach grant it has received, the CDBG funds eligible to be used foradministrative costs as well as the maximum amount of matching funds which thestate is required to pay. The amounts will then be aggregated for all grantsreceived. The state must keep records demonstrating the actual amount of CDBGfunds from each grant received which was used for administrative costs as wellas matching amounts paid by the state. These amounts will also be aggregated forall grants received. The state will be considered to be in compliance with therequirement if the aggregate of actual amounts spent for administrative costsdoes not exceed the maximum amount allowable and the amount which the state haspaid in matching funds is at least equal to the amount of CDBG funds in excessof $100,000 (for each applicable allocation) drawn for administrative purposes.Any administrative amounts associated with a particular state grant shall bededucted from the aggregate totals upon closeout of that state grant.
(B) An accounting process developed and implemented by the state whichprovides sufficient information to demonstrate that the requirements of thissubsection are met.
(2) The state may not charge fees of any entity for processing or consideringany application for CDBG fund, or for carrying out its responsibilities underthis subpart.
(3) The state and its funded units of general local government shall notexpend for planning, management and administrative costs more than 20 percent ofthe aggregate amount of the annual grant, plus program income and fundsreallocated by HUD to the State which are distributed during the time
(b)
(c)
(2)
(d)
(i) Be sufficiently specific to ensure that funds received under this subpartare used in compliance with all applicable statutory and regulatory provisions:
(ii) Ensure that funds received under this subpart are only spent forreasonable and necessary costs of operating programs under this subpart; and
(iii) Ensure that funds received under this subpart are not used for generalexpenses required to carry out other responsibilities of state and localgovernments.
(2) A state may satisfy this requirement by:
(i) Using fiscal and administrative requirements applicable to the use of itsown funds;
(ii) Adopting new fiscal and administrative requirements; or
(iii) Applying the provisions in 24 CFR part 85 “Uniform AdministrativeRequirements for Grants and Cooperative Agreements to State and LocalGovernments.”
(e)
(i) Proceeds from the disposition by sale or long term lease of real propertypurchased or improved with CDBG funds;
(ii) Proceeds from the disposition of equipment purchased with CDBG funds;
(iii) Gross income from the use or rental of real or personal propertyacquired by the unit of general local government or a subrecipient of a unit ofgeneral local government with CDBG funds; less the costs incidental to thegeneration of the income;
(iv) Gross income from the use or rental of real property owned by the unitof general local government or a subrecipient of a unit of general localgovernment, that was constructed or improved with CDBG funds, less the
(v) Payments of principal and interest on loans made using CDBG funds;
(vi) Proceeds from the sale of loans made with CDBG funds;
(vii) Proceeds from the sale of obligations secured by loans made with CDBGfunds;
(viii) Interest earned on funds held in a revolving fund account;
(ix) Interest earned on program income pending disposition of the income;
(x) Funds collected through special assessments made against properties ownedand occupied by households
(xi) Gross income paid to a unit of general local government or subrecipientfrom the ownership interest in a for-profit entity acquired in return for theprovision of CDBG assistance.
(2) “Program income” does not include the following:
(i) The total amount of funds which is less than $25,000 received in a singleyear that is retained by a unit of general local government and itssubrecipients;
(ii) Amounts generated by activities eligible under section 105(a)(15) of theAct and carried out by an entity under the authority of section 105(a)(15) ofthe Act;
(iii) Amounts generated by activities that are financed by a loan guaranteedunder section 108 of the Act and meet one or more of the public benefit criteriaspecified at § 570.482(f)(3)(v) or are carried out in conjunctionwith a grant under section 108(q) of the Act in an area determined by HUD tomeet the eligibility requirements for designation as an Urban Empowerment Zonepursuant to 24 CFR part 597, subpart B. Such exclusion shall not apply if CDBGfunds are used to repay the guaranteed loan. When such a guaranteed loan ispartially repaid with CDBG funds, the amount generated shall be prorated toreflect the percentage of CDBG funds used. Amounts generated by activitiesfinanced with loans guaranteed under section 108 of the Act which are notdefined as program income shall be treated as miscellaneous revenue and shallnot be subject to any of the requirements of this part. However, such treatmentshall not affect the right of the Secretary to require the section 108 borrowerto pledge such amounts as security for the guaranteed loan. The determinationwhether such amounts shall constitute program income shall be governed by theprovisions of the contract required at § 570.705(b)(1).
(3) The state may permit the unit of general local government which receivesor will receive program income to retain the program income, subject to therequirements of paragraph (e)(3)(ii) of this section, or the state may requirethe unit of general local government to pay the program income to the state. Thestate, however, must permit the unit of general local government to retain theprogram income if the program income will be used to continue the activity fromwhich the program income was derived. The state will determine when an activitywill be considered to be continued.
(i)
(ii)
(B) Program income that is received and retained by the unit of general localgovernment after closeout of the grant that generated the program income is notsubject to the requirements of this subpart, except:
(
(
(
(C) The state shall require units of general local government, to the maximumextent feasible, to disburse program income that is subject to the requirementsof this subpart before requesting additional funds from the state foractivities, except as provided in paragraph (f) of this section.
(f)
(2) The state may establish a revolving fund to distribute funds to units ofgeneral local government to carry out specific, identified activities. Arevolving fund, for this purpose, is a separate fund (with a set of accountsthat are independent of other program accounts) established to fund grants tounits of general local government to carry out specific activities which, inturn, generate payments to the fund for additional grants to units of generallocal government to carry out such activities. Program income in the revolvingfund must be disbursed from the fund before additional grant funds are drawnfrom the Treasury for payments to units of general local government which couldbe funded from the revolving fund.
(3) A revolving fund established by either the State or unit of general localgovernment shall not be directly funded or capitalized with grant funds.
(g)
(h)
(ii) In all cases not governed by paragraph (g) of this section, thisparagraph (h) shall apply. Such cases include the acquisition and disposition ofreal property and the provision of assistance with CDBG funds by the unit ofgeneral local government or its subrecipients, to individuals, businesses andother private entities.
(2)
(3)
(4)
(i) A disclosure of the nature of the conflict, accompanied by an assurancethat there has been public disclosure of the conflict and a description of howthe public disclosure was made; and
(ii) An opinion of the attorney for the state or the unit of general localgovernment, as appropriate, that the interest for which the exception is soughtwould not violate state or local law.
(5)
(i) Whether the exception would provide a significant cost benefit or anessential degree of expertise to the program or project which would otherwisenot be available;
(ii) Whether an opportunity was provided for open competitive bidding ornegotiation;
(iii) Whether the person affected is a member of a group or class of low ormoderate income persons intended to be the beneficiaries of the assistedactivity, and the exception will permit such person to receive generally thesame interests or benefits as are being made available or provided to the groupor class;
(iv) Whether the affected person has withdrawn from his or her functions orresponsibilities, or the decisionmaking process with respect to the specificassisted activity in question;
(v) Whether the interest or benefit was present before the affected personwas in a position as described in paragraph (h)(3) of this section;
(vi) Whether undue hardship will result either to the State or the unit ofgeneral local government or the person affected when weighed against the publicinterest served by avoiding the prohibited conflict; and
(vii) Any other relevant considerations.
(i)
(j)
(1) A unit of general local governments may not change the use or planned useof any such property (including the beneficiaries of such use) from that forwhich the acquisition or improvement was made, unless the unit of general localgovernment provides affected citizens with reasonable notice of and opportunityto comment on any proposed change, and either:
(i) The new use of the property qualifies as meeting one of the nationalobjectives and is not a building for the general conduct of government; or
(ii) The requirements in paragraph (j)(2) of this section are met.
(2) If the unit of general local government determines, after consultationwith affected citizens, that it is appropriate to change the use of the propertyto a use which does not qualify under paragraph (j)(1) of this section, it mayretain or dispose of the property for the changed use if the unit of generallocal government's CDBG program is reimbursed or the state's CDBG program isreimbursed, at the discretion of the state. The reimbursement shall be in theamount of the current fair market value of the property, less any portion of thevalue attributable to expenditures of non-CDBG funds for acquisition of, andimprovements to, the property, except that if the change in use occurs aftergrant closeout but within 5 years of such closeout, the unit of general localgovernment shall make the reimbursement to the State's CDBG program account.
(3) Following the reimbursement of the CDBG program in accordance withparagraph (j)(2) of this section, the property no longer will be subject to anyCDBG requirements.
(k)
(l)
(m)
(a)
(2) The state shall keep records to document its funding decisions reachedunder the method of distribution described in 24 CFR 91.320(j)(1), including
(b)
(c)
(2) The State shall provide citizens with reasonable access to recordsregarding the past use of CDBG funds and ensure that units of general localgovernment provide citizens with reasonable access to records regarding the pastuse of CDBG funds consistent with State or local requirements concerning theprivacy of personal records.
(d)
The annual performance and evaluation report shall be submitted in accordancewith 24 CFR part 91.
(a) The state shall make reviews and audits including on-site reviews, ofunits of general local government as may be necessary or appropriate to meet therequirements of section 104(e)(2) of the Act.
(b) In the case of noncompliance with these requirements, the State shalltake such actions as may be appropriate to prevent a continuance of thedeficiency, mitigate any adverse effects or consequences and prevent arecurrence. The state shall establish remedies for units of general localgovernment noncompliance.
(a)
(1) Whether the state has distributed CDBG funds to units of general localgovernment in a timely manner in conformance to the method of distributiondescribed in its action plan under part 91 of this title;
(2) Whether the state has carried out its certifications in compliance withthe requirements of the Act and this subpart and other applicable laws; and
(3) Whether the state has made reviews and audits of the units of generallocal government required by § 570.492.
(b)
(a) States are encouraged to adopt and achieve a goal of obligating andannouncing 95 percent of funds to units of general local government within 12months of the state signing its grant agreement with HUD.
(b) HUD will review each state to determine if the state has distributed CDBGfunds in a timely manner. The state's distribution of CDBG funds is timely if:
(1) All of the state's annual grant (excluding state administration) has beenobligated and announced to units of general local government within 15 months ofthe state signing its grant agreement with HUD; and
(2) Recaptured funds and program income received by the state areexpeditiously obligated and announced to units of general local government.
(c) HUD may collect necessary information from states to determine whetherCDBG funds have been distributed in a timely manner.
(a) If HUD's review and audit under § 570.493 results in anegative determination, or if HUD otherwise determines that a state or unit ofgeneral local government has failed to comply with any requirement of thissubpart, the state will be given an opportunity to contest the finding and willbe requested to submit a plan for corrective action. If the state isunsuccessful in contesting the validity of the finding to the satisfaction ofHUD, or if the state's plan for corrective action is not satisfactory to HUD,HUD may take one or more of the following actions to prevent a continuation ofthe deficiency; mitigate, to the extent possible, the adverse effects orconsequence of the deficiency; or prevent a recurrence of the deficiency:
(1) Issue a letter of warning that advises the State of the deficiency andputs the state on notice that additional action will be taken if the deficiencyis not corrected or is repeated;
(2) Advise the state that additional information or assurances will berequired before acceptance of one or more of the certifications required for thesucceeding year grant;
(3) Advise the state to suspend or terminate disbursement of funds for adeficient activity or grant;
(4) Advise the state to reimburse its grant in any amounts improperlyexpended;
(5) Change the method of payment to the state from an advance basis to areimbursement basis;
(6) Based on the state's current failure to comply with a requirement of thissubpart which will affect the use of the succeeding year grant, condition theuse of the succeeding fiscal years grant funds upon appropriate correctiveaction by the state. When the use of funds is conditioned, HUD shall specify thereasons for the conditions and the actions necessary to satisfy the conditions.
(b)(1) Whenever HUD determines that a state or unit of general localgovernment which is a recipient of CDBG funds has failed to comply with section109 of the Act (nondiscrimination requirements), HUD shall notify the governorof the State or chief executive officer of the unit of general local governmentof the noncompliance and shall request the governor or the chief executiveofficer to secure compliance. If within a reasonable time, not to exceed sixtydays, the governor or chief executive officer fails or refuses to securecompliance, HUD may take the following action:
(i) Refer the matter to the Attorney General with a recommendation that anappropriate civil action be instituted;
(ii) Exercise the powers and functions provided by title VI of the CivilRights Act of 1964 (42 U.S.C. 2000d-2000d-7);
(iii) Exercise the powers and functions provided for in § 570.496;or
(iv) Take such other action as may be provided by law.
(2) When a matter is referred to the Attorney General pursuant to paragraph(b)(1)(i) of this section, or whenever HUD has reason to believe that a
(a)
(b)
(i) Terminate payments to the state;
(ii) Reduce payments for current or future grants to the state by an amountequal to the amount of CDBG funds distributed or used without compliance withthe requirements of this subpart;
(iii) Limit the availability of payments to the state to activities notaffected by the failure to comply or to activities designed to overcome thefailure to comply;
(iv) Based on the state's failure to comply with a requirement of thissubpart (other than the state's current failure to comply which will affect theuse of the succeeding year grant), condition the use of the grant funds uponappropriate corrective action by the state specified by HUD; or
(v) With respect to a CDBG grant awarded by the state to a unit of generallocal government, withhold, reduce, or withdraw the grant, require the state towithhold, reduce, or withdraw the grant, or take other action as appropriate,except that CDBG funds expended on eligible activities shall not be recapturedor deducted from future CDBG grants to such unit of general local government.
(2) HUD may on due notice suspend payments at any time after the issuance ofa notice of opportunity for hearing pursuant to paragraph (d) of this section,pending such hearing and a final decision, to the extent HUD determines suchaction necessary to prevent a continuation of the noncompliance.
(c) In lieu of, or in addition to, the action authorized by paragraph (b) ofthis section, if HUD has reason to believe that the state or unit of generallocal government has failed to comply substantially with any provision of thissubpart, HUD may:
(1) Refer the matter to the Attorney General of the United States with arecommendation that an appropriate civil action be instituted; and
(2) Upon such a referral, the Attorney General may bring a civil action inany United States district court having venue thereof for such relief as may beappropriate, including an action to recover the amount of the CDBG funds whichwas not expended in accordance with this subpart, or for mandatory or injunctiverelief.
(d)
(1)
(i) In a manner which is adequate to allow the respondent to prepare itsresponse, the basis upon which HUD determined that the respondent failed tocomply with a provision of this subpart;
(ii) That the hearing procedures are governed by these rules;
(iii) That the respondent has 14 days from receipt of the notice within whichto provide a written request for a hearing to the Chief Docket Clerk, Office ofAdministrative Law Judges, and the address and telephone number of the ChiefDocket Clerk;
(iv) Of the action which HUD proposes to take and that the authority for thisaction is § 570.496 of this subpart;
(v) That if the respondent fails to request a hearing within the timespecified, HUD's determination that the respondent failed to comply with aprovision of this subpart shall be final and HUD may proceed to take theproposed action.
(2)
(3)
(i) To administer oaths and affirmations;
(ii) To issue subpoenas as authorized by law;
(iii) To rule upon offers of proof and receive relevant evidence;
(iv) To order or limit discovery before the hearing as the interests ofjustice may require;
(v) To regulate the course of the hearing and the conduct of the parties andtheir counsel;
(vi) To hold conferences for the settlement or simplification of the issuesby consent of the parties;
(vii) To consider and rule upon all procedural and other motions appropriatein adjudicative proceedings; and
(viii) To make and file initial determinations.
(4)
(5)
(6)
(7)
(8)
(9)
(10)
Pursuant to section 106(d)(2)(A)(i) of the Act, a State has the right toelect, in such manner and at such time as the Secretary may prescribe, toadminister funds allocated under subpart A of this part for use innonentitlement areas of the State. After January 26, 1995, any State whichelects to administer the allocation of CDBG funds for use in nonentitlementareas of the State in any year must, in addition to all other requirements ofthis subpart, submit a pledge by the State in accordance with section 108(d)(2)of the Act, and in a form acceptable to HUD, of any future CDBG grants it mayreceive under subpart A and this subpart. Such pledge shall be for the purposeof assuring repayment of any debt obligations (as defined in§ 570.701), in accordance with their terms, that HUD may haveguaranteed in the respective State on behalf of any nonentitlement public entity(as defined in § 570.701) or its designated public agency prior tothe State's election.
For the purposes of this subpart, the following terms shall apply:
(a)
(1) Program income includes, but is not limited to, the following:
(i) Proceeds from the disposition by sale or long-term lease of real propertypurchased or improved with CDBG funds;
(ii) Proceeds from the disposition of equipment purchased with CDBG funds;
(iii) Gross income from the use or rental of real or personal propertyacquired by the recipient or by a subrecipient with CDBG funds, less costsincidental to generation of the income;
(iv) Gross income from the use or rental of real property, owned by therecipient or by a subrecipient, that was constructed or improved with CDBGfunds, less costs incidental to generation of the income;
(v) Payments of principal and interest on loans made using CDBG funds, exceptas provided in paragraph (a)(3) of this section;
(vi) Proceeds from the sale of loans made with CDBG funds;
(vii) Proceeds from sale of obligations secured by loans made with CDBGfunds;
(viii) [Reserved]
(ix) Interest earned on program income pending its disposition; and
(x) Funds collected through special assessments made against properties ownedand occupied by households
(2) Program income does not include income earned (except for interestdescribed in § 570.513) on grant advances from the U.S. Treasury. Thefollowing items of income earned on grant advances must be remitted to HUD fortransmittal to the U.S. Treasury, and will not be reallocated under section106(c) or (d) of the Act:
(i) Interest earned from the investment of the initial proceeds of a grantadvance by the U.S. Treasury;
(ii) Interest earned on loans or other forms of assistance provided with CDBGfunds that are used for activities determined by HUD either to be ineligible orto fail to meet a national objective in accordance with the requirements ofsubpart C of this part, or that fail substantially to meet any other requirementof this part; and
(iii) Interest earned on the investment of amounts reimbursed to the CDBGprogram account prior to the use of the reimbursed funds for eligible purposes.
(3) The calculation of the amount of program income for the recipient's CDBGprogram as a whole (i.e., comprising activities carried out by a grantee and itssubrecipients) shall exclude payments made by subrecipients of principal and/orinterest on CDBG-funded loans received from grantees if such payments are madeusing program income received by the subrecipient. (By making such payments, thesubrecipient shall be deemed to have transferred program income to the grantee.)The amount of program income derived from this calculation shall be used forreporting purposes, for purposes of applying the requirement under§ 570.504(b)(2)(iii), and in determining limitations on planning andadministration and public services activities to be paid for with CDBG funds.
(4) Program income does not include:
(i) Any income received in a single program year by the recipient and all itssubrecipients if the total amount of such income does not exceed $25,000; and
(ii) Amounts generated by activities that are financed by a loan guaranteedunder section 108 of the Act and meet one or more of the public benefit criteriaspecified at § 570.209(b)(2)(v) or are carried out in conjunctionwith a grant under section 108(q) in an area determined by HUD to meet theeligibility requirements for designation as an Urban Empowerment Zone pursuantto 24 CFR part 597, subpart B. Such exclusion shall not apply if CDBG funds areused to repay the guaranteed loan. When such a guaranteed loan is partiallyrepaid with CDBG funds, the amount generated shall be prorated to reflect thepercentage of CDBG funds used. Amounts generated by activities financed withloans guaranteed under section 108 which are not defined as program income shallbe treated as miscellaneous revenue and shall not be subject to any of therequirements of this part, except that the use of such funds shall be limited toactivities that are located in a revitalization strategy area and implement aHUD approved area revitalization strategy pursuant to § 91.215(e) ofthis title. However, such treatment shall not affect the right of the Secretaryto require the section 108 borrower to pledge such amounts as security for theguaranteed loan. The determination whether such amounts shall constitute programincome shall
(5) Examples of other receipts that are not considered program income areproceeds from fund raising activities carried out by subrecipients receivingCDBG assistance (the costs of fundraising are generally unallowable under theapplicable OMB circulars referenced in 24 CFR 84.27), funds collected throughspecial assessments used to recover the non-CDBG portion of a publicimprovement, and proceeds from the disposition of real property acquired orimproved with CDBG funds when the disposition occurs after the applicable timeperiod specified in § 570.503(b)(8) for subrecipient-controlledproperty, or in § 570.505 for recipient-controlled property.
(b)
(c)
(a) One or more public agencies, including existing local public agencies,may be designated by the chief executive officer of the recipient to undertakeactivities assisted by this part. A public agency so designated shall be subjectto the same requirements as are applicable to subrecipients.
(b) The recipient is responsible for ensuring that CDBG funds are used inaccordance with all program requirements. The use of designated public agencies,subrecipients, or contractors does not relieve the recipient of thisresponsibility. The recipient is also responsible for determining the adequacyof performance under subrecipient agreements and procurement contracts, and fortaking appropriate action when performance problems arise, such as the actionsdescribed in § 570.910. Where a unit of general local government isparticipating with, or as part of, an urban county, or as part of a metropolitancity, the recipient is responsible for applying to the unit of general localgovernment the same requirements as are applicable to subrecipients, except thatthe five-year period identified under § 570.503(b)(8)(i) shall beginwith the date that the unit of general local government is no longer consideredby HUD to be a part of the metropolitan city or urban county, as applicable,instead of the date that the subrecipient agreement expires.
(a) Recipients and subrecipients that are governmental entities (includingpublic agencies) shall comply with the requirements and standards of OMBCircular No. A-87, “Cost Principles for State, Local, and IndianTribal Governments”; OMB Circular A-128, “Audits
(1) Section 85.3, “Definitions”;
(2) Section 85.6, “Exceptions”;
(3) Section 85.12, “Special grant or subgrant conditions for‘high-risk’ grantees”;
(4) Section 85.20, “Standards for financial management systems,”except paragraph (a);
(5) Section 85.21, “Payment,” except as modified by§ 570.513;
(6) Section 85.22, “Allowable costs”;
(7) Section 85.26, “Non-federal audits”;
(8) Section 85.32, “Equipment,” except in all cases in which theequipment is sold, the proceeds shall be program income;
(9) Section 85.33, “Supplies”;
(10) Section 85.34, “Copyrights”;
(11) Section 85.35, “Subawards to debarred and suspendedparties”;
(12) Section 85.36, “Procurement,” except paragraph (a);
(13) Section 85.37, “Subgrants”;
(14) Section 85.40, “Monitoring and reporting programperformance,” except paragraphs (b) through (d) and paragraph (f);
(15) Section 85.41, “Financial reporting,” except paragraphs (a),(b), and (e);
(16) Section 85.42, “Retention and access requirements forrecords,” except that the period shall be four years;
(17) Section 85.43, “Enforcement”;
(18) Section 85.44, “Termination for convenience”;
(19) Section 85.51 “Later disallowances and adjustments” and
(20) Section 85.52, “Collection of amounts due.”
(b) Subrecipients, except subrecipients that are governmental entities, shallcomply with the requirements and standards of OMB Circular No. A-122,“Cost Principles for Non-profit Organizations,” or OMB Circular No.A-21, “Cost Principles for Educational Institutions,” asapplicable, and OMB Circular A-133, “Audits of Institutions ofHigher Education and Other Nonprofit Institutions” (as set forth in 24 CFRpart 45). Audits shall be conducted annually. Such subrecipients shall alsocomply with the following provisions of the Uniform Administrative requirementsof OMB Circular A-110 (implemented at 24 CFR part 84, “UniformAdministrative Requirements for Grants and Agreements With Institutions ofHigher Education, Hospitals and Other Non-Profit Organizations”) or therelated CDBG provision, as specified in this paragraph:
(1) Subpart A—“General”;
(2) Subpart B—“Pre-Award Requirements,” except for§ 84.12, “Forms for Applying for Federal Assistance”;
(3) Subpart C—“Post-Award Requirements,” except for:
(i) Section 84.22, “Payment Requirements.” Grantees shall followthe standards of §§ 85.20(b)(7) and 85.21 in making payments tosubrecipients;
(ii) Section 84.23, “Cost Sharing and Matching”;
(iii) Section 84.24, “Program Income.” In lieu of§ 84.24, CDBG subrecipients shall follow § 570.504;
(iv) Section 84.25, “Revision of Budget and Program Plans”;
(v) Section 84.32, “Real Property.” In lieu of§ 84.32, CDBG subrecipients shall follow § 570.505;
(vi) Section 84.34(g), “Equipment.” In lieu of the dispositionprovisions of § 84.34(g), the following applies:
(A) In all cases in which equipment is sold, the proceeds shall be programincome (prorated to reflect the extent to which CDBG funds were used to acquirethe equipment); and
(B) Equipment not needed by the subrecipient for CDBG activities shall betransferred to the recipient for the CDBG program or shall be retained aftercompensating the recipient;
(vii) Section 84.51 (b), (c), (d), (e), (f), (g), and (h), “Monitoringand Reporting Program Performance”;
(viii) Section 84.52, “Financial Reporting”;
(ix) Section 84.53(b), “Retention and access requirements forrecords.” Section 84.53(b) applies with the following exceptions:
(A) The retention period referenced in § 84.53(b) pertaining toindividual CDBG activities shall be four years; and
(B) The retention period starts from the date of submission of the annualperformance and evaluation report, as prescribed in 24 CFR 91.520, in which thespecific activity is reported on for the final time rather than from the date ofsubmission of the final expenditure report for the award;
(x) Section 84.61, “Termination.” In lieu of the provisions of§ 84.61, CDBG subrecipients shall comply with§ 570.503(b)(7); and
(4) Subpart D—“After-the-Award Requirements,” except for§ 84.71, “Closeout Procedures.”
(a) Before disbursing any CDBG funds to a subrecipient, the recipient shallsign a written agreement with the subrecipient. The agreement shall remain ineffect during any period that the subrecipient has control over CDBG funds,including program income.
(b) At a minimum, the written agreement with the subrecipient shall includeprovisions concerning the following following items:
(1)
(2)
(3)
(4)
(5)
(i) The subrecipient does not assume the recipient's environmentalresponsibilities described at § 570.604; and
(ii) The subrecipient does not assume the recipient's responsibility forinitiating the review process under the provisions of 24 CFR part 52.
(6)
(7)
(i) Used to meet one of the national objectives in § 570.208(formerly § 570.901) until five years after expiration of theagreement, or for such longer period of time as determined to be appropriate bythe recipient; or
(ii) Not used in accordance with paragraph (b)(7)(i) of this section, inwhich event the subrecipient shall pay to the recipient an amount equal to thecurrent market value of the property less any portion of the value attributableto expenditures of non-CDBG funds for the acquisition of, or improvement to, theproperty. The payment is program income to the recipient. (No payment
(a)
(b)
(2) If the recipient chooses to retain program income, that program incomeshall be disposed of as follows:
(i) Program income in the form of repayments to, or interest earned on, arevolving fund as defined in § 570.500(b) shall be substantiallydisbursed from the fund before additional cash withdrawals are made from theU.S. Treasury for the same activity. (This rule does not prevent a lump sumdisbursement to finance the rehabilitation of privately owned properties asprovided for in § 570.513.)
(ii) Substantially all other program income shall be disbursed for eligibleactivities before additional cash withdrawals are made from the U.S. Treasury.
(iii) At the end of each program year, the aggregate amount of program incomecash balances and any investment thereof (except those needed for immediate cashneeds, cash balances of a revolving loan fund, cash balances from a lump-sumdrawdown, or cash or investments held for section 108 loan guarantee securityneeds) that, as of the last day of the program year, exceeds one-twelfth of themost recent grant made pursuant to § 570.304 shall be remitted to HUDas soon as practicable thereafter, to be placed in the recipient's line ofcredit. This provision applies to program income cash balances and investmentsthereof held by the grantee and its subrecipients. (This provision shall beapplied for the first time at the end of the program year for which FederalFiscal Year 1996 funds are provided.)
(3) Program income on hand at the time of closeout shall continue to besubject to the eligibility requirements in subpart C and all other applicableprovisions of this part until it is expended.
(4) Unless otherwise provided in any grant closeout agreement, and subject tothe requirements of paragraph (b)(5) of this section, income received aftercloseout shall not be governed by the provisions of this part, except that, ifat the time of closeout the recipient has another ongoing CDBG grant receiveddirectly from HUD, funds received after closeout shall be treated as programincome of the ongoing grant program.
(5) If the recipient does not have another ongoing grant received directlyfrom HUD at the time of closeout, income received after closeout from thedisposition of real property or from loans outstanding at the time of closeoutshall not be governed by the provisions of this part, except that such incomeshall be used for activities that meet one of the national objectives in§ 570.901 and the eligibility requirements described in section 105of the Act.
(c)
(d)
The standards described in this section apply to real property within therecipient's control which was acquired or improved in whole or in part usingCDBG funds in excess of $25,000. These standards shall apply from the date CDBGfunds are first spent for the property until five years after closeout of anentitlement recipient's participation in the entitlement CDBG program or, withrespect to other recipients, until five years after the closeout of the grantfrom which the assistance to the property was provided.
(a) A recipient may not change the use or planned use of any such property(including the beneficiaries of such use) from that for which the acquisition orimprovement was made unless the recipient provides affected citizens withreasonable notice of, and opportunity to comment on, any proposed change, andeither:
(1) The new use of such property qualifies as meeting one of the nationalobjectives in § 570.208 (formerly § 570.901) and is not abuilding for the general conduct of government; or
(2) The requirements in paragraph (b) of this section are met.
(b) If the recipient determines, after consultation with affected citizens,that it is appropriate to change the use of the property to a use which does notqualify under paragraph (a)(1) of this section, it may retain or dispose of theproperty for the changed use if the recipient's CDBG program is reimbursed inthe amount of the current fair market value of the property, less any portion ofthe value attributable to expenditures of non-CDBG funds for acquisition of, andimprovements to, the property.
(c) If the change of use occurs after closeout, the provisions governingincome from the disposition of the real property in § 570.504(b)(4)or (5), as applicable, shall apply to the use of funds reimbursed.
(d) Following the reimbursement of the CDBG program in accordance withparagraph (b) of this section, the property no longer will be subject to anyCDBG requirements.
Each recipient shall establish and maintain sufficient records to enable theSecretary to determine whether the recipient has met the requirements of thispart. At a minimum, the following records are needed:
(a) Records providing a full description of each activity assisted (or beingassisted) with CDBG funds, including its location (if the activity has ageographical locus), the amount of CDBG funds budgeted, obligated and expendedfor the activity, and the provision in subpart C under which it is eligible.
(b) Records demonstrating that each activity undertaken meets one of thecriteria set forth in § 570.208. (Where information on income byfamily size is required, the recipient may substitute evidence establishing thatthe person assisted qualifies under another program having income qualificationcriteria at least as restrictive as that used in the definitions of “lowand moderate income person” and “low and moderate incomehousehold” (as applicable) at § 570.3, such as Job TrainingPartnership Act (JTPA) and welfare programs; or the recipient may substituteevidence that the assisted person is homeless; or the recipient may substitute acopy of a verifiable certification from the assisted person that his or herfamily income does not exceed the applicable income limit established inaccordance with § 570.3; or the recipient may substitute a noticethat
(1) For each activity determined to benefit low and moderate income persons,the income limits applied and the point in time when the benefit was determined.
(2) For each activity determined to benefit low and moderate income personsbased on the area served by the activity:
(i) The boundaries of the service area;
(ii) The income characteristics of families and unrelated individuals in theservice area; and
(iii) If the percent of low and moderate income persons in the service areais less than 51 percent, data showing that the area qualifies under theexception criteria set forth at § 570.208(a)(1)(ii).
(3) For each activity determined to benefit low and moderate income personsbecause the activity involves a facility or service designed for use by alimited clientele consisting exclusively or predominantly of low and moderateincome persons:
(i) Documentation establishing that the facility or service is designed forthe particular needs of or used exclusively by senior citizens, adults meetingthe Bureau of the Census' Current Population Reports definition of“severely disabled,” persons living with AIDS, battered spouses,abused children, the homeless, illiterate adults, or migrant farm workers, forwhich the regulations provide a presumption concerning the extent to which low-and moderate-income persons benefit; or
(ii) Documentation describing how the nature and, if applicable, the locationof the facility or service establishes that it is used predominantly by low andmoderate income persons; or
(iii) Data showing the size and annual income of the family of each personreceiving the benefit.
(4) For each activity carried out for the purpose of providing or improvinghousing which is determined to benefit low and moderate income persons:
(i) A copy of a written agreement with each landlord or developer receivingCDBG assistance indicating the total number of dwelling units in eachmultifamily structure assisted and the number of those units which will beoccupied by low and moderate income households after assistance;
(ii) The total cost of the activity, including both CDBG and non-CDBG funds.
(iii) For each unit occupied by a low and moderate income household, the sizeand income of the household;
(iv) For rental housing only:
(A) The rent charged (or to be charged) after assistance for each dwellingunit in each structure assisted; and
(B) Such information as necessary to show the affordability of units occupied(or to be occupied) by low and moderate income households pursuant to criteriaestablished and made public by the recipient;
(v) For each property acquired on which there are no structures, evidence ofcommitments ensuring that the criteria in § 570.208(a)(3) will be metwhen the structures are built;
(vi) Where applicable, records demonstrating that the activity qualifiesunder the special conditions at § 570.208(a)(3)(i);
(vii) For any homebuyer assistance activity qualifying under§ 570.201(e), 570.201(n), or 570.204, identification of theapplicable eligibility paragraph and evidence that the activity meets theeligibility criteria for that provision; for any such activity qualifying under§ 570.208(a), the size and income of each homebuyer's household; and
(viii) For a § 570.201(k) housing services activity,identification of the HOME project(s) or assistance that the housing servicesactivity supports, and evidence that project(s) or assistance meet the HOMEprogram income targeting requirements at 24 CFR 92.252 or 92.254.
(5) For each activity determined to benefit low and moderate income personsbased on the creation of jobs, the recipient shall provide the documentationdescribed in either paragraph (b)(5)(i) or (ii) of this section.
(i) Where the recipient chooses to document that at least 51 percent of thejobs will be available to low and moderate income persons, documentation foreach assisted business shall include:
(A) A copy of a written agreement containing:
(
(
(
(B) A listing by job title of the permanent jobs filled, and which jobs ofthose were available to low and moderate income persons, and a description ofhow first consideration was given to such persons for those jobs. Thedescription shall include what hiring process was used; which low and moderateincome persons were interviewed for a particular job; and which low and moderateincome persons were hired.
(ii) Where the recipient chooses to document that at least 51 percent of thejobs will be held by low and moderate income persons, documentation for eachassisted business shall include:
(A) A copy of a written agreement containing:
(
(
(B) A listing by job title of the permanent jobs filled and which jobs wereinitially held by low and moderate income persons; and
(C) For each such low and moderate income person hired, the size and annualincome of the person's family prior to the person being hired for the job.
(6) For each activity determined to benefit low and moderate income personsbased on the retention of jobs:
(i) Evidence that in the absence of CDBG assistance jobs would be lost;
(ii) For each business assisted, a listing by job title of permanent jobsretained, indicating which of those jobs are part-time and (where it is known)which are held by low and moderate income persons at the time the CDBGassistance is provided. Where applicable, identification of any of the retainedjobs (other than those known to be held by low and moderate income persons)which are projected to become available to low and moderate income personsthrough job turnover within two years of the time CDBG assistance is provided.Information upon which the job turnover projections were based shall also beincluded in the record;
(iii) For each retained job claimed to be held by a low and moderate incomeperson, information on the size and annual income of the person's family;
(iv) For jobs claimed to be available to low and moderate income personsbased on job turnover, a description covering the items required for“available to” jobs in paragraph (b)(5) of this section; and
(v) Where jobs were claimed to be available to low and moderate incomepersons through turnover, a listing of each job which has turned over to date,indicating which of those jobs were either taken by, or available to, low andmoderate income persons. For jobs made available, a description of how firstconsideration was given to such persons for those jobs shall also be included inthe record.
(7) For purposes of documenting, pursuant to paragraph (b)(5)(i)(B),(b)(5)(ii)(C), (b)(6)(iii) or (b)(6)(v) of this section, that the person forwhom a job was either filled by or made available to a low- or moderate-incomeperson based upon the census tract where the person resides or in which thebusiness is located, the recipient, in lieu of maintaining records showing theperson's family size and income, may substitute records showing either theperson's address at the time the determination of income status was made or
(8) For each activity determined to aid in the prevention or elimination ofslums or blight based on addressing one or more of the conditions whichqualified an area as a slum or blighted area:
(i) The boundaries of the area; and
(ii) A description of the conditions which qualified the area at the time ofits designation in sufficient detail to demonstrate how the area met thecriteria in § 570.208(b)(1).
(9) For each residential rehabilitation activity determined to aid in theprevention or elimination of slums or blight in a slum or blighted area:
(i) The local definition of “substandard”;
(ii) A pre-rehabilitation inspection report describing the deficiencies ineach structure to be rehabilitated; and
(iii) Details and scope of CDBG assisted rehabilitation, by structure.
(10) For each activity determined to aid in the prevention or elimination ofslums or blight based on the elimination of specific conditions of blight orphysical decay not located in a slum or blighted area:
(i) A description of the specific condition of blight or physical decaytreated; and
(ii) For rehabilitation carried out under this category, a description of thespecific conditions detrimental to public health and safety which wereidentified and the details and scope of the CDBG assisted rehabilitation bystructure.
(11) For each activity determined to aid in the prevention or elimination ofslums or blight based on addressing slums or blight in an urban renewal area, acopy of the Urban Renewal Plan, as in effect at the time the activity is carriedout, including maps and supporting documentation.
(12) For each activity determined to meet a community development need havinga particular urgency:
(i) Documentation concerning the nature and degree of seriousness of thecondition requiring assistance;
(ii) Evidence that the recipient certified that the CDBG activity wasdesigned to address the urgent need;
(iii) Information on the timing of the development of the serious condition;and
(iv) Evidence confirming that other financial resources to alleviate the needwere not available.
(c) Records that demonstrate that the recipient has made the determinationsrequired as a condition of eligibility of certain activities, as prescribed in§§ 570.201(f), 570.201(i)(2), 570.201(p), 570.201(q),570.202(b)(3), 570.206(f), 570.209, 570.210, and 570.309.
(d) Records which demonstrate compliance with § 570.505 regardingany change of use of real property acquired or improved with CDBG assistance.
(e) Records that demonstrate compliance with the citizen participationrequirements prescribed in 24 CFR part 91, subpart B, for entitlementrecipients, or in 24 CFR part 91, subpart C, for HUD-administered small citiesrecipients.
(f) Records which demonstrate compliance with the requirements in§ 570.606 regarding acquisition, displacement, relocation, andreplacement housing.
(g) Fair housing and equal opportunity records containing:
(1) Documentation of the analysis of impediments and the actions therecipient has carried out with its housing and community development and otherresources to remedy or ameliorate any impediments to fair housing choice in therecipient's community.
(2) Data on the extent to which each racial and ethnic group and single-headed households (by gender of household head) have applied for, participatedin, or benefited from, any program or activity funded in whole or in part withCDBG funds. Such information shall be used only as a basis for furtherinvestigation as to compliance with nondiscrimination requirements. No recipientis required to attain or maintain any particular statistical
(3) Data on employment in each of the recipient's operating units funded inwhole or in part with CDBG funds, with such data maintained in the categoriesprescribed on the Equal Employment Opportunity Commission's EEO-4 form;and documentation of any actions undertaken to assure equal employmentopportunities to all persons regardless of race, color, national origin, sex orhandicap in operating units funded in whole or in part under this part.
(4) Data indicating the race and ethnicity of households (and gender ofsingle heads of households) displaced as a result of CDBG funded activities,together with the address and census tract of the housing units to which eachdisplaced household relocated. Such information shall be used only as a basisfor further investigation as to compliance with nondiscrimination requirements.No recipient is required to attain or maintain any particular statisticalmeasure by race, ethnicity, or gender in covered programs.
(5) Documentation of actions undertaken to meet the requirements of§ 570.607(b) which implements section 3 of the Housing DevelopmentAct of 1968, as amended (12 U.S.C. 1701U) relative to the hiring and training oflow and moderate income persons and the use of local businesses.
(6) Data indicating the racial/ethnic character of each business entityreceiving a contract or subcontract of $25,000 or more paid, or to be paid, withCDBG funds, data indicating which of those entities are women's businessenterprises as defined in Executive Order 12138, the amount of the contract orsubcontract, and documentation of recipient's affirmative steps to assure thatminority business and women's business enterprises have an equal opportunity toobtain or compete for contracts and subcontracts as sources of supplies,equipment, construction and services. Such affirmative steps may include, butare not limited to, technical assistance open to all businesses but designed toenhance opportunities for these enterprises and special outreach efforts toinform them of contract opportunities. Such steps shall not include preferringany business in the award of any contract or subcontract solely or in part onthe basis of race or gender.
(7) Documentation of the affirmative action measures the recipient has takento overcome prior discrimination, where the courts or HUD have found that therecipient has previously discriminated against persons on the ground of race,color, national origin or sex in administering a program or activity funded inwhole or in part with CDBG funds.
(h) Financial records, in accordance with the applicable requirements listedin § 570.502, including source documentation for entities not subjectto parts 84 and 85 of this title. Grantees shall maintain evidence to supporthow the CDBG funds provided to such entities are expended. Such documentationmust include, to the extent applicable, invoices, schedules containingcomparisons of budgeted amounts and actual expenditures, construction progressschedules signed by appropriate parties (e.g., general contractor and/or aproject architect), and/or other documentation appropriate to the nature of theactivity.
(i) Agreements and other records related to lump sum disbursements to privatefinancial institutions for financing rehabilitation as prescribed in§ 570.513; and
(j) Records required to be maintained in accordance with other applicablelaws and regulations set forth in subpart K of this part.
(a)
(2)
(ii)
(A) No later than October 31 for all grants executed before April 1 of thesame calendar year. The first report should cover the period from the executionof the grant until September 30. Reports on grants made after March 31 of acalendar year will be due October 31 of the following calendar year, and thereports will cover the period of time from the execution of the grant untilSeptember 30 of the calendar year following grant execution. After the initialsubmission, the performance and evaluation report will be submitted annually onOctober 31 until completion of the activities funded under the grant;
(B) Hawaii grantees will submit their small cities performance and evaluationreport for each pre-FY 1995 grant no later than 90 days after the completion oftheir most recent program year. After the initial submission, the performanceand evaluation report will be submitted annually until completion of theactivities funded under the grant; and
(C) No later than 90 days after the criteria for grant closeout, as describedin § 570.509(a), have been met.
(iii)
(b)
(c)
(d)
Notwithstanding 24 CFR 85.42(f), recipients shall provide citizens withreasonable access to records regarding the past use of CDBG funds, consistentwith applicable State and local laws regarding privacy and obligations ofconfidentiality.
(a)
(1) All costs to be paid with CDBG funds have been incurred, with theexception of closeout costs (e.g., audit costs) and costs resulting fromcontingent liabilities described in the closeout agreement pursuant to paragraph(c) of this section. Contingent liabilities include, but are not limited to,third-party claims against the recipient, as well as related administrativecosts.
(2) With respect to activities (such as rehabilitation of privately ownedproperties) which are financed by means of escrow accounts, loan guarantees, orsimilar mechanisms, the work to be assisted with CDBG funds (but excludingprogram income) has actually been completed.
(3) Other responsibilities of the recipient under the grant agreement andapplicable laws and regulations appear to have been carried out satisfactorily
(b)
(2) Based on the information provided in the performance report and otherrelevant information, HUD, in consultation with the recipient, will prepare acloseout agreement in accordance with paragraph (c) of this section.
(3) HUD will cancel any unused portion of the awarded grant, as shown in thesigned grant closeout agreement. Any unused grant funds disbursed from the U.S.Treasury which are in the possession of the recipient shall be refunded to HUD.
(4) Any costs paid with CDBG funds which were not audited previously shall besubject to coverage in the recipient's next single audit performed in accordancewith 24 CFR part 44. The recipient may be required to repay HUD any disallowedcosts based on the results of the audit, or on additional HUD reviews providedfor in the closeout agreement.
(c)
(1) Identification of any closeout costs or contingent liabilities subject topayment with CDBG funds after the closeout agreement is signed;
(2) Identification of any unused grant funds to be canceled by HUD;
(3) Identification of any program income on deposit in financial institutionsat the time the closeout agreement is signed:
(4) Description of the recipient's responsibility after closeout for:
(i) Compliance with all program requirements, certifications and assurancesin using program income on deposit at the time the closeout agreement is signedand in using any other remaining CDBG funds available for closeout costs andcontingent liabilities;
(ii) Use of real property assisted with CDBG funds in accordance with theprinciples described in § 570.505;
(iii) Compliance with requirements governing program income receivedsubsequent to grant closeout, as described in § 570.504(b)(4) and(5); and
(iv) Ensuring that flood insurance coverage for affected property owners ismaintained for the mandatory period;
(5) Other provisions appropriate to any special circumstances of the grantcloseout, in modification of or in addition to the obligations in paragraphs(c)(1) through (4) of this section. The agreement shall authorize monitoring byHUD, and shall provide that findings of noncompliance may be taken into accountby HUD, as unsatisfactory performance of the recipient, in the consideration ofany future grant award under this part.
(d)
(e)
(f)
Section 106(c)(3) of the Act authorizes the Secretary to transfer unobligatedgrant funds from an urban county to a new metropolitan city, provided: the citywas an included unit of general local government in the urban county immediatelybefore its qualification as a metropolitan city; the funds to be transferredwere received by the county before the qualification of the city as ametropolitan city; the funds to be transferred had been programmed by the urbancounty for use in the city before such qualification; and the city and countyagree to transfer responsibility for the administration of the funds beingtransferred from the county's letter of credit to the city's letter of credit.The following rules apply to the transfer of responsibility for an activity froman urban county to the new metropolitan city.
(a) The urban county and the metropolitan city must execute a legally bindingagreement which shall specify:
(1) The amount of funds to be transferred from the urban county's letter ofcredit to the metropolitan city's letter of credit;
(2) The activities to be carried out by the city with the funds beingtransferred;
(3) The county's responsibility for all expenditures and unliquidatedobligations associated with the activities before the time of transfer,including a statement that responsibility for all audit and monitoring findingsassociated with those expenditures and obligations shall remain with the county;
(4) The responsibility of the metropolitan city for all other audit andmonitoring findings;
(5) How program income (if any) from the activities specified shall bedivided between the metropolitan city and the urban county; and
(6) Such other provisions as may be required by HUD.
(b) Upon receipt of a request for the transfer of funds from an urban countyto a metropolitan city and a copy of the executed agreement, HUD, inconsultation with the Department of the Treasury, shall establish a date uponwhich the funds shall be transferred from the letter of credit of the urbancounty to the letter of credit of the metropolitan city, and shall take allnecessary actions to effect the requested transfer of funds.
(c) HUD shall notify the metropolitan city and urban county of any specialaudit and monitoring rules which apply to the transferred funds when the date ofthe transfer is communicated to the city and the county.
(a)
(1) The use of escrow accounts under this section is limited to loans andgrants for the rehabilitation of primarily residential properties containing nomore than four dwelling units (and accessory neighborhood-scale non-residentialspace within the same structure, if any,
(2) An escrow account shall not be used unless the contract between theproperty owner and the contractor selected to do the rehabilitation workspecifically provides that payment to the contractor shall be made through anescrow account maintained by the recipient, by a subrecipient as defined in§ 570.500(c), by a public agency designated under§ 570.501(a), or by an agent under a procurement contact governed bythe requirements of 24 CFR 85.36. No deposit to the escrow account shall be madeuntil after the contract has been executed between the property owner and therehabilitation contractor.
(3) All funds withdrawn under this section shall be deposited into oneinterest earning account with a financial institution. Separate bank accountsshall not be established for individual loans and grants.
(4) The amount of funds deposited into an escrow account shall be limited tothe amount expected to be disbursed within 10 working days from the date ofdeposit. If the escrow account, for whatever reason, at any time contains fundsexceeding 10 days cash needs, the grantee immediately shall transfer the excessfunds to its program account. In the program account, the excess funds shall betreated as funds erroneously drawn in accordance with the requirements of U.S.Treasury Financial Manual, paragraph 6-2075.30.
(5) Funds deposited into an escrow account shall be used only to pay theactual costs of rehabilitation incurred by the owner under the contract with aprivate contractor. Other eligible costs related to the rehabilitation loan orgrant,
(b)
(c)
Subject to the conditions prescribed in this section, recipients may drawfunds from the letter of credit in a lump sum to establish a rehabilitation fundin one or more private financial institutions for the purpose of financing therehabilitation of privately owned properties. The fund may be used inconjunction with various rehabilitation financing techniques, including loans,interest subsidies, loan guarantees, loan reserves, or such other uses as may beapproved by HUD consistent with the objectives of this section. The fund mayalso be used for making grants, but only for the purpose of leveraging non-CDBGfunds for the rehabilitaton of the same property.
(a)
(i) Prior level of rehabilitation activity; or
(ii) Rehabilitation staffing and management capacity during the periodspecified in the agreement to undertake activities.
(2) No grant funds may be deposited under this section solely for the purposeof investment, notwithstanding that the interest or other income is to
(3) The recipient's rehabilitation program administrative costs and theadministrative costs of the financial institution may not be funded through lumpsum drawdown. Such costs must be paid from periodic letter of credit withdrawalsin accordance with standard procedures or from program income, other thanprogram income generated by the lump sum distribution.
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(i) Grantees shall require the financial institution to pay interest on thelump sum deposit.
(A) The interest rate paid by the financial institution shall be no more thanthree points below the rate on one year Treasury obligations at constantmaturity.
(B) When an agreement sets a fixed interest rate for the entire term of theagreement, the rate should be based on the rate at the time the agreement isexcuted.
(C) The agreement may provide for an interest rate that would fluctuateperiodically during the term of the agreement, but at no time shall the rate beestablished at more than three points below the rate on one year Treasuryobligations at constant maturity.
(ii) In addition to the payment of interest, at least one of the followingbenefits must be provided by the financial institution:
(A) Leverage of the deposited funds so that the financial institution commitsprivate funds for loans in the rehabilitation program in an amount substantiallyin excess of the amount of the lump sum deposit;
(B) Commitment of private funds by the financial institution forrehabilitation loans at below market interest rates, at higher than normal risk,or with longer than normal repayment periods; or
(C) Provision of administrative services in support of the rehabilitationprogram by the participating financial institution at no cost or at lower thanactual cost.
(c)
(d)
(e)
(f)
(a) This subpart K enumerates laws that the Secretary will treat asapplicable to grants made under section 106 of the Act, other than grants toStates made pursuant to section 106(d) of the Act, for purposes of theSecretary's determinations under section 104(e)(1) of the Act, includingstatutes expressly made applicable by the Act and certain other statutes andExecutive Orders for which the Secretary has enforcement responsibility. Thissubpart K applies to grants made under the Insular areas program in§ 570.405, with the exception of § 570.612. The absence ofmention herein of any other statute for which the Secretary does not have directenforcement responsibility is not intended to be taken as an indication
(b) This subpart also sets forth certain additional program requirementswhich the Secretary has determined to be applicable to grants provided under theAct as a matter of administrative discretion.
(c) In addition to grants made pursuant to section 106(b) and 106(d)(2)(B) ofthe Act (subparts D and F, respectively), the requirements of this subpart K areapplicable to grants made pursuant to sections 107 and 119 of the Act (subpartsE and G, respectively), and to loans guaranteed pursuant to subpart M.
At 72 FR 12536, Mar. 15, 2007,§ 570.600 was amended by revising paragraph (a), effective April 16,2007. For the convenience of the user, the revised text is set forth as follows:
(a) This subpart K enumerates laws that the Secretary will treat asapplicable to grants made under section 106 of the Act, other than grants tostates made pursuant to section 106(d) of the Act, for purposes of theSecretary's determinations under section 104(e)(1) of the Act, includingstatutes expressly made applicable by the Act and certain other statutes andExecutive Orders for which the Secretary has enforcement responsibility. Thissubpart K applies to grants made under the Insular Areas Program in§ 570.405 and § 570.440 with the exception of§ 570.612. The absence of mention herein of any other statute forwhich the Secretary does not have direct enforcement responsibility is notintended to be taken as an indication that, in the Secretary's opinion, suchstatute or Executive Order is not applicable to activities assisted under theAct. For laws that the Secretary will treat as applicable to grants made tostates under section 106(d) of the Act for purposes of the determinationrequired to be made by the Secretary pursuant to section 104(e)(2) of the Act,see § 570.487.
(a) The following requirements apply according to sections 104(b) and 107 ofthe Act:
(1) Public Law 88-352, which is title VI of the Civil Rights Act of1964 (42 U.S.C. 2000d
(2) Public Law 90-284, which is the Fair Housing Act (42 U.S.C.3601-3620). In accordance with the Fair Housing Act, the Secretaryrequires that grantees administer all programs and activities related to housingand community development in a manner to affirmatively further the policies ofthe Fair Housing Act. Furthermore, in accordance with section 104(b)(2) of theAct, for each community receiving a grant under subpart D of this part, thecertification that the grantee will affirmatively further fair housing shallspecifically require the grantee to assume the responsibility of fair housingplanning by conducting an analysis to identify impediments to fair housingchoice within its jurisdiction, taking appropriate actions to overcome theeffects of any impediments identified through that analysis, and maintainingrecords reflecting the analysis and actions in this regard.
(b) Executive Order 11063, as amended by Executive Order 12259 (3 CFR,1959-1963 Comp., p. 652; 3 CFR, 1980 Comp., p. 307) (Equal Opportunity inHousing), and implementing regulations in 24 CFR part 107, also apply.
Section 109 of the Act requires that no person in the United States shall onthe grounds of race, color, national origin, religion, or sex be excluded fromparticipation in, be denied the benefits of, or be subjected to discriminationunder any program or activity receiving Federal financial assistance madeavailable pursuant to the Act. Section 109 also directs that the prohibitionsagainst discrimination on the basis of age under the Age Discrimination Act andthe prohibitions against discrimination on the basis of disability under Section504 shall apply to programs or
(a) Section 110(a) of the Act contains labor standards that apply tononvolunteer labor financed in whole or in part with assistance received underthe Act. In accordance with section 110(a) of the Act, the Contract Work Hoursand Safety Standards Act (40 U.S.C. 327
(b) The regulations in 24 CFR part 70 apply to the use of volunteers.
For purposes of section 104(g) of the Act, the regulations in 24 CFR part 58specify the other provisions of law which further the purposes of the NationalEnvironmental Policy Act of 1969, and the procedures by which grantees mustfulfill their environmental responsibilities. In certain cases, grantees assumethese environmental review, decisionmaking, and action responsibilities byexecution of grant agreements with the Secretary.
Notwithstanding the date of HUD approval of the recipient's application (or,in the case of grants made under subpart D of this part or HUD-administeredsmall cities recipients in Hawaii, the date of submission of the grantee'sconsolidated plan, in accordance with 24 CFR part 91), section 202(a) of theFlood Disaster Protection Act of 1973 (42 U.S.C. 4106) and the regulations in 44CFR parts 59 through 79 apply to funds provided under this part 570.
(a)
(b)
(2)
(A) After notice by the grantee (or the state recipient, if applicable) tomove permanently from the property, if the move occurs after the initialofficial submission to HUD (or the State, as applicable) for grant, loan, orloan guarantee funds under this part that are later provided or granted.
(B) After notice by the property owner to move permanently from the property,if the move occurs after the date of the submission of a request for financialassistance by the property owner (or person in control of the site) that islater approved for the requested activity.
(C) Before the date described in paragraph (b)(2)(i)(A) or (B) of thissection, if either HUD or the grantee (or State,
(D) After the “initiation of negotiations” if the person is thetenant-occupant of a dwelling unit and any one of the following three situationsoccurs:
(
(
(
(ii) Notwithstanding the provisions of paragraph (b)(2)(i) of this section,the term “
(A) A person who is evicted for cause based upon serious or repeatedviolations of material terms of the lease or occupancy agreement. To exclude aperson on this basis, the grantee (or State or state recipient, as applicable)must determine that the eviction was not undertaken for the purpose of evadingthe obligation to provide relocation assistance under this section;
(B) A person who moves into the property after the date of the noticedescribed in paragraph (b)(2)(i)(A) or (B) of this section, but who received awritten notice of the expected displacement before occupancy.
(C) A person who is not displaced as described in 49 CFR 24.2(g)(2).
(D) A person who the grantee (or State, as applicable) determines is notdisplaced as a direct result of the acquisition, rehabilitation, or demolitionfor an assisted activity. To exclude a person on this basis, HUD must concur inthat determination.
(iii) A grantee (or State or state recipient, as applicable) may, at anytime, request HUD to determine whether a person is a displaced person under thissection.
(3)
(c)
(d)
(e)
(f)
(g)
(2) The cost of assistance required under this section may be paid from localpublic funds, funds provided under this part, or funds available from othersources.
(3) The grantee (or State and state recipient, as applicable) must maintainrecords in sufficient detail to demonstrate compliance with the provisions ofthis section.
To the extent that they are otherwise applicable, grantees shall comply with:
(a) Executive Order 11246, as amended by Executive Orders 11375, 11478,
(b) Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.1701u) and implementing regulations at 24 CFR part 135.
The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846),the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C.4851-4856), and implementing regulations at part 35, subparts A, B, J, K,and R of this part apply to activities under this program.
The requirements set forth in 24 CFR part 5 apply to this program.
The recipient, its agencies or instrumentalities, and subrecipients shallcomply with the policies, guidelines, and requirements of 24 CFR part 85 and OMBCirculars A-87, A-110 (implemented at 24 CFR part 84), A-122,A-133 (implemented at 24 CFR part 45), andA-128
(a)
(2) In all cases not governed by 24 CFR 85.36 and 84.42, the provisions ofthis section shall apply. Such cases include the acquisition and disposition ofreal property and the provision of assistance by the recipient or by itssubrecipients to individuals, businesses, and other private entities undereligible activities that authorize such assistance (e.g., rehabilitation,preservation, and other improvements of private properties or facilitiespursuant to § 570.202; or grants, loans, and other assistance tobusinesses, individuals, and other private entities pursuant to§ 570.203, 570.204, 570.455, or 570.703(i)).
(b)
(c)
(d)
(1)
(i) A disclosure of the nature of the conflict, accompanied by an assurancethat there has been public disclosure of the conflict and a description of howthe public disclosure was made; and
(ii) An opinion of the recipient's attorney that the interest for which theexception is sought would not violate State or local law.
(2)
(i) Whether the exception would provide a significant cost benefit or anessential degree of expertise to the program or project that would otherwise notbe available;
(ii) Whether an opportunity was provided for open competitive bidding ornegotiation;
(iii) Whether the person affected is a member of a group or class of low- ormoderate-income persons intended to be the beneficiaries of the assistedactivity, and the exception will permit such person to receive generally thesame interests or benefits as are being made available or provided to the groupor class;
(iv) Whether the affected person has withdrawn from his or her functions orresponsibilities, or the decisionmaking process with respect to the specificassisted activity in question;
(v) Whether the interest or benefit was present before the affected personwas in a position as described in paragraph (b) of this section;
(vi) Whether undue hardship will result either to the recipient or the personaffected when weighed against the public interest served by avoiding theprohibited conflict; and
(vii) Any other relevant considerations.
(a)
(b)
(a)
(b)
(1) Have income eligibility requirements limiting the benefits exclusively tolow and moderate income persons; or
(2) Are targeted geographically or otherwise to primarily benefit low andmoderate income persons (excluding activities serving the public at large, suchas sewers, roads, sidewalks, and parks), and that provide benefits to persons onthe basis of an application.
(c)
(d)
(e)
(2) The Community Development Block Grant program for entitlement grants,administered under subpart D of part 570 of this title.
(3) The Community Development Block Grant program for States, administeredunder subpart I of part 570 of this title until closeout of the unit of generallocal government's grant by the State.
(4) The Urban Development Action Grants program, administered under subpart Gof part 570 of this title until closeout of the recipient's grant.
(a) The Architectural Barriers Act of 1968 (42 U.S.C. 4151-4157)requires certain Federal and Federally funded buildings and other facilities tobe designed, constructed, or altered in accordance with standards that insureaccessibility to, and use by, physically handicapped people. A building orfacility designed, constructed, or altered with funds allocated or reallocatedunder this part after December 11, 1995, and that meets the definition of“residential structure” as defined in 24 CFR 40.2 or the definitionof “building” as defined in 41 CFR 101-19.602(a) is subject tothe requirements of the Architectural Barriers Act of 1968 (42 U.S.C.4151-4157) and shall comply with the Uniform Federal AccessibilityStandards (appendix A to 24 CFR part 40 for
(b) The Americans with Disabilities Act (42 U.S.C. 12131; 47 U.S.C. 155, 201,218 and 225) (ADA) provides comprehensive civil rights to individuals withdisabilities in the areas of employment, public accommodations, State and localgovernment services, and telecommunications. It further provides thatdiscrimination includes a failure to design and construct facilities for firstoccupancy no later than January 26, 1993, that are readily accessible to andusable by individuals with disabilities. Further, the ADA requires the removalof architectural barriers and communication barriers that are structural innature in existing facilities, where such removal is readilyachievable—that is, easily accomplishable and able to be carried outwithout much difficulty or expense.
This subpart contains requirements governing the guarantee under section 108of the Act of debt obligations as defined in § 570.701.
The following public entities may apply for loan guarantee assistance underthis subpart.
(a) Entitlement public entities.
(b) Nonentitlement public entities that are assisted in the submission ofapplications by States that administer the CDBG program (under subpart I of thispart). Such assistance shall consist, at a minimum, of the certificationsrequired under § 570.704(b)(9) (and actions pursuant thereto).
(c) Nonentitlement public entities eligible to apply for grant assistanceunder subpart F of this part.
Guaranteed loan funds may be used for the following activities, provided suchactivities meet the requirements of § 570.200. However, guaranteedloan funds may not be used to reimburse the CDBG program account or line ofcredit for costs incurred by the public entity or designated public agency andpaid with CDBG grant funds or program income.
(a) Acquisition of improved or unimproved real property in fee or by long-
(b) Rehabilitation of real property owned or acquired by the public entity orits designated public agency.
(c) Payment of interest on obligations guaranteed under this subpart.
(d) Relocation payments and other relocation assistance for individuals,families, businesses, nonprofit organizations, and farm operations who mustrelocate permanently or temporarily as a result of an activity financed withguaranteed loan funds, where the assistance is:
(1) Required under the provisions of § 570.606(b) or (c); or
(2) Determined by the public entity to be appropriate under the provisions of§ 570.606(d).
(e) Clearance, demolition, and removal, including movement of structures toother sites and remediation of properties with known or suspected environmentalcontamination, of buildings and improvements on real property acquired orrehabilitated pursuant to paragraphs (a) and (b) of this section. Remediationmay include project-specific environmental assessment costs not otherwiseeligible under § 570.205.
(f) Site preparation, including construction, reconstruction, installation ofpublic and other site improvements, utilities or facilities (other thanbuildings), or remediation of properties (remediation can include project-specific environmental assessment costs not otherwise eligible under§ 570.205) with known or suspected environmental contamination, whichis:
(1) Related to the redevelopment or use of the real property acquired orrehabilitated pursuant to paragraphs (a) and (b) of this section, or
(2) For an economic development purpose.
(g) Payment of issuance, underwriting, servicing, trust administration andother costs associated with private sector financing of debt obligations underthis subpart.
(h) Housing rehabilitation eligible under § 570.202.
(i) The following economic development activities:
(1) Activities eligible under § 570.203; and
(2) Community economic development projects eligible under§ 570.204.
(j) Construction of housing by nonprofit organizations for homeownershipunder section 17(d) of the United States Housing Act of 1937 (HousingDevelopment Grants Program, 24 CFR part 850) or title VI of the Housing andCommunity Development Act of 1987 (Nehemiah Housing Opportunity Grants Program,24 CFR part 280).
(k) A debt service reserve to be used in accordance with requirementsspecified in the contract entered into pursuant to § 570.705(b)(1).
(l) Acquisition, construction, reconstruction, rehabilitation or historicpreservation, or installation of public facilities (except for buildings for thegeneral conduct of government) to the extent eligible under§ 570.201(c), including public streets, sidewalks, other siteimprovements and public utilities, and remediation of known or suspectedenvironmental contamination in conjunction with these activities. Remediationmay include project-specific environmental assessment costs not otherwiseeligible under § 570.205.
(m) In the case of applications by public entities which are, or whichcontain, “colonias” as defined in section 916 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 5306 note), as amended bysection 810 of the Housing and Community Development Act of 1992, acquisition,construction, reconstruction, rehabilitation or installation of public works andsite or other improvements which serve the colonia.
(a)
(i) Develop a proposed application that includes the following items:
(A) The community development objectives the public entity proposes to pursuewith the guaranteed loan funds.
(B) The activities the public entity proposes to carry out with theguaranteed loan funds. Each activity must be
(C) A description of the pledge of grants required under§ 570.705(b)(2). In the case of applications by State-assisted publicentities, the description shall note that pledges of grants will be made by theState and by the public entity.
(ii) Fulfill the applicable requirements in its citizen participation plandeveloped in accordance with § 570.704(a)(2).
(iii) Publish community-wide its proposed application so as to affordaffected citizens an opportunity to examine the application's contents and toprovide comments on the proposed application.
(iv) Prepare its final application. Once the public entity has held thepublic hearing and published the proposed application as required by paragraphs(a)(1)(ii) and (iii) of this section, respectively, the public entity mustconsider any such comments and views received and, if the public entity deemsappropriate, modify the proposed application. Upon completion, the public entitymust make the final application available to the public. The final applicationmust describe each activity in sufficient detail to permit a clear understandingof the nature of each activity, as well as identify the specific provision of§ 570.703 under which it is eligible, the national objective to bemet, and the amount of guaranteed loan funds to be used. The final applicationmust also indicate which activities are expected to generate program income.
(v) If an application for loan guarantee assistance is to be submitted by anentitlement or nonentitlement public entity simultaneously with the publicentity's submission for its grant, the public entity shall include and identifyin its proposed and final consolidated plan the activities to be undertaken withthe guaranteed loan funds, the national objective to be met by each of theseactivities, the amount of any program income expected to be received during theprogram year, and the amount of guaranteed loan funds to be used. The publicentity shall also include in the consolidated plan a description of the pledgeof grants, as required under § 570.705(b)(2). In such cases theproposed and final application requirements of paragraphs (a)(1)(i), (iii), and(iv) of this section will be deemed to have been met.
(2)
(i) Giving citizens timely notice of local meetings and reasonable and timelyaccess to local meetings, information, and records relating to the publicentity's proposed and actual use of guaranteed loan funds, including, but notlimited to:
(A) The amount of guaranteed loan funds expected to be made available for thecoming year, including program income anticipated to be generated by theactivities carried out with guaranteed loan funds;
(B) The range of activities that may be undertaken with guaranteed loanfunds;
(C) The estimated amount of guaranteed loan funds (including program incomederived therefrom) proposed to be used for activities that will benefit low andmoderate income persons;
(D) The proposed activities likely to result in displacement and the publicentity's plans, consistent with the policies developed under§ 570.606 for minimizing displacement of persons as a result of itsproposed activities.
(ii) Providing technical assistance to groups representative of persons oflow and moderate income that request assistance in developing proposals. Thelevel and type of assistance to be provided is at the discretion of the publicentity. Such assistance need not include the provision of funds to such groups.
(iii) Holding a minimum of two public hearings, each at a different stage ofthe public entity's program, for the purpose of obtaining the views of citizensand formulating or responding to proposals and questions. Together the hearingsmust address community development and housing needs, development of proposedactivities and review of program performance. At least one of these hearingsmust be held before submission of the application to obtain the views ofcitizens on community development and housing needs. Reasonable notice of thehearing must be provided and the hearing must be held at times and locationsconvenient to potential or actual beneficiaries, with accommodation for thehandicapped. The public entity must specify in its plan how it will meet therequirement for a hearing at times and locations convenient to potential oractual beneficiaries.
(iv) Meeting the needs of non-English speaking residents in the case ofpublic hearings where a significant number of non-English speaking residents canreasonably be expected to participate.
(v) Providing affected citizens with reasonable advance notice of, andopportunity to comment on, proposed activities not previously included in anapplication and activities which are proposed to be deleted or substantiallychanged in terms of purpose, scope, location, or beneficiaries. The criteria thepublic entity will use to determine what constitutes a substantial change forthis purpose must be described in the citizen participation plan.
(vi) Responding to citizens' complaints and grievances, including theprocedures that citizens must follow when submitting complaints and grievances.The public entity's policies and procedures must provide for timely writtenanswers to written complaints and grievances within 15 working days of thereceipt of the complaint, where practicable.
(vii) Encouraging citizen participation, particularly by low and moderateincome persons who reside in slum or blighted areas, and other areas in whichguaranteed loan funds are proposed to be used.
(b)
(1) A description of how each of the activities to be carried out with theguaranteed loan funds meets one of the criteria in § 570.208.
(2) A schedule for repayment of the loan which identifies the sources ofrepayment, together with a statement identifying the entity that will act asborrower and issue the debt obligations.
(3) A certification providing assurance that the public entity possesses thelegal authority to make the pledge of grants required under§ 570.705(b)(2).
(4) A certification providing assurance that the public entity has madeefforts to obtain financing for activities described in the application withoutthe use of the loan guarantee, the public entity will maintain documentation ofsuch efforts for the term of the loan guarantee, and the public entity cannotcomplete such financing consistent with the timely execution of the programplans without such guarantee.
(5) The drug-free workplace certification required under 24 CFR part 24(appendix C).
(6) The certification regarding debarment and suspension required under 24CFR part 24 (appendix A).
(7) The anti-lobbying statement required under 24 CFR part 87 (appendix A).
(8) Certifications by the public entity that:
(i) It possesses the legal authority to submit the application for assistanceunder this subpart and to use the guaranteed loan funds in accordance with therequirements of this subpart.
(ii) Its governing body has duly adopted or passed as an official act a
(A) Authorizing the person identified as the official representative of thepublic entity to submit the application and amendments thereto and allunderstandings and assurances contained therein, and directing and authorizingthe person identified as the official representative of the public entity to actin connection with the application to provide such additional information as maybe required; and
(B) Authorizing such official representative to execute such documents as maybe required in order to implement the application and issue debt obligationspursuant thereto (provided that the authorization required by this paragraph (B)may be given by the local governing body after submission of the application butprior to execution of the contract required by § 570.705(b);
(iii) Before submission of its application to HUD, the public entity has:
(A) Furnished citizens with information required by§ 570.704(a)(2)(i);
(B) Held at least one public hearing to obtain the views of citizens oncommunity development and housing needs; and
(C) Prepared its application in accordance with§ 570.704(a)(1)(iv) and made the application available to the public.
(iv) It is following a detailed citizen participation plan which meets therequirements described in § 570.704(a)(2).
(v) The public entity will affirmatively further fair housing, and theguaranteed loan funds will be administered in compliance with:
(A) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d
(B) The Fair Housing Act (42 U.S.C. 3601-3619).
(vi)(A) (For entitlement public entities only.) In the aggregate, at least 70percent of all CDBG funds, as defined at § 570.3, to be expendedduring the one, two, or three consecutive years specified by the public entityfor its CDBG program will be for activities which benefit low and moderateincome persons, as described in criteria at § 570.208(a).
(B) (For nonentitlement public entities eligible under subpart F of this partonly.) It will comply with primary and national objectives requirements, asapplicable under subpart F of this part.
(vii) It will comply with the requirements governing displacement,relocation, real property acquisition, and the replacement of low and moderateincome housing described in § 570.606.
(viii) It will comply with the requirements of § 570.200(c)(2)with regard to the use of special assessments to recover the capital costs ofactivities assisted with guaranteed loan funds.
(ix) (Where applicable, the public entity may also include the followingadditional certification.) It lacks sufficient resources from funds providedunder this subpart or program income to allow it to comply with the provisionsof § 570.200(c)(2), and it must therefore assess properties owned andoccupied by moderate income persons, to recover the guaranteed loan fundedportion of the capital cost without paying such assessments in their behalf fromguaranteed loan funds.
(x) It will comply with the other provisions of the Act and with otherapplicable laws.
(9) In the case of an application submitted by a State-assisted publicentity, certifications by the State that:
(i) It agrees to make the pledge of grants required under§ 570.705(b)(2).
(ii) It possesses the legal authority to make such pledge.
(iii) At least 70 percent of the aggregate use of CDBG grant funds receivedby the State, guaranteed loan funds, and program income during the one, two, orthree consecutive years specified by the State for its CDBG program will be foractivities that benefit low and moderate income persons.
(iv) It agrees to assume the responsibilities described in§ 570.710.
(c)
(2) The HUD Office shall review the application for compliance withrequirements specified in this subpart
(3) HUD may disapprove an application, or may approve loan guaranteeassistance for an amount less than requested, for any of the following reasons:
(i) HUD determines that the guarantee constitutes an unacceptable financialrisk. Factors that will be considered in assessing financial risk shall include,but not be limited to, the following:
(A) The length of the proposed repayment period;
(B) The ratio of expected annual debt service requirements to expected annualgrant amount;
(C) The likelihood that the public entity or State will continue to receivegrant assistance under this part during the proposed repayment period;
(D) The public entity's ability to furnish adequate security pursuant to§ 570.705(b), and
(E) The amount of program income the proposed activities are reasonablyestimated to contribute toward repayment of the guaranteed loan.
(ii) The requested loan amount exceeds any of the limitations specified under§ 570.705(a).
(iii) Funds are not available in the amount requested.
(iv) The performance of the public entity, its designated public agency orState under this part is unacceptable.
(v) Activities to be undertaken with the guaranteed loan funds are noteligible under § 570.703.
(vi) Activities to be undertaken with the guaranteed loan funds do not meetthe criteria in § 570.208 for compliance with one of the nationalobjectives of the Act.
(4) HUD will notify the public entity in writing that the loan guaranteerequest has either been approved, reduced or disapproved. If the request isreduced or disapproved, the public entity shall be informed of the specificreasons for reduction or disapproval. If the request is approved, HUD shallissue an offer of commitment to guarantee debt obligations of the borroweridentified in the application subject to compliance with this part, includingthe requirements under § 570.705(b), (d), (g) and (h) for securingand issuing debt obligations, the conditions for release of funds described inparagraph (d) of this section, and such other conditions as HUD may specify inthe commitment documents in a particular case.
(5)
(d)
(e)
(a)
(i) The amount any one entitlement public entity may receive may be limitedto $35,000,000.
(ii) The amount any one nonentitlement public entity may receive may belimited to $7,000,000.
(iii) The amount any one public entity may receive may be limited to suchamount as is necessary to allow HUD to give priority to applications containingactivities to be carried out in areas designated as empowerment zones/enterprisecommunities by the Federal Government or by any State.
(2) In addition to the limitations specified in paragraph (a)(1) of thissection, the following limitations shall apply.
(i)
(ii)
(iii)
(A) The most recent grant approved for the public entity pursuant to subpartF of this part,
(B) The average of the most recent three grants approved for the publicentity pursuant to subpart F of this part, excluding any grant in the samefiscal year as the commitment, or
(C) The average amount of grants made under subpart F of this part to unitsof general local government in New York State in the previous fiscal year.
(b)
(1) Enter into a contract for loan guarantee assistance with HUD, in a formacceptable to HUD, including provisions for repayment of debt obligationsguaranteed hereunder;
(2) Pledge all grants made or for which the public entity or State may becomeeligible under this part; and
(3) Furnish, at the discretion of HUD, such other security as may be deemedappropriate by HUD in making such guarantees. Other security shall be requiredfor all loans with repayment periods of ten years or longer. Such other securityshall be specified in the contract entered into pursuant to§ 570.705(b)(1). Examples of other security HUD may require are:
(i) Program income as defined in § 570.500(a);
(ii) Liens on real and personal property;
(iii) Debt service reserves; and
(iv) Increments in local tax receipts generated by activities carried outwith the guaranteed loan funds.
(c)
(1) Community Development Block Grants allocated pursuant to section 106 ofthe Act (including program income derived therefrom) may be used for:
(i) Paying principal and interest due (including such issuance, servicing,underwriting, or other costs as may be incurred under paragraph (g) of thissection) on the debt obligations guaranteed under this subpart;
(ii) Defeasing such debt obligations; and
(iii) Establishing debt service reserves as additional security pursuant toparagraph (b)(3) of this section.
(2) HUD may apply grants pledged pursuant to paragraph (b)(2) of this sectionto any amounts due under the debt obligations, the payment of costs incurredunder paragraph (g) of this section, or to the purchase or defeasance of suchdebt obligations, in accordance with the terms of the contract required byparagraph (b)(l) of this section.
(d)
(e)
(f)
(g)
(h)
(1) The power to contract with respect to public offerings and other sales ofdebt obligations under this subpart upon such terms and conditions as HUD deemsappropriate;
(2) The right to enforce any such contract by any means deemed appropriate byHUD;
(3) Any ownership rights of HUD, as applicable, in debt obligations underthis subpart.
Section 108(f) of the Act provides for the incontestability of guarantees byHUD under subpart M of this part in the hands of a holder of such guaranteedobligations. If HUD pays a claim under a guarantee made under section 108 of theAct, HUD shall be fully subrogated for all the rights of the holder of theguaranteed debt obligation with respect to such obligation.
(a)
(b)
(c)
(a)
(b)
Of the amount approved in any appropriation act for guarantees under thissubpart in any fiscal year, 70 percent shall be allocated for entitlement publicentities and 30 percent shall be allocated for nonentitlement public entities.HUD need not comply with these percentage requirements in any fiscal year to theextent that there is an absence of applications approvable under this subpartfrom entitlement or nonentitlement public entities.
The State is responsible for choosing public entities that it will assistunder this subpart. States are free to develop procedures and requirements fordetermining which activities will be assisted, subject to the requirements ofthis subpart. Upon approval by HUD of an application from a State-assistedpublic entity, the State will be principally responsible, subject to HUDoversight under subpart I of this part, for ensuring that the public entitycomplies with all applicable requirements governing the use of the guaranteedloan funds. Notwithstanding the State's responsibilities described in thissection, HUD may take any action necessary for ensuring compliance withrequirements affecting the security interests of HUD with respect to theguaranteed loan.
The regulations governing urban renewal projects and neighborhood developmentprograms in subpart N of this part, that were effective immediately before April19, 1996, will continue to govern the rights and obligations of recipients andHUD with respect to such projects and programs.
(a)
(2)
(b)
(1) The Department will determine the performance of each entitlement andHUD-administered small cities recipient in accordance with section 104(e)(1) ofthe Act by reviewing for compliance with the requirements described in§ 570.901 and by applying the performance criteria described in§§ 570.902 and 570.903 relative to carrying out activities and,where applicable, the housing assistance plan in a timely manner. The reviewcriteria in § 570.904 will be used to assist in determining if therecipient's program is being carried out in compliance with civil rightsrequirements.
(2) The Department will review UDAG projects and activities to determinewhether such projects and activities are being carried out substantially inaccordance with the recipient's approved plans and schedules. The Departmentwill also review to determine if the recipient has carried out its UDAG programin accordance with all other requirements of the Grant Agreement and with allapplicable requirements of this part.
(3) In conducting performance reviews, HUD will primarily rely on informationobtained from the recipient's performance report, records maintained, findingsfrom monitoring, grantee and subrecipient audits, audits and surveys conductedby the HUD Inspector General, and financial data regarding the amount of fundsremaining in the line of credit plus program income. HUD may also considerrelevant information pertaining to a recipient's performance gained from othersources, including litigation, citizen comments, and other information providedby or concerning the recipient. A recipient's failure to maintain records in theprescribed manner may result in a finding that the recipient has failed to meetthe applicable requirement to which the record pertains.
(4) If HUD determines that a recipient has not met a civil rights reviewcriterion in § 570.904, the recipient will be provided an opportunityto demonstrate that it has nonetheless met the applicable civil rightsrequirement.
(5) If HUD finds that a recipient has failed to comply with a programrequirement or has failed to meet a performance criterion in§ 570.902 or § 570.903, HUD will give the recipient anopportunity to provide additional information concerning the finding.
(6) If, after considering any additional information submitted by arecipient, HUD determines to uphold the finding, HUD may advise the recipient toundertake appropriate corrective or remedial actions as specified in§ 570.910. HUD will consider the recipient's capacity as described in§ 570.905 prior to selecting the corrective or remedial actions.
(7) If the recipient fails to undertake appropriate corrective or remedialactions which resolve the deficiency to the satisfaction of the Secretary, theSecretary may impose a sanction pursuant to § 570.911, 570,912, or570.913, as applicable.
At 72 FR 12536, Mar. 15, 2007,§ 570.900 was amended by revising paragraphs (a)(1) and (b)(1),effective April
(a)
(b) * * *
(1) The Department will determine the performance of each entitlement,Insular Areas, and HUD-administered small cities recipient in accordance withsection 104(e)(1) of the Act by reviewing for compliance with the requirementsdescribed in § 570.901 and by applying the performance criteriadescribed in §§ 570.902 and 570.903 relative to carrying outactivities in a timely manner. The review criteria in § 570.904 willbe used to assist in determining if the recipient's program is being carried outin compliance with civil rights requirements.
HUD will review each entitlement and HUD-administered small citiesrecipient's program to determine if the recipient has carried out its activitiesand certifications in compliance with:
(a) The requirement described at § 570.200(a)(3) that, consistentwith the primary objective of the Act, not less than 70 percent of the aggregateamount of CDBG funds received by the recipient shall be used over the periodspecified in its certification for activities that benefit low and moderateincome persons;
(b) The requirement described at § 570.200(a)(2) that each CDBGassisted activity meets the criteria for one or more of the national objectivesdescribed at § 570.208;
(c) All other activity eligibility requirements defined in subpart C of thispart;
(d) For entitlement grants only, the submission requirements of 24 CFR part91 and the displacement policy requirements at § 570.606;
(e) For HUD-administered small cities grants only, the citizen participationrequirements at § 570.431, the amendment requirements at§ 570.427 (New York HUD-administered small cities) or§ 570.430(f) (Hawaii HUD-administered small cities), and thedisplacement policy requirements of § 570.606;
(f) The grant administration requirements described in subpart J;
(g) Other applicable laws and program requirements described in subpart K;and
(h) Where applicable, the requirements pertaining to loan guarantees (subpartM) and urban renewal completions (subpart N).
At 72 FR 12536, Mar. 15, 2007,§ 570.901 was amended by revising the introductory paragraph,redesignating existing paragraphs (f), (g), and (h), as paragraphs (g), (h), and(i) respectively, and adding a new paragraph (f), effective April 16, 2007. Forthe convenience of the user, the added and revised text is set forth as follows:
HUD will review each entitlement, Insular Areas, and HUD-administered smallcities recipient's program to determine if the recipient has carried out itsactivities and certifications in compliance with:
(f) For Insular Areas Program grants only, the application and amendmentrequirements at § 570.440, the citizen participation requirements at§ 570.441, the displacement policy requirements of§ 570.606, and the lead-based paint requirements of 24 CFR 35.940;
HUD will review the performance of each entitlement and HUD-administeredsmall cities recipient to determine whether each recipient is carrying out itsCDBG assisted activities in a timely manner.
(a)
(i) Sixty days prior to the end of the grantee's current program year, theamount of entitlement grant funds available to the recipient under grantagreements but undisbursed by the U.S. Treasury is more than 1.5 times theentitlement grant amount for its current program year; and
(ii) The grantee fails to demonstrate to HUD's satisfaction that the lack oftimeliness has resulted from factors beyond the grantee's reasonable control.
(2) Notwithstanding that the amount of funds in the line of credit indicatesthat the recipient is carrying out its activities in a timely manner pursuant toparagraph (a)(1) of this section, HUD may determine that the recipient is notcarrying out its activities in a timely manner if:
(i) The amount of CDBG program income the recipient has on hand 60 days priorto the end of its current program year, together with the amount of funds in itsCDBG line of credit, exceeds 1.5 times the entitlement grant amount for itscurrent program year; and
(ii) The grantee fails to demonstrate to HUD's satisfaction that the lack oftimeliness has resulted from factors beyond the grantee's reasonable control.
(3) In determining the appropriate corrective action to take with respect toa HUD determination that a recipient is not carrying out its activities in atimely manner pursuant to paragraphs (a)(1) or (a)(2) of this section, HUD willconsider the likelihood that the recipient will expend a sufficient amount offunds over the next program year to reduce the amount of unexpended funds to alevel that will fall within the standard described in paragraph (a)(1) of thissection when HUD next measures the grantee's timeliness performance. For thesepurposes, HUD will take into account the extent to which funds on hand have beenobligated by the recipient and its subrecipients for specific activities at thetime the finding is made and other relevant information.
(b)
At 72 FR 12536, Mar. 15, 2007,§ 570.902 was amended by revising the introductory paragraph, andadding a new paragraph (c), effective April 16, 2007. For the convenience of theuser, the added and revised text is set forth as follows:
HUD will review the performance of each entitlement, HUD-administered smallcities, and Insular Areas recipient to determine whether each recipient iscarrying out its CDBG-assisted activities in a timely manner.
(c)
(i) Sixty days prior to the end of the grantee's current program year, theamount of Insular Area grant funds available to the recipient under grantagreements but undisbursed by the U.S. Treasury is more than 2.0 times theInsular Area's grant amount for its current program year; and
(ii) The grantee fails to demonstrate to HUD's satisfaction that the lack oftimeliness has resulted from factors beyond the grantee's reasonable control.
(2) Notwithstanding that the amount of funds in the line of credit indicatesthat the
(i) The amount of CDBG program income the recipient has on hand 60 days priorto the end of its current program year, together with the amount of funds in itsCDBG line of credit, exceeds 2.0 times the Insular Area's grant amount for itscurrent program year; and
(ii) The grantee fails to demonstrate to HUD's satisfaction that the lack oftimeliness has resulted from factors beyond the grantee's reasonable control.
(3) In determining the appropriate corrective action to take with respect toa HUD determination that a recipient is not carrying out its activities in atimely manner pursuant to paragraphs (c)(1) or (c)(2) of this section, HUD willconsider the likelihood that the recipient will expend a sufficient amount offunds over the next program year to reduce the amount of unexpended funds to alevel that will fall within the standards described in paragraphs (c)(1) and (2)of this section when HUD next measures the grantee's timeliness performance. Forthese purposes, HUD will take into account the extent to which funds on handhave been obligated by the recipient and its sub-recipients for specificactivities at the time the finding is made and other relevant information.
(4) If a recipient is determined to be untimely pursuant to paragraphs (c)(1)or (c)(2) of this section in one year, and the recipient is again determined tobe untimely in the following year, HUD may reduce the recipient's next grant by100 percent of the amount in excess of twice the Insular Area's most recent CDBGgrant, unless HUD determines that the untimeliness resulted from factors outsideof the grantee's reasonable control.
(5) The first review under paragraphs (c)(1) and (c)(2) of this section willtake place 60 days prior to the conclusion of the Fiscal Year 2006 program year.
The consolidated plan, action plan, and amendment submission requirementsreferred to in this section are in 24 CFR part 91.
(a)
(b)
(1) Pursuing all resources that the grantee indicated it would pursue;
(2) Providing certifications of consistency, when requested to do so byapplicants for HUD programs for which the grantee indicated that it wouldsupport application by other entities, in a fair and impartial manner; and
(3) Not hindering implementation of the consolidated plan by action orwillful inaction.
(c)
(1) Any factors beyond the control of the recipient that prevented it fromfollowing its consolidated plan, and any actions the recipient has taken orplans to take to alleviate such factors; and
(2) Actions taken by the recipient, if any, beyond those described in theconsolidated plan performance report to facilitate following the consolidatedplan, including the effects of such actions.
(d)
At 72 FR 12537, Mar. 15, 2007,§ 570.903 was amended by revising the introductory paragraph,paragraph (a), and removing paragraph (d), effective April 16, 2007. For theconvenience of the user, the revised text is set forth as follows:
The consolidated plan, action plan, and amendment submission requirementsreferred to in this section are in 24 CFR part 91. For the purpose of thissection, the term consolidated plan includes an abbreviated consolidated planthat is submitted pursuant to 24 CFR 91.235.
(a)
(a)
(i) There is evidence which shows, or from which it is reasonable to infer,that the recipient, motivated by considerations of race, color, religion whereapplicable, sex, national origin, age or handicap, has treated some persons lessfavorably than others, or
(ii) There is evidence that a policy, practice, standard or method ofadministration, although neutral on its face, operates to deny or affectadversely in a significantly disparate way the provision of employment orservices, benefits or participation to persons of a particular race, color,religion where applicable, sex, national origin, age or handicap, or fairhousing to persons of a particular race, color, religion, sex, or nationalorigin, or
(iii) Where the Secretary required a further assurance pursuant to§ 570.304 in order to accept the recipient's prior civil rightscertification, the recipient has failed to meet any such assurance.
(2) In such instances, or where the review criteria in this section are notmet, the recipient will be afforded an opportunity to present evidence that ithas not failed to carry out the civil rights certifications and fair housingrequirements of the Act. The Secretary's determination of whether there has beencompliance with the applicable requirements will be made based on a review ofthe recipient's performance, evidence submitted by the recipient, and all otheravailable evidence. The Department may also initiate separate compliance reviewsunder title VI of the Civil Rights Act of 1964 or section 109 of the Act.
(b)
(1)
(2)
(c)
(d)
If HUD determines that the recipient has not carried out its CDBG activitiesand certifications in accordance with the requirements and criteria described in§ 570.901 or 570.902, HUD will undertake a further review todetermine whether or not the recipient has the continuing capacity to carry outits activities in a timely manner. In making the determination, the Departmentwill consider the nature and extent of the recipient's performance deficiencies,types of corrective actions the recipient has undertaken and the success orlikely success of such actions.
In reviewing the performance of an urban county, HUD will hold the countyaccountable for the actions or failures to act of any of the units of generallocal government participating in the urban county. Where the Department findsthat a participating unit of government has failed to cooperate with the countyto undertake or assist in undertaking an essential community development orassisted housing activity and that such failure results, or is likely to result,in a failure of the urban county to meet any requirement of the program or otherapplicable laws, the Department may prohibit the county's use of funds madeavailable under this part for that unit of government. HUD will also considerany such failure to cooperate in its review of a future cooperation agreementbetween the county and such included unit of government described at§ 570.307(b)(2).
(a)
(b)
(1) Issue a letter of warning advising the recipient of the deficiency andputting the recipient on notice that additional action will be taken if thedeficiency is not corrected or is repeated;
(2) Recommend, or request the recipient to submit, proposals for correctiveactions, including the correction or removal of the causes of the deficiency,through such actions as:
(i) Preparing and following a schedule of actions for carrying out theaffected CDBG activities, consisting of schedules, timetables and milestonesnecessary to implement the affected CDBG activities;
(ii) Establishing and following a management plan which assignsresponsibilities for carrying out the actions identified in paragraph (b)(2)(i)of this section;
(iii) For entitlement recipients, canceling or revising affected activitieswhich are no longer feasible to implement due to the deficiency andreprogramming funds from such affected activities to other eligible activities(pursuant to the citizen participation requirements in 24 CFR part 91); or
(iv) Other actions which will serve to prevent a continuation of thedeficiency, mitigate (to the extent possible) the adverse effects orconsequences of the deficiency, and prevent a recurrence of the deficiency;
(3) Advise the recipient that a certification will no longer be acceptableand that additional assurances will be required;
(4) Advise the recipient to suspend disbursement of funds for the deficientactivity;
(5) Advise the recipient to reimburse its program account or letter of creditin any amounts improperly expended and reprogram the use of the funds inaccordance with applicable requirements;
(6) Change the method of payment to the recipient from a letter of creditbasis to a reimbursement basis;
(7) In the case of claims payable to HUD or the U.S. Treasury, institutecollection procedures pursuant to subpart B of 24 CFR part 17; and
(8) In the case of an entitlement recipient, condition the use of funds froma succeeding fiscal year's allocation upon appropriate corrective action by therecipient pursuant to § 570.304(d). The failure of the recipient toundertake the actions specified in the condition may result in a reduction,pursuant to § 570.911, of the entitlement recipient's annual grant byup to the amount conditionally granted.
At 72 FR 12537, Mar. 15, 2007,§ 570.910 was amended by revising paragraphs (b)(2)(iii) and (b)(8),effective April 16, 2007. For the convenience of the user, the revised text isset forth as follows:
(b) * * *
(2) * * *
(iii) For entitlement and Insular Areas recipients, canceling or revisingaffected activities that are no longer feasible to implement due to thedeficiency and re-programming funds from such affected activities to othereligible activities (pursuant to the citizen participation requirements in 24CFR part 91); or
(8) In the case of an entitlement or Insular Areas recipient, condition theuse of funds from a succeeding fiscal year's allocation upon appropriatecorrective action by the recipient. The failure of the recipient to undertakethe actions specified in the condition may result in a reduction, pursuant to§ 570.911, of the entitlement or Insular Areas recipient's annualgrant by up to the amount conditionally granted.
(a)
(b)
(c)
(d)
At 72 FR 12537, Mar. 15, 2007,§ 570.911 was amended by revising § 570.911(b), effectiveApril 16, 2007. For the convenience of the user, the revised text is set forthas follows:
(b)
(a) Whenever the Secretary determines that a unit of general local governmentwhich is a recipient of assistance under this part has failed to comply with§ 570.602, the Secretary shall notify the governor of such State orchief executive officer of such unit of general local government of thenoncompliance and shall request the governor or the chief executive officer tosecure compliance. If within a reasonable period of time, not to exceed sixtydays, the governor or chief executive officer fails or refuses to securecompliance, the Secretary is authorized to:
(1) Refer the matter to the Attorney General with a recommendation that anappropriate civil action be instituted;
(2) Exercise the powers and functions provided by title VI of the CivilRights Act of 1964 (42 U.S.C. 2000d);
(3) Exercise the powers and functions provided for in § 570.913;or
(4) Take such other action as may be provided by law.
(b) When a matter is referred to the Attorney General pursuant to paragraph(a)(1) of this section, or whenever the Secretary has reason to believe that aState or a unit of general local government is engaged in a pattern or practicein violation of the provisions of § 570.602, the Attorney General maybring a civil action in any appropriate United States district court for suchrelief as may be appropriate, including injunctive relief.
(a)
(1) Terminate payments to the recipient;
(2) Reduce payments to the recipient by an amount equal to the amount of suchpayments which were not expended in accordance with this part; or
(3) Limit the availability of payments to programs or activities not affectedby such failure to comply.
(b) In lieu of, or in addition to, any action authorized by paragraph (a) ofthis section, the Secretary may, if he/she has reason to believe that arecipient has failed to comply substantially with any provision of this part;
(1) Refer the matter to the Attorney General of the United States with arecommendation that an appropriate civil action be instituted; and
(2) Upon such a referral, the Attorney General may bring a civil action inany United States district court having venue thereof for such relief as may beappropriate, including an action to recover the amount of the assistancefurnished under this part which was not expended in accordance with it, or formandatory or injunctive relief;
(c)
(1)
(i) Specify, in a manner which is adequate to allow the respondent to prepareits response, allegations with respect to a failure to comply substantially witha provision of this part;
(ii) State that the hearing procedures are governed by these rules;
(iii) State that a hearing may be requested within 10 days from receipt ofthe notice and the name, address and telephone number of the person to whom anyrequest for hearing is to be addressed:
(iv) Specify the action which the Secretary proposes to take and that theauthority for this action is section 111(a) of the Act;
(v) State that if the respondent fails to request a hearing within the timespecified a decision by default will be rendered against the respondent; and
(vi) Be sent to the respondent by certified mail, return receipt requested.
(2)
(3)
(i) Administer oaths and affirmations;
(ii) Issue subpoenas as authorized by law;
(iii) Rule upon offers of proof and receive relevant evidence;
(iv) Order or limit discovery prior to the hearing as the interests ofjustice may require;
(v) Regulate the course of the hearing and the conduct of the parties andtheir counsel;
(vi) Hold conferences for the settlement or simplification of the issues byconsent of the parties;
(vii) Consider and rule upon all procedural and other motions appropriate inadjudicative proceedings; and
(viii) Make and file initial determinations.
(4)
(5)
(6)
(7)
(8)
(9)
(10)
I.
II. Where appropriate, HUD's underwriting guidelines recognize that differentlevels of review are appropriate to take into account differences in the sizeand scope of a proposed project, and in the case of a microenterprise or othersmall business to take into account the differences in the capacity and level ofsophistication among businesses of differing sizes.
III. Recipients are encouraged, when they develop their own programs andunderwriting criteria, to also take these factors into account. For example, arecipient administering a program providing only technical assistance to smallbusinesses might choose to apply underwriting guidelines to the technicalassistance program as a whole, rather than to each instance of assistance to abusiness. Given the nature and dollar value of such a program, a recipient mightchoose to limit its evaluation to factors such as the extent of need for thistype of assistance by the target group of businesses and the extent to whichthis type of assistance is already available.
IV. The objectives of the underwriting guidelines are to ensure:
(1) that project costs are reasonable;
(2) that all sources of project financing are committed;
(3) that to the extent practicable, CDBG funds are not substituted for non-Federal financial support;
(4) that the project is financially feasible;
(5) that to the extent practicable, the return on the owner's equityinvestment will not be unreasonably high; and
(6) that to the extent practicable, CDBG funds are disbursed on a pro ratabasis with other finances provided to the project.
ii. The recipient should pay particular attention to any cost element of theproject that will be carried out through a non-arms-length transaction. A non-arms-length transaction occurs when the entity implementing the CDBG assistedactivity procures goods or services from itself or from another party with whomthere is a financial interest or family relationship. If abused, non-arms-lengthtransactions misrepresent the true cost of the project.
2.
3.
ii. Because of the high cost of underwriting and processing loans, manyprivate financial lenders do not finance commercial projects that are less than$100,000. A recipient should familiarize itself with the lending practices ofthe financial institutions in its community. If the project's total cost is onethat would normally fall within the range that financial institutionsparticipate, then the recipient should normally determine the following:
A.
B.
iii. If the recipient is assisting a microenterprise owned by a low- ormoderate-income person(s), in conducting its review under this paragraph, therecipient might only need to determine that non-Federal sources of financing arenot available (at terms appropriate for such financing) in the community toserve the low- or moderate-income entrepreneur.
4.
A. some projects make provisions for a negative cash flow in the early yearsof the project while space is being leased up or sales volume built up, but theproject's projections should take these factors into account and provide sourcesof financing for such negative cash flow; and
B. it is expected that a financially viable project will also projectsufficient revenues to provide a reasonable return on equity investment. Therecipient should carefully examine any project that is not economically able toprovide a reasonable return on equity investment. Under such circumstances, abusiness may be overstating its real equity investment (actual costs of theproject may be overstated as well), or it may be overstating some of theproject's operating expenses in the expectation that the difference will betaken out as profits, or the business may be overly pessimistic in its marketshare and revenue projections and has downplayed its profits.
ii. In addition to the financial underwriting reviews carried out earlier,the recipient should evaluate the experience and capacity of the assistedbusiness owners to manage an assisted business to achieve the projections. Basedupon its analysis of these factors, the recipient should identify thoseelements, if any, that pose the greatest risks contributing to the project'slack of financial feasibility.
5.
6.
42 U.S.C. 3535(d) and 12891.
The purpose of the HOPE for Homeownership of Single Family Homes program(HOPE 3) is to provide homeownership opportunities for eligible families topurchase Federal, State, and local government-owned single family properties.HOPE 3 provides grants to eligible applicants to plan and implementhomeownership programs designed to meet the needs of low-income first-timehomebuyers.
The terms
(1) An agreement, enforceable under State (or territorial) and local law,between the recipient or its designee and an eligible family under which thefamily:
(i) Obtains the right to occupy a unit in an eligible property, subject tothe payment of rent and other reasonable lease conditions, for a period of notmore than two years, except as provided in § 572.115(a)(2); and
(ii) At the end of such two years has the right to purchase the unit underthe terms stated in the lease-purchase agreement, including the completion ofany additional rehabilitation required during the lease-purchase period.
(2) A lease-purchase agreement qualifies as a transfer of the unit to theeligible family for purposes of the deadline for transfer in§ 572.115(a), but it is not otherwise an “ownershipinterest”
(1) Is organized and exists under applicable Federal, State, territorial,local, or tribal law;
(2) Has no part of its net earnings inuring to the benefit of any individual,corporation, or other entity;
(3) Has a voluntary board;
(4) Has an accounting system or has designated a fiscal agent in accordancewith requirements established by HUD;
(5) Practices nondiscrimination in the provision of assistance;
(6) Is a tax exempt entity under section 501(c) of the Internal Revenue Codeof 1986 (26 U.S.C. 501(c)), or for a private nonprofit organization in theCommonwealth of Puerto Rico, is a tax-exempt entity under Puerto Rico law;
(7) Is privately controlled and has a governing body that is controlled 51percent or more by private individuals acting in a private capacity. Anindividual is considered to be acting in a private capacity if the individual isnot an employee of a public body, is not appointed by or acting as therepresentative of a public body (including the applicant or recipient), and isnot being paid by a public body (including the applicant or recipient) whileperforming functions in connection with the nonprofit organization.
Assistance under section 8 of the 1937 Act and other rental assistance to the
(a)
(2) A homeownership program may not result in appreciably reducing in thelocality the number of affordable rental housing units of the type to beassisted that would be available to residents currently residing in the types ofproperties proposed for use under the program or to families who would beeligible to reside in the properties.
(b)
(c)
(d)
(2) The property must be rehabilitated to a level that makes it marketablefor homeownership in the market area to families with incomes at or below 80percent of the median for the area. Luxury items (fixtures, equipment, andlandscaping of a type or quality that substantially exceeds that customarilyused in the locality for properties of the same general type as that beingrehabilitated) are not eligible expenses. HUD reserves the right to disapproveimprovements or amenities to be paid for from nonprogram funds that itdetermines are unsuitable for the HOPE 3 program.
(3) Rehabilitation costs must comply with the cost standards established byHUD (see paragraph (c) of this section for applicable cost limitations coveringboth acquisition and rehabilitation). If improvements are made to an eligibleproperty beyond those that qualify as eligible costs, the applicant must assurethat the entire cost of the excess improvements will be covered by funds otherthan the HOPE 3 grant and any amounts contributed toward the match, and that theaffordability of the property will not be impaired.
(4) Higher standards may be proposed by the applicant or required by lenders.
(5) The applicant must adopt written rehabilitation standards.
(e)
(2) The unit must, not later than 2 years after transfer of an ownershipinterest in the unit to an eligible family, or execution of a lease-purchaseagreement for the unit, meet minimum rehabilitation standards under paragraph(d)(1) of this section. The recipient must inspect, or ensure inspection of,each unit to determine that it meets the rehabilitation standards required underparagraph (d)(1) of this section.
(a)
(2)
(i) The eligible family/mortgagor may obtain a loan for the down payment froma corporation or another person under conditions satisfactory to HUD (24 CFR203.19(b) and 234.28(c));
(ii) A second mortgage may be placed against the property even though theentity holding a second mortgage is not a Federal, State, or local governmentagency, if the entity is designated in the homeownership plan of an applicantfor an implementation grant (24 CFR 203.32(b) and 234.55(b)); and
(iii) Certain restrictions on conveyance may be permissible. Property withrestrictions that do not comply with FHA regulations will be ineligible for FHAmortgage insurance, notwithstanding HUD approval under § 572.130(e).
(b)
(a)
(2) The written selection procedures must provide for selection only offamilies that are creditworthy and have the financial capacity to handle theanticipated costs of homeownership. Any family determined not to have paid theappropriate amount of tenant contribution under a HUD housing assistance programmust be required to resolve
(b)
(2) In the case of vacant properties for which the preferences in paragraph(b)(1) of this section do not apply, recipients must give a first preference tootherwise qualified eligible families who reside in public or Indian housingunder the 1937 Act. Recipients must use whatever measures are consideredappropriate to inform residents of public and Indian housing developments withinthe housing market area of the preference, such as informing resident councils,PHAs, and IHAs, or other appropriate measures.
(3) Recipients must give a second preference to otherwise qualified eligiblefamilies who have completed participation in one of the following economic self-sufficiency programs: Project Self-Sufficiency, Operation Bootstrap, FamilySelf-Sufficiency, JOBS, and any other Federal, State, territorial, or localprogram approved by HUD as equivalent.
(c)
(2) Any homebuyer that violates the agreement made under paragraph (c)(1) ofthis section shall be subject to penalties as provided in the transferdocuments, as prescribed by HUD.
(3) Each eligible family selected for the program must participate incounseling and training of homebuyers and homeowners regarding the generalrights and responsibilities of homeownership.
(d)
(1) Require the family to meet the requirements for the disclosure andverification of social security numbers, as provided by part 5, subpart B, ofthis title; and
(2) Require the family to sign and submit consent forms for the obtaining ofwage and claim information from State Wage Information Collection Agencies, asprovided by part 5, subpart B, of this title.
(e)
(a)
(i) Acquisition by an eligible family of an ownership interest in a unit; or
(ii) Execution of a lease-purchase agreement for a unit.
(2) The HUD Field Office may approve a request for an extension of the
(b)
(2) The ownership interest may be subject only to:
(i) The restrictions on resale required or approved under§ 572.130;
(ii) Mortgages, deeds of trust, or other liens or instruments securing theeligible family's purchase money financing as approved by the recipient; or
(iii) Any other restrictions or encumbrances that do not impair the good andmarketable nature of title to the ownership interest except as otherwiseapproved by the recipient. In approving the terms of an eligible family'spurchase money financing or any other encumbrances on the property underparagraphs (b)(2)(ii) and (iii) of this section, the recipient shall not approvefinancing terms that do not comply with the affordability standards in§ 572.120, or mortgage terms and conditions or other encumbrancesthat in effect constitute resale restrictions that would not be approved by HUDunder this part.
(3) Mutual housing is eligible only to the extent it provides for thetransfer of ownership interests to eligible families.
(c)
(2) HUD Headquarters will consider and may approve an exception under thefollowing circumstances:
(i) The reasonably projected net rental income will be included in thedetermination of the appraised value of the property at the time of thehomebuyer's purchase;
(ii) The rent charged by the owner will not exceed the Fair Market Rentestablished by HUD for the area;
(iii) The recipient will provide the homebuyer with counseling and trainingin property management, and will approve the form of lease used by thehomebuyer; and
(iv) The recipient will include the family's potential net rental income incalculating the family's initial affordability in accordance with§ 572.120 of this part.
(a)
(2) The 30 percent cap on monthly payments includes closing costs only ifclosing costs are included in the costs
(3) Applicants are encouraged to consider the additional monthly costs ofutilities and other monthly housing costs, such as condominium and cooperativefees, in determining whether the family can afford to purchase a unit.
(b)
(a)
(b)
(1) The size of the implementation grant and the amount of matchingcontributions;
(2) The availability of insurance, and the home maintenance and repaircapabilities of the families; and
(3) The condition and age of the properties and each of their major systemsand components (including at least the heating, plumbing, and electricalsystems, the roof, foundation, windows, exterior walls, and common area, ifany).
(c)
(d)
(a)
(b)
(2) If no cooperative has jurisdiction over the unit and if the prospectivebuyer is not a low-income family, the recipient or a PHA/IHA with jurisdictionfor the area in which the unit is located, whichever is specified in thedocuments under which the initial family acquires an ownership interest in theunit, has the prior right to purchase the ownership interest in the unit for theamount and on the terms specified in a firm contract between the homeowner and aprospective buyer. The recipient or PHA/IHA has 10 days after receiving noticeof the firm contract to decide whether to exercise its right and 60 additionaldays to complete closing of the purchase.
(3) Where a recipient, cooperative, or PHA/IHA exercises a right to purchase,it must resell the unit to an eligible family promptly.
(4) Unless otherwise provided in the property transfer documents, none of theprovisions of paragraph (b) of this section apply in the case of liquidation ofa security interest in the property. If FHA has insured a mortgage on theproperty, the provisions of paragraph (b) of this section shall not apply uponoccurrence of an event requiring termination under 24 CFR 203.41(c)(2) or234.66(c)(2).
(c)
(i) The contribution to equity paid by the family (such as any downpayment(in the form of cash or the value of sweat equity) and any amount paid towardsprincipal on a mortgage loan during the period of ownership);
(ii) The value of any improvements (not including normal or routinemaintenance) installed at the expense of the family during the family's tenureas owner (including improvements made through sweat equity), as determined bythe recipient or other entity specified in the approved application based onevidence of amounts spent on the improvements, including the cost of materialand labor (or the value of the sweat equity); and
(iii) The appreciated value, determined by applying the Consumer Price Index(Urban Consumers) or other HUD approved index against the contribution to equityunder paragraphs (d)(i) and (ii) of this section.
(2) The recipient (or other entity) may, at the time of initial sale, enterinto an agreement with the family to set a maximum amount which thisappreciation may not exceed.
(3) Amounts that count towards a family's equity may not also count towardsthe match.
(d)
(2) With respect to a sale by an initial homeowner, the note must requirepayment upon sale by the initial homeowner, to the extent proceeds of the saleremain after paying off other outstanding debt secured by the property that wasincurred for the purpose of acquisition or property improvement, paying anyother amounts due in connection with the sale (such as closing costs andtransfer taxes), and paying the family the amount of its equity in the property,computed in accordance with paragraph (c) of this section.
(3) With respect to a sale by an initial homeowner after the first six yearsafter acquisition, through the 20th year, the amount payable under the note mustbe reduced by
(4) Where a subsequent purchaser during the 20-year period, measured by theterm of the initial promissory note, purchases the property for less than thethen current fair market value (determined in accordance with the appraisalrequirements in § 572.100(b)), the purchaser must also execute atclosing a promissory note and mortgage (to be recorded as stated in paragraph(d)(1) of this section) payable to the recipient or its designee, for the amountof the discount (but no more than the amount payable at the time of the sale onthe promissory note by the seller). The term of the promissory note must be theperiod remaining of the original 20-year period. The note must require paymentupon sale by the subsequent homeowner, to the extent proceeds of the sale remainafter covering costs of the sale, paying off other outstanding debt secured bythe property that was incurred for the purpose of acquisition or propertyimprovement, and paying any other amounts due in connection with the sale. Theamount payable on the note must be reduced by a percentage of the originalprincipal amount of the note for each full month of ownership by the subsequenthomeowner. The percentage must be computed by determining the percentage of theterm of the promissory note the homeowner has owned the property. The remaindermay be retained by the subsequent homeowner selling the property.
(e)
(a)
(b)
(c)
(d)
The rights of third parties are governed by 42 U.S.C. 12895(d) and apply tothe requirements of this part.
(a)
(2) In addition to any applicable sanctions under the grant agreement, aviolation of paragraph (a)(1) of this section may trigger a requirement toprovide relocation assistance in accordance with the Uniform RelocationAssistance and Real Property Acquisition Policies Act of 1970 and governmentwideimplementing regulations at 49 CFR part 24.
(b)
(1) Advisory services, including timely information, counseling (including
(2) Payment for actual, reasonable moving expenses; and
(3) Financial assistance sufficient to permit relocation to suitable,affordable, decent, safe, and sanitary housing. This requirement is met if thefamily is provided the opportunity to relocate to suitable, decent, safe, andsanitary housing for which the monthly rent and estimated average utility costsdo not exceed the greater of 30 percent of the person's income or the person'smonthly rent before relocation and the estimated average monthly utility costs.The homeownership program must specify the period for which replacement housingassistance will be provided to persons who do not receive assistance through aSection 8 rental certificate or voucher or other housing program subsidy.
(c)
(d)
Any planning grants made by HUD under the HOPE 3 program will continue to begoverned by the provisions in this section in effect immediately before October16, 1996. When or before HUD announces the availability of funds for planninggrants under this part, these provisions will be recodified.
Any planning grants made by HUD under the HOPE 3 program will continue to begoverned by the provisions in this section in effect immediately before October16, 1996. When or before HUD announces the availability of funds for planninggrants under this part, these provisions will be recodified.
(a)
(b)
(c)
Implementation grants may be used for the reasonable costs of eligibleactivities necessary to carry out a homeownership program under this part. Onlycosts incurred on or after the effective date of an implementation grantagreement qualify for funding under this part. Eligible activities include:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(a)
(2) All contributions toward eligible activities to be counted toward thematch must be provided no later than the deadline for completion of programactivities established in accordance with § 572.210(f), except aspermitted under paragraphs (b)(1)(iv) and (b)(3) of this section.
(3) When the recipient is an IHA, and the IHA (acting in that capacity) hasnot received, and will not receive, amounts under title I of the Housing andCommunity Development Act of 1974 for the fiscal year in which HUD obligatesHOPE grant funds, the match requirements under this section will not apply.
(b)
(1)
(ii) Non-Federal resources may include:
(A) Contribution of trust funds held by Federal agencies for Indian tribes;
(B) PHA section 8 operating reserve funds, where approved by HUD;
(C) Income from a Federal grant earned after the end of the award period, ifno Federal programmatic requirements govern the disposition of the programincome.
(D) Amounts, determined in accordance with paragraph (b)(1)(iv)(B) of thissection, that have been requested by the applicant in an application submittedto the Federal Housing Finance Board for assistance under its affordable housingprogram, so long as the application is approved within 30 days of HUD'sconditional approval of the HOPE 3 application.
(iii) Non-Federal resources may not include:
(A) Funds from a Community Development Block Grant under section 106(b) orsection 106(d), respectively, of the Housing and Community Development Act of1974, except to the extent permitted for administrative expenses under paragraph(b)(2) of this section;
(B) Federal tax expenditures, including low-income housing tax credits.
(iv) The grant equivalent of a below-market interest rate loan to thehomebuyer from non-Federal resources, where all repayments, interest, and otherreturn will not be permanently contributed to the HOPE 3 program, may be countedas a cash contribution. The grant equivalent of a below market interest rateloan must be calculated in accordance with paragraphs (b)(1)(iv) (A) and (B) ofthis section—
(A) If the loan is made from proceeds of obligations issued by or on behalfof a public body that are exempt from taxation by the United States, thecontribution is the present discounted
(B) If the loan is made from funds other than under paragraph (b)(1)(iv)(A)of this section, the contribution is the present discounted cash value of theyield forgone, calculated based on a discount rate approved or prescribed byHUD. In determining the yield forgone, the recipient must use as a measure of amarket yield one of the following, as appropriate:
(
(
(v) Cash contributions may also be made from sales proceeds from the TurnkeyIII Homeownership and Mutual Help programs, as approved by HUD, or an approvedhomeownership program under section 5(h) of the 1937 Act.
(2)
(ii) If an applicant proposes to contribute administrative services, HUD willautomatically approve an applicant's assurances for matching purposes that itwill pay eligible administrative costs from non-Federal sources in an amount upto 7 percent of the implementation grant, and will not require furtherdocumentation of those expenditures for purposes of the HOPE 3 program. If arecipient uses more than 8 percent of its implementation grant to payadministrative costs, the amount credited toward the match will be reduced toless than 7 percent to stay within the 15 percent limitation.
(iii) Non-Federal resources, for the purposes of counting contributions foradministrative costs, may include funds from a Community Development Block Grantunder section 106(b) or section 106(d) of the Housing and Community DevelopmentAct of 1974 and are subject to the recordkeeping and documentation requirementsof that program.
(3)
(ii) Amounts that would be waived, forgone, or deferred for longer than 20years from the date a family acquires homeownership interests in the unit maynot be counted towards the match.
(iii) The present value of taxes, fees, or other charges waived, forgone, ordeferred must be computed by discounting the estimated amount that would beotherwise payable over the time period (up to 20 years) based on a discount rateapproved or prescribed by HUD.
(iv) Where the match includes amounts under paragraph (b)(3) of this section,the documents transferring the homeownership interest to the family mustevidence the contribution, to the extent the contribution has not already beenreceived.
(4)
(i) The as-is fair market value of eligible property may be counted as a
(ii) When eligible real property is sold to the recipient or its designeefrom non-Federal sources at a price below fair market value, the differentialbetween the fair market value and the discounted sales price may be countedtoward the match.
(iii) Vacant land from any non-Federal source located on existing streetswith available utilities (which need not include laterals) may be contributedfor use under the program, but only if a structure acquired or donated from aneligible HOPE 3 source will be moved onto it. The total amount of thecontribution and any amount paid from HOPE 3 funds for acquisition of thestructure, moving, and rehabilitation costs must be within the limits providedin § 572.100.
(5)
(6)
(7)
(8)
(i) The proposed contribution is to be used for an eligible activity underthe proposed homeownership program;
(ii) The application demonstrates that the proposed in-kind contribution willactually be provided; and
(iii) The proposed value of the contribution is reasonable. In determiningwhether the value is reasonable, HUD will generally consider the amount suchcontribution would otherwise cost the program.
(a)
(1) To carry out the program in accordance with the provisions of this part,applicable law, the approved application, and all other applicable requirements;and
(2) To comply with such other terms and conditions, including recordkeepingand reports, as HUD may establish for the purposes of administering, monitoring,and evaluating the program in an effective and efficient manner.
(b)
(i) Preparing and following a schedule of actions or a management plan forproperly completing the approved activities;
(ii) Cancelling or revising the affected activities before expending grantfunds for them, revising the grant budget as necessary, and substituting othereligible activities;
(iii) Discontinuing draws under the C/MI System, and not incurring furthercosts for the affected activities;
(iv) Reimbursing its HOPE 3 program account in the amount not used inaccordance with this part and the grant agreement; and
(v) In the case of implementation grants, making additional matchingcontributions in substitution for contributions not in compliance with this partand the grant agreement or submitting to HUD acceptable evidence that matchingcontributions sufficient to meet the total match required under this part andthe grant agreement will be made, before additional draws are made.
(2) If HUD determines that the recipient is not complying with the correctiveor remedial actions agreed upon with the recipient, or as otherwise authorizedin the grant agreement, HUD may implement the following additional correctiveand remedial actions:
(i) Changing the method of payment under the C/MI System to a reimbursementbasis;
(ii) Suspending the recipient's authority to make draws under the C/MI Systemfor affected activities;
(iii) Reducing (deobligating) the grant in the amount affected by theperformance deficiency, including, in the case of implementation grants, failureto furnish matching contributions in the required amount;
(iv) Terminating the grant for all further activities and initiating close-out procedures;
(v) Taking action against the recipient under 24 CFR part 24 and ExecutiveOrder 12549 (3 CFR, 1986 Comp., p. 189) with respect to future HOPE 3, HUD, orFederal grant awards; and
(vi) Taking any other remedial action legally available.
(3) If the amount of grant funds that has been disbursed under the C/MISystem exceeds the amount finally determined by HUD to be authorized (includingany authorized deobligation), the recipient must repay such excess amount toHUD, and will have no right to reclaim or reuse such excess amount.
(c)
(d)
Disbursement of HOPE 3 grant funds is managed through HUD's Cash andManagement Information (C/MI) System for the HOPE 3 program. Funds that may bedisbursed through the C/MI System include funds awarded to the recipient andobligated through the grant approval letter issued by HUD. HOPE 3 funds aredrawn down by the recipient or its authorized designee from a United StatesTreasury account for the program, using the Treasury Automated Clearinghouse(ACH) System. Any drawdown of HOPE 3 funds from the United States Treasuryaccount is conditioned upon the submission of satisfactory information about theprogram and compliance with other procedures specified by HUD in HUD's forms andissuances concerning the C/MI System.
Amendments to the approved program must be documented or approved by HUD inaccordance with instructions provided by HUD.
When funds are made available for planning grants or implementation grantsunder this part, HUD will publish a NOFA in the
Any planning grants made by HUD under the HOPE 3 program will continue to begoverned by the provisions in this section in effect immediately before October16, 1996. When or before HUD announces the availability of funds for planninggrants under this part, these provisions will be recodified.
Applicants must provide a certification of consistency with the approvedconsolidated plan, in accordance with 24 CFR 91.510.
In addition to the nondiscrimination and equal opportunity requirements setforth in 24 CFR part 5, the following requirements apply to homeownershipprograms under this part:
(a)
(2) In the case of Indian tribes and IHAs, compliance with the requirementsof this section shall be to the maximum extent consistent, but not in derogationof, the Indian Self-Determination and Education Assistance Act (25 U.S.C.450e(b)).
(b)
(c)
(d)
(2) Organizations that are directly funded under the HOPE 3 program may notengage in inherently religious activities, such as worship, religiousinstruction, or proselytization, as part of the programs or services fundedunder this part. If an organization conducts such activities, the activitiesmust be offered separately, in time or location, from the programs or servicesfunded under this part, and participation must be voluntary for thebeneficiaries of the HUD-funded programs or services.
(3) A religious organization that participates in the HOPE 3 program willretain its independence from Federal, State, and local governments, and maycontinue to carry out its mission, including the definition, practice, andexpression of its religious beliefs, provided that it does not use direct HOPE 3funds to support any inherently religious activities, such as worship, religiousinstruction, or proselytization. Among other things, faith-based organizationsmay use space in their facilities to provide HOPE 3-funded services, withoutremoving religious art, icons, scriptures, or other religious symbols. Inaddition, a HOPE 3-funded religious organization retains its authority over itsinternal governance, and it may retain religious terms in its organization'sname, select its board members on a religious basis, and include religiousreferences in its organization's mission statements and other governingdocuments.
(4) An organization that participates in the HOPE 3 program shall not, inproviding program assistance, discriminate against a program beneficiary orprospective program beneficiary on the basis of religion or religious belief.
(5) HOPE 3 funds may not be used for the acquisition, construction, orrehabilitation of structures to the extent that those structures are used forinherently religious activities. HOPE 3 funds may be used for the acquisition,construction, or rehabilitation of structures only to the extent that thosestructures are used for conducting eligible activities under this part. Where astructure is used for both eligible and inherently religious activities, HOPE 3funds may not exceed the cost of those portions of the acquisition,construction, or rehabilitation that are attributable to eligible activities inaccordance with the cost accounting requirements applicable to HOPE 3 funds inthis part. Sanctuaries, chapels, or other rooms that a HOPE 3-funded religiouscongregation uses as its principal place of worship, however, are ineligible forHOPE 3-funded improvements. Disposition of real property after the term of thegrant, or any change in use of the property during the term of the grant, issubject to government-wide regulations governing real property disposition (
(6) If a State or local government voluntarily contributes its own funds tosupplement federally funded activities, the State or local government has theoption to segregate the Federal funds or commingle them. However, if the fundsare commingled, this section applies to all of the commingled funds.
(a)
(b)
(i) Supply HUD with information necessary for it to perform any necessaryenvironmental review of the property (or neighborhood);
(ii) Carry out mitigating measures required by HUD or select alternateeligible property; and
(iii) Not acquire or otherwise carry out program activities with respect toany eligible property until HUD approval for the property (or neighborhood) isreceived.
(2) Before any amounts under this part are used to acquire or rehabilitate aneligible property, HUD must determine whether the proposed activities triggerapplicability thresholds for the applicable Federal environmental laws andauthorities. These may apply when the property is:
(i) Located within designated coastal barriers;
(ii) Listed on, or eligible for listing on, the National Register of HistoricPlaces; or is located within, or adjacent to, an historic district;
(iii) Located near hazardous operations handling fuels or chemicals of anexplosive or flammable nature;
(iv) Contaminated by toxic chemicals or radioactive materials;
(v) Located within a runway clear zone at a civil airport or within a clearzone or accident potential zone at a military airfield; or
(vi) Located within a special flood hazard area or within a locationrequiring flood insurance protection.
(3) A recipient may choose to make the threshold reviews itself or withassistance from State or local governments or qualified persons or to refer theproperty to HUD for threshold review. Where the recipient makes the thresholdreview itself, it must submit the result to HUD.
(4) If a recipient chooses not to make the threshold reviews, it must submitinformation to HUD to permit HUD to make the review.
(5) If HUD determines on the basis of the recipient's threshold review orHUD's threshold review that one or more of the thresholds are exceeded, HUD willconduct an environmental review of that issue and, if appropriate, establishmitigating measures that the recipient must carry out for the property unless itdecides to select an alternate property.
(a)
(b)
(1) Whether the exception would provide a significant cost benefit or anessential degree of expertise to the local homeownership program that wouldotherwise not be available;
(2) Whether an opportunity was provided for open competitive bidding ornegotiation;
(3) Whether the person affected is a member of a group or class intended tobe the beneficiaries of the activity and the exception will permit such personto receive generally the same interests or benefits as are being made availableor provided to the group or class;
(4) Whether the affected person has withdrawn from his or her functions orresponsibilities, or the decisionmaking process, with respect to the specificactivity in question;
(5) Whether the interest or benefit was present before the affected personwas in a position as described in paragraph (b) of this section;
(6) Whether undue hardship will result either to the applicant, recipient, orthe person affected when weighed against the public interest served by avoidingthe prohibited conflict; and
(7) Any other relevant considerations.
(a)
(2) Copies of OMB Circulars may be obtained from E.O.P. Publications, room2200, New Executive Office Building, Washington, DC 20503, telephone (202)395-7332 (this is not a toll-free number). There is a limit of two freecopies.
(b)
(c)-(d) [Reserved]
(e)
(f)
(1) The community in which the area is situated is participating in theNational Flood Insurance program (see 44 CFR parts 59 through 79), or less thanone year has passed since FEMA notification regarding such hazards; and
(2) Flood insurance is obtained as a condition of the acquisition orrehabilitation of the property.
(g)
(h)
(a)
(1) The amount and disposition by the recipient of the planning andimplementation grants received under this part, including sufficient recordsthat document the reasonableness and necessity of each expenditure;
(2) The amount and disposition of proceeds from financing obtained inconnection with the program, sales to eligible families, and any fundsrecaptured upon sale by the homeowner;
(3) The total cost of the homeownership program;
(4) The amount and nature of any other assistance, including cash, property,services, or other items contributed as a condition of receiving animplementation grant;
(5) The cost or other value of all in-kind contributions towards the matchrequired by § 572.220; and
(6) Any other proceeds received for, or otherwise used in connection with,the homeownership program under this part.
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Pub. L. 104-155, 110 Stat. 1392, 18 U.S.C. 241note; 42 U.S.C. 3535(d).
Section 4 of the Church Arson Prevention Act of 1996 (Pub. L. 104-155,approved July 3, 1996) authorizes HUD to guarantee loans made by financialinstitutions to certain nonprofit organizations to finance activities designedto remedy the damage and destruction to real and personal property caused byacts of arson or terrorism. This part establishes the general procedures andrequirements that apply to HUD's guarantee of these loans.
The following definitions are only applicable to loan guarantees under thispart, and are not criminal definitions.
(2)
Guaranteed Loan Funds may be used by a Borrower for the following activitieswhen it is certified in accordance
(a) Acquisition of improved or unimproved real property in fee or under longterm lease.
(b) Acquisition and installation of personal property.
(c) Rehabilitation of real property owner, acquired, or leased by theBorrower.
(d) Construction, reconstruction, or replacement of real propertyimprovement.
(e) Clearance, demolition, and removal, including movement of structures toother sites, of buildings, fixtures and improvements on real property.
(f) Site preparation, including construction, reconstruction, or installationof site improvements, utilities, or facilities, which is related to theactivities described in paragraph (a), (c), or (d) of this section.
(g) Architectural, engineering, and similar services necessary to developplans in connection with activities financed under paragraph (a), (b), (c), or(d) of this section.
(h) Acquisition, installation and restoration of security systems.
(i) Loans for refinancing existing indebtedness secured by a property whichhas been or will be acquired, constructed, rehabilitated or reconstructed, ifsuch financing is determined to be appropriate to achieve the objectives of theAct and this part.
(j) Other necessary project costs such as insurance, bonding, legal fees,appraisals, surveys, relocation, closing costs, etc., paid or incurred by theBorrower in connection with the completion of the above activities.
The term of the loan to be guaranteed by HUD under this part may not exceed20 years.
(a) HUD may, in its discretion, accept the underwriting standards of theFinancial Institution making a loan to a Borrower.
(b) HUD will not make the loan guarantee unless it determines that theguaranteed loan is an acceptable financial risk under HUD's generally applicableloan underwriting standards based on the following:
(1) The Borrower's ability to pay debt service; and
(2) The value of the collateral assigned or pledged as security for therepayment of the loan.
(c) The provision of a loan guarantee to a Financial Institution and theamount of the guarantee do not depend in any way on the purpose, function, oridentity of the organization to which the Financial Institution has made, orintends to make, a Section 4 Guaranteed Loan.
(d) HUD may disapprove a request for loan guarantee assistance based on theavailability of funding.
(e) HUD may decline any Financial Institution's participation if itsunderwriting criteria are insufficient to make the guarantee an acceptablefinancial risk, or if the proposed interest rates or fees are unacceptable. HUDexpects the proposed interest rates to take into account the value of theFederal guarantee.
(f) HUD may limit the availability of Guaranteed Loan Funds to geographicareas having the greatest need, as determined by a needs analysis of the mostcurrent available date conducted by HUD.
(g) Other requirements associated with the underwriting standards andguidelines shall be contained in the Loan Guarantee Agreement.
A Financial Institution seeking a Section 4 Guaranteed Loan must submit toHUD the following documentation:
(a) A statement that the institution is a Financial Institution as defined at§ 573.2.
(b) A statement that the Borrower is eligible as defined at§ 573.2.
(c) A description of each eligible activity for which the loan is requested.
(d) A statement of other available funds to be used to finance the eligibleactivities (e.g., insurance proceeds).
(e) A certification by the Borrower that the activities to be assistedresulted from an act of arson or terrorism which is the subject of thecertification described in paragraph (f) of this section.
(f) A certification by a QCO that the damage or destruction to be remedied bythe use of the Guaranteed Loan Funds resulted from an act of arson or terrorism.
(g) The environmental documentation required by § 573.8.
(h) A narrative of the institution's underwriting standards used in reviewingthe Borrower's loan request.
(i) The interest rate on the loan and fees the lender intends to use inconnection with the loan; and
(j) The percentage of the loan for which a guarantee is requested.
(a) The rights and responsibilities with respect to the guaranteed loan shallbe substantially described in an agreement entered into between the FinancialInstitution, as the lender, and the Secretary, as the guarantor, which agreementshall provide that:
(1) The lender has submitted or will submit a request for loan guaranteeassistance that is accompanied by the Borrower's request for a loan to carry outeligible activities described in § 573.3;
(2) The lender will require the Borrower to execute a promissory notepromising to repay the guaranteed loan in accordance with the terms thereof;
(3) The lender will require the Borrower to provide collateral security, toan extent and in a form, acceptable to HUD;
(4) HUD reserves the right to limit loan guarantees to loans financing thereplacement of damaged property with comparable new property;
(5) The lender will follow certain claim procedures to be specified by HUD inconnection with any defaults, including appropriate notification of default asrequired by HUD;
(6) The lender will follow procedures for payment under the guarantee wherebythe lender will be paid (up to the amount of guarantee) the amount owed to thelender less any amount recovered from the underlying collateral security for theloan; and
(7) The lender will act as the fiscal agent for the loan, servicing theguaranteed loan, maintaining loan documents, and receiving the Borrower'spayments of principal and interest. The Borrower and the lender may be requiredto execute a fiscal agency agreement.
(b) In addition, the agreement shall contain other requirements, terms, andconditions required or approved by HUD.
The environmental review requirements at 24 CFR part 50 are applicable tothis part.
(a)
(1) If HUD determines that one or more of the thresholds are exceeded, HUDshall conduct a compliance review of the issue and, if appropriate, establishmitigating measures that the applicant shall carry out for the property.
(2) The lender's submissions under § 573.6 shall provide HUD with:
(i) Documentation for environmental threshold review; and
(ii) Any previously issued environmental reviews prepared by local, State, orother Federal agencies for the proposed property.
(3) In providing the above information, the Borrower is encouraged to
(4) HUD reserves the right to disqualify any request where one or moreenvironmental thresholds are exceeded if HUD determines that the compliancereview cannot be satisfactorily completed.
(5) If Guaranteed Loan Funds are requested for acquisition, rehabilitation,or construction, Borrowers and Financial Institutions are prohibited fromcommitting or expending State, local, or other funds to undertake propertyacquisition, rehabilitation or construction under this part until HUD issues aletter of commitment notifying the lender of HUD approval of the loan guarantee.
(b)
(1) For minor rehabilitation of a building and acquisition of any property,Federal environmental laws and authorities may apply when the property is:
(i) Located within designated coastal barrier resources;
(ii) Contaminated by toxic chemicals or radioactive materials;
(iii) Located within a floodplain;
(iv) A building for which flood insurance protection is required;
(v) Located within a runway clear zone at a civil airport or within a clearzone or accident potential zone at a military airfield; or
(vi) Listed on, or eligible for listing on, the National Register of HistoricPlaces; located within, or adjacent to, an historic district, or is a propertywhose area of potential effects includes a historic district or property.
(2) For major rehabilitation of a building or for new construction orrebuilding, and environmental assessment under NEPA is required and, in additionto paragraph (b)(1)(i) through (vi) of this section, other Federal environmentallaws and authorities may apply when the property:
(i) Affects coastal zone management;
(ii) Is located near hazardous industrial operations handling fuels orchemicals of an explosive or flammable nature;
(iii) Affects a sole source aquifer;
(iv) Affects endangered species;
(v) Is located within a designated wetland; or
(vi) Is located in a high noise area.
(c)
(d)
(1) Whose estimated cost is less than 75 percent of the estimated cost ofreplacement after completion;
(2) That does not involve changes in land use from residential tononresidential, or from nonresidential to residential; and
(3) In the case of residential properties, that does not increase densitymore than 20 percent.
(e)
(a)
(b)
(c)
(d)
(2)
(3)
(a) No fees will be assessed by HUD for its guaranty of a loan under thispart.
(b) The lender may assess the Borrower loan origination fees or other chargesprovided that such fees and charges are those charged by the lender to its othercustomers for similar transactions, and are no higher than those charged by thelender for similar transactions.
Records pertaining to the loans made by the Financial Institution shall beheld for the life of the loan. A lender with a Section 4 Guaranteed Loan shallallow HUD, the Comptroller General of the United States, and their authorizedrepresentatives access from time to time to any documents, papers or files whichare pertinent to the guaranteed loan, and to inspect and make copies of suchrecords which relate to any Section 4 Loan. Any inspection will be made duringthe lender's regular business hours or any other mutually convenient time.
42 U.S.C. 3535(d) and 12901-12912.
The terms
(1) More than 1,500 cumulative cases of AIDS in those areas of the Stateoutside of eligible metropolitan statistical areas that are eligible to befunded through a qualifying city; and
(2) A consolidated plan prepared, submitted, and approved in accordance with24 CFR part 91 that covers the assistance to be provided under this part. (AState may carry out activities anywhere in the State, including within an EMSA.)
(1) Is organized under State or local laws;
(2) Has no part of its net earnings inuring to the benefit of any member,founder, contributor, or individual;
(3) Has a functioning accounting system that is operated in accordance withgenerally accepted accounting principles, or has designated an entity that willmaintain such an accounting system; and
(4) Has among its purposes significant activities related to providingservices or housing to persons with acquired immunodeficiency syndrome orrelated diseases.
(a) Eligible States and qualifying cities, as defined in § 574.3,qualify for formula allocations under HOPWA.
(b) HUD will notify eligible States and qualifying cities of their formulaeligibility and allocation amounts and EMSA service areas annually.
The formula grants are awarded upon submission and approval of a consolidatedplan, pursuant to 24 CFR part 91, that covers the assistance to be providedunder this part. Certain states and cities that are the most populous unit ofgeneral local government in eligible metropolitan statistical areas will receiveformula allocations based on their State or metropolitan population andproportionate number of cases of persons with AIDS. They will receive fundsunder this part (providing they comply with 24 CFR part 91) for eligibleactivities that address the housing needs of persons with AIDS or relateddiseases and their families (see § 574.130(b)).
The EMSA's applicant shall serve eligible persons who live anywhere withinthe EMSA, except that housing assistance shall be provided only in localitieswithin the EMSA that have a consolidated plan prepared, submitted, and approvedin accordance with 24 CFR part 91 that covers the assistance to be
(a)
(b)
(2) The remaining twenty-five percent is allocated among qualifying cities,but not States, where the per capita incidence of AIDS for the year, April 1through March 31, preceding the fiscal year of the appropriation is higher thanthe average for all metropolitan statistical areas with more than 500,000population. Each qualifying city's allocation reflects its EMSA's proportionateshare of the high incidence factor among EMSA's with higher than average percapita incidence of AIDS. The high incidence factor is computed by multiplyingthe population of the metropolitan statistical area by the difference betweenits twelve-month-per-capita-incidence rate and the average rate for allmetropolitan statistical areas with more than 500,000 population. The EMSA'sproportionate share is determined by dividing its high incidence factor by thesum of the high incidence factors for all EMSA's with higher than average percapita incidence of AIDS.
(c)
If an eligible State or qualifying city does not submit a consolidated planin a timely fashion, in accordance with 24 CFR part 91, that provides for use ofits allocation of funding under this part, the funds allocated to thatjurisdiction will be added to the funds available for formula allocations toother jurisdictions in the current fiscal year. Any formula funds that becomeavailable as a result of deobligations or the imposition of sanctions asprovided for in § 574.540 will be added to the funds available forformula allocations in the next fiscal year.
(a) The Department will set aside 10 percent of the amounts appropriatedunder this program to fund on a competitive basis:
(1) Special projects of national significance; and
(2) Other projects submitted by States and localities that do not qualify forformula grants.
(b) Any competitively awarded funds that become available as a result ofdeobligations or the imposition of sanctions, as provided in§ 574.540, will be added to the funds available for competitivegrants in the next fiscal year.
(c) The competitive grants are awarded based on applications, as described insubpart C of this part, submitted in
(d) If HUD makes a procedural error in a funding competition that, whencorrected, would warrant funding of an otherwise eligible application, HUD willselect that application for potential funding when sufficient funds becomeavailable.
(a) All States, units of general local government, and nonprofitorganizations, may apply for grants for projects of national significance.
(b) Only those States and units of general local government that do notqualify for formula grants, as described in § 574.100; may apply forgrants for other projects as described in § 574.200(a)(2).
(c) Except for grants for projects of national significance, nonprofitorganizations are not eligible to apply directly to HUD for a grant but mayreceive funding as a project sponsor under contract with a grantee.
Applications must comply with the provisions of the Department's Notice ofFunding Availability (NOFA) for the fiscal year published in the
(a) After an application has been selected for funding, any change that willsignificantly alter the scope, location, service area, or objectives of anactivity or the number of eligible persons served must be justified to HUD andapproved by HUD. Whenever any other amendment to the application is made, thegrantee must provide a copy to HUD.
(b) Each amendment request must contain a description of the revised proposeduse of funds. Funds may not be expended for the revised proposed use of fundsuntil:
(1) HUD accepts the revised proposed use; and
(2) For amendments to acquire, rehabilitate, convert, lease, repair orconstruct properties to provide housing, an environmental review of the revisedproposed use of funds has been completed in accordance with§ 574.510.
(a)
(b)
(1) Housing information services including, but not limited to, counseling,information, and referral services to assist an eligible person to locate,acquire, finance and maintain housing. This may also include fair housingcounseling for eligible persons who may encounter discrimination on the basis ofrace, color, religion, sex, age, national origin, familial status, or handicap;
(2) Resource identification to establish, coordinate and develop housingassistance resources for eligible persons (including conducting preliminaryresearch and making expenditures necessary to determine the feasibility ofspecific housing-related initiatives);
(3) Acquisition, rehabilitation, conversion, lease, and repair of facilitiesto provide housing and services;
(4) New construction (for single room occupancy (SRO) dwellings and communityresidences only).
(5) Project- or tenant-based rental assistance, including assistance forshared housing arrangements;
(6) Short-term rent, mortgage, and utility payments to prevent thehomelessness of the tenant or mortgagor of a dwelling;
(7) Supportive services including, but not limited to, health, mental health,assessment, permanent housing placement, drug and alcohol abuse treatment andcounseling, day care, personal assistance, nutritional services, intensive carewhen required, and assistance in gaining access to local, State, and Federalgovernment benefits and services, except that health services may only beprovided to individuals with acquired immunodeficiency syndrome or relateddiseases and not to family members of these individuals;
(8) Operating costs for housing including maintenance, security, operation,insurance, utilities, furnishings, equipment, supplies, and other incidentalcosts;
(9) Technical assistance in establishing and operating a community residence,including planning and other pre-development or pre-construction expenses andincluding, but not limited to, costs relating to community outreach andeducational activities regarding AIDS or related diseases for persons residingin proximity to the community residence;
(10) Administrative expenses:
(i) Each grantee may use not more than 3 percent of the grant amount for itsown administrative costs relating to administering grant amounts and allocatingsuch amounts to project sponsors; and
(ii) Each project sponsor receiving amounts from grants made under thisprogram may use not more than 7 percent of the amounts received foradministrative costs.
(11) For competitive grants only, any other activity proposed by theapplicant and approved by HUD.
(c)
(2) Organizations that are directly funded under the HOPWA program may notengage in inherently religious activities, such as worship, religiousinstruction, or proselytization, as part of the programs or services fundedunder this part. If an organization conducts such activities, the activitiesmust be offered separately, in time or location, from the programs or servicesfunded under this part, and participation must be voluntary for thebeneficiaries of the HUD-funded programs or services.
(3) An organization that participates in the HOPWA program will retain itsindependence from Federal, State, and local governments, and may continue tocarry out its mission, including the definition, practice, and expression of itsreligious beliefs, provided that it does not use direct HOPWA funds to supportany inherently religious activities, such as worship, religious instruction, orproselytization. Among other things, faith-based organizations may use space intheir facilities to provide HOPWA-funded services, without removing religiousart, icons, scriptures, or other religious symbols. In addition, a HOPWA-fundedreligious organization retains its authority over its internal governance, andit may retain religious terms in its organization's name, select its boardmembers on a religious basis, and include religious references in itsorganization's mission statements and other governing documents.
(4) An organization that participates in the HOPWA program shall not, inproviding program assistance, discriminate against a program beneficiary orprospective program beneficiary on the basis of religion or religious belief.
(5) HOPWA funds may not be used for the acquisition, construction, orrehabilitation of structures to the extent
(6) If a State or local government voluntarily contributes its own funds tosupplement federally funded activities, the State or local government has theoption to segregate the Federal funds or commingle them. However, if the fundsare commingled, this section applies to all of the commingled funds.
All grantees using grant funds to provide housing must adhere to thefollowing standards:
(a)(1)
(2)
(i) Under any State compensation program, under an insurance policy, or underany Federal or State health benefits program; or
(ii) By an entity that provides health services on a prepaid basis.
(b)
(1)
(2)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(c)
(i) For a period of not less than 10 years, in the case of assistanceprovided under an activity eligible under § 574.300(b) (3) and (4)involving new construction, substantial rehabilitation or acquisition of abuilding or structure; or
(ii) For a period of not less than 3 years in the cases involving non-substantial rehabilitation or repair of a building or structure.
(2) Waiver of minimum use period. HUD may waive the minimum use period of abuilding or structure as stipulated in paragraph (c)(1) of this section if thegrantee can demonstrate, to the satisfaction of HUD, that:
(i) The assisted structure is no longer needed to provide supported housingor assistance, or the continued operation of the structure for such purposes isno longer feasible; and
(ii) The structure will be used to benefit individuals or families whoseincomes do not exceed 80 percent of the median income for the area, asdetermined by HUD with adjustments for smaller and larger families, if theSecretary finds that such variations are necessary because of construction costsor unusually high or low family incomes.
(d)
(1) 30 percent of the family's monthly adjusted income (adjustment factorsinclude the age of the individual, medical expenses, size of family and childcare expenses and are described in detail in 24 CFR 5.609). The calculation ofthe family's monthly adjusted income must include the expense deductionsprovided in 24 CFR 5.611(a), and for eligible persons, the calculation ofmonthly adjusted income also must include the disallowance of earned income asprovided in 24 CFR 5.617, if applicable;
(2) 10 percent of the family's monthly gross income; or
(3) If the family is receiving payments for welfare assistance from a publicagency and a part of the payments, adjusted in accordance with the family'sactual housing costs, is specifically designated by the agency to meet thefamily's housing costs, the portion of the payment that is designated forhousing costs.
(e)
(2)
(ii)
(A) Serving the participant with a written notice containing a clearstatement of the reasons for termination;
(B) Permitting the participant to have a review of the decision, in which theparticipant is given the opportunity to confront opposing witnesses, presentwritten objections, and be represented by their own counsel, before a personother than the person (or a subordinate of that person) who made or approved thetermination decision; and
(C) Providing prompt written notification of the final decision to theparticipant.
(a) If grant funds are used to provide rental assistance, the followingadditional standards apply:
(1)
(i) The lower of the rent standard or reasonable rent for the unit; and
(ii) The resident's rent payment calculated under § 574.310(d).
(2)
(3)
(b) With respect to shared housing arrangements, the rent charged for anassisted family or individual shall be in relation to the size of the privatespace for that assisted family or individual in comparison to other privatespace in the shared unit, excluding common space. An assisted family orindividual may be assigned a pro rata portion based on the ratio derived bydividing the number of bedrooms in their private space by the number of bedroomsin the unit. Participation in shared housing arrangements shall be voluntary.
Short-term supported housing includes facilities to provide temporary shelterto eligible individuals as well as rent, mortgage, and utilities payments toenable eligible individuals to remain in their own dwellings. If grant funds areused to provide such short-term supported housing assistance, the followingadditional standards apply:
(a)
(2)
(b)
(2)
(c)
(d)
(e)
(a) A community residence is a multiunit residence designed for eligiblepersons to provide a lower cost residential alternative to institutional care;to prevent or delay the need for such care; to provide a permanent ortransitional residential setting with appropriate services to enhance thequality of life for those who are unable to live independently; and to enablesuch persons to participate as fully as possible in community life.
(b) If grant funds are used to provide a community residence, except forplanning and other expenses preliminary to construction or other physicalimprovement for a community residence, the grantee must, prior to theexpenditure of such funds, obtain and keep on file the following certifications:
(1)
(ii) A certification that the grantee has entered into a written agreementwith a project sponsor or contracted service provider to provide services asrequired by § 574.310(a) to eligible persons assisted by thecommunity residence;
(2)
(ii) A certification that the grantee has on file an analysis of the servicelevel needed for each community residence, a statement of which grantee agency,project sponsor, or service provider will provide the needed services, and astatement of how the services will be funded; and
(3)
(ii) A certification that the project sponsor or the service provider isqualified to provide the services.
Amounts received from grants under this part may not be used to replace otheramounts made available or designated by State or local governments throughappropriations for use for the purposes of this part.
The grantee shall ensure that any project sponsor with which the granteecontracts to carry out an activity under this part has the capacity andcapability to effectively administer the activity.
(a) The grantee shall agree, and shall ensure that each project sponsoragrees, to cooperate and coordinate in providing assistance under this part withthe agencies of the relevant State and local governments responsible forservices in the area served by the grantee for eligible persons and other publicand private organizations and agencies providing services for such eligiblepersons.
(b) A grantee that is a State shall obtain the approval of the unit ofgeneral local government in which a project is to be located before enteringinto a contract with a project sponsor to carry out an activity authorized underthis part.
(c) A grantee that is a city receiving a formula allocation for an EMSA shallcoordinate with other units of general local government located within themetropolitan statistical area to address needs within that area.
The grantee shall agree, and shall ensure that each project sponsor agrees,that no fee, except rent, will be charged of any eligible person for any housingor services provided with amounts from a grant under this part.
The grantee shall agree, and shall ensure that each project sponsor agrees,to ensure the confidentiality of the name of any individual assisted under thispart and any other information regarding individuals receiving assistance.
The grantee shall agree, and shall ensure that each project sponsor agrees,to maintain and make available to HUD for inspection financial recordssufficient, in HUD's determination, to ensure proper accounting and disbursingof amounts received from a grant under this part.
(a)
(b)
(1) Operate the program in accordance with the provisions of theseregulations and other applicable HUD regulations;
(2) Conduct an ongoing assessment of the housing assistance and supportiveservices required by the participants in the program;
(3) Assure the adequate provision of supportive services to the participantsin the program; and
(4) Comply with such other terms and conditions, including recordkeeping andreports (which must include racial and ethnic data on participants) for programmonitoring and evaluation purposes, as HUD may establish for purposes ofcarrying out the program in an effective and efficient manner.
(c)
(a) Activities under this part are subject to HUD environmental regulationsin part 58 of this title, except that HUD will perform an environmental reviewin accordance with part 50 of this title for any competitive grant for FiscalYear 2000.
(b) The recipient, its project partners and their contractors may notacquire,
(c) For activities under a grant to a nonprofit entity that would generallybe subject to review under part 58, HUD may make a finding in accordance with§ 58.11(d) and may itself perform the environmental review under theprovisions of part 50 of this title if the recipient nonprofit entity objects inwriting to the responsible entity's performing the review under part 58.Irrespective of whether the responsible entity in accord with part 58 (or HUD inaccord with part 50) performs the environmental review, the recipient shallsupply all available, relevant information necessary for the responsible entity(or HUD, if applicable) to perform for each property any environmental reviewrequired by this part. The recipient also shall carry out mitigating measuresrequired by the responsible entity (or HUD, if applicable) or select alternateeligible property.
(a)
(b)
Each grantee must ensure that records are maintained for a four-year periodto document compliance with the provisions of this part. Grantees must maintaincurrent and accurate data on the race and ethnicity of program participants.
HUD may deobligate all or a portion of the amounts approved for eligibleactivities if such amounts are not expended in a timely manner, or the proposedactivity for which funding was approved is not provided in accordance with theapproved application or action plan and the requirements of this regulation. HUDmay deobligate any amount of grant funds that have not been expended within athree-year period from the date of the signing of the grant agreement. The grantagreement may set forth other circumstances under which funds may be deobligatedor sanctions imposed.
The Federal requirements set forth in 24 CFR part 5 apply to this program asspecified in this subpart.
Within the population eligible for this program, the nondiscrimination andequal opportunity requirements set forth in 24 CFR part 5 and the followingrequirements apply:
(a)
(2) Executive Order 11246, as amended by Executive Orders 11375, 11478,12086, and 12107 (3 CFR, 1964-1965 Comp., p. 339; 3 CFR, 1966-1970Comp., p. 684; 3 CFR, 1966-1970 Comp., p. 803; 3 CFR 1978 Comp., p. 230;and 3 CFR, 1978 Comp., p. 264) (Equal Employment Opportunity) does not apply tothis program.
(b)
The policies, guidelines, and requirements of 24 CFR part 85 (codifiedpursuant to OMB Circular No. A-102) and OMB Circular No. A-87 applywith respect to the acceptance and use of funds under the program by States andunits of general local government, including public agencies, and Circulars Nos.A-110 and A-122 apply with respect to the acceptance and use offunds under the program by private non-profit entities. (Copies of OMB Circularsmay be obtained from E.O.P. Publications, room 2200, New Executive OfficeBuilding, Washington, DC 20503, telephone (202) 395-7332. (This is not atoll-free number.) There is a limit of two free copies.
(a) In addition to the conflict of interest requirements in OMB CircularA-102 and 24 CFR 85.36(b)(3), no person who is an employee, agent,consultant, officer, or elected or appointed official of the grantee or projectsponsor and who exercises or has exercised any functions or responsibilitieswith respect to assisted activities, or who is in a position to participate in adecision making process or gain inside information with regard to suchactivities, may obtain a financial interest or benefit from the activity, orhave an interest in any contract, subcontract, or agreement with respectthereto, or the proceeds thereunder, either for himself or herself or for thosewith whom he or she has family or business ties, during his or her tenure or forone year thereafter.
(b)
(1) A disclosure of the nature of the conflict, accompanied by an assurancethat there has been public disclosure of the conflict and a description of howthe public disclosure was made; and
(2) An opinion of the recipient's attorney that the interest for which theexception is sought would not violate State or local law.
(c)
(1) Whether the exception would provide a significant cost benefit or anessential degree of expertise to the program or project that would otherwise notbe available;
(2) Whether the person affected is a member of a group or class of eligiblepersons and the exception will permit such person to receive generally the sameinterests or benefits as are being made available or provided to the group orclass;
(3) Whether the affected person has withdrawn from his or her functions orresponsibilities, or the decisionmaking process with respect to the specificassisted activity in question;
(4) Whether the interest or benefit was present before the affected person
(5) Whether undue hardship will result either to the recipient or the personaffected when weighed against the public interest served by avoiding theprohibited conflict; and
(6) Any other relevant considerations.
(a)
(b)
(c)
(d)
(e)
(2) The cost of required relocation assistance is an eligible project cost inthe same manner and to the same extent as other project costs. Such costs alsomay be paid for with funds available from other sources.
(3) The grantee shall maintain records in sufficient detail to demonstratecompliance with these provisions.
(f)
(i) After notice by the grantee, project sponsor, or property owner to movepermanently from the property, if the move occurs on or after the date that thegrantee submits to HUD an application for assistance that is later approved andfunded;
(ii) Before the submission of the application to HUD, if the grantee, projectsponsor, or HUD determines that the displacement resulted directly fromacquisition, rehabilitation, or demolition for the assisted project; or
(iii) By a tenant-occupant of a dwelling unit, if any one of the followingthree situations occurs:
(A) The tenant moves after the “initiation of negotiations” andthe move occurs before the tenant has been provided written notice offering himor her the opportunity to lease and occupy a suitable, decent, safe and sanitarydwelling in the same building/complex, under reasonable terms and conditions,upon completion of the project. Such reasonable terms and conditions include amonthly rent and estimated average monthly utility costs that do not exceed thegreater of:
(
(
(B) The tenant is required to relocate temporarily, does not return to thebuilding/complex and either:
(
(
(C) The tenant is required to move to another unit in the samebuilding/complex but is not offered reimbursement for all reasonable out-of-pocket expenses incurred in connection with the move, or other conditions of themove are not reasonable.
(2) Notwithstanding the provisions of paragraph (f)(1) of this section, aperson does not qualify as a “displaced person” (and is not eligiblefor relocation assistance under the URA or this section), if:
(i) The person has been evicted for serious or repeated violation of theterms and conditions of the lease or occupancy agreement, violation orapplicable Federal, State or local law, or other good cause, and HUD determinesthat the eviction was not undertaken for the purposes of evading the obligationto provide relocation assistance;
(ii) The person moved into the property after the submission of theapplication and, before signing a lease and commencing occupancy, was providedwritten notice of the project, its possible impact on the person (e.g., theperson may be displaced, temporarily relocated, or suffer a rent increase) andthe fact that the person would not qualify as a “displaced person”(or for any assistance provided under this section), if the project is approved;
(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 ofacquisition, rehabilitation, or demolition for the project.
(3) The grantee or project sponsor may request, at any time, HUD'sdetermination of whether a displacement is or would be covered under thissection.
(g)
The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846),the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C.4851-4856), and implementing regulations at part 35, subparts A, B, H, J,K, M, and R of this part apply to activities under this program.
No property to be assisted under this part may be located in an area that hasbeen identified by the Federal Emergency Management Agency (FEMA) as havingspecial flood hazards, unless:
(a)(1) The community in which the area is situated is participating in theNational Flood Insurance Program and the regulations thereunder (44 CFR parts 59through 79); or
(2) Less than a year has passed since FEMA notification regarding suchhazards; and
(b) The grantee will ensure that flood insurance on the structure is obtainedin compliance with section 102(a) of the Flood Disaster Protection Act of 1973(42 U.S.C. 4001 et seq.).
In accordance with the Coastal Barrier Resources Act, 16 U.S.C. 3501, nofinancial assistance under this part may be made available within the CoastalBarrier Resources System.
The financial management system used by a State or unit of general localgovernment that is a grantee must provide for audits in accordance with 24 CFRpart 44. A nonprofit organization that is a grantee or a project sponsor issubject to the audit requirements set forth in 24 CFR part 45.
The provisions of the Davis-Bacon Act (40 U.S.C. 276a-276a-5) donot apply
42 U.S.C. 3535(d) and 11376.
This part implements the Emergency Shelter Grants program contained insubtitle B of title IV of the Stewart B. McKinney Homeless Assistance Act (42U.S.C. 11371-11378). The program authorizes the Secretary to make grantsto States, units of general local government, territories, and Indian tribes(and to private nonprofit organizations providing assistance to homelessindividuals in the case of grants made with reallocated amounts) for therehabilitation or conversion of buildings for use as emergency shelter for thehomeless, for the payment of certain operating expenses and essential servicesin connection with emergency shelters for the homeless, and for homelessprevention activities. The program is designed to be the first step in acontinuum of assistance to enable homeless individuals and families to movetoward independent living as well as to prevent homelessness.
The terms
(1) Assistance in obtaining permanent housing.
(2) Medical and psychological counseling and supervision.
(3) Employment counseling.
(4) Nutritional counseling.
(5) Substance abuse treatment and counseling.
(6) Assistance in obtaining other Federal, State, and local assistanceincluding mental health benefits; employment counseling; medical assistance;Veteran's benefits; and income support assistance such as Supplemental SecurityIncome benefits, Aid to Families with Dependent Children, General Assistance,and Food Stamps;
(7) Other services such as child care, transportation, job placement and jobtraining; and
(8) Staff salaries necessary to provide the above services.
(1) Short-term subsidies to defray rent and utility arrearages for familiesthat have received eviction or utility termination notices;
(2) Security deposits or first month's rent to permit a homeless family tomove into its own apartment;
(3) Mediation programs for landlord-tenant disputes;
(4) Legal services programs for the representation of indigent tenants ineviction proceedings;
(5) Payments to prevent foreclosure on a home; and
(6) Other innovative programs and activities designed to prevent theincidence of homelessness.
(a)
(b)
(c)
(a)
(1) Renovation, major rehabilitation, or conversion of buildings for use asemergency shelters for the homeless;
(2) Provision of essential services to the homeless, subject to thelimitations in paragraph (b) of this section;
(3) Payment for shelter maintenance, operation, rent, repairs, security,fuel, equipment, insurance, utilities, food, and furnishings. Not more than 10percent of the grant amount may be used for costs of staff;
(4) Developing and implementing homeless prevention activities, subject tothe limitations in 42 U.S.C. 11374(a)(4) and paragraph (c) of this section.Grant funds may be used under this paragraph to assist families that havereceived eviction notices or notices of termination of utility services only ifthe conditions stated in 42 U.S.C. 11374(a)(4) are met; and
(5) Administrative costs, in accordance with 42 U.S.C. 11378.
(b)
(2) Limits on the use of assistance for essential services established in 42U.S.C. 11374(a)(2) are applicable even when the unit of local government,territory, or Indian tribe provides some or all of its grant funds to anonprofit recipient. This limitation may be waived in accordance with 42 U.S.C.11374.
(c)
(a) Organizations that are religious or faith-based are eligible, on the same
(b) Organizations that are directly funded under the Emergency Shelter Grantsprogram may not engage in inherently religious activities, such as worship,religious instruction, or proselytization as part of the programs or servicesfunded under this part. If an organization conducts such activities, theactivities must be offered separately, in time or location, from the programs orservices funded under this part, and participation must be voluntary for thebeneficiaries of the HUD-funded programs or services.
(c) A religious organization that participates in the Emergency ShelterGrants program will retain its independence from Federal, State, and localgovernments, and may continue to carry out its mission, including thedefinition, practice, and expression of its religious beliefs, provided that itdoes not use direct Emergency Shelter Grants funds to support any inherentlyreligious activities, such as worship, religious instruction, orproselytization. Among other things, faith-based organizations may use space intheir facilities to provide Emergency Shelter Grants-funded services, withoutremoving religious art, icons, scriptures, or other religious symbols. Inaddition, an Emergency Shelter Grants-funded religious organization retains itsauthority over its internal governance, and it may retain religious terms in itsorganization's name, select its board members on a religious basis, and includereligious references in its organization's mission statements and othergoverning documents.
(d) An organization that participates in the Emergency Shelter Grants programshall not, in providing program assistance, discriminate against a programbeneficiary or prospective program beneficiary on the basis of religion orreligious belief.
(e) Emergency shelter grants may not be used for the rehabilitation ofstructures to the extent that those structures are used for inherently religiousactivities. Emergency shelter grants may be used for the rehabilitation ofstructures only to the extent that those structures are used for conductingeligible activities under this part. Where a structure is used for both eligibleand inherently religious activities, emergency shelter grants may not exceed thecost of those portions of the rehabilitation that are attributable to eligibleactivities in accordance with the cost accounting requirements applicable toemergency shelter grants in this part. Sanctuaries, chapels, or other rooms thatan Emergency Shelter Grants-funded religious congregation uses as its principalplace of worship, however, are ineligible for Emergency Shelter Grants-fundedimprovements. Disposition of real property after the term of the grant, or anychange in use of the property during the term of the grant, is subject togovernment-wide regulations governing real property disposition (
(f) If a State or local government voluntarily contributes its own funds tosupplement federally funded activities, the State or local government has theoption to segregate the Federal funds or commingle them. However, if the fundsare commingled, this section applies to all of the commingled funds.
(a)
(b)
(1) Units of general local government in the State, which may include formulacities and counties even if such cities and counties receive grant amountsdirectly from HUD; or
(2) Private nonprofit organizations, in accordance with 42 U.S.C. 11373(c).
(c)
(a)
(b)
(1) Submit documentation required under this part, part 5 of this title, orany other applicable provisions of Federal law; and
(2) Submit and obtain HUD approval of a consolidated plan that includesactivities to be funded under this part. This consolidated plan serves as thejurisdiction's application for funding under this part.
(a)
(b)
(a)(1)
(2)
(ii)
(b)
(c)
(2) The State must recapture any grant amounts that a State recipient doesnot obligate and spend within the time periods specified in paragraph (a)(2) ofthis section. The State, at its option, must make these amounts and otheramounts returned to the State (except amounts referred to in§ 576.22(b)(6) available as soon as practicable to other units ofgeneral local government for use within the time period specified in paragraph(a)(2) of this section or to HUD for reallocation under § 576.45.
(a)
(b)
(c)
(d)
(1) Execute a grant agreement with HUD for the fiscal year for which theamounts to be reallocated were initially made available.
(2) If necessary, submit an amendment to its application for that fiscal yearfor the reallocation amounts it wishes to receive. The amendment must besubmitted to the responsible HUD field office no later than 30 days afternotification is given to the State under paragraph (c) of this section.
(e)
(2) Program activities represented by proposed amendments are subject toenvironmental review under § 576.57 in the same manner as originalproposals.
(f)
(g)
(a)
(1) A State, territory, or Indian tribe fails to obtain approval of itsconsolidated plan within 90 days of the date upon which amounts under this partfirst become available for allocation in any fiscal year; or
(2) Grant amounts cannot be reallocated to a State under § 576.41.
(b)
(i) In accordance with 42 U.S.C. 11373(d)(3); and
(ii) If grant amounts remain, then to territories that demonstrateextraordinary need or large numbers of homeless individuals.
(2) HUD will make available the amounts that a territory under paragraph(a)(1) of this section would have
(c)
(d)
(1) Submit an amendment, in accordance with 24 CFR part 91, to itsconsolidated plan for that program year to cover activities for the reallocationamount it wishes to receive; and
(2) Execute a grant agreement with HUD for the fiscal year for which theamounts to be reallocated were initially made available.
(e)
(i) The nature and extent of the unmet homeless need within the jurisdictionin which the grant amounts will be used;
(ii) The extent to which the proposed activities address this need; and
(iii) The ability of the grantee to carry out the proposed activitiespromptly.
(2) HUD will endeavor to make grant awards within 30 days of the applicationamendment deadline, or as soon thereafter as practicable.
(f)
(g)
(h)
(a)
(b)
(c)
(i) Returned grant amounts that were allocated to a State will be madeavailable (A) first, to units of general local government within the State and(B) if grant amounts remain, then to other States.
(ii) Returned grant amounts that were allocated to a formula city or countywill be made available:
(A) First, for use in the city or county, to units of general localgovernment that are authorized under applicable law to carry out activitiesserving the homeless in the jurisdiction;
(B) If grant amounts remain, then to the State in which the city or county islocated;
(C) If grant amounts remain, to units of general local government in theState; and
(D) If grant amounts remain, to other States.
(2)
(3)
(4)
(5) The responsible HUD field office will announce the availability ofreturned grant amounts. The announcement will establish deadlines for submittingapplications, and will set out other terms and conditions relating to grantawards, consistent with this part. The announcement will specify the applicationdocuments to be submitted.
(6) The responsible HUD field office may establish maximum grant amounts,considering the grant amounts available, and will rank the applications usingthe criteria in paragraph (e) of this section.
(7) HUD may make a grant award for less than the amount applied for or forfewer than all of the activities identified in the application, based oncompeting demands for grant amounts and the extent to which the respectiveactivities address the needs of the homeless.
(8) HUD will endeavor to make grant awards within 30 days of the applicationdeadline or as soon thereafter as practicable.
(9) Grants awarded under this section are subject to environmental reviewunder § 576.57.
(d)
(e)
(1) The nature and extent of the unmet homeless need within the jurisdictionin which the grant amounts will be used;
(2) The extent to which the proposed activities address this need; and
(3) The ability of the grantee to carry out the proposed activities promptly.
(f)
(2) For purposes of this section, emergency shelter grant amounts areconsidered “unused” (i.e., Federal deobligation):
(i) When they become available for reallocation by HUD after a grantee hasexecuted a grant agreement with HUD for those amounts; or
(ii) The amounts remain after reallocation under § 576.43 orparagraph (c) of this section.
(a)
(b)
(a)(1)
(2) For purposes of the requirements under this section, the term
(b)
(1) In the case of a building that was not operated as an emergency shelterfor the homeless before receipt of grant amounts under this part, on the date ofinitial occupancy as an emergency shelter for the homeless.
(2) In the case of a building that was operated as an emergency shelterbefore receipt of grant amounts under this part, on the date that grant amountsare first obligated for the shelter.
(a) Any building for which emergency shelter grant amounts are used forconversion, major rehabilitation, rehabilitation, or renovation must meet localgovernment safety and sanitation standards.
(b) For projects of 15 or more units, when rehabilitation costs are:
(1) 75 percent or more of the replacement cost of the building, that projectmust meet the requirements of § 8.23(a) of this title; or
(2) Less than 75 percent of the replacement cost of the building, thatproject must meet the requirements of § 8.23(b) of this title.
(a)
(i) Appropriate supportive services, including permanent housing, medicalhealth treatment, mental health treatment, counseling, supervision, and otherservices essential for achieving independent living; and
(ii) Other Federal, State, local, and private assistance available for suchindividuals.
(2) Requirements to ensure confidentiality of records pertaining to theprovision of family violence prevention or treatment services with assistanceunder this part are set forth in 42 U.S.C. 11375(c)(5).
(3) Grantees and recipients may, in accordance with 42 U.S.C. 11375(e),terminate assistance provided under this part to an individual or family whoviolates program requirements.
(b)
(2) Each State, territory, Indian tribe, unit of local government, andnonprofit recipient that receives funds under this part must involve homelessindividuals and families in providing work or services pertaining to facilitiesor activities assisted under this part, in accordance with 42 U.S.C.11375(c)(7).
In addition to the Federal requirements set forth in 24 CFR part 5, use ofemergency shelter grant amounts must comply with the following requirements:
(a)
(1)
(2) Use of emergency shelter grant amounts must also comply with therequirement that the grantee or the State recipient make known that use of thefacilities and services is available to all on a nondiscriminatory basis. If theprocedures that the grantee or recipient intends to use to make known theavailability of the facilities and services are unlikely to reach persons of anyparticular race, color, religion, sex, age, national origin, familial status, ordisability who may qualify for such facilities and services, the grantee orrecipient must establish additional procedures that will ensure that suchpersons are made aware of the facilities and services. Grantees and recipientsmust also adopt procedures which will make available to interested personsinformation concerning the location of services and facilities that areaccessible to persons with disabilities.
(b)
(c) The Lead-Based Paint Poisoning Prevention Act (42 U.S.C.4821-4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992(42 U.S.C. 4851-4856), and implementing regulations at part 35, subpartsA, B, J, K, and R of this title apply to activities under this program.
(d)
(1)(i) Who is an employee, agent, consultant, officer, or elected orappointed official of the grantee, State recipient, or nonprofit recipient (orof any designated public agency) that receives emergency shelter grant amountsand
(ii) Who exercises or has exercised any functions or responsibilities withrespect to assisted activities, or
(2) Who is in a position to participate in a decisionmaking process or gaininside information with regard to such activities, may obtain a personal orfinancial interest or benefit from the activity, or have an interest in anycontract, subcontract, or agreement with respect thereto, or the proceedsthereunder, either for him or herself or for those with whom he or she hasfamily or business ties, during his or her tenure, or for one year thereafter.HUD may grant an exception to this exclusion as provided in § 570.611(d) and (e) of this chapter.
(e)
(2)
(i) Units of general local government, the unit of general local governmentshall be the responsible entity, and the State will assume HUD's functions withregard to the release of funds; or
(ii) Nonprofit organizations, the State shall be the responsible entity, andHUD will perform functions regarding release of funds under part 58 of thistitle.
(3)
(f)
(g)
(h)
(i)
(j)
(a)
(b)
(c)
(d) Responsibility of grantees and recipients. Each grantee and recipientmust assure that it will comply with the URA, the regulations at 49 CFR part 24,and the requirements of this section. The cost of assistance required by thissection may be paid from local public funds, funds provided in accordance withthis part, or funds available from other sources.
(e)
(f)
(A) A permanent move from the real property (building or complex) followingnotice by the grantee, recipient or property owner to move permanently from theproperty, if the move occurs on or after the date that the grantee or recipientsubmits to HUD an application for assistance that is later approved and funded;
(B) A permanent move from the real property that occurs before the submissionof the application to HUD, if the grantee, recipient or HUD determines that thedisplacement resulted directly from acquisition, rehabilitation, or demolitionfor the project, or
(C) A permanent move from the real property by a tenant-occupant of adwelling unit that occurs after the execution of the agreement between therecipient and HUD if:
(
(
(
(ii) A person does not qualify as a “displaced person” if:
(A) The person has been evicted for cause based upon a serious or repeatedviolation of material terms of the lease or occupancy agreement and HUDdetermines that the eviction was not undertaken for the purpose of evading theobligation to provide relocation assistance;
(B) The person moved into the property after the submission of theapplication and, before commencing occupancy, received written notice of theexpected displacement;
(C) The person is ineligible under 49 CFR 24.2(g)(2); or
(D) HUD determines that the person was not displaced as a direct result ofacquisition, rehabilitation, or demolition for the project.
(iii) The grantee or recipient may, at any time, request a HUD determinationof whether a displacement is or would be covered under this section.
(2) Initiation of negotiations. For purposes of determining the type ofreplacement housing payment to be made to a residential tenant displaced as adirect result of privately undertaken rehabilitation, demolition, or acquisitionof the real property, the term “initiation of negotiations” meansthe execution of the agreement between the grantee and HUD.
Grantees are responsible for ensuring that emergency shelter grant amountsare administered in accordance with the requirements of this part and otherapplicable laws. The State, territory,
(a) A State making grant amounts available to State recipients; or
(b) A territory, Indian tribe, or unit of general local governmentdistributing grant amounts to nonprofit recipients.
Payments are made to a grantee upon its request after the grant agreement hasbeen fully executed, and may include a working capital advance for 30 days' cashneeds or an advance of $5,000, whichever is greater. Thereafter, the granteewill be reimbursed for the amount of its actual cash disbursements. If a granteerequests a working capital advance, it must base the request on a realistic,firm estimate of the amounts required to be disbursed over the 30-day period inpayment of eligible activity costs.
(a) Each grantee must ensure that records are maintained for a 4-year periodto document compliance with the provisions of this part.
(b) Requirements to ensure confidentiality of records pertaining to theprovision of family violence prevention or treatment services with assistanceunder this part are set forth in 42 U.S.C. 11375(c)(5).
(a)
(1) Issue a warning letter that further failure to comply with suchrequirements will result in a more serious sanction;
(2) Condition a future grant;
(3) Direct the grantee to stop the incurring of costs with grant amounts;
(4) Require that some or all of the grant amounts be remitted to HUD;
(5) Reduce the level of funds the grantee would otherwise be entitled toreceive; or
(6) Elect not to provide future grant funds to the grantee until appropriateactions are taken to ensure compliance.
(b)
(c)
42 U.S.C. 11411 note; 42 U.S.C. 3535(d).
(1) An individual or family that lacks a fixed, regular, and adequatenighttime residence; and
(2) An individual or family that has a primary nighttime residence that is:
(i) A supervised publicly or privately operated shelter designed to providetemporary living accommodations (including welfare hotels, congregate shelters,and transitional housing for the mentally ill);
(ii) An institution that provides a temporary residence for individualsintended to be institutionalized; or
(iii) A public or private place not designed for, or ordinarily used as, aregular sleeping accommodation for human beings. This term does not include anyindividual imprisoned or otherwise detained under an Act of the Congress or aState law.
(a) This part applies to Federal real property which has been designated byFederal landholding agencies as unutilized, underutilized, excess or surplus andis therefore subject to the provisions of title V of the McKinney Act (42 U.S.C.11411).
(b) The following categories of properties are not subject to this subpart(regardless of whether they may be unutilized or underutilized).
(1) Machinery and equipment.
(2) Government-owned, contractor-operated machinery, equipment, land, andother facilities reported excess for sale only to the using contractor andsubject to a continuing military requirement.
(3) Properties subject to special legislation directing a particular action.
(4) Properties subject to a court order.
(5) Property not subject to survey requirements of Executive Order 12512(April 29, 1985).
(6) Mineral rights interests.
(7) Air space interests.
(8) Indian Reservation land subject to section 202(a)(2) of the FederalProperty and Administrative Service Act of 1949, as amended.
(9) Property interests subject to reversion.
(10) Easements.
(11) Property purchased in whole or in part with Federal funds if title tothe property is not held by a Federal landholding agency as defined in thispart.
(a)
(1) HUD will request descriptive information on properties sufficient to makea reasonable determination, under the criteria described below, of thesuitability of a property for use as a facility to assist the homeless.
(2) HUD will direct landholding agencies to respond to requests forinformation within 25 days of receipt of such requests.
(b)
(1) Was included in a list of suitable properties published that year by HUD,and
(2) Remains available for application for use to assist the homeless, or hasbecome available for application during that year.
(c)
(d)
At 56 FR 23794, 23795, May 24, 1991, part581 was added, effective on May 24, 1991, except for § 581.3 whichwill not become effective until approved by the District Court for the Districtof Columbia, pending further proceedings.
(a)
(b)
(c)
(d)
(1) The suitability determination for a particular piece of property, and thereasons for that determination; and
(2) The landholding agency's response to the determination pursuant to therequirements of § 581.7(a).
(e)
(f)
(2) Requests for review of a determination of unsuitability may be made
(3) The request for review must specify the grounds on which it is based,i.e., that HUD has improperly applied the criteria or that HUD has relied onincorrect or incomplete information in making the determination (e.g., thatproperty is in a floodplain but not in a floodway).
(4) Upon receipt of a request to review a determination of unsuitability, HUDwill notify the landholding agency that such a request has been made, requestthat the agency respond with any information pertinent to the review, and advisethe agency that it should refrain from initiating disposal procedures until HUDhas completed its reconsideration regarding unsuitability.
(i) HUD will act on all requests for review within 30 days of receipt of thelandholding agency's response and will notify the representative of the homelessand the landholding agency in writing of its decision.
(ii) If a property is determined suitable as a result of the review, HUD willrequest the landholding agency's determination of availability pursuant to§ 581.7(a), upon receipt of which HUD will promptly publish thedetermination in the
(a) Each landholding agency must submit a report to GSA of properties itdetermines excess. Each landholding agency must also provide a copy of HUD'ssuitability determination, if any, including HUD's identification number for theproperty.
(b) If a landholding agency reports a property to GSA which has been reviewedby HUD for homeless assistance suitability and HUD determined the propertysuitable, GSA will screen the property pursuant to § 581.5(g) andwill advise HUD of the availability of the property for use by the homeless asprovided in § 581.5(e). In lieu of the above, GSA may submit a newchecklist to HUD and follow the procedures in § 581.5(c) through§ 581.5(g).
(c) If a landholding agency reports a property to GSA which has not beenreviewed by HUD for homeless assistance suitability, GSA will complete aproperty checklist, based on information provided by the landholding agency, andwill forward this checklist to HUD for a suitability determination. Thischecklist will reflect any change in classification, i.e., from unutilized orunderutilized to excess.
(d) Within 30 days after GSA's submission, HUD will advise GSA of thesuitability determination.
(e) When GSA receives a letter from HUD listing suitable excess properties inGSA's inventory, GSA will transmit to HUD within 45 days a response whichincludes the following for each identified property:
(1) A statement that there is no other compelling Federal need for theproperty, and therefore, the property will be determined surplus; or
(2) A statement that there is further and compelling Federal need for theproperty (including a full explanation of such need) and that, therefore, theproperty is not presently available for use to assist the homeless.
(f) When an excess property is determined suitable and available and noticeis published in the
(g) Upon submission of a Report of Excess to GSA, GSA may screen the propertyfor Federal use. In addition, GSA may screen State and local governmental unitsand eligible nonprofit organizations to determine interest in the property inaccordance with current regulations. (See 41 CFR 101-47.203-5,101-47.204-1 and 101-47.303-2.)
(h) The landholding agency will retain custody and accountability and willprotect and maintain any property which is reported excess to GSA as provided in41 CFR 101-47.402.
(a) All properties, buildings and land will be determined suitable unless a
(1)
(2)
(3)
(4)
(5)
(6)
(a) Within 45 days after receipt of a letter from HUD pursuant to§ 581.4(a), each landholding agency must transmit to HUD a statementof one of the following:
(1) In the case of unutilized or underutilized property:
(i) An intention to declare the property excess,
(ii) An intention to make the property available for use to assist thehomeless, or
(iii) The reasons why the property cannot be declared excess or madeavailable for use to assist the homeless. The reasons given must be differentthan those listed as suitability criteria in § 581.6.
(2) In the case of excess property which had previously been reported to GSA:
(i) A statement that there is no compelling Federal need for the property,and that, therefore, the property will be determined surplus; or
(ii) A statement that there is a further and compelling Federal need for theproperty (including a full explanation of such need) and that, therefore, theproperty is not presently available for use to assist the homeless.
(a) No later than 15 days after the last 45 day period has elapsed forreceiving responses from the landholding agencies regarding availability, HUDwill publish in the
(1) Properties that are suitable and available.
(2) Properties that are suitable and unavailable.
(3) Properties that are suitable and to be declared excess.
(4) Properties that are unsuitable.
(b) Information about specific properties can be obtained by contacting HUDat the following toll free number, 1-800-927-7588.
(c) HUD will transmit to the ICH a copy of the list of all propertiespublished in the
(d) No later than February 15 of each year, HUD shall publish in the
(e) HUD shall publish an annual list of properties determined suitable butwhich agencies reported unavailable including the reasons such properties arenot available.
(f) Copies of the lists published in the
(a)
(2) If a written expression of interest to apply for suitable property foruse to assist the homeless is received by HHS within the 60 day holding period,such property may not be made available for any other purpose until the date HHSor the appropriate landholding agency has completed action on the applicationsubmitted pursuant to that expression of interest.
(3) The expression of interest should identify the specific property, brieflydescribe the proposed use, include the name of the organization, and indicatewhether it is a public body or a private non-profit organization. The expressionof interest must be sent to the Division of Health Facilities Planning (DHFP) ofthe Department of Health and Human Services at the following address:
(4) An expression of interest may be sent to HHS any time after the 60 dayholding period has expired. In such a case, an application submitted pursuant tothis expression of interest may be approved for use by the homeless if:
(i) No application or written expression of interest has been made under anylaw for use of the property for any purpose; and
(ii) In the case of excess or surplus property, GSA has not received a bonafide offer to purchase that property or advertised for the sale of the propertyby public auction.
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(c)
(d)
(e)
(2) HHS will evaluate each completed application within 25 days of receiptand will promptly advise the applicant of its decision. Applications areevaluated on a first-come, first-serve basis. HHS will notify all organizationswhich have submitted expressions of interest for a particular property regardingwhether the first application received for that property has been approved ordisapproved. All applications will be reviewed on the basis of the followingelements, which are listed in descending order of priority, except thatparagraphs (e)(2)(iv) and (e)(2)(v) of this section are of equal importance.
(i)
(ii)
(iii)
(iv)
(v)
(3) Additional evaluation factors may be added as deemed necessary by HHS. Ifadditional factors are added, the application packet will be revised to includea description of these additional factors.
(4) If HHS receives one or more competing applications for a property within5 days of the first application HHS will evaluate all completed applicationssimultaneously. HHS will rank approved applications based on the elements listedin § 581.8(e)(2), and notify the landholding agency, or GSA, asappropriate, of the relative ranks.
(a)
(2) The landholding agency maintains the discretion to decide the following:
(i) The length of time the property will be available. (Leases and permitswill be for a period of at least one year unless the applicant requests ashorter term.)
(ii) Whether to grant use of the property via a lease or permit;
(iii) The terms and conditions of the lease or permit document.
(b)
(2) Prior to assignment to HHS, GSA may consider other Federal uses and otherimportant national needs; however, in deciding the disposition of surplus realproperty, GSA will generally give priority of consideration to uses to assistthe homeless. GSA may consider any competing request for the property made undersection 203(k) of the Federal Property and Administrative Services Act of 1949(40 U.S.C. 484(k)) that is so meritorious and compelling that it outweighs theneeds of the homeless, and HHS may likewise consider any competing request madeunder subsection 203(k)(1) of that law.
(3) Whenever GSA or HHS decides in favor of a competing request over arequest for property for homeless assistance use as provided in paragraph (b)(2)of this section, the agency making the decision will transmit to the appropriatecommittees of the Congress an explanatory statement which details the needsatisfied by conveyance of the
(4)
(c)
The landholding agency will defer, for 20 days after the date that notice ofa property is published in the
(a) At the end of the 60 day holding period described in§ 581.9(a), HHS will notify GSA, or the landholding agency, asappropriate, if an expression of interest has been received for a particularproperty. Where there is no expression of interest, GSA or the landholdingagency, as appropriate, will proceed with disposal in accordance with applicablelaw.
(b) Upon advice from HHS that all applications have been disapproved, or ifno completed applications or requests for extensions have been received by HHSwithin 90 days from the date of the last expression of interest, disposal mayproceed in accordance with applicable law.
The Secretary may waive any requirement of this part that is not required bylaw, whenever it is determined that undue hardship would result from applyingthe requirement, or where application of the requirement would adversely affectthe purposes of the program. Each waiver will be in writing and will besupported by documentation of the pertinent facts and grounds. The Secretaryperiodically will publish notice of granted waivers in the
42 U.S.C. 3535(d) and 11403-11407b.
(a)
(b)
The terms
As used in this part:
(1) A person shall be considered to have a disability if such person has a
(2) A person will also be considered to have a disability if he or she has adevelopmental disability, which is a severe, chronic disability that—
(i) Is attributable to a mental or physical impairment or combination ofmental and physical impairments;
(ii) Is manifested before the person attains age 22;
(iii) Is likely to continue indefinitely;
(iv) Results in substantial functional limitations in three or more of thefollowing areas of major life activity:
(A) Self-care;
(B) Receptive and expressive language;
(C) Learning;
(D) Mobility;
(E) Self-direction;
(F) Capacity for independent living; and
(G) Economic self-sufficiency; and
(v) Reflects the person's need for a combination and sequence of special,interdisciplinary, or generic care, treatment, or other services which are oflifelong or extended duration and are individually planned and coordinated.
(3) Notwithstanding the preceding provisions of this definition, the term
(1) Addresses the special needs of eligible persons; and
(2) Provides appropriate services or assists such persons in obtainingappropriate services, including health care, mental health treatment, alcoholand other substance abuse services, child care services, case managementservices, counseling, supervision, education, job training, and other servicesessential for achieving and maintaining independent living.
(a)
(b)
(c)
(d)
(2) SRO housing must be in need of moderate rehabilitation and must meet therequirements of 24 CFR 882.803(a). Costs associated with rehabilitation ofcommon areas may be included in the calculation of the cost for assisted unitsbased on the proportion of the number of units to be assisted under this part tothe total number of units.
(3) SRO assistance may also be used for efficiency units selected forrehabilitation under this program, but the gross rent (contract rent plus anyutility allowance) for those units will be no higher than for SRO units (i.e.,75 percent of the 0-bedroom Moderate Rehabilitation Fair Market Rent).
(4) The requirements regarding maintenance, operation, and inspectionsdescribed in 24 CFR 882.806(b)(4) and 882.808(n) must be met.
(5)
(a)
(b)
(c)
(2) A recipient must serve at least as many participants as shown in itsapplication. Where the grant amount reserved for rental assistance over thegrant period exceeds the amount that will be needed to pay the actual costs ofrental assistance, due to such factor as contract rents being lower than FMRsand participants are being able to pay a portion of the rent, recipients may usethe remaining funds for the costs of administering the housing assistance, asdescribed in paragraph (e) of this section, for damage to property, as describedin paragraph (f) of this section, for covering the costs of rent increases, orfor serving a great number of participants.
(d)
(2) As used in this paragraph (d), the term “vacate” does notinclude brief periods of inpatient care, not to exceed 90 days for eachoccurrence.
(e)
(2) Eligible administrative activities include processing rental payments tolandlords, examining participant income and family composition, providinghousing information and assistance, inspecting units for compliance with housingquality standards, and receiving into the program new participants. Thisadministrative allowance does not include the cost of administering thesupportive services or the grant (
(f)
(a)
(b)
(c)
(1) Salaries paid to staff of the recipient to provide supportive services toS+C participants;
(2) The value of supportive services provided by other persons ororganizations to S+C participants;
(3) The value of time and services contributed by volunteers at the rate of$10.00 an hour, except for donated professional services which may be counted atthe customary charge for the service provided (professional services areservices ordinarily performed by donors for payment, such as the services ofhealth professionals, that are equivalent to the services they provide in theiroccupations);
(4) The value of any lease on a building used for the provision of supportiveservices, provided the value included in the match is no more than the proratedshare used for the program; and
(5) The cost of outreach activities, as described in § 582.325(a)of this part.
(a)
(b)
(c)
(2) Organizations that are directly funded under the S+C program may notengage in inherently religious activities, such as worship, religiousinstruction, or proselytization as part of the programs or services funded underthis part. If an organization conducts such activities, the activities must beoffered separately, in time or location, from the programs or services fundedunder this part, and participation must be voluntary for the beneficiaries ofthe HUD-funded programs or services.
(3) A religious organization that participates in the S+C program will retainits independence from Federal, State, and local governments, and may continue tocarry out its mission, including the definition, practice and expression of itsreligious beliefs, provided that it does not use direct S+C funds to support anyinherently religious activities, such as worship, religious instruction, orproselytization. Among other things, faith-based organizations may use space intheir facilities to provide S+C-funded services, without removing religious art,icons, scriptures, or other religious symbols. In addition, an S+C-fundedreligious organization retains its authority over its internal governance, andit may retain religious terms in its organization's name, select its boardmembers on a religious basis, and include religious references in itsorganization's mission statements and other governing documents.
(4) An organization that participates in the S+C program shall not, inproviding program assistance, discriminate against a program beneficiary orprospective program beneficiary on the basis of religion or religious belief.
(5) If a State or local government voluntarily contributes its own funds tosupplement federally funded activities, the State or local government has theoption to segregate the Federal funds or commingle them. However, if the fundsare commingled, this section applies to all of the commingled funds.
(d)
(a)
(b)
(c)
(d)
(a)
(b)
(1) The extent to which the applicant has demonstrated coordination withother Federal, State, local, private and other entities serving homeless personsin the planning and operation of the project, to the extent practicable;
(2) Extent to which the project targets homeless persons living in emergencyshelters, supportive housing for homeless persons, or in places not designedfor, or ordinarily used as, a regular sleeping accommodation for human beings;
(3) Quality of the project; and
(4) Extent to which the program will serve homeless persons who are seriouslymentally ill, have chronic alcohol and/or drug abuse problems, or have AIDS andrelated diseases.
(a) Activities under this part are subject to HUD environmental regulationsin part 58 of this title, except that HUD will perform an environmental reviewin accordance with part 50 of this title prior to its approval of anyconditionally selected applications from PHAs for Fiscal Year 2000 and prioryears for other than the SRO component. For activities under a grant to a PHAthat generally would be subject to review under part 58, HUD may make a findingin accordance with § 58.11(d) and may itself perform theenvironmental review under the provisions of part 50 of this title if therecipient PHA objects in writing to the responsible entity's performing thereview under part 58. Irrespective of whether the responsible entity in accordwith part 58 (or HUD in accord with part 50) performs the environmental review,the recipient shall supply all available, relevant information necessary for theresponsible entity (or HUD, if applicable) to perform for each property anyenvironmental review required by this part. The recipient also shall carry outmitigating measures required by the responsible entity (or HUD, if applicable)or select alternate eligible property. HUD may eliminate from consideration anyapplication that would require an Environmental Impact Statement (EIS).
(b) The recipient, its project partners and their contractors may notacquire, rehabilitate, convert, lease, repair, dispose of, demolish, orconstruct property for a project under this part, or commit or expend HUD orlocal funds for such eligible activities under this part, until the responsibleentity (as defined in § 58.2 of this title) has completed theenvironmental review procedures required by part 58 and the environmentalcertification and RROF have been approved or HUD has performed an environmentalreview under part 50 and the recipient has received HUD approval of theproperty. HUD will not release grant funds if the recipient or any other partycommits grant funds (
(a)
(2) To the maximum extent practicable, each recipient must involve homelessindividuals and families, through employment, volunteer services, or otherwise,in constructing or rehabilitating housing assisted under this part and inproviding supportive services required under § 582.215 of this part.
(b)
(c)
(d)
(2) Each recipient must keep on file, and make available to the public onrequest, a description of the procedures used to select sponsors under the SRAcomponent and buildings under the SRO, SRA, and PRA components.
(3) Each recipient must develop, and make available to the public uponrequest, its procedures for managing the rental housing assistance fundsprovided by HUD. At a minimum, such procedures must describe how units will beidentified and selected; how the responsibility for inspections will be handled;the process for deciding which unit a participant will occupy; how participantswill be placed in, or assisted in finding appropriate housing; how rentcalculations will be made and the amount of rental assistance paymentsdetermined; and what safeguards will be used to prevent the misuse of funds.
(a)
(b)
(a)
(b)
(2) Recipients must examine a participant's income initially, and at leastannually thereafter, to determine the amount of rent payable by the participant.Adjustments to a participant's rental payment must be made as necessary.
(3) As a condition of participation in the program, each participant mustagree to supply the information or documentation necessary to verify theparticipant's income. Participants must provide the recipient information at anytime regarding changes in income or other circumstances that may result inchanges to a participant's rental payment.
(a)
(b)
(a)
(b)
(1) Written notice to the participant containing a clear statement of thereasons for termination;
(2) A review of the decision, in which the participant is given theopportunity to present written or oral objections before a person other than theperson (or a subordinate of that person) who made or approved the terminationdecision; and
(3) Prompt written notice of the final decision to the participant.
Recipients must use their best efforts to ensure that eligible hard-to-reachpersons are served by S+C. Recipients are expected to make sustained efforts toengage eligible persons so that they may be brought into the program. Outreachshould be primarily directed toward eligible persons who have a nighttimeresidence that is an emergency shelter or a public or private place not designedfor, or ordinarily used as, a regular sleeping accommodation for human beings(
(a)
(b)
(2) The nondiscrimination and equal opportunity requirements set forth atpart 5 of this title are modified as follows:
(i) The Indian Civil Rights Act (25 U.S.C. 1301
(ii) [Reserved]
(c)
(2) The recipient must adopt procedures to make available information on theexistence and locations of facilities and services that are accessible topersons with a handicap and maintain evidence of implementation of theprocedures.
(d) The accessibility requirements, reasonable modification, andaccommodation requirements of the Fair Housing Act and of section 504 of theRehabilitation Act of 1973, as amended.
(a)
(b)
(c)
(d)
(2) The cost of required relocation assistance is an eligible project cost inthe same manner and to the same extent as other project costs. Such costs alsomay be paid for with local public funds or funds available from other sources.
(3) The recipient must maintain records in sufficient detail to demonstratecompliance with provisions of this section.
(e)
(f)
(i) A person that moves permanently from the real property after the propertyowner (or person in control of the site) issues a vacate notice or refuses torenew an expiring lease, if the move occurs on or after:
(A) The date that the recipient submits to HUD an application for assistancethat is later approved and funded, if the recipient has control of the projectsite; or
(B) The date that the recipient obtains control of the project site, if suchcontrol is obtained after the submission of the application to HUD.
(ii) Any person, including a person who moves before the date described inparagraph (f)(1)(i) of this section, if the recipient or HUD determines that thedisplacement resulted directly from acquisition, rehabilitation, or demolitionfor the assisted project.
(iii) A tenant-occupant of a dwelling unit who moves permanently from thebuilding/complex on or after the date of the “initiation ofnegotiations” (see paragraph (g) of this section) if the move occursbefore the tenant has been provided written notice offering him or her theopportunity to lease and occupy a suitable, decent, safe and sanitary dwellingin the same building/complex, under reasonable terms and conditions, uponcompletion of the project. Such reasonable terms and conditions must include amonthly rent and estimated average monthly utility costs that do not exceed thegreater of:
(A) The tenant's monthly rent before the initiation of negotiations andestimated average utility costs, or
(B) 30 percent of gross household income. If the initial rent is at or nearthe maximum, there must be a reasonable basis for concluding at the time theproject is initiated that future rent increases will be modest.
(iv) A tenant of a dwelling who is required to relocate temporarily, but doesnot return to the building/complex, if either:
(A) A tenant is not offered payment for all reasonable out-of-pocket expensesincurred in connection with the temporary relocation, or
(B) Other conditions of the temporary relocation are not reasonable.
(v) A tenant of a dwelling who moves from the building/complex permanentlyafter he or she has been required to move to another unit in the samebuilding/complex, if either:
(A) The tenant is not offered reimbursement for all reasonable out-of-pocketexpenses incurred in connection with the move; or
(B) Other conditions of the move are not reasonable.
(2) Notwithstanding the provisions of paragraph (f)(1) of this section, aperson does not qualify as a “displaced person” (and is not eligiblefor relocation assistance under the URA or this section), if:
(i) The person has been evicted for serious or repeated violation of theterms and conditions of the lease or occupancy agreement, violation ofapplicable Federal, State, or local or tribal law, or other good cause, and HUDdetermines that the eviction was not undertaken for the purpose of evading theobligation to provide relocation assistance;
(ii) The person moved into the property after the submission of theapplication and, before signing a lease and commencing occupancy, was providedwritten notice of the project, its possible impact on the person (e.g., theperson may be displaced, temporarily relocated, or suffer a rent increase) andthe fact that the person would not qualify as a “displaced person”(or for any assistance provided under this section), if the project is approved;
(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 ofacquisition, rehabilitation, or demolition for the project.
(3) The recipient may request, at any time, HUD's determination of whether adisplacement is or would be covered under this section.
(g)
In addition to the Federal requirements set forth in 24 CFR part 5, thefollowing requirements apply to this program:
(a)
(2) The financial management systems used by recipients under this programmust provide for audits in accordance with the provisions of 24 CFR part 44.Private nonprofit organizations who are subrecipients are subject to the auditrequirements of 24 CFR part 45. HUD may perform or require additional audits asit finds necessary or appropriate.
(b)
(2) Upon the written request of the recipient, HUD may grant an exception tothe provisions of paragraph (b)(1) of this section on a case-by-case basis whenit determine that the exception will serve to further the purposes of theprogram and the effective and efficient administration of the recipient'sproject. An exception may be considered only after the recipient has providedthe following:
(i) For States, units of general local governments, PHAs and IHAs, adisclosure of the nature of the conflict, accompanied by an assurance that therehas been public disclosure of the conflict and a description of how the publicdisclosure was made; and
(ii) For all recipients, an opinion of the recipient's attorney that theinterest for which the exception is sought would not violate State or local law.
(3) In determining whether to grant a requested exception after the recipienthas satisfactorily met the requirement of paragraph (b)(2) of this section, HUDwill consider the cumulative effect of the following factors, where applicable:
(i) Whether the exception would provide a significant cost benefit or anessential degree of expertise to the project which would otherwise not beavailable;
(ii) Whether the person affected is a member of a group or class of eligiblepersons and the exception will permit such person to receive generally the sameinterests or benefits as are being made available or provided to the group orclass;
(iii) Whether the affected person has withdrawn from his or her functions orresponsibilities, or the decisionmaking process with respect to the specificassisted activity in question;
(iv) Whether the interest or benefit was present before the affected personwas in a position as described in paragraph (b)(1) of this section;
(v) Whether undue hardship will result either to the recipient or the personaffected when weighed against the public interest served by avoiding theprohibited conflict; and
(vi) Any other relevant considerations.
(a)
(b)
(a)
(b)
(a)
(b)
(2) HUD may readvertise, in a notice of fund availability, the availabilityof funds that have been deobligated, or may reconsider applications that weresubmitted in response to the most recently published notice of fund availabilityand select applications for funding with the deobligated funds. Such selectionswould be made in accordance with the selection process described in§ 582.220 of this part. Any selections made using deobligated fundswill be subject to applicable appropriation act requirements governing the useof deobligated funding authority.
42 U.S.C. 11389 and 3535(d).
(a)
(b)
(1) Transitional housing to facilitate the movement of homeless individualsand families to permanent housing;
(2) Permanent housing that provides long-term housing for homeless personswith disabilities;
(3) Housing that is, or is part of, a particularly innovative project for, oralternative methods of, meeting the immediate and long-term needs of homelesspersons; or
(4) Supportive services for homeless persons not provided in conjunction withsupportive housing.
As used in this part:
(a)
(b)
(1) Establish new supportive housing facilities or new facilities to providesupportive services;
(2) Expand existing facilities in order to increase the number of homelesspersons served;
(3) Bring existing facilities up to a level that meets State and localgovernment health and safety standards;
(4) Provide additional supportive services for residents of supportivehousing or for homeless persons not residing in supportive housing;
(5) Purchase HUD-owned single family properties currently leased by theapplicant for use as a homeless facility under 24 CFR part 291; and
(6) Continue funding supportive housing where the recipient has receivedfunding under this part for leasing, supportive services, or operating costs.
(c)
(d)
(a)
(1) Pay a portion of the cost of the acquisition of real property selected bythe recipients for use in the provision of supportive housing or supportiveservices, including the repayment of
(2) Pay a portion of the cost of rehabilitation of structures, includingcost-effective energy measures, selected by the recipients to provide supportivehousing or supportive services; or
(3) Pay a portion of the cost of acquisition and rehabilitation ofstructures, as described in paragraphs (a)(1) and (2) of this section.
(b)
(1) $200,000; or
(2) The total cost of the acquisition, rehabilitation, or acquisition andrehabilitation minus the applicant's contribution toward the cost.
(c)
(a)
(b)
(1) $400,000; or
(2) The total cost of the new construction, including the cost of landassociated with that construction, minus the applicant's contribution toward thecost of same.
(a)
(b)(1)
(2)
(a)
(b)
(a)
(b)
(c)
Upon execution of a grant agreement covering assistance for leasing,supportive services, or operating costs, HUD will obligate amounts for a periodnot to exceed five operating years. The total amount obligated will be equal toan amount necessary for the specified years of operation, less the recipient'sshare of operating costs.
(a)
(b)
(a)
(b)
(c)
(a)
(b)
(c)
(a)
(b)
(2) Organizations that are directly funded under the Supportive HousingProgram may not engage in inherently religious activities, such as worship,religious instruction, or proselytization as part of the programs or servicesfunded under this part. If an organization conducts such activities, theactivities must be offered separately, in time or location, from the programs orservices funded under this part, and participation must be voluntary for thebeneficiaries of the HUD-funded programs or services.
(3) A religious organization that participates in the Supportive HousingProgram will retain its independence from Federal, State, and local governments,and may continue to carry out its mission, including the definition, practice,and expression of its religious beliefs, provided that it does not use directSupportive Housing Program funds to support any inherently religious activities,such as worship, religious instruction, or proselytization. Among other things,faith-based organizations may use space in their facilities to provideSupportive Housing Program-funded services, without removing religious art,icons, scriptures, or other religious symbols. In addition, a Supportive HousingProgram-funded religious organization retains its authority over its internalgovernance, and it may retain religious terms in its organization's name, selectits board members on a religious basis, and include religious references in itsorganization's mission statements and other governing documents.
(4) An organization that participates in the Supportive Housing Program shallnot, in providing program assistance, discriminate against a program beneficiaryor prospective program beneficiary on the basis of religion or religious belief.
(5) Program funds may not be used for the acquisition, construction, orrehabilitation of structures to the extent that those structures are used forinherently religious activities. Program funds may be used for the acquisition,construction, or rehabilitation of structures only to the extent that thosestructures are used for conducting eligible activities under this part. Where astructure is used for both eligible and inherently religious activities, programfunds may not exceed the cost of those portions of the acquisition,construction, or rehabilitation that are attributable to eligible activities inaccordance with the cost accounting requirements applicable to SupportiveHousing Program funds in this part. Sanctuaries, chapels, or other rooms that aSupportive Housing Program-funded religious congregation uses as its principalplace of worship, however, are ineligible for Supportive Housing Program-fundedimprovements. Disposition of real property after the term of the grant, or anychange in use of the property during the term of the grant, is subject togovernment-wide regulations governing real property disposition (
(6) If a State or local government voluntarily contributes its own funds tosupplement federally funded activities,
(c)
(a)
(b)
(c)
(d)
When funds are made available for assistance, HUD will publish a notice offunding availability (NOFA) in the
(a) Activities under this part are subject to HUD environmental regulationsin part 58 of this title, except that HUD will perform an environmental reviewin accordance with part 50 of this title prior to its approval of anyconditionally selected applications for Fiscal Year 2000 and prior years thatwere received directly from private nonprofit entities and governmental entitieswith special or limited purpose powers. For activities under a grant thatgenerally would be subject to review under part 58, HUD may make a finding inaccordance with § 58.11(d) and may itself perform the environmentalreview under the provisions of part 50 of this title if the recipient objects inwriting to the responsible entity's performing the review under part 58.Irrespective of whether the responsible entity in accord with part 58 (or HUD inaccord with part 50) performs the environmental review, the recipient shall
(b) The recipient, its project partners and their contractors may notacquire, rehabilitate, convert, lease, repair, dispose of, demolish or constructproperty for a project under this part, or commit or expend HUD or local fundsfor such eligible activities under this part, until the responsible entity (asdefined in § 58.2 of this title) has completed the environmentalreview procedures required by part 58 and the environmental certification andRROF have been approved or HUD has performed an environmental review under part50 and the recipient has received HUD approval of the property. HUD will notrelease grant funds if the recipient or any other party commits grant funds (
(a)
(b)
(1) Up to 50 percent of the actual operating and leasing costs in the finalyear of the initial funding period;
(2) Up to the amount of HUD assistance for supportive services in the finalyear of the initial funding period; and
(3) An allowance for cost increases.
(c)
(2) HUD reserves the right to reject a request from any organization with anoutstanding obligation to HUD that is in arrears or for which a payment schedulehas not been agreed to, or
(3) HUD will notify the recipient in writing that the request has beenapproved or disapproved.
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(ii) The public areas of all housing must be equipped with a sufficientnumber, but not less than one for each area, of battery-operated or hard-wiredsmoke detectors. Public areas include, but are not limited to, laundry rooms,community rooms, day care centers, hallways, stairwells, and other common areas.
(c)
(d)
(e)
(f)
(2) Each recipient of assistance under this part must, to the maximum extentpracticable, involve homeless individuals and families, through employment,volunteer services, or otherwise, in constructing, rehabilitating, maintaining,and operating the project and in providing supportive services for the project.
(g)
(h)
(1) The confidentiality of records pertaining to any individual services; and
(2) That the address or location of any project assisted will not be madepublic, except with written authorization of the person or persons responsiblefor the operation of the project.
(i)
(1) Written notice to the participant containing a clear statement of thereasons for termination;
(2) A review of the decision, in which the participant is given theopportunity to present written or oral objections before a person other than theperson (or a subordinate of that person) who made or approved the terminationdecision; and
(3) Prompt written notice of the final decision to the participant.
(j)
(k)
(l)
(a)
(b)
(a)
(b)
(c)
(d)
(2) The cost of required relocation assistance is an eligible project cost inthe same manner and to the same extent as other project costs. Such costs alsomay be paid for with local public funds or funds available from other sources.
(3) The recipient must maintain records in sufficient detail to demonstratecompliance with provisions of this section.
(e)
(f)
(i) A person that moves permanently from the real property after the propertyowner (or person in control of the site) issues a vacate notice, or refuses torenew an expiring lease in order to evade the responsibility to providerelocation assistance, if the move occurs on or after the date the recipientsubmits to HUD the application or application amendment designating the projectsite.
(ii) Any person, including a person who moves before the date described inparagraph (f)(1)(i) of this section, if the recipient or HUD determines that thedisplacement resulted directly from acquisition, rehabilitation, or demolitionfor the assisted project.
(iii) A tenant-occupant of a dwelling unit who moves permanently from thebuilding/complex on or after the date of the “initiation ofnegotiations” (see paragraph (g) of this section) if the move occursbefore the tenant has been provided written notice offering him or her theopportunity to lease and occupy a suitable, decent, safe and sanitary dwellingin the same building/complex, under reasonable terms and conditions, uponcompletion of the project. Such reasonable terms and conditions must include amonthly rent and estimated average monthly
(A) The tenant's monthly rent before the initiation of negotiations andestimated average utility costs, or
(B) 30 percent of gross household income. If the initial rent is at or nearthe maximum, there must be a reasonable basis for concluding at the time theproject is initiated that future rent increases will be modest.
(iv) A tenant of a dwelling who is required to relocate temporarily, but doesnot return to the building/complex, if either:
(A) A tenant is not offered payment for all reasonable out-of-pocket expensesincurred in connection with the temporary relocation, or
(B) Other conditions of the temporary relocation are not reasonable.
(v) A tenant of a dwelling who moves from the building/complex permanentlyafter he or she has been required to move to another unit in the samebuilding/complex, if either:
(A) The tenant is not offered reimbursement for all reasonable out-of-pocketexpenses incurred in connection with the move; or
(B) Other conditions of the move are not reasonable.
(2) Notwithstanding the provisions of paragraph (f)(1) of this section, aperson does not qualify as a “displaced person” (and is not eligiblefor relocation assistance under the URA or this section), if:
(i) The person has been evicted for serious or repeated violation of theterms and conditions of the lease or occupancy agreement, violation ofapplicable Federal, State, or local or tribal law, or other good cause, and HUDdetermines that the eviction was not undertaken for the purpose of evading theobligation to provide relocation assistance;
(ii) The person moved into the property after the submission of theapplication and, before signing a lease and commencing occupancy, was providedwritten notice of the project, its possible impact on the person (e.g., theperson may be displaced, temporarily relocated, or suffer a rent increase) andthe fact that the person would not qualify as a “displaced person”(or for any assistance provided under this section), if the project is approved;
(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 ofacquisition, rehabilitation, or demolition for the project.
(3) The recipient may request, at any time, HUD's determination of whether adisplacement is or would be covered under this section.
(g)
(h)
(a)
(1) 30 percent of the family's monthly adjusted income (adjustment factorsinclude the number of people in the family, age of family members, medicalexpenses and child care expenses). The calculation of the family's monthlyadjusted income must include the expense deductions provided in 24 CFR 5.611(a),and for persons with disabilities, the calculation of the family's monthlyadjusted income also must include the disallowance of earned income as providedin 24 CFR 5.617, if applicable;
(2) 10 percent of the family's monthly gross income; or
(3) If the family is receiving payments for welfare assistance from a publicagency and a part of the payments, adjusted in accordance with the family'sactual housing costs, is specifically designated by the agency to meet thefamily's housing costs, the portion of the payment that is designated forhousing costs.
(b)
(c)
(a)
(2) Where grant funds will be used to lease all or part of a structure toprovide supportive housing or supportive services, or where grant funds will beused to lease individual housing units for homeless persons who will eventuallycontrol the units, site control need not be demonstrated.
(b)
(2) If the acquisition, rehabilitation, acquisition and rehabilitation, ornew construction costs for the substitute site are greater than the amount ofthe grant awarded for the site specified in the application, the recipient mustprovide for all additional costs. If the recipient is unable to demonstrate toHUD that it is able to provide for the difference in costs, HUD may deobligatethe award of assistance.
(c)
(a)
(b)
(c)
(2) The recipient must adopt procedures to make available information on theexistence and locations of facilities and services that are accessible topersons with a handicap and maintain evidence of implementation of theprocedures.
(d)
(1) All new construction must meet the accessibility requirements of 24 CFR8.22 and, as applicable, 24 CFR 100.205.
(2) Projects in which costs of rehabilitation are 75 percent or more of thereplacement cost of the building must meet the requirements of 24 CFR 8.23(a).Other rehabilitation must meet the requirements of 24 CFR 8.23(b).
In addition to the requirements set forth in 24 CFR part 5, use of assistanceprovided under this part must comply with the following Federal requirements:
(a)
(i) The community in which the area is situated is participating in theNational Flood Insurance Program (see 44 CFR parts 59 through 79), or less thana year has passed since FEMA notification regarding such hazards; and
(ii) Flood insurance is obtained as a condition of approval of theapplication.
(2) Applicants with supportive housing located in an area identified by FEMAas having special flood hazards and receiving assistance for acquisition orconstruction (including rehabilitation) are responsible for assuring that floodinsurance under the National Flood Insurance Program is obtained and maintained.
(b) The Coastal Barrier Resources Act of 1982 (16 U.S.C. 3501
(c)
(d)
(e)
(2) Upon the written request of the recipient, HUD may grant an exception tothe provisions of paragraph (e)(1) of this section on a case-by-case basis whenit determines that the exception will serve to further the purposes of theprogram and the effective and efficient administration of the recipient'sproject. An exception may be considered only after the recipient has providedthe following:
(i) For States and other governmental entities, a disclosure of the nature ofthe conflict, accompanied by an assurance that there has been public disclosureof the conflict and a description of how the public disclosure was made; and
(ii) For all recipients, an opinion of the recipient's attorney that theinterest for which the exception is sought would not violate State or local law.
(3) In determining whether to grant a requested exception after the recipienthas satisfactorily met the requirement of paragraph (e)(2) of this section, HUDwill consider the cumulative effect of the following factors, where applicable:
(i) Whether the exception would provide a significant cost benefit or anessential degree of expertise to the project which would otherwise not beavailable;
(ii) Whether the person affected is a member of a group or class of eligiblepersons and the exception will permit such person to receive generally the sameinterests or benefits as are being made available or provided to the group orclass;
(iii) Whether the affected person has withdrawn from his or her functions orresponsibilities, or the decisionmaking process with respect to the specificassisted activity in question;
(iv) Whether the interest or benefit was present before the affected personwas in a position as described in paragraph (e)(1) of this section;
(v) Whether undue hardship will result either to the recipient or the personaffected when weighed against the public interest served by avoiding theprohibited conflict; and
(vi) Any other relevant considerations.
(f)
(g) Davis-Bacon Act. The provisions of the Davis-Bacon Act do not apply tothis program.
(a)
(b)
(a)
(2) Approval for changes is contingent upon the application ranking remaininghigh enough after the approved change to have been competitively selected forfunding in the year the application was selected.
(b)
(a)
(b)
(c)
(i) If the actual total cost of acquisition, rehabilitation, acquisition andrehabilitation, or new construction is less than the total cost anticipated inthe application; or
(ii) If proposed activities for which funding was approved are not begunwithin three months or residents do not begin to occupy the facility within ninemonths after grant execution.
(2) HUD may deobligate the amounts for annual leasing costs, operating costsor supportive services in any year:
(i) If the actual leasing costs, operating costs or supportive services forthat year are less than the total cost anticipated in the application; or
(ii) If the proposed supportive housing operations are not begun within threemonths after the units are available for occupancy.
(3) The grant agreement may set forth in detail other circumstances underwhich funds may be deobligated, and other sanctions may be imposed.
(4) HUD may:
(i) Readvertise the availability of funds that have been deobligated underthis section in a notice of fund availability under § 583.200, or
(ii) Award deobligated funds to applications previously submitted in responseto the most recently published notice of fund availability, and in accordancewith subpart C of this part.
42 U.S.C. 3535(d) and 8011.
(a)
(b)
The purposes of the Youthbuild program are set out in section 451 of theNational Affordable Housing Act (42 U.S.C. 12899) (“NAHA”).
A Youthbuild implementation program uses comprehensive and multi-disciplinaryapproaches designed to prepare young adults who have dropped out of high schoolfor educational and employment opportunities by employing them as constructiontrainees on work sites for housing designated for homeless persons and low- andvery low-income families. A Youthbuild planning grant is designed to giverecipients sufficient time and financial resources to develop a comprehensiveYouthbuild program that can be effectively implemented. Youthbuild programs mustcontain the three components described in paragraphs (a), (b) and (d) of thissection. Other activities described in paragraph (c) of this section areoptional:
(a)
(1) Services and activities designed to meet the basic educational needs ofparticipants. For example, a Youthbuild program may include basic skillsinstruction and remedial education, bilingual education for individuals withlimited English proficiency, secondary educational services and activitiesdesigned to lead to the attainment of a high school diploma or its equivalency(GED), or counseling and assistance in attaining post-secondary education andrequired financial aid;
(2) Vocational classroom courses geared to construction terminology andconcepts; and
(3) Strategies to coordinate with local trade unions and apprenticeshipprograms where possible.
(b)
(1) Activities designed to develop employment and leadership skills,including support for youth councils;
(2) Counseling services to assist trainees in personal, health, housing,child care, family or legal problems and/or referral services to appropriatesocial service resources;
(3) Support services and stipends necessary to enable individuals toparticipate in the program and, for a period not to exceed 12 months aftercompletion of training, to assist participants through continued supportservices;
(4) Job development and placement activities and post-graduation follow-upassistance; and
(5) Pre-employment training plan aimed at developing job seeking skills.
(c)
(1) Entrepreneurial training and courses in small business development;
(2) Assistance to correct learning disabilities; or
(3) Drivers' education courses.
(d)
(1) Access to housing sites where construction/ rehabilitation work is beingcarried out;
(2) Work site training plan for a closely supervised construction site;
(3) Construction or rehabilitation plan and timetable; and
(4) Approaches to work site safety.
(e) The Youthbuild implementation program must be structured so that 50percent of each full-time participant's time is spent in educational servicesand activities (paragraphs (a), (b), and (c) of this section) and 50 percent isspent in on-site training (paragraph (d) of this section). Youthbuild planninggrant applications must contain strategies, plans and approaches to be usedduring the planning process to ultimately implement these program requirements.
The terms “adjusted income,” “community basedorganization,” “homeless individual,” “housingdevelopment agency,” “Indian tribe,” “individual who hasdropped out of high school,” “institution of highereducation,” “limited-English proficiency,” “low-incomefamily,” “offender,” “State,” and “very low-income family” are defined in section 457 of NAHA.
The terms
(1) A community-based organization;
(2) An administrative entity designated under section 103(b)(1)(B) of the JobTraining Partnership Act;
(3) A community action agency;
(4) A State or local housing development agency;
(5) A community development corporation;
(6) A public and/or Indian housing authority and resident managementcorporations, resident councils and resident organizations;
(7) A State or local youth service or conservation corps; and
(8) Any other entity (including States, units of general local government,and Indian Tribes) eligible to provide education and employment training.
(1) An individual who is:
(i) 16 to 24 years of age, inclusive, at time of enrollment;
(ii) A very low-income individual or a member of a very low-income family;and
(iii) An individual who has dropped out of high school.
(2) An exception of not more than 25 percent of all full-time participants ispermitted for young adults who do not meet the program's income or educationalrequirements but who have educational needs despite attainment of a high schooldiploma or its equivalent.
(1) Is organized and exists under Federal, State, local, or tribal law;
(2) Has no part of its earnings inuring to the benefit of any individual,corporation, or other entity;
(3) Has a voluntary board;
(4) Has an accounting system or has designated a fiscal agent in accordancewith requirements established by HUD; and
(5) Practices nondiscrimination in the provision of assistance.
HUD will award Youthbuild planning grants to eligible applicants for thepurpose of developing Youthbuild programs in accordance with subtitle D of titleIV of the National Affordable Housing Act. Applications will be selected in anational competition in accordance with the selection process described in thecurrent NOFA.
Funds awarded for planning grants are expected to be used within 12 months ofthe effective date of the planning grant agreement. The award of a Youthbuildplanning grant does not obligate HUD to fund the implementation of the programupon completion of the approved planning activities (unless the companionimplementation grant was submitted as a
HUD will not approve multiple applications for planning grants in the samejurisdiction unless it determines that the jurisdiction is sufficiently large tojustify approval of more than one application.
Planning grant activities to develop a Youthbuild program may include:
(a) The undertaking of studies and research efforts to determine thefeasibility and need for a Youthbuild program in a selected location includingwhether a proposed program can meet the education and training needs of youngadults, aid in the expansion of affordable housing to meet the needs of thecommunity, and achieve financial feasibility;
(b) The formation and establishment of a consortium among Federal, State, orlocal training and education programs, service providers, housing programs andproviders including but not limited to homeless providers, housing owners,developers, and other organizations necessary for the establishment of aYouthbuild program;
(c) The preliminary identification and potential selection of housing for theYouthbuild program including an assessment of the type of housing program to beused and the method by which program participants will have access to thehousing project;
(d) The planning and identification of resources required for basic skillsinstruction and education, job training and job development, leadership andemployment skills development, counseling, referral, and other related supportservices that will be provided as part of the Youthbuild program;
(e) The preparation of an application for an implementation grant.
(f) Preliminary architectural and engineering (A & E) work for theYouthbuild proposed housing including:
(1) The development of cost and time estimates associated with the amount ofwork to be done through new construction or the rehabilitation of existinghousing;
(2) Technical studies to evaluate environmental problems and to determinewhether mitigation is feasible on the potential site; and
(3) The identification and initiation of the permit process required tocommence work on the selected site.
(g) The planning and development of multi-disciplinary educational andemployment training curricula, leadership development training, counseling, andother supportive services and activities for the Youthbuild program includingthe identification and training of staff assigned to each program component;
(h) The identification and establishment of relationships with local unions,apprenticeship programs, housing owners, local employers and public or privatecommunity organizations for job training, development, and placementopportunities;
(i)
HUD will award Youthbuild implementation grants to eligible applicants forthe purpose of carrying out Youthbuild programs in accordance with subtitle D oftitle IV of the National Affordable Housing Act. Applications will be selectedin a national competition in accordance with the selection process described inthe current NOFA.
Funds awarded for implementation grants are expected to be used within
Each application for an implementation grant may only include activities tocarry out one Youthbuild program, i.e., to start a new Youthbuild program or tofund new classes of Youthbuild participants for an existing program. The sameapplicant organization may submit more than one application in the currentcompetition if the proposed programs are in different jurisdictions. HUD willnot approve multiple applications for implementation grants in the samejurisdiction unless it determines that the jurisdiction is sufficiently large tojustify approval of more than one application.
Implementation grant activities to conduct a Youthbuild program may include:
(a) Acquisition of housing and related facilities to be used for the purposesof providing homeownership, residential rental housing, or transitional housingfor the homeless and low- and very low-income persons and families;
(b) Architectural and engineering work associated with Youthbuild housing;
(c) Construction of housing and related facilities to be used for thepurposes of providing homeownership, residential rental housing, or transitionalhousing for the homeless and low- and very low-income persons and families;
(d) Rehabilitation of housing and related facilities to be used for thepurposes of providing homeownership, residential rental housing, or transitionalhousing for the homeless and low- and very low-income persons and families,including lead-based paint activities; in accordance with part 35 of this title;
(e) Operating expenses and replacement reserves for the housing assisted inthe Youthbuild program;
(f) Relocation payments and other assistance required to comply with§ 585.308, legal fees, and construction management;
(g) Outreach and recruitment activities, emphasizing special outreach effortsto be undertaken to recruit eligible young women (including young women withdependent children);
(h) Education and job training services and activities including workexperience, basic skills instruction and remedial education, bilingualeducation; secondary education leading to the attainment of a high schooldiploma or its equivalent; counseling and assistance in attaining post-secondaryeducation and required financial aid;
(i) Wages, benefits and need-based stipends provided to participants;
(j) Leadership development, counseling, support services, and development ofemployment skills;
(k) Defraying costs for the ongoing training and technical assistance needsof the recipient that are related to developing and carrying out a Youthbuildprogram;
(l) Job placement (including entrepreneurial training and businessdevelopment), counseling, and support services for a period not to exceed 12months after completion of training to assist participants; and
(m)
The following budget items are to be considered training or other costs underthe Youthbuild implementation grant and should not be considered costsassociated with acquisition, rehabilitation, or new construction for thepurposes of §§ 585.307, 585.309, 585.310, and 585.311.
(a) Trainees' tools and clothing.
(b) Participant stipends and wages.
(c) On-site trainee supervisors.
(d) Construction management.
(e) Relocation costs.
(f) Legal fees.
(g) Clearance and demolition.
(a)
(1) Before any Youthbuild implementation application that requests funds foracquisition, rehabilitation, or construction can be selected for funding, HUDshall determine whether any environmental thresholds are exceeded in accordancewith 24 CFR part 50, which implements the National Environmental Policy Act(NEPA) and the related Federal environmental laws and authorities listed under24 CFR 50.4.
(i) If HUD determines that one or more of the thresholds are exceeded, HUDshall conduct a compliance review of the issue and, if appropriate, establishmitigating measures that the applicant shall carry out for the property;
(ii) In performing its review, HUD may use previously issued environmentalreviews prepared by local, State, or other Federal agencies for the proposedproperty;
(iii)(A) The application for the Youthbuild implementation grant shallprovide HUD with:
(
(
(B) The applicant is encouraged to contact the local community developmentagency to obtain any previously issued environmental reviews for the proposedproperty as well as for other relevant information that can be used in theapplicant documentation for the environmental threshold review. In usingprevious reviews by other sources, HUD must, however, conduct the environmentalanalysis and prepare the environmental review and be responsible for anyrequired environmental findings.
(2) HUD reserves the right to disqualify any application where one or moreenvironmental thresholds are exceeded if HUD determines that the compliancereview cannot be conducted and satisfactorily completed within the HUD reviewperiod for applications.
(3) If Youthbuild funds are requested for acquisition, rehabilitation, orconstruction, applicants are prohibited from committing or expending State,local or other funds to undertake property acquisition (including lease),rehabilitation or construction under this program until notification of grantaward.
(b)
(1) For minor rehabilitation of a building and any property acquisition(including lease), Federal environmental laws and authorities may apply when theproperty is:
(i) Located within designated coastal barrier resources;
(ii) Contaminated by toxic chemicals or radioactive materials;
(iii) Located within a floodplain;
(iv) A building for which flood insurance protection is required;
(v) Located within a runway clear zone at a civil airport or within a clearzone or accident potential zone at a military airfield; or
(vi) Listed on, or eligible for listing on, the National Register of HistoricPlaces; located within, or adjacent to, an historic district, or is a property
(2) For major rehabilitation of a building and also for substantialimprovement in floodplains, in addition to paragraphs (b)(1)(i) through (vi) ofthis section, other Federal environmental laws and authorities may apply whenthe property:
(i) Has significant impact to the human environment;
(ii) Is a project involving five or more dwelling units severely noise-impacted; or
(iii) Affects coastal zone management.
(3) For new construction, conversion or increase in dwelling unit density, inaddition to paragraphs (b)(1)(i) through (vi) and paragraphs (b)(2)(i) through(iii) of this section, other Federal environmental laws and authorities mayapply when the property:
(i) Is located near hazardous industrial operations handling fuels orchemicals of an explosive or flammable nature;
(ii) Affects a sole source aquifer;
(iii) Affects endangered species; or
(iv) Is located within a designated wetland.
(c)
(d)
(1) Whose estimated cost is less than 75 percent of the property value aftercompletion;
(2) That does not involve changes in land use from residential tononresidential, or from nonresidential to residential;
(3) That does not involve the demolition of one or more buildings, or partsof a building, containing the primary use served by the property; and
(4) That does not increase unit density more than 20 percent.
The Youthbuild program is subject to the provisions of the Uniform RelocationAssistance and Real Property Acquisition Policies Act of 1970, as amended (URA)and implementing regulations at 49 CFR part 24. HUD Handbook 1378, TenantAssistance, Relocation and Real Property Acquisition, available from theRelocation and Real Estate Division at the address listed in this section,describes these policies and procedures. Any occupied property used in aYouthbuild program is subject to the URA regardless of the source of theproperty or construction funds. The URA requires recipients to providerelocation assistance to persons (families, individuals, businesses, andnonprofit organizations) that are displaced as a direct result of acquisition,rehabilitation or demolition for an assisted project. Property occupants who arenot displaced also have certain rights. Therefore, if a proposed Youthbuildimplementation program involves occupied property, before submitting theapplication the applicant should consult with staff of the Relocation and RealEstate Division, Office of Community Planning and Development, Department ofHousing and Urban Development, Room 7154, 451 Seventh Street, SW, Washington, DC20410; telephone: (202) 708-0336. TDD: (202) 708-1455. Fax: (202)708-1744. (These are not toll-free numbers.)
Where the award of a Youthbuild implementation grant includes the eligibleactivities of acquisition, architectural and engineering fees, construction,rehabilitation, operating costs or replacement reserves for residential rentalunits, and where the costs for these activities are to be funded, in whole or inpart, from the Youthbuild grant award, the recipient shall be required to complywith the following Youthbuild project-related restrictions for a period of notless than 10 years:
(a)
(2) In order to maintain the financial stability of the project and toprovide flexibility in averting long-term vacancies in the 90 percent category,the rightful owner is permitted, under certain circumstances described below, toexecute temporary two year leases with individuals and families with incomesbetween 60 and 80 percent of the area median income. This temporary deviation ispermitted when no qualifying tenant (with an income of 60 percent or less ofmedian) leases the unit upon the end of the 90 day advertising period. The ownermay then advertise the unit to individuals and families with incomes less than80 percent of the area median income, adjusted for family size, for anotheradvertisement period of 90 days. Temporary leases for tenants whose incomes arebetween 60 and 80 percent of the area median income (exclusive of the 10 percentallowance) shall be limited to two years. Temporary tenants are not covered byYouthbuild tenant protections regarding termination of tenancy (paragraph (b)(2)of this section), tenant selection plan (paragraph (b)(4) of this section) andtenant participation plan (paragraph (d) of this section).
(3) The remaining 10 percent of the units must be made available to andoccupied by low-income families—“the 10 percent category.” Theincome test must be conducted for both the 90 percent and 10 percent categoriesonly at time of entry for each unit available for occupancy.
(b)
(1)
(2)
(3)
(4)
(i) The plan is consistent with the purpose of providing housing for homelessand very low-income families and individuals;
(ii) The plan is reasonably related to program eligibility and theapplicant's or owner's ability to perform the obligations of the lease;
(iii) The plan gives reasonable consideration to the housing needs offamilies that would qualify for a preference under section 6(c)(4)(A) of theUnited States Housing Act of 1937;
(iv) The plan provides for the selection of tenants from a written waitinglist in the chronological order of their application, to the extent practicable,and for the prompt notification in writing of any rejected applicant of thegrounds for any rejection; and
(v) The plan acknowledges that a family holding tenant-based assistance undersection 8 of the United States Housing Act of 1937 will not be refused tenancybecause of the status of the prospective tenant as a holder of such assistance.
(c)
(d)
(e)
(f)
(g)
Where the award of a Youthbuild implementation grant includes the eligibleactivities of acquisition, architectural and engineering fees, construction,rehabilitation, operating costs or replacement reserves of transitional housingunits, and where the costs for these activities are funded, in whole or in part,with Youthbuild grant funds, the housing project shall be required to complywith the following Youthbuild project-related restrictions:
(a)
(b)
(c)
(2) The Secretary may waive these requirements to permit the conversion of aYouthbuild transitional housing project to a permanent housing project only ifsuch housing complies with the Youthbuild project-related restrictions forresidential rental housing projects found in § 585.309.
(d)
Where the award of a Youthbuild implementation grant includes the eligibleactivities of acquisition, architectural and engineering fees, construction, orrehabilitation of homeownership housing, and where the costs for theseactivities are to be funded, in whole or in part, with Youthbuild grant funds,the housing project shall be required to comply with the following Youthbuildproject-related restrictions:
(a)
(b)
(c)
Applicable provisions are stated in section 456(e) of NAHA.
(a)
(b)
(2) The labor standards requirements in paragraph (b)(1) of this section donot apply where a Youthbuild grant is provided solely for classroom and/or on-the-job training and supportive services for Youthbuild trainees, and the grantdoes not include costs for housing project development involving acquisition(including lease), rehabilitation or new construction of real properties;however, if other Federal programs provide assistance to the housing project,labor standards apply to laborers and mechanics other than Youthbuild traineesto the extent required by the other Federal programs. Applicants need to reviewapplicable Federal regulations to determine which relevant requirements apply totheir individual situations.
(a) Each recipient of a planning or implementation Youthbuild grant awardmust keep records that will facilitate an effective audit to determinecompliance with program requirements and that fully disclose:
(1) The amount and disposition by the recipient of the planning orimplementation Youthbuild grants received, including sufficient records thatdocument the reasonableness, accuracy and necessity of each expenditure;
(2) The amount and disposition of proceeds, if any, from financing obtainedin connection with the Youthbuild program, e.g., housing sales to eligible low-income families, property sales to other public or private entities;
(3) The total cost from all sources of funding for the Youthbuild programincluding all educational, training, counseling, placement, and housingactivities and services;
(4) The amount and nature of any other assistance, including cash, property,services, materials, in-kind contributions or other items contributed as acondition of receiving an implementation grant;
(5) Any other proceeds received for, or otherwise used in connection with,the Youthbuild program.
(6)
(7)
(8)
(b) Implementation grant recipients must submit reports pursuant to section 3regulations at 24 CFR part 135.
(c)
(a)
(b)
(a)
(b)
(a) There are three basic types of changes that recipients may wish to maketo their programs:
(1) Grant Agreement amendments.
(2) Material changes, which include, but are not limited to changes inhousing sites, changes in significant participating parties, and changes inapproved activities. All material changes require HUD approval.
(3) Self-implementing program changes, which may include changes in recipientstaffing and content of curriculum. All self-implementing changes requiredocumentation in the recipient's files.
(b) Approval for Grant Agreement amendments and material changes iscontingent upon the application ranking remaining high enough after the approvedchange to have been competitively selected for funding in the year theapplication was selected.
(a)
(b)
(c)
(2) HUD may award deobligated funds to applications previously submitted inresponse to the most recently published NOFA, and in accordance with subpart Bof this part.
(a) Organizations that are religious or faith-based are eligible, on the samebasis as any other organization, to participate in the Youthbuild program.Neither the Federal government nor a State or local government receiving fundsunder Youthbuild programs shall discriminate against an organization on thebasis of the organization's religious character or affiliation.
(b) Organizations that are directly funded under the Youthbuild program maynot engage in inherently religious activities, such as worship, religiousinstruction, or proselytization, as part of the programs or services fundedunder this part. If an organization conducts such activities, the activitiesmust be offered separately, in time or location, from the programs or servicesfunded under this part, and participation must be voluntary for thebeneficiaries of the HUD-funded programs or services.
(c) A religious organization that participates in the Youthbuild Program willretain its independence from Federal, State, and local governments, and maycontinue to carry out its mission, including the definition, practice, andexpression of its religious beliefs, provided that it does not use directYouthbuild Program funds to support any inherently religious activities, such asworship, religious instruction, or proselytization. Among other things, faith-based organizations may use space in their facilities to provide YouthbuildProgram-funded services, without removing religious art, icons, scriptures, orother religious symbols. In addition, a Youthbuild Program-funded religiousorganization retains its authority over its internal governance, and it mayretain religious terms in its organization's name, select its board members on areligious basis, and include religious references in its organization's missionstatements and other governing documents.
(d) An organization that participates in the Youthbuild program shall not, inproviding program assistance, discriminate against a program beneficiary orprospective program beneficiary on the basis of religion or religious belief.
(e) Youthbuild funds may not be used for the acquisition, construction, orrehabilitation of structures to the extent that those structures are used forinherently religious activities. Youthbuild funds may be used for theacquisition, construction, or rehabilitation of structures only to the extentthat those structures are used for conducting eligible activities under thispart. Where a structure is used for both eligible and inherently religiousactivities, Youthbuild funds may not exceed the cost of those portions of theacquisition, construction, or rehabilitation that are attributable to eligibleactivities in accordance with the cost accounting requirements applicable toYouthbuild funds in this part. Sanctuaries, chapels, or other rooms that aYouthbuild-funded religious congregation uses as its principal place of worship,however, are ineligible for Youthbuild-funded improvements. Disposition of realproperty after the term of the grant, or any change in use of the propertyduring the term of the grant, is subject to government-wide regulationsgoverning real property disposition (
(f) If a State or local government voluntarily contributes its own funds tosupplement federally funded activities, the State or local government has theoption to segregate the Federal funds or commingle them. However, if the fundsare commingled, this section applies to all of the commingled funds.
(a) The policies, guidelines and requirements of OMB Circular Nos. A-87(Cost Principles Applicable to Grants, Contracts and other Agreements with Stateand Local Governments) and 24 CFR part 85 (Administrative Requirements forGrants and Cooperative Agreements to State, Local and Federally RecognizedIndian Tribal Governments) apply to the award, acceptance and use of assistanceunder the program by applicable entities, and to the remedies for non-compliance, except where inconsistent with the provisions of NAHA, other Federalstatutes or this part. 24 CFR part 84 (Grants and Cooperative Agreements withInstitutions of Higher Education, Hospitals, and other Nonprofit Organizations),OMB Circular A-122 (Cost Principles Applicable to Grants, Contracts andother Agreements with Nonprofit Institutions), and, as applicable, OMB CircularA-21 (Cost Principles for Educational Institutions) apply to theacceptance and use of assistance by covered organizations, except whereinconsistent with the provisions of NAHA, other Federal statutes or this part.Recipients are also subject to the audit requirements of 24 CFR part 44 (AuditRequirements for State and Local Governments) and 24 CFR part 45 (AuditRequirements for Institutions of Higher Education and other NonprofitInstitutions), as applicable. HUD may perform or require additional audits as itfinds necessary or appropriate.
(b) Copies of OMB Circulars may be obtained from E.O.P. Publications, Room2200, New Executive Office Building, Washington, DC 20503, telephone (202)395-7332. (This is not a toll-free number.) There is a limit of two freecopies.
In addition to the standard assurances of compliance with Federal rules andOMB Circulars contained in applications for Federal grant assistance, applicantsmust also make the following certifications:
(a)
(2)
(3) The Insular Areas of Guam, the Virgin Islands, American Samoa and theNorthern Mariana Islands are not required to have a Consolidated Plan or to makea Consolidate Plan certification. An application by an Indian tribe or otherapplicant for a Youthbuild program that will be located on a reservation of anIndian tribe does not require a certification by the tribe or State. However,where an Indian tribe or an Indian Housing Authority (IHA) is the applicant fora Youthbuild program that will not be located on a reservation, the requirementfor a certification by the jurisdiction or jurisdictions in which the Youthbuildprogram will be located under the preceding paragraph applies.
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(a)(1) In addition to the conflict of interest requirements in 24 CFR parts84 and 85, no person who is an employee, agent, consultant, officer, or electedor appointed official of the recipient or cooperating entity named in theapplication and who exercises or has exercised any functions or responsibilitieswith respect to assisted activities, or who is in a position to participate in adecision-making process or gain inside information with regard to suchactivities, may obtain a financial interest or benefit from the activity, orhave an interest in any contract, subcontract, or agreement with respectthereto, or the proceeds thereunder, either for himself or herself or for thosewith whom he or she has family or business ties, during his or her tenure or forone year thereafter, except that a resident of an eligible property may acquirean ownership interest.
(2)
(i) Whether the exception would provide a significant cost benefit or anessential degree of expertise to the Youthbuild program that would otherwise notbe available;
(ii) Whether an opportunity was provided for open competitive bidding ornegotiation;
(iii) Whether the person affected is a member of a group or class intended tobe the beneficiaries of the activity and the exception will permit such personto receive generally the same interests
(iv) Whether the affected person has withdrawn from his or her functions orresponsibilities, or the decision-making process, with respect to the specificactivity in question;
(v) Whether the interest or benefit was present before the affected personwas in a position as described in paragraph (a)(2) of this section;
(vi) Whether undue hardship will result either to the applicant, recipient,or the person affected when weighed against the public interest served byavoiding the prohibited conflict; and
(vii) Any other relevant considerations.
(b) [Reserved]
The provisions of 24 CFR part 24 apply to the employment, engagement ofservices, awarding of contracts, or funding of any contractors or subcontractorsduring any period of debarment, suspension, or placement in ineligibilitystatus.
10 U.S.C. 2687
This part implements the Base Closure Community Redevelopment and HomelessAssistance Act, as amended (10 U.S.C. 2687
As used in this part:
(1) A comprehensive homeless assistance system that includes:
(i) A system of outreach and assessment for determining the needs andcondition of an individual or family who is homeless, or whether assistance isnecessary to prevent an individual or family from becoming homeless;
(ii) Emergency shelters with appropriate supportive services to help ensurethat homeless individuals and families receive adequate emergency shelter andreferral to necessary service providers or housing finders;
(iii) Transitional housing with appropriate supportive services to help thosehomeless individuals and families who are not prepared to make the transition toindependent living;
(iv) Housing with or without supportive services that has no establishedlimitation on the amount of time of residence to help meet long-term needs ofhomeless individuals and families; and
(v) Any other activity that clearly meets an identified need of the homelessand fills a gap in the continuum of care.
(2) Supportive services are services that enable homeless persons andfamilies to move through the continuum of care toward independent living. Theseservices include, but are not limited to, case management, housing counseling,job training and placement, primary health care, mental health services,substance abuse treatment, child care, transportation, emergency food andclothing, family violence services, education services, moving services,assistance in obtaining entitlements, and referral to veterans services andlegal services.
(2) An individual or family who has a primary nighttime residence that is:
(i) A supervised publicly or privately operated shelter designed to providetemporary living accommodations (including welfare hotels, congregate sheltersand transitional housing for the mentally ill);
(ii) An institution that provides a temporary residence for individualsintended to be institutionalized; or
(iii) A public or private place not designed for, or ordinarily used as, aregular sleeping accommodation for human beings.
(3) This term does not include any individual imprisoned or otherwisedetained under an Act of the Congress or a State law.
HUD. Department of Housing and Urban Development.
(a)
(b)
(1) For installations with Title V applications pending but not approvedbefore October 25, 1994, the LRA shall consider and specifically address anyapplication for use of buildings and property to assist the homeless that werereceived by HHS prior to October 25, 1994, and were pending with the Secretaryof HHS on that date. These pending requests shall be addressed in the LRA'shomeless assistance submission.
(2) For installations with Title V applications approved before October 25,1994 where there is an approved Title V application, but property has not beenassigned or otherwise disposed of by the Military Department, the LRA mustensure that its homeless assistance submission provides the Title V applicantwith:
(i) The property requested;
(ii) Properties, on or off the installation, that are substantiallyequivalent to those requested;
(iii) Sufficient funding to acquire such substantially equivalent properties;
(iv) Services and activities that meet the needs identified in theapplication; or
(v) A combination of the properties, funding, and services and activitiesdescribed in § 586.10(b)(2)(i) through (iv).
(c)
(a) After consultation with the LRA and HUD, and upon a finding that it is inthe interest of the communities affected by the closure/realignment of theinstallation, DoD, through the Director of the Office of Economic Adjustment,may extend or postpone any deadline contained in this part.
(b) Upon completion of a determination and finding of good cause, and exceptfor deadlines and actions required on the part of DoD, HUD may waive anyprovision of §§ 586.20 through 586.45 in any particular case,subject only to statutory limitations.
(a)
(b)
(c)
(1) Publish, within 30 days, in a newspaper of general circulation in thecommunities in the vicinity of the installation, the time period during whichthe LRA will receive notices of interest from State and local governments,representatives of the homeless, and other interested parties. This publicationshall include the name, address, telephone number and the point of contact forthe LRA who can provide information on the prescribed form and contents of thenotices of interest. The LRA shall notify DoD of the deadline specified forreceipt of notices of interest. LRAs are strongly encouraged to make thispublication as soon as possible within the permissible 30 day period in order toexpedite the closure process.
(i) In addition, the LRA has the option to conduct an informal solicitationof notices of interest from public and non-profit entities interested inobtaining property via a public benefit transfer other than a homelessassistance conveyance under either 40 U.S.C. 471
(ii) For all installations selected for closure or realignment prior to 1995that elected to proceed under Public Law 103-421, the LRA shall acceptnotices of interest for not less than 30 days.
(iii) For installations selected for closure or realignment in 1995 orthereafter, notices of interest shall be accepted for a minimum of 90 days andnot more than 180 days after the LRA's publication under§ 586.20(c)(1).
(2) Prescribe the form and contents of notices of interest.
(i) The LRA may not release to the public any information regarding thecapacity of the representative of the homeless to carry out its program, adescription of the organization, or its financial plan for implementing theprogram, without the consent of the representative of the homeless concerned,unless such release is authorized under Federal law and under the law of theState and communities in which the installation concerned is located. Theidentity of the representative of the homeless may be disclosed.
(ii) The notices of interest from representatives of the homeless mustinclude:
(A) A description of the homeless assistance program proposed, including thepurposes to which the property or
(B) A description of the need for the program;
(C) A description of the extent to which the program is or will becoordinated with other homeless assistance programs in the communities in thevicinity of the installation;
(D) Information about the physical requirements necessary to carry out theprogram including a description of the buildings and property at theinstallation that are necessary to carry out the program;
(E) A description of the financial plan, the organization, and theorganizational capacity of the representative of the homeless to carry out theprogram; and
(F) An assessment of the time required to start carrying out the program.
(iii) The notices of interest from entities other than representatives of thehomeless should specify the name of the entity and specific interest in propertyor facilities along with a description of the planned use.
(3) In addition to the notice required under § 586.20(c)(1),undertake outreach efforts to representatives of the homeless by contactinglocal government officials and other persons or entities that may be interestedin assisting the homeless within the vicinity of the installation.
(i) The LRA may invite persons and organizations identified on the HUD listof representatives of the homeless and any other representatives of the homelesswith which the LRA is familiar, operating in the vicinity of the installation,to the workshop described in § 586.20(c)(3)(ii).
(ii) The LRA, in coordination with the Military Department and HUD, shallconduct at least one workshop where representatives of the homeless have anopportunity to:
(A) Learn about the closure/realignment and disposal process;
(B) Tour the buildings and properties available either on or off theinstallation;
(C) Learn about the LRA's process and schedule for receiving notices ofinterest as guided by § 586.20(c)(2); and
(D) Learn about any known land use constraints affecting the availableproperty and buildings.
(iii) The LRA should meet with representatives of the homeless that expressinterest in discussing possible uses for these properties to alleviate gaps inthe continuum of care.
(4) Consider various properties in response to the notices of interest. TheLRA may consider property that is located off the installation.
(5) Develop an application, including the redevelopment plan and homelessassistance submission, explaining how the LRA proposes to address the needs ofthe homeless. This application shall consider the notices of interest receivedfrom State and local governments, representatives of the homeless, and otherinterested parties. This shall include, but not be limited to, entities eligiblefor public benefit transfers under either 40 U.S.C. 471
(6) Make the draft application available to the public for review and commentperiodically during the process of developing the application. The LRA mustconduct at least one public hearing on the application prior to its submissionto HUD and the appropriate Military Department. A summary of the public commentsreceived during the process of developing the application shall be included inthe application when it is submitted.
(d)
HUD may negotiate and consult with the LRA before and during the course ofpreparation of the LRA's application and during HUD's review thereof with a viewtoward avoiding any preliminary determination that the application does not meetany requirement of this part. LRAs are encouraged to contact HUD for a list ofpersons and organizations that are representatives of the homeless operating inthe vicinity of the installation.
(a)
(b)
(1) Information about homelessness in the communities in the vicinity of theinstallation.
(i) A list of all the political jurisdictions which comprise the LRA.
(ii) A description of the unmet need in the continuum of care system withineach political jurisdiction, which should include information about any gapsthat exist in the continuum of care for particular homeless subpopulations. Thesource for this information shall depend upon the size and nature of thepolitical jurisdictions(s) that comprise the LRA. LRAs representing:
(A) Political jurisdictions that are required to submit a Consolidated Planshall include a copy of their Homeless and Special Needs Population Table (table1), Priority Homeless Needs Assessment Table (table 2), and narrativedescription thereof from that Consolidated Plan, including the inventory offacilities and services that assist the homeless in the jurisdiction.
(B) Political jurisdictions that are part of an urban county that is requiredto submit a Consolidated Plan shall include a copy of their Homeless and SpecialNeeds Population Table (table 1), Priority Homeless Needs Assessment Table(table 2), and narrative description thereof from that Consolidated Plan,including the inventory of facilities and services that assist the homeless inthe jurisdiction. In addition, the LRA shall explain what portion of thehomeless population and subpopulations described in the Consolidated Plan areattributable to the political jurisdiction it represents.
(C) A political jurisdiction not described by§ 586.30(b)(1)(ii)(A) or § 586.30(b)(1)(ii)(B) shallsubmit a narrative description of what it perceives to be the homelesspopulation within the jurisdiction and a brief inventory of the facilities andservices that assist homeless persons and families within the jurisdiction. LRAsthat represent these jurisdictions are not required to conduct surveys of thehomeless population.
(2) Notices of interest proposing assistance to homeless persons and/orfamilies.
(i) A description of the proposed activities to be carried out on or off theinstallation and a discussion of how these activities meet a portion or all ofthe needs of the homeless by addressing the gaps in the continuum of care. Theactivities need not be limited to expressions of interest in property, but mayalso include discussions of how economic redevelopment may benefit the homeless;
(ii) A copy of each notice of interest from representatives of the homelessfor use of buildings and property and a description of the manner in which theLRA's application addresses the need expressed in each notice of interest. Ifthe LRA determines that a particular
(iii) A description of the impact that the implemented redevelopment planwill have on the community. This shall include information on how the LRA'sredevelopment plan might impact the character of existing neighborhoods adjacentto the properties proposed to be used to assist the homeless and should discussalternative plans. Impact on schools, social services, transportation,infrastructure, and concentration of minorities and/or low income persons shallalso be discussed.
(3) Legally binding agreements for buildings, property, funding, and/orservices.
(i) A copy of the legally binding agreements that the LRA proposes to enterinto with the representative(s) of the homeless selected by the LRA to implementhomeless programs that fill gaps in the existing continuum of care. The legallybinding agreements shall provide for a process for negotiating alternativearrangements in the event that an environmental analysis conducted under§ 586.45(b) indicates that any property identified for transfer inthe agreement is not suitable for the intended purpose. Where the balancedetermined in accordance with § 586.30(b)(4) provides for the use ofinstallation property as a homeless assistance facility, legally bindingagreements must provide for the reversion or transfer, either to the LRA or toanother entity or entities, of the buildings and property in the event theycease to be used for the homeless. In cases where the balance proposed by theLRA does not include the use of buildings or property on the installation, thelegally binding agreements need not be tied to the use of specific real propertyand need not include a reverter clause. Legally binding agreements shall beaccompanied by a legal opinion of the chief legal advisor of the LRA orpolitical jurisdiction or jurisdictions which will be executing the legallybinding agreements that the legally binding agreements, when executed, willconstitute legal, valid, binding, and enforceable obligations on the partiesthereto;
(ii) A description of how buildings, property, funding, and/or serviceseither on or off the installation will be used to fill some of the gaps in thecurrent continuum of care system and an explanation of the suitability of thebuildings and property for that use; and
(iii) Information on the availability of general services such astransportation, police, and fire protection, and a discussion of infrastructuresuch as water, sewer, and electricity in the vicinity of the proposed homelessactivity at the installation.
(4) An assessment of the balance with economic and other development needs.
(i) An assessment of the manner in which the application balances theexpressed needs of the homeless and the needs of the communities comprising theLRA for economic redevelopment and other development; and
(ii) An explanation of how the LRA's application is consistent with theappropriate Consolidated Plan(s) or any other existing housing, social service,community, economic, or other development plans adopted by the jurisdictions inthe vicinity of the installation.
(5) A description of the outreach undertaken by the LRA. The LRA shallexplain how the outreach requirements described at § 586.20(c)(1) and§ 586.20(c)(3) have been fulfilled. This explanation shall include alist of the representatives of the homeless the LRA contacted during theoutreach process.
(c)
(a)
(b)
(1)
(2)
(i) Whether the plan is feasible in light of demands that would be placed onavailable social services, police and fire protection, and infrastructure in thecommunity; and,
(ii) Whether the selected notices of interest are consistent with theConsolidated Plan(s) or any other existing housing, social service, community,economic, or other development plans adopted by the political jurisdictions inthe vicinity of the installation.
(3)
(i) They include all the documents legally required to complete thetransactions necessary to realize the homeless use(s) described in theapplication;
(ii) They include all appropriate terms and conditions;
(iii) They address the full range of contingencies including those describedat § 586.30(b)(3)(i);
(iv) They stipulate that the buildings, property, funding, and/or serviceswill be made available to the representatives of the homeless in a timelyfashion; and
(v) They are accompanied by a legal opinion of the chief legal advisor of theLRA or political jurisdiction or jurisdictions which will be executing thelegally binding agreements that the legally binding agreements will, whenexecuted, constitute legal, valid, binding, and enforceable obligations on theparties thereto.
(4)
(5)
(c)
(i) A summary of the deficiencies in the application;
(ii) An explanation of the determination; and
(iii) A statement of how the LRA must address the determinations.
(2) In the event that no application is submitted and no extension isrequested as of the deadline specified in § 586.20(c)(5), and theState does not accept within 30 days a DoD written request to become recognizedas the LRA, the absence of such application will trigger an adversedetermination by HUD effective on the date of the lapsed deadline. Under theseconditions, HUD will follow the process described at § 586.40.
(d)
(2) HUD shall, within 30 days of its receipt of the LRA's resubmission, sendwritten notification of its final determination of whether the application meetsthe requirements of § 586.35(b) to both DOD and the LRA.
(a)
(1) Shall consult with the representatives of the homeless, if any, forpurposes of evaluating the continuing interest of such representatives in theuse of buildings or property at the installation to assist the homeless;
(2) May consult with the applicable Military Department regarding thesuitability of the buildings and property at the installation for use to assistthe homeless; and
(3) May consult with representatives of the homeless and other parties asnecessary.
(b)
(i) Notify DoD and the LRA of the buildings and property at the installationthat HUD determines are suitable for use to assist the homeless; and
(ii) Notify DoD and the LRA of the extent to which the revised redevelopmentplan meets the criteria set forth in § 586.35(b).
(2) In the event that an LRA does not submit a revised redevelopment planunder § 586.35(d), HUD shall, based upon its reviews andconsultations under § 586.40(a), notify DoD and the LRA of thebuildings and property at the installation that HUD determines are suitable foruse to assist the homeless, either
(i) Within 190 days after HUD sends its notice of preliminary adversedetermination under § 586.35(c)(1), if an LRA has not submitted arevised redevelopment plan; or
(ii) Within 390 days after the Military Department's
(a)
(b)
(c)
(d)
(e)
12 U.S.C. 1706e; 42 U.S.C. 3535(d).
This part applies to the completion of activities remaining under the UrbanHomesteading Program authorized under section 810(b) of the Housing andCommunity Development Act of 1974 (12 U.S.C. 1706e). Authority to reimburseFederal agencies for transfer of additional properties to LUHAs under this partwas repealed effective October 1, 1991.
(a) [Reserved]
(b)
(1)
(2)
(i) Exclude prospective homesteaders who own other residential property;
(ii) Take into account a prospective homesteader's capacity to make or causeto be made the repairs and improvements required under the homesteaderagreement, including the capacity to contribute a substantial amount of labor tothe rehabilitation process, or to obtain assistance from private sources,community organizations, or other sources;
(iii) Provide that membership in, or other ties to, any private organization(including a qualified community organization) may not be made a factoraffecting selection as a homesteader;
(iv) Include locally adopted criteria reasonably matching family size to thenumber of bedrooms in each property for which a homesteader is being selected,provided that a prospective homesteader who is a one person household shall notbe permitted to receive a property having more than two bedrooms, unless thereare no larger households on the waiting list, notwithstanding the relativestanding of the respective households under the low-income priority (see§ 590.7(b)(2)(v)).
(v) Provide that, before a property is offered to other prospectivehomesteaders who are eligible, the property will be offered to eligible low-income families, except that properties obtained under the RTC's AffordableHousing Disposition Program (12 CFR part 1609) must be transferred to low-incomefamilies; and
(vi) Include other reasonable selection criteria which are consistent withthis § 590.7(b)(2) and which shall be specified in the applicant'sapplication pursuant to § 590.11(a) and approved by HUD under§ 590.13. Such selection criteria may include preferences for theselection of neighborhood residents or other local residents, but only to theextent that they are not inconsistent with this section and with affirmativemarketing objectives under § 590.11(d)(5)(ii). Such preferences basedon residential location may not be based upon the length of time the prospectivehomesteader has resided in the jurisdiction or the neighborhood. Also, personswho are employed, or who have been notified that they have been hired, in thejurisdiction shall be extended any preference available to current residents.
(3)
(4)
(5)
(i) To repair, within one year from the date of conditional conveyance of theproperty to the homesteader, any defects that pose a substantial danger tohealth and safety;
(ii) To make or cause to be made additional repairs and improvementsnecessary to meet the applicable local standards for decent, safe, and sanitaryhousing within three years from the date of conditional conveyance of theproperty to the homesteader, and to comply with any energy conservation measuresdesignated by the LUHA as part of the repairs;
(iii) To occupy the property as his or her principal residence for not lessthan five consecutive years from the date of initial occupancy except asotherwise approved in writing by HUD on a case-by-case basis when emergencyconditions make compliance with this requirement infeasible;
(iv) To permit reasonable inspections at reasonable times by employees ordesignated agents of the LUHA to determine compliance with the agreement; and
(v) To surrender possession of, and any interest in, the property uponmaterial breach of the homesteader agreement (including default on anyrehabilitation financing secured by the property), as determined by the LUHA inaccordance with this part.
(6)
(7)
(8)
(c)
(2)
(i) Act as LUHA in its own name, while identifying within its administrativeorganization a lead department or agency to act as the primary contact point forHUD;
(ii) Designate, and enter into a written agreement with, a legally separatepublic body or agency to act as LUHA in accordance with this part; or
(iii) Designate, and enter into a written agreement with, a qualifiedcommunity organization (as defined in the Act) to act as LUHA in accordance withthis part.
Participants receiving Community Development Block Grant (CDBG) funds maycharge eligible administrative expenses incurred in operating their urbanhomesteading programs to their otherwise available CDBG administrative funds,provided such administrative expenditures would satisfy other title Irequirements.
(a)
(b) Close-out may be subject to later audit in accordance with§ 590.27(b).
(c)
The LUHA shall maintain adequate financial records, property dispositiondocuments, supporting documents, statistical records, and all other recordspertinent to the local urban homesteading program until fee simple title hasbeen conveyed to all homesteaders, generally a five-year period. The LUHA willalso maintain current and accurate data on the race and ethnicity of programbeneficiaries.
(a)
(b)
(a) HUD may review the performance of each active LUHA as necessary, asdetermined by HUD, to determine whether:
(1) The program complies with the urban homesteading program participationagreement and certifications, the Act, this part, and other applicable Federallaws and regulations;
(2) The LUHA is carrying out its program substantially as approved by HUD;
(3) The federally-owned properties the LUHA selects are suitable forhomesteading and rehabilitation;
(4) The LUHA is making reasonable progress in moving properties through thestages of the homesteading process, including acquisition, homesteaderselection, conditional conveyance, rehabilitation, and final conveyance.
(5) The improvements in neighborhood public facilities and services providedfor in the coordinated approach toward neighborhood improvement are occurring ona timely basis; and
(6) The LUHA has a continuing administrative and legal capacity to carry outthe approved program in a cost-effective and timely manner.
(b) In reviewing a LUHA's performance, HUD will consider all availableevidence, which may include, but need not be limited to, the following:
(1) Records maintained by the LUHA;
(2) Results of HUD's monitoring of the LUHA's performance;
(3) Audit reports, whether conducted by the LUHA or by HUD auditors;
(4) Records of comments and complaints by citizens and organizations; and
(5) Litigation history.
(c) LUHAs shall supply data and make available records necessary for HUD'smonitoring of the LUHA's local urban homesteading program.
When HUD determines on the basis of its review that the LUHA's performancedoes not meet the standards specified in § 590.29(a), HUD shall takeone or more of the following corrective or remedial actions, as appropriate inthe circumstances:
(a) Issue a letter of warning that advises the LUHA of the deficiency andputs it on notice that HUD will take more serious corrective and remedial actionif the LUHA does not correct the deficiency, or if it is repeated;
(b) Advise the LUHA to suspend, discontinue or not incur costs for identifieddefective aspects of the local program;
(c) [Reserved]
(d) In cases of continued substantial noncompliance, terminate the urbanhomesteading program participation agreement, close out the program and advisethe LUHA of the reasons for such action; or
(e) Where HUD determines that a LUHA has, contrary to its obligations under§ 590.7(b), converted a property received under this part to its ownuse, failed to adequately preserve and protect the property, failed to timelysecure a homesteader for the property, or received excessive consideration forconveyance of the property, HUD may direct the LUHA to repay to HUD either theamount of compensation HUD finds that the LUHA has received for the property orthe amount of section 810 funds expended for the property, as HUD determinesappropriate.
42 U.S.C. 3535(d) and 5318a.
(a)
(b)
(1) A depository institution, the accounts of which are insured pursuant tothe Federal Deposit Insurance Act, 12 U.S.C. 1811 et seq., or the Federal CreditUnion Act, 12 U.S.C. 1751 et seq., and any subsidiary (as such term is definedin 12 U.S.C. 1813(w)) thereof;
(2) A depository institution holding company and any subsidiary (as such termis defined in 12 U.S.C. 1813(w)) thereof; or
(3) A company at least 75 percent of the common stock of which is owned byone or more insured depository institutions or depository institution holdingcompanies.
(a)
(1) The organization must be incorporated as a private, voluntary, nonprofitcorporation under the laws of the State in which it operates;
(2) The organization must be responsible through a governing body to theresidents of the neighborhood it serves, and not less than 51 percent of themembers of the governing body must be residents of the neighborhood;
(3) The organization must have conducted business for at least one year;
(4) The organization must operate within an area that meets at least one ofthe following criteria:
(i) The area meets the requirements for Federal assistance under section 119of the Housing and Community Development Act of 1974, 42 U.S.C. 5318;
(ii) The area is designated as an Enterprise Community or Empowerment Zoneunder Federal law as enacted;
(iii) The area is designated as an enterprise zone under State law and isrecognized by the Secretary as a State enterprise zone for purposes of thispart; or
(iv) The area is a qualified distressed community within the meaning ofsection 233(b)(1) of the Bank Enterprise Act of 1991, 12 U.S.C. 1834a(b)(1); and
(5) The organization must have conducted one or more eligible neighborhooddevelopment activities that primarily benefit low- and moderate-income persons.
(b)
In addition, an applicant must meet the following threshold requirements:
(a) Specify a management business plan for accomplishing one or more of theeligible activities specified in § 594.10;
(b) Specify a strategy for achieving greater long-term private sectorsupport, especially in cooperation with a neighborhood development fundingorganization; and
(c) Specify a strategy for increasing the capacity of the applicant.
Eligible activities include, but are not limited to, the following:
(a) Developing economic development activities that include:
(1) Creating permanent jobs in the neighborhood; or
(2) Establishing or expanding businesses within the neighborhood;
(b) Developing new housing, rehabilitating existing housing, or managinghousing stock within the neighborhood;
(c) Developing delivery mechanisms for essential services that have lastingbenefits to the neighborhood; and
(d) Planning, promoting, or financing voluntary neighborhood improvementefforts.
(a)
(b)
(a)
(1) The degree of economic distress and the benefit to low- and moderate-income residents of the neighborhood;
(2) The past performance in carrying out eligible activities, and staffcapability;
(3) The quality of the Management/Business Plan;
(4) The evidence of coordination and resident participation; and
(5) The quality of the strategy to increase the capacity of the organizationand the strategy developed for meeting long-term financial needs.
(b)
(a)
(b) Applications shall be submitted in accordance with the time, place, andcontent described in the NOFA.
(a)
(b)
However, if independent evidence is available that tends to challenge in asubstantial manner an applicant's certification, HUD may require furtherinformation or assurances to be submitted in order to determine whether theapplicant's certification is satisfactory.
Project administration will be governed by the terms of the grant agreement.
(a) For all proposed actions or activities that are not consideredcategorically excluded under 24 CFR 50.20, HUD will perform the appropriateenvironmental reviews under the National Environmental Policy Act (NEPA).
(b) Whether the action or activity is categorically excluded from NEPA reviewor not, HUD will comply also with other applicable requirements of environmentalstatutes, Executive Orders, and HUD standards listed in 24 CFR 50.4. Theenvironmental reviews will be performed before award of a grant. Grantees shalladhere to all assurances applicable to environmental concerns as contained inthe RFGA and grant agreements.
Each participating neighborhood development organization must certify that itwill carry out activities assisted under the program in compliance with thenondiscrimination and equal opportunity requirements set forth in 24 CFR part 5and:
(a) The requirements at 24 CFR part 200, subpart M;
(b) The prohibitions against discrimination and related requirements ofsection 109 of the Housing and Community Development Act of 1974 (42 U.S.C.5309);
(c) The requirements of the Americans with Disabilities Act (42 U.S.C.12181-12189) and implementing regulations at 28 CFR part 36, asapplicable;
(d) The Consolidated Plan of the appropriate unit of general localgovernment; and
(e) Other Federal requirements as specified in the applicable NOFA andapplication kit.
26 U.S.C. 1391; 42 U.S.C. 3535(d).
(a) This part establishes policies and procedures applicable to urbanEmpowerment Zones and Enterprise Communities, authorized under subchapter U ofthe Internal Revenue Code of 1986, as amended, relating to the designation andtreatment of Empowerment Zones, Enterprise Communities and Rural DevelopmentInvestment Areas.
(b) This part contains provisions relating to area requirements, thenomination process for urban Empowerment Zones and urban Enterprise Communities,and the designation and administration of these Zones and Communities by HUD.Provisions dealing with the nomination and designation of rural EmpowermentZones and Enterprise Communities will be promulgated by the Department ofAgriculture. HUD and the Department of Agriculture will consult in all cases inwhich nominated areas possess both urban and rural characteristics, and willutilize a flexible approach in determining the appropriate designation.
The purpose of this part is to provide for the establishment of EmpowermentZones and Enterprise Communities in urban areas, to stimulate the creation ofnew jobs, particularly for the disadvantaged and long-term unemployed, and topromote revitalization of economically distressed areas.
The terms
(1) Any area that lies inside a Metropolitan Area (MA), as designated by theOffice of Management and Budget; or
(2) Any area outside an MA if the jurisdiction of the nominating localgovernment has a population of 20,000 or more, or documents the urban characterof the area.
(a)
(b)
(1) The close of the tenth calendar year beginning on or after the date ofdesignation;
(2) The termination date designated by the State and local governments intheir application for nomination; or
(3) The date the Secretary modifies or revokes the designation, in accordancewith § 597.402 or 597.403.
A nominated urban area may be eligible for designation pursuant to this partonly if the area:
(a) Has a maximum population which is the lesser of:
(1) 200,000; or
(2) The greater of 50,000 or ten percent of the population of the mostpopulous city located within the nominated area;
(b) Is one of pervasive poverty, unemployment and general distress, asdescribed in § 597.102;
(c) Does not exceed twenty square miles in total land area;
(d) Has a continuous boundary, or consists of not more than threenoncontiguous parcels;
(e) Is located entirely within the jurisdiction of the unit or units ofgeneral local government making the nomination, and is located in no more thantwo contiguous States; and
(f) Does not include any portion of a central business district, as this termis used in the most recent Census of Retail Trade, unless the poverty rate foreach population census tract in the district is not less than 35 percent for anEmpowerment Zone and 30 percent for an Enterprise Community.
(a)
(b)
(a)
(1) Poverty is widespread throughout the nominated area; or
(2) Poverty has become entrenched or intractable over time (throughcomparison of 1980 and 1990 census data or other relevant evidence); or
(3) That no portion of the nominated area contains any component areas of anaffluent character.
(b)
(1) Data indicating that the weighted average rate of unemployment for thenominated area is not less than the national average rate of unemployment; or
(2) Evidence of especially severe economic conditions, such as military baseor plant closings or other conditions which have brought about significant jobdislocation within the nominated area.
(c)
(a)
(1) In each census tract within a nominated urban area, the poverty rateshall be not less than 20 percent;
(2) For at least 90 percent of the population census tracts within thenominated urban area, the poverty rate shall not be less than 25 percent; and
(3) For at least 50 percent of the population census tracts within thenominated urban area, the poverty rate shall be not less than 35 percent.
(b)
(2)
(3)
(i) The 20 percent threshold in paragraph (a)(1) of this section;
(ii) The 25 percent threshold in paragraph (a)(2) of this section; and
(iii) The 35 percent threshold in paragraph (a)(3) of this section;
(4)
(c)
(d)
(a)
(1) The urban area meets the requirements for eligibility set forth in§§ 597.100 and 597.103;
(2) The urban area is within the jurisdiction of a State or States and localgovernment(s) that have the authority to nominate the urban area for designationand that provide written assurances satisfactory to the Secretary that thestrategic plan described in paragraph (c) of this section will be implemented;
(3) All information furnished by the nominating State(s) and localgovernment(s) is determined by the Secretary to be reasonably accurate; and
(4) The State(s) and local government(s) certify that no portion of the areanominated is already included in an Empowerment Zone or Enterprise Community orin an area otherwise nominated to be designated under this section.
(b)
(1) Demonstrates that the nominated urban area satisfies the eligibilitycriteria set forth at § 597.100;
(2) Includes a strategic plan, as described in paragraph (c) of this section;and
(3) Includes such other information as may be required by HUD in theapplication or in a Notice Inviting Applications, to be published in the
(c)
(1) Economic opportunity, including job creation within the community andthroughout the region, as well as entrepreneurial initiatives, small businessexpansion and training for jobs that offer upward mobility;
(2) Sustainable community development, to advance the creation of liveableand vibrant communities through comprehensive approaches that coordinateeconomic, physical, community and human development;
(3) Community-based partnerships, involving the participation of all segmentsof the community, including the political and governmental leadership, communitygroups, health and social service groups, environmental groups, religiousorganizations, the private and non-profit sectors, centers of learning and othercommunity institutions; and
(4) Strategic vision for change, which identifies what the community willbecome and a strategic map for revitalization. The vision should build on assetsand coordinate a response to community needs in a comprehensive fashion. Itshould also set goals and performance benchmarks for measuring progress andestablish a framework for evaluating and adjusting the revitalization plan.
(d)
(1) Indicate and briefly describe the specific groups, organizations, andindividuals participating in the production of the plan and describe the historyof these groups in the community;
(2) Explain how participants were selected and provide evidence that theparticipants, taken as a whole, broadly represent the racial, cultural andeconomic diversity of the community;
(3) Describe the role of the participants in the creation, development andfuture implementation of the plan;
(4) Identify two or three topics addressed in the plan that caused the mostserious disagreements among participants and describe how those disagreementswere resolved;
(5) Explain how the community participated in choosing the area to be
(6) Provide evidence that key participants have the capacity to implement theplan;
(7) Provide a brief explanation of the community's vision for revitalizingthe area;
(8) Explain how the vision creates economic opportunity, encourages self-sufficiency and promotes sustainable community development;
(9) Identify key needs of the area and the current barriers to achieving thevision for it, including a description of poverty and general distress, barriersto economic opportunity and development and barriers to human development;
(10) Discuss how the vision is related to the assets and needs of the areaand its surroundings;
(11) Describe the ways in which the community's approaches to economicdevelopment, social/human services, transportation, housing, sustainablecommunity development, public safety, drug abuse prevention, and educational andenvironmental concerns will be addressed in a coordinated fashion; and explainhow these linkages support the community's vision;
(12) Indicate how all Social Services Block Grant funds for designatedEmpowerment Zones and Enterprise Communities (EZ/EC SSBG funds) will beutilized.
(i) In doing so, the strategic plan shall provide the following information:
(A) A commitment by the applicant, as well as by the nominating State-chartered economic development corporation or State government(s) and localgovernments, that the EZ/EC SSBG funds will be used to supplement, not replace,other Federal or non-Federal funds available for financing for services oractivities which can be used to achieve or maintain the goals outlined inparagraph (d)(12) of this section;
(B) A description of the entities that will administer the EZ/EC SSBG funds;
(C) A certification by such entities that they will provide periodic reportson the use of the EZ/EC SSBG funds; and
(D) A detailed description of all the activities to be financed with theEZ/EC SSBG funds and how all such funds will be allocated.
(ii) The EZ/EC SSBG funds must be used to achieve or maintain the followinggoals. The goals may be achieved by undertaking one or more of the followingprogram options:
(A) The goal of economic self-support to prevent, reduce or eliminatedependencies, through one or more of the following program options:
(
(
(
(B) The goal of self-sufficiency, including reduction or prevention ofdependencies, through one or more of the following program options:
(
(
(C) The goal of prevention or remedying the neglect, abuse or exploitation ofchildren and/or adults unable to protect their own interest; and the goal ofpreservation, rehabilitation, or reuniting of families, through one or more ofthe following program options:
(
(
(iii) Designated Empowerment Zone and Enterprise Communities may work toachieve or maintain the goals outlined in paragraphs (d)(12)(ii)(A) and (B) ofthis section by using EZ/EC SSBG funds to capitalize revolving or micro-enterprise loan funds which benefit low-income residents of the designatedEmpowerment Zones and Enterprise Communities. Similarly, the Zones andCommunities may work to achieve or maintain the goals outlined in paragraphs(d)(12)(ii)(A) and (B) of this section by using the EZ/EC SSBG funds to createjobs and promote economic opportunity for low-income families and individualsthrough matching grants, loans, or investments in community developmentfinancial institutions.
(iv) If the EZ/EC SSBG funds are to be used for program options not includedin paragraph (d)(12)(ii) of this section, the strategic plan must indicate howthe proposed activities meet the goals set forth in paragraph (d)(12)(ii) ofthis section and the reasons the approved program options were not pursued.
(v) To the extent that the EZ/EC SSBG funds are to be used for the programoptions included in paragraph (d)(12)(ii) of this section, they may be used forthe following activities, in addition to those activities permitted by section2005 of the Social Security Act (42 U.S.C. 1379d):
(A) To purchase or improve land or facilities;
(B) To make cash payments to individuals for subsistence or room and board;
(C) To make wage payments to individuals as a social service;
(D) To make cash payments for medical care; and
(E) To provide social services to institutionalized persons.
(vi) The State must obligate the EZ/EC SSBG funds in accordance with thestrategic plan within 2 years from the date of payment to the State, or remitthe unobligated funds to the Secretary of Health and Human Services (HHS).
(vii) The strategic plan must indicate how all the EZ/EC SSBG funds will beinvested and used for the period of designation of the Empowerment Zone orEnterprise Community.
(viii) The strategic plan must provide for periodic reporting of informationby the State in which the Empowerment Zone or Enterprise Community is located.
(13) Indicate how tax benefits for designated Zones and Communities, Stateand local resources, existing Federal resources available to the locality andadditional Federal resources believed necessary to implement the strategic planwill be utilized within the Empowerment Zone or Enterprise Community;
(14) Indicate a level of commitment necessary to ensure that these resourceswill be available to the area upon designation;
(15) Identify the Federal resources applied for or for which applications areplanned; if a strategic plan indicates how Community Development Block Grant(CDBG), HOME, Emergency Shelter Grant, and Housing Opportunities for People withAIDS (HOPWA) funds will be expended (for the entire locality including thenominated area), the strategic plan will be considered by the Office ofCommunity Planning and Development at HUD toward satisfying the consolidatedplanning requirements that will soon be issued for these programs;
(16) Identify private resources and support, including assistance frombusiness, non-profit organizations and foundations, which are available to beleveraged with public resources; and provide assurances that these resourceswill be made available to the area upon designation;
(17) Identify changes necessary to Federal rules and regulations necessary toimplement the plan, including specific paperwork or other Federal programrequirements that must be altered to permit effective implementation of thestrategic plan; and
(18) Identify specific regulatory and other impediments to implementing thestrategic plan for which waivers
(19) Demonstrate how State and local governments will reinvent themselves tohelp implement the plan, by identifying changes that will be made in State andlocal organizations, processes and procedures, including laws and ordinances;
(20) Explain how different agencies in State and local governments will worktogether in new responsive ways to implement the strategic plan;
(21) Identify the specific tasks and timetable necessary to implement theplan;
(22) Describe the partnerships that will be established to carry out theplan;
(23) Explain how the plan will be regularly revised to reflect newinformation and opportunities; and
(24) Identify benchmarks and goals that should be used in evaluatingperformance in implementing the plan.
(e)
(1) The establishment of a new branch, affiliate, or subsidiary will notresult in a decrease in employment in the area of original location or in anyother area where the existing business entity conducts business operations; and
(2) There is no reason to believe that the new branch, affiliate, orsubsidiary is being established with the intention of closing down theoperations of the existing business entity in the area of its original locationor in any other area where the existing business entity conducts businessoperations.
(f)
(g)
(1) Economic problems, through measures designed to create job training andemployment opportunities; support for business start-up or expansion; ordevelopment of community institutions;
(2) Human concerns, through the provision of social services, such asrehabilitation and treatment programs or the provision of training, education,or other services within the affected area;
(3) Community needs, such as the expansion of housing stock and homeownershipopportunities, efforts to reduce homelessness, efforts to promote fair housingand equal opportunity, efforts to reduce and prevent crime and improve securityin the area; and
(4) Physical improvements, such as the provision or improvement ofrecreational areas, transportation or other public services within the affectedarea, and improvements to the infrastructure and environmental protection.
The strategic plan will be evaluated for effectiveness as part of thedesignation process for nominated urban areas described in § 597.301.On the basis of this evaluation, HUD may negotiate reasonable modifications ofthe strategic plan or of the boundaries of a nominated urban area or the periodfor which such designation shall remain in full effect. The effectiveness of thestrategic plan will be determined in accordance with the four key principles setforth in § 597.200(c). HUD will review each plan submitted in termsof the four equally weighted key principles, and of such other elements of thesekey principles as are appropriate to address the opportunities and problems ofeach nominated area which may include:
(a)
(2) The extent to which residents will achieve a real economic stake in theZone or Community;
(3) The extent to which residents will be employed in the process ofimplementing the plan and in all phases of economic and community development;
(4) The extent to which residents will be linked with employers and jobsthroughout the entire region or metropolitan area, and the way in whichresidents will receive training, assistance, and family support to becomeeconomically self-sufficient;
(5) The extent to which economic revitalization in the Zone or Communityinterrelates with the broader regional or metropolitan economies; and
(6) The extent to which lending and investment opportunities will increasewithin the Zone or Community through the establishment of mechanisms toencourage community investment and to create new economic growth.
(b)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(c)
(2)
(3)
(4)
(d)
(2)
(3)
(4)
(a)
(b)
(1) The nominated urban area satisfies the boundary tests of§ 597.100(d);
(2) The nominated urban area is one of pervasive poverty, unemployment andgeneral distress, as prescribed by § 597.102;
(3) The nominated urban area satisfies the poverty rate tests set forth in§ 597.103;
(4) The nominated urban area contains no portion of an area that is eitheralready designated as an Empowerment Zone and/or Enterprise Community, or isotherwise included in any other area nominated for designation as an EmpowermentZone and/or Enterprise Community;
(5) Each nominating governmental entity has the authority to:
(i) Nominate the urban area for designation as an Empowerment Zone and/orEnterprise Community;
(ii) Make the State and local commitments required by§ 597.200(d); and
(iii) Provide written assurances satisfactory to the Secretary that thesecommitments will be met.
(6) Provide assurances that the amounts provided to the State for the areaunder section 2007 of title XX of the Social Security Act will not be used tosupplant Federal or non-Federal funds for services and activities
(7) Provide that the nominating governments or corporations agree to makeavailable all information requested by HUD to aid in the evaluation of progressin implementing the strategic plan and reporting on the use of EmpowermentZone/Enterprise Community Social Service Block Grant funds; and
(8) Provide assurances that the nominating State(s) agrees to distribute theEmpowerment Zone/Enterprise Community Social Service Block Grant funds inaccordance with the strategic plan submitted for the designated Zone orCommunity.
(c)
(a)
(b)
(2) The nomination for designation as an Empowerment Zone or EnterpriseCommunity must be received by HUD on or before the time on the date establishedby the Notice Inviting Applications published in the
(c)
(d)
(e)
(a)
(1) The effectiveness of the strategic plan in accordance with the keyprinciples and evaluative criteria set out in § 597.201;
(2) The effectiveness of the assurances made pursuant to§ 597.200(a)(2) that the strategic plan will be implemented;
(3) The extent to which an application proposes activities that are creativeand innovative in comparison to other applications; and
(4) Such other factors established by HUD. Such factors include, but are notlimited to, the degree of need demonstrated by the nominated area for assistanceunder this part. If other factors are established by HUD, a
(b)
HUD will require periodic reports for the Empowerment Zones and EnterpriseCommunities designated pursuant to this part. These reports will identify thecommunity, local government and State actions which have been taken inaccordance with the strategic plan. In addition to these reports, such otherinformation relating to designated Empowerment Zones and Enterprise Communitiesas HUD shall request from time to time, including information documentingnondiscrimination in hiring and employment by businesses within the designatedEmpowerment Zone or Enterprise Community, shall be submitted promptly.
HUD will regularly evaluate the progress of the strategic plan in eachdesignated Empowerment Zone and Enterprise Community on the basis of performancereviews to be conducted on site and other information submitted. HUD will alsocommission evaluations of the Empowerment Zone program as a whole by animpartial third party, at such intervals as HUD may establish.
(a)
(b)
(a)
(1) Has modified the boundaries of the area;
(2) Has failed to make progress in achieving the benchmarks set forth in thestrategic plan; or
(3) Has not complied substantially with the strategic plan.
(b)
(1) Advising that the Secretary has determined that the nominating localgovernment(s) and/or State(s) has:
(i) Modified the boundaries of the area; or
(ii) Is not complying substantially with, or has failed to make progress inachieving the benchmarks set forth in the strategic plan prepared pursuant to§ 597.200(c); and
(2) Requesting a reply from all involved parties within 90 days of thereceipt of this letter of warning.
(c)
(d)
No urban Empowerment Zone or Enterprise Community may include any area withinan Indian reservation.
If more than one State or local government seeks to nominate an urban areaunder this part, any reference to or requirement of this part shall apply to allsuch governments.
Any urban area nominated by an Economic Development Corporation chartered bythe State in which it is located or by the District of Columbia shall be treatedas nominated by a State and local government.
Population and poverty rate data shall be determined by the most recentdecennial census data available.
26 U.S.C. 1391; 42 U.S.C. 3535(d).
(a) This part establishes policies and procedures applicable to the secondand third rounds of designations of urban Empowerment Zones, authorized underSubchapter U of the Internal Revenue Code of 1986 (26 U.S.C. 1391, et seq.), asamended. Any reference to, or requirement of, Round II in this part is also areference to, or requirement of, Round III.
(b) This part contains provisions relating to area requirements, thenomination process for urban Empowerment Zones, and the designation andevaluation of these Zones by HUD. Provisions dealing with the nomination anddesignation of rural Empowerment Zones
The purpose of this part is to provide for the establishment of EmpowermentZones in urban areas, to stimulate the creation of new jobs—empoweringlow-income persons and families receiving public assistance to becomeeconomically self-sufficient—and to promote revitalization of economicallydistressed areas.
In addition to the definitions of “HUD” and“Secretary” found in 24 CFR 5.100, the following definitions applyto this part.
(1) An area that lies inside a Metropolitan Statistical Area (MSA), asdesignated by the Office of Management and Budget; or
(2) An area outside an MSA if the jurisdiction of the nominating localgovernment documents:
(i) The urban character of the area, or
(ii) The link between the area and the proposed area in the MSA.
The designation of an urban area as an Empowerment Zone will remain in fulleffect during the period beginning on the date of designation and ending on theearliest of:
(a) The close of the tenth calendar year beginning on the date ofdesignation;
(b) The termination date designated by the State and local Governments intheir application for nomination; or
(c) The date the Secretary modifies or revokes the designation.
A nominated urban area is eligible for designation in accordance with thispart only if the area:
(a) Has a maximum population that is the lesser of:
(1) 200,000; or
(2) The greater of 50,000 or ten percent of the population of the mostpopulous city located within the nominated area;
(b) Is one of pervasive poverty, unemployment and general distress, asdescribed in § 598.110;
(c) Does not exceed twenty square miles in total land area, excluding up tothree noncontiguous developable sites that are exempt from the poverty criteria;
(d) Has a continuous boundary, or consists of not more than three non-contiguous parcels meeting the poverty criteria, and not more than threenoncontiguous developable sites exempt under § 598.115(c)(1) from thepoverty rate criteria;
(e) Is located entirely within the jurisdiction of the unit or units ofgeneral local government making the nomination, and is located in no more thantwo contiguous States; and
(f) Does not include any portion of a central business district, as this termis used in the most recent Census of Retail Trade, unless the poverty rate foreach census tract in the district is not less than 35 percent.
(a)
(b)
(a)
(1) Poverty, as indicated by the number of persons listed as being in povertyin the 1990 Decennial Census, is widespread throughout the nominated area; or
(2) Poverty, as described above, has become entrenched or intractable overtime (through comparison of 1980 and 1990 census data or other relevantevidence).
(b)
(1) The most recent data available indicating that the annual rate ofunemployment for the nominated area is not less than the national annual averagerate of unemployment; or
(2) Evidence of especially severe economic conditions, such as military baseor plant closings or other conditions that have brought about significant jobdislocation within the nominated area.
(c)
(a)
(1) In each census tract within a nominated urban area, the poverty rate mustbe not less than 20 percent; and
(2) For at least 90 percent of the census tracts within the nominated urbanarea, the poverty rate must be not less than 25 percent.
(b)
(2)
(c)
(2) The total area of the noncontiguous parcels that are developable sitesexempt from the poverty rate criteria of paragraph (a) of this section must notexceed 2,000 acres.
(3) A nominated urban area must not contain a noncontiguous parcel unlesssuch parcel separately meets the criteria set forth at paragraphs (a)(1) and (2)of this section, except for up to three developable sites.
(4) There must not be more than three noncontiguous parcels, except that upto three developable sites are not included in this limit.
Applicants for empowerment zone designation must be nominated by the State orStates and one or more local government(s) in which the area is located, exceptas provided in §§ 598.500, 598.510, and 598.515. The nominationmust be submitted in a form to be prescribed by HUD in the application and inthe document announcing the initiation of the designation process, and mustcontain complete and accurate information.
(a)
(1) The urban area is within the jurisdiction of a State or States and localgovernment(s) that have the authority to nominate the urban area for designationand that provide written assurances satisfactory to the Secretary that thestrategic plan described in § 598.215 will be implemented, and thesegovernments submit its nomination;
(2) All information furnished by the nominating State(s) and localgovernment(s) is determined by the Secretary to be reasonably accurate; and
(3) The application for designation is complete, as described in paragraph(b) of this section.
(b)
(1) Demonstrate that the nominated urban area satisfies the eligibilitycriteria set forth in subpart B of this part;
(2) Include a strategic plan, as described in § 598.215;
(3) Include the certifications described in § 598.210;
(4) Include the 1990 census maps showing the following:
(i) The boundaries of the local government(s): and
(ii) The boundaries of the nominated area, including any developable sites;and
(5) Include such other information as may be required by HUD in theapplication or in the document announcing the initiation of the designationprocess.
Certifications must be submitted by the State(s) and local government(s)requesting designation stating that:
(a) The nominated urban area satisfies the boundary tests of§ 598.100(d);
(b) The nominated urban area is one of pervasive poverty, unemployment andgeneral distress, as prescribed by § 598.110;
(c) The nominated urban area contains no portion of an area that is includedin an Empowerment Zone or any other area currently nominated for designation asan Empowerment Zone (but it may include an Enterprise Community);
(d) Each nominating governmental entity has the authority to:
(1) Nominate the urban area for designation as an Empowerment Zone;
(2) Make the commitments required of nominating entities by§ 598.215(b); and
(3) Provide written assurances satisfactory to the Secretary that thestrategic plan will be implemented.
(e) Provide assurances that any Round II EZ/EC SSBG funds that may beprovided to the State for the area will not be used to supplant Federal or non-Federal funds for services and activities that promote the purposes of section2007 of the Social Security Act;
(f) Provide that the nominating governments or corporations agree to makeavailable all information requested by HUD to aid in the evaluation of progressin implementing the strategic plan and reporting on the use of EZ/EC SSBG funds;and
(g) Provide assurances that the nominating State(s) agrees to distribute anyEZ/EC SSBG funds that may be awarded to it for use by a designated EmpowermentZone for programs, services, and activities included in the Empowerment Zone'sstrategic plan to the extent they are consistent with section 2007(a) of theSocial Security Act as well as other applicable Federal, State, and local lawsand regulations.
(h) Provide assurances that the nominating governments will administer theEmpowerment Zone program in a manner which affirmatively furthers fair housingon the bases of race, color, national origin, religion, sex, disability, andfamilial status (presence of children).
(a)
(1) Strategic Vision for Change, which identifies what the community willbecome and a strategic map for revitalization. The vision should build on assetsand coordinate a response to community needs in a comprehensive fashion. It alsoshould set goals and performance benchmarks for measuring progress and establisha framework for evaluating and adjusting the revitalization plan;
(2) Community-Based Partnerships, involving the participation of all segmentsof the community, including the political and governmental leadership, communitygroups, local public health and social service departments and nonprofit groupsproviding similar services, environmental groups, local transportation planningentities, public and private schools, religious organizations, the private andnonprofit sectors, centers of learning, and other community institutions andindividual citizens;
(3) Economic Opportunity, including job creation within the community andthroughout the region, entrepreneurial initiatives, small business expansion,job training and other important job readiness and job support services, such asaffordable child care and transportation services, that may enable residents tobe employed in jobs that offer upward mobility;
(4) Sustainable Community Development, to advance the creation of livable andvibrant communities through comprehensive approaches that coordinate economic,physical, environmental, community and human development. These approachesshould preserve the environment and historic landmarks, address“brownfields” clean-up and redevelopment, explore the economicdevelopment advantages of energy efficiency and use of renewable energyresources, and improve transportation, education, public safety, and enhancedaccess to information and technology among all segments of the community.
(b)
(1)
(2)
(i)
(ii)
(3)
(4)
(i)
(A) A narrative outlining the specific projects and programs that will beimplemented that will result in the achievement of the community's goals;
(B) Proposed timelines for implementing identified projects and programs;
(C) Identification of lead implementers of identified projects and programs,along with innovative partnerships that will be utilized to insure maximumcommunity participation and project sustainability;
(D) Proposed budgets for each identified project or program, includingprojected costs, and sources of funding. Information on sources of funding willinclude whether the funding is anticipated or committed, and whether funding isconditioned upon the designation of the community as an Empowerment Zone.Evidence of committed funding is required, and may include letters ofcommitment, resolutions of support, or similar documentation as outlined inparagraph (b)(6) of this section. Funding may include cash and in-kind supportfrom Federal, State and local governments, non-profit organizations,foundations, private businesses and other entities that will assist in theimplementation of the strategic plan. Budgets will also include details aboutproposed uses of any Round II EZ/EC SSBG funds that may become available fromHHS, in accordance with Guidelines on Eligible Uses of EZ/EC SSBGFunds.
(E) Baselines and proposed measurable outputs;
(ii)
(iii)
(iv)
(A) The name of the proposed lead implementing entity, and other major
(B) Evidence that the lead implementing entity and other key entitiesparticipating in the strategic plan implementation have the capacity toimplement the plan;
(C) Proposed composition and date of establishment of any governance boards,advisory boards, commissions or similar bodies that will be established tomanage the implementation of the strategic plan. Specific information will beincluded regarding representation of residents and businesses of the proposedEmpowerment Zone area, and how members of the boards or commissions will beselected;
(D) The relationship between any governance structure created and localgovernments and other major community or regional organizations, such as ametropolitan planning organization, operating in the same geographic area;
(E) The methods by which stakeholders within the Zone will be kept informedabout Zone activities and progress in implementing the strategic plan, includinga description of plans for meetings open to the public. The community shouldutilize modern communication techniques and incorporate the Internet in order toenhance the communication and access to information among all stakeholders andparticipants; and
(F) The methods and procedures that will ensure continuing community andgrassroots participation in the implementation of the strategic plan and in thegovernance of the Zone's activities.
(v)
(5)
(i) Explain how the community participated in choosing the area that is beingnominated and why the area was nominated;
(ii) Indicate and briefly describe the specific groups, organizations, andindividuals participating in the production of the plan and describe the historyof these groups in the community;
(iii) Explain how participants were selected and provide evidence that theparticipants, taken as a whole, broadly represent the racial, cultural, gender,and economic diversity of the community;
(iv) Describe the role of the participants in the creation, development andfuture implementation of the plan; and
(v) Identify two or three topics addressed in the plan that caused the mostserious disagreements among participants and describe how those disagreementswere resolved; and
(6)
(c)
(1) The establishment of the new branch, affiliate, or subsidiary will notresult in a decrease in employment in the area of original location or in anyother area where the existing business entity conducts business operations; and
(2) There is no reason to believe that the new branch, affiliate, orsubsidiary is being established with the intention of closing down theoperations of the existing business entity in the area of its original locationor in any other
(a)
(b)
(c)
In choosing among nominated urban areas eligible for designation, theSecretary will consider:
(a)
(b)
(c)
(a) HUD will award planning grants up to $100,000 to each of the EmpowermentZones designated in accordance with this part.
(b) Eligible recipients for these grants are the lead unit of general localgovernment that received designation under this part, or its designee. Theserecipients may subgrant all or part of the planning grant to qualifiedsubgrantees, such as community organizations, agencies of local government,regional planning authorities, or planning consultants.
(c) Eligible planning activities include: hiring and development of staff,consulting services, publication of materials, community outreach andparticipation, governing board training, and similar activities that areintended to:
(1) Expand the planning capacity of the designee local government, thegoverning board, and/or participating entities, such as community organizations;
(2) Help the designee plan the implementation of the strategic plan; and
(3) Help the designee to develop its performance measurement process.
(d) The document announcing the initiation of the designation processdescribes the procedures for award of these planning grants, post-awardreporting requirements with respect to the grants, and the uniform requirementsapplicable to all Federal grants.
Where an empowerment zone's strategic plan or any revision thereof proposesthe use of EZ/EC SSBG funds for activities that are not excluded fromenvironmental review under 24 CFR 50.19(b), an environmental review will beperformed as required by applicable law.
The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846),the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C.4851-4856), and the lead-based paint requirements set forth at part 35,subparts A, B, J, K, and R of this title apply to the activities funded by HUDunder this program.
After designation, an area designated an EZ must make available to the publiccopies of the strategic plan and supporting documentation and must conduct itsmeetings in accordance with applicable open meetings statutes. HUD may make thestrategic plan and supporting documentation available to members of the public.
(a) Empowerment Zones designated in accordance with this part must submitperiodic reports to HUD. These reports must identify the community, localgovernment and State actions that have been taken in accordance with thestrategic plan and provide notice of updates and modifications to the strategicplan. In addition to these reports, such other information relating todesignated Empowerment Zones as HUD requests from time to time, includinginformation documenting nondiscrimination in hiring and employment by businesseswithin the designated Empowerment Zone, must be submitted promptly.
(b) The States must submit periodic reports to HUD, demonstrating compliancewith the certifications it is required to submit in accordance with this part.
HUD will regularly evaluate the progress of implementation of the strategicplan in each designated Empowerment Zone on the basis of available information.HUD also may commission evaluations of the Empowerment Zone program as a wholeby an impartial third party, at such intervals as HUD may establish.
(a) On the basis of the periodic progress determinations described in§ 598.420, and subject to the provisions relating to the revocationof designation in § 598.430, HUD will make findings on the continuingeligibility for and the validity of the designation of any Empowerment Zone.
(b) HUD may approve an Empowerment Zone's request for boundary modification,subject to the requirements specified in subpart B of this part.
(a)
(1) Has modified the boundaries of the area without written approval fromHUD;
(2) Has failed to make progress in implementing the strategic plan; or
(3) Has not complied substantially with the strategic plan.
(b)
(1) Advising that the Secretary has determined that the nominating localgovernment(s) and/or State(s) has:
(i) Modified the boundaries of the area without written approval from HUD; or
(ii) Is not complying substantially with, or has failed to make progress inimplementing the strategic plan; and
(2) Requesting a reply from the nominating entities within 90 days of thereceipt of this letter of warning.
(c)
(d)
(e)
(f)
(a) An area within an Indian reservation (as defined in section 168(j)(6) ifthe Internal Revenue Code, 26 U.S.C. 168(j)(6)) may be included in an areanominated as an Empowerment Zone by State and local governments. An areacompletely within an Indian reservation may be nominated by the reservationgoverning body and, in that case, the area is treated as if it also werenominated by a State and a local government. Where two (or more) governingbodies have joint jurisdiction over an Indian reservation, the nomination of areservation area must be a joint nomination.
(b) For purposes of paragraph (a) of this section, a reservation governingbody must be the governing body of an Indian entity recognized and eligible toreceive services from the Bureau of Indian Affairs, United States Department ofInterior.
If more than one State or local government seeks to nominate an urban areaunder this part, any reference to or requirement of this part applies to allsuch governments.
Any urban area nominated by an Economic Development Corporation chartered bythe State in which it is located or by the District of Columbia shall be treatedas nominated by a State and local government.
A nominated area in Alaska or Hawaii is deemed to satisfy the criteria ofdistress, size, and poverty rate detailed in § 598.100(b), (c), (d),and (f), and § 598.110 if, for each census tract or block numberingarea within the area, 20 percent or more of the families have income that is 50percent or less of the statewide median family income (as determined undersection 143 of the Internal Revenue Code).
26 U.S.C. 1400E; 42 U.S.C. 3535(d).
(a) This part establishes requirements and procedures applicable to thedesignation of Renewal Communities (RCs) through December 31, 2001, authorizedunder Subchapter X of the Internal Revenue Code of 1986 (26 U.S.C. 1400E, etseq.). HUD may choose to use these requirements and procedures in whole or inpart for any future Renewal Community designations that may be authorized.
(b) This part contains provisions relating to area requirements, thenomination process for Renewal Communities, and the evaluation and designationof nominated areas by HUD.
In addition to the definitions of “HUD” and“Secretary” found in 24 CFR 5.100, the following definitions applyto this part:
(1) Which is within a local government jurisdiction or jurisdictions with apopulation of less than 50,000; or
(2) Which is outside of an MA; or
(3) Which is determined by HUD, after consultation with the Secretary ofCommerce, to be a rural area. An area may qualify as a rural area under thisparagraph (3) of this definition if:
(i) It is a nominated area that crosses jurisdictional boundaries;
(ii) The total population of the nominated area does not exceed 200,000;
(iii) The nominated area as a whole would not satisfy the requirements ofeither paragraph (1) or (2) of this definition;
(iv) Each portion of the nominated area that is located within a separatejurisdiction meets the requirements of either paragraph (1) or (2) of thisdefinition; and
(v) The area is specifically nominated as a rural area; or
(4) Which does not meet the requirements of either paragraph (1), (2), or (3)of this definition but which is determined by HUD on a case-by-case basis, afterconsultation with the Secretary of Commerce, to be a rural area based oninformation submitted to demonstrate that the nominated area should beconsidered as a rural area.
(a)
(b)
(a)
(b)
(c)
(a)
(1) The area must be within the jurisdiction of one or more localgovernments.
(2) The boundary of the area must be continuous.
(i) The boundary line of the nominated area may be interrupted byjurisdictional boundaries, such as State or county lines, or natural boundaries,such as rivers, as long as the resulting area is entirely within the boundaryline except for the interruptions.
(ii) The nominated area may enclose an area or areas that are excluded fromthe nominated area, as long as each enclosed area to be excluded is within acontinuous boundary line.
(3) The nominated area may be any size, as long as it meets all of therequirements of this part.
(b)
(i) 4,000 if any portion of the area (other than a nominated rural area) islocated within an MA which has a population of 50,000 or greater; or
(ii) 1,000 in any other case.
(2)
(a)
(b)
(c)
(d)
(e)
(2)
(A) Poverty, as indicated by the number of persons listed as being in povertyin the 1990 Decennial Census, is widespread throughout the nominated area; or
(B) Poverty, as described in paragraph (e)(2)(i)(A) of this section, hasbecome entrenched or intractable over time (through comparison of 1980 and 1990census data or other relevant evidence).
(ii)
(A) The most recent data available indicating that the annual rate ofunemployment for the nominated area is not less than the national annual averagerate of unemployment; or
(B) Evidence of especially severe economic conditions, such as military baseor plant closings or other conditions that have brought about significant jobdislocation within the nominated area.
(iii)
(a)
(2)
(ii)
(iii)
(iv)
(v)
(A) A reduction of tax rates or fees applying within the Renewal Community;
(B) An increase in the level of efficiency of local services within theRenewal Community, such as services for residents funded through the FederalTemporary Assistance for Needy Families program and related Federal programsincluding, for example, job support services, child care and after school carefor children of working residents, employment training, transportation servicesand other services that help residents become economically self-sufficient;
(C) Crime reduction strategies, such as crime prevention, including theprovision of crime prevention services by nongovernmental entities;
(D) Actions to reduce, remove, simplify, or streamline governmentalrequirements applying within the Renewal Community, such as:
(
(
(
(
(
(E) Involvement in economic development activities by private entities,organizations, neighborhood organizations, and community groups, particularlythose in the Renewal Community, including a commitment from such privateentities to provide jobs and job training for, and technical, financial, orother assistance to, employers, employees, and residents from the RenewalCommunity;
(F) The gift or sale at below fair market value of surplus real property heldby State or local governments, such as land, homes, and commercial or industrialstructures in the Renewal Community to neighborhood organizations, communitydevelopment corporations, or private companies.
(3)
(b)
(i) Licensing requirements for occupations that do not ordinarily require aprofessional degree;
(ii) Zoning restrictions on home-based businesses which do not create apublic nuisance;
(iii) Permit requirements for street vendors who do not create a publicnuisance;
(iv) Zoning or other restrictions that impede the formation of schools orchild care centers; and
(v) Franchises or other restrictions on competition for businesses providingpublic services, including taxicabs, jitneys, cable television, or trashhauling.
(2)
(c)
(a)
(b)
The basic application submission requirements for nominating an area as aRenewal Community are:
(a)
(b)
(c)
(a)
(1)
(2)
(b)
(2)
(a)
(b)
(c)
(i)
(ii)
(2)
(a)
(b)
(1)
(2)
(a)
(1)
(2)
(3)
(b)
(a)
(2)
(b)
(1)
(2)
(c)
(a)
(b)
Any designation of an area as a Renewal Community will remain in effectduring the period beginning on January 1, 2002, and ending on the earliest of:
(a) December 31, 2009;
(b) The termination date designated by the State and local governments intheir nomination application, if any; or
(c) The date HUD revokes the designation.
The designation of any area as an Empowerment Zone or Enterprise Communityshall cease to be in effect as of the date that the designation of any portionof such area as a Renewal Community takes effect.
Within 30 days of the Renewal Community designation, the State and localgovernments in which the area is located must submit to HUD informationidentifying the coordinating responsible authority (CoRA), which is the entity,organization or persons with the responsibility and authority to achieve theState and local government commitments made at the time of application asrequired by § 599.107 and to undertake the development andadministration of policies, procedures and activities to implement and maximizethe Federal, State and local benefits made available in the Renewal Community.
(a)
(b)
(c)
(d)
(e)
The CoRA may submit requests to HUD to modify the State and local commitmentsmade at the time of application as required by § 599.107 and the taxincentives utilization plans required by § 599.505. Requests mustprovide evidence to support the proposed modifications. HUD will review theproposed modification for consistency with regulatory and statutory requirementsand approve, suggest additional or alternate modifications or deny the requestwithin 30 days.
The CoRA and the State or local governments in which the Renewal Community islocated must submit such periodic reports and provide such additionalinformation as HUD may require.
(a)
(1) Have modified the boundaries of the area; or
(2) Are not complying substantially with, or fail to make progress inachieving the State and local commitments made at the time of application asrequired by § 599.107.
(b)
(1) Advising that HUD has determined that the CoRA and/or State and/or localgovernments in which the area is located have:
(i) Modified the boundaries of the area without written approval from HUD; or
(ii) Are not complying substantially with, or have failed to make progress inachieving the State and local commitments made at the time of application asrequired by § 599.107; and
(2) Requesting a reply from the CoRa and State and local governments in whichthe area is located within 90 days of the receipt of this letter of warning.
(c)
(d)
(e)
(f)