§ 950.630 - Procedures for obtaining approval of a modernization program.

(a) HUD notification. After modernization funds for a particular FFY become available, HUD shall publish in the Federal Register a notice of funding availability (NOFA) and the time frame for submission of the CIAP application, and other pertinent information.

(b) IHA consultation with tribal/local officials and residents/homebuyers. An IHA shall develop the application in consultation with tribal and local officials and with residents and homebuyers, as set forth in § 950.632.

(c) IHA application. An IHA shall submit to HUD an application, in a form prescribed by HUD. Where an IHA has not included all its developments in the CIAP application, HUD may not consider funding any nonemergency work at excluded developments or subsequently approve use of leftover funds at excluded developments.

(d) Completeness review. To be eligible for processing, an application must be physically received by HUD by the time and date specified in the NOFA. Immediately after the application deadline, HUD shall perform a completeness review to determine whether the application is complete, responsive to the NOFA, and acceptable for technical processing.

(1) If the application form or any other essential document, as specified in the NOFA, is missing, the IHA's application will be considered substantially incomplete and, therefore, ineligible for further processing. HUD shall immediately notify the IHA in writing.

(2) If other required documents, as specified in the NOFA, are missing or there is a technical mistake, such as no signature on a submitted form, HUD shall immediately notify the IHA in writing to submit or correct the deficiency within a specified period of time from the date of HUD's written notification. This is not additional time to substantially revise the application. Deficiencies that may be corrected at this time are inadvertently omitted documents or clarifications of previously submitted material and other changes which are not of such a nature as to improve the competitive position of the application.

(3) If an IHA fails to submit or correct the items within the required time period, the IHA's application will be ineligible for further processing. HUD shall immediately notify the IHA in writing after this occurs.

(4) An IHA may submit an application for Emergency Modernization whenever needed.

(e) Eligibility review. (1) Eligibility for processing. To be eligible for processing each eligible development for which work is proposed must have reached the Date of Full Availability (DOFA) and be under ACC amendment at the time of CIAP application submission.

(2) Eligibility for processing on reduced scope. When the following conditions exist, an IHA will be reviewed on a reduced scope:

(i) Section 504 compliance. Where an IHA has not completed all required structural changes to meet the need for accessible units, as identified in the IHA's Section 504 needs assessment, the IHA is eligible for processing only for Emergency Modernization or physical work needed to meet Section 504 requirements.

(ii) Lead-based paint (LBP) testing compliance. Where an IHA has not complied with the statutory requirement to complete LBP testing on all pre-1978 family units, the IHA is eligible for processing only for Emergency Modernization or work needed to complete the testing.

(iii) Fair Housing and Equal Opportunity (FHEO) compliance. Where an IHA has not complied with any applicable FHEO requirements set forth in § 950.115, as evidenced by an enforcement action, finding or determination, the IHA is eligible for processing only for Emergency Modernization or for work needed to remedy civil rights deficiencies—unless the IHA is implementing a voluntary compliance agreement or settlement agreement designed to correct the area(s) of noncompliance. The enforcement actions, findings, or determinations that trigger limited eligibility are described in paragraphs (e)(2)(iii)(A) through (E) of this section:

(A) A pending proceeding against the IHA based upon a charge of discrimination issued under the Fair Housing Act. A charge of discrimination is a charge under section 810(g)(2) of the Fair Housing Act (42 U.S.C. 3610(g)(2)), issued by the Department's General Counsel or legally authorized designee;

(B) A pending civil rights suit against the IHA, referred by the Department's General Counsel and instituted by the Department of Justice;

(C) Outstanding HUD findings of IHA noncompliance with civil rights statutes and executive orders under § 950.115, or implementing regulations, as a result of formal administrative proceedings;

(D) A deferral of the processing of applications from the IHA imposed by HUD under Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-1) and HUD implementing regulations (24 CFR 1.8), the Attorney General's Guidelines (28 CFR 50.3), and procedures (HUD Handbook 8040.1), or under Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and HUD implementing regulations (24 CFR 8.57); or

(E) An adjudication of a violation under any of the authorities specified in § 950.115 in a civil action filed against the IHA by a private individual.

(f) Technical processing. After all CIAP applications are reviewed for eligibility, HUD shall categorize the eligible IHAs and their developments into two processing groups: Group 1 for Emergency Modernization; and Group 2 for Other Modernization. IHA developments may be included in both groups and the same development may be in each group. However, an IHA is only required to submit one CIAP application. Group 1 developments are not subject to the technical review rating and ranking and the long-term viability and reasonable cost determination. Group 2 developments are subject to the technical review rating and ranking and the long-term viability and reasonable cost determination. Preference will be given to IHAs which request assistance for developments that either have conditions that threaten the health or safety of the residents or have a significant number of vacant, substandard units, and which have demonstrated a capability of carrying out the proposed activities.

(g) Rating on technical review factors. After categorizing the eligible IHAs/developments into Group 1 and Group 2, HUD shall review and rate each Group 2 IHA on each of the following technical review factors:

(1) Extent and urgency of need, including need to comply with statutory, regulatory, or court-ordered deadlines;

(2) Extent of vacancies, where the vacancies are not due to insufficient demand;

(3) IHA's modernization capability;

(4) IHA's management capability;

(5) Degree of resident involvement in IHA operations;

(6) Degree of IHA activity in resident initiatives, including resident management, economic development, and drug elimination efforts;

(7) Degree of resident employment;

(8) Tribal/local government support for proposed modernization; and

(9) Such additional factors as the Secretary determines necessary and appropriate.

(h) Ranking and selection for Joint Review. After rating all Group 2 IHAs/developments, the Area ONAP shall then rank each Group 2 IHA based on its total score, list Group 2 IHAs in descending order, subject to confirmation of need and cost at Joint Review, and identify for Joint Review selection the highest IHA ranking applications in Group 2 and other Group 2 IHAs with lower ranking applications, but with high priority needs, which most reasonably approximate the amount of modernization which can be funded. High priority needs are nonemergency needs, but related to: health or safety; vacant, substandard units; structural or system integrity; or compliance with statutory, regulatory, or court-ordered deadlines. All Group 1 applications are automatically selected for Joint Review.

(i) Joint review. The purpose of the Joint Review is for HUD to discuss with an IHA the proposed modernization program, as set forth in the CIAP application, review long-term viability and cost reasonableness determinations, and determine the size of the grant, if any, to be awarded. HUD shall notify each IHA whose application has been selected for further processing as to whether Joint Review will be conducted on-site or off-site (e.g., by telephone or in-office meeting). An IHA shall prepare for Joint Review by preparing a draft CIAP budget, and reviewing the other items to be covered during Joint Review, as prescribed by HUD. If conducted on-site, Joint Review may include an inspection of the proposed physical work. IHAs not selected for Joint Review will be advised in writing of the reasons for non-selection.

(j) Funding decisions. After all Joint Reviews are completed, HUD shall adjust the IHAs, developments, and work items to be funded and the amounts to be awarded, on the basis of information obtained from Joint Reviews, environmental reviews, and FHEO review, and make the funding decisions. An IHA will not be selected for CIAP funding if there is a duplication of funding. HUD shall select all bona fide emergencies in Group 1 before funding Group 2 applications. After funding announcement, HUD shall request a funded IHA to submit a CIAP budget, including an implementation schedule, and any other required documents, including the ACC amendment. IHAs not selected for funding will be advised in writing of the reasons for non-selection.

(k) ACC amendment. After HUD approval of the CIAP budget, HUD and the IHA shall enter into an ACC amendment in order for the IHA to draw down modernization funds. The ACC amendment shall require low-income use of the housing for not less than 20 years from the date of the ACC amendment (subject to sale of homeownership units in accordance with the terms of the ACC). The IHA Executive Director, where authorized by the Board of Commissioners and permitted by tribal or State law, may sign the ACC amendment on behalf of the IHA. HUD has the authority to condition an ACC amendment (e.g., to require an IHA to hire a modernization coordinator or contract administrator to administer its modernization program).

(l) Declaration of trust. As HUD may require, an IHA shall execute and file for record a Declaration of Trust as provided under the ACC to protect the rights and interests of HUD throughout the 20-year period during which the IHA is obligated to operate its developments in accordance with the ACC, the Act, and HUD regulations and requirements. A Declaration of Trust is not required for Mutual Help units.

(Approved by the Office of Management and Budget under control number 2577-0044. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a valid control number.)