[Federal Register Volume 61, Number 60 (Wednesday, March 27, 1996)]
[Rules and Regulations]
[Pages 13586-13594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5990]
[[Page 13585]]
_______________________________________________________________________
Part III
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 880, et al.
Consolidation of Regulations for Project-Based Section 8 Programs;
Final Rule
Federal Register / Vol. 61, No. 60 / Wednesday, March 27, 1996 /
Rules and Regulations
[[Page 13586]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing--Federal Housing
Commissioner; Consolidation of Regulations for Project-Based Section 8
Programs
24 CFR Parts 880, 881, 883, and 884
[Docket No. FR-3984-F-01]
RIN 2502-AG65
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner (HUD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule removes obsolete provisions concerning development
of housing under regulations for the Section 8 project-based assistance
programs for New Construction, Substantial Rehabilitation, and State
Housing Agencies, and Rural Rental Housing now found in 24 CFR parts
880, 881, 883, and 884. It also consolidates into one part, the certain
nearly identical provisions concerning the housing assistance payments
contract and management for the New Construction, Substantial
Rehabilitation, and State Housing Agencies programs that are now found
in three parts.
EFFECTIVE DATE: April 26, 1996.
FOR FURTHER INFORMATION CONTACT: For development issues: Jane Luton,
Director, New Products Division (telephone: (202) 708-2556, ext. 2537)
or for management issues: Barbara D. Hunter, Director, Program
Management Division (telephone: (202) 708-4162, ext. 2632), Office of
Multifamily Housing, Department of Housing and Urban Development, 451
Seventh Street, SW, Washington, D.C. 20410. The above telephone numbers
may be accessed through TDD by calling the Federal Relay Service at
(202) 708-9300 or 1-800-877-TDDY (1-800-877-8389). (Other than the ``1-
800'' number, these telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act Statement
This rule does not alter existing information collection
requirements. An agency may not conduct or sponsor, and person is not
required to respond to a collection of information unless the
collection displays a valid control number.
Background
On March 4, 1995, President Clinton issued a memorandum to all
Federal departments and agencies regarding regulatory reinvention. In
response to this memorandum, the Department of Housing and Urban
Development conducted a page-by-page review of its regulations to
determine which can be eliminated, consolidated, or otherwise improved.
The authority for funding activity under the Section 8 project-
based assistance programs affected by this rule was repealed in 1983,
and there have been no projects in the development stage for a
substantial period. This rule, accordingly, removes from 24 CFR parts
880, 881, 883, and 884 obsolete provisions relating to the development
of projects under these parts. The removed provisions include but are
not limited to: part 880, subparts C and D; part 881, subparts C, D,
and G; and part 883, subparts B, D, and E. Section 883.106, added by
this rule, replaces current Sec. 883.201, which was in subpart B. In
part 884, individual sections have been removed.
This rule also consolidates into part 880, subparts E and F, the
closely-related housing assistance payments (HAP) contract and the
management regulations currently contained in parts 880, 881, and 883.
Because of the similarity of the two sets of HAP contract regulations,
Secs. 881.505 through 881.508 have been removed and replaced by a
cross-reference to the same sections in part 880, subpart E. (See
Sec. 881.503) In part 883, which is not as closely related to part 880,
Secs. 883.605 and 883.608 have been replaced by cross-reference to the
comparable Secs. 880.504 and 880.508 provisions in part 880, subpart E.
In both parts 881 and 883, the respective Management subparts have
been removed and replaced by cross-references to part 880, subpart F.
Part 880, subpart F has been revised to include certain part 883-
specific requirements, where the current part 883 requirements differ
from those applicable to part 880 and part 881 projects.
The New Construction Set-Aside for Section 515 Rural Rental Housing
Projects program, contained in part 884, is administered by the Rural
Housing and Community Development Service, successor agency to the
Farmers Home Administration, under a memorandum of understanding. The
part 884 provisions have not been consolidated into part 880.
Justification for Final Rulemaking
HUD generally publishes a rule for public comment before issuing a
rule for effect, in accordance with its own regulations on rulemaking
in 24 CFR part 10. However, part 10 provides for exceptions to the
general rule if the agency finds good cause to omit advance notice and
public participation. The good cause requirement is satisfied when
prior public procedure is ``impracticable, unnecessary, or contrary to
the public interest'' (24 CFR 10.1). HUD finds that good cause exists
to publish this rule for effect without first soliciting public
comment. This rule merely consolidates existing CFR parts and removes
obsolete regulatory provisions and does not establish or affect
substantive policy. Therefore, prior public comment is unnecessary.
Findings and Certifications
Impact on the Environment
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR Part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969. The Finding of No Significant Impact is available for
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the
Office of the Rules Docket Clerk at the above address.
Federalism Impact
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule do not have significant impact on States or
their political subdivisions since the rule merely consolidates
existing provisions into one part.
Impact on the Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule does not have
potential for significant impact on family formation, maintenance, and
general well-being, since it only consolidates and streamlines existing
provisions. Therefore, the rule is not subject to review under the
Order.
Impact on Small Entities
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule will not have a significant
impact on a substantial number of small entities, because it makes no
substantive changes in the regulations affected.
Catalog
The Catalog of Federal Domestic Assistance number for the programs
affected by this rule is 14.182.
[[Page 13587]]
List of Subjects
24 CFR Part 880
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 881
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 883
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 884
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements, Rural areas.
Accordingly, under the authority of 42 U.S.C. 3535(d), for the
reasons stated in the preamble, parts 880, 881, 883, and 884 of title
24 of the Code of Federal Regulations are amended as follows:
PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW
CONSTRUCTION
1. The authority citation for part 880 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
Subpart A--Summary and Applicability
2. Section 880.101 is revised to read as follows:
Sec. 880.101 General.
(a) The purpose of the Section 8 program is to provide low-income
families with decent, safe and sanitary rental housing through the use
of a system of housing assistance payments. This part contains the
policies and procedures applicable to the Section 8 new construction
program. The assistance may be provided to public housing agency owners
or to private owners either directly from HUD or through public housing
agencies.
(b) This part does not apply to projects developed under other
Section 8 program regulations, including 24 CFR parts 881, 882, 883,
884, and 885, except to the extent specifically stated in those parts.
Portions of subparts E and F of this part 880 have been cross-
referenced in 24 CFR parts 881 and 883.
Secs. 880.102 and 880.103 [Removed]
3. Sections 880.102 and 880.103 are removed.
4. Section 880.104 is revised to read as follows:
Sec. 880.104 Applicability of part 880 in effect as of November 5,
1979.
(a) Part 880, in effect as of November 5, 1979, applies to all
proposals for which a notification of selection was not issued before
the November 5, 1979 effective date of part 880. (See 24 CFR part 880,
revised as of April 1, 1980.) Where a notification of selection was
issued for a proposal before the November 5, 1979 effective date, part
880, in effect as of November 5, 1979, applies if the owner notified
HUD within 60 calendar days that the owner wished the provisions of
part 880, effective November 5, 1979, to apply and promptly brought the
proposal into conformance.
(b) Subparts E (Housing Assistance Payments Contract) and F
(Management) of this part apply to all projects for which an Agreement
was not executed before the November 5, 1979, effective date of part
880. Where an Agreement was so executed:
(1) The owner and HUD may agree to make the revised subpart E of
this part applicable and to execute appropriate amendments to the
Agreement and/or Contract.
(2) The owner and HUD may agree to make the revised subpart F of
this part applicable (with or without the limitation on distributions)
and to execute appropriate amendments to the Agreement and/or Contract.
(c) Section 880.607, Termination of Tenancy and Modification of
Leases, applies to new families who begin occupancy or execute a lease
on or after 30 days after the November 5, 1979, effective date of part
880. This section also applies to families not covered by the preceding
sentence, including existing families under lease, with respect to all
leases in which a renewal becomes effective on or after the 60th day
following the November 5, 1979 effective date of part 880. A lease is
considered to be renewed where both the landlord and the family fail to
terminate a tenancy under a lease permitting either party to terminate.
(d) Notwithstanding the provisions of paragraph (b) of this
section, the provisions of 24 CFR part 5 (concerning preferences for
selection of applicants) apply to all projects, regardless of when an
Agreement was executed.
Subpart B--Definitions and Other Requirements
5. The heading for subpart B of part 880 is revised as set forth
above.
6. Section 880.201 is amended by removing the definitions of
``Allocation area'', ``New Communities'', and ``Preliminary proposal''
and by adding in alphabetical order, the definition of ``Agency'', to
read as follows:
Sec. 880.201 Definitions.
* * * * *
Agency. As defined in 24 CFR part 883.
* * * * *
Secs. 880.202, 880.203, 880.204, 880.206, 880.209, and
880.210 [Removed]
7. Sections 880.202, 880.203, 880.204, 880.206, 880.209, and
880.210 are removed.
Subparts C and D--[Removed and Reserved]
8. Subpart C (Secs. 880.301 through 880.311) and subpart D
(Secs. 880.401 through 880.405) of part 880 are removed and reserved.
Subpart E--Housing Assistance Payments Contract
9. Section 880.501 is amended by revising paragraph (a), and by
removing and reserving paragraph (b), to read as follows:
Sec. 880.501 The contract.
(a) Contract. The Housing Assistance Payments Contract sets forth
rights and duties of the owner and the contract administrator with
respect to the project and the housing assistance payments. The owner
and contract administrator execute the Contract in the form prescribed
by HUD upon satisfactory completion of the project.
(b) [Reserved]
* * * * *
10. In Sec. 880.504, paragraphs (b), (c) introductory text, (c)(1),
and (e) are revised, to read as follows:
Sec. 880.504 Leasing to eligible families.
* * * * *
(b) Reduction of number of units covered by Contract. (1) Part 880
and 24 CFR part 881 projects. HUD (or the PHA at the direction of HUD,
as appropriate) may reduce the number of units covered by the Contract
to the number of units available for occupancy by eligible families if:
(i) The owner fails to comply with the requirements of paragraph
(a) of this section; or
(ii) Notwithstanding any prior approval by the contract
administrator to lease such units to ineligible families, HUD (or the
PHA at the direction of HUD, as appropriate) determines that the
inability to lease units to eligible families is not a temporary
problem.
(2) For 24 CFR part 883 projects. HUD and the Agency may reduce the
number
[[Page 13588]]
of units covered by the Contract to the number of units available for
occupancy by eligible families if:
(i) The owner fails to comply with the requirements of paragraph
(a) of this section; or
(ii) Notwithstanding any prior approval by the Agency to lease such
units to ineligible families, HUD and the Agency determine that the
inability to lease units to eligible families is not a temporary
problem.
(c) Restoration. For this part 880 and 24 CFR part 881 projects,
HUD will agree to an amendment of the ACC or the Contract, as
appropriate, to provide for subsequent restoration of any reduction
made pursuant to paragraph (b) of this section, and for 24 CFR part 883
projects, HUD will agree to an amendment of the ACC and the Agency may
agree to an amendment to the Contract to provide for subsequent
restoration of any reduction made pursuant to paragraph (b) of this
section, if:
(1) HUD determines (for 24 CFR part 883 projects, HUD and the
Agency determine) that the restoration is justified by demand,
* * * * *
(e) Termination of assistance for failure to submit evidence of
citizenship or eligible immigration status. If an owner who is subject
to paragraphs (a) and (b) of this section is required to terminate
housing assistance payments for the family in accordance with 24 CFR
part 5 because the owner determines that the entire family does not
have U.S. citizenship or eligible immigration status, the owner may
allow continued occupancy of the unit by the family without Section 8
assistance following the termination of assistance, or if the family
constitutes a mixed family, as defined in 24 CFR part 5, the owner
shall comply with the provisions of 24 CFR part 5 concerning assistance
to mixed families, and deferral of termination of assistance.
Subpart F--Management
11. Section 880.601 is amended by revising paragraphs (a)(4), (b),
(c), and (e), to read as follows:
Sec. 880.601 Responsibilities of owner.
(a) * * *
(4) At the time of Contract execution, the owner must submit a list
of leased and unleased units, with justification for the unleased
units, in order to qualify for vacancy payments for the unleased units.
(b) Management and maintenance. The owner is responsible for all
management functions, including determining eligibility of applicants
in accordance with 24 CFR parts 5 and 24 CFR part 813, provision of
Federal selection preferences in accordance with 24 CFR part 5,
selection of tenants, obtaining and verifying Social Security Numbers
submitted by families (as provided by 24 CFR part 5), obtaining signed
consent forms from families for the obtaining of wage and claim
information from State Wage Information Collection Agencies (as
provided by 24 CFR part 5), reexamination of family income, evictions
and other terminations of tenancy, and collection of rents, and all
repair and maintenance functions (including ordinary and extraordinary
maintenance and replacement of capital items). All these functions
shall be performed in compliance with applicable Equal Opportunity
requirements.
(c) Contracting for services. (1) For this part 880 and 24 CFR part
881 projects, with HUD approval, the owner may contract with a private
or public entity (except the contract administrator) for performance of
the services or duties required in paragraphs (a) and (b) of this
section.
(2) For 24 CFR part 883 projects, with approval of the Agency, the
owner may contract with a private or public entity (but not with the
Agency unless temporarily necessary for the Agency to protect its
financial interest and to uphold its program responsibilities where no
alternative management agent is immediately available) for performance
of the services or duties required in paragraphs (a) and (b) of this
section.
(3) However, such an arrangement does not relieve the owner of
responsibility for these services and duties.
* * * * *
(e) Use of project funds. (1) Project funds must be used for the
benefit of the project, to make required deposits to the replacement
reserve in accordance with Sec. 880.602 and to provide distributions to
the owner as provided in Sec. 880.205, Sec. 881.205 of this chapter, or
Sec. 883.306 of this chapter, as appropriate.
(2) For this part 880 and 24 CFR part 881 projects:
(i) Any remaining project funds must be deposited with the
mortgagee or other HUD-approved depository in an interest-bearing
residual receipts account. Withdrawals from this account will be made
only for project purposes and with the approval of HUD.
(ii) Partially-assisted projects are exempt from the provisions of
this section.
(iii) In the case of HUD-insured projects, the provisions of this
paragraph (e) will apply instead of the otherwise applicable mortgage
insurance provisions.
(3) For 24 CFR part 883 projects:
(i) Any remaining project funds must be deposited with the Agency,
other mortgagee or other Agency-approved depository in an interest-
bearing account. Withdrawals from this account may be made only for
project purposes and with the approval of the Agency.
(ii) In the case of HUD-insured projects, the provisions of this
paragraph will apply instead of the otherwise applicable mortgage
insurance provisions, except in the case of partially-assisted projects
which are subject to the applicable mortgage insurance provisions.
* * * * *
12. Section 880.602 is revised to read as follows:
Sec. 880.602 Replacement reserve.
(a) A replacement reserve must be established and maintained in an
interest-bearing account to aid in funding extraordinary maintenance
and repair and replacement of capital items.
(1) Part 880 and 24 CFR part 881 projects. (i) For this part 880
and 24 CFR part 811 projects, an amount equivalent to .006 of the cost
of total structures, including main buildings, accessory buildings,
garages and other buildings, or any higher rate as required by HUD from
time to time, will be deposited in the replacement reserve annually.
This amount will be adjusted each year by the amount of the automatic
annual adjustment factor.
(ii) The reserve must be built up to and maintained at a level
determined by HUD to be sufficient to meet projected requirements.
Should the reserve achieve that level, the rate of deposit to the
reserve may be reduced with the approval of HUD.
(iii) All earnings including interest on the reserve must be added
to the reserve.
(iv) Funds will be held by the mortgagee or trustee for
bondholders, and may be drawn from the reserve and used only in
accordance with HUD guidelines and with the approval of, or as directed
by, HUD.
(v) Partially-assisted part 880 and 24 CFR part 881 projects are
exempt from the provisions of this section.
(2) Part 883 of this chapter projects. (i) For 24 CFR part 883
projects, an amount equivalent to at least .006 of the cost of total
structures, including main buildings, accessory buildings, garages and
other buildings, or any higher rate as required from time to time by:
[[Page 13589]]
(A) The Agency, in the case of projects approved under 24 CFR part
883, subpart D; or
(B) HUD, in the case of all other projects, will be deposited in
the replacement reserve annually. For projects approved under 24 CFR
part 883, subpart D, this amount may be adjusted each year by up to the
amount of the automatic annual adjustment factor. For all projects not
approved under 24 CFR part 883, subpart D, this amount must be adjusted
each year by the amount of the automatic annual adjustment factor.
(ii) The reserve must be built up to and maintained at a level
determined to be sufficient by the Agency to meet projected
requirements. Should the reserve achieve that level, the rate of
deposit to the reserve may be reduced with the approval of the Agency.
(iii) All earnings, including interest on the reserve, must be
added to the reserve.
(iv) Funds will be held by the Agency, other mortgagee or trustee
for bondholders, as determined by the Agency, and may be drawn from the
reserve and used only in accordance with Agency guidelines and with the
approval of, or as directed by, the Agency.
(v) The Agency may exempt partially-assisted projects approved
under 24 CFR part 883, subpart D, from the provisions of this section.
All partially-assisted projects not approved under the Fast Track
Procedures formerly in 24 CFR part 883, subpart D, are exempt from the
provisions of this section.
(b) In the case of HUD-insured projects, the provisions of this
section will apply instead of the otherwise applicable mortgage
insurance provisions, except in the case of partially-assisted insured
projects which are subject to the applicable mortgage insurance
provisions.
13. Section 880.603 is revised to read as follow:
Sec. 880.603 Selection and admission of assisted tenants.
(a) Application. The owner must accept applications for admission
to the project in the form prescribed by HUD. Both the owner (or
designee) and the applicant must complete and sign the application. For
this part 880 and 24 CFR part 881 projects, on request, the owner must
furnish copies of all applications to HUD and the PHA, if applicable.
For 24 CFR part 883 projects, on request, the owner must furnish to the
Agency or HUD copies of all applications received.
(b) Determination of eligibility and selection of tenants. The
owner is responsible for obtaining and verifying information related to
income in accordance with 24 CFR part 813, and evidence related to
citizenship and eligible immigration status in accordance with 24 CFR
part 5, to determine whether the applicant is eligible for assistance
in accordance with the requirements of 24 CFR part 5, and 24 CFR part
813, and to select families for admission to the program, which
includes giving selection preferences in accordance with 24 CFR part 5,
subpart D.
(1) If the owner determines that the family is eligible and is
otherwise acceptable and units are available, the owner will assign the
family a unit of the appropriate size in accordance with HUD standards.
If no suitable unit is available, the owner will place the family on a
waiting list for the project and notify the family of when a suitable
unit may become available. If the waiting list is so long that the
applicant would not be likely to be admitted for the next 12 months,
the owner may advise the applicant that no additional applications are
being accepted for that reason, provided the owner complies with the
procedures for informing applicants about admission preferences as
provided in 24 CFR part 5, subpart D.
(2) If the owner determines that an applicant is ineligible on the
basis of income or family composition, or because of failure to meet
the disclosure and verification requirements for Social Security
Numbers (as provided by 24 CFR part 5), or because of failure by an
applicant to sign and submit consent forms for the obtaining of wage
and claim information from State Wage Information Collection Agencies
(as provided by 24 CFR parts 5 and 813), or that the owner is not
selecting the applicant for other reasons, the owner will promptly
notify the applicant in writing of the determination and its reasons,
and that the applicant has the right to meet with the owner or managing
agent in accordance with HUD requirements. Where the owner is a PHA,
the applicant may request an informal hearing. If the PHA determines
that the applicant is not eligible, the PHA will notify the applicant
and inform the applicant that he or she has the right to request HUD
review of the PHA's determination. The applicant may also exercise
other rights if the applicant believes that he or she is being
discriminated against on the basis of race, color, creed, religion,
sex, or national origin. See 24 CFR part 5 for the informal review
provisions for the denial of a Federal preference or the failure to
establish citizenship or eligible immigration status and for notice
requirements where assistance is terminated, denied, suspended, or
reduced based on wage and claim information obtained by HUD from a
State Wage Information Collection Agency.
(3) Records on applicants and approved eligible families, which
provide racial, ethnic, gender and place of previous residency data
required by HUD, must be maintained and retained for three years.
(c) Reexamination of family income and composition--(1) Regular
reexaminations. The owner must reexamine the income and composition of
all families at least every 12 months. After consultation with the
family and upon verification of the information, the owner must make
appropriate adjustments in the Total Tenant Payment in accordance with
24 CFR part 813 and determine whether the family's unit size is still
appropriate. The owner must adjust Tenant Rent and the Housing
Assistance Payment to reflect any change in Total Tenant Payment and
must carry out any unit transfer required by HUD. At the time of the
annual reexamination of family income and composition, the owner must
require the family to disclose the verify Social Security Numbers, as
provided by 24 CFR part 5. For requirements regarding the signing and
submitting of consent forms by families for the obtaining of wage and
claim information from State Wage Information Collection Agencies, see
24 CFR part 5. At the first regular reexamination after June 19, 1995,
the owner shall follow the requirements of 24 CFR part 5 concerning
obtaining and processing evidence of citizenship or eligible
immigration status of all family members. Thereafter, at each regular
reexamination, the owner shall follow the requirements of 24 CFR part 5
and verify the immigration status of any new family member.
(2) Interim reexaminations. The family must comply with provisions
in its lease regarding interim reporting of changes in income. If the
owner receives information concerning a change in the family's income
or other circumstances between regularly scheduled reexaminations, the
owner must consult with the family and make any adjustments determined
to be appropriate. Any change in the family's income or other
circumstances that results in an adjustment in the Total Tenant
Payment, Tenant Rent and Housing Assistance Payment must be verified.
See 24 CFR part 5 for the requirements for the disclosure and
verification of Social Security Numbers
[[Page 13590]]
at interim reexaminations involving new family members. For
requirements regarding the signing and submitting of consent forms for
the obtaining of wage and claim information from State Wage Information
Collection Agencies, see 24 CFR part 5. At any interim reexamination
after June 19, 1995, when a new family member has been added, the owner
shall follow the requirements of 24 CFR part 5 concerning obtaining and
processing evidence of the citizenship or eligible immigration status
of any new family member.
(3) Continuation of housing assistance payments. A family's
eligibility for Housing Assistance Payments continues until the Total
Tenant Payment equals the Gross Rent. The termination of eligibility at
such point will not affect the family's other rights under its lease,
nor will such termination preclude the resumption of payments as a
result of later changes in income, rents, or other relevant
circumstances during the term of the Contract. However, eligibility
also may be terminated in accordance with HUD requirements, for such
reasons as failure to submit requested verification information,
including failure to meet the disclosure and verification requirements
for Social Security Numbers, as provided by 24 CFR part 5, or failure
to sign and submit consent forms for the obtaining wage and claim
information from State Wage Information Collection Agencies, as
provided by 24 CFR part 5. See 24 CFR part 5 for provisions requiring
termination of assistance for failure to establish citizenship or
eligible immigration status and also for provisions concerning certain
assistance for mixed families (families whose members include those
with eligible immigration status, and those without eligible
immigration status) in lieu of termination of assistance, and for
provisions concerning deferral of termination of assistance.
(Approved by the Office of Management and Budget under control
number 2502-0204.)
14. In Sec. 880.606, paragraph (b) is revised to read as follows:
Sec. 880.606 Lease requirements.
* * * * *
(b) Form. (1) Part 880 and 24 CFR part 881 projects. For this part
880 and 24 CFR part 881 projects, the form of lease must contain all
required provisions, and none of the prohibited provisions specified in
the developer's packet, and must conform to the form of lease included
in the approved final proposal.
(2) 24 CFR part 883 projects. For 24 CFR part 883 projects, the
form of lease must contain all required provisions, and none of the
prohibited provisions specified below.
(i) Required provisions (Addendum to lease).
Addendum to Lease
The following additional Lease provisions are incorporated in
full in the Lease between ____ (Landlord) and ____ (Tenant) for the
following dwelling unit: ____. In case of any conflict between these
and any other provisions of the Lease, these provisions will
prevail.
a. The total rent will be $____ per month.
b. Of the total rent, $____ will be payable by the State Agency
(Agency) as housing assistance payments on behalf of the Tenant and
$____ will be payable by the Tenant. These amounts will be subject
to change by reason of changes in the Tenant's family income, family
composition, or extent of exceptional medical or other unusual
expenses, in accordance with HUD-established schedules and criteria;
or by reason of adjustment by the Agency of any applicable Utility
Allowance; or by reasons of changes in program rules. Any such
change will be effective as of the date stated in a notification to
the Tenant.
c. The Landlord will not discriminate against the Tenant in the
provision of services, or in any other manner, on the grounds of
race, color, creed, religion, sex, or national origin.
d. The Landlord will provide the following services and
maintenance: ____________
e. A violation of the Tenant's responsibilities under the
Section 8 Program, as determined by the Agency, is also a violation
of the lease.
Landlord---------------------------------------------------------------
By---------------------------------------------------------------------
Date-------------------------------------------------------------------
Tenant-----------------------------------------------------------------
Date-------------------------------------------------------------------
[End of addendum]
(ii) Prohibited provisions. Lease clauses which fall within the
classifications listed below must not be included in any Lease.
Lease Clauses
a. Confession of Judgment. Consent by the tenant to be sued, to
admit guilt, or to accept without question any judgment favoring the
landlord in a lawsuit brought in connection with the lease.
b. Seize or Hold Property for Rent or Other Charges.
Authorization to the landlord to take property of the tenant and/or
hold it until the tenant meets any obligation which the landlord has
determined the tenant has failed to perform.
c. Exculpatory Clause. Prior agreement by the tenant not to hold
the landlord or landlord's agents legally responsible for acts done
improperly or for failure to act when the landlord or landlord's
agent was required to do so.
d. Waiver of Legal Notice. Agreement by the tenant that the
landlord need not give any notices in connection with (1) a lawsuit
against the tenant for eviction, money damages, or other purposes,
or (2) any other action affecting the tenant's rights under the
lease.
e. Waiver of Legal Proceeding. Agreement by the tenant to allow
eviction without a court determination.
f. Waiver of Jury Trial. Authorization to the landlord's lawyer
to give up the tenant's right to trial by jury.
g. Waiver of Right to Appeal Court Decision. Authorization to
the landlord's lawyer to give up the tenant's right to appeal a
decision on the ground of judicial error or to give up the tenant's
right to sue to prevent a judgment being put into effect.
h. Tenant Chargeable with Cost of Legal Actions Regardless of
Outcome of Lawsuit. Agreement by the tenant to pay lawyer's fees or
other legal costs whenever the landlord decides to sue the tenant
whether or not the tenant wins. (Omission of such a clause does not
mean that the tenant, as a party to a lawsuit, may not have to pay
lawyer's fees or other costs if the court so orders.)
[End of clauses]
15. Section 880.607 is amended by:
a. Removing from paragraph (b)(3)(ii), the words ``part 812'',
``part 750'', ``part 760'', and by adding, in their respective places,
the words ``part 5''; and
b. Revising paragraphs (c)(4) and (d), to read as follows:
Sec. 880.607 Termination of tenancy and modification of lease.
* * * * *
(c) * * *
(4) See 24 CFR part 5 for provisions related to termination of
assistance because of failure to establish citizenship or eligible
immigration status, including informal hearing procedures and also for
provisions concerning certain assistance for mixed families (families
whose members include those with eligible immigration status, and those
without eligible immigration status) in lieu of termination of
assistance, and for provisions concerning deferral of termination of
assistance.
(d) Modification of Lease form. The owner, with the prior approval
of HUD or, for a 24 CFR part 883 project, the Agency, may modify the
terms and conditions of the lease form effective at the end of the
initial term or a successive term, by serving an appropriate notice on
the family, together with the offer of a revised lease or an addendum
revising the existing lease. This notice and offer must be received by
the family at least 30 days prior to the last date on which the family
has the right to terminate the tenancy without being bound by the
modified terms and conditions. The family may accept the modified terms
and conditions by executing the offered revised lease or addendum, or
may reject the modified terms and conditions by giving the owner
written notice in
[[Page 13591]]
accordance with the lease that the family intends to terminate the
tenancy. Any increase in rent must in all cases be governed by
Sec. 880.609 and other applicable HUD regulations.
* * * * *
Sec. 880.608 [Amended]
16. In Sec. 880.608, paragraph (f) introductory text is amended by
removing the words ``HUD or the PHA, as appropriate,'' and by adding,
in their place, the words ``the contract administrator''.
17. In Sec. 880.609, paragraph (b) is revised to read as follows:
Sec. 880.609 Adjustment of contract rents.
* * * * *
(b) Special additional adjustments. For all projects, special
additional adjustments will be granted, to the extent determined
necessary by HUD (for 24 CFR part 883 projects, by the Agency and HUD),
to reflect increases in the actual and necessary expenses of owning and
maintaining the assisted units which have resulted from substantial
general increases in real property taxes, assessments, utility rates,
and utilities not covered by regulated rates, and which are not
adequately compensated for by annual adjustments under paragraph (a) of
this section. The owner must submit to the contract administrator
required supporting data, financial statements and certifications.
* * * * *
18. In Sec. 880.611, the introductory text to paragraph (d)(3) is
revised to read as follows:
Sec. 880.611 Conditions for receipt of vacancy payments.
* * * * *
(d) * * *
(3) The owner has (for 24 CFR part 883 projects, the owner and the
Agency have) demonstrated to the satisfaction of HUD that:
* * * * *
19. In Sec. 880.612, paragraph (b) is revised to read as follows:
Sec. 880.612 Reviews during management period.
* * * * *
(b) In addition:
(1)(i) For this part 880 and 24 CFR part 881 private-owner/PHA
projects, HUD will review the PHA's administration of the Contract at
least annually to determine whether the PHA is in compliance with the
ACC; and
(ii) For 24 CFR part 883 projects, HUD will periodically review the
Agency's administration of the Contract to determine whether it is in
compliance with the Contract.
(2) HUD may independently inspect project operations and units at
any time.
* * * * *
PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR
SUBSTANTIAL REHABILITATION
20. The authority citation for part 881 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
Subpart A--Summary and Applicability
21. Section 881.101 is revised to read as follows:
Sec. 881.101 General.
(a) The purpose of the Section 8 program is to provide low-income
families with decent, safe and sanitary rental housing through the use
of a system of housing assistance payments. This part contains the
policies and procedures applicable to the Section 8 substantial
rehabilitation program. The assistance may be provided to public
housing agency owners or to private owners either directly from HUD or
through public housing agencies.
(b) This part does not apply to projects developed under other
Section 8 program regulations, including 24 CFR parts 880, 882, 883,
884, and 885, except to the extent specifically stated in those parts.
Secs. 881.102 and 881.103 [Removed]
22. Sections 881.102 and 881.103 are removed.
23. Section 881.104 is revised to read as follows:
Sec. 881.104 Applicability of part 881 in effect as of February 20,
1980.
(a) Part 881, in effect as of February 20, 1980, applies to all
proposals for which a notification of selection was not issued before
the February 20, 1980 effective date of part 881. (See 24 CFR part 881,
revised as of April 1, 1980). Where a notification of selection was
issued for a proposal before the February 20, 1980, effective date,
part 881 in effect as of February 20, 1980 applies if the owner
notified HUD within 60 calendar days that the owner wished the
provisions of part 881, effective February 20, 1980, to apply and
promptly brought the proposal into conformance.
(b) Subparts E (Housing Assistance Payments Contract) and F
(Management) of this part apply to all projects for which an Agreement
was not executed before the February 20, 1980, effective date of part
881. Where an Agreement was so executed:
(1) The owner and HUD may agree to make the revised subpart E of
this part applicable and to execute appropriate amendments to the
Agreement and/or Contract.
(2) The owner and HUD may agree to make the revised subpart F of
this part applicable (with or without the limitation on distributions)
and to execute appropriate amendments to the Agreement and/or Contract.
(c) Section 880.607 of this chapter, Termination of Tenancy and
Modification of Leases, applies to new families who begin occupancy or
execute a lease on or after 30 days after the February 20, 1980,
effective date of part 881. This section also applies to families not
covered by the preceding sentence, including existing families under
lease, with respect to all leases in which a renewal becomes effective
on or after the 60th day following the February 20, 1980 effective date
of part 881. A lease is considered to be renewed where both the
landlord and the family fail to terminate a tenancy under a lease
permitting either party to terminate.
(d) Notwithstanding the provisions of paragraph (b) of this
section, the provisions of 24 CFR part 5 (concerning preferences for
selection of applicants) apply to all projects, regardless of when an
Agreement was executed.
Subpart B--Definitions and Other Requirements
24. The heading for subpart B of part 881 is revised to read as set
forth above.
Sec. 881.201 [Amended]
25. Section 881.201 is amended by removing the definitions of
``Allocation area'', ``New Communities'', and ``Preliminary proposal''.
Secs. 881.202, 881.203, 881.204, 881.206, 881.209, and
881.210 [Removed]
26. Sections 881.202, 881.203, 881.204, 881.206, 881.209, and
881.210 are removed.
Subparts C and D--[Removed and Reserved]
27. Subpart C (Secs. 881.301 through 881.312) and subpart D
(Secs. 881.401 through 881.405) of part 881 are removed and reserved.
Subpart E--Housing Assistance Payments Contract
28. In Sec. 881.501, paragraph (a) is revised and paragraph (b) is
removed and reserved, to read as follows:
Sec. 881.501 The contract.
(a) Contract. The Housing Assistance Payments Contract sets forth
rights and duties of the owner and the contract administrator with
respect to the project
[[Page 13592]]
and the housing assistance payments. The owner and contract
administrator execute the Contract in the form prescribed by HUD upon
satisfactory completion of the project.
(b) [Reserved]
* * * * *
29. Section 881.503 is revised to read as follows:
Sec. 881.503 Cross-reference.
All of the provisions of Secs. 880.503, 880.504, 880.505, 880.506,
880.507, and 880.508 of this chapter apply to projects assisted under
this part, subject to the requirements of Sec. 881.104.
Secs. 881.504, 881.505, 881.506, 881.507, and 881.508 [Removed]
29a. Sections 881.504, 881.505, 881.506, 881.507, and 881.508 are
removed.
30. Subpart F of part 881 is revised to read as follows:
Subpart F--Management
Sec. 881.601 Cross-reference.
All of the provisions of part 880, subpart F, of this chapter apply
to projects assisted under this part, subject to the requirements of
Sec. 881.104.
Subpart G--[Removed]
31. Subpart G (Secs. 881.701 through 881.709) of part 881 is
removed.
PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE
HOUSING AGENCIES
32. The authority citation for part 883 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
Subpart A--Summary and Guide
33. Section 883.101 is revised to read as follows:
Sec. 883.101 General.
(a) The purpose of the Section 8 program is to provide decent, safe
and sanitary housing for low-income families through the use of a
system of housing assistance payments. These needs may be met by
statewide or special purpose housing agencies established by the
various States.
(b) The regulations in this part 883 contain the policies and
procedures applicable to the Section 8 program for these State
agencies.
Secs. 883.102, 883.103, and 883.104 [Removed]
34. Sections 883.102, 883.103 and 883.104 are removed.
35. Section 883.105, is revised to read as follows:
Sec. 883.105 Applicability of part 883 in effect as of February 29,
1980.
(a) Part 883, in effect as of February 29, 1980, applies to
projects for which the initial application was submitted on or after
the February 29, 1980, effective date. (See 24 CFR part 883, revised as
of April 1, 1980.) Projects for which applications or proposals were
submitted before the February 29, 1980, effective date of part 883 have
been processed under the part 883 regulations and procedures in effect
at the date of submission. If, however, the agency notified HUD within
60 calendar days of the February 29, 1980, effective date of the part
883 regulations that they chose to have the provisions of part 883, in
effect as of February 29, 1980, apply to a specific case, it must have
promptly modified the application(s) and proposal(s) to comply.
(b) Subpart F of this part, dealing with the HAP contract and
subpart G of this part, dealing with management, apply to all projects
for which an Agreement was not executed before the February 29, 1980,
effective date of part 883. In cases where an Agreement has been
executed:
(1) The Agency, owner and HUD may agree to make the revised subpart
F of this part applicable and execute appropriate amendments to the
Agreement or Contract;
(2) The Agency, Owner and HUD may agree to make the revised subpart
G of this part applicable (with or without the limitation on
distributions) and execute appropriate amendments to the Agreement or
Contract.
(c) Section 883.708, Termination of Tenancy and Modifications of
Leases, applies to new families who begin occupancy or execute a lease
on or after 30 days following the February 29, 1980, effective date of
part 883. This section also applies to families not covered by the
preceding sentence, including families currently under lease, who have
a lease in which a renewal becomes effective on or after the 60th day
following the February 29, 1980 effective date of part 883. A lease is
considered renewed when both the landlord and the family fail to
terminate a tenancy under a lease permitting either to terminate.
(d) Notwithstanding the provisions of paragraph (b) of this
section, the provisions of 24 CFR part 5 (concerning preferences for
selection of applicants) apply to all projects, regardless of when am
Agreement was executed.
36. A new Sec. 883.106 is added to subpart A to read as follows:
Sec. 883.106 Applicability and relationships between HUD and State
agencies.
(a) Applicability. This subpart A applies to contract authority set
aside for a State Agency.
(b) General responsibilities and relationships. Subject to audit
and review by HUD to assure compliance with Federal requirements and
objectives, Housing Finance Agencies (HFAs) shall assume responsibility
for project development and for supervision of the development,
management and maintenance functions of owners.
(c) Certifications and HUD monitoring. (1) Generally, when
reviewing any of the certifications of an HFA required by this part,
HUD shall accept the certification as correct. If HUD has substantial
reason to question the correctness of any element in a certification,
HUD shall promptly bring the matter to the attention of the HFA and ask
it to provide documentation supporting the certifications. When the HFA
provides such evidence, HUD will act in accordance with the HFA's
judgment or evaluation unless HUD determines that the certification is
clearly not supported by the documentation.
(2) HUD will periodically monitor the activities of HFA's
participating under this part only with respect to Section 8 or other
HUD programs. This monitoring is intended primarily to ensure that
certifications submitted and projects operated under this part reflect
appropriate compliance with Federal law and requirements.
Subpart B--[Removed and Reserved]
37. Subpart B (Secs. 883.201 through 883.207) of part 883 is
removed and reserved.
Subpart C--Definitions and Other Requirements
38. The heading for subpart C of part 883 is revised to read as set
forth above.
Sec. 883.302 [Amended]
39. Section 883.302 is amended by removing the definitions of
``Allocation area'', ``Allocation plan'', ``Impacted jurisdiction'',
and ``New Communities''.
Secs. 883.303, 883.304, 883.305, 883.309, 883.311, and
883.312 [Removed]
40. Sections 883.303, 883.304, 885.305, 883.309, 883.311, and
883.312 are removed.
41. In Sec. 883.307, paragraph (a) is revised to read as follows:
Sec. 883.307 Financing.
(a) Types of financing. A State Agency that used the Fast Track
Procedures formerly in this part must provide
[[Page 13593]]
permanent financing for any new construction or substantial
rehabilitation project without Federal mortgage insurance, except
coinsurance under section 244 under the National Housing Act (12 U.S.C.
1701 et seq). Obligations issued by the HFA for this purpose may be
taxable under section 802 of the Housing and Community Development Act
of 1974 (42 U.S.C. 1440) or tax-exempt under section 103 of the
Internal Revenue Code (26 U.S.C. 103), 24 CFR part 811 or other Federal
Law.
* * * * *
Subparts D and E--[Removed and Reserved]
42. Subpart D (Secs. 883.401 through 883.412) and subpart E
(Sec. 883.501) of part 883 are removed and reserved.
Subpart F--Housing Assistance Payments Contract
Sec. 883.602 [Amended]
43. Section 883.602 is amended by:
a. Removing paragraph (b);
b. Redesignating paragraphs (c), (d), and (e) as paragraphs (b),
(c), and (d), respectively; and
c. By amending newly redesignated paragraphs (b)(2), (c)(2), and
(c)(3) by removing the words ``Sec. 883.712'' in each place they
appear, and by adding the words ``Sec. 880.611 of this chapter'', in
their place.
Sec. 883.604 [Amended]
44. In Sec. 883.604, paragraph (b)(2) is amended by removing the
words ``U.S. Housing Act of 1937'' and adding, in their place, the
words ``1937 Act''.
45. Section 883.605 is revised to read as follows:
Sec. 883.605 Leasing to eligible families.
The provisions of Sec. 880.504 of this chapter apply, subject to
the requirements of Sec. 883.105.
46. Section 883.608 is revised to read as follows:
Sec. 883.608 Notice upon contract expiration.
The provisions of Sec. 880.508 of this chapter apply, subject to
the requirements of Sec. 883.105.
47. Subpart G of part 883 is revised to read as follows:
Subpart G--Management
Sec. 883.701 Cross-reference.
All of the provisions of part 880, subpart F, of this chapter apply
to projects assisted under this part, subject to the requirements of
Sec. 883.105. For purposes of this subpart G, all references in part
880, subpart F, of this chapter to ``contract administrator'' shall be
construed to refer to ``Agency''.
PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS
48. The authority citation for part 884 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
Subpart A--Applicability, Scope and Basic Policies
49. In Sec. 884.101, paragraph (a) is revised to read as follows:
Sec. 884.101 Applicability and scope.
(a) The policies and procedures in subparts A and B of this part
apply to the making of Housing Assistance Payments on behalf of
Eligible Families leasing newly constructed housing pursuant to the
provisions of section 8 of the 1937 Act. They are applicable only to
proposals submitted by the Department of Agriculture/Farmers Home
Administration (now the Department of Agriculture/Rural Housing and
Community Development Service) that have been charged against the set-
aside of section 8 contract authority specifically established for
projects to be funded under section 515 of title V of the Housing Act
of 1949 (42 U.S.C. 1485).
* * * * *
Sec. 884.102 [Amended]
50. Section 884.102 is amended by:
a. Amending the definition of ``Agreement to enter into housing
assistance payments contract (`agreement')'', by removing the word
``FmHA'' in each place it appears in paragraphs (a) and (b), and by
adding, in each place, the word ``RHCDS'';
b. Removing the definition of ``FmHA'' and by adding, in
alphabetical order, the definition ``RHCDS''; and
c. Placing the definition of ``Proposal'' in alphabetical order and
amending it by removing the word ``FmHA'', and by adding in its place,
the word ``RHCDS'', to read as follows:
Sec. 884.102 Definitions.
* * * * *
RHCDS. The Rural Housing and Community Development Service.
* * * * *
Sec. 884.103 [Removed]
51. Section 884.103 is removed.
Sec. 884.105 [Amended]
52. Section 884.105 is amended by removing the word ``Act'' from
paragraphs (b)(1) and (b)(2) in each place it appears and adding, in
each place, the words ``1937 Act''.
Secs. 884.107, 884.111, 884.112, and, 884.113 [Removed]
53. Sections 884.107, 884.111, 884.112, and 884.113 are removed.
Secs. 884.108, 884.118, 884.119, and 884.120 [Amended]
54. Sections 884.108(a), 884.118(a)(9), 884.119(b), and
884.120(b)(3) are amended by removing the word ``FmHA'', each place it
appears, and by adding in each place the word ``RHCDS''.
Sec. 884.117 [Amended]
55. Section 884.117 is amended by removing the words ``part 705''
and adding, in their place, the words ``part 5''.
56. In Sec. 884.118, paragraphs (a)(3) and (a)(7) are revised, to
read as follows:
Sec. 884.118 Responsibilities of the owner.
(a) * * *
(3) Performance of all management functions, including the taking
of applications; determining eligibility of applicants in accordance
with 24 CFR parts 5 and 813; selection of families, including
verification of income, provision of Federal selection preferences in
accordance with 24 CFR part 5, obtaining and verifying Social Security
Numbers submitted by applicants (as provided by 24 CFR part 5),
obtaining signed consent forms from applicants for the obtaining of
wage and claim information from State Wage Information Collection
Agencies (as provided in 24 CFR part 5), and other pertinent
requirements; and determination of the amount of tenant rent in
accordance with HUD established schedules and criteria;
* * * * *
(7) Reexamination of family income and composition;
redetermination, as appropriate, of the amount of Tenant Rent and the
amount of housing assistance payment in accordance with 24 CFR part
813; obtaining and verifying Social Security Numbers submitted by
participants, as provided by 24 CFR part 5; and obtaining signed
consent forms from participants for the obtaining of wage and claim
information from State Wage Information Collection Agencies, as
provided by 24 CFR part 5;
* * * * *
[[Page 13594]]
Subpart B--Project Development and Operation
Secs. 884.201, 884.202, 884.203, 884.204, 884.205, 884.206, 884.207,
884.208, 884.209, 884.210, and 884.211 [Removed]
57. Sections 884.201, 884.202, 884.203, 884.204, 884.205, 884.206,
884.207, 884.208, 884.209, 884.210, and 884.211 are removed.
Sec. 884.214 [Amended]
58. In Sec. 884.214, paragraph (b)(1) is amended by removing the
phrase ``part 812,'' and adding, in its place, the phrase ``part 5,''.
Sec. 884.216 [Amended]
59. Section 884.216 is amended by:
a. Removing the words ``part 760,'' and adding in their place, the
words ``part 5,''; and
b. Removing the words ``24 CFR 812.9, and also 24 CFR 812.10'' and
adding, in their place, the words ``24 CFR part 5 and also''.
Sec. 884.218 [Amended]
60. Section 884.218 is amended by:
a. Amending paragraph (a) by removing the words ``part 750'' where
it appears, by removing ``part 760'' where it appears, and by removing
``part 812'' each place it appears, and by adding in each place the
words ``part 5'';
b. Amending paragraph (b) by removing the words ``part 760'', where
it appears, and by removing ``part 812'', where it appears, and by
adding in each place the words, ``part 5'';
c. Amending paragraph (c) by removing the words ``part 750'', where
it appears, and by removing the words ``part 760'', where it appears,
and by adding in each place the words, ``part 5''; and
d. Further amending paragraph (c), by removing the words ``24 CFR
812.9, and also 24 CFR 812.10'' and adding, in their place, the words
``24 CFR part 5 and also''.
Sec. 884.223 [Amended]
61-62. In Sec. 884.223(e), remove the words ``Sec. 812.9 of this
chapter'' and add, in their place, the words ``24 CFR part 5'' and
remove the words ``24 CFR 812.10'' in each place they occur and add, in
each place, the words ``24 CFR part 5''.
Dated: February 28, 1996.
Stephanie A. Smith,
Acting General Deputy, Assistant Secretary for Housing-Federal Housing
Commissioner.
[FR Doc. 96-5990 Filed 3-26-96; 8:45 am]
BILLING CODE 4210-27-P
