[Federal Register Volume 60, Number 41 (Thursday, March 2, 1995)]
[Rules and Regulations]
[Pages 11836-11842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4889]
[[Page 11835]]
_______________________________________________________________________
Part VI
Department of Housing and Urban Development
_______________________________________________________________________
Office of Assistant Secretary for Housing--Federal Housing Commissioner
_______________________________________________________________________
24 CFR Part 890
Supportive Housing for Persons With Disabilities; Management; Interim
Rule
Federal Register / Vol. 60, No. 41 / Thursday, March 2, 1995 / Rules
and Regulations
[[Page 11836]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of Assistant Secretary for Housing--Federal Housing Commissioner
24 CFR Part 890
[Docket No. R-95-1766; FR-3337-I-01]
RIN 2502-AF87
Supportive Housing for Persons With Disabilities; Management
AGENCY: Office of Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Interim rule.
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SUMMARY: This interim rule establishes the requirements related to
management and operation of the Supportive Housing for Persons with
Disabilities Program. The purpose of the Supportive Housing for Persons
with Disabilities Program is to enable persons with disabilities to
live with dignity and independence within their communities by
expanding the supply of supportive housing that is designed to
accommodate the special needs of such persons and provides supportive
services that address the individual health, mental health, and other
needs of such persons. Included in a companion interim rule in today's
Federal Register for the management and operation of projects funded by
the Supportive Housing for the Elderly Program are amendments which add
both Supportive Housing programs to the list of projects covered by the
pet ownership requirements, and which apply the wage and claim consent
form requirements to both programs.
DATES: Effective Date: April 13, 1995.
Sunset Provisions: Sections 890.600 through 890.650 shall expire
and shall not be in effect after October 2, 1996, unless changes in
this interim rule are published as a final rule, or the Department
publishes a notice in the Federal Register to extend the effective
date.
Comments due date: May 1, 1995.
ADDRESSES: Interested persons are invited to submit comments regarding
this interim rule to the Rules Docket Clerk, Office of the General
Counsel, Room 10276, Department of Housing and Urban Development, 451
Seventh Street SW., Washington, DC 20410-0500. Communications should
refer to the above docket number and title. A copy of each
communication submitted will be available for public inspection during
regular business hours (weekdays 7:30 a.m. to 5:30 p.m.) at the above
address.
FOR FURTHER INFORMATION CONTACT: Margaret Milner, Acting Director,
Office of Elderly and Assisted Housing, Department of Housing and Urban
Development, 451 Seventh Street SW., Room 6130, Washington, DC 20410,
telephone (202) 708-4542; (TDD) (202) 708-4594. (These are not toll-
free numbers).
SUPPLEMENTARY INFORMATION:
I. Paperwork Burden
The information collection requirements contained in this interim
rule have been approved by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520), and
assigned OMB control number 2502-0470.
II. Justification for Interim Rulemaking
In general, the Department publishes a rule for public comment
before issuing a rule for effect, in accordance with its own
regulations on rulemaking, 24 CFR part 10. However, part 10 provides
for exceptions from that general rule when 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). The Department finds that good cause exists to publish this
interim rule for effect without first soliciting public comment, in
that prior public procedure is unnecessary. These management rules vary
only slightly from previous management requirements for the section
202/162 direct loan program for persons with disabilities. This interim
rule furthers the legislative mandate of section 811 of the Cranston-
Gonzalez National Affordable Housing Act, as amended, and it involves
only minor interpretations of that statute. The section 811 capital
advance program currently is operating under a series of interim rules.
The Department intends to publish a final rule that will incorporate
public comments for all aspects of the section 811 capital advance
program.
Furthermore, the Department finds that prior public procedure would
be impracticable. The Department has awarded capital advances since
1991, and many of these projects are approaching the management phase
or have become operational. Management requirements are needed
immediately to assure transition from the development phase to the
management phase.
III. Sunset of Interim Rule
In accordance with the Department's policy on interim rules, the
amendments made by this interim rule shall expire 18 months after the
effective date of this interim rule, unless extended by notice
published in the Federal Register, or adopted by a final rule published
on or before the 18-month anniversary date of the effective date of
this interim rule.
IV. Background
The Supportive Housing for Persons with Disabilities Program is
authorized by section 811 of the Cranston-Gonzalez National Affordable
Housing Act (the NAHA Act), as amended by the Housing and Community
Development Act of 1992 (1992 Act). Under the program, which is
implemented in 24 CFR part 890, assistance is provided to nonprofit
organizations to expand the supply of supportive housing for persons
with disabilities. Such assistance is provided as (1) capital advances
and (2) project rental assistance contracts. Capital advances may be
used to finance the acquisition with rehabilitation, acquisition
without rehabilitation (group homes only), construction or
rehabilitation of a structure, and acquisition of property from the
Resolution Trust Corporation (group homes and independent living
facilities) to be used as supportive housing for persons with
disabilities. This assistance may also cover the cost of real property
acquisition, site improvement, conversion, demolition, relocation, and
other expenses that the Secretary determines are necessary to expand
the supply of supportive housing for persons with disabilities.
On June 12, 1991, the Department published an interim rule (56 FR
27070) implementing section 811 of the NAHA to establish the Supportive
Housing for Persons with Disabilities Program. That interim rule, which
enabled the program to be funded for FY-1991, described application
procedures and program requirements, selection of applications and
duration of fund reservation requirements. A second interim rule was
published on August 12, 1992 (57 FR 36330) to provide the development-
related requirements (closing of capital advances and requirements
related to project rental assistance contracts) of the program. The
program was the subject of further amendments by the 1992 Act, which
were implemented by a third interim rule published on May 5, 1993 (58
FR 26816). All three interim rules are codified at 24 CFR part 890.
Today's interim rule (subpart F, part 890) completes the
establishment of the program by providing the requirements for
management and operation of projects funded under the program. After
the period of public comment is [[Page 11837]] completed on this
interim rule, the Department will develop a final rule based on all
previous rules.
V. Summary of Interim Rule (Subpart F)
Subpart F provides the responsibilities of the Owner, requirements
of the replacement reserve, selection and admission requirements for
tenants, obligations of tenants, provisions regarding overcrowded and
underoccupied units, lease requirements, and requirements regarding
termination of tenancy, modifications of leases, security deposits and
vacancy payments.
The subpart F requirements are similar to existing requirements for
the Section 202 Projects for Nonelderly Handicapped Families and
Individuals receiving assistance under section 202(h) of the Housing
Act of 1959. See 24 CFR 885.940-885.985.
Owner Responsibilities
The responsibilities of an Owner under part 890 include marketing,
management and maintenance, contracting for services, submission of
financial and operating statements, project fund accounting and
reporting. Marketing must be conducted in accordance with a HUD-
approved affirmative fair housing marketing plan and all Federal, State
or local fair housing and equal opportunity requirements. The Owner is
responsible for all management functions. These functions include
selection and admission of tenants, required reexaminations of incomes
for households occupying assisted units or residential spaces,
collection of tenant payments, termination of tenancy and eviction, and
all repair and maintenance functions (including ordinary and
extraordinary maintenance and replacement of capital items). All
functions must be performed in compliance with equal opportunity
requirements. The section 811 Owner must also establish and maintain a
replacement reserve to aid in funding extraordinary maintenance, and
repair and replacement of capital items.
The Owner is required to adopt written tenant selection procedures
which ensure nondiscrimination in the selection of tenants and that are
(1) consistent with the purpose of improving housing opportunities for
very low-income persons with disabilities; and (2) reasonably related
to program eligibility and an applicant's ability to perform the
obligations of the lease. The Owner must comply with all
nondiscrimination authorities. The Owner must accept applications for
admission to the project in the form prescribed by HUD. Applicant
households applying for assisted units (or residential spaces in a
group home) must complete a certification of eligibility as part of the
application for admission.
The Owner is also responsible for determining whether applicants
are eligible for admission and for the selection of households. To be
eligible for admission, an applicant must be a disabled person (as
defined in Sec. 890.105); must meet any project occupancy requirements
approved by HUD under Sec. 890.305(a)(1); must meet the disclosure and
verification requirements for Social Security Numbers, as provided by
24 CFR part 750; must sign and submit consent forms for the obtaining
of wage and claim information from State Wage Information Collection
Agencies, as provided by 24 CFR part 760; and must be a very low-income
family, as defined by Sec. 890.105. Owners shall make selections in a
nondiscriminatory manner without regard to considerations such as race,
religion, color, sex, national origin, familial status, or disability.
However, an Owner may, with the approval of the Secretary, limit
occupancy within housing developed under this part to persons with
disabilities who have similar disabilities and require a similar set of
supportive services in a supportive housing environment. Under certain
circumstances, HUD may permit the leasing of units to ineligible
families under Sec. 890.515. If the Owner determines that the household
is eligible and is otherwise acceptable and units (or residential
spaces in a group home) are available, the Owner will assign the
household a unit or residential space in a group home. If the household
will occupy an assisted unit, the Owner will assign the household a
unit of the appropriate size in accordance with HUD's general occupancy
guidelines. If no suitable unit (or residential space in a group home)
is available, the Owner will place the household on a waiting list for
the project and notify the household when a suitable unit or
residential space 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 for admission are being considered for that reason.
If the Owner determines that an applicant is ineligible for
admission or the Owner is not selecting the applicant for other
reasons, the Owner will promptly notify the applicant in writing of the
determination, the reasons for the determination, and that the
applicant has a right to request a meeting to review the rejection, in
accordance with HUD requirements.
Records on applicants and approved eligible households, which
provide racial, ethnic, gender and place of previous residency data
required by HUD, must be retained for three years. The Owner must
reexamine the income and composition of the household at least every 12
months. Upon verification of the information, the Owner must make
appropriate adjustments in the total tenant payment in accordance with
part 813, as modified by Sec. 890.105, and must determine whether the
household's unit size is still appropriate. The Owner must adjust
tenant payment and the project rental assistance payment and must carry
out any unit transfer in accordance with HUD standards.
Household Responsibilities
Households under the program are required to do the following: (1)
Pay amounts due under the lease directly to the Owner; (2) supply such
certification, release, information, or documentation as the Owner or
HUD determines necessary, including information and documentation
relating to the disclosure and verification of Social Security Numbers,
as provided by 24 CFR part 750, and the signing and submission of
consent forms for the obtaining of wage and claim information from
State Wage Information Collection Agencies, as provided by 24 CFR part
760; (3) allow the Owner to inspect the dwelling unit or residential
space at reasonable times and after reasonable notice; (4) notify the
Owner before vacating the dwelling unit or residential space; and (5)
use the dwelling unit or residential space solely for residence by the
household, and as the household's principal place of residence. The
household may not assign the lease or transfer the unit or residential
space, nor may it occupy, or receive assistance for the occupancy of a
unit or residential space governed under this part while occupying, or
receiving assistance for occupancy of, another unit assisted under any
Federal housing assistance program, including any section 8 program.
Lease
The term of the lease may not be less than one year. Unless the
lease has been terminated by appropriate action, upon expiration of the
lease term, the household and Owner may execute a new lease for a term
not less than one year, or may take no action. If no action is taken,
the lease will automatically be [[Page 11838]] renewed for successive
terms of one month. The Owner shall use the lease form prescribed by
HUD. The Owner may not use any of the prohibited provisions specified
by HUD. In addition to required provisions of the lease form, the Owner
may include a provision in the lease permitting the Owner to enter the
leased premises, at any time, without advance notice where there is
reasonable cause to believe that an emergency exists or that health or
safety of a family member is endangered. The provisions of 24 CFR part
247 apply to all decisions by an Owner to terminate the tenancy or
modify the lease of a household residing in a unit (or residential
space in a group home).
Security Deposit
At the time of the initial execution of the lease, the Owner will
require each household occupying an assisted unit (or residential space
in a group home) to pay a security deposit in an amount equal to one
month's tenant payment or $50, whichever is greater. The household is
expected to pay the security deposit from its own resources and other
available public or private resources. The Owner may collect the
security deposit on an installment basis. The Owner must place the
security deposits in a segregated interest-bearing account.
Utility Allowances
The Owner must submit an analysis of any utility allowances
applicable in an independent living complex. Such data as changes in
utility rates and other facts affecting utility consumption should be
provided as part of this analysis to permit appropriate adjustments in
the utility allowances for assisted units. In addition, if utility rate
changes would result in a cumulative increase of 10 percent or more in
the most recently approved utility allowances, the Owner must advise
HUD and request approval of new utility allowances. Whenever a utility
allowance for an assisted unit is adjusted, the Owner will promptly
notify affected households and make a corresponding adjustment of the
tenant payment and the amount of the project rental assistance payment.
Vacancy Payments
Vacancy payments under the Project Rental Assistance Contract
(PRAC) will not be made unless the conditions for receipt of these
project rental assistance payments are fulfilled. For each unit (or
residential space in a group home) that is not leased as of the
effective date of the PRAC, the Owner is entitled to vacancy payments
in the amount of 50 percent of the per unit operating cost (or pro rata
share of the group home operating cost) for the first 60 days of
vacancy, if the Owner: (1) Conducted marketing in accordance with
Sec. 890.600(a) and otherwise complied with Sec. 890.600; (2) has taken
and continues to take all feasible actions to fill the vacancy; and (3)
has not rejected any eligible applicant except for good cause
acceptable to HUD. If an eligible household vacates an assisted unit
(or residential space in a group home) the Owner is entitled to vacancy
payments in the amount of 50 percent of the approved per unit operating
cost (or pro rata share of the group home operating cost) for the first
60 days of vacancy if the Owner: (1) Certifies that it did not cause
the vacancy by violating the lease, the PRAC, or any applicable law;
(2) notified HUD of the vacancy or prospective vacancy and the reasons
for the vacancy upon learning of the vacancy or prospective vacancy;
(3) has fulfilled and continues to fulfill the requirements specified
in Sec. 890.600(a) (2) and (3) and Sec. 890.645(b) (2) and (3); and (4)
for any vacancy resulting from the Owner's eviction of an eligible
household, certifies that it has complied with Sec. 890.630. If the
Owner collects payments for vacancies from other sources (tenant
payment, security deposits, payments under Sec. 890.635(c), or
governmental payments under other programs), the Owner shall not be
entitled to collect vacancy payments to the extent these collections
from other sources plus the vacancy payment exceed the approved per
unit operating cost.
HUD Reviews
HUD shall conduct periodic on-site management reviews of the
Owner's compliance with the requirements of part 890.
HUD Issuances
The Department intends to amend the Handbook 4350.3, Occupancy
Requirements of Subsidized Multifamily Housing Programs, with these new
part 890 requirements.
VI. Other Matters
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50
implementing section 102(2)(C) of the National Environmental Policy Act
of 1969, 42 U.S.C. 4332. The Finding of No Significant Impact is
available for public inspection and copying between 7:30 a.m. and 5:30
p.m. weekdays at the Office of the Rules Docket Clerk, 451 Seventh
Street, SW., Room 10276, Washington, DC 20410-0500.
Regulatory Flexibility Act
Under 5 U.S.C. 605(b), (the Regulatory Flexibility Act), the
undersigned hereby certifies that this interim rule does not have a
significant economic impact on a substantial number of small entities.
The interim rule would provide capital advances to private nonprofit
organizations to expand the supply of supportive housing for persons
with disabilities. Although small entities will participate in the
program, the interim rule would not have a significant impact on them.
Executive Order 12606, the Family
The General Counsel, as the Designated Official for Executive order
12606, the Family, has determined that the provisions of this interim
rule will not have a significant impact on family formation,
maintenance or well being. No significant change in existing HUD
policies or programs will result from promulgation of this interim
rule, as those policies and programs relate to family concerns.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order No. 12611--Federalism, has determined that this
interim rule does not involve the preemption of State law by Federal
statute or regulation and does not have federalism impacts.
Regulatory Agenda
This interim rule was listed as sequence 1809 in the Department's
Semiannual Agenda of Regulations published on November 14, 1994 (59 FR
57632, 57658) under Executive Order 12866 and the Regulatory
Flexibility Act.
Catalog of Federal Domestic Assistance
The program number is 14.181, Supportive Housing for Persons with
Disabilities.
List of Subjects in 24 CFR Part 890
Civil rights, Grant programs--housing and community development,
Individuals with disabilities, Loan programs--housing and community
development, Low and moderate income housing, Mental health programs,
Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, part 890 of
title 24 of the [[Page 11839]] Code of Federal Regulations is amended
as follows:
PART 890--SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES
1. The authority citation for part 890 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 8013.
2. Section 890.100 is amended by adding paragraph (d) to read as
follows:
Sec. 890.100 Purpose and policy.
* * * * *
(d) Effective date of regulation. Sections 890.600 through 890.650
shall expire and shall not be in effect after October 2, 1996, unless
changes in this interim rule are published as a final rule, or the
Department publishes a notice in the Federal Register to extend the
effective date.
3. Part 890 is amended by adding subpart F to read as follows:
Subpart F--Project Management
Sec.
890.600 Responsibilities of Owner.
890.605 Replacement reserve.
890.610 Selection and admission of tenants.
890.615 Obligations of the household.
890.620 Overcrowded and underoccupied units.
890.625 Lease requirements.
890.630 Termination of tenancy and modification of lease.
890.635 Security deposits.
890.640 Adjustment of utility allowances.
890.645 Conditions for receipt of vacancy payments for assisted
units.
890.650 HUD review.
Subpart F--Project Management
Sec. 890.600 Responsibilities of Owner.
(a) Marketing. (1) The Owner must commence and continue diligent
marketing activities not later than 90 days before the anticipated date
of availability for occupancy of the group home or the anticipated date
of availability of the first unit in an independent living complex.
Market activities shall include the provision of notices of the
availability of housing under the program to operators of temporary
housing for the homeless in the same housing market.
(2) Marketing must be done in accordance with a HUD-approved
affirmative fair housing marketing plan and all Federal, State or local
fair housing and equal opportunity requirements. The purpose of the
plan and requirements is to achieve a condition in which eligible
households of similar income levels in the same housing market area
have a like range of housing choices available to them regardless of
discriminatory considerations such as their race, color, creed,
religion, familial status, disability, sex or national origin.
(3) At the time of PRAC execution, the Owner must submit to HUD a
list of leased and unleased assisted units (or in the case of a group
home, leased and unleased residential spaces) with a justification for
the unleased units or residential spaces, in order to qualify for
vacancy payments for the unleased units or residential spaces.
(b) Management and maintenance. The Owner is responsible for all
management functions. These functions include selection and admission
of tenants, required reexaminations of incomes for households occupying
assisted units or residential spaces, collection of tenant payments,
termination of tenancy and eviction, and all repair and maintenance
functions (including ordinary and extraordinary maintenance and
replacement of capital items). All functions must be performed in
compliance with equal opportunity requirements.
(c) Contracting for services. (1) With HUD approval, the Owner may
contract with a private or public entity for performance of the
services or duties required in paragraphs (a) and (b) of this section.
However, such an arrangement does not relieve the Owner of
responsibility for these services and duties. All such contracts are
subject to the restrictions governing prohibited contractual
relationship described in Sec. 890.105 (definition of Owner) (These
prohibitions do not extend to management contracts entered into by the
Owner with the Sponsor or its non-profit affiliate).
(2) Consistent with the objectives of Executive Orders 11625, 12432
and 12138, the Owner will promote awareness and participation of
minority and women's business enterprises in contracting and
procurement activities.
(d) Submission of financial and operating statements. The Owner
must submit to HUD:
(1) Within 60 days after the end of each fiscal year of project
operations, financial statements for the project audited by an
independent public accountant and in the form required by HUD; and
(2) Other statements regarding project operation, financial
conditions and occupancy as HUD may require to administer the PRAC and
to monitor project operations.
(e) Use of project funds. The Owner shall maintain a separate
interest bearing project fund account in a depository or depositories
which are members of the Federal Deposit Insurance Corporation or
National Credit Union Share Insurance Fund and shall deposit all tenant
payments, charges, income and revenues arising from project operation
or ownership to this account. All project funds are to be deposited in
Federally insured accounts. All balances shall be fully insured at all
times, to the maximum extent possible. Project funds must be used for
the operation of the project (including required insurance coverage),
and to make required deposits to the replacement reserve under
Sec. 890.605, in accordance with HUD-approved budget. Any remaining
project funds in the project funds account (including earned interest)
following the expiration of the fiscal year shall be deposited in a
Federally-insured residual receipts account within 60 days following
the end of the fiscal year. Withdrawals from this account may be made
only for project purposes and with the approval of HUD. If there are
funds remaining in the residual receipts account when the mortgage is
satisfied, such funds shall be returned to HUD.
(f) Reports. The Owner shall submit such reports as HUD may
prescribe to demonstrate compliance with applicable civil rights and
equal opportunity requirements. See Sec. 890.610(a). (Approved by the
Office of Management and Budget under control number 2502-0470).
Sec. 890.605 Replacement reserve.
(a) Establishment of reserve. The Owner shall establish and
maintain a replacement reserve to aid in funding extraordinary
maintenance and repair and replacement of capital items.
(b) Deposits to reserve. The Owner shall make monthly deposits to
the replacement reserve in an amount determined by HUD.
(c) Level of reserve. 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 reach that level, the amount
of the deposit to the reserve may be reduced with the approval of HUD.
(d) Administration of reserve. Replacement reserve funds must be
deposited with HUD or in a Federally-insured depository in an interest-
bearing account(s) whose balances(s) are fully insured at all times.
All earnings including interest on the reserve must be added to the
reserve. Funds may be drawn from the reserve and used only in
accordance with HUD guidelines and with the approval of, or as directed
by, HUD. [[Page 11840]]
Sec. 890.610 Selection and admission of tenants.
(a) Written tenant selection procedures. The Owner shall adopt
written tenant selection procedures which ensure nondiscrimination in
the selection of tenants and that are consistent with the purpose of
improving housing opportunities for very low-income persons with
disabilities; and reasonably related to program eligibility and an
applicant's ability to perform the obligations of the lease. The Owner
must comply with the following nondiscrimination authorities: section
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and the
implementing regulations at 24 CFR part 8; the Fair Housing Act (42
U.S.C. 3600-3619) and the implementing regulations at 24 CFR parts 100,
108, 109, and 110; Title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d) and the implementing regulations at 24 CFR part 1; section 3 of
the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and the
implementing regulations at 24 CFR part 135; the Age Discrimination Act
of 1975 (42 U.S.C. 6101-6107) and the implementing regulations at 24
CFR part 146; Executive Order 11246 (as amended), 3 CFR, 1964-1965
COMP., p. 339, and the implementing regulations at 41 CFR Chapter 60;
the regulations implementing Executive Order 11063 (Equal Opportunity
in Housing), 3 CFR, 1959-1963 COMP., p. 652, at 24 CFR part 107; the
Americans with Disabilities Act (42 U.S.C. 12101 et seq.) to the extent
applicable; and other applicable Federal, State and local laws
prohibiting discrimination and promoting equal opportunity. While local
residency requirements are prohibited, local residency preferences may
be applied in selecting tenants only to the extent that they are not
inconsistent with affirmative fair housing marketing objectives and the
Owner's HUD-approved affirmative fair housing marketing plan.
Preferences may not be based on the length of time the applicant has
resided in the jurisdiction. With respect to any residency preference,
persons expected to reside in the community as a result of current or
planned employment will be treated as residents. Owners shall promptly
notify in writing any rejected applicant of the grounds for any
rejection. Additionally, owners shall maintain a written, chronological
waiting list showing the name, race, gender and ethnicity and date of
each person applying for the program.
(b) Application for admission. The Owner must accept applications
for admission to the project in the form prescribed by HUD. Applicant
households applying for assisted units (or residential spaces in a
group home) must complete a certification of eligibility as part of the
application for admission. Applicant households must meet the
disclosure and verification requirements for Social Security Numbers,
as provided by 24 CFR part 750. Applicant families must sign and submit
consent forms for the obtaining of wage and claim information from
State Wage Information Collection Agencies, as provided by 24 CFR part
760. Both the Owner and the applicant household must complete and sign
the application for admission. On request, the Owner must furnish
copies of all applications for admission to HUD.
(c) Determination of eligibility and selection of tenants. The
Owner is responsible for determining whether applicants are eligible
for admission and for the selection of households. To be eligible for
admission, an applicant must be a disabled person (as defined in
Sec. 890.105); must meet any project occupancy requirements approved by
HUD under Secs. 890.265(c)(14) and 890.305(a)(1); must meet the
disclosure and verification requirements for Social Security Numbers,
as provided by 24 CFR part 750; must sign and submit consent forms for
the obtaining of wage and claim information from State Wage Information
Collection Agencies, as provided by 24 CFR part 760; and must be a very
low-income family, as defined by Sec. 890.105. An Owner, may with the
approval of the Secretary, limit occupancy within housing developed
under this part to persons with disabilities who have similar
disabilities and require a similar set of supportive services in a
supportive housing environment. Owners shall make selections in a
nondiscriminatory manner without regard to considerations such as race,
religion, color, sex, national origin, familial status, or disability.
However, an Owner may, with the approval of the Secretary, limit
occupancy within housing developed under this part to persons with
disabilities who have similar disabilities and require a similar set of
supportive services in a supportive housing environment. Under certain
circumstances, HUD may permit the leasing of units to ineligible
families under Sec. 890.515.
(d) Unit assignment. If the Owner determines that the household is
eligible and is otherwise acceptable and units (or residential spaces
in a group home) are available, the Owner will assign the household a
unit or residential space in a group home. If the household will occupy
an assisted unit, the Owner will assign the household a unit of the
appropriate size in accordance with HUD's general occupancy guidelines.
If no suitable unit (or residential space in a group home) is
available, the Owner will place the household on a waiting list for the
project and notify the household when a suitable unit or residential
space 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 for
admission are being considered for that reason.
(e) Ineligibility determination. If the Owner determines that an
applicant is ineligible for admission or the Owner is not selecting the
applicant for other reasons, the Owner will promptly notify the
applicant in writing of the determination, the reasons for the
determination, and the applicant's right to request a meeting to review
the rejection, in accordance with HUD requirements. The review, if
requested, may not be conducted by a member of the Owner's staff who
made the initial decision to reject the applicant. The applicant may
also exercise other rights (e.g., rights granted under Federal, State
or local civil rights laws) if the applicant believes he or she is
being discriminated against on a prohibited basis.
(f) Records. Records on applicants and approved eligible
households, which provide racial, ethnic, gender and place of previous
residency data required by HUD, must be retained for three years. See
Sec. 890.610(a).
(g) Reexamination of household family income and composition.--(1)
Regular reexaminations. The Owner must reexamine the income and
composition of the household at least every 12 months. Upon
verification of the information, the Owner must make appropriate
adjustments in the total tenant payment in accordance with part 813 of
this chapter, as modified by Sec. 890.105, and must determine whether
the household's unit size is still appropriate. The Owner must adjust
tenant payment and the project rental assistance payment, and must
carry out any unit transfer in accordance with HUD standards. At the
time of reexamination under paragraph (g)(1) of this section, the Owner
must require the household to meet the disclosure and verification
requirements for Social Security Numbers, as provided by 24 CFR part
750. For requirements regarding the signing and submitting of consent
forms by families for obtaining of wage and claim information from
State Wage Information Collection Agencies, see 24 CFR part 760.
[[Page 11841]]
(2) Interim reexaminations. The household must comply with the
provisions in its lease regarding interim reporting of changes in
income. If the Owner receives information concerning a change in the
household's income or other circumstances between regularly scheduled
reexaminations, the Owner must consult with the household and make any
adjustments determined to be appropriate. See 24 CFR 750.10(d)(2)(i)
for the requirements for the disclosure and verification of Social
Security Number at interim reexaminations involving new household
members. For requirements regarding the signing and submitting of
consent forms by families for the obtaining of wage and claim
information from State Wage Information Collection Agencies, see 24 CFR
part 760. Any change in the household's income or other circumstances
that result in an adjustment in the total tenant payment, tenant
payment, and project rental assistance payment must be verified.
(3) Continuation of project rental assistance payment. (i) A
household shall remain eligible for project rental assistance payment
until the total tenant payment equals or exceeds the gross rent (or a
pro rata share of the gross rent in a group home). The termination of
subsidy eligibility will not affect the household's other rights under
its lease. Project rental assistance payment may be resumed if, as a
result of changes in income, rent or other relevant circumstances
during the term of the PRAC, the household meets the income eligibility
requirements of 24 CFR part 813 (as modified in Sec. 890.105) and
project rental assistance is available for the unit or residential
space under the terms of the PRAC. The household will not be required
to establish its eligibility for admission to the project under the
remaining requirements of paragraph (c) of this section.
(ii) A household's eligibility for project rental assistance
payment may be terminated in accordance with HUD requirements for such
reasons as failure to submit requested verification information,
including information related to disclosure and verification of Social
Security Numbers, as provided by 24 CFR part 750 or failure to sign and
submit consent forms for the obtaining of wage and claim information
from State Wage Information Collection Agencies (as provided by 24 CFR
part 760).
Sec. 890.615 Obligations of the household.
(a) Requirements. The household shall:
(1) Pay amounts due under the lease directly to the Owner;
(2) Supply such certification, release of information, consent,
completed forms or documentation as the Owner or HUD determines
necessary, including information and documentation relating to the
disclosure and verification of Social Security Numbers, as provided by
24 CFR part 750, and the signing and submission of consent forms for
the obtaining of wage and claim information from State Wage Information
Collection Agencies, as provided by 24 CFR part 760;
(3) Allow the Owner to inspect the dwelling unit or residential
space at reasonable times and after reasonable notice;
(4) Notify the Owner before vacating the dwelling unit or
residential space; and
(5) Use the dwelling unit or residential space solely for residence
by the household and as the household's principal place of residence.
(b) Prohibitions. The household shall not:
(1) Assign the lease or transfer the unit or residential space; or
(2) Occupy, or receive assistance for the occupancy of, a unit or
residential space governed under this part while occupying, or
receiving assistance for occupancy of, another unit assisted under any
Federal housing assistance program, including any section 8 program.
Sec. 890.620 Overcrowded and underoccupied units.
If the Owner determines that because of change in household size,
an assisted unit is smaller than appropriate for the eligible household
to which it is leased, or that the assisted unit is larger than
appropriate, project rental assistance payment with respect to the unit
will not be reduced or terminated until the eligible household has been
relocated to an appropriate alternate unit. If possible, the Owner
will, as promptly as possible, offer the household an appropriate
alternate unit. The Owner may receive vacancy payments for the vacated
unit if the Owner complies with the requirements of Sec. 890.645.
Sec. 890.625 Lease requirements.
(a) Term of lease. The term of the lease may not be less than one
year. Unless the lease has been terminated by appropriate action, upon
expiration of the lease term, the household and Owner may execute a new
lease for a term not less than one year or may take no action. If no
action is taken, the lease will automatically be renewed for successive
terms of one month.
(b) Termination by the household. All leases may contain a
provision that permits the household to terminate the lease upon 30
days advance notice. A lease for a term that exceeds one year must
contain such provision.
(c) Form. The Owner shall use the lease form prescribed by HUD. In
addition to required provisions of the lease form, the Owner may
include a provision in the lease permitting the Owner to enter the
leased premises, at any time, without advance notice where there is
reasonable cause to believe that an emergency exists or that health or
safety of a family member is endangered.
Sec. 890.630 Termination of tenancy and modification of lease.
The provisions of part 247 of this title apply to all decisions by
an Owner to terminate the tenancy or modify the lease of a household
residing in a unit (or residential space in a group home).
Sec. 890.635 Security deposits.
(a) Collection of security deposit. At the time of the initial
execution of the lease, the Owner will require each household occupying
an assisted unit (or residential space in a group home) to pay a
security deposit in an amount equal to one month's tenant payment or
$50, whichever is greater. The household is expected to pay the
security deposit from its own resources and other available public or
private resources. The Owner may collect the security deposit on an
installment basis.
(b) Security deposit provisions applicable to units.--(1)
Administration of security deposit. The Owner must place the security
deposits in a segregated interest-bearing account. The amount of the
segregated, interest-bearing account maintained by the Owner must at
all times equal the total amount collected from the households then in
occupancy plus any accrued interest and less allowable administrative
cost adjustments. The Owner must comply with any applicable State and
local laws concerning interest payments on security deposits.
(2) Household notification requirement. In order to be considered
for the refund of the security deposit, a household must provide the
Owner with a forwarding address or arrange to pick up the refund.
(3) Use of security deposit. The Owner, subject to State and local
law and the requirements of paragraphs (b)(1) and (b)(3) of this
section, may use the household's security deposit balance as
reimbursement for any unpaid amounts which the household owes under the
lease. Within 30 days (or shorter time if required by State or local
[[Page 11842]] law) after receiving notification under paragraph (b)(2)
of this section the Owner must:
(i) Refund to a household which does not owe any amount under the
lease the full amount of the household's security deposit balance;
(ii) Provide to a household owing amounts under the lease a list
itemizing each amount, along with a statement of the household's rights
under State and local law. If the amount which the Owner claims is owed
by the household is less than the amount of the household's security
deposit balance, the Owner must refund the excess balance to the
household. If the Owner fails to provide the list, the household will
be entitled to the refund of the full amount of the household's
security deposit balance.
(4) Disagreements. If a disagreement arises concerning
reimbursement of the security deposit, the household will have the
right to present objections to the Owner in an informal meeting. The
Owner must keep a record of any disagreements and meetings in a tenant
file for inspection by HUD. The procedures of paragraph (b)(4) of this
section do not preclude the household from exercising its rights under
State or local law.
(5) Decedent's interest in security deposit. Upon the death of a
member of a household, the decedent's interest, if any, in the security
deposit will be governed by State or local law.
(c) Reimbursement by HUD for assisted units. If the household's
security deposit balance is insufficient to reimburse the Owner for any
amount which the household owes under the lease for an assisted unit or
residential space and the Owner has provided the household with the
list required by paragraph (b)(3)(ii) of this section, the Owner may
claim reimbursement from HUD for an amount not to exceed the lesser of:
(1) The amount owed the Owner, or
(2) One month's per unit operating cost, minus the amount of the
household's security deposit balance. Any reimbursement under this
section will be applied first toward any unpaid tenant payment due
under the lease. No reimbursement may be claimed for any unpaid tenant
payment for the period after termination of the tenancy. The Owner may
be eligible for vacancy payments following a vacancy in accordance with
the requirements of Sec. 890.645.
(Approved by the Office of Management and Budget under control
number 2502-0470.)
Sec. 890.640 Adjustment of utility allowances.
The Owner must submit an analysis of any utility allowances
applicable in an independent living complex. Such data as changes in
utility rates and other facts affecting utility consumption should be
provided as part of this analysis to permit appropriate adjustments in
the utility allowances for assisted units. In addition, when utility
rate changes would result in a cumulative increase of 10 percent or
more in the most recently approved utility allowances, the Owner must
advise HUD and request approval of new utility allowances. Whenever a
utility allowance for an assisted unit is adjusted, the Owner will
promptly notify affected households and make a corresponding adjustment
of the tenant payment and the amount of the project rental assistance
payment.
Sec. 890.645 Conditions for receipt of vacancy payments for assisted
units.
(a) General. Vacancy payments under the PRAC will not be made
unless the conditions for receipt of these project rental assistance
payments set forth in this section are fulfilled.
(b) Vacancies during rent-up. For each unit (or residential space
in a group home) that is not leased as of the effective date of the
PRAC, the Owner is entitled to vacancy payments in the amount of 50
percent of the per unit operating cost (or pro rata share of the group
home operating cost) for the first 60 days of vacancy, if the Owner:
(1) Conducted marketing in accordance with Sec. 890.600(a) and
otherwise complied with Sec. 890.600;
(2) Has taken and continues to take all feasible actions to fill
the vacancy; and
(3) Has not rejected any eligible applicant except for good cause
acceptable to HUD.
(c) Vacancies after rent-up. If an eligible household vacates an
assisted unit (or residential space in a group home) the Owner is
entitled to vacancy payments in the amount of 50 percent of the
approved per unit operating cost (or pro rata share of the group home
operating cost) for the first 60 days of vacancy if the Owner:
(1) Certifies that it did not cause the vacancy by violating the
lease, the PRAC, or any applicable law;
(2) Notified HUD of the vacancy or prospective vacancy and the
reasons for the vacancy upon learning of the vacancy or prospective
vacancy;
(3) Has fulfilled and continues to fulfill the requirements
specified in Sec. 890.600(a) (2) and (3) and Sec. 890.645(b) (2) and
(3); and
(4) For any vacancy resulting from the Owner's eviction of an
eligible household, certifies that it has complied with Sec. 890.630.
(d) Prohibition of double compensation for vacancies. If the Owner
collects payments for vacancies from other sources (tenant payment,
security deposits, payments under Sec. 890.635(c), or governmental
payments under other programs), the Owner shall not be entitled to
collect vacancy payments to the extent these collections from other
sources plus the vacancy payment exceed the approved per unit operating
cost.
Sec. 890.650 HUD review.
HUD shall conduct periodic on-site management reviews of the
Owner's compliance with the requirements of this part.
Dated: December 27, 1994.
Jeanne K. Engel,
General Deputy Assistant Secretary for Housing--Federal Housing
Commissioner.
[FR Doc. 95-4889 Filed 3-1-95; 8:45 am]
BILLING CODE 4210-27-P
