[Federal Register Volume 60, Number 41 (Thursday, March 2, 1995)]
[Rules and Regulations]
[Pages 11828-11834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4890]
[[Page 11827]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 243, 760 and 889
Low Income Housing: Elderly Persons Supportive Housing; Management and
Operation Requirements; Final Rule
Federal Register / Vol. 60, No. 41 / Thursday, March 2, 1995 / Rules
and Regulations
[[Page 11828]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
24 CFR Parts 243, 760 and 889
[Docket No. R-95-1767; FR-3336-I-01]
RIN 2502-AF86
Supportive Housing for the Elderly; Management
AGENCY: Office of the Secretary, HUD.
ACTION: Interim rule.
-----------------------------------------------------------------------
SUMMARY: This interim rule establishes the requirements related to
management and operation of the Supportive Housing for the Elderly
Program. The purpose of the Supportive Housing for the Elderly Program
is to enable elderly persons to live with dignity and independence by
expanding the supply of supportive housing that is designed to
accommodate the special needs of elderly persons and provides a range
of services that are tailored to the needs of elderly persons occupying
such housing. An interim rule similar to this interim rule is also
being published in today's Federal Register for the Supportive Housing
for Persons with Disabilities Program. This interim rule also adds both
Supportive Housing programs to the list of projects covered by the pet
ownership requirements. This interim rule also applies the wage and
claim consent form requirements to both programs.
DATES: Effective Date: April 3, 1995.
Sunset Provisions: Sections 243.3(c)(1), 760.3(b)(10) and (11), and
889.600 through 889.655, 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
(of the Housing Act of 1959) direct loan program. This interim rule
furthers the legislative mandate of section 202 of the Housing Act of
1959, as amended, and it involves only minor interpretations of that
statute. The section 202 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 202 capital advance program.
The Department also 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 the Elderly Program is authorized by
section 202 of the Housing Act of 1959, as amended by section 801 of
the Cranston-Gonzalez National Affordable Housing Act (the NAHA Act)
and the Housing and Community Development Act of 1992 (1992 Act). Under
the program, which is implemented in 24 CFR part 889, assistance is
provided to private nonprofit organizations and nonprofit consumer
cooperatives to expand the supply of supportive housing for the
elderly. Such assistance is provided as (1) capital advances and (2)
project rental assistance contracts. Capital advances may be used to
finance the construction or rehabilitation of a structure, or the
acquisition of a structure from the Resolution Trust Corporation (RTC),
to be used as supportive housing for the elderly. 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 the elderly.
On June 12, 1991, the Department published an interim rule (56 FR
27104) implementing the amendments made by section 801 of the NAHA to
establish the Supportive Housing for the Elderly 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 36338) 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 of the 1992
Act, which were implemented by a third interim rule published on May 5,
1993 (58 FR 26836). All three interim rules are codified at 24 CFR part
889.
Selection preference rules (Secs. 889.611-889.615) for this program
were published on July 18, 1994 at 59 FR 36616. Today's interim rule
(subpart F, part 889) 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
completed on this interim rule, the Department will develop a final
rule based on all previous rules. [[Page 11829]]
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 889 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 the 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 families occupying assisted units, 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 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 elderly persons; 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 Secretary is to provide to an appropriate agency in
each area (which may be the applicable State or Area Agency on Aging)
information regarding the availability of housing assisted under this
part. The Owner must accept applications for admission to the project
in the form prescribed by HUD. Applicant families applying for assisted
units 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 families. To be
eligible for admission, an applicant must be an elderly person (as
defined in Sec. 889.105); must meet any project occupancy requirements
approved by HUD under Sec. 889.305(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. 889.105. Under certain circumstances, HUD
may permit the leasing of units to ineligible families under
Sec. 889.515. 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. The Owner will assign the family a unit of the
appropriate size in accordance with HUD's general occupancy guidelines.
If no suitable unit is available, the Owner will place the family on a
waiting list for the project and notify the family 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 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 families, 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 family 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. 889.105, and must determine whether the family'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.
Family Responsibilities
Families 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; and (5) use the dwelling unit
solely for residence by the family, and as the family's principal place
of residence. The family may not assign the lease or transfer the unit,
nor may it occupy, or receive assistance for the occupancy of a unit
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 family 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.
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 part 247 apply to all
decisions by an Owner to terminate the tenancy or modify the lease of a
family residing in a unit.
Security Deposit
At the time of the initial execution of the lease, the Owner will
require each family occupying a unit to pay a [[Page 11830]] security
deposit in an amount equal to one month's total tenant payment or $50,
whichever is greater. The family is expected to pay the security
deposit from its own resources and 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 also submit an analysis of any utility allowances
applicable. 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
families 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 certain conditions for receipt of these
project rental assistance payments are fulfilled. For each unit 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 for the first 60 days of vacancy, if the Owner: (1)
Conducted marketing in accordance with Sec. 889.600(a) and otherwise
complied with Sec. 889.600; (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 family vacates a unit, the Owner is entitled to vacancy
payments in the amount of 50 percent of the approved per unit 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. 889.600(a)(2) and (3) and
Sec. 889.650(b)(2) and (3); and (4) for any vacancy resulting from the
Owner's eviction of an eligible family, certifies that it has complied
with Sec. 889.635. If the Owner collects payments for vacancies from
other sources (tenant payments, security deposits, payments under
Sec. 889.640(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 889.
VI. Amendments to 24 CFR Parts 243 and 760
This interim rule also amends 24 CFR part 243 by including the
Supportive Housing for the Elderly and Supportive Housing for Persons
with Disabilities projects in the list of projects covered by the pet
ownership requirements. The interim rule also amends part 760 and
applies the wage and claim consent form requirements to the Supportive
Housing for the Elderly and Supportive Housing for Persons with
Disabilities Programs.
VII. 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 and nonprofit consumer cooperatives to expand the supply
of supportive housing for the elderly. 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.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order No. 12611--Federalism, has determined that the
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 number 1807 in the
Department's Semiannual Agenda of Regulations published on November 14,
1994 (59 FR 57632, 57657) under Executive Order 12866 and the
Regulatory Flexibility Act.
Catalog of Federal Domestic Assistance
The program number is 14.157, Housing for the Elderly or
Handicapped.
List of Subjects
24 CFR Part 243
Aged, Grant programs--housing and community development,
Individuals with disabilities, Loans programs--housing and community
development, Low and moderate income housing, Mortgage insurance, Pets,
Reporting and recordkeeping requirements.
24 CFR Part 760
Grant programs--housing and community development, Income
verification procedures, Indians, Intergovernmental relations, Loan
programs--housing and community development, Penalties, Public housing,
Rent subsidies, Reporting and recordkeeping requirements, Wages.
24 CFR Part 889
Aged, Capital advance programs, Grant programs--housing and
communtiy development, Loan programs--housing and community
development, Low and moderate income housing, Rent subsidies, Reporting
and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, title 24 of
the Code of Federal Regulations is amended to read as follows:
PART 243--PET OWNERSHIP IN HOUSING FOR THE ELDERLY OR HANDICAPPED
1. The authority citation for part 243 continues to read as
follows:
Authority: 12 U.S.C. 1701r-1; 42 U.S.C. 3535(d).
[[Page 11831]] 2. In Sec. 243.3, paragraph (c) introductory text
and paragraph (c)(1) are revised to read as follows:
Sec. 243.3 Definitions.
* * * * *
(c) Project for the elderly or persons with disabilities means a
specific rental or cooperative multifamily property that, unless
currently owned by HUD, is subject to a first mortgage, and:
(1) That is assisted under section 202 of the Housing Act of 1959,
and as amended (Housing for the Elderly or Disabled or Supportive
Housing for the Elderly) or is assisted under section 811 of the
National Affordable Housing Act (Supportive Housing for Persons with
Disabilities);
* * * * *
3. Section 243.4 is revised to read as follows:
Sec. 243.4 Effective date.
This part shall be effective on March 2, 1987. However, project
owners shall have until May 1, 1987 to implement the provisions of this
part. Section 243.3(c)(1) 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.
PART 760--PROCEDURES FOR OBTAINING WAGE AND CLAIM INFORMATION ABOUT
APPLICANTS AND PARTICIPANTS IN HUD'S SECTION 8 AND PUBLIC HOUSING
PROGRAMS FROM STATE WAGE INFORMATION COLLECTION AGENCIES (SWICAs)
4. The authority citation for part 760 is revised to read as
follows:
Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437a, 1437d, 1437ee,
1437f, 3535(d), and 3544.
5. In Sec. 760.3, paragraph (b) is amended by redesignating
paragraphs (b)(10) through (b)(13) as paragraphs (b)(12) through
(b)(15), and by adding new paragraphs (b)(10) and (b)(11), to read as
follows:
Sec. 760.3 Applicability.
* * * * *
(b) * * *
(10) Part 889, Supportive Housing for the Elderly.
(11) Part 890, Supportive Housing for Persons with Disabilities.
* * * * *
6. Section 760.40 is amended by adding paragraph (c) to read as
follows:
Sec. 760.40 Effective date of rule.
* * * * *
(c) Expiration date. Sections 760.3(b)(10) and (11) 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.
PART 889--SUPPORTIVE HOUSING FOR THE ELDERLY
7. The authority citation for part 889 continues to read as
follows:
Authority: 12 U.S.C. 1701q, 42 U.S.C. 3535(d).
8. Section 889.100 is amended by adding paragraph (d) to read as
follows:
Sec. 889.100 Purpose and policy.
* * * * *
(d) Expiration date. Sections 889.600 through 889.655 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.
9. Subpart F is amended by adding Secs. 889.600, 889.605, 889.610,
889.620, 889.625, 889.630, 889.635, 889.640, 889.645, and 889.650, to
read as follows:
Subpart F--Project Management
Sec.
889.600 Responsibilities of owner.
889.605 Replacement reserve.
889.610 Selection and admission of tenants.
889.611 Selection preferences.
* * * * *
889.620 Obligations of the family.
889.625 Overcrowded and underoccupied units.
889.630 Lease requirements.
889.635 Termination of tenancy and modification of lease.
889.640 Security deposits.
889.645 Adjustment of utility allowances.
889.650 Conditions for receipt of vacancy payments for assisted
units.
889.655 HUD review.
Subpart F--Project Management
Sec. 889.600 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 of the first unit. 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 the 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
families of similar income levels in the same housing market 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, with a 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. These functions include selection and admission
of tenants, required reexaminations of incomes for families occupying
assisted units, 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. 889.105 (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-owned 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. [[Page 11832]]
(e) Use of project funds. The Owner shall maintain a separate
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. 889.605, 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. 889.610(a). (Approved by the
Office of Management and Budget under control number 2502-0470).
Sec. 889.605 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 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.
Sec. 889.610 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 elderly persons;
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 Part 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, ethnicity and date of each
person applying for the program.
(b) Information on availability of assisted housing. The Secretary
shall provide to an appropriate agency in each area (which may be the
applicable State or Area Agency on Aging) information regarding the
availability of housing assisted under this part.
(c) Application for admission. The Owner must accept applications
for admission to the project in the form prescribed by HUD and is
obligated to confirm all information provided by the applicant families
on the application. Applicant families must be requested to complete a
release of information consent for verification of information.
Applicant families applying for assisted units must complete a
certification of eligibility as part of the application for admission.
Applicant families 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 family must complete and sign the application for
admission. On request, the Owner must furnish copies of all
applications for admission to HUD.
(d) Determination of eligibility and selection of tenants. The
Owner is responsible for determining whether applicants are eligible
for admission and for the selection of families. To be eligible for
admission, an applicant must be an elderly person (as defined in
Sec. 889.105); 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. 889.105. Under certain circumstances, HUD may permit
the leasing of units to ineligible families under Sec. 889.515.
(e) Unit assignment. 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. The Owner will assign the family a unit
of the appropriate size in accordance with HUD's general occupancy
guidelines. If no suitable unit is available, the Owner will place the
family on a waiting list for the project and notify the family 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
[[Page 11833]] additional applications for admission are being
considered for that reason.
(f) 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.
(g) Records. Records on applicants and approved eligible families,
which provide racial, ethnic, gender and place of previous residency
data required by HUD, must be retained for three years. See
Sec. 889.610(a).
(h) Reexamination of family income and composition. (1) Regular
reexaminations. The Owner must reexamine the income and composition of
the family 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. 889.105, and must determine whether the family'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 (h)(1) of this section, the Owner must require the family 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.
(2) Interim reexaminations. The family 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
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. 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 family members.
For requirements regarding the signing and submitting of consent forms
by families for the obtaining of wage and claim information from State
Wage Information Collection Agencies, see 24 CFR part 760. Any change
in the family'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 family
shall remain eligible for project rental assistance payment until the
total tenant payment equals or exceeds the gross rent. The termination
of subsidy eligibility will not affect the family'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 family meets the income eligibility
requirements of part 813 of this chapter (as modified in Sec. 889.105)
and project rental assistance is available for the unit under the terms
of the PRAC. The family will not be required to establish its
eligibility for admission to the project under the remaining
requirements of paragraph (d) of this section.
(ii) A family'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. 889.620 Obligations of the family.
(a) Requirements. The family 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; and
(5) Use the dwelling unit solely for residence by the family and as
the family's principal place of residence.
(b) Prohibitions. The family shall not:
(1) Assign the lease or transfer the unit; or
(2) Occupy, or receive assistance for the occupancy of, a unit
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.
(Approved by the Office of Management and Budget under control
number 2502-0470)
Sec. 889.625 Overcrowded and underoccupied units.
If the Owner determines that because of change in family size, a
unit is smaller than appropriate for the eligible family to which it is
leased, or that the unit is larger than appropriate, project rental
assistance payment with respect to the unit will not be reduced or
terminated until the eligible family has been relocated to an
appropriate alternate unit. If possible, the Owner will, as promptly as
possible, offer the family an appropriate alternate unit. The Owner may
receive vacancy payments for the vacated unit if the Owner complies
with the requirements of Sec. 889.650.
Sec. 889.630 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 family 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 family. All leases may contain a provision
that permits the family 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. [[Page 11834]]
Sec. 889.635 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 family
residing in a unit.
Sec. 889.640 Security deposits.
(a) Collection of security deposit. At the time of the initial
execution of the lease, the Owner will require each family occupying a
unit to pay a security deposit in an amount equal to one month's total
tenant payment or $50, whichever is greater. The family is expected to
pay the security deposit from its own resources and 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 families 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) Family notification requirement. In order to be considered for
the refund of the security deposit, a family 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 paragraph (b)(3) of this section, may use
the family's security deposit balance as reimbursement for any unpaid
family contribution or other amount which the family owes under the
lease. Within 30 days (or shorter time if required by State or local
law) after receiving notification under paragraph (b)(2) of this
section the Owner must:
(i) Refund to a family which does not owe any amount under the
lease the full amount of the family's security deposit balance;
(ii) Provide to a family owing amounts under the lease a list
itemizing each amount, along with a statement of the family's rights
under State and local law. If the amount which the Owner claims is owed
by the family is less than the amount of the family's security deposit
balance, the Owner must refund the excess balance to the family. If the
Owner fails to provide the list, the family will be entitled to the
refund of the full amount of the family's security deposit balance.
(4) Disagreements. If a disagreement arises concerning
reimbursement of the security deposit, the family will have the right
to present objections to the Owner in an informal meeting. The Owner
must keep a record of any disagreements and meetings in a tenant file
for inspection by HUD. The procedures of paragraph (b)(4) of this
section do not preclude the family from exercising its rights under
State or local law.
(5) Decedent's interest in security deposit. Upon the death of a
member of a family, 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 family's
security deposit balance is insufficient to reimburse the Owner for any
amount which the family owes under the lease for a unit and the Owner
has provided the family 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
family'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 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. 889.650.
Sec. 889.645 Adjustment of utility allowances.
The Owner must submit an analysis of any utility allowances
applicable. 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
families and make a corresponding adjustment of the tenant payment and
the amount of the project rental assistance payment.
(Approved by the Office of Management and Budget under control
number 2502-0470)
Sec. 889.650 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 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 for
the first 60 days of vacancy, if the Owner:
(1) Conducted marketing in accordance with Sec. 889.600(a) and
otherwise complied with Sec. 889.600;
(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 family vacates a unit,
the Owner is entitled to vacancy payments in the amount of 50 percent
of the approved per unit 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. 889.600(a)(2) and (3) and Sec. 889.650(b)(2) and (3);
and
(4) For any vacancy resulting from the Owner's eviction of an
eligible family, certifies that it has complied with Sec. 889.635.
(d) Prohibition of double compensation for vacancies. If the Owner
collects payments for vacancies from other sources (tenant payments,
security deposits, payments under Sec. 889.640(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. 889.655 HUD review.
HUD shall conduct periodic on-site management inspections and
reviews of the Owner's compliance with the requirements of this part.
Henry G. Cisneros,
Secretary.
[FR Doc. 95-4890 Filed 3-1-95; 8:45 am]
BILLING CODE 4210-32-P
