[Federal Register Volume 59, Number 66 (Wednesday, April 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8065]
[[Page Unknown]]
[Federal Register: April 6, 1994]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
Office of the Assistant Secretary for Housing; Federal Housing
Commissioner
_______________________________________________________________________
Notice of Funding Availability for Intermediaries to Administer
Preservation Technical Assistance Grants; Notice
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing; Federal Housing
Commissioner
[Docket No. N-94-3719; FR-3473-N-02]
NOFA for Intermediaries to Administer Preservation Technical
Assistance Grants
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Notice of funding availability.
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SUMMARY: The Department requests applications from intermediaries
seeking to administer grant funds as described in the body of this
NOFA. An intermediary that applies to cover an area smaller than one
State must seek to administer grants in a jurisdiction covering at
least one HUD area office. Intermediaries will receive funding, to be
used as processing fees, from a portion of the $45 million funding that
is available for technical assistance grants to promote the ability of
residents of eligible low-income housing to participate meaningfully in
the preservation process established by the Emergency Low Income
Housing Preservation Act of 1987 (ELIHPA) and the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 (LIHPRHA). The NOFA
describes the technical assistance grants that will be made available
through intermediaries and the selection criteria that will be used for
those grants; however, this is not a request for applications for those
direct technical assistance grants.
Of the available funds, $13.5 million will be available for
Resident Capacity Grants and $31.5 million will be available for
Predevelopment grants. Both of these grant categories are described in
Appendix A of this NOFA. Dollar amounts have been made available by
State, utilizing the Department's estimates of preservation activity.
Any additional amounts made available from the termination of the
September 3, 1992, NOFA, or by appropriation in future years, if any,
will be divided proportionately between the grant categories.
In the body of this document is information concerning eligible
intermediary applicants; the funding available by State; HUD's
processing of the intermediary applications; grant applicants eligible
for technical assistance; and the selection criteria for both the
intermediary applicants and technical assistance grant applicants.
Technical assistance applicants should be aware that the determination
of which regulatory requirements apply to an applicant's purchase
depends on the preservation program under which the owner has filed a
Notice of Intent. Thus, applicants must comply with 24 CFR part 248 and
with either ELIHPA or LIHPRHA, as appropriate. (Applicants should note
that part 248, as codified in the April 1, 1993, revision of the Code
of Federal Regulations (CFR) was amended subsequently in a rule
published on July 13, 1993 (57 FR 3384), which reflects requirements of
the Housing and Community Development Act of 1992.)
DATES: The deadline for submission of intermediary applications is June
6, 1994. Applications must be physically received in the Preservation
Division, Department of Housing and Urban Development, room 6284, 451
Seventh Street, SW., Washington, DC 20410, by 5 p.m., EST, on the due
date.
ADDRESSES: Application kits for intermediaries may be obtained from the
Multifamily Preservation Division, Department of Housing and Urban
Development, room 6284, 451 Seventh Street, SW., Washington, DC 20410;
and from the Multifamily Housing Clearinghouse, P.O. Box 6424,
Rockville, MD 20850, telephone 1-800-955-2232.
FOR FURTHER INFORMATION CONTACT: Kevin J. East, Director, Preservation
Division, Department of Housing and Urban Development, room 6284, 451
Seventh Street, SW., Washington, DC 20410; telephone (202) 708-2300. To
provide service for persons who are hearing- or speech-impaired, this
number may be reached via TDD by dialing the Federal Information Relay
Service on 1-800-877-TDDY (1-800-877-8339) or 202-708-9300. (Except for
the ``800'' number, telephone numbers are not toll-free).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act Statement
The information collection requirements contained in this notice
have been reviewed by the Office of Management and Budget under the
provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-
3520). The OMB control number is 2502-0502.
Background
On July 13, 1993, the Department took the unusual step of
publishing a draft Notice of Fund Availability (58 FR 37819),
specifically inviting public comments on the Department's proposed
methodology for implementing the provisions of section 312 of the
Housing and Community Development Act of 1992 (Pub. L. 102-550,
approved October 28, 1992) (1992 HCDA), which added sections 251-257 to
the Low-Income Housing Preservation and Resident Homeownership Act of
1990 (Pub. L. 101-625, section 601 of the National Affordable Housing
Act (NAHA), approved November 28, 1990) (LIHPRHA). The comment period
expired on August 28, 1993. The Department received a total of 26
comments. Two comments were from legal/advocacy organizations; eight
were from low-income housing organizations that are involved in
development of and advocacy for affordable housing; nine were from
tenant organizations; three were from community development
corporations; two were from community service organizations; one was
from a local government agency; and one was from an individual housing
consultant.
This NOFA implements sections 251, 252, 253, 255, 256, and 257 of
LIHPRHA, as added by section 312 of the 1992 HCDA. This NOFA does not
implement section 254 of LIHPRHA, which will be implemented soon
through a separate NOFA. Therefore, the comments received on section
254 as a result of the draft NOFA published July 13, 1993, will not be
addressed here, but will be considered in that separate NOFA.
The first section of this NOFA is a discussion of the public
comments and modifications from the draft NOFA that were made in
response to the public comments and as a result of additional HUD
consideration. The actual NOFA follows the discussion of public
comments and begins with the section designated ``II. Purpose and
Substantive Description.''
I. Public Comments
A. Direct Technical Assistance Grants
1. Resident Notification
The proposed NOFA required each applicant for a technical
assistance grant to notify the residents of the property of the
application. Seventeen commenters requested that this requirement be
clarified or strengthened. Six commenters requested that the
notification be in writing, and be required to include a summary of the
proposed plan for the property including items on the development team,
budget, and proposed tasks. The Department has adopted this
recommendation.
A number of commenters requested that the notification advise that
residents themselves can also apply for grant funds and can endorse an
eligible organization of their choice. Several others said this
information should be given, not by the applicant, but by the
Department, possibly as part of current resident notification forms
under 24 CFR part 248. The Department has decided to require, as part
of the applicant's resident notification, a statement that residents
may themselves become eligible grantees. One commenter said the notice
must have a name and contact number for the intermediary and the
applicant. The Department has implemented this requirement. The same
commenter suggested that intermediaries be required to supply a copy of
the application with translations. The Department has decided that this
requirement would be too burdensome on the intermediary and too costly
to the Department. In general, however, translation expenses would be
considered a reimbursable expense under the grant.
Three commenters expressed concern that owners may thwart access to
buildings to prevent distribution of notices and/or resident meetings.
Therefore, HUD should require managers to provide addresses of tenants
to intermediaries, and any costs to owners would be reimbursable. The
Department agrees that this could be a problem in certain cases. If the
applicant is having difficulties getting access to the building, it may
contact the administering intermediary, who will have the authority to
contact the owner for access to the property and the names and
addresses of residents.
Twelve commenters requested, as part of resident notification, an
advance notification of application submission for technical
assistance, followed by a tenant comment period. Many of these
commenters also requested the inclusion of a requirement that the
applicants meet with the residents prior to application submission. The
comments ranged from requiring a 15-day notice prior to application
submission, to a 30-day comment period following a resident meeting,
with a seven-day notification that the meeting itself will take place.
One commenter said at least two resident meetings should be required,
one informational and one for tenant comment. One commenter suggested
that the tenant comment period could partially overlap with the
administering intermediary's review of the application so there would
be less delay in grant awards. Another said that the general
requirement to notify all residents could be too burdensome in large
projects, and when owners are not cooperative, the applicant could
simply certify that a public meeting was held.
The Department seeks to maximize resident participation, where
appropriate, without unduly delaying the grant award process.
Therefore, the Department will require written notification that a
resident meeting will take place. This notification shall include
summary information on the grant proposal and an indication that the
residents will be able to comment on the grant proposal subsequent to
the resident meeting. The meeting shall occur at least 14 days prior to
application submission and resident comments may be submitted to the
intermediary and the applicant during that 14-day period. If there are
substantive objections by the residents, the applicant must provide a
response to the residents and to the intermediary before the grant can
be awarded. If necessary, the applicant will meet again with the
residents to resolve issues. In any case, if a majority of residents
are opposed to the application, the application will be rejected.
2. Applicant Eligibility
Seven commenters were concerned with the requirement that, if the
owner has not submitted a Notice of Intent to sell, the applicant must
have a binding commitment from the owner to sell to the applicant.
Several suggested that a letter of intent to sell should be adequate,
others that a letter to work exclusively with the applicant should be
sufficient. The wording ``binding agreement to sell'' is statutory;
however, the Department agrees that it would be impractical to require
a purchase and sale agreement before the applicant has become an
eligible purchaser under the preservation program and/or has become a
sponsor with the capacity to purchase, own, and manage the property.
Therefore, the Department interprets the binding agreement to sell as
an exclusive agreement to work with the applicant entity towards a sale
unless it subsequently becomes clear that the applicant is not moving
towards that goal in a reasonable and timely manner. If the owner seeks
to work with another entity without the consent of the applicant,
consultation with the intermediary on what constitutes a timely manner
would be required.
Four commenters requested that HUD clarify what ``seeking to
purchase with a majority of resident support'' means. One suggested it
should be clear that the intention of the applicant is to become an
eligible purchaser in the first six months of the sale period. Several
thought applicants should be required to detail the method for securing
support and adhere to that method. One thought that to require a
majority-supported preferred priority purchase in order to receive
later grant funds is not inconsistent with the statute. The application
kit will require that each applicant detail its method for securing
resident support, and this will be reviewed by the intermediary in
deciding whether the plan to achieve a resident-supported purchase is
reasonable and achievable. In general, applicants must adhere to their
grant plans to receive further funding.
Seven commenters said documented resident opposition to a grantee
should be sufficient to reject or terminate a grant; four of these
commenters also requested that resident withdrawal of support for a
grantee stop all funding. Two commented that HUD should be required to
address the reasons for withdrawal of funding. One commented that
residents should be able to appeal the selection of a Community-Based
Nonprofit Organization (CBO) applicant, and that termination should be
allowed for nonperformance.
The Department reiterates that termination of a grant for
nonperformance has always been the Department's practice. The
Department has included in the NOFA the provision that a majority of
resident opposition to the applicant prior to approval of an
application would be sufficient for the intermediary to reject the
application. In addition, a majority of resident support for another
eligible entity at any time would be sufficient for termination of the
grant.
One commenter stated that Resident Capacity grants should only be
given to groups that will not seek to purchase and recipients should be
disqualified as a priority purchaser. Another, however, said that
potential purchasers should not be categorically prohibited from
receiving Resident Capacity grant funds. One commenter said the NOFA
should maintain the Resident Capacity-applicant concept that RCs,
Resident Groups and Community-Based Nonprofit Housing Developers (CBDs)
are equally eligible.
The Department believes that the statute is clear on eligibility in
this case. Nonprofit community-based housing developers may receive
Resident Capacity grants in order to educate and organize the residents
and resident organizations. However, in the case of competing
applications for Resident Capacity grants, the intermediaries will give
preference to resident groups and resident organizations.
A commenter said that grantees should be required to demonstrate
fiscal standards or to use grant funds to establish them. The
Department has included this requirement in previous grant programs and
will continue to include the requirement.
Four commenters suggested that the threshold for resident
membership in resident groups should be raised to 10% of the units. One
suggested that all recipients should have this support. Another
suggested that a committee structure that involves residents by
building or floor should be required. Another commenter, however, felt
that the proposed NOFA set a realistically low threshold for
demonstrating resident support at an early stage and that, instead, the
requirement should be for ongoing progress toward gaining greater
resident support. The Department has not increased the minimum unit
threshold, but will, through its guidance to intermediaries, require
direct assistance grantees to show continued effort towards gaining
resident support.
One commenter stated that resident groups that are not yet Resident
Councils should not be able to apply for Resident Capacity grants.
Again, the statute is clear on this point--resident groups are eligible
for these grants. Two commenters felt that Resident Capacity grant
applicants should be required to identify persons carrying out
activities and their qualifications. The Department has clarified this
in the NOFA.
One commenter suggested that joint venture applications should be
permitted from any eligible applicants. The Department has clarified
this in the NOFA.
Five commenters wanted clarification that a Notice of Election to
Proceed under the provision of section 604 of LIHPRHA (Form 9610)
should count as a Notice of Intent for purposes of eligibility. The
Department has made this clarification. Two others suggested that the
Form 9610 should make a property eligible regardless of whether or not
the owner is currently proceeding under the program.
The Department will not allow applications in properties when the
owner is not proceeding under the program at this time. A Form 9610
will count as a Notice of Intent under this NOFA only if the owner has
checked box B on that form and is proceeding under the program. Not
many owners have submitted a Form 9610 electing to proceed through the
LIHPRHA appraisal process, but have not subsequently submitted a Notice
to the Department indicating their intent to proceed.
Three commenters suggested expanding the definition of eligible
applicants. One suggested including Community Action Agencies, which
have been servicing the low-income community in all areas for more than
25 years, and Community-Based Nonprofit Organizations. One felt
Statewide organizations should be eligible for Resident Capacity
grants. The third suggested that where there is no existing CBD (in
rural or underserved areas), a new CBO should be able to align itself
with an existing nonprofit that has two years of experience. Again, the
Department believes the statute is clear: these are not eligible
applicants.
One commenter sought clarification that if the owner is not
selling, residents can receive a Resident Capacity grant. Two
commenters sought further clarification that resident capacity grants
are separate from Predevelopment grants and can be awarded concurrently
and to separate organizations. The Department has made both of these
clarifications.
One commenter felt the word ``community'' was vaguely defined in
the NOFA, and that even if an organization has not been active
throughout its entire region for some time, the organization should not
be precluded from applying for a grant. The Department has repeated the
statutory requirement in this case, and believes it is clear.
One commenter requested that HOPE 2 grantees not be required to
wait for notification of termination of HOPE 2 grant before applying
for a technical assistance (resident capacity or predevelopment) grant
because there might be HUD delays. Because an owner cannot file a
Notice of Intent (NOI) until HOPE 2 is terminated, the criterion for
previous HOPE selectees should be an owner's filing of a NOI. The
Department has adopted this suggestion.
One commenter requested that existing owner/sellers (including
nonprofits) should not be able to apply for Resident Capacity grants.
In general, this is the Department's requirement, with the exception of
nonprofit general partners seeking to buy out their limited partners.
Substantive objections from residents in the case of an application
from a nonprofit general partner, however, will be considered by
intermediaries.
One commenter was concerned that grantees under the 1992 NOFA may
not be eligible to apply for additional funds under this NOFA because
they are not Community-Based Nonprofit Housing Developers. The
Department considers the statute clear and finds no reason to change
the statutory requirement or the NOFA. Community-Based Nonprofit
Organizations funded under the previous NOFA are not necessarily
eligible under this NOFA.
3. Eligible Activities
Seven commenters sought clarification on eligible activities for
Resident Capacity grants. Suggestions for additional eligible
activities included: providing training on rights and opportunities
under LIHPRHA; training on resident issues if an owner is not selling;
hiring architect or other consultants to advise residents during the
Preservation Capital Needs Assessment (PCNA)/appraisal process; hiring
a tenant coordinator or a project manager; expense to cover phone and
copying; and legal services to interpret preservation documentation.
The Department has made these clarifications.
Seven commenters sought clarification on eligible activities for
Predevelopment grants. Suggestions for additional eligible activities
included: obtaining a financial feasibility analysis; preparing a Plan
of Action or Resident Homeownership Plan; preparing a Transfer of
Physical Assets package; tenant and board training on ``development''
and the preservation process; legal expenses; and hiring a project
manager. The Department has made these clarifications.
Six commenters felt tenant-related expenses, such as child care,
bus fare to meetings, and beverages at meetings, should be allowable.
The Department has made this clarification. However these expenses are
only allowable to the extent that they support residents in their
ability to participate in resident meetings and in planning for the
grant.
Two commenters suggested that newly formed resident groups should
be required to ensure a democratic process developed in conjunction
with the National Alliance of HUD Tenants, that residents should have
oversight authority over recipients, and that tenant input should be a
criterion in receiving additional funds. The Department decided that a
requirement to work with a specific national organization would be too
burdensome on the grantees. The Department is clarifying that residents
should be notified of the progress of the grant, but requiring resident
oversight will be too burdensome on the grantee and the intermediaries.
One commenter requested that HUD consider the administrative
structure necessary for providing the grants, given that the nonprofit
grantees may not end up being purchasers/sponsors. The Department
considered this issue and believes the statutory intent is clear. The
creation of an eligible Community-Based Nonprofit Organization (CBO)
purchaser is a requirement of a Community-Based Nonprofit Housing
Developer (CBD) seeking a grant to purchase a property under LIHPRHA.
The Department will work with intermediaries to ensure that grant fund
release is not delayed due to the creation of a new entity. Funds for
activities subsequent to a purchase offer may be released to the new
entity. However, that new entity is expected to continue working with
the Community-Based Nonprofit Housing Developer through the term of the
grant.
A commenter suggested that the requirement that grantees be in
conformance with appropriate program regulations and guidelines is too
burdensome on grantees and, rather, should be a requirement of HUD or
intermediaries as part of monitoring. The Department believes this
requirement is not too burdensome. A grantee may use the grant to fund
administrative activities in order to conform with the grant and the
preservation programs.
Three commenters felt HUD should spell out a clear priority to
maximize grant funds to tenant-controlled coalitions. Two others
requested a requirement that all grantees obtain tenant group approval,
to ensure maximum tenant control over the eventual purchaser. While the
Department has clarified that resident organizations have preference
for Resident Capacity grants, the Department believes that the other
priorities listed by the commenters are contrary to statutory intent.
4. Conflicts of Interest
The Department received six comments on the proposed NOFA's
conflict of interest requirements. One commenter believed that the
requirements should be stronger. Another felt the requirement should
involve disclosure rather than strict guidelines, so groups could
continue to work with current consultants. Three commenters believed
that the conflict of interest requirements should require grant
recipients to certify that there is no violation of the Related Party
rule, as defined in 24 CFR 248.101. Further, to prevent ``straw''
buyers, the Related Party Rule should: apply to entities other than
individuals (e.g., corporations and partnerships); prohibit an identity
of interest with a for-profit owner; not prohibit use of consultants
and attorneys who are arms length; and require all related parties to
make disclosures. One commenter felt the applicant should also disclose
any intent to be involved in management, development, or provision of
services for money, but that continued use of architects, management
agents, development consultants, etc., should not be prohibited after
acquisition. Another felt there should not be a blanket prohibition on
a grantee contracting with owner consultants, as long as full
disclosure is made and residents, through these disclosures, are able
to have a say in personnel decisions. One commenter suggested a
requirement that the applicant submit: Forms 2530 for the applicant and
all board members; articles of incorporation; statements of officers
and directors; financial statements for the last five years; and a
listing of properties owned and operated in the last ten years. This
commenter felt that conflicts with current management as well as the
owner should be disclosed.
The Department has decided to tighten the proposed NOFA's conflict
of interest requirements. The required certification will state that
there has been no conflict of interest relationship during the previous
five years, and it will include a requirement that the applicant not
seek any financial benefit from project ownership. The Department has
further clarified that nonprofit general partners seeking to buy out
their limited partners are exempt from this rule. In addition, the NOFA
will require disclosure to tenants and to the intermediary to include
any relationship with owners, management, or any other parties to the
sale. The Department will also require certification by the applicant
that it will not interfere with the tenants' right to organize.
5. Funding
Six commenters requested that the Department allow funding for
activities conducted prior to grant award. Two of these specifically
made this suggestion to prevent lack of assistance where there are
delays in funding that are not the fault of the grantee--suggesting
funding of activities beginning at the earlier of award approval or 30
days after application submission, which is the date by which funds
should have been awarded. One suggestion was to allow funding for
activities conducted prior to the grant award and after NOI submission
because this would be consistent with other HUD programs--specifically
the Department's Section 202 (12 U.S.C. 1701q) program. Under the
Section 202 program, previous expenses must be fully documented and
fall within application budget.
The Department has decided to allow reimbursement of funds back to
the time when the applicant became eligible for grant funds. For
Resident Capacity grants this will be the time the owner files any
Notice of Intent to Proceed. For Predevelopment grants this will be the
time the owner has indicated an intent to sell the property. This
decision was based in part on the increased resident notification
period, which will inherently delay the time which grant funds are
awarded and received by the recipient. While grantees may be reimbursed
for eligible activities, they undertake these activities at their own
risk. If a grant is not subsequently awarded, there will be no
mechanism for compensating the applicant. To qualify for reimbursement,
activities performed prior to the grant award must be eligible
activities under the NOFA and must be clearly identified in the
application submission package.
One commenter requested that residents be informed when grant is
awarded. The Department has adopted this requirement.
The Department has rejected a suggestion that the grants be
competitive with quarterly awards, rather than ongoing awards, in order
to give residents more time to get applications and formally comment.
The statute allows applications on a rolling basis, and requiring a
grantee to wait several months for an award could hinder a resident-
supported purchase for the property.
One commenter was concerned that $200,000 would not be enough to
cover predevelopment costs for most projects. This funding limit is
statutory, and the Department has no discretion to alter the limit.
Four commenters sought clarification on what terminating the
current grant program means. In order to ensure continuity of the
program, they suggest that: awardees under the September 3, 1992, NOFA
should be able to apply for new funds as soon as old funds are
obligated; grantees should not be able to receive grants over the total
of this NOFA; and, because it is an ongoing process, grantees should
not be required to expend all funds awarded in the 1992 NOFA. In this
NOFA the Department is allowing applications from grantees with active
grants under the September 3, 1992, NOFA; however, as awards are made
by the intermediary, the previous awards shall be terminated. It is
impractical for grantees to report to both the HUD field office and the
intermediary on ongoing grant status. The total grant award from both
NOFAs must not be greater than the total allowed in this NOFA.
There were ten comments on the Department's method for funding
technical assistance grants on a State-by-State basis. One concern was
that basing fund allocation solely on active Notices of Intent, plus
active Plans of Action, will be skewed, because this does not directly
correlate with preservation sales activity. The Department should not
include cases where owners have not yet indicated an intention to sell;
rather, funding for predevelopment grants should be tied to the number
of NOIs to sell plus binding sales commitments. Another suggested that
the same allocation formula should not be used for both Resident
Capacity and Predevelopment grants. Several commented that the formula
should remain flexible to reflect actual activity levels in States, and
suggested a hold-back so that funds could be reallocated according to
actual participation levels. Several others suggested a reallocation
method between States. The Department seriously considered using only
Notices of Intent to Sell as the criteria for a State breakdown of
funding. The Department cannot use binding commitments as an indicator,
because it will not have these in advance of the State-by-State
allocation. However, experience from the September 3, 1992, NOFA shows
that an owner's Initial Notice of Intent is only a partial indication
of what an owner will actually do. Therefore, the Department will not
change its method for allocation by State. The Department has also
decided not to maintain a holdback, but will reallocate funds between
intermediaries if levels of grant activity justify a reallocation.
One commenter requested HUD to allocate unused funds from the 1992
NOFA using the 90/10 formula in the statute, rather than giving all
unused funds to technical assistance grants. The Department has decided
to allocate unused funds using the 90/10 formula. Another commenter
sought clarification of the exact amount of funds available from 1992
NOFA and how these funds will be divided. Because the 1992 NOFA is
active, and will be for several months, the Department cannot know
exactly how much will be available once the 1992 NOFA is terminated.
6. Applicant Selection
Several commenters felt that the application review should include
review of the financial viability of the property and an analysis of
the development team, rather than a simple review of the applicant
itself. One commenter was concerned that resident support would
override strong underwriting criteria. The Department has chosen not to
amend this selection criteria, but will also instruct intermediaries
reviewing Predevelopment grant applications to conduct a review on the
feasibility of the purchase, including a review of the development
team.
One commenter requested that if any award is made by an
intermediary or HUD, the procurement requirements of OMB Circular A-110
should be deemed to have been met. This would permit continuity of
service for consultants who were identified by grantees prior to the
availability of Federal funds. The Department finds it unnecessary to
address this in the NOFA. However, if the organization is currently
meeting the OMB requirements, the Department anticipates that the
organization will continue to do so under another grant.
A commenter pointed out that the NOFA says grants are awarded
within 30 days, and that this should be specified as 30 calendar days.
Another commenter requested that the NOFA specify the appeals process
to HUD. The Department has adopted both of these suggestions in this
NOFA.
Several commenters recommended requiring intermediaries to explain
why an application was not funded or why items within an application
were not funded. The Department has adopted this recommendation.
One commenter suggested that applicant resident groups should be
able to request the intermediary to provide expertise and assistance in
grant activities. Because the Department does not wish to have
intermediaries performing activities inconsistently across the country,
it has not made this a requirement of intermediaries.
Eleven comments were received regarding the NOFA's guidance on
competing applications. One area of concern was the time by which
another application could be received. Several commenters suggested
allowing an applicant 30 days to gain support, others suggested 20
days, another 14 days. Several commenters also suggested giving the
intermediary additional review time should two applications be
received. Several commenters felt the intermediary should attempt to
resolve the situation or require that competing applicants meet and
attempt to come to a resolution. Three commenters suggested that in the
case of dual applicants, a clear priority should be for resident groups
and resident councils over Community-Based Nonprofit Housing
Developers.
The Department has decided if a second application is received
within 30 days of receipt of the first application, the intermediary
will have an additional 20 days to complete the review of both. If the
applications are for a Resident Capacity grant, the intermediary will
give funding preference to a resident group or a Resident Council over
another applicant. If there are competing Predevelopment grant
applicants and both are otherwise acceptable, the intermediary will
send back the applications and give applicants an opportunity to meet,
explain differences to tenants, and come to a resolution/compromise. If
no compromise is reached the intermediary would fund the applicant that
it found most capable of performing grant and nonprofit sponsor
activities. The fact that a nonprofit developer is receiving a
Predevelopment grant would not preclude a separate resident group from
getting a Resident Capacity grant.
B. Selection of Intermediaries
1. Fee Structure
Twelve commenters were concerned that the proposed fee structure
for intermediaries would not yield sufficient funds to cover the scope
of services listed in the NOFA. The proposed NOFA contemplated a $5,000
start-up fee, plus 2 percent of the grant awards for the State or
States in which the intermediary administered grants. Suggestions
ranged from 4 to 5 percent of the grant awards. One commenter suggested
that the minimum start-up fee should be $15,000 so smaller States will
participate. Several others suggested that the fee should vary
according to the level of activities that the intermediary is
performing.
The Department considered seriously the appropriateness of the fee
and awarding a different level of funding to intermediaries performing
a higher level of activities. The Department has chosen a processing
fee structure through which each intermediary will receive a $15,000
start-up fee and five percent of each technical assistance grant it
administers, which will be allocated as the grants are disbursed. Each
intermediary will also receive a flat fee of $500 for each grant
application rejected. If a selected intermediary receives no grant
applications, it will receive only the start-up fee.
2. Intermediary Selection
At least one commenter felt that the Department should give
preference to local intermediaries, then State and regional
intermediaries, over national intermediaries. The Department has
decided to allow sub-State intermediaries in areas where there appears
to be enough preservation activity to justify a sub-State intermediary.
However, any sub-State intermediary must apply to administer grants in
a geographic area covering at least one HUD area office. In most
States, any economies of scale would be lost if there was more than one
intermediary. In its review of intermediaries the Department will
review and rate all local intermediaries before reviewing State and
regional intermediaries. However, the Department will consider the
capacity, experience, and point scores of all local, State and regional
intermediaries before making final intermediary selection. National
intermediaries will be chosen for those areas for which no other
acceptable intermediary has applied.
Concern from eleven commenters lead to suggestions that outside
parties, particularly resident groups, should be able to comment on the
applications and selections of intermediaries. Because the selection of
intermediary grantees is competitive, the disclosure of grant
applications would be in violation of section 12 of the Department of
Housing and Urban Development Act (42 U.S.C. 3537a), and, therefore,
the Department cannot implement this suggestion.
One commenter suggested that intermediaries be required to state in
their proposals how they will deal with the problem of monitoring
unincorporated entities to ensure that they act with proper fiscal
standards. The same commenter agreed with the Department's preference
for an intermediary handling both Resident Capacity and Predevelopment
grants. As part of its overall evaluation of each intermediary's
application, the Department will evaluate proposals to deal with the
problem of monitoring fiscal standards.
One commenter requested that Community Action Agencies, which have
been the leader in services to the low-income community in all areas
for more than 25 years, be eligible intermediaries. The Department is
adhering to the statutory definition of intermediary, but to the extent
such an agency has the capacity to become an eligible applicant under
the guidelines, a Community Action Agency could apply.
Several commenters suggested that intermediaries receive preference
if they have a structured plan that maximizes resident participation in
administrative policy issues. Another commenter requested that HUD
require intermediaries to work with a tenant-based coalition, and if an
intermediary cannot develop this support, HUD should administer the
grants. The Department will not include this requirement because it
would be too burdensome, particularly for national intermediaries.
However, four commenters suggested giving preference to intermediaries
with demonstrated resident/nonprofit accountability. The Department
will give preference for such a demonstrated track record.
One commenter recommended deleting language that requires
intermediaries to have a record of service in ``multiple communities''
because the language is vague and confusing. The requirement is
statutory and therefore the language remains unchanged. The Department
does not agree that it is confusing. The Department considers ``a
record of service * * * in multiple communities'' to mean the
intermediary has worked with various types of organizations within
varied communities. Preferably these communities would include a cross-
section of the geographic area for which the intermediary is applying
to administer grants. The definition would exclude an intermediary that
has worked solely in one community or neighborhood.
3. Intermediary Tasks
Seven commenters requested more detail in the NOFA of the
Department's expectations to guide intermediaries, particularly in
their monitoring activities, with standards and timeframes. Several
sought clarification of the legal responsibilities of the
intermediaries, others felt intermediary activities should be expanded
and negotiated with HUD to include underwriting, monitoring, servicing,
site visits, and technical assistance provision. One commenter sought
clarification of whether an intermediary will act as a delegated
processor with final grant authority, or whether it will function under
some other model. One commenter disagreed with negotiating the level of
activities, arguing that HUD should require specific tasks of all
intermediaries to get all essential tasks covered. The Department has
seriously considered this issue and has provided a greater level of
detail of its expectations of the intermediaries.
The Department will not allow a variety of participation levels by
intermediaries. However, if an intermediary seeks to perform a higher
level of activities, such as technical assistance, it may apply to
perform these activities under a separate HUD NOFA that will implement
section 254 of LIHPRHA as added by section 312 of the Housing and
Community Development Act of 1992. That NOFA is expected to be
published soon.
One commenter stated that intermediaries, in general, should not
have say over who is selected as a priority purchaser, which
consultants are hired, what are the contract terms, etc. While the
Department's regulations regarding priority purchasers are separate
from this NOFA, the intermediaries will have review authority over
consultants hired and terms of contracts under the technical assistance
grants.
One commenter suggested that some technical assistance grantees may
want closer oversight and assistance, and intermediaries should be
required to provide to those grantees what is agreed upon in the grant.
As discussed above, and in order to provide consistency nationwide, the
grantees cannot request a higher level of service from the
intermediaries.
4. Accountability
Three commenters suggested that resident groups should be able to
formally monitor intermediaries prior to their receipt of further
funding, and to include standards that encourage intermediaries to have
accountability to residents and nonprofits without micromanagement by
the intermediary. One of these commenters suggested that intermediaries
should show evidence of a commitment to tenant organizing; another
suggested a stronger conflict of interest proviso and performance
benchmarks for the intermediary. However, a fourth commenter believed
oversight of intermediaries should not be by tenant groups or other
prospective grantees; rather, HUD should provide this oversight. This
commenter recommended a selection of intermediaries when the track
record indicates absence of abuse. As part of its monitoring of
intermediaries, the Department will accept comments from outside
parties on intermediary performance after intermediary grants are in
place and active. However, the Department does not find it appropriate
to include, nor does it desire to delay intermediary funding by
including, resident groups directly in the monitoring process.
5. Other Comments
One commenter recommended that the benchmarks for Technical
Assistance Grantees be made by the Department, rather than left up to
the intermediary. The statute requires that HUD work with
intermediaries to come up with the performance benchmarks for the
Predevelopment Grant phases. The Department intends these benchmarks to
be consistent across the country.
One commenter requested clarification that intermediaries, at their
own risk, may incur costs from the date they are selected, as opposed
to the date of contract execution. The Department agrees with this
request; however, no actual fees will be paid prior to the date of
contract execution and the intermediary may not begin funding technical
assistance grantees prior to such execution.
II. Purpose and Substantive Description
A. Authority and Background
The funding made available under this NOFA is authorized by section
312 of the Housing and Community Development Act of 1992 (Pub. L. 102-
550, approved October 28, 1992) in order to provide assistance to
resident groups and Community-Based Nonprofit Housing Developers (CBDs)
involved in projects proceeding under the provisions of the Emergency
Low-Income Housing Preservation Act of 1987 (Pub. L.100-242, section
201 of the Housing and Community Development Act of 1987, approved Feb.
5, 1988) (ELIHPA) or the Low Income Housing Preservation and Resident
Homeownership Act of 1990 (Pub. L. 101-625, section 601 of the National
Affordable Housing Act (NAHA), approved November 28, 1990) (LIHPRHA).
The origins of LIHPRHA are in ELIHPA. The purpose of ELIHPA was to
preserve low-income affordability restrictions on certain HUD-insured
or assisted multifamily projects. ELIHPA authorized the use of
incentives to encourage owners to retain low-income affordability
restrictions or to transfer the property to purchasers who would agree
to retain those restrictions. The fundamental principles underlying
ELIHPA were that the low-income housing should be preserved for the
intended beneficiaries and that owners should be guaranteed a fair and
reasonable return on their investments.
ELIHPA was intended to be a temporary measure that would allow
Congress time to fashion a permanent program for the preservation of
existing low-income housing projects. This permanent program is
LIHPRHA, which replaced ELIHPA except to the extent that section 604 of
NAHA provides a transition option for certain owners. In addition,
section 226 of LIHPRHA establishes the Resident Homeownership Program,
under which tenants may become homeowners of eligible low income
housing. The Department's regulations implementing these statutory
provisions are set out in 24 CFR part 248. (Applicants should note that
part 248, as codified in the April 1, 1993, revision of the Code of
Federal Regulations (CFR) was amended subsequently in a rule published
on July 13, 1993 (57 FR 3384). Most requirements under this NOFA were
imposed by title III of the Housing and Community Development Act of
1992 and are included in the July 13, 1993, amendments to part 248.)
B. Request for Applications
Eligible intermediaries are invited to apply to administer funds
under the provisions of this NOFA (see Section V.A, ``Obtaining
Intermediary Applications'' of this NOFA). The Department will announce
the selected intermediaries and will publish the addresses of the
intermediaries and the date on which applicants may apply to
intermediaries for technical assistance grant funds. Selected
intermediaries will also announce the availability of technical
assistance grant funds as described in Section III of this NOFA.
C. Allocation and Funding
The purpose of this NOFA is to make available $45 million in funds
to and through intermediaries for eligible resident and community
organizations. The dollar amounts will be made available on a State-by-
State basis for two types of grants: Resident Capacity grants and
Predevelopment grants. The description of how funds will initially be
divided by State is listed in Appendix B of this NOFA. The Department
will rate local intermediaries, then State intermediaries, then
regional intermediaries before making selections for each geographic
area. Some States may be subdivided for purposes of the NOFA activities
if there are a sufficient number of eligible low-income housing
projects in the State to justify sub-State intermediaries. Local or
sub-State intermediaries applying to perform grant administration
activities must apply to perform activities covering at least the
jurisdiction of one HUD area office. The Department will generally
favor local or sub-State intermediaries over State intermediaries, and
will favor State intermediaries over regional intermediaries.
However, before making the final intermediary selections, the
Department will assess the overall capacity and experience of
intermediary applicants. If no intermediary applicant applies to
administer grants in a particular State or area, the Department will
select a national intermediary to perform those activities in that
State or area. If no acceptable application is received from a national
intermediary, the Department's field offices will administer the
Resident Capacity and Predevelopment grants for all areas not covered
by local, State, or regional intermediaries.
The Preservation Technical Assistance Grant program that is
currently being administered by the Department, in accordance with a
NOFA published on September 3, 1992, at 57 FR 40570 (as amended at 57
FR 56929 (December 1, 1992) and 58 FR 8766 (February 17, 1993)), will
be terminated at intermediary selection. A portion of the unreserved
funds from that earlier NOFA will be made available under this NOFA
through the intermediaries. Grantees active under the September 3,
1992, NOFA will continue under that grant program unless they apply for
and receive funds under this NOFA.
The two forms of technical assistance grants that will be made
available through intermediaries are Resident Capacity grants and
Predevelopment grants. These are described in Appendix A to this NOFA.
Of the $45 million available from FY 1993 and 1994 appropriations,
$13.5 million is available for Resident Capacity grants and $31.5
million is available for Predevelopment grants. Of any additional funds
made available under this program, 30 percent will be set aside for
Resident Capacity grants and 70 percent for Predevelopment grants. The
dollar amounts available to the individual resident and community
organizations shall be limited to $30,000 for Resident Capacity grants
and $200,000 for Predevelopment grants. The Predevelopment grants will
be funded in at least two phases. The performance benchmarks for these
phases will be negotiated between the Department and selected
intermediaries prior to technical assistance application submission.
III. Intermediaries
A. Eligible Intermediaries
(1) General Definition
An eligible intermediary applicant is a local, State, regional, or
national nonprofit or quasi-public organization or a State or local
housing agency that has as a central purpose of its organization the
preservation of low-income housing and the prevention of displacement
of low- and moderate-income residents. An eligible intermediary must
not receive direct Federal appropriations for operating support. All
intermediaries must have a record of service to low-income individuals
or community-based nonprofit housing developers in multiple
communities, and must meet the standards of fiscal responsibilities
established in OMB Circulars A-110 and A-122 or, if a State or local
agency, 24 CFR 85 and OMB Circular 87. In addition, intermediaries must
have experience with the allocation or administration of grant or loan
funds. (Copies of OMB circulars are available from E.O.P. Publications,
room 2200, New Executive Office Building, Washington, DC 20503,
telephone (202) 395-7332. (This is not a toll-free number.) There is a
limit of two free copies.)
(2) Intermediary Categories
(a) A national nonprofit applicant must also have been in existence
for at least five years and be classified as an exempt organization
under section 501(c)(3) of the Internal Revenue Code of 1986.
(b) A regional, State or local nonprofit applicant must also have
been in existence for at least three years and either be classified as
an exempt organization under section 501(c)(3) of the Internal Revenue
Code of 1986 or be recognized otherwise as a tax-exempt entity.
(c) A State or local agency. This category includes public housing
agencies and State housing finance agencies.
B. Fees
Each selected intermediary will receive processing fees. The fees
will include a start-up fee of $15,000 and an additional fee of five
percent of each technical assistance grant the intermediary
administers, which will be allocated as the grants are disbursed. These
fees are based on the intermediary performing the following activities:
Announcing the availability of grant funds; producing and distributing
application kits; accepting, reviewing and approving and/or rejecting
grant applications; executing grant agreements; disbursing grant funds;
monitoring the grantees' activities under the grant award; monitoring
compliance with the grant agreement through the term of the grant; and
maintaining documentation of grant activities for the Department's
monitoring of the intermediary.
Intermediaries will be legally responsible to the Department for
approving eligible applicants, activities, and budgets, and shall
maintain all correspondence with and documentation regarding the
technical assistance grantees for not less than five years. All
intermediaries will receive the start-up fee when the intermediary
contract is executed. Intermediaries will draw down five percent of
each technical assistance grant award at the time those awards are
disbursed, not to exceed five percent of the total funds available to
the jurisdiction. If an intermediary reviews and rejects a technical
assistance application, it will receive an administrative fee of $500.
If an intermediary receives no technical assistance grant applications,
it will receive only its start-up fee. On occasion, the Department will
review grant activity to determine if reallocation of funds between
geographic regions is necessary.
C. Eligible Tasks
Intermediaries may apply for one or both parts of the intermediary
tasks described in this NOFA. The two distinct tasks are:
Administering Resident Capacity grants; and
Administering predevelopment grants. Through its
application, an intermediary must describe the specific jurisdiction in
which it proposes to perform such tasks.
There will be no duplication of geographic coverage for any
administrative task. In States where there is sufficient preservation
activity to justify sub-State intermediaries, State or regional
intermediaries may apply to perform activities in areas that include
the jurisdiction of one or more HUD field offices. In no case will a
field office jurisdiction be subdivided for purposes of intermediary
selection for grant administration. To assure maximum geographic
coverage by intermediaries, HUD may negotiate geographic coverage with
intermediaries as part of intermediary selection.
Specific tasks for all intermediaries will include the following:
Advertising fund availability for the jurisdiction
overseen.
Producing and distributing grant application kits. (A
sample kit will be provided by the Department.)
Accepting grant applications.
Reviewing and approving or rejecting grant applications.
Executing grant agreements. (A draft grant agreement will
be provided by the Department.)
Vouchering for funds through the Department.
Disbursing grant funds.
Monitoring activities under the grant, including
compliance under the grant agreement, throughout the term of the grant.
Reporting to the Department at least quarterly on the
status of applications, grant awards, grantee activities, and funds
expended.
Maintaining grant documentation for HUD monitoring and
audits.
D. Ineligible Intermediary Activities
Intermediaries may not receive payment, directly or indirectly,
from the proceeds of grants they have approved. In addition,
intermediaries may not provide other services to grant recipients with
respect to the specific properties for which the grant has been
awarded.
E. Selection Criteria
1. Threshold
Intermediaries must meet minimum criteria described in Section
III.A, ``Eligible Intermediaries,'' of this NOFA. If in its review the
Department determines that the applicant does not meet the threshold
criteria, the application will be rejected. If the application does
meet the threshold criteria, then the Department will select
intermediaries through a rating and ranking competition described in
Section III.E(2) of this NOFA.
2. Preferences and Factors for Award
The intermediary applications will be rated and ranked on a point
system, with the maximum point score of 100. The Department will first
rate and rank any local or sub-State intermediary applications, then
all State intermediary applications, and then regional applications. In
general, the Department will give preference to local intermediaries,
as discussed in Section II.C, ``Allocation and Funding'', of this NOFA;
however, capacity, experience, and overall points for these
intermediaries will be considered before selection. The Department may
establish a threshold score on capacity and experience that local
applicants must meet in order to qualify for funding.
After selecting local, State, and regional intermediaries, the
Department will rate and rank all national intermediary applications to
select an intermediary in States or regions for which no other eligible
intermediary, acceptable to the Secretary, has submitted a proposal to
participate. If no such national intermediary applies to perform NOFA
activities, the Department, through its field offices, will administer
technical assistance grant funds for all areas without an acceptable
intermediary. The Department will consider joint venture applications
as long as one eligible intermediary is identified in the application
as the primary applicant. The rating points will be allocated based on
the categories below:
(a) Preservation Experience. (30 points) The Secretary shall give
rating points to applications from eligible intermediaries based on
expertise or experience with ELIHPA and LIHPRHA. Maximum points will be
given to applicants with significant demonstrated expertise or
experience with ELIHPA or LIHPRHA.
(b) Range of Activities. (10 points) These points will be given to
organizations applying to administer both the Resident Capacity grants
and the Predevelopment grants, rather than applying to administer just
one of those grant programs.
(c) Direct Experience. (30 points) Rating points will be given to
intermediaries based on their direct experience in performing the tasks
for which they have applied. This would include administration of
grants to resident organizations, administration of grants to nonprofit
organizations and State or local agencies, and monitoring of nonprofit
grantees. The Department will not assign preference to intermediaries
with experience in administering Federal grants, but may exclude
applicants that have failed to perform under prior contracts of a
similar nature.
(d) Organizational Capacity. (30 points) Each applicant will be
rated on its organizational capacity to implement its plan to
administer grants. Each applicant should submit evidence that its
organization can implement the proposed activities in an efficient
manner, based on demonstrated organizational capacity and staff
expertise.
IV. Responsibilities of Intermediaries
A. General
Intermediaries will be responsible for performing the tasks listed
in Section III.C, ``Eligible Tasks,'' of this NOFA. The technical
assistance grant program that the intermediaries will be administering
is described in detail in Appendix A to this NOFA.
B. Timeframes
Once funding availability is advertised by the intermediary for its
jurisdiction, technical assistance applications will be submitted to
the intermediaries on an ongoing basis. If the applications are
acceptable, grants must be awarded no later than 30 calendar days after
a complete application is received by the intermediary. If the
application is found to be substantially complete (i.e., there are no
missing exhibits), but technically deficient (i.e., an exhibit does not
adequately meet the application requirements), the intermediary shall
send the applicant a deficiency letter and allow 14 days for
resubmission of deficient exhibits. The intermediary will have an
additional 30 days to review and approve an application, following
receipt of application revisions. If the application is not
substantially complete, it will be rejected.
C. Technical Assistance Grant Selection Criteria
1. Resident Capacity Grants
All Resident Capacity applicants will receive an application kit,
which will be produced and distributed by the intermediary. A sample
application kit will be provided to the intermediaries from the
Department. Applications will be accepted on an ongoing basis, and all
acceptable applications will be approved unless there are no funds
available for Resident Capacity grants. Intermediaries must review and
approve or reject applications for Resident Capacity grants based on
the following threshold criteria:
(a) The applicant meets the eligible applicant criteria listed in
paragraph A of Appendix A to this NOFA.
(b) The applicant is applying for funds for eligible activities
listed in paragraph D(1) of Appendix A to this NOFA.
(c) The applicant has notified the residents of its application in
accordance with paragraph B of Appendix A to this NOFA.
(d) The plan for promoting the ability of residents to participate
meaningfully in the preservation process is reasonable and feasible.
(e) The budget submitted with the application reflects reasonable
costs directly associated with the grant activities.
(f) The estimate of time necessary to achieve completion of
activities and delivery of products is reasonable and realistic and
within the time frames set forth in the applicable program regulation.
2. Predevelopment Grants
All Predevelopment grant applicants will receive an application kit
that will have been produced and distributed by the intermediary. A
sample application kit will be provided to the intermediaries from the
Department. Applications will be accepted on an ongoing basis, and all
acceptable applications will be approved unless there are no funds
available for Predevelopment grants. Intermediaries must review and
approve or reject applications for Predevelopment grants based on the
following threshold criteria:
(a) The applicant meets the eligible applicant criteria listed in
paragraph A of Appendix A to this NOFA;
(b) The applicant is applying for eligible activities listed in
paragraph D(2) of Appendix A to this NOFA;
(c) The applicant has notified the residents of its application in
accordance with paragraph B of Appendix A to this NOFA;
(d) The plan for promoting and achieving a resident supported
purchase of the property must be reasonable and feasible and in
conformance with the appropriate program regulations and guidelines.
This will include an evaluation of the experience and capacity of the
applicant's development team;
(e) The budget submitted with the application reflects reasonable
costs directly associated with the grant activities that would result
in the development of a feasible purchase; and
(f) The estimate of time necessary to achieve completion of
activities and delivery of products is reasonable and realistic and
within the time frames set forth in the applicable program regulation.
3. Competing Grant Applications
If a second technical assistance application is received within 30
days of receipt of the first application for any property, and if that
application is for the same grant category, the intermediary shall have
an additional 20 days to review both applications. The total review
time for any grant cannot exceed 50 days. If the competing applications
are for Resident Capacity grants, resident groups and Resident Councils
shall have priority over other applicants. If the competing
applications are for Predevelopment grants, and both are found
technically acceptable, the Intermediary will return the applications
with instructions that the applicants meet together and with the
residents to reach a resolution for a final application. If no
compromise is reached, the intermediary will approve the applicant that
the intermediary finds most capable of performing grant and nonprofit
sponsor activities. In addition, in the case of any application, if
there is an indication that a majority of the residents oppose the
applicant's selection, that application shall be denied.
4. Decision Not To Fund
In any denial of award letter, the intermediary shall be required
to explain the reasons for its determination. In addition, if the
intermediary makes a determination that results in a reduction of
proposed grant funds, that determination shall also be explained in
writing.
5. Appeals
If an application for either a Resident Capacity grant or a
Predevelopment grant is denied, the applicant will have the right to
appeal that denial to the Department. The appeal must be made within 45
days of application rejection to: Multifamily Preservation Division,
Department of Housing and Urban Development, 451 7th Street, NW., room
6284, Washington DC, 20410. The Department will make a binding
determination within 45 days of the appeal.
6. Award Notification
If an applicant is awarded and accepts a Resident Capacity or
Predevelopment grant, the applicant must inform the residents of the
property about the award, by posting a notice or through a resident
meeting or both, within three weeks of the applicant's acceptance of
the award.
V. Intermediary Application Process
A. Obtaining Intermediary Applications
Intermediary application kits are available from the Multifamily
Preservation Division, Department of Housing and Urban Development,
room 6284, 451 7th Street, SW., Washington, DC 20410; telephone (202)
708-2300; and the Multifamily Housing Clearinghouse, P.O. Box 6424,
Rockville, MD 20850, telephone 1-800-955-2232.
B. Submitting Applications
Applications will be submitted to the Multifamily Preservation
Division Department of Housing and Urban Development, 451 7th Street,
SW., room 6284, Washington, DC 20410. Applications must be received no
later than June 6, 1994. No facsimiled (FAXed) applications will be
accepted. Any application received after 5:00 p.m., E.D.T., on the due
date will not be accepted for processing and will be returned to the
applicant. Any corrections to deficient applications made in accordance
with Section V.E of this NOFA may be transmitted by facsimile; however,
the original subsequently must be submitted by mail.
C. Submission Requirements
An intermediary must provide the following:
(1) A completed application, including the following, as
applicable:
(a) OMB Standard Form 424;
(b) Identification of proposed geographic area in which it will
perform intermediary activities;
(c) Information about how the applicant meets the Factors for Award
listed in Section III.E(2) of this NOFA;
(d) Information about the applicant, including its history, its
staff and their qualifications, and its experience;
(e) Summary of plan to advertise grant availability, distribute
applications, review applications, disburse funds, and monitor
activities under the grant;
(f) Evidence of tax exempt status, if applicable;
(g) Certification that the intermediary will not receive payment,
directly or indirectly, from the proceeds of the grants it has
approved;
(h) Certification that assistance provided under this NOFA will not
be used to supplant or duplicate other resources for the proposed
activities. For purposes of this paragraph, ``other resources'' means
resources provided from any source other than under this NOFA;
(i) Other disclosures, certifications, and assurances (including
Drug-Free Workplace and Anti-Lobbying certifications), as required
under the law and this NOFA; and
(j) Other information and materials as may be described in the
application kit.
D. Intermediary Selection Process
The selection process for intermediaries consists of a threshold
screening to determine whether the application meets the technical
requirements for application submission contained in this NOFA and the
application kit. If the application meets the technical requirements,
it will be reviewed and ranked by the Preservation Division in HUD
Headquarters according to the selection criteria in Section III.E of
this NOFA. Within 60 days from the application deadline, the
Preservation Division will notify an intermediary of its selection or
rejection. Selected intermediaries will be required to sign a grant
agreement. If no intermediary is selected for a particular State, the
HUD field offices will administer the grants directly.
E. Corrections to Deficient Applications
If an application submitted by an intermediary is found to be
deficient in a nonsubstantive manner, the Department will inform the
applicant of such deficiency within 15 days after the application
deadline and the applicant will have seven days to submit revisions to
its application. Nonsubstantive deficiencies are those that are not
integral to the application's review, such as a certification. If an
application is substantively deficient at the time of application
deadline, the application will be rejected.
F. Application Selection Timeframe
The Department will complete its review and selection process
within 60 days of the deadline date for intermediaries. Once
intermediaries are selected and agreements are executed, intermediaries
will have 30 days to make grant funds available to eligible technical
assistance applicants. Grants from technical assistance applicants will
be accepted on a rolling basis by the intermediaries administering such
grants.
G. Intermediary Information
The Department will publish in the Federal Register the list of
selected Intermediaries within 30 days of the date that the
Department's intermediary selection process is completed. That
publication will include information for potential technical assistance
applicants on how to obtain application kits and will list contact
names at the Intermediary organizations selected to administer the
grants.
VI. Other Matters
Environmental Impact
In accordance with 40 CFR 1508.4 of the regulations of the Council
on Environmental Quality and 24 CFR 50.20(b) of the HUD regulations,
the policies and procedures contained in this notice relate only to
technical assistance and, therefore, are categorically excluded from
the requirements of the National Environmental Policy Act.
Federalism Impact
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this notice will not have substantial direct effects on
States or their political subdivisions, or the relationship between the
federal government and the States, or on the distribution of power and
responsibilities among the various levels of government. As a result,
the notice is not subject to review under the Order. Specifically, the
funds available under this NOFA will be used to select intermediaries
that will administer technical assistance grants to eligible
recipients. The grants to eligible recipients will be for technical
assistance activities related to the preservation of low-income
housing.
Family Executive Order
The General Counsel, as the Designated Official under Executive
order 12606, The Family, has determined that this notice does not have
potential for significant impact on family formation, maintenance, and
general well-being, and, thus, is not subject to review under the
Order. No significant change in existing HUD policies or programs will
result from promulgation of this notice, as those policies and programs
relate to family concerns.
Section 102 of the HUD Reform Act: Documentation and Public Access
Requirements; Applicant/Recipient Disclosures
Documentation and Public Access Requirements
HUD will ensure that documentation and other information regarding
each application submitted pursuant to this NOFA are sufficient to
indicate the basis upon which assistance was provided or denied. This
material, including any letters of support, will be made available for
public inspection for a five-year period beginning not less than 30
days after the award of the assistance. Material will be made available
in accordance with the Freedom of Information Act (5 U.S.C. 552) and
HUD's implementing regulations at 24 CFR part 15. In addition, HUD will
include the recipients of assistance pursuant to this NOFA in its
quarterly Federal Register notice of all recipients of HUD assistance
awarded on a competitive basis. (See 24 CFR 12.14(a) and 12.16(b) for
further information on these documentation and public access
requirements.)
Disclosures
HUD will make available to the public for five years all applicant
disclosure reports (HUD Form 2880) submitted in connection with this
NOFA. Update reports (also Form 2880) will be made available along with
the applicant disclosure reports, but in no case for a period generally
less than three years. All reports--both applicant disclosures and
updates--will be made available in accordance with the Freedom of
Information Act (5 U.S.C. 552) and HUD's implementing regulations at 24
CFR part 15. (See 24 CFR part 12, subpart C, for further information on
these disclosure requirements.)
Section 103 HUD Reform Act
HUD's regulation (24 CFR part 4) implementing section 103 of the
Department of Housing and Urban Development Reform Act of 1989 (42
U.S.C. 3537a) (Reform Act) applies to the funding competition announced
today. The requirements of the rule continue to apply until the
announcement of selection of successful applicants.
Both HUD and intermediary employees involved in the review of
applications and in the making of funding decisions are limited by 24
CFR part 4 from providing advance information to any person (other than
an authorized employee of HUD) concerning funding decisions, or from
otherwise giving any applicant an unfair competitive advantage. Persons
who apply for assistance in this competition should confine their
inquiries to the subject areas permitted under 24 CFR part 4.
Applicants who have questions should contact the HUD Office of
Ethics (202) 708-3815 (voice/TDD). (This is not a toll-free number.)
The Office of Ethics can provide information of a general nature, as
well. However, a HUD employee who has specific program questions, such
as whether particular subject matter can be discussed with persons
outside the Department, should contact his or her Regional or Field
Office Counsel, or Headquarters counsel for the program to which the
question pertains.
Section 112 of the Reform Act
Section 112 of the HUD Reform Act added a new section 13 to the
Department of Housing and Urban Development Act (42 U.S.C. 3537b).
Section 13 contains two provisions dealing with efforts to influence
HUD's decisions with respect to financial assistance. The first imposes
disclosure requirements on those who are typically involved in these
efforts--those who pay others to influence the award of assistance or
the taking of a management action by the Department and those who are
paid to provide the influence. The second restricts the payment of fees
to those who are paid to influence the award of HUD assistance, if the
fees are tied to the number of housing units received or are based on
the amount of assistance received, or if they are contingent upon the
receipt of assistance.
Section 13 was implemented by regulations codified in part 86. If
readers are involved in any efforts to influence the Department in
these ways, they are urged to read the regulations, particularly the
examples contained in Appendix A of part 86.
Any questions about the rule should be directed to the Office of
Ethics, room 2158, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington, DC 20410-3000. Telephone: (202) 708-
3815 (voice/TDD). (This is not a toll-free number.) Forms necessary for
compliance with the rule may be obtained from the local HUD office.
Prohibition Against Lobbying Activities
The use of funds awarded under this NOFA is subject to the
disclosure requirements and prohibitions of section 319 of the
Department of Interior and Related Agencies Appropriations Act for
Fiscal Year 1990 (31 U.S.C. 1352) (the ``Byrd Amendment'') and the
implementing regulations at 24 CFR part 87. These authorities prohibit
recipients of Federal contracts, grants, or loans from using
appropriated funds for lobbying the Executive or Legislative branches
of the Federal Government in connection with a specific contract,
grant, or loan. The prohibition also covers the awarding of contracts,
grants, cooperative agreements, or loans unless the recipient has made
an acceptable certification regarding lobbying. Under 24 CFR part 87,
applicants, recipients, and subrecipients of assistance exceeding
$100,000 must certify that no Federal funds have been or will be spent
on lobbying activities in connection with the assistance.
Authority: 42 U.S.C. 4101 et seq.; 42 U.S.C. 3535(d).
Dated: March 29, 1994.
Jeanne K. Engel,
General Deputy Assistant Secretary for Housing--Federal Housing
Commissioner.
Appendix A: Technical Assistance Applications
A. Eligible Applicants
(1) General Definition. An eligible applicant must notify
residents of all occupied units that it is applying for a grant.
That notification shall meet the specifications of paragraph B
below. An eligible applicant is one of the entities described in the
following paragraphs (a) through (c) that complies with the
applicable criteria:
(a) Resident Group. Resident Groups are eligible for Resident
Capacity grants only. For an applicant to be considered a resident
group, the following must be submitted:
(i) Evidence that the greater of 5% of the occupied units or 10
units of the subject property have heads of households that are
members;
(ii) A copy of a notice announcing an organizational meeting to
discuss resident participation in decisions affecting the project;
(iii) A copy of the agenda of the organizational meeting
referred to in item (ii) of this paragraph; and
(iv) A list of attendees of the organizational meeting referred
to in item (ii) of this paragraph.
(b) Resident Council. (RC) For an applicant to be considered an
RC, it must meet the definition of ``resident council'' as set out
in Sec. 248.101. Specifically, an RC is any incorporated nonprofit
organization or association in which membership is available to all
the tenants, and only the tenants, of a particular project and:
(i) Is representative of the residents of the project;
(ii) Adopts written procedures providing for the election of
officers on a regular basis; and
(iii) Has a democratically elected governing board, elected by
the residents of the project.
(c) Community-Based Nonprofit Housing Developer. (CBD) For an
applicant to be considered a CBD it must submit evidence that it:
(i) Is classified as tax exempt under section 501(c)(3) of the
Internal Revenue Code of 1986;
(ii) Has been in existence for at least two years, and has at
least two years of housing and community development experience,
prior to the date of grant application;
(iii) Has a record of service to low- and moderate-income people
in the community in which the project is located;
(iv) Is organized at the neighborhood, city, county or a multi-
county level;
(v) In the case of an organization seeking to acquire eligible
housing under LIHPRHA, agrees to form a purchasing entity that
conforms to the definition of a community-based nonprofit
organization (CBO) in Sec. 248.101;
(vi) Agrees to use its best efforts to secure majority tenant
consent to the acquisition of the project for which grant assistance
is requested. Evidence of ``best efforts'' shall include a plan in
the application which details method for securing such support. In
addition, continued evidence of ``best efforts,'' such as additional
resident meetings and notices, is required as a grantee moves
towards a purchase.
(2) Resident Capacity Grant Applicants. Applicants for Resident
Capacity grants must meet the eligibility criteria listed in
paragraph A of this Appendix. In addition, these grants may be made
only with respect to eligible low-income housing, as defined in
Sec. 248.101, for which the owner has filed a Notice of Intent under
ELIHPA, an Initial Notice of Intent under LIHPRHA, or a Notice of
Election to Proceed under section 604 of NAHA and is proceeding
under the LIHPRHA appraisal process.
(3) Predevelopment Grant Applicants. Predevelopment grant
applicants must be RCs or CBDs meeting the criteria listed in
paragraph A of this Appendix. These grants may be made only to
organizations seeking to purchase the property with a majority of
resident support for the purchase. These grants may be made only
with respect to eligible low-income housing projects for which: (i)
the owner has filed an initial or second Notice of Intent to
transfer the housing to a qualified purchaser under LIHPRHA, or has
filed any Notice of Intent under LIHPRHA or ELIHPA and the owner has
entered into a binding agreement to sell the housing to the
applicant organization, or (ii) the owner has filed a Notice of
Election to Proceed under section 604 of NAHA and is proceeding
under the LIHPRHA appraisal process and has entered into a binding
agreement to sell the housing to the applicant organization. This
binding agreement shall not necessarily be a formal sales contract;
rather, it may state that the owner will neither work with nor
accept a purchase offer from any other entity during the term of the
grant, as long as the grantee is progressing towards a purchase
offer, plan of action or resident homeownership plan, and
acquisition in a reasonable period of time.
(4) Conflict of Interest. Each applicant must certify that its
organization is not a ``Related Party'', as set forth in 24 CFR
248.101, and that no individual that has, or has had within the last
five years, a personal or professional relationship with the owner
entity will receive financial benefit from the grant funds. This
certification shall prohibit using mutual consultants, attorneys,
etc. It shall not explicitly prohibit using architects or engineers
that have worked with the owner or in the property in the past, as
long as there is no ongoing professional relationship with the owner
that could be perceived as a conflict of interest. A nonprofit
general partner of an eligible property that is attempting to buy
out its limited distribution partners is exempt from this part of
the conflict of interest requirement. A certification shall also
require disclosure, to the intermediary and the tenants of any
relationship with ownership, management, or any other parties to a
sale, and will state that the applicant will not seek any financial
benefit from project ownership or operations other than those
disclosed.
B. Resident Notification
Each applicant will be required to notify residents of the
property of its application prior to submitting the application
package to the intermediary. That notification shall be in writing,
be distributed to each resident of the property, and include a
summary of the applicant's plan for the property. The notification
shall also include a statement that residents can themselves become
eligible applicants under the Preservation Technical Assistance
grant program. In addition, the applicant must meet with the
residents of the property at least two weeks prior to application
submission, and give the residents at least two weeks notification
of such meeting. In the meeting the applicant must provide the
following information to the residents:
A summary of the grant proposal;
A list of members of the board of directors, if known;
A list of the proposed development team and management
company, if known;
A list of all proposed consultants and attorneys;
Disclosure of any relationship with ownership,
management, or any other parties related to the owner or, if
applicable, related to the sale; and
Information on how the residents may comment to the
intermediary on the applicant's proposal and that residents shall
have 14 days to submit comments to the applicant and to the
intermediary on the proposal. This information shall include a name
and contact number for the intermediary and a name and phone number
for a contact person in the applicant organization.
If the applicant is unable to make this notification due to lack
of access to the property or lack of resident addresses, the
applicant may contact the intermediary for assistance. The
intermediary may contact the owner to request access or resident
addresses for the applicant. If the owner is uncooperative, the
intermediary may contact the HUD field office for assistance. If
residents make substantive comments to the intermediary, the
applicant will be required to address these comments prior to any
grant award from the intermediary.
C. Ineligible Technical Assistance Applicants
(1) Entities that have applications pending for funds under the
HOPE 2 program are not eligible to apply for funding under this NOFA
(because the owner would have already elected to proceed under the
distinct requirements applicable to HOPE 2 grants and is precluded
from concurrently filing the prerequisite Notice of Intent under
LIHPRHA or ELIHPA). An entity that is receiving HOPE 2 funding for
preservation-eligible property is ineligible to apply under this
NOFA for a grant for that property until the HOPE 2 grant has been
terminated due to HUD's acceptance of the owner's filing of a Notice
of Intent under ELIHPA or LIHPRHA.
(2) Entities that have been awarded grants under the
Preservation NOFA (entitled ``Technical Assistance Planning Grants
for Resident Groups, Community Groups, and Community-Based Nonprofit
Organizations and Resident Councils'') issued September 3, 1992 (57
FR 40570), may not receive funds under this NOFA for any properties
for which those grants were funded either until all funds awarded to
the grantee under the 1992 NOFA have been expended, or until the
grant under the September 3, 1992, NOFA has been terminated as a
result of a new grant approval under this NOFA. The total funds
received from the September 3, 1992, NOFA plus the total grant award
for this NOFA may not exceed the funding limits of this NOFA. A
grantee under the September 3, 1992, NOFA is eligible for funds
under this NOFA only if it also meets the eligibility criteria of
this NOFA and meets the notification requirements of Paragraph B
above.
D. Eligible Technical Assistance Grant Activities
(1) Resident Capacity Grants. Resident Capacity grants may be
used to cover expenses for the following activities:
Resident outreach and coordination;
Legal services to incorporate the resident organization
or RC, establish a board of directors, write by-laws, or establish
nonprofit status;
Accounting services for budgeting, planning, and
creation of accounting systems that are in compliance with OMB
Circular A-110 or A-122;
Conducting resident meetings and democratic elections;
Training residents and developing resident leadership;
and
Hiring an architect or engineer to advise the residents
during the Preservation Capital Needs Assessment and or the
appraisal stage of the Preservation process.
Other technical assistance related to developing the
capacity of the residents of the organization to meaningfully
participate in decisions related to the project.
(2) Predevelopment Grants. Predevelopment grants may be used to
cover consultant costs, and grantee staff and overhead costs related
to the following activities:
Legal services to organize a purchasing entity;
Accounting services for budgeting, planning, and
creation of accounting systems that are in compliance with OMB
Circular A-110 or A-122;
Preparing bona fide offers including contracts and
other documents to purchase the property;
Training residents, resident council staff and board
members on the Preservation process and in skills related to the
operation and management of the project;
Developing and negotiating management contracts,
related contract monitoring, and management procedures;
Engineering studies, such as site, water, and soil
analysis, mechanical inspections; and estimations of the cost of
rehabilitation and of meeting local building and zoning codes, in
anticipation of purchasing a property, as necessary to supplement
the capital needs assessment developed by HUD (see the Final
Guidelines for Determining Appraisals of Preservation Value Under
LIHPRHA, 57 FR 1970 (May 8, 1992));
Securing financing and preparation of mortgage
documents, transfer documents, and other documentation incident to
closing a purchase offer;
Preparing feasibility analyses, market studies and
management plans;
If applicable, creating a Community-Based Nonprofit
Organization that conforms to the definition of such organization
under 24 CFR Sec. 248.101;
Preparing a Plan of Action, Resident Homeownership
Plan, and related documents, such as a Transfer of Physical Assets
in accordance with 24 CFR Secs. 248.213, 135, and 173; and
Other activities related to promoting the ability of
eligible applicants to acquire, rehabilitate and competently own and
manage eligible housing.
E. Ineligible Grant Activities
Examples of activities that are not eligible to be funded for
technical assistance grantees include:
Earnest money deposits as part of a purchase offer made
under 24 CFR 248.157, 248.161, 248.173, and 248.175;
Purchase of land or buildings or any improvements to
land or buildings;
Activities not directly related to the eligible
activities listed in paragraph D of this Appendix A;
Entertainment, including associated costs such as food
and beverages, except that refreshments served at resident meetings
shall be allowable to the extent they facilitate resident
participation in planning for the grant;
Payments of fees for lobbying services;
Activities funded from other sources;
Activities completed prior to the time an applicant
becomes eligible for a grant; and
Activities performed by the administering intermediary.
Appendix B: Activity Level and State Allocation
The allocation of funds by State will be determined according to
the level of activity in that State as of the closing date for
intermediaries to submit applications to become intermediaries. If
additional grant funds are made available, the State allocations
will be revised according to the activity levels at the time the new
funding is made available. The total funding under this NOFA has
been divided by the number of active Notices of Intent submitted by
owners for properties in the State. Regional and national
intermediaries may utilize funds for their entire geographical areas
on a first come first serve basis, rather than maintaining the State
allocations in funding grants. Sub-State intermediaries will be
considered in the States of California, Texas, and Washington. The
following is a breakdown of dollar amounts by state based on
activity level by State as of November 30, 1993. This will be
updated prior to actual release of funds based on activity levels at
the time of intermediary selection, but provides a good estimate of
expected funds available by State. In addition, the Department will
periodically assess activity levels and, if necessary, reallocate
funds among intermediaries.
Resident Capacity Grants
Alabama: $131,250
Alaska: $37,500
Arizona: $150,000
Arkansas: $150,000
California: $3,693,750
Colorado: $75,000
Connecticut: $187,500
Delaware: $0
District of Columbia: $37,500
Florida: $168,750
Georgia: $93,750
Hawaii: $131,250
Idaho: $243,750
Illinois: $243,750
Indiana: $375,000
Iowa: $243,750
Kansas: $18,750
Kentucky: $112,500
Louisiana: $168,750
Maine: $18,750
Maryland: $281,250
Massachusetts: $750,000
Michigan: $262,500
Minnesota: $375,000
Mississippi: $187,500
Missouri: $168,750
Montana: $93,750
Nebraska: $187,500
Nevada: $0
New Hampshire: $18,750
New Jersey: $225,000
New Mexico: $18,750
New York: $225,000
North Carolina: $150,000
North Dakota: $56,250
Ohio: $131,250
Oklahoma: $0
Oregon: $581,250
Pennsylvania: $262,500
Puerto Rico: $75,000
Rhode Island: $300,000
South Carolina: $93,750
South Dakota: $75,000
Tennessee: $187,500
Texas: $543,750
Utah: $56,250
Vermont: $18,750
Virginia: $206,250
Virgin Islands: $0
Washington: $1,143,750
West Virginia: $0
Wisconsin: $543,750
Wyoming: $0
Predevelopment Grants
Alabama: $306,250
Alaska: $87,500
Arizona: $350,000
Arkansas: $350,000
California: $8,618,750
Colorado: $175,000
Connecticut: $437,500
Delaware: $0
District of Columbia: $87,500
Florida: $393,750
Georgia: $218,750
Hawaii: $306,250
Idaho: $568,750
Illinois: $568,750
Indiana: $875,000
Iowa: $568,750
Kansas: $43,750
Kentucky: $262,500
Louisiana: $363,750
Maine: $43,750
Maryland: $656,250
Massachusetts: $1,750,000
Michigan: $612,500
Minnesota: $875,000
Mississippi: $437,500
Missouri: $393,750
Montana: $218,750
Nebraska: $437,500
Nevada: $0
New Hampshire: $43,750
New Jersey: $525,000
New Mexico: $43,750
New York: $525,000
North Carolina: $350,000
North Dakota: $131,250
Ohio: $306,250
Oklahoma: $0
Oregon: $1,356,250
Pennsylvania: $612,500
Puerto Rico: $175,000
Rhode Island: $700,000
South Carolina: $218,750
South Dakota: $175,000
Tennessee: $437,500
Texas: $1,268,750
Utah: $131,250
Vermont: $43,750
Virginia: $481,250
Virgin Islands: $0
Washington: $2,668,750
West Virginia: $0
Wisconsin: $1,268,750
Wyoming: $0
[FR Doc. 94-8065 Filed 4-5-94; 8:45 am]
BILLING CODE 4210-27-P
