94-24190. Notice of Extension of CDBG Direct Homeownership Assistance Eligibility

[Federal Register Volume 59, Number 189 (Friday, September 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24190]


[[Page Unknown]]

[Federal Register: September 30, 1994]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Community Planning and 
Development
[Docket No. N-94-3819; FR-3783-N-01]

 

Notice of Extension of CDBG Direct Homeownership Assistance 
Eligibility

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Notice of extension of eligibility.

-----------------------------------------------------------------------

SUMMARY: This Notice extends the termination date for the direct 
homeownership assistance provision at section 105(a)(25) of the Housing 
and Community Development Act of 1974.

DATES: This Notice extends the termination date from October 1, 1994, 
to October 1, 1995.

FOR FURTHER INFORMATION CONTACT: Gordon McKay, Director, Office of 
Affordable Housing Programs, U.S. Department of Housing and Urban 
Development, 451 Seventh Street, S.W., Washington, D.C. 20410, 
telephone [phone], TDD [phone]. (These are not toll-free 
numbers.)

SUPPLEMENTARY INFORMATION:

I. Extension of Termination Date

    In accordance with title IX, section 907(b)(2) of the National 
Affordable Housing Act of 1990 (NAHA), as amended by the Housing and 
Community Development Act of 1992, the Department has determined that 
extension of the termination date for the direct homeownership 
provision at section 105(a)(25) of the Housing and Community 
Development Act of 1974, as amended, is necessary to continue to 
provide homeownership assistance until homeownership assistance is 
available under title II of NAHA, the HOME Investment Partnerships 
Program. Therefore, the termination date is hereby extended from 
October 1, 1994, to October 1, 1995.
    For CDBG entitlement communities, HUD-administered Small Cities 
grantees in Hawaii, and for Insular Area grantees, no CDBG funds may be 
expended for any activity eligible under the direct homeownership 
provision unless the funds are obligated to a homebuyer before October 
1, 1995. For the State CDBG program, HUD-administered Small Cities 
program in New York, and the Indian CDBG program, no funds for 
homeowner assistance may be expended unless a grant for such activities 
was made by the State or by HUD, as appropriate, before October 1, 1995 
to a unit of general local government, and then only for such amounts 
as are specifically approved.

II. Basis for Determination

    The basis for the extension is the Department's determination that 
assistance to homebuyers would not be fully available under the HOME 
Investment Partnerships Program by October 1, 1994. The first-time 
homebuyer and resale restriction provisions of the HOME program have 
proven difficult for many participating jurisdictions (PJs) to 
implement. Recent amendments to the HOME regulations intended to 
facilitate funding homebuyer assistance under the HOME program have not 
yet been in effect long enough to be fully implemented by HOME PJs. 
Funding homebuyer assistance under the HOME program is especially 
difficult for CDBG grantees that are not HOME PJs.
    The recent changes to the HOME homebuyer provisions are both 
statutory and regulatory. Statutory changes to the definition of 
eligible homebuyers and to the recapture provisions were enacted in 
section 203 of the Multifamily Housing Property Disposition Reform Act 
of 1994 (Pub. L. 102-233, approved April 11, 1994). These changes were 
implemented by a memorandum dated May 10, 1994 and a rule published on 
August 26, 1994 (59 FR 44258), but PJs have not yet had time to 
redesign their HOME programs to reflect the amendments. Similarly, the 
April 19, 1994, interim rule for the HOME program (59 FR 18626) offers 
additional flexibility by changing the basis for determining the 
affordability period applicable to homebuyer units and provides 
additional guidance on recapture provisions. PJs have not yet had time 
to incorporate these changes into their programs. The Department is 
also still in the process of developing model documents that may be 
used by PJs for such activities.
    The lack of time to implement the HOME program changes and the 
resulting limits on the availability of funds is especially problematic 
for CDBG entitlements that are not HOME PJs. Without CDBG funds 
available for direct homeownership assistance, these communities would 
have to wait for the next State HOME program funding rounds to get 
funding for this purpose. In most States, the next funding round 
following the above-referenced statutory and regulatory changes will 
not be until after October 31, 1994. This extension will allow smaller 
CDBG communities to provide continuous funding for direct homeownership 
activities until such CDBG entitlements have a reasonable chance of 
receiving State HOME funds.
    In making this determination to extend the CDBG homeownership 
provision, the Department is acting in accord with its national 
initiative to increase homebuyer assistance, particularly for lower-
income families. This initiative includes Departmental proposals to 
extend permanently the CDBG direct homeownership provision, bolster the 
HOPE programs, expand the Single Family Property Disposition 
Initiative, and develop additional homebuyer program models under the 
HOME program.

    Dated: September 26, 1994.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development
[FR Doc. 94-24190 Filed 9-29-94; 8:45 am]
BILLING CODE 4210-29-P