[Federal Register Volume 61, Number 121 (Friday, June 21, 1996)]
[Rules and Regulations]
[Pages 32292-32309]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15712]
[[Page 32291]]
_______________________________________________________________________
Part IX
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 92 and 954
Indian HOME Program Streamlining; Final Rule
Federal Register / Vol. 61, No. 121 / Friday, June 21, 1996 / Rules
and Regulations
[[Page 32292]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 92 and 954
[Docket No. FR-3567-I-01]
RIN 2577-AB35
Office of the Assistant Secretary for Public and Indian Housing;
Indian HOME Program Streamlining
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, (HUD).
ACTION: Interim rule.
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SUMMARY: This interim rule moves the Indian HOME Program from 24 CFR
part 92 to 24 CFR part 954, and includes clarifications and
simplifications intended to facilitate the use of the rule by
interested parties, increase similarity with the Indian Community
Development Block Grant (ICDBG) program, and simplify administration of
Native American Tribal Programs.
DATES: Effective date: July 22, 1996.
Comments due date: August 20, 1996.
ADDRESSES: Interested persons are invited to submit comments regarding
this interim rule to the Rules Docket Clerk, Office of General Counsel,
Room 10276, Department of Housing and Urban Development, 451 Seventh
Street, SW, Washington, DC 20410-0500. Communications should refer to
the above docket number and title. Facsimile (FAX) comments are not
acceptable. A copy of each communication submitted will be available
for public inspection and copying between 7:30 a.m. and 5:30 p.m.
weekdays at the above address.
FOR FURTHER INFORMATION CONTACT: David Pass, Housing & Community
Development Division, Office of Native American Programs, Public and
Indian Housing, Room B-133, Department of Housing and Urban
Development, 451 Seventh Street, S.W., Washington, D.C. 20410,
telephone (202) 755-0102, ext. 119; Email: David__Pass@hud.gov Hearing-
or speech-impaired persons may use a Telecommunications Device for the
Deaf (TTY) by contacting the Federal Information Relay Service on 1-
800-877-TDDY (1-800-877-8339)(a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Paperwork Burden
The information collection requirements contained in Secs. 954.106,
954.505, 954.506, 954.507 of this interim rule have been approved by
the Office of Management and Budget in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501-3520), and assigned OMB control
number 2577-0191. An agency may not conduct or sponsor, and a person is
not required to respond to, a collection of information unless the
collection displays a valid control number.
II. Background
The HOME Investment Partnerships Act (the HOME Act)(Title II of the
Cranston-Gonzalez National Affordable Housing Act) was signed into law
on November 28, 1990 (Pub. L. 101-625), and created the HOME Investment
Partnerships (or HOME) Program that provides funds to the Indian HOME
program to expand the supply of affordable housing for very low-income
and low-income persons. Interim regulations for the HOME Investment
Partnerships Program were published on December 16, 1991 (56 FR 65313)
and are codified at 24 CFR part 92. The requirements of 24 CFR part 92,
subpart A and subpart M (Secs. 92.600-92.652) apply specifically to the
Indian HOME program.
The HOME Act was amended October 28, 1992 by title II of the
Housing and Community Development Act of 1992 (HCDA 1992) (P.L. 102-
550, approved October 28, 1992). The Multifamily Housing Property
Disposition Reform Act of 1994 (MHPDRA) (Pub. L. 103-233, approved
April 11, 1994) included an additional number of amendments to the HOME
Act. Amendments to the HOME rule at 24 CFR part 92 were published on
December 11, 1992 (57 FR 58862); December 22, 1992 (57 FR 60960); June
23, 1993 (58 FR 34130); April 19, 1994 (59 FR 18626); August 26, 1994
(59 FR 44258); March 10, 1995 (60 FR 13348); July 12, 1995 (60 FR
36020); January 23, 1996 (61 FR 1824); and March 6, 1996 (61 FR 9036).
In accordance with section 217(a)(2) of the HOME Act, each Fiscal
Year (FY) HUD shall provide funds for the Indian HOME program totaling
one percent (or such other percentage or amount as authorized by
Congress) of the amount appropriated for the HOME program to expand the
supply of affordable housing.
The initial regulatory requirements for the Indian HOME program
were similar to the rule for the HOME program for State and local
governments. During the years since the publication of the December 16,
1991, interim rule in the Federal Register, there have been four
complete funding cycles (FY 92, FY 93, FY 94 and FY 95) of the Indian
HOME program. The Indian HOME program has gradually developed its own
particular characteristics to serve its constituency, and the Office of
Indian Housing has become the Office of Native American Programs
(ONAP), receiving Community Planning and Development field office staff
and administering both the Indian Community Development Block Grant
(ICDBG) program and the Indian HOME program.
This interim rule includes clarifications and simplifications
intended to eliminate confusion and facilitate the use of the rule by
interested parties, increases similarity with the Indian Community
Development Block Grant (ICDBG) program, and simplifies administration
of Native American Tribal Programs. In addition, the regulation is
relocated from part 92 to part 954 of title 24. The Department is
consolidating all of its Native American programs in the 950 series of
title 24.
III. Regulatory Reinvention
Consistent with Executive Order 12866 and President Clinton's
memorandum of March 4, 1995 to all Federal Departments and Agencies on
regulatory reinvention, HUD has reviewed all its regulations to
determine whether certain regulations can be eliminated, streamlined,
or consolidated with other regulations. The changes in the Indian HOME
Program are a part of this regulatory reinvention effort. The
Department is inviting comments on these changes and any other
provision in part 954. HUD intends to issue a final rule taking into
account comments on this interim rule and comments received by HUD on
part 92--the HOME program for State and local governments. The
following discussion of sections in the new 24 CFR part 954 describes
the changes made to the part 92 provisions as part of the move to part
954:
Subpart A--General Provisions
Section 954.1 Overview and Purpose
Section 954.1, based upon Sec. 92.1, is edited so that it applies
to only the Indian HOME program. References to participants in the HOME
program for State and local governments are deleted.
Section 954.2 Definitions
Section 954.2, based upon Sec. 92.2, is edited so that it applies
to only the Indian HOME program. Definitions for and references to
participants in the HOME program for State and local governments are
deleted.
Section 954.4 Other Federal Requirements
Indian preference
To increase similarity between tribal assistance programs,
Sec. 92.631 (now Sec. 954.4) is revised to conform with the
[[Page 32293]]
Indian preference as described in 24 CFR part 953. The language of this
section has been revised to: correct inaccuracies in certain referenced
definitions; include a definition of ``Indian'' as this word is defined
in the Indian Self-Determination and Education Assistance Act (25
U.S.C. 450e(b)); delete subsection (e), Additional Indian preference
requirements (this subsection is being deleted since its provisions
have never been used and, upon analysis, did not appear to be
meaningful); and, to add a subsection, Complaint procedures, in which
the specific process to be followed is clarified and in which the
grantee is identified as the final arbiter.
Environmental Review
Section 92.633 is relocated to Sec. 954.4. Displacement,
relocation, and acquisition.
Section 92.634, now included in Sec. 954.4, is revised to conform
to 24 CFR 953.602 for the ICDBG program.
Labor
Section 92.635, now in Sec. 954.4, is revised to conform to
Sec. 92.354, the regulation for the HOME program for State and local
governments which was revised in the April 19, 1994 and August 26, 1994
rules. Also, the regulation includes information about force account
and Davis-Bacon; the grantee is responsible for compliance rather than
requiring prior HUD approval.
Lead-based paint
ONAP considered replacing the text at Sec. 92.636 (now Sec. 954.4)
with the text from the CDBG program at Sec. 570.608. However, HUD is in
the process of revising the lead-based paint requirements for all HUD
programs in accordance with recent statutory amendments to the lead-
based paint statute, and no change is made here.
Debarment and Suspension
ONAP considered similar sections on debarment and suspension (HOME
Sec. 92.638; CDBG Sec. 570.609) for both the Indian HOME and ICDBG
programs. The HOME regulation refers to part 24, which prohibits awards
to ineligible entities. ICDBG, too, prohibits awards to ineligible
entities. Section 92.638 has not been revised in its move to
Sec. 954.4.
Subpart B--Applying for Assistance
Section 954.100 General
Section 92.600, now Sec. 954.100, is edited to reflect the
Department's change in nomenclature from Field Offices to Area Offices
of Native American Programs.
Section 954.101 Allocation of Funds
Section 92.601 (now Sec. 954.101), Regional allocation of funds,
was changed to Allocation of funds and amended in the process. No
formula for the distribution of funds to the regions is included. The
decision whether to hold a regional competition or a national
competition will be announced in NOFAs for the Indian HOME Program.
Section 954.102 Eligible Applicants
This section reflects Sec. 92.602, except that paragraph (e), which
dealt with administrative capacity, has been deleted because it is
already covered in Sec. 954.104(b) as a factor for selection.
Section 954.106 Announcement of Competition
Section 92.605 (now Sec. 954.106), Deadline and other information,
is changed to Announcement of competition. Section 92.606,
Certifications, is eliminated. This requirement will be in the NOFA.
Section 954.107 Project Amendment
Section 954.107 is added to provide for an amendment to a project.
Subpart C--Eligible Activities and Affordability
Section 954.300 Eligible Activities
Section 92.611, Eligible activities, is now Sec. 954.300, except
Sec. 92.611(c), Termination before completion, which is placed in
Sec. 954.500, Repayment of investment, and revised to clarify the
account to which repaid HOME funds are to be deposited. Sections
92.614(e), and 92.615(c), which both dealt with manufactured housing,
have also been moved to Sec. 954.300.
Section 954.303 Eligible Project Costs
Section 92.612 (now Sec. 954.303) is revised to expand eligible
costs to include the cost to provide a security deposit in tenant-based
rental assistance. The meaning of site improvements is clarified, as is
the pro-rata development cost of facilities.
Impact fees on housing are eligible under the HOME program for
State and local governments. See Sec. 92.206(c)(7). There is no reason
to treat grantees in the Native American program differently.
Therefore, the payment of reasonable impact fees that are charged to
all housing, not just HOME-assisted housing, is now eligible.
The clarification in Sec. 954.303(a)(4) states unexpended funds in
reserve must be reprogrammed or returned to HUD; previously,
Sec. 92.612(a)(4) only stated that the funds should be returned to the
grantee's local HOME account.
The clarification in Sec. 954.303(b) Acquisition costs expands the
previous Sec. 92.612(b) coverage from ``Costs of acquiring improved or
unimproved real property'' to ``Costs of acquiring improved or
unimproved real property, including acquisition by homebuyers.''
Section 954.304 Eligible Administrative Costs
A new Sec. 954.304 is added to clarify program administrative
costs, with reference to OMB Circular A-87.
Section 954.305 Tenant-based Rental Assistance
In Sec. 954.305 (formerly Sec. 92.613), the explanation of what a
community-wide exception rent is has been relocated from paragraph
(f)(3) (where it appeared in Sec. 92.613) to the definitions section
(Sec. 954.2). To facilitate flexibility, an alternative rent standard
has been added in paragraph (f)(3), which permits the grantee's rent
standard for a unit size to be based on local market conditions.
The provision in Sec. 92.613(g), Housing Quality Standards, that
allowed for variations has been dropped as not necessary. Grantees may
always propose and request HUD approval of justifiable variations
through waivers.
Section 954.307 Homeownership: Qualification as Affordable Housing
Section 954.307discusses affordability restrictions, recapture of
the HOME investment, and use of recaptured HOME funds.
Section 954.308 Prohibited Activities
Section 954.308 (formerly Sec. 92.616) includes a prohibition
related to the provision of assistance in connection with programs
authorized under part 950 (Indian Housing Programs) of title 24. The
HOME statute does not specifically prohibit the use of HOME funds for
Indian housing, mutual help housing, new construction of public housing
or related costs. However, the statutory affordability requirements of
HOME present problems of compatibility with these programs. The HOME
rent restrictions apply for the period of affordability specified in
the regulation. The HOME affordability period for new construction is
20 years. The Indian Housing Programs under part 950 are large and
separately funded; ONAP does not contemplate accepting applications for
assistance which combine HOME with these other programs.
Subpart E--Program Administration
This subpart has been reorganized. Previously in part 92, it
followed the Other Federal requirements section.
[[Page 32294]]
Section 954.500 Repayment of Investment
Section 954.500 (formerly Sec. 92.643) has been changed to clarify
existing terms.
Section 954.502 Applicability of Uniform Administrative Requirements
A new paragraph (c) has been added to Sec. 954.502 (formerly
Sec. 92.645) to provide for alternatives to bond requirements.
Section 954.504 Closeout
Section 954.504 has revised Sec. 92.647 to provide that--except for
the special case of closeouts subject to audit--grant closeout may not
occur until all the funds to be closed out have been audited, and, if
the U.S. Department of Interior (DOI) review results in significant
delays, the Area ONAP may request a signed copy of the audit prior to
DOI review.
Section 954.505 Recordkeeping
To streamline the rule, the detailed list of records is deleted. It
will appear in a program guide.
Section 954.506 Performance Reports
Section 954.506 (formerly Sec. 92.649) has been amended to add a
financial status report to the annual performance report requirement.
Section 954.507 Submission of Project Completion Reports
This new section provides for the submission of project completion
reports.
Subpart F--Performance Reviews and Sanctions
Section 954.601 Corrective and Remedial Actions
Section 954.601 (formerly Sec. 92.651) has been expanded to include
immediate temporary lockout of the grantee from the grant funds.
In addition, the treatment of the following sections in part 92 has
changed as discussed below:
Section 92.625 Elder cottage housing opportunity (ECHO) units--
This subject need not be dealt with separately in the regulation.
Section 92.632 Methods of procurement--This subject is generic
(see 24 CFR Part 85) and need not be repeated in this program
regulation.
Section 92.640 HOME account--Reference to a grantee local HOME
account has been dropped.
Section 92.641 HOME Investment Partnership--There is no discussion
of this concept in the regulation.
Section 92.642 Cash Management Information System: disbursement of
HOME funds--This system is no longer used.
IV. Other Matters
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this interim rule before publication and
by approving it certifies that this interim rule does not have a
significant economic impact on a substantial number of small entities.
The interim rule provides revisions to the existing Indian HOME program
under which Indian tribes receive grant assistance from HUD to increase
the number of housing opportunities for low-income and very low-income
people. HUD does not anticipate a significant economic impact on small
entities since Indian tribes will continue to carry out their Indian
HOME program activities as they now do.
Executive Order 12606--Impact on the Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this interim rule 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 interim rule, as those policies and
programs relate to family concerns. To the extent there is an impact on
families, it will be beneficial in that additional affordable housing
will be available. The interim rule does not have the potential for
significant impact on family formation, maintenance, or general well-
being, since its effect is limited to revising program procedures for
Indian tribes applying for Indian HOME program grants.
Executive Order 12612--Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this interim rule 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 rule is not subject to review under the order. The rule is
limited to providing funds to Indian tribes in accordance with a
program to expand the supply of affordable housing.
Environmental Review
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50 that
implement section 102(2)(C) of the National Environmental Policy Act of
1969 (NEPA). The Finding of No Significant Impact is available for
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the
Office of the Rules Docket Clerk at the above address.
Justification for Interim Rulemaking
HUD generally publishes a rule for public comment before issuing a
rule for effect, in accordance with its own regulations on rulemaking
in 24 CFR part 10. However, part 10 provides for exceptions to the
general rule if the agency finds good cause to omit advance notice and
public participation. The good cause requirement is satisfied when
prior public procedure is ``impracticable, unnecessary, or contrary to
the public interest'' (24 CFR 10.1). HUD finds that good cause exists
to publish this interim rule for effect without first soliciting public
comment. This interim rule merely moves the Indian HOME rule to a new
part 954 in title 24, and removes unnecessary regulatory provisions but
does not establish or affect substantive policy. Therefore, prior
public comment is unnecessary.
The Catalog of Federal Domestic Assistance Number for the HOME
Program is 14.239.
List of Subjects
24 CFR Part 92
Administrative practice and procedure, Grant programs--housing and
community development, Grant programs--Indians, Indians, Low and
moderate income housing, Manufactured homes, Rent subsidies, Reporting
and recordkeeping requirements.
24 CFR Part 954
Administrative practice and procedure, Grant programs--housing and
community development, Grant programs--Indians, Indians, Low and
moderate income housing, Manufactured homes, Rent subsidies, Reporting
and recordkeeping requirements.
Accordingly, in title 24 of the Code of Federal Regulations, part
92 is amended and a new part 954 is added, as follows:
PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM
1. The authority citation for part 92 continues to read as follows:
[[Page 32295]]
Authority: 42 U.S.C. 3535(d) and 12701-12839.
Subpart M--[Removed and Reserved]
2. Subpart M, consisting of Secs. 92.600 through 92.652, is removed
and reserved.
3. A new part 954 is added to title 24, to read as follows:
PART 954--INDIAN HOME PROGRAM
Subpart A--General Provisions
Sec.
954.1 Overview.
954.2 Definitions.
954.3 Waivers.
954.4 Other Federal Requirements.
Subpart B--Applying for Assistance
954.100 General.
954.101 Allocation of funds.
954.102 Eligible applicants.
954.103 Housing strategy.
954.104 Performance thresholds.
954.105 Criteria for selection.
954.106 Announcement of competition.
954.107 Grant conditions.
954.108 Project amendment.
Subpart C--Eligible Activities and Affordability
954.300 Eligible activities.
954.301 Religious organizations.
954.302 Income determinations.
954.303 Eligible project costs.
954.304 Eligible administrative costs.
954.305 Tenant-based rental assistance.
954.306 Rental housing: qualification as affordable housing and
income targeting.
954.307 Homeownership: qualification as affordable housing.
954.308 Prohibited activities.
Subpart D--Project Requirements
954.400 Maximum per-unit subsidy amount.
954.401 Property standards.
954.402 Tenant and participant protections.
Subpart E--Program Administration
954.500 Repayment of investment.
954.501 Grantee responsibilities; written agreements; monitoring.
954.502 Applicability of uniform administrative requirements.
954.503 Audit.
954.504 Closeout.
954.505 Recordkeeping.
954.506 Performance reports.
954.507 Submission of project completion reports.
Subpart F--Performance Reviews and Sanctions
954.600 Performance reviews.
954.601 Corrective and remedial actions.
954.602 Notice and opportunity for hearing; sanctions.
Authority: 42 U.S.C. 3535(d) and 12701-12839.
Subpart A--General Provisions
Sec. 954.1 Overview.
This part implements the Indian HOME Investment Partnerships
Program. In general, under the Indian HOME Investment Partnerships
Program, HUD awards funds competitively to eligible applicants to
provide more affordable housing. Grantees may use HOME funds to carry
out projects through acquisition, rehabilitation, and new construction
of housing, and tenant-based rental assistance. Grantees are able to
provide assistance in a number of eligible forms, including loans,
advances, equity investments, interest subsidies and other forms of
investment that HUD approves.
Sec. 954.2 Definitions.
Adjusted income. See 24 CFR part 950.
Annual income. See 24 CFR part 950.
Area Office of Native American Programs (ONAP). See 24 CFR part
950.
Certification means a written assertion, based on supporting
evidence, which must be kept available for inspection by HUD, the
Inspector General and the public, which assertion is deemed to be
accurate for purposes of this part, unless HUD determines otherwise
after inspecting the evidence and providing due notice and opportunity
for comment.
Community-wide exception rents are maximum gross rents approved by
HUD for the Rental Certificate program under Sec. 882.106(a)(3) of this
title for a designated municipality, county, or similar locality, which
apply to the whole IHA jurisdiction.
Family. See 24 CFR part 950.
HOME funds means funds made available under this part through
grants, plus all repayments and interest or other return on the
investment of these funds.
Homeownership means ownership in fee simple title or a leasehold
interest of not less than 50 years (including 25 years, automatically
renewable for an additional term of 25 years) in a one-to-four unit
dwelling or in a condominium unit, ownership or membership in a
cooperative, or equivalent form of ownership approved by HUD. The
ownership interest may be subject only to the restrictions on resale
required under Sec. 954.307(a); mortgages, deeds of trust, or other
liens or instruments securing debt on the property as approved by the
tribe; or any other restrictions or encumbrances that do not impair the
good and marketable nature of title to the ownership interest.
Household means one or more persons occupying a housing unit.
Housing includes site constructed, modular, manufactured housing
and housing lots.
HUD. See 24 CFR part 950.
Indian housing authority (IHA). See 24 CFR part 950.
Low-income family See 24 CFR part 950.
Monthly adjusted income. See 24 CFR part 950.
Monthly income. See 24 CFR part 950.
NOFA means notice of funding availability.
Project means housing developed, acquired, or assisted with HOME
funds, and the improvement of this housing. It includes the site on
which the housing is located and all of the HOME-assisted activities
associated with the building and the site.
Project completion means that all necessary title transfer
requirements and construction work have been performed and the project
complies with the requirements of this part (including the property
standards adopted under Sec. 954.401); the final drawdown has been
disbursed for the project; a Project Completion Report has been
submitted and a final accounting of project expenses is provided by the
grantee as prescribed by HUD. For tenant-based rental assistance, it
also means the final drawdown has been disbursed for the project and
the final payment certification has been submitted and processed as
prescribed by HUD.
Secretary means the Secretary of Housing and Urban Development.
Single room occupancy (SRO) housing means housing consisting of
single room dwelling units that is the primary residence of its
occupant or occupants. The unit may contain either food preparation
facilities or sanitary facilities, or both. Alternatively, sanitary
facilities may be located outside the unit and be shared by tenants in
the project. SRO does not include facilities for students.
Subgrantee means a public agency or nonprofit organization retained
by the grantee under a written agreement to administer all or a portion
of the grantee's program for its HOME grant. A public agency or
nonprofit organization that receives HOME funds solely as a developer
or owner of housing is not a subgrantee. The grantee's selection of a
subgrantee is not subject to the procurement procedures and
requirements.
Tenant-based rental assistance is a form of rental assistance in
which the assisted tenant may move from a dwelling unit with a right to
continued assistance.
Transitional housing means housing that--
[[Page 32296]]
(1) Is designed to provide housing and supportive services to
persons, including (but not limited to) deinstitutionalized individuals
with disabilities, homeless individuals with disabilities, and homeless
families with children; and
(2) Has as its purpose facilitating the movement of individuals and
families to independent living within a time period that is set by the
grantee before occupancy.
Very low-income family. See 24 CFR part 950.
Sec. 954.3 Waivers.
Upon determination of good cause, HUD may waive any provision of
this part not required by statute. Each waiver must be in writing and
must be supported by documentation of the pertinent facts and grounds.
Sec. 954.4 Other Federal Requirements.
(a) Equal opportunity. (1) Section 282. Pursuant to the
requirements of Section 282 of the Cranston-Gonzales National
Affordable Housing Act (42 U.S.C. 12832), no person in the United
States shall on the grounds of race, color, national origin, religion,
or sex be excluded from participation in, be denied the benefits of, or
be subjected to discrimination under any program or activity funded in
whole or in part with HOME funds. In addition, HOME funds must be made
available in accordance with the prohibitions against discrimination on
the basis of age under the Age Discrimination Act of 1975 (42 U.S.C.
6101-6107) and implementing regulations at 24 CFR part 146, and the
prohibitions against discrimination against handicapped individuals
under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and
implementing regulations at 24 CFR part 8.
(2) Civil Rights Act. Title VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d-2000d-4), which prohibits discrimination on the basis of
race, color or national origin in federally assisted programs, the Fair
Housing Act (42 U.S.C. 3601-3620), which prohibits discrimination based
on race, color, religion, sex, or national origin in the sale or rental
of housing, and Executive Order 11063 (27 FR 11527, 3 CFR 1959-1963
Comp., p. 652), which provides for equal opportunity in housing, do not
apply to grantees exercising recognized powers of self-government.
Indian tribes and tribal organizations applying on behalf of Indian
tribes that do not exercise recognized powers of self-government must
make HOME funds available in accordance with Title VI of the Civil
Rights Act of 1964, the Fair Housing Act, and Executive Order 11063.
(b) Indian Civil Rights Act. The Indian Civil Rights Act (title II
of the Civil Rights Act of 1968, 25 U.S.C. 1301-1303) provides, among
other things, that ``no Indian tribe in exercising powers of self-
government shall. . . deny to any person within its jurisdiction the
equal protection of its laws or deprive any person of liberty or
property without due process of law.'' The Indian Civil Rights Act
(ICRA) applies to any tribe, band, or other group of Indians subject to
the jurisdiction of the United States in the exercise of recognized
powers of self-government.
(c) Indian preference requirements. (1) Applicability. HUD has
determined that grants under this part are subject to Section 7(b) of
the Indian Self-Determination and Education Assistance Act (25 U.S.C.
450e(b)). Section 7(b) provides that any contract, subcontract, grant
or subgrant pursuant to an act authorizing grants to Indian
organizations or for the benefit of Indians shall require that, to the
greatest extent feasible:
(i) Preference and opportunities for training and employment shall
be given to Indians; and
(ii) Preference in the award of contracts and subcontracts shall be
given to Indian organizations and Indian-owned economic enterprises as
defined in section 3 of the Indian Financing Act of 1974 (25 U.S.C.
1452).
(2) Definitions. (i) The Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450e(b)) defines ``Indian'' to mean a person
who is a member of an Indian tribe and defines ``Indian tribe'' to mean
any Indian tribe, band, nation, or other organized group or community
including any Alaska native village or regional or village corporation
as defined or established pursuant to the Alaska Native Claims
Settlement Act, which is recognized as eligible for the special
programs and services provided by the United States to Indians because
of their status as Indians.
(ii) In section 3 of the Indian Financing Act of 1974 (25 U.S.C.
1452) ``economic enterprise'' is defined as any Indian-owned
commercial, industrial, or business activity established or organized
for the purpose of profit, except that Indian ownership must constitute
not less than 51 percent of the enterprise. This act defines ``Indian
organization'' to mean the governing body of any Indian tribe or entity
established or recognized by such governing body.
(3) Preference in administration of grant. To the greatest extent
feasible, preference and opportunities for training and employment in
connection with the administration of grants awarded under this part
shall be given to Indians.
(4) Preference in contracting. To the greatest extent feasible,
grantees shall give preference in the award of contracts for projects
funded under this part to Indian organizations and Indian-owned
economic enterprises.
(i) Each grantee shall:
(A) Advertise for bids or proposals limited to qualified Indian
organizations and Indian-owned enterprises; or
(B) Use a two-stage preference procedure, as follows:
(1) Stage 1. Invite or otherwise solicit Indian-owned economic
enterprises to submit a statement of intent to respond to a bid or
proposal announcement limited to Indian-owned firms.
(2) Stage 2. If responses are received from more than one Indian
enterprise found to be qualified, advertise for bids or proposals
limited to Indian organizations and Indian-owned economic enterprises;
or
(C) Develop, subject to area ONAP one-time approval, the grantee's
own method of providing preference.
(ii) If the grantee selects a method of providing preference that
results in fewer than two responsible qualified organizations or
enterprises submitting a statement of intent, a bid or a proposal to
perform the contract at a reasonable cost, then the grantee shall:
(A) Re-bid the contract, using any of the methods described in
paragraph (d)(1) of this section; or
(B) Re-bid the contract without limiting the advertisement for bids
or proposals to Indian organizations and Indian-owned economic
enterprises; or
(C) If one approvable bid is received, request area ONAP review and
approval of the proposed contract and related procurement documents, in
accordance with 24 CFR 85.36, in order to award the contract to the
single bidder.
(iii) Procurements that are within the dollar limitations
established for small purchases under 24 CFR 85.36 need not follow the
formal bid procedures of paragraph (d) of this section, since these
procurements are governed by the small purchase procedures of 24 CFR
85.36. However, a grantee's small purchase procurement shall, to the
greatest extent feasible, provide Indian preference in the award of
contracts.
(iv) All preferences shall be publicly announced in the
advertisement and bidding or proposal solicitation and the bidding or
proposal documents.
(v) A grantee, at its discretion, may require information of
prospective contractors seeking to qualify as Indian
[[Page 32297]]
organizations or Indian-owned economic enterprises. Grantees may
require prospective contractors to include the following information
prior to submitting a bid or proposal, or at the time of submission:
(A) Evidence showing fully the extent of Indian ownership and
interest;
(B) Evidence of structure, management and financing affecting the
Indian character of the enterprise, including major subcontracts and
purchase agreements; materials or equipment supply arrangements; and
management salary or profit-sharing arrangements; and evidence showing
the effect of these on the extent of Indian ownership and interest; and
(C) Evidence sufficient to demonstrate to the satisfaction of the
grantee that the prospective contractor has the technical,
administrative, and financial capability to perform contract work of
the size and type involved.
(vi) The grantee shall incorporate the following clause (referred
to as the Section 7(b) clause) in each contract awarded in connection
with a project funded under this part:
(A) The work to be performed under this contract is on a project
subject to Section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450e(b)) (Indian Act). Section 7(b) requires
that to the greatest extent feasible preferences and opportunities for
training and employment shall be given to Indians, and preferences in
the award of contracts and subcontracts shall be given to Indian
organizations and Indian-owned economic enterprises.
(B) The parties to this contract shall comply with the provisions
of Section 7(b) of the Indian Act.
(C) In connection with this contract, the contractor shall, to the
greatest extent feasible, give preference in the award of any
subcontracts to Indian organizations and Indian-owned economic
enterprises, and preferences and opportunities for training and
employment to Indians.
(D) The contractor shall include this Section 7(b) clause in every
subcontract in connection with the project, and shall, at the direction
of the grantee, take appropriate action pursuant to the subcontract
upon a finding by the grantee or HUD that the subcontractor has
violated the Section 7(b) clause of the Indian Act.
(5) Complaint procedures. The following complaint procedures are
applicable to complaints arising out of any of the methods of providing
for Indian preference contained in this part, including alternate
methods enacted and approved in a manner described in this section.
(i) Each complaint shall be in writing, signed, and filed with the
grantee.
(ii) A complaint must be filed with the grantee no later than 20
calendar days from the date of the action (or omission) upon which the
complaint is based.
(iii) Upon receipt of a complaint, the grantee shall promptly stamp
the date and time of receipt upon the complaint, and immediately
acknowledge its receipt.
(iv) Within 20 calendar days of receipt of a complaint, the grantee
shall either meet, or communicate by mail or telephone, with the
complainant in an effort to resolve the matter. The grantee shall make
a determination on a complaint and notify the complainant, in writing,
within 30 calendar days of the submittal of the complaint to the
grantee. The decision of the grantee shall constitute final
administrative action on the complaint.
(d) Environmental review. The Indian tribe must assume
responsibility for environmental review, decisionmaking, and action for
each activity that it carries out with HOME funds, in accordance with
the requirements imposed on a recipient under 24 CFR part 58. The
grantee shall also be responsible for compliance with flood insurance,
coastal barrier resource and airport clear zone requirements under 24
CFR 58.6.
(e) Displacement, relocation, and acquisition. (1) Minimizing
displacement. Consistent with the other goals and objectives of this
part, the grantee must ensure that it has taken all reasonable steps to
minimize the displacement of persons (families, individuals,
businesses, nonprofit organizations, and farms) as a result of a
project assisted with HOME funds. To the extent feasible, residential
tenants must be provided a reasonable opportunity to lease and occupy a
suitable, decent, safe, sanitary, and affordable dwelling unit in the
building/complex upon completion of the project.
(2) Temporary relocation. The following policies cover residential
tenants who will not be required to move permanently but who must
relocate temporarily for the project. Such tenants must be provided:
(i) Reimbursement for all reasonable out-of-pocket expenses
incurred in connection with the temporary relocation, including the
cost of moving to and from the temporarily occupied housing and any
increase in monthly rent/utility costs.
(ii) Appropriate advisory services, including reasonable advance
written notice of--
(A) The date and approximate duration of the temporary relocation;
(B) The location of the suitable, decent, safe, and sanitary
dwelling to be made available for the temporary period;
(C) The terms and conditions under which the tenant may lease and
occupy a suitable, decent, safe, and sanitary dwelling in the building/
complex upon completion of the project; and
(D) The provisions of paragraph (e)(2)(i) of this section.
(3) Relocation assistance for displaced persons. (i) General. A
displaced person (defined in paragraph (e)(3)(ii) of this section) must
be provided relocation assistance at the levels described in, and in
accordance with the requirements of, the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970 (URA) (42 U.S.C.
4201-4655) and 49 CFR part 24.
(ii) Displaced Person. (A) For purposes of paragraph (c) of this
section, the term displaced person means a person (family individual,
business, private nonprofit organization, or farm, including any
corporation, partnership or association) that moves from real property
or moves personal property from real property, permanently, as a direct
result of acquisition, rehabilitation, or demolition for a project
assisted with HOME funds. This includes any permanent, involuntary move
for an assisted project, including any permanent move from the real
property that is made:
(1) After notice by the owner to move permanently from the
property, if the move occurs on or after:
(i) The date of the submission of an application to the grantee or
HUD, if the applicant has site control and the application is later
approved; or
(ii) The date the grantee approves the applicable site, if the
applicant does not have site control at the time of the application; or
(2) Before the date described in paragraph (e)(3)(ii)(A)(1) of this
section, if the grantee or HUD determines that the displacement
resulted directly from acquisition, rehabilitation, or demolition for
the project; or
(3) By a tenant-occupant of a dwelling unit, if any one of the
following three situations occurs:
(i) The tenant moves after execution of the agreement covering the
acquisition, rehabilitation, or demolition and the move occurs before
the tenant is provided written notice offering the tenant the
opportunity to lease and occupy a suitable, decent,
[[Page 32298]]
safe, and sanitary dwelling in the same building/complex upon
completion of the project under reasonable terms and conditions. Such
reasonable terms and conditions must include a term of at least one
year at a monthly rent and estimated average monthly utility costs that
do not exceed the greater of: the tenant's monthly rent before such
agreement and estimated average monthly utility costs; or the total
tenant payment, as determined under 24 CFR part 5, if the tenant is
low-income, or 30 percent of gross household income, if the tenant is
not low-income; or
(ii) The tenant is required to relocate temporarily, does not
return to the building/complex, and either: the tenant is not offered
payment for all reasonable out-of-pocket expenses incurred in
connection with the temporary relocation; or other conditions of the
temporary relocation are not reasonable; or
(iii) The tenant is required to move to another dwelling unit in
the same building/complex but is not offered reimbursement for all
reasonable out-of-pocket expenses incurred in connection with the move,
or other conditions of the move are not reasonable.
(B) Notwithstanding paragraph (e)(3)(ii)(A) of this section, a
person does not qualify as a displaced person if:
(1) The person has been evicted for cause based upon a serious or
repeated violation of the terms and conditions of the lease or
occupancy agreement, violation of applicable Federal or tribal law (or
state law, which may apply if the grantee is not exercising recognized
powers of self-government), or other good cause, and the grantee
determines that the eviction was not undertaken for the purpose of
evading the obligation to provide relocation assistance. The effective
date of any termination or refusal to renew must be preceded by at
least 30 days advance written notice to the tenant specifying the
grounds for the action.
(2) The person moved into the property after the submission of the
application but, before signing a lease and commencing occupancy, was
provided written notice of the project, its possible impact on the
person (e.g., the person may be displaced, temporarily relocated, incur
a rent increase), and the fact that the person would not qualify as a
``displaced person'' (or for any assistance under this section) as a
result of the project;
(3) The person is ineligible under 49 CFR 24.2(g)(2); or
(4) HUD determines that the person was not displaced as a direct
result of acquisition, rehabilitation, or demolition for the project.
(C) The grantee may, at any time, ask HUD to determine whether a
displacement is or would be covered by this part.
(iii) Initiation of negotiations. For purposes of determining the
formula for computing replacement housing assistance to be provided
under paragraph (e)(3) of this section to a tenant displaced from a
dwelling as a direct result of private-owner rehabilitation, demolition
or acquisition of the real property, the term initiation of
negotiations means the execution of the agreement covering the
acquisition, rehabilitation, or demolition.
(4) Optional relocation assistance. The grantee may provide
relocation payments and other relocation assistance to families,
individuals, businesses, nonprofit organizations, and farms displaced
by a project assisted with HOME funds where the displacement is not
subject to paragraph (e)(3) of this section. The grantee may also
provide relocation assistance to persons covered under paragraph (e)(3)
of this section beyond that required. For any such assistance that is
not required by tribal law (or state law, which may apply if the
grantee is not exercising recognized powers of self-government), the
grantee must adopt a written policy available to the public that
describes the optional relocation assistance that it has elected to
furnish and provides for equal relocation assistance within each class
of displaced persons.
(5) Real property acquisition requirements. The acquisition of real
property for a project is subject to the URA and the requirements of 49
CFR part 24, subpart B.
(6) Appeals. A person who disagrees with the grantee's
determination concerning whether the person qualifies as a displaced
person, or the amount of relocation assistance for which the person may
be eligible, may file a written appeal of that determination with the
grantee.
(7) Responsibility of grantee. (i) The grantee must certify that it
will comply with the URA, the regulations at 49 CFR part 24, and the
requirements of this section, and must ensure such compliance
notwithstanding any third party's contractual obligation to the grantee
to comply.
(ii) The cost of required relocation assistance is an eligible
project cost. This cost also may be paid from tribal funds, or funds
available from other sources.
(f) Labor. (1) General. (i) Every contract for the construction
(rehabilitation or new construction) of housing that includes 12 or
more units assisted with HOME funds must contain a provision requiring
the payment of not less than the wages prevailing in the locality, as
predetermined by the Secretary of Labor pursuant to the Davis-Bacon Act
(40 U.S.C. 276a-276a-5), to all laborers and mechanics employed in the
development of any part of the housing. Such contracts must also be
subject to the overtime provisions, as applicable, of the Contract Work
Hours and Safety Standards Act (42 CFR 327-332).
(ii) The contract for construction must contain these wage
provisions if HOME funds are used for any project costs (as defined in
subpart C of this part), including construction or non-construction
costs, of housing with 12 or more HOME-assisted units. When HOME funds
are only used to assist homebuyers to acquire single-family housing,
and not for any other project costs, the wage provisions apply to the
construction of the housing if there is a written agreement with the
owner or developer of the housing that HOME funds will be used to
assist homebuyers to buy the housing and the construction contract
covers 12 or more housing units to be purchased with HOME assistance.
The wage provisions apply to any construction contract that includes a
total of 12 or more HOME-assisted units, whether one or more than one
project phase is covered by the construction contract. Once they are
determined to be applicable, the wage provisions must be contained in
the construction contract so as to cover all laborers and mechanics
employed in the development of the entire project, including portions
other than the assisted units. Arranging multiple construction
contracts within a single project for the purpose of avoiding the wage
provisions is not permitted.
(iii) Grantees, contractors, subcontractors, and other participants
must comply with regulations issued under these Acts and with other
Federal laws and regulations pertaining to labor standards and HUD
Handbook 1344.1 (Federal Labor Standards Compliance in Housing and
Community Development programs), as applicable. Grantees must require
certification as to compliance with the provisions of this section
before making any payment under such contract.
(2) Volunteers. The prevailing wage provisions of paragraph (f)(1)
of this section do not apply to an individual who receives no
compensation or is paid expenses, reasonable benefits, or a nominal fee
to perform the services for which the individual volunteered and who is
not otherwise employed at any
[[Page 32299]]
time in the construction work. See 24 CFR part 70.
(3) Sweat equity. The prevailing wage provisions of paragraph
(f)(1) of this section do not apply to members of an eligible family
who provide labor in exchange for acquisition of a property for
homeownership or provide labor in lieu of, or as a supplement to, rent
payments.
(4) Force account. (i) The grantee is responsible for compliance
with regulatory requirements in the use of grantee work forces for
construction or renovation activities performed as part of the
activities funded under this part. The grantee must provide for its
files the following:
(A) Documentation to indicate that it has carried out or can carry
out successfully a project of the size and scope of the proposal;
(B) Documentation to indicate that it has obtained or can obtain
adequate supervision for the workers to be used;
(C) Information showing that the workers to be used are, or will
be, listed on the grantee payroll and are employed directly by the
grantee.
(ii) Any and all excess funds derived from the force account
construction or renovation activities shall accrue to the grantee and
shall be reprogrammed for other activities eligible under this part or
returned to HUD promptly.
(iii) Insurance coverage for force account workers and activities
shall, where applicable, include worker's compensation, public
liability, property damage, builder's risk, and vehicular liability.
(iv) The grantee shall specify and apply reasonable labor
performance, construction, or renovation standards to work performed
under the force account.
(v) The contracting and procurement standards set forth in 24 CFR
85.36 apply to material, equipment, and supply procurement from outside
vendors under this section.
(vi) In force account there is no contract. If the grantee which
has received the HOME grant to construct the housing units performs the
construction work using force account, i.e., with its own employees,
the work is not covered by Davis-Bacon and related Acts. If the grantee
contracts out the work or part of the work, that work is covered.
(g) Lead-based paint. Housing assisted with HOME funds constitutes
HUD-associated housing for the purpose of the Lead-Based Paint
Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and is, therefore,
subject to 24 CFR part 35. Grantees are responsible for testing and
abatement activities.
(h) Conflict of interest. (1) Applicability. (i) The conflict of
interest provisions in 24 CFR part 84 and 24 CFR 85.36 apply to the
procurement of supplies, equipment, construction, and services by
grantees and their subgrantees.
(ii) The provisions of this section apply to all cases not governed
by 24 CFR part 84 and 24 CFR 85.36. These cases include the acquisition
and disposition of real property and the provision of assistance by the
grantee, by subgrantees, or to individuals, housing developers, and
other private entities under eligible activities which authorize such
assistance (e.g., rehabilitation of housing).
(2) Conflicts prohibited. The general rule is that no persons
described in paragraph (h)(3) of this section who have or had any
functions or responsibilities with respect to activities assisted under
this part, or who are in a position to participate in a decision, or
gain inside information about such activities, may obtain a financial
interest or benefit from these activities. Further, these persons may
not have an interest in any contract, subcontract, or agreement
concerning such activities; and these persons may not, during their
employment or tenure in office and for one year thereafter, have an
interest in the proceeds from these activities, either for themselves
or for those with whom they have family or business ties. This
paragraph does not apply to approved eligible administrative or
personnel costs.
(3) Persons covered. The conflict of interest provisions of
paragraph (h)(2) of this section apply to any person who is an
employee, agent, consultant, officer, or elected or appointed official
of the grantee or subgrantee receiving HOME funds.
(4) Exceptions requiring HUD approval. (i) Threshold requirements.
Upon the written request of a grantee, HUD may grant an exception to
the provisions of paragraph (h)(2) of this section on a case-by-case
basis, when it determines that such an exception will serve to further
the purposes of the HOME program and the effective and efficient
administration of the grantee's project. An exception may be considered
only after the grantee has provided the following:
(A) A disclosure of the nature of the possible conflict,
accompanied by an assurance that there has been public disclosure of
the conflict and a description of how the public disclosure was made;
and
(B) An opinion of the grantee's attorney that the interest for
which the exception is sought would not violate tribal laws on conflict
of interest (or State law on conflict of interest, which may apply if
the grantee is not exercising recognized powers of self-government).
(ii) Factors to be considered for exceptions. In determining
whether to grant a requested exception after the grantee has
satisfactorily met the requirements of paragraph (h)(4)(i) of this
section, HUD shall consider the cumulative effect of the following
factors, where applicable:
(A) Whether the exception would provide a significant cost benefit
or essential expert knowledge to the project which would otherwise not
be available;
(B) Whether the affected person has withdrawn from his or her
functions or responsibilities, or from the decision-making process,
with reference to the specific assisted activity in question;
(C) Whether the interest or benefit was present before the affected
person was in a position as described in paragraph (h)(2) of this
section;
(D) Whether undue hardship will result, either to the grantee or to
the person affected, when weighed against the public interest served by
avoiding the prohibited conflict; and
(E) Any other relevant considerations.
(5) Circumstances under which the conflict prohibition does not
apply. (i) In instances where a person who might otherwise be deemed to
be included under the conflict prohibition is a member of a group or
class of beneficiaries of the assisted activity and receives generally
the same interest or benefits as are being made available or provided
to the group or class, the prohibition does not apply, except that if,
by not applying the prohibition against conflict of interest, a
violation of tribal (or State) laws on conflict of interest would
result, the prohibition does apply.
(ii) A public disclosure of the nature of the grant assistance to
be provided and the specific basis for the selection of the proposed
beneficiaries must be made prior to the submission of an application to
HUD. Evidence of this disclosure must be provided as a component of the
application.
(i) Debarment and suspension. As required by 24 CFR part 24, each
grantee must require participants in lower tier covered transactions
(e.g., sub-contractors) to include the certification in appendix B of
24 CFR part 24 (that neither it nor its principals is presently
debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded from participation from the covered transaction)
in any proposal submitted in connection with
[[Page 32300]]
the lower tier transactions. A grantee may rely on the certification,
unless it knows the certification is erroneous.
Subpart B--Applying for Assistance
Sec. 954.100 General.
For each fiscal year, HUD will provide funds for the Indian HOME
program, totaling one percent (or such other percentage or amount as
authorized by Congress) of the amount appropriated for the HOME program
to expand the supply of affordable housing. The funds will be awarded
competitively and will be made available pursuant to a NOFA published
in the Federal Register, in accordance with the requirements of this
part.
Sec. 954.101 Allocation of funds.
Unless HUD determines for administrative convenience based on the
amount of HOME funds available to hold a nationwide competition, HOME
funds will be allocated to the HUD Area ONAPs responsible for the
Indian HOME program competition based upon relative need for housing as
measured by the most recent and reliable data available.
Sec. 954.102 Eligible applicants.
(a) Eligible applicants for HOME funds for Indian tribes are any
Indian Tribe, band, group, or nation, including Alaskan Indians,
Aleuts, and Eskimos, and any Alaska native village of the United States
which is considered an eligible recipient under Title I of the Indian
Self-Determination and Education Assistance Act (25 U.S.C. 450).
Eligible recipients under the Indian Self-Determination and Education
Assistance Act are determined by the Bureau of Indian Affairs.
(b) Tribal organizations which are eligible under Title I of the
Indian Self-Determination and Education Assistance Act may apply for
funds on behalf of any Indian Tribe, band, group, nation, or Alaska
native village eligible under that Act when one or more of these
entities have authorized the tribal organization to do so through
concurring resolutions. Such resolutions must accompany the application
for funding. Eligible tribal organizations under Title I of the Indian
Self-Determination and Education Assistance Act will be determined by
the Bureau of Indian Affairs or Indian Health Service, as appropriate.
(c) Only eligible applicants shall receive grants. However,
eligible applicants may contract or otherwise agree with non-eligible
entities such as States, cities, counties, or other organizations to
assist in the preparation of applications and to help implement
assisted activities.
(d) To apply for funding in a given fiscal year, an applicant must
be eligible as an Indian Tribe or Alaska native village, as provided in
paragraph (a) of this section, or as a tribal organization, as provided
in paragraph (b) of this section, by the application submission date.
Sec. 954.103 Housing strategy.
Grantees are not required to submit a housing strategy to receive
HOME funds. However, the application must demonstrate how the proposed
project(s) will contribute to a comprehensive approach for expanding
the supply of affordable housing for members of the Indian tribe.
Sec. 954.104 Performance thresholds.
Applicants must have the administrative capacity to undertake the
project proposed, including systems of internal control necessary to
administer these projects effectively. In addition, an applicant that
has participated in the HOME program must have performed adequately. In
cases of previously documented deficient performance, the applicant
must have taken appropriate corrective action to improve its
performance prior to submitting a HOME application to HUD. The Area
ONAP will determine whether or not a grantee is eligible to participate
in a particular funding round. Examples of deficient performance may
include unresolved serious audit findings and failure to initiate a
previous grant.
Sec. 954.105 Criteria for selection.
There are four categories of projects that may be funded under the
HOME Indian program: housing rehabilitation; acquisition of housing;
new housing construction; and tenant-based rental assistance. Each
project must be evaluated using the following three criteria:
(a) Project need and design. The degree to which the proposed
project addresses the housing need(s) of the grantee as identified in
the application, and the degree to which the proposed project is
feasible while maximizing benefits to low-income families.
(b) Planning and implementation. The degree to which the financial,
administrative, and legal actions necessary to undertake the proposed
project have been considered and addressed in the application, and the
degree to which the grantee has the administrative staff to carry out
the project successfully.
(c) Leveraging. The degree to which other sources of assistance,
including mortgage insurance, State funds, other Federal grants, and
private contributions, are used in conjunction with HOME funds to carry
out the proposed project.
Sec. 954.106 Announcement of competition.
A NOFA will describe the maximum points for each of the selection
criteria and any special factors to be evaluated in awarding points
under the selection factors. The NOFA will also state the deadline for
the submission of applications, the total funding available for the
competition and any maximum amount of individual awards.
[Approved by the Office of Management and Budget under OMB control
number 2577-0191]
Sec. 954.107 Grant conditions.
HUD may impose reasonable conditions on grant awards.
Sec. 954.108 Project amendment.
(a) Grantees shall request prior HUD approval for all project
amendments.
(b) HUD can approve an amendment to a project if:
(1) The amendment is due to factors beyond the control of the
grantee; and
(2) The request for approval for a project amendment which involves
$100,000 or more includes all application components required by the
NOFA published for the last application cycle (not necessarily the year
in which the project was rated and ranked) and the modified project
scores high enough to have been funded in the competition for the last
application cycle. A rating equal to or greater than the lowest rating
received by a funded project during the last rating cycle must be
attained by the modified project. The request for approval of an
amendment for a project which involves less than $100,000 does not have
to include the components which address the selection criteria. It does
require a description of and the reason for the modification.
(c) Approval of an amendment request is subject to the following:
(1) Demonstration by the grantee of the capacity to promptly
complete the modified or new project.
(2) The preparation of an amended or new environmental review in
accordance with Part 58 of this title, if there is a significant change
in the scope or location of approved project.
(d) If a project amendment fails to be approved and the original
project is no longer feasible, the grant funds proposed for amendment
shall be deobligated by HUD and recaptured.
[[Page 32301]]
Subpart C--Eligible Activities and Affordability
Sec. 954.300 Eligible activities.
(a) Eligible activities. (1) General. HOME funds may be used by a
grantee to provide incentives to develop and support affordable rental
housing and homeownership affordability and to provide payment of
reasonable administrative and planning costs. The housing must be
permanent or transitional housing, and includes permanent housing for
disabled homeless persons, and single-room occupancy housing. The
specific eligible costs for these activities are set forth in
Sec. 954.303 and Sec. 954.304.
(2) Acquisition of vacant land or demolition must be undertaken
only as an integral part of a particular HOME new construction project.
(3) Manufactured housing. Purchase and/or rehabilitation of a
manufactured housing unit qualifies as affordable housing only if, at
the time of project completion, the unit:
(i) Is situated on a permanent foundation (except--for
rehabilitation not involving purchase--when assisting existing unit
owners who rent the lot on which their unit sits);
(ii) Is connected to permanent utility hook-ups;
(iii) Is located on land that is held in fee-simple title, land-
trust, or long-term ground lease with a term at least equal to that of
the appropriate affordability period;
(iv) Meets the construction standards established under 24 CFR part
3280 if produced after June 15, 1976. If the unit was produced prior to
June 16, 1976, it must comply with applicable tribal, State or local
codes; and
(v) In cases where the owner of a manufactured housing unit does
not hold fee-simple title to the land on which the unit is located, the
owner may be assisted in purchasing the land under provisions governing
rehabilitation not involving purchase.
(b) Forms of assistance. A grantee may invest HOME funds as equity
investments, interest-bearing loans or advances, noninterest-bearing
loans or advances, interest subsidies consistent with the purposes of
this part, deferred payment loans, grants, or other forms of assistance
that HUD determines to be consistent with the purposes of this part.
Each grantee has the right to establish the terms of assistance,
subject to the requirements of this part.
Sec. 954.301 Religious organizations.
HOME funds may not be provided to primarily religious
organizations, such as churches, for any activity including secular
activities. In addition, HOME funds may not be used to rehabilitate or
construct housing owned by primarily religious organizations or to
assist primarily religious organizations in acquiring housing. However,
HOME funds may be used by a secular entity to acquire housing from a
primarily religious organization, and a primarily religious entity may
transfer title to property to a wholly secular entity and the entity
may participate in the HOME program in accordance with the requirements
of this part. The entity may be an existing or newly established entity
(which may be an entity established, but not controlled, by the
religious organization). The completed housing project must be used
exclusively by the owner entity for secular purposes, available to all
persons regardless of religion. In particular, there must be no
religious or membership criteria for tenants of the property.
Sec. 954.302 Income determinations.
Whenever a grantee makes a determination under this part based on
family income or adjusted family income, it must use the definitions of
annual income, adjusted income, monthly income, and monthly adjusted
income, as those terms are defined in 24 CFR part 950, except when
determining the income of a homeowner for an owner-occupied
rehabilitation project, the equity in the homeowner's principal
residence is excluded from ``Net Family Assets.''
Sec. 954.303 Eligible project costs.
HOME funds may be used to pay the following eligible costs:
(a) Development hard costs. The actual cost of constructing or
rehabilitating housing. These costs include the following:
(1) For new construction, costs to meet the applicable new
construction standards of the grantee and the Model Energy Code
referred to in Sec. 954.401;
(2) For rehabilitation, costs:
(i) To meet the applicable rehabilitation standards of the grantee
or correcting substandard conditions (minimally, the housing quality
standards at Sec. 882.109 of this title), to make essential
improvements including energy-related repairs or improvements,
improvements necessary to permit the use by handicapped persons, and
the abatement of lead-based paint hazards, as required by Sec. 954.4,
and to repair or replace major housing systems in danger of failure;
and
(ii) To refinance existing debt secured by a single-family owner-
occupied unit when loaning HOME funds to rehabilitate the unit, if the
overall housing costs of the borrower will be reduced and made more
affordable.
(3) For both new construction and rehabilitation, costs to demolish
existing structures and for improvements to the project site that are
in keeping with improvements of surrounding, standard projects, and
costs to make utility connections. The ``site'' of the improvements may
include property adjacent to or near the immediate site of the housing
if this property and the housing are owned by the same entity (e.g.,
the housing is owned--at least until sold to homebuyers--by the grantee
and the housing and the improvements are located on a reservation). If
the site improvements will benefit other housing (existing or future)
in addition to housing assisted with the particular Indian HOME grant,
only a pro-rated share of the site improvements may be charged against
the HOME grant. Site improvements include roads, streets, sidewalks,
curbs, gutters, and connections to utilities, such as storm and
sanitary sewers, water supply, gas, and electricity, and the pro rata
development cost of facilities for water supply and sewerage collection
utilities.
(4) For new construction or substantial rehabilitation (an
expenditure of $25,000 or more per home) the cost of funding an initial
operating deficit reserve, which is a reserve to meet any shortfall in
project income during the period of project rent-up (not to exceed 18
months) and which may only be used to pay operating expenses, reserve
for replacement payments, and debt service. Any HOME funds placed in an
operating deficit reserve that remain unexpended when the reserve
terminates must be returned to the grantee's account and shall be
reprogrammed for other activities eligible under this part or returned
to HUD promptly.
(b) Acquisition costs. Costs of acquiring improved or unimproved
real property, including acquisition by homebuyers.
(c) Related soft costs. Other reasonable and necessary costs
incurred by the owner and associated with the financing, or development
(or both) of new construction, rehabilitation or acquisition of housing
assisted with HOME funds. These costs include, but are not limited to:
(1) Architectural, engineering or related professional services
required to prepare plans, drawings, specifications, or work write-ups;
(2) Costs to process and settle the financing for a project, such
as private
[[Page 32302]]
lender origination fees, credit reports, fees for title evidence, fees
for recordation and filing of legal documents, building permits,
attorneys' fees, private appraisal fees and fees for an independent
cost estimate, builder and developer fees;
(3) Costs of a project audit that the grantee may require with
respect to the development of a specific project; and
(4) Costs to pay impact fees that are charged to all housing.
(d) Relocation costs. Costs of relocation payments and other
relocation assistance for permanently and temporarily relocated
individuals, families, businesses, private nonprofit organizations, and
farm operations where assistance is required under Sec. 954.4 or
determined by the grantee to be appropriate under Sec. 954.4.
(e) Costs related to tenant-based rental assistance. Eligible costs
are the rental assistance and security deposit payments made to provide
tenant-based rental assistance for a family.
Sec. 954.304 Eligible administrative costs.
Eligible administrative costs means reasonable and necessary costs,
as described in OMB Circular A-87, (available from the Executive Office
of the President, Publication Service, 725 17th Street, N.W., Suite G-
2200, Washington, DC 20503; Telephone, (202) 395-7332)) incurred by the
grantee and related to the planning and execution of HOME activities
assisted in whole or in part with funds provided under this part. The
grantee may use up to 15 percent of the HOME funds for the payment of
eligible administrative costs.
Sec. 954.305 Tenant-based rental assistance.
(a) General. A grantee may use HOME funds for tenant-based rental
assistance only if the grantee selects families in accordance with
written tenant selection policies and criteria that are consistent with
the purpose of providing housing to very low- and low-income families
and are reasonably related to preference rules established under
section 6(c)(4)(A) of the U.S. Housing Act of 1937 (42 U.S.C. 1437d).
The grantee may select eligible families currently residing in units
that are designated for rehabilitation or acquisition under the
grantee's HOME program without requiring that the family meet the
written tenant selection policies and written criteria. Families so
selected may use the tenant-based assistance in the rehabilitated or
acquired unit or in other qualified housing.
(b) Program operation. The grantee may operate the program, or may
contract with another entity with the capacity to operate a rental
assistance program. The tenant-based rental assistance may be provided
through an assistance contract to an owner that leases a unit to an
assisted family or directly to the family.
(c) Term of rental assistance contract. The term of the rental
assistance contract providing assistance with HOME funds may not exceed
24 months, but may be renewed, subject to the availability of HOME
funds. The term of the rental assistance contract must begin on the
first day of the term of the lease. For a rental assistance contract
between a grantee and an owner, the term of the contract must terminate
on termination of the lease. For a rental assistance contract between a
grantee and a family, the term of the contract need not end on
termination of the lease, but no payments may be made after termination
of the lease until a family enters into a new lease.
(d) Rent reasonableness. The grantee must disapprove a lease if the
rent is not reasonable, based on rents that are charged for comparable
unassisted rental units.
(e) Lease requirements. The lease must comply with the requirements
in Sec. 954.402 of this part.
(f) Maximum subsidy. (1) The amount of the monthly assistance that
a grantee may pay to, or on behalf of, a family may not exceed the
difference between a rent standard for the unit size established by the
grantee and 30 percent of the family's monthly adjusted income.
(2) The grantee must establish a minimum dollar amount tenant
contribution to rent.
(3) The grantee's rent standard for a unit size may not be less
than 80 percent of the published section 8 existing housing fair market
rent (in effect when the payment standard amount is adopted) for the
unit size, nor more than the section 8 fair market rent or HUD-approved
community-wide exception rent (in effect when the grantee adopts its
rent standard amount) for the unit size. Alternatively, the grantee's
rent standard for a unit size may be based on local market conditions.
Further, a grantee may approve on a unit-by-unit basis a subsidy based
on a rent standard that exceeds the applicable section 8 fair market
rent by up to 10 percent for 20 percent of units assisted.
(g) Housing quality standards. Housing occupied by a family
receiving tenant-based assistance under this section must meet the
performance requirements and acceptability criteria set forth in
Sec. 882.109 of this title.
(h) Use of section 8 assistance. In any case where assistance under
section 8 of the United States Housing Act of 1937 becomes available to
a grantee, recipients of tenant-based rental assistance under this part
will qualify for tenant selection preferences to the same extent as
when they received the tenant-based rental assistance under this part.
(i) Security deposits. (1) A grantee may use HOME funds provided
for tenant-based rental assistance to provide loans or grants to very
low- and low-income families for security deposits for rental of
dwelling units whether or not the grantee provides any other tenant-
based rental assistance under this section.
(2) The relevant tribe, State or local definition of ``security
deposit'' in the jurisdiction where the unit is located is applicable
for the purposes of this part, except that the amount of HOME funds
that may be provided for a security deposit may not exceed the
equivalent of two month's rent for the unit.
(3) Only the prospective tenant may apply for HOME security deposit
assistance, although the grantee may pay the funds directly to the
tenant or to the landlord.
(4) The lease between a tenant and an owner of rental housing for
which HOME security deposit assistance is provided must comply with the
requirements of Sec. 954.402.
(5) HOME funds for security deposits may be provided as a grant or
a loan. If they are provided as a loan, the provisions at Sec. 954.501
for repayment of HOME investments apply.
Sec. 954.306 Rental housing: qualification as affordable housing and
income targeting.
(a) Rent limitation. A rental housing project (including the non-
owner-occupied units in housing purchased with HOME funds in accordance
with Sec. 954.306) qualifies as affordable housing under this part only
if the project:
(1) Bears rents not greater than the lesser of--
(i) The section 8 fair market rent for existing housing for
comparable units in the area as established by HUD under Sec. 888.111
of this title, less the monthly allowance for the utilities and
services (excluding telephone and cable TV) to be paid by the tenant;
or
(ii) A rent that does not exceed 30 percent of the adjusted income
of a family whose gross income equals 65 percent of the median income
for the area, as determined by HUD, with adjustment for number of
bedrooms in the unit, except that HUD may establish income ceilings
higher or lower than 65
[[Page 32303]]
percent of the median for the area on the basis of HUD's findings that
such variations are necessary because of prevailing levels of
construction costs or section 8 fair market rents, or unusually high or
low family incomes. In determining the maximum monthly rent that may be
charged for a unit that is subject to this limitation, the owner or
grantee must subtract a monthly allowance for any utilities and
services (excluding telephone and cable TV) to be paid by the tenant.
HUD will provide average occupancy costs per unit and adjusted income
assumptions to be used in calculating the maximum rent allowed under
this paragraph (a)(1)(ii) of this section;
(2) Has, in the case of projects with three or more rental units,
not less than 20 percent of the units--
(i) Occupied by very low-income families who pay as a contribution
toward rent (excluding any Federal, State, or tribal rental subsidy
provided on behalf of the family) not more than 30 percent of the
family's monthly adjusted income as determined by HUD. To obtain the
maximum monthly rent that may be charged for a unit that is subject to
this limitation, the owner or grantee multiplies the annual adjusted
income of the tenant family by 30 percent and divides by 12 and, if
applicable, subtracts a monthly allowance for the utilities and
services (excluding telephone and cable TV) to be paid by the tenant;
or
(ii) Occupied by very low-income families and bearing rents not
greater than 30 percent of the gross income of a family whose income
equals 50 percent of the median income for the area, as determined by
HUD, with adjustment for smaller and larger families, except that HUD
may establish income ceilings higher or lower than 50 percent of the
median for the area on the basis of HUD's findings that such variations
are necessary because of prevailing levels of construction costs or
section 8 fair market rents, or unusually high or low family incomes.
In determining the maximum monthly rent that may be charged for a unit
that is subject to this limitation, the owner or grantee must subtract
a monthly allowance for any utilities and services (excluding telephone
and cable TV) to be paid by the tenant. HUD will provide average
occupancy per unit assumptions to be used in calculating the maximum
rent allowed under paragraph (a)(2)(ii) of this section;
(3) Is occupied only by households that qualify as low-income
families;
(4) Is not refused for leasing to a holder of a certificate of
family participation under 24 CFR part 882 (rental certificate program)
or a rental voucher under 24 CFR part 887 (rental voucher program) or
to the holder of a comparable document evidencing participation in a
HOME tenant-based assistance program because of the status of the
prospective tenant as a holder of such certificate of family
participation, rental voucher, or comparable HOME tenant-based
assistance document; and
(5) Will remain affordable without regard to the term of any
mortgage or the transfer of ownership, pursuant to deed restrictions,
covenants running with the land, or other mechanisms approved by HUD,
for not less than the appropriate period, beginning after project
completion, as specified in the following table, except that the
affordability restrictions may terminate upon foreclosure or transfer
in lieu of foreclosure. The tribe may use purchase options, rights of
first refusal or other preemptive rights to purchase the housing before
foreclosure or deed in lieu of foreclosure to preserve affordability.
The affordability restrictions shall be revived according to the
original terms if, during the affordability period, the owner of record
before the foreclosure, or deed in lieu of foreclosure, or any entity
that includes the former owner or those with whom the former owner has
or had family of business ties, obtains an ownership interest in the
project or property.
------------------------------------------------------------------------
Minimum
period of
Activity affordability
in years
------------------------------------------------------------------------
Rehabilitation or acquisition of existing housing per
unit amount of HOME funds: Under $15,000................ 5
$15,000 to $40,000....................................... 10
Over $40,000............................................. 15
New construction or acquisition of newly constructed
housing................................................. 20
------------------------------------------------------------------------
(b) Rent schedule and utility allowances. The grantee must review
and approve rents proposed by the owner for units with ``flat rents,''
i.e., units subject to the maximum rent limitations in paragraphs
(a)(1)(i), (a)(1)(ii), or (a)(2)(ii) of this section, and, if
applicable, must review and approve, for all units subject to the
maximum rent limitations paragraph (a) of this section, the monthly
allowances, proposed by the owner, for utilities and services to be
paid by the tenant. The owner must reexamine the income of each tenant
household living in lower income units at least annually. The maximum
monthly rent must be recalculated by the owner and reviewed and
approved by the grantee annually, and may change as changes in the
applicable gross rent amounts, the income adjustments, or the monthly
allowance for utilities and services warrant. Any increase in rents for
low-income units is subject to the provisions of outstanding leases; in
any event, the owner must provide tenants of those units not less than
30 days prior written notice before implementing any increase in rents.
(c) Increases in tenant income. Rental housing qualifies as
affordable housing despite a temporary noncompliance with paragraphs
(a)(2) or (a)(3) of this section, if the noncompliance is caused by
increases in the incomes of existing tenants and if actions
satisfactory to HUD are being taken to ensure that all vacancies are
filled in accordance with this section until the noncompliance is
corrected. Tenants who no longer qualify as low-income families must
pay as rent the lesser of the amount payable by the tenant under
tribal, State or local law or 30 percent of the family's adjusted
monthly income, as recertified annually. The preceding sentence shall
not apply with respect to funds made available under this part for
units that have been allocated a low-income housing tax credit by a
housing credit agency pursuant to section 42 of the Internal Revenue
Code 1986 (26 U.S.C. 7805).
(d) Adjustment of qualifying rent. HUD may adjust the qualifying
rent established for a project under paragraph (a)(1) of this section,
only if HUD finds that an adjustment is necessary to support the
continued financial viability of the project and only by an amount that
HUD determines is necessary to maintain continued financial viability
of the project. HUD expects that this authority will be used sparingly.
Adjustments in section 8 fair
[[Page 32304]]
market rents and in median income over time should help maintain the
financial viability of a project within the qualifying rent standard in
paragraph (a)(1) of this section. Regardless of changes in fair market
rents and in median income over time, the qualifying rents are not
required to be lower than the HOME rent for the project in effect at
the time of project commitment.
Sec. 954.307 Homeownership: qualification as affordable housing.
(a) Purchase with or without rehabilitation. Housing that is for
purchase by a family qualifies as affordable housing only if the
housing: (1)(i) Has an initial purchase price that does not exceed 95%
of the median purchase price for the type of single family housing (1-
to 4-family residence, condominium unit, cooperative unit, combination
manufactured home and lot, or manufactured home lot) for the area as
determined by HUD, and which may be appealed in accordance with 24 CFR
203.18b; and
(ii) Has an estimated appraised value at acquisition, if standard,
or after any repair needed to meet property standards in Sec. 954.401,
that does not exceed the limit described in paragraph (a)(1)(i) of this
section.
(2) Is the principal residence of an owner whose family qualifies
as a low-income family at the time of purchase; and
(3) Is subject--for minimum periods of: 5 years where the per unit
amount of HOME funds provided is less than $15,000; 10 years where the
per unit amount of HOME funds provided is $15,000 to $40,000; and 15
years where the per unit amount of HOME funds provided is greater than
$40,000--to resale restrictions, as described in paragraph (a)(3)(i) of
this section, or recapture provisions, as described in paragraph
(a)(3)(ii) of this section, that are established by the grantee and
determined by HUD to be appropriate.
(i) Resale restrictions must make the housing available for
subsequent purchase only to a low income family that will use the
property as its principal residence; and
(A) Provide the owner with a fair return on investment, including
any improvements; and
(B) Ensure that the housing will remain affordable, pursuant to
deed restrictions, covenants running with the land, or other similar
mechanisms to ensure affordability, to a reasonable range of low-income
homebuyers. The affordability restrictions must terminate upon
occurrence of any of the following termination events: foreclosure,
transfer in lieu of foreclosure or assignment of an FHA insured
mortgage to HUD. The grantee may use purchase options, rights of first
refusal or other preemptive rights to purchase the housing before
foreclosure to preserve affordability. The affordability restrictions
shall be revived according to the original terms if, during the
original affordability period, the owner of record before the
termination event reacquires title to the property.
(ii) A grantee's recapture provisions must provide for the
recapture of the full HOME investment out of net proceeds, except as
provided in paragraph (a)(3)(ii)(B) of this section.
(A) Net proceeds means the sales price minus loan repayment and
closing costs.
(B) If the net proceeds are not sufficient to recapture the full
HOME investment plus enable the homeowner to recover the amount of the
homeowner's downpayment, principal payments, and any capital
improvement investment, the grantee's recapture provisions may allow
the HOME investment amount that must be recaptured to be reduced. The
HOME investment amount may be reduced pro rata based on the time the
homeowner has owned and occupied the unit measured against the required
affordability period; except that the grantee's recapture provisions
may not allow the homeowner to recover more than the amount of the
homeowner's downpayment, principal payments, and any capital
improvement investment.
(C) The HOME investment that is subject to recapture is the HOME
assistance that enabled the first homebuyer to buy the dwelling unit.
This includes any HOME assistance, whether a direct subsidy to the
homebuyer or a construction or development subsidy, that reduced the
purchase price from fair market value to an affordable price. The
recaptured funds must be used to carry out HOME-eligible activities. If
no HOME funds will be subject to recapture, the provisions at
Sec. 954.306(a)(3)(i) apply.
(D) Upon recapture of the HOME funds used in a single-family,
homebuyer project with two to four units, the affordability period on
rental units may be terminated at the discretion of the tribe.
(b) Rehabilitation not involving purchase. Housing that is
currently owned by a family qualifies as affordable housing only if--
(1) The value of the property, after rehabilitation, does not
exceed 95% of the median purchase price for the type of single family
housing (1- to 4-family residence, condominium unit, combination
manufactured home and lot, or manufactured home lot) for the area as
determined by HUD, and which may be appealed in accordance with 24 CFR
203.18b; and
(2) The housing is the principal residence of an owner whose family
qualifies as a low-income family at the time HOME funds are committed
to the housing.
Sec. 954.308 Prohibited activities.
(a) HOME funds may not be used to--
(1) Provide a project reserve account for replacements, a project
reserve account for unanticipated increases in operating costs, or
operating subsidies; except as authorized under Sec. 954.302; (2)
Provide nonfederal matching contributions required under any other
Federal program;
(3) Provide assistance in connection with programs authorized under
part 950 (Indian Housing Programs) of this title;
(4) Provide assistance to eligible low-income housing under part
248 (Prepayment of Low Income Housing Mortgages) of this title; or
(5) Provide assistance (other than tenant-based rental assistance
or assistance to a homebuyer to acquire housing previously assisted
with HOME funds) to a project previously assisted with HOME funds
during the period of affordability established by the grantee under
Sec. 954.306 or Sec. 954.307. However, additional HOME funds may be
committed to a project up to one year after project completion (see
Sec. 954.500), but the amount of HOME funds in the project may not
exceed the maximum per-unit subsidy amount established under
Sec. 954.400.
(b) Grantees may not charge monitoring, servicing and origination
fees in HOME-assisted projects. However, grantees may charge nominal
application fees (although these fees are not an eligible HOME cost) to
project owners to discourage frivolous applications.
Subpart D--Project Requirements
Sec. 954.400 Maximum per-unit subsidy amount.
The amount of HOME funds that a grantee may invest on a per-unit
basis in affordable housing may not exceed the total development cost
standard for the area, as issued by HUD under 24 CFR 950.220. These
total development cost standards are available from HUD Area ONAPs.
Sec. 954.401 Property standards.
(a) Housing that is assisted with HOME funds, at a minimum, must
meet the housing quality standards in Sec. 882.109 of this title. In
addition,
[[Page 32305]]
housing that is newly constructed or substantially rehabilitated with
HOME funds must meet all applicable local codes, rehabilitation
standards, ordinances, and zoning ordinances. The grantee must have
written standards for rehabilitation. Newly constructed housing must
meet the current edition of the Model Energy Code published by the
Council of American Building Officials.
(b) The following requirements apply to housing for homeownership
that is to be rehabilitated after transfer of the ownership interest:
(1) Before the transfer of the ownership interest, the grantee
must:
(i) Inspect the housing for any defects that pose a danger to
health; and
(ii) Notify the prospective purchaser of the work needed to cure
the defects and the time by which defects must be cured and applicable
property standards met.
(2) The housing must be free from all noted health and safety
defects before occupancy and not later than 6 months after the transfer
for completion of the transitional housing tenancy period.
(3) The housing must meet the applicable property standards (at a
minimum, the housing quality standards in Sec. 882.109 of this title)
not later than 2 years after transfer of the ownership interest.
Sec. 954.402 Tenant and participant protections.
(a) Lease. The lease between a tenant and an owner of rental
housing assisted with HOME funds must be for not less than one year,
unless by mutual agreement between the tenant and the owner.
(b) Prohibited lease terms. The lease may not contain any of the
following provisions:
(1) Agreement to be sued. Agreement by the tenant to be sued, to
admit guilt, or to a judgment in favor of the owner in a lawsuit
brought in connection with the lease;
(2) Treatment of property. Agreement by the tenant that the owner
may take, hold, or sell personal property of household members without
notice to the tenant and a court decision on the rights of the parties.
This prohibition, however, does not apply to an agreement by the tenant
concerning disposition of personal property remaining in the housing
unit after the tenant has moved out of the unit. The owner may dispose
of this personal property in accordance with tribal law (or State law,
which may apply if the Indian tribe is not exercising recognized powers
of self-government);
(3) Excusing owner from responsibility. Agreement by the tenant not
to hold the owner or the owner's agents legally responsible for any
action or failure to act, whether intentional or negligent;
(4) Waiver of notice. Agreement of the tenant that the owner may
institute a lawsuit without notice to the tenant;
(5) Waiver of legal proceedings. Agreement by the tenant that the
owner may evict the tenant or household members without instituting a
civil court proceeding in which the tenant has the opportunity to
present a defense, or before a court decision on the rights of the
parties;
(6) Waiver of a jury trial. Agreement by the tenant to waive any
right to a trial by jury;
(7) Waiver of right to appeal court decision. Agreement by the
tenant to waive the tenant's right to appeal, or to otherwise challenge
in court, a court decision in connection with the lease; and
(8) Tenant chargeable with cost of legal actions regardless of
outcome. Agreement by the tenant to pay attorney's fees or other legal
costs even if the tenant wins in a court proceeding by the owner
against the tenant. The tenant, however, may be obligated to pay costs
if the tenant loses.
(c) Termination of tenancy. An owner may not terminate the tenancy
or refuse to renew the lease of a tenant of rental housing assisted
with HOME funds except for serious or repeated violation of the terms
and conditions of the lease; for violation of applicable Federal, or
tribal law (or State law, which may apply if the grantee is not
exercising recognized powers of self-government); or for other good
cause. Any termination or refusal to renew must be preceded by not less
than 30 days by the owner's service upon the tenant of a written notice
specifying the grounds for the action.
(d) Maintenance and replacement. An owner of rental housing
assisted with HOME funds must maintain the premises in compliance with
all applicable housing quality standards and local code requirements.
(e) Tenant selection. An owner of rental housing assisted with HOME
funds must adopt written tenant selection policies and criteria that--
(1) Are consistent with the purpose of providing housing for very
low-income and low-income families;
(2) Are reasonably related to program eligibility and the
applicant's ability to perform the obligations of the lease;
(3) Give reasonable consideration to the housing needs of families
that would have a preference under section 6(c)(4)(A) of the U.S.
Housing Act of 1937 (Federal selection preferences for admission to
public housing); and
(4) Provide for--
(i) The selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable;
and
(ii) The prompt written notification to any rejected applicant of
the grounds for any rejection.
Subpart E--Program Administration
Sec. 954.500 Repayment of investment.
(a) HOME funds will be made available pursuant to a HOME Investment
Partnership Agreement. The agreement ensures that HOME funds invested
in affordable housing are repayable if the housing ceases to qualify as
affordable housing before the period of affordability expires. The
amount of HOME funds expended on housing assisted with HOME funds that
does not meet the affordability requirements for the period specified
in Sec. 954.306 or Sec. 954.307, as applicable, must be repaid in
accordance with paragraph (b) of this section.
(b) Any repayment of HOME funds (including repayment required if
the housing no longer qualifies as affordable housing), and any payment
of interest or other return on the investment of HOME funds, that is
made before grant close out must be deposited in the grantee's account
and used in accordance with the requirements of this part. A grantee
may retain repayments, interest, and other return on investment of HOME
funds that are made after grant closeout if the grantee agrees to use
the funds for eligible activities.
(c) HUD will recapture HOME funds that are not expended within five
years after the last day of the month in which it obligated the funds.
(d) Termination before completion. If a project is terminated
before its completion, whether voluntarily by the grantee or otherwise,
an amount equal to the HOME funds disbursed for the project must be
paid by the grantee to its HOME account. If the HOME funds were
disbursed by HUD, the amount must be paid to HUD; if the HOME funds
were disbursed from the grantee's account, the amount must be paid to
the grantee's account. If the amount is not repaid, the grantee will be
subject to actions under Sec. 954.600 Performance reviews, Sec. 954.601
Corrective and remedial actions, and Sec. 954.602 Notice and
opportunity for hearing; sanctions.
Sec. 954.501 Grantee responsibilities; written agreements; monitoring.
(a) Responsibilities. The grantee is responsible for ensuring that
HOME
[[Page 32306]]
funds are used in accordance with all program requirements. The use of
subgrantees and contractors does not relieve the grantee of this
responsibility.
(b) Executing a written agreement. Before disbursing any HOME funds
to any entity (e.g., for-profit housing developer, nonprofit
organization, homeowner, or IHA) the grantee must enter into a written
agreement with the entity ensuring compliance with the requirements of
this part. A subgrantee and a contractor must also enter into a written
agreement before it disburses funds to any entity. The agreement
remains in effect during the period for affordability under
Sec. 954.306 or Sec. 954.307, as applicable, or if the entity is a
subgrantee, during any period that the entity has control over HOME
funds.
(c) Provisions in written agreement. At a minimum, the written
agreement must include applicable provisions concerning the following
items:
(1) Use of the HOME funds. The agreement must describe the use of
the HOME funds, including the tasks to be performed, a schedule for
completing the tasks, and a budget. These items must be in sufficient
detail to provide a sound basis for the grantee effectively to monitor
performance under the agreement.
(2) Affordability. The agreement must require housing assisted with
HOME funds to meet the affordability requirements of Sec. 954.306 or
Sec. 954.307, as applicable, and must require repayment of the funds if
the housing does not meet the affordability requirements for the
specified time period.
(3) Repayments. If the entity is a subgrantee, the agreement must
state if repayment, interest, and other return on the investment of
HOME funds are to be remitted to the grantee or are to be retained for
additional eligible activities by the entity.
(4) Uniform administrative requirements. If the entity is a
subgrantee, the agreement must require the entity to comply with
applicable uniform administrative requirements, as described in
Sec. 954.502.
(5) Project requirements. The agreement must require compliance
with project requirements in Sec. 954.400 through Sec. 954.402 of this
part, as applicable in accordance with the type of project assisted.
(6) Housing quality standard. The agreement must require owners of
rental housing assisted with HOME funds to maintain the housing in
compliance with applicable Housing Quality Standards and local housing
code requirements for the duration of the agreement.
(7) Other program requirements. The agreement must require the
entity to carry out each activity in compliance with all Federal laws
and regulations described in Sec. 954.4.
(8) Conditions for religious organizations. Where applicable, the
agreement must include the conditions prescribed in Sec. 954.301 for
the use of HOME funds by religious organizations.
(9) Requests for disbursements of funds. The agreement must specify
that the entity may not request disbursement of funds under the
agreement until the funds are needed for payment of eligible costs. The
amount of each request must be limited to the amount needed.
(10) Reversion of assets. If the entity is a subgrantee, the
agreement must specify that upon expiration of the agreement, the
entity must transfer to the grantee any HOME funds on hand at the time
of expiration and any accounts receivable attributable to the use of
HOME funds.
(11) Records and reports. The agreement must specify the particular
records that must be maintained and any information or reports that
must be submitted in order to assist the grantee in meeting its
recordkeeping and reporting requirements.
(12) Enforcement of the agreement. The agreement must provide for a
means of enforcement by the grantee or the intended beneficiaries. In
addition, the agreement must specify remedies for breach of the
provisions of the agreement. If the entity is a subgrantee, the
agreement must specify that, in accordance with 24 CFR 85.43,
suspension or termination may occur if the entity materially fails to
comply with any term of the agreement, and that the agreement may be
terminated for convenience in accordance with 24 CFR 85.44.
(13) Duration of the agreement. The agreement must specify that the
agreement is in effect for the period of affordability required by the
grantee under Sec. 954.306 or Sec. 954.307.
(d) Monitoring. The grantee is responsible for managing the day-to-
day operations of its HOME program, for monitoring the performance of
all entities receiving HOME funds from the grantee to assure compliance
with the requirements of this part, and for taking appropriate action
when performance problems arise.
(1) Not less than annually, the grantee must review the activities
of owners of rental housing assisted with HOME funds to assess
compliance with the requirement of this part, as set forth in the
written agreement under paragraphs (b) and (c) of this section. For
multifamily housing, each review must include on-site inspection to
determine compliance with housing codes and the requirements of this
part. For rental housing containing one- to four-dwelling units, an on-
site review must be made once within each two-year period. The results
of each review must be included in the grantee's performance report.
(2) Not less than annually, the grantee must review the performance
of each contractor and subgrantee.
Sec. 954.502 Applicability of uniform administrative requirements.
(a) Governmental entities. The requirements of OMB Circular No. A-
87 and the following requirements of 24 CFR part 85 apply to the
grantee and any governmental subgrantee receiving HOME funds:
Secs. 85.6, 85.12, 85.20, 85.21, 85.22, 85.26, 85.32, 85.33, 85.35,
85.36, 85.43, 85.44, 85.51, and 85.52.
(b) Non-profit organizations. The requirements of OMB Circular No.
A-122 (available from the Executive Office of the President,
Publication Service, 725 17th Street, N.W., Suite G-2200, Washington,
DC 20503; Telephone, (202) 395-7332)) and the following requirements of
24 CFR part 84 apply to subgrantees receiving HOME funds that are
private nonprofit organizations: Secs. 84.12, 84.22, 84.23, 84.25,
84.51, 84.52, and 84.71.
(c) Alternatives to bonding. For construction contracts that exceed
the amount for small purchase under 24 CFR 85.36, each contractor shall
be required to provide bid guarantees and adequate assurance of
performance and payment acceptable to HUD in accordance with 24 CFR
85.36(h). Performance and payment bonds for 100 percent of the total
contract price are acceptable to HUD. There may be circumstances under
which the bonding requirements of Sec. 85.36(h) are inconsistent with
other responsibilities and obligations of the grantee. Alternative
methods to provide performance and payment assurance may include:
(1) Deposit with the grantee of a cash escrow of not less than 20
percent of the total contract price, subject to reduction during the
warranty period, commensurate with potential risk;
(2) Letter of credit for 25 percent of the total contract price,
unconditionally payable upon demand of the grantee, subject to
reduction during the warranty period commensurate with potential risk.
Sec. 954.503 Audit.
Audits of the grantee and subgrantees must be conducted in
accordance with 24 CFR parts 44 and 45, as applicable.
[[Page 32307]]
Sec. 954.504 Closeout.
(a) A grant will be closed out when all the following criteria have
been met:
(1) All funds to be closed out have been drawn down and expended
for completed project costs, or funds not drawn down and expended have
been deobligated by HUD;
(2) Project Completion Reports for all projects using funds to be
closed out have been submitted. HUD will use data contained in the
project completion reports in the preparation of the Closeout Reports;
(3) The grantee has been reviewed and audited and HUD has
determined that all requirements, including affordability (for which
also see paragraph (b)(2) of this section), are met or all monitoring
and audit findings have been resolved.
(i) A signed copy of the grantee's most recent audit report--
covering all funds to be closed out--must be received by HUD. If the
audit review by the Department of Interior (DOI) results in significant
delays, the Area ONAP may request a signed copy of the audit prior to
DOI review and use it as the document needed prior to closeout. If the
audit does not cover all funds to be closed out, the closeout may
proceed, provided the grantee agrees in the Closeout Report that any
costs paid with the funds that were not audited must be subject to the
grantee's next single audit and that the grantee may be required to
repay to HUD any disallowed costs based on the results of the audit.
(ii) The on-site monitoring of the grantee by the Area ONAP must
include verification of data reflected in the Closeout Report and
reconciliation of any discrepancies which may exist between HUD data
and grantee records.
(b) The Closeout Report contains the final data on the funds and
must be signed by the grantee and HUD. In addition, the report must
contain:
(1) A provision regarding unaudited funds (``closeout subject to
audit''), required by paragraph (a)(3)(i) of this section; and
(2) A provision requiring the grantee to continue to meet the
requirements applicable to housing projects for the period of
affordability specified in Sec. 954.306 or Sec. 954.307, to keep
records demonstrating that the requirements have been met and to repay
the HOME funds, as required by Sec. 954.500, if the housing fails to
remain affordable for the required period.
Sec. 954.505 Recordkeeping.
(a) General. Each grantee must establish and maintain sufficient
records to enable HUD to determine whether the grantee has met the
requirements of this part. Records must be kept in a manner that
identifies the source and use of funds for each project.
(b) Period of record retention. (1) Except as provided in
paragraphs (b)(2), (b)(3), or (b)(4) of this section, records must be
retained for three years after closeout of the funds.
(2) If any litigation, claim, negotiation, audit, or other action
has been started before the expiration of the regular period specified
in paragraph (b)(1) of this section, the records must be retained until
completion of the action and resolution of all issues which arise from
it, or until the end of the regular period, whichever is later.
(3) Records regarding project requirements (Sec. 954.400 to
Sec. 954.402) and other federal requirements (Sec. 954.4) that apply
for the duration of the period of affordability, as well as the written
agreement and inspection and monitoring reports must be retained for
three years after the required period of affordability specified in
Sec. 954.306 or Sec. 954.307, as applicable.
(4) Records covering displacements and acquisition must be retained
for at least three years after the date by which all persons displaced
from the property and all persons whose property is acquired for the
project have received the final payment to which they are entitled in
accordance with Sec. 954.4(e).
(c) Access to records. (1) The grantee must provide citizens,
public agencies, and other interested parties with reasonable access to
records, consistent with applicable tribal laws (or State law, which
may apply if the Indian tribe is not exercising recognized powers of
self-government) regarding privacy and obligations of confidentiality.
(2) HUD and the Comptroller General of the United States, or any of
their representatives, have the right of access to any pertinent books,
documents, papers or other records of the grantees and subgrantees, in
order to make audits, examinations, excerpts, and transcripts.
[Approved by the Office of Management and Budget under OMB control
number 2577-0191]
Sec. 954.506 Performance reports.
(a) Management reports. Each grantee must submit management reports
on its HOME program in such format and at such time as HUD may
prescribe. Each grantee must submit a ``Financial Status Report,'' SF-
269A, short form, at the same time it submits the Semi-Annual
Performance Report, described below. A separate ``Financial Status
Report'' is to be submitted for each Indian HOME program grant that the
grantee has received.
(b) Semi-Annual performance report. (1) Submission. A grantee must
submit a semi-annual performance report on its HOME activities to the
responsible Area ONAP at such time as HUD may prescribe. Single copies
of the report must be provided to the public upon request at no charge.
(2) Elements of the semi-annual performance report. The report must
contain such information and be in such form as HUD may prescribe, and
must include at least the following:
(i) A report on the proposed use of HOME funds from the grant
application, consisting of the number of additional housing
opportunities to be created for low-income and very low-income
families, by project category (housing rehabilitation, acquisition of
housing, new housing construction, and tenant-based rental assistance);
(ii) A report on the actual use of HOME funds, consisting of the
number of additional housing opportunities created for low-income and
very low-income families, by project category (housing rehabilitation,
acquisition of housing, new housing construction, and tenant-based
rental assistance). This includes a report on project income and
includes data on the amount of repayments, interest, and other return
on investment of HOME funds and the use of the funds for projects,
including number of projects assisted, and characteristics of tenants
and owners;
(iii) An assessment of the effectiveness of the efforts in
providing the preferences and opportunities under section 7(b) of the
Indian Self-Determination and Education Assistance Act (25 U.S.C.
450e(b)); and
(iv) Data on the total number of households (families and
individuals) and business and nonprofit organizations displaced as a
result of investments of HOME funds, including the cost of relocation
payments (moving expenses and replacement housing), and the number and
cost of real property acquisitions.
[Approved by the Office of Management and Budget under OMB control
number 2577-0191]
Sec. 954.507 Submission of project completion reports.
A Project Completion Report must be submitted to HUD within 120
days of the final drawdown request for the project. If a satisfactory
Project Completion Report is not submitted by the due date, HUD will
suspend further HOME disbursements and grant approvals for the grantee.
Disbursements and grant approvals will remain suspended until a
satisfactory Project Completion Report is received.
[[Page 32308]]
[Approved by the Office of Management and Budget under OMB control
number 2577-0191]
Subpart F--Performance Reviews and Sanctions
Sec. 954.600 Performance reviews.
(a) General. HUD will review the performance of each grantee in
carrying out its responsibilities under this part whenever determined
necessary by HUD, but at least annually. In conducting performance
reviews, HUD will rely primarily on information obtained from the
grantee's records and reports, findings from on-site monitoring, audit
reports, and information generated from fund requisition systems. Where
applicable, HUD may also consider relevant information pertaining to a
grantee's performance gained from other sources, including citizen
comments, complaint determinations, and litigation. Reviews to
determine compliance with specific requirements of this part will be
conducted as necessary, with or without prior notice to the grantee.
Comprehensive performance reviews under the standards in paragraph (b)
of this section will be conducted after prior notice to the grantee.
(b) Standards for comprehensive performance review. A grantee's
performance will be comprehensively reviewed periodically, as
prescribed by HUD, to determine whether the grantee:
(1) Has committed the HOME funds in the HUD account as required and
expended the funds as required; and
(2) Has met the requirements of the grant agreement and this part,
particularly eligible activities and affordability.
Sec. 954.601 Corrective and remedial actions.
(a) General. HUD will use the procedures in this section in
conducting the performance review as provided in Sec. 954.600 and in
taking corrective and remedial actions. However, HUD may temporarily
suspend payments based upon HUD's preliminary determination that the
grantee has failed to comply with the requirements of the Act,
regulations, or grant agreement if suspension is necessary to preclude
the further expenditure of funds for activities affected by the failure
to comply.
(b) Performance review. (1) If HUD determines preliminarily that
the grantee has not met a requirement of this part, the grantee will be
given notice of this determination and an opportunity to demonstrate,
within the time prescribed by HUD (not to exceed 30 days) and on the
basis of substantial facts and data, that it has done so.
(2) If the grantee fails to demonstrate to HUD's satisfaction that
it has met the requirement, HUD will take corrective or remedial action
in accordance with this section or Sec. 954.602.
(c) Corrective and remedial actions. Corrective or remedial actions
for a performance deficiency (failure to meet a provision of this part)
will be designed to prevent a continuation of the deficiency; mitigate,
to the extent possible, its adverse effects or consequences; and
prevent its recurrence.
(1) HUD may request the grantee to submit and comply with proposals
for action to correct, mitigate and prevent a performance deficiency,
including:
(i) Preparing and following a schedule of actions for carrying out
the affected activities, consisting of schedules, timetables, and
milestones necessary to implement the affected activities;
(ii) Establishing and following a management plan that assigns
responsibilities for carrying out the remedial actions;
(iii) Cancelling or revising activities likely to be affected by
the performance deficiency, before expending HOME funds for the
activities;
(iv) Reprogramming HOME funds in the HUD account that have not yet
been expended from affected activities to other eligible activities;
(v) Reimbursing the HUD account in any amount not used in
accordance with the requirements of this part; and
(vi) Suspending disbursement of funds in the HUD account for
affected activities.
(2) HUD may also--
(i) Change the method of payment from an advance to reimbursement
basis; and
(ii) Take other remedies that may be legally available.
Sec. 954.602 Notice and opportunity for hearing; sanctions.
(a) If HUD finds after reasonable notice and opportunity for
hearing that a grantee has failed to comply with any provision of this
part and until HUD is satisfied that there is no longer any such
failure to comply:
(1) HUD shall reduce the funds in the HUD account by the amount of
any expenditures that were not in accordance with the requirements of
this part; and
(2) HUD may--
(i) Prevent withdrawals from the HUD account for activities
affected by the failure to comply; or
(ii) Prohibit the grantee from competing for HOME funds under
Sec. 954.104; Provided, however, that HUD may on due notice suspend
payments from the HUD account at any time after the issuance of a
notice of opportunity for hearing pursuant to paragraph (b)(1) of this
section, pending such hearing and a final decision, to the extent HUD
determines such action necessary to preclude the further expenditure of
funds for activities affected by the failure to comply.
(b) Proceedings. When HUD proposes to take action pursuant to this
section, the respondent in the proceedings will be the grantee.
(1) Notice of opportunity for hearing. HUD shall notify the
respondent in writing of the proposed action and of the opportunity for
a hearing. The notice shall be sent by first class mail. The notice
shall specify:
(i) In a manner which is adequate to allow the respondent to
prepare its response, the basis upon which HUD determined that the
respondent failed to comply with a provision of this part;
(ii) That the hearing procedures are governed by these rules;
(iii) That the respondent has 14 days from receipt of the notice
within which to provide a written request for a hearing to the Chief
Docket Clerk, Office of Administrative Law Judges, and the address and
telephone number of the Chief Docket Clerk;
(iv) The action HUD proposes to take and that the authority for
this action is Sec. 954.602; and
(v) That if the respondent fails to request a hearing within the
time specified, HUD's determination that the respondent failed to
comply with a provision of this part shall be final and HUD may proceed
to take the proposed action.
(2) Initiation of hearing. The respondent shall be allowed 14 days
from receipt of the notice within which to notify the Chief Docket
Clerk, Office of Administrative Law Judges, of its request for a
hearing. If no request is received within the time specified, HUD's
determination that the respondent failed to comply with a provision of
this part shall be final and HUD may proceed to take the proposed
action.
(3) Administrative Law Judge. Proceedings conducted under these
rules shall be presided over by an Administrative Law Judge (ALJ),
appointed as provided by section 11 of the Administrative Procedures
Act (5 U.S.C. 3105). The case shall be referred to the ALJ at the time
a hearing is requested. The ALJ shall promptly notify the parties of
the time and place at which the hearing will be held. The ALJ shall
conduct a fair and impartial hearing and take all action necessary to
avoid delay in the disposition of
[[Page 32309]]
proceedings and to maintain order. The ALJ shall have all powers
necessary to those ends, including but not limited to the power to:
(i) Administer oaths and affirmations;
(ii) Issue subpoenas as authorized by law;
(iii) Rule upon offers of proof and receive relevant evidence;
(iv) Order or limit discovery before the hearing as the interests
of justice may require;
(v) Regulate the course of the hearing and the conduct of the
parties and their counsel;
(vi) Hold conferences for the settlement or simplification of the
issues by consent of the parties;
(vii) Consider and rule upon all procedural and other motions
appropriate in adjudicative proceedings; and
(viii) Make and file initial determinations.
(4) Ex parte communications. An ex parte communication is any
communication with an ALJ, direct or indirect, oral or written,
concerning the merits or procedures of any pending proceeding which is
made by a party in the absence of any other party. Ex parte
communications are prohibited except where the purpose and content of
the communication have been disclosed in advance or simultaneously to
all parties, or the communication is a request for information
concerning the status of the case. Any ALJ who receives an ex parte
communication which the ALJ knows or has reason to believe is
unauthorized shall promptly place the communication, or its substance,
in all files and shall furnish copies to all parties. Unauthorized ex
parte communications shall not be taken into consideration in deciding
any matter in issue.
(5) The hearing. All parties shall have the right to be represented
at the hearing by counsel. The ALJ shall conduct the proceedings in an
expeditious manner while allowing the parties to present all oral and
written evidence which tends to support their respective positions, but
the ALJ shall exclude irrelevant, immaterial or unduly repetitious
evidence. HUD has the burden of proof in showing by a preponderance of
the evidence that the respondent failed to comply with a provision of
this part. Each party shall be allowed to cross-examine adverse
witnesses and to rebut and comment upon evidence presented by the other
party. Hearings shall be open to the public. So far as the orderly
conduct of the hearing permits, interested persons other than the
parties may appear and participate in the hearing.
(6) Transcripts. Hearings shall be recorded and transcribed only by
a reporter under the supervision of the ALJ. The original transcript
shall be a part of the record and shall constitute the sole official
transcript. Respondents and the public, at their own expense, may
obtain copies of the transcript.
(7) The ALJ's decision. At the conclusion of the hearing, the ALJ
shall give the parties a reasonable opportunity to submit proposed
findings and conclusions and supporting reasons therefor. Generally
within 60 days after the conclusion of the hearing, the ALJ shall
prepare a written decision which includes a statement of findings and
conclusions, and the reasons or basis therefor, on all the material
issues of fact, law or discretion presented on the record and the
appropriate sanction or denial thereof. The decision shall be based on
consideration of the whole record or those parts thereof cited by a
party and supported by and in accordance with the reliable, probative,
and substantial evidence. A copy of the decision shall be furnished to
the parties immediately by first class mail and shall include a notice
that any requests for review by the Secretary must be made in writing
to the Secretary within 30 days of the receipt of the decision.
(8) The record. The transcript of testimony and exhibits, together
with the decision of the ALJ and all papers and requests filed in the
proceeding, constitutes the exclusive record for decision and, on
payment of its reasonable cost, shall be made available to the parties.
After reaching the initial decision, the ALJ shall certify to the
complete record and forward the record to the Secretary.
(9) Review by the Secretary. The decision by the ALJ shall
constitute the final decision of the Secretary unless, within 30 days
after the receipt of the decision, either the respondent or the
Assistant Secretary files an exception and request for review by the
Secretary. The excepting party must transmit simultaneously to the
Secretary and the other party the request for review and the basis of
the party's exceptions to the findings of the ALJ. The other party
shall be allowed 30 days from receipt of the exception to provide the
Secretary and the excepting party with a written reply. The Secretary
shall then review the record of the case, including the exceptions and
the reply. On the basis of such review, the Secretary shall issue a
written determination, including a statement of the rationale therefor,
affirming, modifying or revoking the decision of the ALJ. The
Secretary's decision shall be made and transmitted to the parties
within 60 days after the decision of the ALJ was furnished to the
parties.
Dated: May 10, 1996.
Michael B. Janis,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 96-15712 Filed 6-20-96; 8:45 am]
BILLING CODE 4210-33-P
