[Federal Register Volume 61, Number 137 (Tuesday, July 16, 1996)]
[Notices]
[Pages 37132-37141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18012]
[[Page 37131]]
_______________________________________________________________________
Part III
Department of Housing and Urban Development
_______________________________________________________________________
Funding Availability and Program Guidelines for the Economic
Development Initiative; Notice
Federal Register / Vol. 61, No. 137 / Tuesday, July 16, 1996 /
Notices
[[Page 37132]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4065-N-01]
Office of the Assistant Secretary for Community Planning and
Development; Notice of Funding Availability (NOFA) and Program
Guidelines for the Economic Development Initiative (EDI)
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD
SUMMARY: This NOFA announces the availability of funds for grants under
section 108(q) of the Housing and Community Development Act of 1974, as
amended. HUD reserves the right to award grants under this NOFA up to
the maximum amount authorized by law. As of the date of this NOFA and
subject to funding availability, HUD intends to award up to $50 million
in EDI grant funds.
In addition to soliciting proposals that undertake traditional
economic development projects, HUD is also soliciting proposals to
undertake large-scale projects that would create Homeownership Zones--
proposals designed to reclaim hard-pressed neighborhoods by creating
homeownership opportunities for hardworking low- and moderate-income
families and serving as a catalyst for private investment, business
creation and neighborhood revitalization. See the separate discussion
on Homeownership Zones in section I.(D) below.
Communities that are authorized to obtain Section 108 loan
guarantee commitments to carry out qualifying projects are eligible
under this NOFA to receive EDI grants. EDI grants are used to enhance
the security of the Section 108 guaranteed loan or to improve the
feasibility of proposed projects through techniques such as interest
rate subsidies, loan loss reserves, etc. This NOFA sets out program
guidelines that will govern the application, application review, and
award process for this round of EDI grants.
DATES: Applications are due in HUD Headquarters at the address stated
below under ``Addresses'' by September 17, 1996. HUD will not accept
applications that are submitted to HUD via facsimile (FAX)
transmission. Applications that are mailed prior to September 17, 1996,
and received within ten (10) days after that date will be deemed to
have been received by that date if postmarked by the United States
Postal Service by no later than September 16, 1996. Overnight delivery
items received within ten (10) days after September 17, 1996, will be
deemed to have been received by that date upon submission of
documentary evidence that they were placed in transit with the
overnight delivery service by no later than September 16, 1996.
ADDRESSES: On or prior to September 17, 1996, completed applications
will be accepted at the following address: Processing and Control Unit,
Room 7255, Office of Community Planning and Development, Department of
Housing and Urban Development, 451 Seventh Street, SW, Washington, DC
20410, Attention: EDI Grant. At close of business on the deadline date,
completed applications will also be received in the south lobby of the
Department of Housing and Urban Development at the above address
(inquire at the security guard desk). However, any application received
by the Office of Community Planning and Development in Headquarters,
Washington, DC, by September 17, 1996 will be accepted.
FOR FURTHER INFORMATION CONTACT: Paul Webster, Director, Financial
Management Division, Office of Block Grant Assistance, Room 7178,
Department of Housing and Urban Development, 451 Seventh Street, SW,
Washington, DC 20410; telephone (202) 708-1871.
With respect to proposals for Homeownership Zones contact: Gordon
McKay, Director, Office of Affordable Housing Programs, Office of
Community Planning and Development, Room 7164, Department of Housing
and Urban Development, 451 Seventh Street, SW, Washington, DC 20410;
telephone (202) 708-2685. (These are not toll-free numbers.)
Persons with hearing or speech impairments may access these numbers
via TTY by calling the Federal Information Relay Service at (800) 877-
8339.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act Statement
The information collection requirements contained in this NOFA have
been submitted to the Office of Management and Budget (OMB) for review
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The
OMB control number, when assigned, will be announced by separate notice
in the Federal Register. 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.
I. Purpose and Substantive Description
(A) Authority. Title I, Housing and Community Development Act of
1974, as amended, (42 U.S.C. 5301-5320) (the ``Act''); 24 CFR part 570.
(B) Definitions. CDBG funds means, in addition to those funds
specified at Sec. 570.3, grant funds received pursuant to Section
108(q). CDBG funds received pursuant to section 108(q) must be used for
activities eligible under section 108(a) of the Act. This does not
include all CDBG-eligible activities, but only those listed in 24 CFR
570.703. In addition, funds received pursuant to section 108(q) must be
used only in conjunction with projects and activities assisted with
section 108 loan guarantee proceeds. Finally, funds received pursuant
to section 108(q) may not be disbursed until the section 108
obligations financing the related assisted projects and activities are
actually guaranteed under section 108.
Community and Individual Investment Corporation (CIIC) means a for-
profit corporation capitalized in part by EDI and Section 108 funds
which invests in economic development activities (otherwise eligible
for EDI and Section 108 Loan Guarantee assistance under this NOFA) in
an identified service area where at least 51 percent of the residents
are low and moderate income people and which offers residents of the
service area opportunities to purchase and own shares in the
Corporation. Note that the CIIC must provide financial and other
services to a qualifying low and moderate income area meeting the CDBG
program national objective for area benefit activities at 24 CFR
570.208(a)(1). It is important to emphasize that there is a fundamental
difference between a CIIC and a Community Development Financial
Institution (CDFI). CDFIs are private and community initiated financial
institutions which may apply for part of their capitalization to the
Federal Government (the CDFI Fund which is part of the Department of
the Treasury). By contrast, in the case of CIICs, the process of
formation is initiated by a public entity as part of its community
development strategy.
Designated Empowerment Zone or Enterprise Community means an urban
area designated as an Empowerment Zone or an Enterprise Community by
the Secretary of HUD on December 21, 1994.
Economic Development Initiative (EDI) means the provision of
economic development grant assistance under Section 108(q) of the Act,
as authorized by Section 232 of the Multifamily
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Housing Property Disposition Reform Act of 1994 (Pub. L. 103-233;
approved April 11, 1994) (the ``1994 Act'').
Economic development project means an activity or activities
(including mixed use projects with housing components) that are
eligible under the Act and under 24 CFR 570.703, and that increase
economic opportunity for persons of low- and moderate-income, or that
stimulate or retain businesses or jobs, or that otherwise lead to
economic revitalization.
Empowerment Zone Strategic Plan means a strategy developed and
agreed to by the nominating local government(s) and State(s) and
submitted in partial fulfillment of the application requirements for
designation as an Empowerment Zone or Enterprise Community pursuant to
24 CFR part 597.
HOME funds means funds made available under title II of the
Cranston-Gonzalez National Affordable Housing Act (Pub. L. 101-625;
approved November 28, 1990).
Homeownership Zone means a continuous, geographically defined
neighborhood that is primarily residential in character and in which
the Homeownership Zone activities together with other physical and
economic development activities can make a measurable, visible
improvement to the area.
National Homeownership Strategy is a five-year blueprint containing
100 actions, developed and implemented by a partnership involving HUD
and more than 50 other national organizations. The goal of the Strategy
is to achieve an all-time high level of homeownership by the end of the
year 2000.
Neighborhood Revitalization Strategy means a strategy submitted as
part of a CDBG grantee's Consolidated Plan, or an amendment, for
reinvestment of human and economic capital in a distressed
neighborhood. The strategy must meet the guidelines of Notice CPD-96-
01, issued January 16, 1996, and must be approved by HUD. Any
Empowerment Zone Strategic Plan prepared for a Federally-designated
Empowerment Zone or Enterprise Community will be presumed to be
approved by HUD and meet HUD's guidelines for a Neighborhood
Revitalization Strategy.
Qualifying Empowerment Zone or Enterprise Community area means an
urban area designated as an Empowerment Zone or Enterprise Community
pursuant to 24 CFR part 597 or nominated by one or more local
governments and the State or States in which it is located for
consideration of designation as an Empowerment Zone or Enterprise
Community pursuant to 24 CFR part 597. The area need not have been
designated an Empowerment Zone or Enterprise Community by the Secretary
to be a qualifying Empowerment Zone or Enterprise Community area, but
if it was not so designated it must meet the eligibility requirements
for a nominated area pursuant to 24 CFR part 597, subpart B.
Unless otherwise defined herein, terms defined in 24 CFR part 570
and used in this NOFA shall have the respective meanings given thereto
in that part.
(C) Background. EDI is intended to complement and enhance the
Section 108 Loan Guarantee program (see 24 CFR 570.700-710 for
regulations governing the Section 108 program). This provision of the
Community Development Block Grant (CDBG) program provides communities
with a source of financing for economic development (including
capitalization of CIICs), housing rehabilitation, and large scale
physical development projects. HUD is authorized pursuant to section
108 to guarantee notes issued by CDBG entitlement communities and
nonentitlement units of general local government eligible to receive
funds under the State CDBG program. Regulations governing the Section
108 program are found at 24 CFR part 570, subpart M.
The Section 108 Loan Guarantee program is authorized at $1.5
billion in loan guarantee authority in Fiscal Year 1996. Under this
program, communities (and States on behalf of a State's non-entitlement
community) pledge future years' CDBG allocations as security for loans
guaranteed by HUD. The full faith and credit of the United States is
pledged to the payment of all guarantees made under Section 108. The
Section 108 program, however, does not require CDBG funds to be
escrowed for loan repayment. This means that a community or State may
continue to spend its existing allocation for other CDBG purposes,
unless needed for loan repayment. One purpose of EDI grant funds is to
further minimize the risk of Section 108 borrowing and potential loss
of future CDBG allocations:
(1) By strengthening the economic feasibility of the projects
financed with Section 108 funds (and thereby increasing the probability
that the project will generate enough cash to repay the guaranteed
loan),
(2) By directly enhancing the security of the guaranteed loan, or
(3) Through a combination of these or other risk mitigation
techniques.
Through this NOFA, in addition to soliciting proposals for the
typical economic development projects previously funded under the EDI
grant program, HUD is particularly soliciting Homeownership Zone
proposals.
(D) Proposals to implement a Homeownership Zone. Homeownership is a
key component of the American dream and the Administration's National
Homeownership Strategy. It is also one of the most important vehicles
to create opportunities throughout the country and to support economic
development in our neighborhoods. Increasing homeownership can serve as
the engine that produces visible change and drives economic growth in
distressed neighborhoods.
Homeownership Zones will build on the successes of Empowerment
Zones in several key ways:
Empowerment: Homeownership is one of the best ways to
empower community residents. It provides them with a stake in their
community, increases the bonds among residents, and helps low- and
moderate-income residents achieve a key component of the American
Dream.
Public/private cooperation: Competitive Homeownership
Zone proposals would include close collaboration between the public and
private sectors, significant leveraging of private dollars, and a
coordinated approach that uses homeownership as part of a larger
community and economic development strategy.
National Homeownership Strategy: Homeownership Zones will
also increase homeownership levels and build stronger communities, in
furtherance of the National Homeownership Strategy. The Strategy is a
five-year blueprint of cooperative actions identified by 56 private and
public organizations that is to achieve an all-time high level of
homeownership in America by the end of the year 2000. The National
Homeownership Strategy, ``Partners in the American Dream,'' was
prepared by the Department and its Partners in response to a request
from President Clinton in 1995.
Streamlined processes: Homeownership Zone proposals would
indicate, where appropriate, how local processes and building and
development regulations would be streamlined or modified to result in
prompt and cost-effective construction.
Emphasis on performance: Homeownership Zones will have
clear performance measures and benchmarks. In addition, they will build
on proven performance in Empowerment Zones and Enterprise Communities.
Visible change: Homeownership Zones must plan to provide
tangible and visible evidence of neighborhood revitalization. Proposals
should involve
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large tracts of previously vacant or blighted areas that would be
transformed into vital and vibrant neighborhoods which can spur further
community revitalization.
Homeownership Zones are intended to make a major impact in
distressed neighborhoods by converting vacant, abandoned land and
buildings into thriving, vibrant neighborhoods by using single-family
homeownership as a catalyst for revitalization. Offering these
homeownership opportunities to low- and moderate-income residents in
designated neighborhoods will provide the foundation for needed
commercial and economic development.
(1) A Homeownership Zone proposal must provide for significant new
homeownership opportunities that will make a visible difference in a
concentrated area. An application that includes at least 300 new
single-family homes will be presumed to meet this standard. If the
application proposes fewer than 300 such homes, the applicant must
demonstrate how the strategy will make a visible difference and impact
within the Homeownership Zone. It is anticipated that most newly
constructed housing will be single-family housing (one to four units,
including rowhouses); however, condominium and cooperative developments
which contain up to four units per structure may also be included.
(2) Construction should be ready to proceed promptly. Particular
attention will be paid to applications that can begin significant
construction activities within 60 days of the award of the EDI grant.
Therefore, it is expected as a practical matter that the most
successful programs will develop land already vacant, available for
development, and reasonably clear of environmental hazards and other
problems. However, the program need not be limited to vacant areas and
may include infill housing and rehabilitation of existing housing if
the overall project meets the goal of visible and meaningful change in
a concentrated area.
(3) Homeownership Zone proposals should provide for a mix of
incomes in a distressed and readily identifiable neighborhood. In all
likelihood, in order to achieve this income mix, it will be necessary
to use other sources of funds, including housing developed through the
applicant's CDBG or HOME programs, a State mortgage revenue bond
program, private financing, or other sources. However, any program that
uses different sources of funds will need to ensure that all applicable
program regulations and guidelines are met.
Note that in order to achieve a mix of incomes within the
Homeownership Zone assisted units and to also meet the CDBG national
objective criterion of benefitting low- and moderate-income persons,
applicants may wish to focus proposals on approved Neighborhood
Revitalization Strategy areas. If an applicant has an approved
Neighborhood Revitalization Strategy, all housing activities in the
area, pursuant to the strategy, may, during the year in which EDI and
Section 108 assistance is obligated, be considered to be a single
structure for purposes of meeting the low- and moderate-income
provisions. This means that 51 percent or more of the assisted units,
in the aggregate, would need to be occupied by low- and moderate-income
households (see 24 CFR 570.208(d)(5)(ii)) instead of 100 percent if a
Neighborhood Strategy Area were not in place. Also note, that any
Empowerment Zone Strategic Plan prepared for a Federally-designated
Empowerment Zone Supplemental Empowerment Zone or Enterprise Community
or Enhanced Enterprise Community will be presumed to be approved by HUD
and meet HUD's guidelines for a Neighborhood Revitalization Strategy.
(4) It is anticipated that the developer or developers will take
advantage of the most recent advances in urban housing design to create
a sense of neighborhood and community through the overall plan for the
area, including linkages with transit, innovative architectural design,
and development of structures on a scale that encourages interaction
among residents and fosters a sense of community.
(5) The essence of Homeownership Zone proposals is that the Federal
EDI grant serves as a challenge to other public, private, and nonprofit
partners to participate in the Homeownership Zone development. Thus, it
is expected that applicants will donate land, commit to construct site
improvements and public facilities, waive fees, expedite approvals of
permits and plans, and otherwise act to remove impediments to the
development of affordable housing. Consistent with the National
Homeownership Strategy, it is further expected that the applicant will
establish extensive partnerships with the private and nonprofit
sectors, such as businesses, lending institutions, real estate
professionals, builders, educational institutions, nonprofit
organizations, religious entities, and other city-wide and community-
based organizations. The extent to which the Homeownership Zone
proposal serves to broaden participation by residents and leverage
other resources will be important factors in the award of points in the
competition.
(6) Homeownership Zones are expected to include development of
housing opportunities as part of a comprehensive approach and overall
revitalization of the neighborhood.
(7) Homeownership Zones must incorporate clear performance measures
and benchmarks. The EDI grant contract will be conditioned upon the
benchmarks submitted with the application, or subsequent amendments,
such that subsequent draw downs of EDI grant funds and/or related
Section 108 Loan Guarantee amounts will be dependent upon
accomplishment of the applicant's established benchmarks.
(8) It is anticipated that the developers and local governments
will utilize, to the greatest extent possible, innovations in
construction techniques and land use planning that can reduce the cost
of housing construction; and, will also reform building, planning and
zoning regulations so as to minimize regulatory barriers to prompt and
cost-effective construction.
(9) Homeownership Zones should strive to incorporate several of the
basic principles of the New Urbanism. Neighborhoods that have been
designed according to these principles have typically had a finite
size, defined by a comfortable walking distance from their center, and
have included, for example, such characteristics as: a mix of
compatible uses such as housing, shops, workplaces, parks, civic and
cultural institutions; a mix of housing types to accommodate a range of
incomes, ages and lifestyles; buildings with architectural variety; at
the center, a public gathering space such as a square or green, one or
several public buildings such as a library, community center or daycare
center, and a connection to transit; edges defined by boulevards,
greenbelts or other natural features; and a network of pedestrian-
friendly streets, alleys, and blocks that encourage connection with
adjacent neighborhoods.
Eligible Homeownership activities. With respect to the types of
housing development activities that are eligible to be carried out
using EDI grant and Section 108 Loan funds, a recipient or a qualified
subrecipient may use such funds to:
(1) Acquire improved or unimproved real property;
(2) Undertake site preparation, including construction,
reconstruction, or installation of public and other site improvements,
utilities, or facilities;
(3) Undertake housing rehabilitation eligible under 24 CFR 570.202;
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(4) Assist qualified Community-Based Development Organizations to
carry out a community economic development project containing a mixed-
use business and housing development project consistent with 24 CFR
570.204(a)(2); and
(5) Carry out other activities eligible under 24 CFR 570.703.
Examples of Homeownership Zone housing projects using EDI grants
and Section 108 Guaranteed Loan funds.
HUD provides the following examples to give applicants an idea of
how they may use EDI grants and Section 108 Loan Guarantee funds to
assist housing development activities. While for clarity these examples
do not show the use of other Federal, State, local, and private
financing, it is anticipated that comprehensive housing development
strategies will maximize the use of such other sources in order to make
housing development projects more financially feasible.
Acquisition of land for a project site. A community may
use EDI grant funds in conjunction with Section 108 Loan Guarantee
funds to write-down the cost of land acquisition and thus reduce the
overall development cost of the project. For example, a proposal to
develop 300 units of new construction housing with a design density of
10 dwelling units per acre would require approximately 30 acres. In
most urban areas, a single parcel so large does not exist and can only
be created by purchasing a number of smaller parcels, often at greater
expense than a single parcel of the same size would cost. This
increased cost without any additional economic value generally makes
redevelopment of such land economically infeasible. In this example,
the cost of acquiring such sites could be as much as $200,000 per acre
or $6,000,000 total. This would result in a $20,000 land acquisition
cost per housing unit built. Using $3,000,000 in EDI grant funds to
write-down the acquisition cost, the land acquisition cost per housing
unit is reduced by $10,000.
By reducing the total project costs, EDI grant funds, when used in
conjunction with the Section 108 guaranteed loans, enhance the
financial security of the Section 108 guaranteed loan and improve the
viability of the project.
Infrastructure improvements. A community may use EDI grant
funds and Section 108 Loan Guarantee funds to write-down the cost of
infrastructure improvements or finance such improvements over time with
loan funds guaranteed under Section 108.
Substantial or ``gut'' rehabilitation. If some portion of
the housing development project involves the substantial rehabilitation
of housing units, a community may use the EDI grant funds to write-down
the cost of rehabilitation with some or all of the remainder of the
rehabilitation costs financed with Section 108 Loan Guarantee funds.
For example, a community's proposal to provide 300 single-family
homeowner units may include substantially rehabilitating 50
structurally sound vacant units located in the Homeownership Zone. A
typical per-unit cost might include an acquisition cost of $20,000 per
unit with an additional $40,000 in substantial rehabilitation for a
total redevelopment cost of $60,000 per unit. EDI grant funds and
Section 108 Loan Guarantee funds could be used to subsidize the
acquisition and/or a portion of the rehabilitation costs.
The community may sell the home for $45,000 (an amount affordable
to a low-or moderate-income family). The sales proceeds are used to
repay the Section 108 guaranteed loan and the development subsidy of
$15,000 is financed with the EDI grant.
Range of Proposals. In addition to requesting proposals for
Homeownership Zones, HUD is also soliciting proposals for a range of
economic development project proposals submitted for EDI grant and
Section 108 Loan Guarantee funding.
Typical financing structures for typical economic development
projects and economic development revolving loan funds.
HUD envisions that the following project structures (though not
limited to them) could be typical:
Funding reserves--The cash flow generated by an economic
development project may be expected to be relatively ``thin'' in the
early stages of the project. The EDI grant can make it possible for
debt service or operating reserves to be established in a way that does
not jeopardize the economic feasibility of the project.
An example is a supermarket or neighborhood shopping center that is
designed to provide basic services and jobs for residents in a
distressed neighborhood. The public entity must be prepared to make the
Section 108 loan repayments that are required to be made during the
period after completion of construction and during the lease-up phase
when the shopping center is not fully leased and thus is not likely to
generate sufficient revenues to support the Section 108 loan
repayments. It may therefore require the developer to establish with a
trustee a reserve account (or accounts) that would be available to
cover operating expenses and/or debt service during this lease-up
period. While such reserves are commonplace, their cost may be so high
as to make an already risky neighborhood shopping center project
economically infeasible. The increased cost resulting from establishing
such reserves may be defrayed by the EDI grant. As with the letter of
credit example below, such reserves protect the CDBG program against
the risk that CDBG funds will have to be used to cover shortfalls in
the intended source for repayment of the Section 108 loan.
Over-collateralizing the Section 108 loan--The use of EDI grant
funds may be structured, in appropriate cases, so as to improve the
chances that cash flow will be sufficient to cover debt service on the
Section 108 loan and directly to enhance the guaranteed loan. One
technique for accomplishing this approach is over-collateralization of
the Section 108 loan.
An example is the creation of a loan pool made up of Section 108
and EDI grant funds. The community would make loans to various
businesses at an interest rate equal to or greater than the rate on the
Section 108 loan. The total loan portfolio would be pledged to the
repayment of the Section 108 loan. If the total loan repayments from
the loan fund were twice the amount of the debt service on the Section
108 loan, the community could accumulate a loan loss reserve that would
mitigate virtually any risk to future CDBG funds.
Direct enhancement of the security of the Section 108 loan--The EDI
grant can be used to cover the cost of providing enhanced security. An
example of how the EDI grant can be used for this purpose is by using
the grant funds to cover the cost of a standby letter of credit, issued
in favor of HUD. This letter of credit will be available to fund
amounts due on the Section 108 loan if other sources fail to
materialize and will, thus, serve to protect the public entity's future
CDBG funds.
Provision of financing to for-profit businesses at a below market
interest rate--While the rates on loans guaranteed under Section 108
are only slightly above the rates on comparable U.S. Treasury
obligations, they may nonetheless be higher than can be afforded by
businesses in severely economically distressed neighborhoods. The EDI
grant can be used to make Section 108 financing affordable.
For example, a community's strategic plan to stabilize the economic
viability of a severely distressed neighborhood may include providing
loan assistance
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to both new and existing businesses at very low interest rates for some
period of time until each business has reached a stabilized and
profitable level of operation. EDI grant funds could serve to ``buy
down'' the interest rate up front, or make full or partial interest
payments, allowing the businesses to be financially viable in the early
start-up period not otherwise possible with Section 108 alone. This
strategy would be particularly useful where a community was undertaking
a large commercial/retail project in a distressed neighborhood to act
as a catalyst for other development in the area. The use of EDI/Section
108 funds for financing the commercial/retail project along with
providing financial assistance to neighboring new or existing
businesses within the target area would create complementary economic
activity and enhance the financial viability of all assisted
activities.
(E) Timing of Grant Awards. To the extent a full Section 108
application is submitted with the EDI grant application, the Section
108 application will be evaluated concurrently with the request for EDI
grant funds. Note that EDI grant assistance cannot be used to support a
Section 108 Loan Guarantee approved prior to the date of the
publication of this NOFA. (See II.B. of this NOFA.) However, the EDI
grant may be awarded prior to HUD approval of the Section 108 Loan
Guarantee commitment if HUD determines that such award will further the
purposes of the Act. HUD notification to the grantee of the amount and
conditions (if any) of EDI funds awarded based upon review of the EDI
application shall constitute an obligation of grant funds, subject to
compliance with the conditions of award and execution of a grant
agreement.
Notwithstanding HUD's approval and announcement of an EDI grant
award, HUD cannot actually disburse EDI grant funds for approved
activities until after the execution of a grant agreement and after HUD
guarantees the notes evidencing the related Section 108 loans. It is
anticipated that final EDI Grant Agreements and final Section 108 note
guarantee documents will be executed concurrently.
(F) Limitations on the Ratio of EDI grant funds to Section 108 Loan
Guarantee funds. HUD reserves the right to determine a minimum or a
maximum amount of any EDI grant award or Section 108 Loan Guarantee
award per applicant, application, or project and to modify requests
accordingly.
HUD expects to approve EDI grant amounts for approvable
applications at a range of ratios of EDI grant funds awarded to new
Section 108 loan guarantee commitments. For example, an applicant could
request an EDI grant of $1 million and propose to leverage only $1
million in new Section 108 loan guarantee commitments and another
applicant could request an EDI grant of $1 million and propose to
leverage $5 million in new Section 108 loan guarantee commitments.
However, in no event will HUD make an award in which the amount of EDI
funds awarded exceeds the amount of new Section 108 commitments. Of
course, even in the first example above, applicants remain free to
propose a greater leverage ratio of new Section 108 to EDI grant funds,
for example $5 million of new Section 108 to $1 million of EDI grant
funds. All applicants should discuss why their project requires the
particular level of EDI grant assistance to Section 108 loan guarantee
funds in their response to the Selection Criterion--``Extent of need
for EDI assistance to financially support the Section 108 loan and the
project''--in section II.(C)(2) described below. It is understood that
certain activities such as housing-related activities for Homeownership
Zones or capitalization of a CIICs may not be able to support Section
108 guaranteed loans without equivalent amounts of EDI grant funds.
EDI grant funds may not be used to substitute for the Section 108
financed activity, or to immediately repay the Section 108 loan. For
example, a recipient of an EDI grant may not undertake land assemblage
for an economic development project with a loan guaranteed by Section
108 and upon completion of all acquisition repay the Section 108
guaranteed loan with the EDI grant. A recipient may, however, acquire
land with a combination of an EDI grant and Section 108 guaranteed loan
funds.
In the case of an applicant that has received a prior EDI grant
award, the Department reserves the right to consider the amount of the
previous EDI award and the grant amount requested in response to this
NOFA and to adjust the amount of an EDI award under this NOFA,
including, if appropriate, not making an award.
In the event the applicant is awarded an EDI grant that has been
reduced below the original request, the applicant will be required to
modify its project plans and application to conform to the terms of HUD
approval before execution of a grant agreement and/or a Section 108
Loan Guarantee commitment. HUD reserves the right to reduce or de-
obligate the EDI grant award if an approvable Section 108 loan
guarantee application is not submitted by the grantee in the required
amounts on a timely basis. After approval of the EDI grant, any
requested modifications must be within the scope of the original EDI
application or upon re-ranking must score at or above the lowest score
obtained by the lowest ranked application that was funded.
In the case of requested amendments to an approved Section 108 loan
guarantee commitment (as further discussed in paragraph II.B.), the EDI
assistance approved will be based on the increased amount of Section
108 loan guarantee assistance.
(G) Eligibility to apply for grant assistance. Any public entity
eligible to apply for Section 108 loan guarantee assistance pursuant to
Sec. 570.702 may apply for grant assistance under Section 108(q) and
this NOFA. ELIGIBLE APPLICANTS ARE CDBG ENTITLEMENT UNITS OF GENERAL
LOCAL GOVERNMENT AND NON-ENTITLEMENT UNITS OF GENERAL LOCAL GOVERNMENT
ELIGIBLE TO RECEIVE LOAN GUARANTEES UNDER Sec. 570.702. Note that
effective January 25, 1995, nonentitlement communities in the States of
New York and Hawaii were authorized to apply to HUD for Section 108
loans. Thus nonentitlement communities in all 50 States and Puerto Rico
are now eligible to participate in the Section 108 and EDI programs.
(H) Eligible activities. EDI grant funds may be used for:
(1) Activities listed at Sec. 570.703, provided such activities are
carried out as part of an economic development project, including a
Homeownership Zone proposal. If the applicant is awarded points for
activities and projects under selection criterion II.(C)(6)(b)
(Proposals Addressing Special Need), the applicant is required to
continue to use any funds awarded for such activities and projects
under this NOFA and Program Guidelines to benefit the Qualifying
Empowerment Zone or Enterprise Community area.
(2) Payment of costs of private financial guaranty insurance
policies, letters of credit, or other credit enhancements for the notes
or other obligations guaranteed by HUD pursuant to Section 108,
provided such notes or obligations are used to finance an economic
development project. Such enhancements shall be specified in the
contract required by Sec. 570.705(b)(1), and shall be satisfactory in
form and substance to HUD for security purposes.
(3) The payment of principal or interest due (including such
servicing, underwriting, or other costs as may be authorized by HUD) on
the notes or other obligations guaranteed pursuant to the Section 108
loan guarantee program.
[[Page 37137]]
(4) Capitalization of Community and Individual Investment
Corporations (CIICs) serving low- and moderate-income areas. A
Community and Individual Investment Corporation is a type of economic
development revolving loan fund designed to stimulate asset building
among low- and moderate-income persons and return these assets to the
community in the form of investments in economic development
activities. Section 108 funds and EDI grant funds are used to
capitalize the for-profit Community and Individual Investment
Corporation. The CIIC provides financial services to residents and
businesses in a low- and moderate-income area. Section 108 and EDI
grant funds may be provided as permanent capital to the Corporation.
The Section 108 funds may be provided to the Corporation in various
ways such as a loan, as equity, or as other creative mechanisms with
appropriate terms to allow for the repayment of the Section 108
guaranteed loan. The EDI grant funds, when provided as part of the
Corporation's permanent capital act as the ultimate security for the
repayment of the Section 108 guaranteed loan in the event that there
are losses in the Corporation's overall operations. If the Corporation
is chartered so that its service area is limited to a qualifying low-
and moderate-income area, and the Corporation provides economic
development financial assistance and services (eligible pursuant to 24
CFR 570.203) to the residents and businesses of the low- and moderate-
income area, then the Corporation as a whole can meet the CDBG national
objectives of benefitting a low- and moderate-income area. It is
important to emphasize that there is a fundamental difference between a
CIIC and a Community Development Financial Institution (CDFI). CDFIs
are private and community initiated financial institutions which may
apply for part of their capitalization to the federal government (the
CDFI Fund which is part of the Department of the Treasury). By
contrast, in the case of CIICs, the process of formation is initiated
by a public entity as part of its community development strategy. (A
complete description of the CIIC model is available in a CIIC guide
that may be requested from HUD. Please call Community Connections at 1-
800-998-9999 to request a copy of the guide.)
(5) EDI grants shall not be used as a resource to immediately repay
a loan guaranteed by Section 108. For example, Section 108 guaranteed
loan proceeds cannot be used to acquire land for an economic
development project and immediately upon the purchase of the land use
EDI grant funds to repay the Section 108 guaranteed loan. However, it
would be acceptable to use EDI grant funds in combination with loan
funds guaranteed by Section 108 to acquire land.
(I) Neighborhood Revitalization Strategies. If an applicant has not
been designated an Empowerment Zone or Enterprise Community and has not
previously submitted a Neighborhood Revitalization Strategy for HUD
approval, an applicant may submit such a strategy with its EDI grant
application. If HUD has not approved the Neighborhood Revitalization
Strategy by the time that HUD announces awards under this NOFA, and if
the applicant has ranked high enough to receive an EDI grant, HUD may
condition such award upon approval of the applicant's Neighborhood
Revitalization Strategy. If after a reasonable period of time, but not
less than 60 days after the award, unless an exception is granted by
HUD for good cause, HUD is not able to approve the applicant's
Neighborhood Revitalization Strategy, HUD may ask the applicant to
amend or modify its program or if that's not possible HUD may cancel
the EDI grant award proceed to fund additional grant(s) in rank order,
beginning with the first applicant just below the original cut-off line
for funding.
(J) Catalogue of Federal Domestic Assistance (CFDA). The EDI
program CFDA number is ``14.246.'' Please insert this number on the SF
424 as appropriate.
(K) Section 3. Additionally, assistance provided under this NOFA is
subject to the requirements of section 3 of the Housing and Urban
Development Act of 1968, and the implementing regulations in 24 CFR
part 135, as amended by an interim rule published on June 30, 1994 (59
FR 33866). Section 3 requires that to the greatest extent feasible, and
consistent with Federal, State, and local laws and regulations, job
training, employment and other contracting opportunities generated from
certain HUD financial assistance be directed to low- and very-low
income persons. The eligible activities for which funding is provided
under this NOFA are consistent with the objectives of section 3. Public
entities awarded funds under this NOFA and that intend to use the funds
for housing rehabilitation, housing construction, or other public
construction must comply with the applicable requirements of the
interim regulations published on June 30, 1994.
II. The Application Process
Public entities seeking EDI assistance must apply in accordance
with this NOFA. The EDI application shall be accompanied by a request
for a Section 108 loan guarantee commitment, as further described in
Section II.B. of this NOFA below. Application requirements for the
Section 108 program are found at Sec. 570.704.
(A) Timing of submission. Applications for EDI assistance shall be
received at HUD Headquarters in the manner described under ``Dates''
and ``Addresses'' above.
(B) Submission requirements. (1) The EDI application (an original
plus two copies) shall be accompanied by a request for loan guarantee
assistance under Section 108. The request for Section 108 loan
guarantee can be either one or more of the following:
(a) A formal application for Section 108 loan guarantee(s),
including the documents listed at Sec. 570.704(b);
(b) A brief description of a Section 108 loan guarantee
application(s) to be submitted within 60 days (with HUD reserving the
right to extend such period for good cause on a case-by-case basis) of
a notice of EDI selection (EDI awards will be conditioned on approval
of actual Section 108 loan commitments). This description must be
sufficient to support the basic eligibility of the proposed project or
activities for Section 108 assistance;
(c) If applicable, a copy of a Section 108 loan guarantee approval
document with grant number and date of approval (which was approved
after the date of this NOFA, except in conjunction with a previous EDI
award); or
(d) A request for a Section 108 loan guarantee amendment [analogous
to subparagraph (a) or (b) above] that proposes to increase the amount
of a previously approved application.
(e) However, any amount of Section 108 loan guarantee authority
approved before the date of this NOFA is not eligible to be used in
conjunction with an EDI grant under this NOFA. Further, a Section 108
loan guarantee amount that is required to be used in conjunction with a
prior EDI grant award, whether or not the Section 108 loan guarantee
has been approved as of the date of this NOFA, is not eligible for an
EDI award under this NOFA. For example, if a community has a previously
approved Section 108 loan guarantee commitment of $12 million, even if
none of the funds have been utilized, or if the community had
previously been awarded an EDI grant of $1 million and had certified
that it would submit a Section 108 loan application for $10 million in
support of that EDI grant, the community's application under this NOFA
must propose to increase the amount of its
[[Page 37138]]
total Section 108 loan guarantee commitments beyond those amounts (the
$12 million or $10 million in this example) to which it has previously
agreed.
(f) Applicants should note that an application for a Section 108
Loan Guarantee commitment requires that the applicant certify that it
has made efforts to obtain financing without the use of the Section 108
Loan Guarantee and that it cannot complete such financing consistent
with the timely execution of the program plans without the Section 108
Loan Guarantee.
(2) In addition, an application for EDI grant funds shall include
the following:
(a) SF 424, Application for Federal Assistance.
(b) The certification regarding lobbying required under 24 CFR part
87 (Appendix A). The applicant may use the lobbying certification
published with this NOFA.
(c) A narrative statement providing a description of the activities
that will be carried out with the EDI grant funds and explaining how
the use of EDI grant funds meets the criteria in paragraph II.(C)
below. The narrative statement shall clearly state whether the proposal
is for (i) a Homeownership Zone, (ii) a CIIC, or (iii) another economic
development project.
In addition to the above, HUD encourages applicants to submit maps
and related information generated by the community's Consolidated Plan
computer software with their applications.
The Homeownership Zone description shall:
Identify and describe the boundaries, the approximate
size, and population size of the Zone;
Include a map of the neighborhood (Note that the Office of
Community Planning and Development's Consolidated Plan computer
software is available for applicants to use in defining their zone
area, planning and coordinating revitalization activities, and
illustrating how zone activities will produce visible change. HUD
encourages applicants to submit maps and other data generated with this
software with their applications.); and
Describe the activities to be carried out with the EDI
grant, how they will create visible change and are part of a larger
comprehensive revitalization effort, and how they meet the selection
criteria, including performance measures and benchmarks for these
activities.
Where appropriate, the Homeownership Zone proposal should also
indicate how local processes and building development regulations have
been or would be streamlined or modified to ensure prompt and cost-
effective construction or rehabilitation. Identify who or which agency
will carry out each activity, the estimated cost and funding sources,
and the timetable for completion.
The Community and Individual Investment Corporation (CIIC)
description shall
Identify and describe the service area.
Include a draft business plan with financial projections
for not less than a five year period.
Describe a plan for marketing shares of the CIIC to
residents of the service area.
(d) The narrative statement and the response to all of the
selection criteria in II.(C) below should preferably not exceed thirty
(30) 8.5'' by 11'' pages.
(3) Where relevant, applications shall be deemed to include a copy
of the strategic plan for community revitalization previously submitted
to HUD as part of a Federal Empowerment Zone or Enterprise Community
application pursuant to a Notice inviting applications, published on
January 18, 1994 at 59 FR 2711, or any approved Neighborhood
Revitalization Strategy covering the approved Homeownership Zone.
(C) Selection Criteria. All applications will be considered for
selection based on the following criteria. As described in section
II.(B)(2)(d) above, each applicant's response to the narrative
statement and all of the selection criteria should preferably not
exceed thirty (30) 8.5'' by 11'' typewritten pages. Each application
will receive only one score. Applicants should not mix more than one
type of proposal in a single application, but may submit a separate
application for each project type.
(1) Distress--(up to 20 points). In evaluating this criterion, HUD
will consider the level of distress in the immediate community/
neighborhood to be served by the project and the jurisdiction applying
for assistance. Note that in previous EDI competitions, poverty rates
for the community/neighborhood area served by the project were often
considered the best indicator of distress levels, although the
applicant may demonstrate the level of distress with other factors
indicative of distress such as income, unemployment, drug use,
homelessness and other indicators of distress. Also, in previous
competitions, all other factors being equal, an indicator of distress
in the immediate community/neighborhood area to be served by the
project that was greater than the general level of distress in the
applicant's overall jurisdiction as a whole had a greater impact on the
score under this criterion.
(2) Extent of need for EDI assistance to financially support the
Section 108 loan and the project--(up to 10 points).
(a) HUD will use the following information to evaluate this
criterion. In addition to the information listed below, HUD will also
consider the information in (b) below for proposals for Homeownership
Zones. In utilizing the information in this subparagraph (a), HUD will
consider the extent to which the applicant's response demonstrates the
financial need for the EDI grant to financially support the loan
guaranteed by the Section 108 Loan Guarantee commitment and enhance the
viability of the project. Additionally, the score may be increased
within this criterion to the extent other funds (non-Federal public or
private) are leveraged. Note that if the applicant proposes a generic
loan fund to assist a certain category of project or businesses, the
applicant should demonstrate why the use of Section 108 loans to assist
such businesses would not be financially feasible without EDI grant
assistance. Relevant information may include:
(i) Project costs and financial requirements;
(ii) The amount of any debt service or operating reserve accounts
to be established in connection with the economic development project;
(iii) The reasonableness of the costs of any credit enhancement
paid with EDI grant funds.
(iv) The amount of program income (if any) to be received each year
during the repayment period for the guaranteed loan;
(v) Interest rates on those loans to third parties (other than
subrecipients) (either as an absolute rate or as a plus/minus spread to
the Section 108 rate);
(vi) Underwriting guidelines used (or expected to be used) in
determining project feasibility;
(vii) The extent to which federal funds provided as a result of the
Federal Empowerment Zone/Enterprise Community designation process may
be utilized for the proposed EDI project; and
(viii) Other relevant information.
(b) In addition to the information in (a) above, HUD will consider
the use of the following to evaluate Homeownership Zone proposals:
(i) The leveraging of other non-Federal public and private
resources for housing and;
(ii) The extent to which the EDI and Section 108 financial
assistance achieves affordability and marketability for lower-income
households while
[[Page 37139]]
ensuring the financial viability of the Section 108 Guaranteed loan.
(3) The extent to which the proposal, compared to other proposals
for similar types of activities, e.g. Homeownership Zones or other
traditional economic development proposal, leverages other non-Federal
public and private resources, in addition to loan funds guaranteed
under the Section 108 Loan Guarantee program (up to 15 points). For
Homeownership Zone Proposals: Leveraged funds include State and local
public funding and private financing. Leveraged funds may also include
donations of land, nonprofit organizations' commitments of financing
and volunteer labor, and waivers of local fees or taxes.
(4) Quality of the plan--(up to 60 points). HUD will consider the
quality of the applicant's plan for the use of EDI funds and Section
108 loans, including the extent to which the applicant's proposed plan
for the effective use of EDI grant/Section 108 loan guarantee will
address its described need in the applicant's immediate community and/
or its jurisdiction, and the extent to which the plan is logically,
feasibly, and substantially likely to achieve its stated purpose. HUD
will also consider the extent to which the proposal includes public/
private partnerships, i.e. the involvement of groups such as non-profit
organizations, builders/developers and others. In addition to the
above, HUD will use the criteria in (a) below to evaluate this factor
for Homeownership Zones:
(a) Proposals for Homeownership Zones: The extent to which the plan
demonstrates a logical, feasible, and efficient approach to addressing
the Zone's problems; a high likelihood of success; and the ability to
begin implementation and construction almost immediately after grant
approval. HUD will also consider the following:
(i) the number of new homeownership opportunities;
(ii) how quickly construction can begin, and how quickly results
will be achieved;
(iii) the mix of incomes;
(iv) the use of recent advances in urban housing design to create a
sense of neighborhood and community;
(v) the degree to which the applicant provides for a comprehensive
approach to neighborhood revitalization;
(vi) the clarity and feasibility of performance measures, including
interim benchmarks, timeliness for construction, and other clear
deliverables;
(vii) the level of involvement of the community in the preparation
of revitalization plans, whether there is an ongoing role for the
community residents in implementing the plan, and a clear strategy for
ensuring that residents will benefit from the new homeownership
opportunities. Evidence of such benefits to residents may include
marketing the new housing to existing residents of the neighborhood,
training of neighborhood residents in construction skills, and
assistance in establishing and expanding neighborhood-owned businesses.
(b) Due to an order of the U.S. District Court for the Northern
District of Texas, Dallas Division, with respect to any application
submitted by the City of Dallas, Texas, HUD's consideration of the
quality of the plan will consider the extent to which the applicant's
plan for the use of EDI funds and Section 108 loans will be used to
eradicate the vestiges of racial segregation in the Dallas Housing
Authority's programs consistent with the Court's order.
(5) The capacity or potential capacity of the public entity to
successfully carry out the plan--(up to 15 points). This may include
factors such as the applicant's performance in the administration of
its CDBG, HOME or other programs, including, for Homeownership Zone
proposals, whether the applicant has been recognized by the National
Partners in Homeownership as having formed, and is effectively
implementing a Local Partnership consistent with the National
Homeownership Strategy; its previous experience, if any, in
administering a section 108 loan guarantee; its performance and
capacity in carrying out economic development projects; its ability to
conduct prudent underwriting; its capacity to manage and service loans
made with the guaranteed loan funds or EDI grant funds; its capacity to
carry out its projects and programs in a timely manner; and, if
applicable, its capacity to manage projects under this NOFA along with
any federal funds awarded as a result of a federal urban Empowerment
Zone/Enterprise Community designation.
The capacity of subrecipients, nonprofit organizations and other
entities that have a role in implementing the proposed program will be
included in this review. HUD may rely on information from performance
reports, financial status information, monitoring reports, audit
reports and other information available to HUD, in making its
determination under this criterion.
(6) Applicants will be rated on both criteria (a) and (b) (if
applicable) below, but will receive points for only the higher rated
criterion of the two, but not both.
(a) The extent to which the proposed plan follows a comprehensive
and coordinated approach in addressing the community and economic
development needs of the public entity and furthers neighborhood
revitalization--(up to 20 points).
(b) Proposals Addressing Special Need--(Applicants to which this
criterion does not apply need not respond thereto.) (up to 20 points).
Of the 20 points under this factor, one point will be awarded to
applicants that received a federal urban Empowerment Zone or Enterprise
Community designation and up to 19 additional points will be awarded to
applicants that propose EDI and Section 108 loan assisted activities
that will benefit the applicant's Qualifying Empowerment Zone or
Enterprise Community area and are consistent with the applicant's
Strategic Plan; and
(7) Innovation and creativity--(up to 20 points). The extent to
which the applicant incorporated innovation and/or creativity in the
design and proposed implementation of the proposed activities carried
out with Section 108/EDI funds. In addition to the above, HUD will use
the criteria below to evaluate this factor for Homeownership Zones:
Proposals for Homeownership Zones. The extent to which the
applicant proposes a unique approach to increasing homeownership or
expanding economic opportunity, or incorporates innovation and/or
creativity in the design and implementation of the proposed activities
carried out with the EDI grant and Section 108 funds, including
community planning, urban design, housing architecture, and
construction methods and materials.
(D) Selection Process--Once all proposals are scored under the
selection criteria above, applications for Homeownership Zones and
CIICs will each have 10 additional points added to its total score.
Then, all applications will be ranked in order of points assigned, with
the applications receiving more points ranking above those receiving
fewer points. Applications will be funded in rank order, however, HUD,
in its sole discretion, may choose to award EDI assistance to a lower
rated approvable application over a higher rated application in order
to increase the level of geographic diversity of grants approved under
this part. The parameters of any diversity factors used in the
selection process will be described in writing by the panel and/
[[Page 37140]]
or selecting official, and consistently applied in the final
selections. However, no application will be funded for geographic
diversity that does not have a selection score of at least 80 points.
As discussed in paragraph I.(F) above, HUD reserves the right to
determine a minimum and a maximum amount of any EDI award or Section
108 commitment per applicant, application or project and to modify
requests accordingly. In addition, if HUD determines that an
application rated, ranked and fundable could be funded at a lesser EDI
grant amount than requested consistent with feasibility of the funded
project or activities and the purposes of the Act, HUD reserves the
right to reduce the amount of the EDI award and/or increase the Section
108 loan guarantee commitment, if necessary, in accordance with such
determination.
HUD may decide not to award the full amount of EDI grant funds
available under this NOFA and may make any remaining amounts available
under a future NOFA.
To review and rate applications, the Department may establish
panels including persons not currently employed by HUD to obtain
certain expertise and outside points of view, including views from
other Federal agencies.
(E) Timing of grant awards--To the extent full Section 108
applications are submitted concurrently with the EDI grant application,
HUD's approval of the related Section 108 loan guarantee commitment
will in most cases be granted contemporaneously with EDI grant
approval. However, the EDI grant may be awarded prior to HUD approval
of the Section 108 commitment if HUD determines that such award will
further the purposes of the Act. EDI funds shall not be disbursed to
the public entity before the issuance of the related Section 108
guaranteed obligations.
III. Technical Assistance
To the extent permitted by law, HUD may advise applicants of
technical deficiencies in the EDI applications after submission and
permit them to be corrected. Technical deficiencies relate only to
items, such as a failure to submit or sign a required certification,
that would not improve the substantive quality of the application
relative to the selection criteria. Applicants will have 14 calendar
days from the date HUD notifies the applicant of any such technical
deficiency to submit the appropriate information in writing to HUD. At
any time during the selection process, which began with preparation of
this NOFA, HUD staff are limited in the assistance they are permitted
to provide regarding applications for EDI grants, due to the
requirements of the HUD Reform Act. The assistance and advice that can
be provided includes such activities as explaining and responding to
questions about program regulations or generally discussing strengths
and weaknesses observed in applications during previous competitions,
the dates by which decisions will be made and the procedures that are
required to be performed to process an application. The term
``technical assistance'' however, does not include advising the
applicant how to make substantive improvements in its application that
will affect ratings.
In addition, any information published in the Federal Register and
in this NOFA, and any information that has been made public through a
means other than the Federal Register or NOFA, may be discussed.
HUD staff will be available throughout the EDI application period
to provide extensive advice and assistance, as is currently provided,
to develop 108 loan applications since the 108 program is not subject
to the HUD Reform Act. Staff providing such assistance may provide
technical advice to the EDI selection panel but in no case will such
staff participate in the panel's voting process for EDI awards under
this NOFA.
IV. Other Matters
Environmental Impact. A Finding of No Significant Impact with
respect to the environment has been made in accordance with HUD
regulations at 24 CFR part 50, implementing section 102(2)(C) of the
National Environmental Policy Act of 1969 (42 U.S.C. 4332). The Finding
of No Significant Impact is available for public inspection and copying
between 7:30 a.m. and 5:30 p.m. weekdays at the Office of the Rules
Docket Clerk, 451 Seventh Street, SW., Room 10276, Washington, DC
20410.
Federalism. The General Counsel, as the Designated Official under
section 6(a) of Executive Order 12612, Federalism, has determined that
this NOFA will not have substantial, direct effects on States, on their
political subdivisions, or on their relationship with the Federal
Government, or on the distribution of power and responsibilities
between them and other levels of government. While the NOFA offers
financial assistance to units of general local government, none of its
provisions will have an effect on the relationship between the Federal
Government and the States, or the States' political subdivisions.
Family. The General Counsel, as the Designated Official for
Executive Order 12606, The Family, has determined that the policies
announced in this NOFA would not have the potential for significant
impact on family formation, maintenance and general well-being within
the meaning of the Order. No significant change in existing HUD
policies and programs will result from issuance of this NOFA, as those
policies and programs relate to family concerns.
Section 102 of the HUD Reform Act. Section 102 of the Department of
Housing and Urban Development Reform Act of 1989 (HUD Reform Act) and
the final rule codified at 24 CFR part 4, subpart A, published on April
1, 1996 (61 FR 1448), contain a number of provisions that are designed
to ensure greater accountability and integrity in the provision of
certain types of assistance administered by HUD. On January 14, 1992,
HUD published, at 57 FR 1942, a notice that also provides information
on the implementation of section 102. The documentation, public access,
and disclosure requirements of section 102 are applicable to assistance
awarded under this NOFA as follows:
Documentation and public access requirements. HUD will ensure that
documentation and other information regarding each application
submitted pursuant to this NOFA are sufficient to indicate the basis
upon which assistance was provided or denied. This material, including
any letters of support, will be made available for public inspection
for a five-year period beginning not less than 30 days after the award
of the assistance. Material will be made available in accordance with
the Freedom of Information Act (5 U.S.C. 552) and HUD's implementing
regulations at 24 CFR part 15. In addition, HUD will include the
recipients of assistance pursuant to this NOFA in its Federal Register
notice of all recipients of HUD assistance awarded on a competitive
basis.
Disclosures. HUD will make available to the public for five years
all applicant disclosure reports (HUD Form 2880) submitted in
connection with this NOFA. Update reports (also Form 2880) will be made
available along with the applicant disclosure reports, but in no case
for a period less than three years. All reports--both applicant
disclosures and updates--will be made available in accordance with the
Freedom of Information Act (5 U.S.C. 552) and HUD's implementing
regulations at 24 CFR part 15.
Section 103 of the HUD Reform Act. HUD's regulations implementing
section 103 of the Department of Housing and Urban Development Reform
Act of 1989,
[[Page 37141]]
codified as 24 CFR part 4, apply to this funding competition. The
requirements of the regulations continue to apply until the
announcement of the selection of successful applicants. HUD employees
involved in the review of applications and in the making of funding
decisions are limited by part 4 from providing advance information to
any person (other than an authorized employee of HUD) concerning
funding decisions, or from otherwise giving any applicant an unfair
competitive advantage. Persons who apply for assistance in this
competition should confine their inquiries to the subject areas
permitted under 24 CFR part 4.
Applicants or employees who have ethics-related questions should
contact the HUD Office of Ethics (202) 708-3815. (This is not a toll-
free number.) For HUD employees who have specific program questions,
such as whether particular subject matter can be discussed with persons
outside HUD, the employee should contact the appropriate Field Office
Counsel or Headquarters counsel for the program to which the question
pertains.
Prohibition Against Lobbying Activities. The use of funds awarded
under this NOFA is subject to the disclosure requirements and
prohibitions of section 319 of the Department of Interior and Related
Agencies Appropriations Act for Fiscal Year 1990 (31 U.S.C. 1352) and
the implementing regulations at 24 CFR part 87. These authorities
prohibit recipients of Federal contracts, grants, or loans from using
appropriated funds for lobbying the Executive or Legislative Branches
of the Federal Government in connection with a specific contract,
grant, or loan. The prohibition also covers the awarding of contracts,
grants, cooperative agreements, or loans unless the recipient has made
an acceptable certification regarding lobbying. Under 24 CFR part 87,
applicants, recipients, and subrecipients of assistance exceeding
$100,000 must certify that no Federal funds have been or will be spent
on lobbying activities in connection with the assistance.
Dated: July 11, 1996.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development.
Certification Regarding Lobbying
Certification for Contracts, Grants, Loans and Cooperative
Agreements
The undersigned certifies, to the best of his or her knowledge
and belief, that:
(1) No Federal appropriated funds have been paid or will be
paid, by or on behalf of the undersigned, to any person for
influencing or attempting to influence an officer or employee of an
agency, a Member of Congress, an officer or employee of Congress, or
an employee of a Member of Congress in connection with the awarding
of any Federal contract, the making of any Federal grant, the making
of any Federal loan, the entering into of any cooperative agreement,
and the extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been
paid or will be paid to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with this Federal contract, grant,
loan, or cooperative agreement, the undersigned shall complete and
submit Standard Form-LLL, ``Disclosure Form to Report Lobbying,'' in
accordance with its instructions.
(3) The undersigned shall require that the language of this
certification be included in the award documents for all subawards
at all tiers (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all
subrecipients shall certify and disclose accordingly.
This certification is a material representation of fact upon
which reliance was placed when this transaction was made or entered
into. Submission of this certification is a prerequisite for making
or entering into this transaction imposed by section 1352, title 31,
U.S. Code. Any person who fails to file the required certification
shall be subject to a civil penalty of not less than $10,000 and not
more than $100,000 for each such failure.
Signed:----------------------------------------------------------------
(Print name and title)
Date:------------------------------------------------------------------
24 CFR Part 87, Appendix A1
[FR Doc. 96-18012 Filed 7-15-96; 11:55 am]
BILLING CODE 4210-29-P
