4571.2

CHAPTER 1. GENERAL INTRODUCTION TO SECTION 811 PROGRAM

1-1. AUTHORITY.

Section 811 of the National Affordable Housing Act of 1990,

42 U.S.C. 8013 replaces the Section 202 Program of Housing

for Handicapped People as authorized by Section 202 of the

Housing Act of 1959, as amended by Section 162 of the

Housing and Community Development Act of 1987. Section 202

projects for the handicapped currently in the pipeline that

were funded prior to Fiscal Year 1989 remain governed by

Handbook 4571.1 REV-2. Projects, funded under Section 202 as

amended by Section 162 are governed by Notice 90-I.

Applicable Interim Regulations for the Section 811 program

appear in the Federal Register, dated June 12, 1991, 24 CFR

Part 890.

1-2. DELEGATION OF AUTHORITY IN HUD.

Responsibility for program administration is delegated to

Regional Administrators and Field Office Managers.

Field Office Managers and their deputies recommend for

approval or disapproval Section 811 capital advances for

housing projects for persons with disabilities, amend fund

reservations for approved Owners, and make contracts and

execute documents. As used in this Handbook, Field Office

Managers and Housing Development Directors also means

Supervisors of Multifamily Service Offices.

1-3. PURPOSE OF SECTION 811 PROGRAM.

The purpose of the Section 811 program is to enable persons

with disabilities to live with dignity and independence

within their communities by expanding the supply of housing

that provides supportive services which address the

individual health, mental health and other needs of the

residents and is designed to accommodate these special

needs. To accomplish this purpose, direct Federal capital

advances are provided to assist private, nonprofit

corporations to finance the acquisition with or without

rehabilitation (group homes only), construction or

rehabilitation of housing, including the acquisition of

property from the Resolution Trust Corporation (RTC) (group

homes and independent living facilities), and may include

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4571.2

(1-3)

real property acquisition, site improvement, conversion,

demolition, relocation, and other expenses of supportive

housing for persons with disabilities.

Project rental assistance is made available to Owners of

Section 811 projects for assisted units.

1-4. PARTICIPANT ELIGIBILITY.

A. Sponsor. Only a Sponsor may obtain a reservation for a

capital advance, which will be transferred to an Owner

to be organized by the Sponsor.

1\. Definition.

a\. Must be a private nonprofit entity (need not

be incorporated) and must have an IRS tax

exemption ruling.

b\. May not be a public body or instrumentality

of a public body.

c\. No part of its earnings may inure to the

benefit of any private shareholder,

contributor or individual.

d\. May not be controlled by or directed by

persons or firms seeking to derive profit or

gain from the project.

2\. Significance of Sponsor.

a\. HUD provides a Section 811 fund reservation

on the basis of the Sponsor\'s management

experience (housing or services) and its

pledge of financial support to the project.

b\. The Sponsor will be evaluated on the strength

of its activities as an organization and not

on the individual records of the officers,

board members, or general membership.

B. Owner. The Owner corporation, to be formed by the

Sponsor, must comply with the requirements of Part 890,

as follows:

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4571.2

(1-4) 1. Must be a private nonprofit corporation whose

purposes must include the promotion of the welfare

of persons with disabilities.

2\. May not be a public body or instrumentality of a

public body.

3\. No part of its net earnings may inure to the

benefit of any private shareholder, contributor,

or individual.

4\. May not be controlled by or directed by persons or

firms seeking to derive profit or gain from the

project.

5\. Must be a single asset corporation. It may not

engage in any other business or activity or incur

any liability or obligation unrelated to the

project.

6\. Must be exempt from Federal income taxes under

Section 501(c)(3) or (4) of the Internal Revenue

Code.

C. Ineligible Participants.

1\. Religious organizations.

a\. Religious bodies may not be an Owner (but may

be a Sponsor).

b\. Under Constitutional requirement for

separation of church and State, Section 811

capital advances may not be made to religious

organizations or ones that have religious

purposes.

2\. Public bodies and instrumentalities of public

bodies.

a\. Public bodies (examples: Public Housing

Agencies and Local Public Agencies) may not

serve as Sponsors or Owners.

b\. Instrumentalities of public bodies also are

ineligible.

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4571.2

(1-4) c. Indications of instrumentality relationship:

\(1\) Articles of Incorporation or by-laws

provide for control of corporation by

public body.

\(2\) Public body names majority of Board

members or exercises supervisory power

in operation of corporation.

\(3\) Dissolution clause runs to a public

body.

d\. Public bodies may provide housing consultant

and management services to Section 811

projects.

1-5. RESIDENT ELIGIBILITY.

A. Eligibility for Occupancy (General). Occupancy of

Section 811 housing is open to persons with

disabilities. A person with a disability is a

household composed of one or more persons, at least one

of whom meets the following criteria:

1\. is at least 18 years of age or older; and,

2\. has a physical, mental or emotional impairment

which:

a\. is expected to be of long-continued and

indefinite duration,

b\. substantially impedes the person\'s ability to

live independently, and

c\. is of a nature that such ability could be

improved by more suitable housing conditions.

OR

3\. has a developmental disability, defined as a

severe chronic disability which:

a\. is attributable to a mental or physical

impairment or combination of mental and

physical impairments,

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4571.2

(1-5) b. is manifested before the person attains age

twenty-two,

c\. is likely to continue indefinitely,

d\. results in substantial functional limitation

in three or more of the following areas of

major life activity:

\(1\) self-care,

\(2\) receptive and expressive language,

\(3\) learning,

\(4\) mobility,

\(5\) self-direction,

\(6\) capacity for independent living, and

\(7\) economic self-sufficiency.

e\. reflects the person\'s need for a combination

and sequence of special, interdisciplinary,

or generic care, treatment, or other services

which are of lifelong, or extended duration

and are individually planned and coordinated.

B. Disability Categories. For the purposes of the Section

811 program, disabilities are separated into three

major categories: Physical disability (meeting the

criteria in 2. above), developmental disability

(meeting the criteria in 3. above), and chronic mental

illness (meeting the criteria in 2. above).

C. Eligibility of Alcoholics, Drug Addicts and Persons

with the Human Acquired Immunodeficiency Virus (HIV).

A person whose sole impairment is alcoholism, drug

addiction or an HIV-positive diagnosis (i.e., who does

not have a physical disability, developmental

disability or chronic mental illness which is the

disabling condition required for eligibility in a

particular project) is not considered disabled under

the Section 811 program and is, therefore, not eligible

for occupancy in any Section 811 project.

D. Eligibility of Households with a Disabled Child. As

described above, eligibility for occupancy is

contingent upon one member of the household being at

least 18 years of age and disabled. Thus, in order for

a household that has a child with a disability to

qualify for occupancy in Section 811 housing, the child

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4571.2

(1-5) must be at least 18 years old or an adult (age 18 or

older) in the household must have a disability meeting

one or more of the criteria above.

E. Restriction of Occupancy to Persons Having Similar

Disabilities. With HUD Headquarters approval, Owners

may restrict occupancy of Section 811 projects to

persons who have similar disabilities (i.e.,

subcategories of the three major disability categories

described in paragraph B. above) if they can justify

that the proposed occupants share a need for a similar

set of supportive services that are unique to their

disability.

1-6. DEVELOPMENT METHODS.

Projects may be developed using one of the following three

methods:

A. New construction

B. Rehabilitation - the improvement of the condition of a

property from deteriorated and substandard to good

condition.

Rehabilitation may include any of the following

provided the cost of the rehabilitation requires at

least 15 percent of the estimated development cost to

rehabilitate the project to a useful life of 55 years:

1\. gutting and extensive reconstruction.

2\. cure of substantial accumulation of deferred

maintenance.

3\. renovation, alteration or remodeling for the

conversion or adaptation of structurally sound

property to the design and condition required for

use in the Section 811 program.

4\. repair or replacement of major building systems or

components in danger of failure.

C. Acquisition - the purchase of (or otherwise obtaining

title to) existing structures to be used as group

homes, including housing and related facilities from

the Resolution Trust Corporation (RTC). The housing to

be acquired may or may not require rehabilitation.

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4571.2

(1-6) With the exception of property acquired from the RTC,

the following requirements must be met:

1\. The structure must be developed as a group home.

2\. The structure must have been completed at least

three years before the date of the Sponsor\'s

application, or at least three years must have

elapsed from the date of initial occupancy,

whichever is later.

3\. A capital advance may not be used to refinance a

structure already owned by the Sponsor.

4\. Sponsors may use capital advances to acquire

structures they currently lease.

1-7. PROJECT ELIGIBILITY.

A. Types of Housing. The following types of housing are

eligible to be developed under the Section 811 program:

1\. Group home. A single family residential structure

that may combine multiple bedrooms (single or

double occupancy) with a kitchen, shared living

areas, utility areas and at least one bathroom for

every four (4) persons, all of which are known as

common areas. A one-bedroom unit may be provided

for residential staff.

2\. Independent living facility. A project consisting

of separate units where each dwelling unit

includes a kitchen and a bath. The structure may

contain a congregate dining facility, community

space, a laundry, small administrative office and

storage. A one-bedroom unit may be provided for

residential staff.

3\. Intermediate care facility. A group home for

persons with developmental disabilities that is

licensed by the State Medicaid Agency and receives

Title XIX funds to cover the cost of services. In

order to qualify as an intermediate care facility,

the project must meet the following criteria:

a\. The proposed project will be a housing

facility rather than be medical in nature.

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4571.2

(1-7) b. Necessary medical services will be provided

off-site.

c\. The design of the facility must not include

medical features. (e.g., nursing stations,

oxygen outlets, lavatories in bedrooms, call

buttons in bedrooms).

d\. The in-house staff are not medical

professionals.

e\. The residents will be enrolled in structured

programs outside the home for at least six

hours each weekday.

f\. The State Agency (e.g., Medicaid) accepts

responsibility to pay the tenant contribution

to rent in the Medicaid payment to the Owner.

4\. Cooperative/Condominium Projects. An independent

living facility can be developed for cooperative

ownership by the residents. A Sponsor can also

purchase units in an existing condominium,

provided the condominium documents do not conflict

with the HUD Regulatory Agreement.

B. Project Size Limits. An optional resident manager\'s

bedroom/unit is not counted when determining the

following project size limits.

1\. Group home. A group home may house no more than 8

persons with disabilities, with no more than two

persons per bedroom.

2\. Independent living facility. An independent

living facility for persons with physical or

developmental disabilities may house no more than

24 persons with disabilities. An independent

living facility for persons with chronic mental

illness may house no more than 20 persons with

disabilities. Units may be comprised of

efficiency, one, two or more bedrooms with three

or more bedroom units restricted to occupancy by

families comprised of at least one person with a

disability.

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4571.2

(1-7)

C. Exceptions to Project Size Limits.

1\. Increased limits. Field Offices may approve

exceptions to the project size limits described

above for group homes and independent living

facilities as follows:

a\. Group homes may be approved up to 15

residents with disabilities.

b\. Independent living facilities for persons

with physical disabilities and/or

developmental disabilities may be approved up

to 40 residents with disabilities.

(Exceptions will not be considered to the 20

person limit for projects for persons with

chronic mental illness.)

2\. Approval criteria. Sponsors must provide

justification in their applications for a larger

project including the following:

a\. The increased number of persons is necessary

for the economic feasibility of the project;

b\. The project is compatible with the

surrounding residential development and with

the population density of the area in which

it will be located;

c\. The project can be integrated successfully

into the community; and

d\. The project is marketable.

D. Multiple Structure Projects. Sponsors may apply for a

project that will consist of more than one structure.

However, the following restrictions apply:

1\. If the project will consist of more than one group

home, each home must be located on a separate site

which is not located adjacent to a site containing

another such facility.

2\. In cases of an independent living facility, the

Sponsor may design it in such a way to create

clusters of units on one site, as long as the

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4571.2

(1-7) project does not exceed the size limits in paragraph B.

2\. above. This design flexibility may not be applied

to group homes.

1-8. PROGRAM COMPONENTS.

A. Capital Advances. Capital advances bear no interest

and their repayment is not required as long as the

housing remains available for very low-income persons

with disabilities for not less than 40 years.

1\. Establishment of cost limits for independent

living facilities and group homes. Periodically,

the Secretary shall establish development cost

limits by market area for various types and sizes

of supportive housing for persons with

disabilities by publishing a notice of the cost

limits in the Federal Register, in accordance with

the factors in Section 890.245.

2\. Development cost limits. To determine the capital

advance amount to be reserved for new construction

or rehabilitation projects for persons with

disabilities, the following development cost

limits shall be used:

a\. Independent living facilities

\(1\) For nonelevator structures:

\$28,032 per family unit without a

bedroom;

\$32,321 per family unit with one

bedroom;

\$38,979 per family unit with two

bedrooms;

\$49,893 per family unit with three

bedrooms;

\$55,583 per family unit with four or

more bedrooms.

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4571.2

(1-8) (2) For elevator type structures:

\$29,500 per family unit without a

bedroom;

\$33,816 per family unit with one

bedroom;

\$41,120 per family unit with two

bedrooms;

\$53,195 per family unit with three

bedrooms;

\$58,392 per family unit with four or

more bedrooms.

b\. Group homes

Type of Disability

Number of Physical or Developmental Chronic Mental

Residents Disability Illness

3 \$128,710 \$124,245

4 137,730 131,980

5 146,750 139,715

6 155,760 147,450

7 162,876 153,576

8 168,126 157,731

9 170,840 160,920

10 178,000 167,000

11 185,16O 173,070

12 192,320 179,150

13 199,920 185,380

14 207,510 191,610

15 215,100 197,830

c\. Increased capital advance limits.

\(1\) Field Offices may increase the cost

limits set forth above by the

Headquarters approved high cost factor

of up to 140 percent. Where the cost

levels require, Headquarters may approve

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4571.2

(1-8) high cost factors above 140 percent up

to 160 percent on a project-by-project

basis.

\(2\) If high construction costs in Alaska,

Guam, or Hawaii make it infeasible to

construct dwellings without sacrificing

sound standards of construction, design,

and livability standards within the cost

limits provided above, and adjusted by

the Field Office\'s approved high cost

factor, the amount of the capital

advance may be increased to compensate

for such costs. The increase may not

exceed the limits established after

applying the Field Office\'s approved

high cost factor by more than 50

percent.

\(3\) Regional Offices may approve requests by

Field Offices for increases of up to 10

percent in cost limits provided in

paragraph 2.b. above (group homes only)

in areas which can provide convincing

documentation that high land costs limit

or prohibit project feasibility. The

Sponsor must submit documentation such

as the following;

\- Evidence of at least three land

sales which have actually taken

place (listed prices for land are

not acceptable) within the last two

years in the area in which the

project is to be built. The sites

for which sale prices are given

must be reasonably comparable to

the project site. The average cost

of the documented sales must exceed

7 percent of the development cost

limit for which the project in

question is eligible.

d\. Rehabilitation projects. A capital advance

that involves a project to be rehabilitated

is subject to the following additional

limitations:

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4571.2

(1-8) (1) Property held in fee. If the Sponsor is

the fee simple owner of an unmortgaged

property, the capital advance amount may

not exceed 100 percent of the cost of

the proposed rehabilitation.

\(2\) Property subject to existing mortgage.

If the Sponsor owns a mortgaged property

that is to be refinanced with part of

the capital advance, the maximum capital

advance amount may not exceed the cost

of rehabilitation plus the portion of

the outstanding indebtedness that does

not exceed the fair market value of the

land and improvements before the

rehabilitation, as determined by the

Field Office.

\(3\) Property to be acquired. If the

property is to be acquired by the Owner

from an entity other than the Sponsor,

and the purchase price is to be financed

with a part of the Section 811 capital

advance, the maximum capital advance

amount may not exceed the cost of the

rehabilitation plus the portion of the

purchase price that does not exceed the

fair market value of such land and

improvements before the rehabilitation,

as determined by the Field Office.

\(4\) Leaseholds. If the site is secured by a

leasehold estate rather than by a fee

simple estate, the amount of the capital

advance attributable to the cost of the

property may not exceed the value of the

leasehold estate.

3\. Revisions to development cost limits.

Periodically, the Department will revise the

development cost limits by market area for various

types and sizes of supportive housing for persons

with disabilities by publishing a notice of the

cost limits in the Federal Register in accordance

with Section 890.245 of the regulations.

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4571.2

(1-8) 4. Annual adjustments. The cost limits shall be

adjusted at least once annually to reflect changes

in the general level of construction or

rehabilitation costs.

5\. Prevailing cost data. In establishing development

cost limits for a given market area, data will be

used that reflect currently prevailing costs of

acquisition, construction or rehabilitation, and

land acquisition in the area.

6\. RTC Properties. In the case of existing housing

and related facilities to be acquired from the RTC

under Section 21A(c) of the Federal Home Loan Bank

Act, the cost limits shall include:

a\. the cost of acquiring such housing (or such

lesser amount as may be supported by the HUD

appraisal);

b\. the cost of rehabilitation, alteration,

conversion, or improvement, including the

rehabilitation thereof; and

c\. the cost of the land on which the housing and

related facilities are located.

NOTE: In the case of existing housing and

related facilities which require no

rehabilitation and are to be

acquired from the RTC, 85 percent

of the development cost limits

identified in paragraph A. of this

section shall be used to calculate

the capital advance amount to be

reserved.

7\. Savings incentive. The development cost limits

established under paragraph A. above, adjusted by

the Field Office\'s high cost factor up to 140

percent, shall be used to calculate the fund

reservation amount of the capital advance to be

made available to individual Owners. If actual

development costs are less than the amount of the

initial fund reservation, the Owner is entitled to

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4571.2

(1-8) retain 50 percent of the savings in a Replacement

Reserve Account. This percentage shall be

increased up to 75 percent for Owners which add

energy efficiency features which:

a\. exceed the energy efficiency standards

promulgated by the Secretary in accordance

with Section 109 of the National Affordable

Housing Act;

b\. substantially reduce the life-cycle cost of

the housing;

c\. reduce gross rent requirements; and

d\. enhance tenant comfort and convenience.

The Replacement Reserve Account may only be used

with the approval of the Field Office Manager for

repairs, replacements and capital improvements to

the project.

8\. Funds from non-Federal sources. An Owner may

voluntarily provide funds from non-Federal sources

for amenities and other features of appropriate

design and construction suitable for supportive

housing for persons with disabilities if the cost

of such amenities is not (1) financed with the

capital advance, and (2) taken into account in

determining the amount of Federal assistance or of

the tenant payments.

B. Project Rental Assistance Contracts (PRAC)

1\. Annual contract amount. The annual contract

amount for any project shall not exceed the

HUD-approved annual operating budget for all units so

occupied (or as approved by the Secretary held for

occupancy) and any initial utility allowances for

such units, as approved by the Secretary. Any

contract amounts not used by a project in any year

shall remain available to the project until the

expiration of the contract. The Secretary may

adjust the annual contract amount if the sum of

the project income and the amount of assistance

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4571.2

(1-8) payments available are inadequate to provide for

reasonable HUD-approved operating costs.

2\. Operating cost standards. HUD shall establish

operating cost standards based on the average

annual operating cost of comparable housing for

persons with disabilities in each Field Office,

and shall adjust the standard annually based on

appropriate indices of an increase in housing

costs such as the Consumer Price Index. HUD

may adjust the operating cost standard applicable

to an approved project to reflect such factors as

differences in costs based on location within the

Field Office jurisdiction. The operating cost

standard will be used to determine the initial

reservation amount of the project assistance

funds. The Owner must submit estimates based on

project design, maintenance and services provided

at the time of issuance of conditional and firm

commitment stages of processing. NOTE: The cost

of supportive services is not included in the

project rental assistance.

C. Term of Commitment. All units in housing assisted

under Part 890 shall be made available for occupancy by

very low-income persons with disabilities for not less

than 40 years. The initial term of a project rental

assistance contract shall be 240 months. The Secretary

will, to the extent approved in appropriations acts,

extend any expiring contract for a term of not less

than 60 months. In order to facilitate the orderly

extension of expiring contracts, the Secretary is

authorized to make commitments to extend expiring

contracts during the year prior to the date of

expiration.

D. Tenant Payment. A very low-income person with a

disability shall make a tenant payment for a dwelling

unit assisted under Part 890, which will be the highest

of the following amounts, rounded to the nearest

dollar:

1\. 30 percent of the person\'s monthly adjusted income

(as defined in 24 CFR 813.102),

2\. 10 percent of the person\'s monthly income, or

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4571.2

(1-8) 3. If the person is receiving payments for welfare

assistance from a public agency and a part of such

payment, adjusted in accordance with the person\'s

actual housing costs, is specifically designated

by such agency to meet the person\'s housing costs,

the portion of such payments which is so

designated.

If the person\'s welfare assistance is ratably

reduced from the standard of need by applying a

percentage, the amount calculated under 3. above

shall be the amount resulting from one application

of the percentage.

E. Financial Obligations of Sponsor.

1\. Owner deposit (Minimum Capital Investment). The

Owner must deposit one-half of one percent (0.5%)

of the HUD-approved capital advance amount not to

exceed \$10,000 in a special escrow account to

assure the Owner\'s commitment to the housing. The

Minimum Capital Investment (MCI) will be placed in

escrow prior to disbursing any capital advance

funds and will be held by HUD or by a HUD-approved

escrow agent. If construction starts

within the initial 18 months of the fund

reservation, HUD will waive one-half of the MCI,

which would be required under the aforementioned

formula, at the time the deposit would be

required. If final closing occurs within six

months after construction completion, HUD will

approve the return of all remaining funds not used

to cover operating deficits during the first three

years of operation. If final closing does not

occur within six months after project completion

(unless extended by the Field Office for up to two

months due to Justifiable delay), the balance

remaining at the end of three years will not be

returned and shall be deposited in the Replacement

Reserve Account.

2\. Other possible financial obligations. Besides the

minimum capital investment, additional funds may

be required as follows:

a\. Front-end money for any project costs (such

as individual unit balconies) which are not

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4571.2

(1-8) eligible to be included in the capital

advance.

b\. Off-site escrow for off-site drives, walk-ups,

etc., which may be required but may not

be included in the capital advance.

c\. Initial operating deficit escrow if an

expected slow rent-up would result in a

projected operating deficit.

d\. Unforeseen expenses incurred during

construction or operation of project.

e\. Incremental development and operational cost

of facilities not eligible for capital

advances (e.g., amenities not covered under

HUD\'s design and cost standards).

f\. Supportive services (see paragraph 1-6F).

3\. Loans. Funds for the Minimum Capital Investment

may not be borrowed, nor may letters of credit be

used. Where the Sponsor entity lacks the

financial resources, it may borrow the necessary

funds for any other project purposes from third

parties, under the following conditions:

a\. Loans from the contractor or other parties

standing to gain a profit from the project

are prohibited.

b\. Indebtedness must not create a situation

where such a creditor can exercise any

direction or control over the Owner.

c\. Funds used to cover items which are in excess

of those permitted under HUD\'s design and

cost standards may not be repaid from project

resources. Funds borrowed outside of capital

advance proceeds for other approved purposes

may be secured only by a promissory note

executed by the Owner on a Form FHA-1710

after a prior written approval by the Field

Office. The note shall be endorsed as

follows:

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4571.2

(1-8) \"Approval to make repayment of this loan from

Residual Receipts is hereby granted this

\_\_\_\_\_ day of \_\_\_\_\_\_\_\_\_\_\_\_\_, 19\_\_\_.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Assistant Secretary for

Housing-Federal Housing Commissioner by

\"Authorized Agent\"

1-9. Supportive Services.

A. General. While adequate housing is a basic necessity

of life for everyone, the provision of housing alone

cannot create a stable living environment for many

persons with disabilities. Housing is one component in

the spectrum of services needed for persons with

disabilities to live independently in the community.

Thus, the provision of supportive services is essential

to the success of any Section 811 project. It is the

responsibility of the Sponsor to arrange for the

provision and funding of those services appropriate to

the assessed needs of the residents. For some

residents with physical disabilities, for example,

services may be limited to housekeeping assistance,

personal care attendants, or structured recreational or

educational activities. Other residents with more

severe physical or mental disabilities may require more

intensive services such as case management, training in

the skills of independent living (i.e., personal

grooming, cooking, money management, etc.), medication

monitoring, occupational therapy, or training in social

skills. Necessary supportive services should be

provided off-site to the greatest extent possible to

ensure a normal (non-institutional) home environment

for the residents.

B. On-site services may include the following:

1\. case management

2\. personal assistance/attendant care

3\. housekeeping assistance

4\. supervision

5\. counseling/advocacy/referral

6\. training in independent living skills

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4571.2

(1-9) 7. recreation

8\. transportation

9\. meals and nutrition

C. Off-site services may include the following:

1\. health and dental care (Health care must be based

in the community, not in the project. No on-site

staff provisions may be made for doctors, nurses

or other medical personnel.)

2\. periodic inter-disciplinary diagnostic and

assessment services

3\. specialized educational/vocational services

D. Supportive services plan. The supportive services plan

is one of the most essential components of each

application for a Section 811 fund reservation. It is

through this plan that the Sponsor must describe the

prospective residents of the proposed group home or

independent living facility in terms of their general

disability, the supportive services needs of the

residents, the services to be provided (who will

provide them and where), the staffing plan for the

facility, and most important, an identification of the

extent, source and commitment of funds for the

services.

Since funding for supportive services is essential to

the long-term stability of Section 811 housing, HUD

will not select any application that does not contain

satisfactory evidence of a commitment to provide

funding for the supportive services.

Sponsors must provide documentation in writing from the

agency that will be providing the funding for the

supportive services, indicating the extent of its

commitment. Usually, funds for supportive services are

provided by the State and are allocated in various

ways, i.e., to localities, projects, or to individual

residents. States generally are unable to make

binding, long-term funding commitments, but can

indicate planned funding subject to future

appropriations actions.

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4571.2

(1-9) In those States where, due to fiscal or other

constraints (e.g., States which have been retracting

funding for services in group homes), the State

indicates funds cannot be made available for services,

the Sponsor must secure and provide documentation of

other funding sources to meet the anticipated needs of

the residents. In States where existing projects are

experiencing difficulty with continuation of State

funding, the proposed projects should not be

recommended for approval unless satisfactory evidence

of a commitment from other service funding sources is

provided.

A commitment to provide funds for services from an

outside funding source must be in the form of a letter

of intent demonstrating the reasonable expectation of

the funding source and its resolve to provide the funds

if the application is selected.

If the Sponsor is providing funds for supportive

services, evidence of its financial capability to do so

must be provided.

E. Management capacity. The Field Office shall ensure

that Owners have the managerial capacity to: (1) assess

the ongoing service needs of residents; (2) coordinate

the provision of supportive services and tailor such

services to the individual needs of residents; and (3)

seek on a continuous basis new sources of assistance to

ensure the long-term provision of supportive services.

1-10.General Application Limits.

No Sponsor in a given fiscal year may singly or as a co-sponsor

(including affiliated entities) apply for more units

in a given Region than advertised for that Region in the

Invitation. Affiliated entities which submit separate

applications shall be deemed to be a single entity for

purposes of this limit.

NOTE: Any Sponsor found to exceed the above limit will

be afforded the opportunity to withdraw the excess

applications. If it refuses, funding will be denied

for all of its applications.

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4571.2

1-11.PROGRAM REQUIREMENTS.

A. Accessibility Requirements.

1\. Applicable laws. Projects must comply with

Section 504 of the Rehabilitation Act of 1973 and

HUD\'s implementing regulations at 24 CFR Part 8

and the Fair Housing Amendments Act of 1988 and

HUD\'s implementing regulations at 24 CFR Part 100.

a\. Section 504 of the Rehabilitation Act of

1973\.

\(1\) 5 percent of all units (at least one)

must be accessible according to the

Uniform Federal Accessibility Standards

or an equivalent standard.

\(2\) An additional 2 percent of the units (at

least one) must be designed to meet the

needs of persons with visual and/or

hearing impairments.

Each project should have

appliances/accessories available to be

installed on an as-needed basis in the

number of units required to be

accessible to individuals with hearing

or visual impairments. In addition,

each project should be prepared to

provide tenants or prospective tenants

with information on the available

accommodations.

Since the 2 percent requirement is to be

met through subsequent installation or

adaptation, there is no design impact

during processing. The only processing

implication is that Owners must commit

to their willingness to provide

reasonable accommodation when requested

and must demonstrate that they have

provided appropriate equipment on-site

to meet the needs of tenants with

hearing and/or visual impairments. A

requirement to this effect must be in

the Regulatory Agreement.

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4571.2

(1-11) In units for people with hearing

impairments:

\- Visual alarms should be available.

Alarms should be installed in

accordance with UFAS 4.28.4 (either

connected to the building emergency

alarm system or plugged into a

standard 110 volt electrical

receptacle).

\- If telephone wiring is installed in

the unit as a standard practice, an

electrical outlet should be

provided adjacent to the telephone

outlet to permit use of a

telecommunications device for the

deaf (TDD). The outlet may be one

of the unit\'s required outlets.

\- Peep sights should be available for

installation on all doors leading

into the unit.

\- If the unit has a buzzer or

doorbell, at the time of occupancy

by a person with a hearing

impairment, it should be wired to

provide a flashing light signal.

In units for people with visual

impairments:

\- Any lighting fixtures provided in

the unit should be equipped with

receptacles capable of handling

150-watt bulbs for tenants with

residual vision.

\- Cooktop controls should be mounted

on the front or side of the range

and controls with tactile markings

should be available for

installation if required by the

tenant.

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4571.2

(1-11) - Baseboards, doors and door frames,

and window frames should be painted

to contrast with the wall and floor

color for tenants with residual

vision.

\(3\) Section 504 applies on a project-by-project

basis. For example, if an Owner

has a scattered-site project, the 5% and

2% requirements described above would

apply to the entire project, not to each

individual building.

\(4\) Section 504 requirements cannot be

waived.

b\. Fair Housing Amendments Act of 1988

\(1\) Requires limited accessibility in all

covered multifamily dwellings of 4 or

more units designed for first occupancy

after March 13, 1991.

\(a\) If the building was occupied before

March 13, 1991 or the last building

permit or renewal was obtained

before June 15, 1990, it is exempt

from the design and construction

requirements of the Fair Housing

Amendments Act of 1988.

\(b\) Each covered multifamily dwelling

must have the following:

\- At least one (1) building

entrance must be on an

accessible route.

\- Public and common use areas

must be readily accessible to

and usable by persons with

disabilities.

\- All doorways designed to allow

passage into and within the

premises must be at least 32

inches wide.

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4571.2

(1-11) (c) Units in covered multifamily

dwellings fall into two categories:

\- Elevator building - all units

must be adaptable.

\- Non-elevator building - all

ground floor units must be

adaptable.

\(d\) New construction dwelling unit

design requirements

\- Accessible route into and

throughout the dwelling unit,

\- Light switches, outlets, and

environmental controls in

accessible location,

\- Reinforced bathroom walls at

tub, toilet and shower stall,

\- Usable kitchens and bathrooms

that will allow room for a

wheelchair user to maneuver

about the space.

\(2\) Tenant Accommodations - Owners must

allow tenants to make reasonable

modifications to their units (e.g.,

lower kitchen cabinets).

\(a\) The tenant must pay for the

modifications.

\(b\) The Owner may require the money to

be placed in an escrow account to

restore the unit to its original

condition when the tenant leaves.

\(3\) The requirements apply on a

building-by-building basis.

\(4\) Group homes are not subject to the

design and construction requirements.

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4571.2

(1-11) 2. Program Accessibility Requirements. Section 811

projects are also subject to the following program

accessibility requirements which must be met using

UFAS specifications.

a\. New Construction.

\(1\) Projects for Persons with Chronic Mental

Illness

\(a\) All entrances, common areas, units

to be occupied by residential

staff, and amenities, must be

readily accessible to and usable by

persons with physical disabilities.

\(b\) In an independent living facility,

a minimum of 10 percent of all

dwelling units, but at least one,

must be accessible or adaptable for

physically disabled people.

\(c\) In a group home, a minimum of 10

percent of all bedrooms and

bathrooms, but at least one of

each, must be accessible or

adaptable for physically disabled

people.

\(2\) Projects for Persons with Physical or

Developmental Disabilities

\(a\) All entrances, common areas,

amenities, and units for

residential staff must be readily

accessible to and usable by persons

with physical disabilities.

\(b\) All units in independent living

facilities, and all bedrooms and

bathrooms in group homes, must be

accessible or adaptable for persons

with physical disabilities.

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4571.2

(1-11) b. Projects to be Acquired and/or Rehabilitated

\(1\) Projects designed for persons with

chronic mental illness must comply with

the applicable requirements for new

construction above.

\(2\) Projects designed for persons with

physical or developmental disabilities

may provide less than full accessibility

if the following criteria are met:

\(a\) The cost of providing full

accessibility makes the project

financially infeasible;

\(b\) Less than one-half of the intended

occupants will have mobility

impairments; and

\(c\) The project complies with the

requirements of 24 CFR 8.23.

B. Affirmative Marketing. The Owner must determine the

racial or ethnic groups least likely to apply for

project occupancy taking into consideration the

location of the project, and shall establish a plan to

inform and encourage such groups to apply.

C. Certifications. The following certifications are

required for participation in the Section 811 program:

1\. Conflict of Interest. Officers and board members

of either the Sponsor or Owner cannot have any

financial interest in any contract with the Owner

or in any firm which has a contract with the

Owner.

a\. This restriction includes individuals of the

Sponsor and Owner organization who serve as:

\(1\) a board member, officer, director,

partner, employee or authorized agent of

any firm providing services or products

related to the construction or operation

of the proposed project.

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4571.2

(1-11) (2) the attorney, general contractor, land

seller, architect, housing consultant,

or service provider, among other things,

in connection with the project, EXCEPT

that the:

\(i\) Sponsor or its nonprofit affiliate

may contract for a fee with the

owner to provide management

services and/or supportive

services. In such cases, only two

persons who are paid by the Sponsor

or its nonprofit management firm

may serve as directors on the Owner

board and only in a nonvoting

capacity.

\(ii\) Sponsoring entity may enter into an

agreement to sell the land to the

Owner.

b\. Family members of any officer, director, or

authorized agent of the Sponsor or Owner are

prohibited from entering into any contracts

for services with the Sponsor or Owner.

c\. When submitting its application for a Section

811 fund reservation, Sponsor must include a

Conflict of Interest Resolution (Appendix 1)

duly adopted by the Sponsor, along with an

Incumbency Certificate (Appendix 2) agreeing

to comply by the Department\'s conflict of

interest requirements,

d\. At time of submission of a conditional

commitment application, both Sponsor

and Owner must file Conflict of Interest and

Disclosure Certifications (Appendix 3) for

each officer, director, and authorized agent

along with an updated Incumbency Certificate.

e\. The Section 811 fund reservation is subject

to cancellation if the certifications under

item d. above are not provided for all

officers, directors, and authorized agents of

the Sponsor and Owner.

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4571.2

(1-11) f. Certifications from only Executive board

members are not acceptable.

2\. Identity of Interest. An identity of interest

between the Sponsor/Owner and the development team

member or between development team members is

prohibited.

a\. Development team members include, but are not

limited to, consultant, architect, general

contractor, attorney, management agent and

seller of the land.

b\. This prohibition excludes the following:

\(1\) An identity is permitted between the

Sponsor and its nonprofit affiliate, and

the Owner.

\(2\) The Sponsor or its nonprofit affiliate

may contract for a fee with the Owner to

provide management services under the

conditions specified in 1a. above.

\(3\) The Owner may self-manage the project

provided the salaried employee

responsible for managing the project is

not an officer, director or authorized

agent of the Sponsor or Owner.

\(4\) The Sponsor may be the seller of the

land.

\(5\) The consulting firm may serve as the

management agent with the prior approval

of the local HUD Field Office.

\(6\) Staff of the Sponsor/Owner may perform

services typically performed by the

consultant. In such cases, no

consultant fees or expenses related to

overhead salaries for these services may

be included in the Section 811 capital

advance.

\(7\) An identity of interest may exist

between the general contractor and the

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4571.2

(1-11) subcontractors, material suppliers and

equipment lessors with the prior

approval of their contracts and the

allowance for general overhead and

profit by the local HUD Field Office.

\(8\) An officer, director or board member of

the Sponsor or Owner or any development

team member may donate their services to

the project, except that a donation of

the land may only be made by the Sponsor

or Owner or an individual/firm/

corporation which had no other

involvement in the project.

c\. A prohibited identity of interest will exist

if any development team member

firm/corporation or any officer, director,

partner or authorized agent of a development

team member\'s firm/corporation:

\(1\) is also an officer, director, board

member, partner, or authorized agent for

any other development team member.

\(2\) has any financial interest in any other

development team member\'s firm/

corporation.

\(3\) has a family relationship with any

officer, director, board member, partner

or authorized agent of any other

development team member\'s firm/

corporation.

\(4\) advances any funds or thing of value to

the Sponsor/Owner including the land

option or the land or the cost of

providing the land option or takes stock

or any interest in the Sponsor/Owner

corporation or property as part of

consideration for payment.

d\. This prohibition extends to:

\(1\) the consultant firm/corporation or any

of its officers, directors, or partners

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4571.2

(1-11) who are involved as an officer,

director, board member or general

partner in a business venture with any

other development team member.

\(2\) the attorney for the Sponsor/Owner who

also serves as the attorney for a

development team member, except that the

Sponsor/Owner\'s attorney may serve as

the personal attorney for an individual

associated with a development team

member in matters not involving the

Section 811 project.

\(3\) any firm or subsidiary having an

identity of interest with a contractor

that is providing the option or selling

the land to the Sponsor/Owner. In such

cases, the Sponsor/Owner is prohibited

from selecting that contractor or its

affiliate to construct the project for

which the Application for a Fund

Reservation is being made.

e\. Identity of Interest Disclosure

Certifications (Appendix 4) on the

development team members noted in

subparagraph 2.a. above are to be submitted

along with the Owner\'s Application for a

Conditional Commitment, except:

\(1\) where a consultant has been identified

at the time of filing of the Section 811

Fund Reservation Application, the

certification on the consultant must be

submitted at that time.

\(2\) where the development team member\'s

initial contact with the Owner occurs at

a later processing stage, the

certification must be filed at that

time, but prior to initial closing.

3\. Delinquent Federal Debt. OMB Circular A-129,

Managing Federal Credit Management Programs,

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4571.2

(1-11) requires Owner certification relating to credit

availability from private sources and also

requires each Owner corporation official to

certify that he or she is not delinquent on the

repayment of any Federal debt.

a\. At the time the Application for a Fund

Reservation is submitted, the Sponsor

completes and includes a copy of Form SF-424,

Application for Federal Assistance. SF-424

includes a question regarding delinquent

Federal debt. The Sponsor is required to

answer this question and provide an

explanation if any delinquent Federal debt is

acknowledged.

b\. Included with the Application for a

Conditional Commitment, each officer, and

director of the Owner corporation submits the

certification regarding delinquent Federal

debt as contained in Appendix 6.

\(1\) This certification requirement applies

to all Section 811 Owners regardless of

the type of project proposed.

\(2\) Should any officer or director of an

Owner corporation be unable to bring

current his or her Federal debt, the

individual will be unable to receive

approval.

\(3\) Examples of Federal debts are:

Department of Education student loans,

IRS tax payments, HUD, FmHA, SBA and VA

loans, audit disallowances and

mortgages.

4\. Lobbying Activities. Pursuant to statutory

requirements, Sponsors and Owners cannot use grant

or loan funds to lobby the Executive or

Legislative branches of the Federal Government.

a\. A certification form and a Disclosure of

Lobbying Activities Form (Standard Form - LLL)

as found in Appendix 7 must be submitted

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4571.2

(1-11) by the Sponsor with its Application for a

Fund Reservation.

b\. The forms in item a. above must be submitted

by the Owner with its Application for a

Conditional Commitment.

5\. Drug-Free Workplace. In accordance with the

Drug-Free Workplace Act, all Sponsors and Owners must

certify to comply with the requirements under the

Act.

a\. The required certification form,

Certification Regarding Drug-Free Workplace

Requirements, in Appendix 8 must be submitted

by the Sponsor at the time of filing its

Application for a Fund Reservation.

b\. The above certification must be submitted by

the Owner with its Application for a

Conditional Commitment.

6\. Design and Cost Standards. The Sponsor must

certify that the project will comply with HUD\'s

design and cost standards. (Appendix 9)

7\. Civil Rights Compliance. The Owner must certify

to comply with the following civil rights

requirements. (Appendix 23)

a\. Title VI of the Civil Rights Act of 1964 (42

U.S.C. 2000d) and regulations pursuant

thereto (24CFR Part 1);

b\. The Fair Housing Act (42 U.S.C. 3601-19) and

regulations pursuant thereto (24 CFR Part

100);

c\. The fair housing poster regulations (24 CFR

Part 110) and advertising guidelines (24 CFR

Part 109);

d\. Executive Order 11063 and regulations

pursuant thereto (24 CFR Part 107);

e\. Section 504 of the Rehabilitation Act of 1973

(29 U.S.C. 794) and regulations issued

pursuant thereto (24 CFR Part 8);

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4571.2

(1-11) f. The Age Discrimination Act of 1975 (42 U.S.C.

6101-07) and regulations issued pursuant

thereto (24 CFR Part 146);

g\. Executive Order 11246 and all regulations

pursuant thereto (41 CFR Chapter 60-1);

h\. Section 3 of the Housing and Urban

Development Act of 1968 (12 U.S.C. 1701u) and

regulations pursuant thereto (24 CFR Part

135);

i\. The Affirmative Fair Housing Marketing

Program requirements of 24 CFR 200, Subpart M

and the implementing regulations at 24 CFR

Part 108; and

j\. The requirements of Executive Orders 11625,

12432, and 12138 (Minority and Women-Owned

Business Enterprises).

D. Facilities for Religious Observances. Facilities

cannot be set aside for use only for religious

purposes; however, a multipurpose room may be used for

religious services and other related purposes.

Religious articles or equipment may not be installed

permanently and must be removed at the conclusion of

any service or observance. Any room or space used for

such purposes must be available for equitable use by

all groups composing the tenancy.

E. Project Design.

1\. In designing housing for persons with

disabilities, the following should be considered:

a\. Land costs in relation to the economic

feasibility of the project;

b\. The social environment in relation to the

safety and security of the residents;

c\. The available sites which offer adequate

proximity to community services and

facilities and accessibility to low-cost

transportation;

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4571.2

(1-11) d. The established land-use patterns in the

community.

2\. Design and Cost Standards. The Owner, to the

extent practicable, has the flexibility to design

the housing appropriate to the proposed location

and resident population, subject to the following

design and cost standards.

a\. Unit sizes.

\(1\) Group homes.

Group homes must provide no less than

the general square footage requirements

in the minimum group home standards.

Each resident must have at least 290

square feet of prorated space, including

a minimum area of 80 square feet in a

shared bedroom (no more than two

residents) or 100 square feet in a

single bedroom.

\(2\) Independent living facilities.

The proposed unit sizes and number of

bathrooms shall not exceed the following

(except for rehabilitation projects

where it would be more expensive to

comply with these limitations than to

retain the existing features):

Number of Bedrooms 0 1 2 3 4

Sq. Ft. Rentable Area 415 540 800 1050 1150

Number of Baths 1 1 1 1 1/2 2

\(a\) For projects involving five or more

bedrooms, the maximum unit size may

be increased up to 100 square feet

for each additional bedroom.

\(b\) Three or more bedroom units are

limited to families and may not

serve single, unrelated persons

with disabilities.

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4571.2

(1-11) b. Restrictions on amenities.

\(1\) Projects must be modest in design.

Amenities not eligible for HUD funding

include:

\(a\) individual unit balconies and

decks,

\(b\) atriums,

\(c\) bowling alleys,

\(d\) swimming pools,

\(e\) saunas

\(f\) jacuzzis

\(2\) In independent living facilities,

dishwashers, trash compactors, and

washers and dryers in individual units

will not be funded. However, space for

these appliances may be provided and

mechanical hook-ups for the appliances

are eligible costs.

\(3\) The use of durable materials to control

or reduce maintenance, repair and

replacement costs is not an excess

amenity.

c\. Community spaces. The cost of construction

of community spaces may not exceed 10 percent

of the total cost of construction, except as

provided in paragraph (d) of this section.

d\. Exceptions. HUD may approve a project that

does not comply with the design and cost

standards of paragraphs (b) and (c) of this

section if:

\(1\) The Sponsor demonstrates a willingness

and ability to contribute the

incremental development cost and

continuing operating costs associated

with the additional amenities or design

features; or

\(2\) The proposed project involves

rehabilitation or acquisition, the

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4571.2

(1-11) additional amenities or design features

were incorporated into the existing

structure before the submission of the

application, and the total development

cost of the project with the additional

amenities or design features does not

exceed the cost limits described in

paragraph 1-6.A.2., unless the Sponsor

indicates a willingness to pay the

excess costs from other than capital

advance proceeds.

e\. Prohibited facilities. Project facilities

may not include commercial spaces,

infirmaries, nursing stations, spaces

dedicated to the delivery of medical

treatment or physical therapy, padded rooms,

or space for respite care or sheltered

workshops. Except for office space used by

the Owner exclusively for the administration

of the project, project facilities may not

include office space.

F. Location of Project. Site location is of the utmost

importance in the success of any housing development.

Housing for persons with disabilities developed under

Section 811 must be integrated into local communities

and neighborhoods so that the residents are afforded

the same opportunities for active participation in

community life as are afforded to the population at

large. Proper site location, therefore, can greatly

influence the success of housing for persons with

disabilities. Sponsors, in looking for an approvable

site, should carefully review the site and neighborhood

standards in Section 890.230 of the regulations with

particular emphasis on the following:

1\. The site must be in close proximity, either by

foot or accessible transportation, to necessary

services and facilities (i.e., employment and

educational opportunities, shopping, recreational

activities, etc.).

2\. The site must be located in a residential

neighborhood and have an appearance consistent

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4571.2

(1-11) with the type of project proposed, so as to not

draw attention to itself as housing for persons

with disabilities. If it is a group home, the

site must be located among and resemble other

single family homes. If the project will be an

independent living facility, it must be situated

among other apartment buildings and have similar

physical characteristics.

3\. Projects may not be located adjacent to the

following facilities, or in areas where such

facilities are concentrated:

a\. schools or day-care centers for persons with

disabilities

b\. sheltered workshops

c\. medical facilities

d\. housing primarily serving elderly persons or

persons with disabilities

G. Relocation, Displacement and Real Property Acquisition.

1\. Applicable relocation and real property

acquisition rules. The Section 811 program is

subject to the following requirements:

a\. The Uniform Relocation Assistance and Real

Property Acquisition Policies Act of 1970

(URA) and implementing regulations at

49 CFR Part 24. These requirements are

described in Chapters 1 through 6 of HUD

Handbook 1378, Tenant Assistance, Relocation

and Real Property Acquisition.

b\. Section 24 CFR 890.265(e). These additional

policies are described in this Section G.

2\. Definition of displaced person. For purposes of

providing relocation assistance (at URA levels),

the term \"displaced person\" is generally described

in Paragraph 1-8 of HUD Handbook 1378. However,

24 CFR 890.265(e)(6) provides the following

additional guidance:

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4571.2

(1-11) a. The term \"displaced person\" includes, but may

not be limited to:

\(1\) A person that moves permanently from the

real property after receiving a notice

from the Sponsor/Owner that requires

such move, if the move occurs on or

after:

\(a\) The date of the submission of the

application to HUD for assistance

for the project which is later

approved, if the Sponsor has

control of the site; or

\(b\) The date that the Sponsor obtains

control of the site, if such

control is obtained after the

submission of the application to

HUD.

\(2\) Any person, including a person who moves

before the date described in Paragraph

G.2.a.(1), if either HUD or the

Sponsor/Owner determines that the

displacement directly resulted from

acquisition, rehabilitation, or

demolition for the project.

\(3\) A tenant-occupant of a dwelling who

moves permanently from the

building/complex after execution of the

Agreement between the Sponsor/Owner and

HUD, if the move occurs before

the tenant is provided written notice

offering him or her the opportunity to

lease and occupy a suitable, decent,

safe, and sanitary dwelling in the same

building/complex, under reasonable terms

and conditions, upon completion of the

project. Such reasonable terms and

conditions shall include a monthly rent

and estimated average monthly utility

costs that do not exceed the \"total

tenant payment,\" as determined under

24 CFR 813.107.

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4571.2

(1-11) (4) A tenant-occupant of a dwelling who is

required to relocate temporarily and

does not return to the building/complex,

if either:

\(a\) The tenant is not offered payment

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

unit and any increased housing

costs), or

\(b\) Other conditions of the temporary

relocation are not reasonable.

\(5\) A tenant-occupant of a dwelling who

moves from the building/complex

permanently after he or she has been

required to move to another unit in the

building/complex, if either:

\(a\) The tenant is not offered

reimbursement for all reasonable

out-of-pocket expenses incurred in

connection with the move, or

\(b\) Other conditions of the move are

not reasonable.

b\. Persons Not Eligible. Notwithstanding the

provisions of Paragraph G.2.a., a Person does

not qualify as a \"displaced person,\" if:

\(1\) The person is excluded under Paragraph

1-8c of HUD Handbook 1378; or

\(2\) The person has been evicted for serious

or repeated violation of the terms and

conditions of the lease or occupancy

agreement, violation of applicable

Federal, State or local law, or other

good cause, and HUD determines that the

eviction was not undertaken for the

purpose of evading the obligation to

provide relocation assistance; or

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4571.2

(1-11) (3) The person moved into the property after

the submission of the application and,

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 or

suffer a rent increase) and the fact

that the person would not qualify as a

\"displaced person\" as a result of the

project.

3\. Definition of initiation of negotiations. For

purposes of providing the appropriate notice under

Paragraph 2-3b of HUD Handbook 1378 and

determining whether a person displaced from a

dwelling qualifies for a replacement housing

payment under Paragraph 3-3 or Paragraph 3-4 of

HUD Handbook 1378 (as opposed to paragraph 3-5),

the term \"initiation of negotiations\" means the

execution of the Agreement between the

Sponsor/Borrower and HUD.

4\. Application requirements. To evaluate the

feasibility of a proposed project and assess

training, technical assistance and monitoring

needs, the Sponsor/Owner must provide HUD the

information described in Exhibit 17. When

preparing an estimate of the cost of required

relocation payments and services, the applicant

may wish to consult with the HUD CPD Relocation

Specialist serving the community.

5\. Minimizing displacement. Consistent with the

other goals and objectives of the Supportive

Housing for Persons with Disabilities Program, the

Sponsor/Owner shall assure that all reasonable

steps have been taken to minimize displacement as

a result of an assisted project.

6\. Appeal by lower-income person. Under the

Supportive Housing for Persons with Disabilities

Program, a low-income person, who is dissatisfied

with the determination of the Sponsor/Owner on his

or her appeal under Paragraph 1-33 of HUD Handbook

1378, may request HUD to review that determination

as described in Paragraph 1-33i of that handbook.

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4571.2

(1-11) 7. Compliance responsibility of Sponsor/Owner.

a\. Certification. Before receiving HUD

financial assistance, the applicant must

certify to HUD that it will comply with the

URA, 49 CFR Part 24, and 890.265(e). The

Sponsor/Owner is responsible for ensuring

compliance with such requirements, as

described in HUD Handbook 1378,

notwithstanding any third party\'s contractual

obligation to the Sponsor/Owner to comply

with such provisions.

b\. The cost of required relocation assistance is

an eligible project cost in the same manner

and to the same extent as other project

costs. However, such assistance may also be

paid for with funds available from other

sources.

c\. The Sponsor/Owner must maintain records in

sufficient detail to demonstrate compliance

with the provisions of HUD Handbook 1378, as

described in Chapter 6 of that handbook.

H. Site Control.

Sponsors must submit either (1) documentary evidence

that they has site control, OR (2) an identification of

a site with reasonable assurances that they will have

control of the site within 6 months of notification of

fund reservation (if approved), as described below.

1\. Evidence of site control. Documentary evidence of

site control may be in the form of a contract of

sale, a site option agreement, a deed or other

legal commitment. The option agreement period

should extend through the end of the month in

which funding decisions are announced and contain

a renewal provision to guarantee site availability

through the subsequent stage of processing.

Sites to be acquired from public bodies. When

sites are to be acquired from a public body,

satisfactory site control consists of evidence

that the public body:

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4571.2

(1-11) - possesses clear title to the land, and

\- has entered into a legally binding

written agreement to convey the property

to the Sponsor when its receives a

Section 811 Fund Reservation.

a\. A mere recitation of intent to convey the

land made by an official of the public body

to the Sponsor or preliminary actions (such

as initiating condemnation proceedings or

being under consideration by the City

Council) on the part of the public body are

not adequate evidence of site control. The

contract of sale, option agreement, or other

legal agreement must have been executed prior

to the application deadline date.

b\. If the public body does not own the land or

public hearings have to be conducted at a

later date, sufficient evidence of site

control by the Sponsor does not exist.

c\. However, since time constraints of the

funding round may not permit all of the

required official actions (e.g., approval of

Community Planning Boards as required by New

York City) which are necessary to convey

city-owned sites, a letter in the application

from the Mayor or Director of the appropriate

local agency indicating their approval of

conveyance of the site contingent upon the

necessary approval action is acceptable.

d\. The proposed site cannot be optioned or

acquired from a general contractor (who is to

be the project contractor) or any other

development team member.

e\. Applications from two or more Sponsors

proposing to use the same publicly-owned site

are acceptable for processing in the normal

manner if the locality has agreed to make the

site available to more than one Sponsor,

conditioned in each case on the particular

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4571.2

(1-11) Sponsor being the one selected for funding by

HUD. In such instances, however, both the

Field Office and the Regional Office must

take steps to assure that duplicate

selections are not made for the same site.

2\. Identification of a site. The Sponsor must

provide the location of the site, describe the

activities undertaken thus far to identify the

site as well as what actions must be taken and the

time necessary to control the site, and provide a

status of the sale of the site.

3\. Site Occupancy Data. The Sponsor must provide the

information requested in Exhibit 17, Data on

Project Occupancy, Displacement and Real Property

Acquisition.

I. Site and Neighborhood Standards. All sites must meet

the following site and neighborhood requirements:

1\. The site must be adequate in size, exposure and

contour to accommodate the number and type of

units proposed, and adequate utilities (water,

sewer, gas and electricity) and streets must be

available to service the site.

2\. The site and neighborhood must be suitable from

the standpoint of facilitating and furthering full

compliance with the applicable provisions of Title

VI of the Civil Rights Act of 1964, the Fair

Housing Act, Executive Order 11063 and

implementing HUD regulations.

3\. New construction sites must meet the following

site and neighborhood requirements:

\(a\) The site must not be located in an area of

minority concentration except as permitted

under subparagraph 3 (e) of this section, and

must not be located in a racially mixed area

if the project will cause a significant

increase in the proportion of minority to

non-minority residents in the area.

\(b\) A project may be located in an area of

minority concentration only if:

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4571.2

(1-11) (1) Sufficient, comparable opportunities

exist for housing for minority disabled

households in the income range to be

served by the proposed project, outside

areas of minority concentration (see

subparagraph (c)(3) of this section for

further guidance on this criterion); or

\(2\) The project is necessary to meet

overriding housing needs that cannot be

met in that housing market area (see

subparagraph 3 (e)(8) of this section

for further guidance on this criterion).

\(c\) \"Sufficient\" does not require that in every

locality there be an equal number of assisted

units within and outside of areas of minority

concentration. Rather, application of this

standard should produce a reasonable

distribution of assisted units each year

which, over a period of several years, will

approach an appropriate balance of housing

opportunities within and outside areas of

minority concentration. An appropriate

balance in any jurisdiction must be

determined in light of local conditions

affecting the range of housing choices

available for very low-income minority

disabled households and in relation to the

racial mix of the locality\'s population.

\(d\) Units may be considered to be \"comparable

opportunities\" if they have the same

household type (disabled) and tenure type

(owner/renter); require approximately the

same total tenant payment; serve the same

income group; are located in the same housing

market; and are in standard condition.

\(e\) Application of this sufficient, comparable

opportunities standard involves assessing the

overall impact of HUD-assisted housing on the

availability of housing choices for very

low-income minority disabled households in and

outside areas of minority concentration, and

must take into account the extent to which

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4571.2

(1-11) the following factors are present, along with

any other factor relevant to housing choice:

\(1\) A significant number of assisted housing

units are available outside areas of

minority concentration.

\(2\) There is significant integration of

assisted housing projects constructed or

rehabilitated in the past ten years,

relative to the racial mix of the

eligible population.

\(3\) There are racially integrated

neighborhoods in the locality.

\(4\) Programs are operated by the locality to

assist minority disabled households who

wish to find housing outside areas of

minority concentration.

\(5\) Minority disabled households have

benefitted from local activities (e.g.,

acquisition and write-down of sites, tax

relief programs for homeowners,

acquisition of units for use as assisted

housing units) undertaken to expand

choice for minority households outside

of areas of minority concentration.

\(6\) A significant proportion of minority

disabled households has been successful

in finding units in non-minority areas

under the Section 8 Certificate and

Housing Voucher programs.

\(7\) Comparable housing opportunities have

been made available outside areas of

minority concentration through other

programs.

\(8\) Application of the \"overriding housing

needs\" criterion, for example, permits

approval of sites that are an integral

part of an overall local strategy for

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4571.2

(1-11) the preservation or restoration of the

immediate neighborhood and of sites in a

neighborhood experiencing significant

private investment that is demonstrably

changing the economic character of the

area (a \"revitalizing area\"). An

\"overriding housing need\", however, may

not serve as the basis for determining

that a site is acceptable if the only

reason the need cannot otherwise be

feasibly met is that discrimination on

the basis of race, color, creed, sex, or

national origin renders sites outside

areas of minority concentration

unavailable or if the use of this

standard in recent years has had the

effect of circumventing the obligation

to provide housing choice.

4\. The housing must be accessible to social,

recreational, educational, commercial, and

health facilities and services, and other

municipal facilities and services that are at

least equivalent to those typically found in

neighborhoods consisting largely of

unassisted, standard housing of similar

market rents.

5\. Travel time and cost via public

transportation or private automobile, from

the neighborhood to places of employment

providing a range of jobs for very

low-income workers, must not be excessive.

6\. The neighborhood must not be one which is

seriously detrimental to family life or in

which substandard dwellings or other

undesirable conditions predominate, unless

there is actively in progress a concerted

program to remedy the undesirable conditions.

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4571.2

(1-11) 7. Projects must be located in neighborhoods

where other family housing is located.

Projects may not be located adjacent to the

following facilities or in areas where such

facilities are concentrated:

\- schools or day care centers for persons

with disabilities,

\- workshops,

\- medical facilities, or

\- other housing primarily serving the

elderly or persons with disabilities.

Not more than one group home may be located

on any one site and no such home may be

located on a site contiguous to another site

containing such a home.

1-12.HOW SECTION 811 WORKS.

A. Application Process.

1\. Headquarters will allocate funds on a \"fair share\"

basis to the HUD Field Offices.

2\. Headquarters will publish annually a Notice of

Fund Availability (NOFA) in the Federal Register

to announce the availability of funds.

3\. Field Offices will publish Invitations requesting

applications in newspapers of general circulation

and in any minority media serving the Field Office

jurisdiction.

4\. Field Offices will receive, process, and rate

applications.

5\. Regional Offices will review Field Offices,

processing for consistency and compliance with

program requirements, complete the rating and

ranking of applications, and submit selection

recommendations to Headquarters.

6\. Headquarters will review Regional Offices\'

submissions, copies of applications that require

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4571.2

(1-12) Headquarters\' approval (see Chapter 3, paragraph

3-6) approve applications, and announce

applications selected for funding.

B. Competition for Fund Reservation. Due to funding

limitations, competition for Section 811 fund

reservations is intense. Since funding depends on

strong sponsorship, unsuccessful applicants may wish to

strengthen subsequent applications by obtaining

experienced and financially sound cosponsors. To be

considered for funding, a new application will have to

be submitted for each Notice of Fund Availability.

1-13.INELIGIBLE PROPOSALS.

A. Nursing homes, infirmaries and medical facilities.

B. Transitional housing facilities.

C. Manufactured housing projects.

D. Community centers, with or without special components

for use by persons with disabilities.

E. Sheltered workshops and centers for persons with

disabilities.

F. Headquarters for organizations for persons with

disabilities.

G. Refinancing of Sponsor-owned facilities without

rehabilitation.

1-14.UNACCEPTABLE PROPOSALS.

A. Applications from \"front\" organizations for

profit-motivated developers.

B. Proposals based on syndication for profit-motivated

investors.

C. Proposals to finance construction or rehabilitation of

a project, but without provision for occupancy under

Project Rental Assistance Contract program.

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