**MEETING MINUTES**

**(Issued 7/30/07)**

**Date: July 24, 2007**

**Attendees:** Alanda Jackson; Blair Schiff; Caroline Clayton; Carrie
Dobbins; Dale Gravett; Eric Brown; Gary Rosen; Holly Edwards; James
McCreight; Jennifer Lavorel; John Wilson; Kathleen Foster; Leroy
Ferguson; Marcel Slag; Maria Maio; Maria Marquez; Reginal Barner;
Satinder Munjal; Shawn Sweet; Tara O\'Neill; Vivian Bryant

**RE:** Meeting of July 12, 2007 at the REAC

**Tentative Dates/Goals:**

-   September 27, 2007: Read-out of group's ideas, suggestions, etc.

-   September 20, 2007: Final review of read-out report

-   September 13, 2007: Final read-out report is completed

-   Conference calls each Tuesday at 10:00 AM (Eastern) starting July
    24, 2007

**Action Items:**

-   Review 24 CFR 941 and provide comments/observations/ideas as how to
    improve the process; Part 970, Part 983 (Project Based HCV) and
    85.36 will be reviewed at a later date

-   Do people want to meet on September 12, 2007, and if so, where?

**Main Discussion Items:**

-   Question of whether we will get together for a face-to-face session
    before the "read out" report is completed on 9/13/07. Some were
    asked if they would be going to the 4^th^ conference on finance
    leveraging which is to take place in Chicago between 9/12 and 9/14.
    \[Prior conferences were held in Baltimore, Texas, and San Diego,
    and those who attended earlier ones probably wouldn't get anything
    out of this.\] Tara noted that according to an 7/16/07 e-mail from
    the industry groups, there was some kind of scheduling conflict for
    9/12, and therefore they thought 9/13 would likely be the
    reconvening date in DC. Group decided that we would meet on 9/13 in
    DC at the REAC building, and Shawn is to confirm this and get back
    with us. \[Note: The 9/13 meeting will be held at the REAC's finance
    conference room.\]

-   **Comments on 24 CFR Part 941 begin on page 2.**

**Next Meeting Scheduled:** Tuesday, July 31, 2007, 10:00 AM (Eastern)
via conference call

.

.

+------------------------------+---------------------------------------+
| **24 CFR 941**               |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.102 Development   | **Comments, suggestions, etc.**       |
| methods and funding:**       |                                       |
+------------------------------+---------------------------------------+
| \(a\) PHA may use any        | 1.  For mixed-finance deals, HUD      |
| generally accepted method of |     should enforce TDC and audit      |
| development including but    |     periodically and leave it to HFAs |
| not limited to:              |     to perform subsidy layering and   |
| Conventional, Turnkey,       |     determining appropriateness of    |
| Acquisition, Mixed Finance,  |     development in terms of site      |
| Force Account (w/approval).  |     selection/approval, etc. In North |
|                              |     Carolina, for example, the HFA    |
|                              |     has more stringent neighborhood   |
|                              |     standards than does HUD in terms  |
|                              |     of proximity of good services for |
|                              |     residents, etc. In other words,   |
|                              |     in mixed-finance deals, HUD       |
|                              |     should rely on others in the deal |
|                              |     to underwrite the deal in terms   |
|                              |     of good real estate practices.    |
|                              |                                       |
|                              | 2.  For other types of development    |
|                              |     methods, where there are no       |
|                              |     others performing underwriting,   |
|                              |     etc., HUD review is critical.     |
|                              |                                       |
|                              | 3.  Need language that provides       |
|                              |     maximum flexibility; what about   |
|                              |     refinancing? Other methods of     |
|                              |     financing? Proposed language at   |
|                              |     Sec. 941.102(a) was suggested.    |
|                              |                                       |
|                              | 4.  There may be other development    |
|                              |     methods, and HUD staff should not |
|                              |     look at this as the only way of   |
|                              |     doing it. For example, one PHA    |
|                              |     had talked about a design/build   |
|                              |     proposal (like a turnkey, but     |
|                              |     with the developer doing the work |
|                              |     on land that the PHA continued to |
|                              |     hold) and the HUD Field Office    |
|                              |     balked. We may need to clarify    |
|                              |     that we can use a lot of methods, |
|                              |     including refinancing.            |
|                              |                                       |
|                              | 5.  There might be a problem with     |
|                              |     Field Offices not recognizing     |
|                              |     other methods.                    |
|                              |                                       |
|                              | 6.  Adding language to 24 CFR         |
|                              |     941.102(a), "but not limited to", |
|                              |     to make clear that other methods  |
|                              |     of development were possible      |
|                              |     would be helpful.                 |
|                              |                                       |
|                              | 7.  Maybe grants managers at HUD      |
|                              |     should become development         |
|                              |     coordinators? They become very    |
|                              |     sophisticated about development   |
|                              |     over time.                        |
|                              |                                       |
|                              | 8.  Maybe grants managers at HUD      |
|                              |     should become development         |
|                              |     coordinators? They become very    |
|                              |     sophisticated about development   |
|                              |     over time.                        |
|                              |                                       |
|                              | 9.  HUD DC office might want to look  |
|                              |     at letting the Grants Managers at |
|                              |     the Field Office doing the        |
|                              |     development approval, since they  |
|                              |     were more likely to know what was |
|                              |     possible and be flexible. If some |
|                              |     of the responsibility for mixed   |
|                              |     finance approval was taken off    |
|                              |     the Grants Managers (based on the |
|                              |     other approvals by HFAs, etc.),   |
|                              |     this would give them more ability |
|                              |     to do this                        |
|                              |                                       |
|                              | 10. Why make all PHAs jump through    |
|                              |     hoops for this (Force Account)    |
|                              |     for this rarely used development  |
|                              |     method?                           |
|                              |                                       |
|                              | 11. HOPE VI should be noted in this   |
|                              |     section.                          |
+------------------------------+---------------------------------------+
| \(b\) PHA may develop using  |                                       |
| development grants (i.e.,    |                                       |
| HOPE VI), capital funds,     |                                       |
| private/ local funds,        |                                       |
| non-PIH Federal funds        |                                       |
+------------------------------+---------------------------------------+
| \(c\) Limit on number of     | 1.  Some PHAs have units that are     |
| units: lesser of ACC units   |     off-line are receiving subsidy.   |
| on 8/21/96 or number of      |                                       |
| units receiving subsidy on   | 2.  What if you have the funds to     |
| same date (QHWRA has date of |     develop additional public         |
| 10/1/99); Replacement ACC    |     housing? Can the cap be removed?  |
| units may use HUD & non-HUD  |     Would require a statutory change. |
| funding, which must be       |                                       |
| approved by HUD to be added  | 3.  Need to assure flexibility as to  |
| to the ACC.                  |     date; 1996 is better for some     |
|                              |     PHAs, 1999 is better for others.  |
|                              |     Need at least to grandfather in   |
|                              |     some flexibility for PHAs that    |
|                              |     have relied on one date or        |
|                              |     another.                          |
|                              |                                       |
|                              | 4.  Which dates were to be used       |
|                              |     (since there's a reference to     |
|                              |     both 1996 and a QHWRA date)?      |
|                              |     There was also the question of    |
|                              |     why two different formulas were   |
|                              |     used for 1996. It was explained   |
|                              |     that some PHAs had units off      |
|                              |     line, and you have to figure out  |
|                              |     which way you do better.          |
|                              |                                       |
|                              | 5.  HUD staff noted that the draft    |
|                              |     capital rule (not yet issued as a |
|                              |     proposed rulemaking, and still in |
|                              |     internal clearance), includes     |
|                              |     this topic.                       |
|                              |                                       |
|                              | 6.  At various PHAs, some             |
|                              |     developments came on line after   |
|                              |     1996, and they may like to        |
|                              |     include this. Others said,        |
|                              |     though, that they'd do better     |
|                              |     under the 1996 formula.           |
|                              |                                       |
|                              | 7.  If you had the funds, could you   |
|                              |     go beyond the cap? The answer was |
|                              |     no, due to the statute. HUD staff |
|                              |     indicated that the draft capital  |
|                              |     rule will have the 1999 date. The |
|                              |     question was asked, could you     |
|                              |     grandfather for those who did     |
|                              |     better under the prior formula,   |
|                              |     and who may have relied on it.    |
|                              |     HUD staff couldn't say.           |
|                              |                                       |
|                              | 8.  Add the exception for mixed       |
|                              |     finance deals where they are less |
|                              |     expensive than Section 8.         |
|                              |                                       |
|                              | 9.  "However, development of such     |
|                              |     units must be approved by HUD in  |
|                              |     advance **[in                     |
|                              |     writing]{.underline}** for them   |
|                              |     to be eligible for inclusion      |
|                              |     under the ACC."                   |
+------------------------------+---------------------------------------+
| **Sec. 941.103               |                                       |
| Definitions.**               |                                       |
+------------------------------+---------------------------------------+
| [Additional Project Costs    |                                       |
| (APC)]{.underline} means the |                                       |
| sum of the following         |                                       |
| HUD-approved costs related   |                                       |
| to the development of a      |                                       |
| public housing project,      |                                       |
| which costs are not subject  |                                       |
| to the Total Development     |                                       |
| Cost limit but are included  |                                       |
| in the maximum project cost, |                                       |
| as described in Sec.         |                                       |
| 941.306:                     |                                       |
+------------------------------+---------------------------------------+
| \(1\) Demolition of, or      | Demolition costs should not be part   |
| remediation of environmental | of TDC. Not all PHAs have a cleared   |
| hazards associated with,     | site with which to work. Would        |
| public housing units that    | require a statutory change to exclude |
| will not be replaced on the  | demolition costs from TDC, although   |
| site; and                    | any extraordinary costs may be        |
|                              | excluded from TDC.                    |
| \(2\) Extraordinary site     |                                       |
| costs that have been         |                                       |
| verified by an independent   |                                       |
| registered engineer (e.g.,   |                                       |
| removal of underground       |                                       |
| utility systems, and         |                                       |
| replacement of off-site      |                                       |
| underground utility systems, |                                       |
| extensive rock and/or soil   |                                       |
| removal and replacement, and |                                       |
| amelioration of unusual site |                                       |
| conditions such as unusual   |                                       |
| slopes, terraces, water      |                                       |
| catchments, lakes, etc.)     |                                       |
+------------------------------+---------------------------------------+
| [Annual Contributions        | 1.  If placing public housing units   |
| Contract (ACC]{.underline}). |     in an FHA property, for example,  |
| A contract (in the form      |     it seems that the declaration of  |
| prescribed by HUD) for loans |     trust needs to apply to the       |
| and contributions, which may |     entire property. This is a        |
| be in the form of grants,    |     problem.                          |
| whereby HUD agrees to        |                                       |
| provide financial assistance | 2.  Need a "floating trust" specific  |
| and the PHA agrees to comply |     to just the number of units in    |
| with HUD requirements for    |     the project.                      |
| the development and          |                                       |
| operation of a public        | 3.  Should ask HUD to define a        |
| housing project.             |     declaration of trust specific to  |
|                              |     mixed-finance deals.              |
+------------------------------+---------------------------------------+
| [Community Renewal Cost      |                                       |
| (CRC)]{.underline} means the |                                       |
| sum of the following         |                                       |
| HUD-approved costs related   |                                       |
| to the development of a      |                                       |
| public housing project:      |                                       |
| planning (including proposal |                                       |
| preparation),                |                                       |
| administration, site         |                                       |
| acquisition, relocation,     |                                       |
| demolition of, and site      |                                       |
| remediation of environmental |                                       |
| hazards associated with,     |                                       |
| public housing units that    |                                       |
| will be replaced on the      |                                       |
| project site, interest and   |                                       |
| carrying charges, off-site   |                                       |
| facilities, community        |                                       |
| buildings and non-dwelling   |                                       |
| facilities, contingency      |                                       |
| allowance, insurance         |                                       |
| premiums, any initial        |                                       |
| operating deficit, on-site   |                                       |
| streets, on-site utilities,  |                                       |
| and other costs necessary to |                                       |
| develop the project that are |                                       |
| not covered under APC or     |                                       |
| Housing Construction Cost.   |                                       |
+------------------------------+---------------------------------------+
| [Construction                |                                       |
| Contract]{.underline}. A     |                                       |
| contract between the PHA and |                                       |
| a contractor to build or     |                                       |
| rehabilitate a project using |                                       |
| the conventional development |                                       |
| method.                      |                                       |
+------------------------------+---------------------------------------+
| [Construction                |                                       |
| documents.]{.underline} The  |                                       |
| working drawings and         |                                       |
| construction specifications  |                                       |
| and the rehabilitation work  |                                       |
| write-ups, where applicable, |                                       |
| that set forth the work to   |                                       |
| be done under a construction |                                       |
| contract or contract of      |                                       |
| sale.                        |                                       |
+------------------------------+---------------------------------------+
| [Contract of                 |                                       |
| sale.]{.underline} A         |                                       |
| contract between the PHA and |                                       |
| a developer whereby the PHA  |                                       |
| agrees to purchase a         |                                       |
| completed project after      |                                       |
| construction or              |                                       |
| rehabilitation by a          |                                       |
| developer using the turnkey  |                                       |
| development method.          |                                       |
+------------------------------+---------------------------------------+
| [Cooperation                 | "An agreement between a PHA and the   |
| Agreement]{.underline}. An   | applicable local governing body or    |
| agreement between a PHA and  | bodies which assures exemption from   |
| the applicable local         | real and personal property taxes,     |
| governing body or bodies     | provides for **[equal]{.underline}**  |
| which assures exemption from | local support..."                     |
| real and personal property   |                                       |
| taxes, provides for local    |                                       |
| support and services for the |                                       |
| development and operation of |                                       |
| a public housing project,    |                                       |
| and provides for PHA         |                                       |
| payments in lieu of taxes.   |                                       |
+------------------------------+---------------------------------------+
| [Design                      | Hasn't HUD eliminated the minimum     |
| documents.]{.underline} The  | construction standards?               |
| preliminary drawings and     |                                       |
| specifications and the       |                                       |
| preliminary rehabilitation   |                                       |
| work write-ups, where        |                                       |
| applicable, in sufficient    |                                       |
| detail to define the extent  |                                       |
| of construction or           |                                       |
| rehabilitation and           |                                       |
| demonstrate compliance with  |                                       |
| HUD design and construction  |                                       |
| standards.                   |                                       |
+------------------------------+---------------------------------------+
| [Housing Construction Cost   | Other regs impose Davis-Bacon         |
| (HCC)]{.underline} means the | requirements.                         |
| sum of the following         |                                       |
| HUD-approved costs related   |                                       |
| to the development of a      |                                       |
| public housing project:      |                                       |
| dwelling unit hard costs     |                                       |
| (including construction and  |                                       |
| equipment); builder\'s       |                                       |
| overhead and profit; the     |                                       |
| cost of extending utilities  |                                       |
| from the street to the       |                                       |
| public housing project;      |                                       |
| finish landscaping; and the  |                                       |
| payment of Davis-Bacon wage  |                                       |
| rates.                       |                                       |
+------------------------------+---------------------------------------+
| [Proposal]{.underline}. A    |                                       |
| document submitted by a PHA  |                                       |
| to HUD, in accordance with   |                                       |
| subpart C of this part, for  |                                       |
| approval of the development  |                                       |
| of a public housing project. |                                       |
| As used in this part,        |                                       |
| "proposal\'\' refers to both |                                       |
| the "site acquisition        |                                       |
| proposal\'\' (Sec. 941.303), |                                       |
| and the "full proposal\'\'   |                                       |
| (Sec. 941.304), unless       |                                       |
| specifically indicated       |                                       |
| otherwise.                   |                                       |
+------------------------------+---------------------------------------+
| [Public housing capital      |                                       |
| assistance]{.underline}      |                                       |
| means assistance provided by |                                       |
| HUD under the Act or the     |                                       |
| HOPE VI program in           |                                       |
| connection with the          |                                       |
| development of public        |                                       |
| housing under this part,     |                                       |
| including: Capital Fund      |                                       |
| assistance provided under    |                                       |
| section 9(d) of the Act,     |                                       |
| public housing development   |                                       |
| assistance provided under    |                                       |
| section 5 of the Act,        |                                       |
| Operating Fund assistance    |                                       |
| used for capital purposes    |                                       |
| under section 9(g)(1) or     |                                       |
| (g)(2) of the Act, and HOPE  |                                       |
| VI grant assistance.         |                                       |
+------------------------------+---------------------------------------+
| [Reformulation.]{.underline} | How do AMPs play into this            |
| The procedure by which HUD   | definition?                           |
| approves division of a       |                                       |
| project (including units and |                                       |
| related funds) into two or   |                                       |
| more projects, or combining  |                                       |
| two or more projects into    |                                       |
| one, or redistributing units |                                       |
| and related funds in a       |                                       |
| project among two or more    |                                       |
| projects, in order to        |                                       |
| provide PHAs with the        |                                       |
| flexibility to adapt to site |                                       |
| availability, to resolve     |                                       |
| development problems, to     |                                       |
| acquire buildings ready for  |                                       |
| development (before          |                                       |
| acquisition of other         |                                       |
| buildings), and to save on   |                                       |
| interest and initial         |                                       |
| operating costs.             |                                       |
+------------------------------+---------------------------------------+
| [Total Development Cost      | 1.  Where does the developers' fee    |
| (TDC) limit]{.underline}.    |     fit under the definitions, since  |
| The maximum amount of public |     it isn't part of "housing         |
| housing capital assistance   |     construction cost (HCC). Several  |
| that can be used to pay for  |     indicated that it would be        |
| Housing Construction Costs   |     included in the total development |
| and community Renewal Costs  |     cost (TDC), but not in the HCC,   |
| in connection with the       |     as HCC is considered hard costs.  |
| development of a public      |     TDC? Definition should be         |
| housing project, as          |     included in regs.                 |
| determined under Sec.        |                                       |
| 941.306(b)(2). The TDC limit | 2.  In some cases, the safe harbor    |
| does not apply to Additional |     provisions in the HUD rules were  |
| Project Costs \*.            |     better than what might be under a |
|                              |     state's qualified allocation      |
|                              |     plan---thus, HUD safe harbors     |
|                              |     discuss a 9-12% developer fee,    |
|                              |     where the state's QAP would allow |
|                              |     15%. This may give PHAs some      |
|                              |     leverage to push back with        |
|                              |     developers.                       |
|                              |                                       |
|                              | 3.  Slight disagreement in that safe  |
|                              |     harbor rules should also be       |
|                              |     enforced by HUD, as they can be   |
|                              |     beneficial to PHAs, particularly  |
|                              |     with regard to developer fees.    |
|                              |                                       |
|                              | 4.  The costs of environmental        |
|                              |     remediation (discussed in         |
|                              |     "additional project costs") would |
|                              |     appear to discriminate between    |
|                              |     PHAs that had cleared sites       |
|                              |     already available for development |
|                              |     and those that did not. If the    |
|                              |     PHA were replacing housing on the |
|                              |     site, it would have to pay for    |
|                              |     this, but if it wasn't, it        |
|                              |     wouldn't. Would it be possible to |
|                              |     simply say that                   |
|                              |     demolition-related costs weren't  |
|                              |     part of TDC?                      |
|                              |                                       |
|                              | 5.  HUD staff advised that when the   |
|                              |     TDC was developed, demolition     |
|                              |     costs were part of it, and that   |
|                              |     this was in the statute, and will |
|                              |     provide the reference.            |
|                              |     Additionally, PHAs can identify   |
|                              |     extraordinary costs which would   |
|                              |     not be included in the TDC.       |
|                              |                                       |
|                              | 6.  \* add:"...or amounts paid with   |
|                              |     other than public housing funds." |
+------------------------------+---------------------------------------+
| **Subpart B---PHA            |                                       |
| Eligibility and Program      |                                       |
| Requirements**               |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.201 PHA           |                                       |
| eligibility**                |                                       |
+------------------------------+---------------------------------------+
| \(a\) [General]{.underline}. |                                       |
| In order to participate in   |                                       |
| the public housing program,  |                                       |
| a PHA must be approved as an |                                       |
| eligible PHA. HUD will       |                                       |
| determine eligibility based  |                                       |
| on a showing that the PHA    |                                       |
| has the legal authority and  |                                       |
| local cooperation required   |                                       |
| by this part.                |                                       |
+------------------------------+---------------------------------------+
| \(b\) [Legal                 | How is this done?                     |
| authority]{.underline}. The  |                                       |
| PHA must demonstrate that it |                                       |
| has the legal authority to   |                                       |
| develop, own, and operate a  |                                       |
| public housing project under |                                       |
| the Act.                     |                                       |
+------------------------------+---------------------------------------+
| \(c\) [Troubled              | 1.  Will modernization/troubled       |
| PHAs]{.underline}. Unless    |     definition change? (Yes).         |
| HUD determines that a PHA    |                                       |
| that has been classified as  | 2.  Will references here to PHMAP be  |
| troubled or                  |     eliminated because it's been      |
| modernization-troubled, in   |     replaced? HUD said yes, this will |
| accordance with 24 CFR part  |     disappear in final version        |
| 901\* , has adequate         |                                       |
| capacity to develop public   | 3.  \* Should be "90**2**".           |
| housing units, the PHA so    |                                       |
| classified shall engage a    |                                       |
| HUD-approved program manager |                                       |
| to develop and implement the |                                       |
| PHA\'s proposal. HUD shall   |                                       |
| review the solicitation and  |                                       |
| the selection before award   |                                       |
| of a contract is made by     |                                       |
| such a PHA.                  |                                       |
+------------------------------+---------------------------------------+
| \(d\) [Local                 | 1.  [It was noted that some PHAs      |
| cooperation]{.underline}.    |     would form a limited liability    |
| The PHA must provide a       |     corporation (LLC) to get 9% tax   |
| cooperation agreement        |     credits, and they might lose a    |
| between the PHA and the      |     tax exemption. HUD staff noted    |
| applicable local governing   |     that there is a QHWRA provision   |
| body for the area in which   |     on alternatives to keep tax       |
| the public housing project   |     exemption \[they'd locate where   |
| is to be located as evidence |     this is\]; Mac noted that 42 USC  |
| that the local governing     |     1437d(d) also has some language   |
| body will provide the local  |     which is relevant]{.mark}.        |
| cooperation required by HUD  |                                       |
| pursuant to the Act. This    | 2.  QHWRA permits mixed-finance deals |
| local cooperation shall      |     to use public housing resources   |
| include exemption from real  |     and pay property taxes as long as |
| and personal property taxes, |     the property is consistent with   |
| acceptance of PHA payments   |     the PHA plan                      |
| in lieu of taxes, and the    |                                       |
| provision at no cost or at   | 3.  1437(d)(d) addresses property     |
| no greater cost by the local |     taxation                          |
| governing body of the same   |                                       |
| public services and          |                                       |
| facilities normally          |                                       |
| furnished to others in the   |                                       |
| community.                   |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.202 Site and      |                                       |
| neighborhood standards.**    |                                       |
+------------------------------+---------------------------------------+
| Proposed sites for public    | 1.  Inconsistencies with demo/dispo?  |
| housing projects to be newly |                                       |
| constructed or rehabilitated | 2.  In North Carolina, the HFA had    |
| must be approved by the      |     neighborhood siting criteria that |
| field office as meeting the  |     were even more stringent than     |
| following standards:         |     HUD---won't let you build where   |
|                              |     there's concentrated poverty, or  |
|                              |     where the may be a question of    |
|                              |     local services. Don't know if     |
|                              |     that's the case in other states.  |
|                              |                                       |
|                              | 3.  Perhaps HUD could have a process  |
|                              |     whereby it would certify that if  |
|                              |     an HFA's site and neighborhood    |
|                              |     approval process was as good as   |
|                              |     HUD's, it could defer to this,    |
|                              |     but if not, usual rules would     |
|                              |     apply. HUD may not trust certain  |
|                              |     approval processes based on past  |
|                              |     experience with a HFA.            |
|                              |                                       |
|                              | 4.  Might be good to have HUD work    |
|                              |     with states to certify that a     |
|                              |     particular state's neighborhood   |
|                              |     standards are equal to or better  |
|                              |     than HUD's and can serve as a     |
|                              |     proxy for HUD's.                  |
|                              |                                       |
|                              | 5.  Only suggested this for mixed     |
|                              |     finance, where there would be an  |
|                              |     expectation of other layers of    |
|                              |     review; not familiar with what    |
|                              |     might happen for the other        |
|                              |     methods of development. Question  |
|                              |     was whether someone else was in   |
|                              |     the deal who had an equally       |
|                              |     strong interest in making sure it |
|                              |     was a good real estate deal.      |
|                              |                                       |
|                              | 6.  Limitations on siting are         |
|                              |     fair-housing related, and asked   |
|                              |     if there was any inconsistency    |
|                              |     between what was here and in the  |
|                              |     demo/disposition regulations.     |
|                              |     Satinder said no. Several people  |
|                              |     asked what would happen if the    |
|                              |     one-for-one replacement           |
|                              |     requirements came back, as        |
|                              |     proposed in Congress for HOPE VI  |
|                              |     amendments, where they didn't     |
|                              |     have adequate land elsewhere, and |
|                              |     needed to rebuild on site.        |
|                              |     (Several people didn't appear to  |
|                              |     realize the limitations that this |
|                              |     regulation would place on such    |
|                              |     rebuilding.) Mac asked if there   |
|                              |     was any definition of the term    |
|                              |     "racially mixed", and HUD staff   |
|                              |     said this is something FHEO would |
|                              |     have to answer.                   |
|                              |                                       |
|                              | 7.  Why not require proper zoning for |
|                              |     what is proposed?                 |
+------------------------------+---------------------------------------+
| \(a\) The site must be       |                                       |
| adequate in size, exposure   |                                       |
| and contour to accommodate   |                                       |
| the number and type of units |                                       |
| proposed, and adequate       |                                       |
| utilities (e.g., water,      |                                       |
| sewer, gas and electricity)  |                                       |
| and streets must be          |                                       |
| available to service the     |                                       |
| site.                        |                                       |
+------------------------------+---------------------------------------+
| \(b\) The site and           | \* Add: "...as demonstrated by a      |
| neighborhood must be         | letter from the jurisdiction's chief  |
| suitable from the standpoint | elected official certifying to this   |
| of facilitating and          | factor"                               |
| furthering full compliance   |                                       |
| with the applicable          |                                       |
| provisions of Title VI of    |                                       |
| the Civil Rights Act of      |                                       |
| 1964, Title VIII of the      |                                       |
| Civil Rights Act of 1968,    |                                       |
| E.O. 11063, and HUD          |                                       |
| regulations issued pursuant  |                                       |
| thereto. \*                  |                                       |
+------------------------------+---------------------------------------+
| (c)(1)The site for new       |                                       |
| construction projects must   |                                       |
| not be located in:           |                                       |
+------------------------------+---------------------------------------+
| (i)An area of minority       | Delete these sections.                |
| concentration unless (A)     |                                       |
| sufficient, comparable       |                                       |
| opportunities exist for      |                                       |
| housing for minority         |                                       |
| families, in the income      |                                       |
| range to be served by the    |                                       |
| proposed project, outside    |                                       |
| areas of minority            |                                       |
| concentration, or            |                                       |
|                              |                                       |
| \(B\) the project is         |                                       |
| necessary to meet overriding |                                       |
| housing needs which cannot   |                                       |
| otherwise feasibly be met in |                                       |
| that housing market area. An |                                       |
| "overriding need\'\' may not |                                       |
| serve as the basis for       |                                       |
| determining that a site is   |                                       |
| acceptable if the only       |                                       |
| reason the need cannot       |                                       |
| otherwise feasibly be met is |                                       |
| that discrimination on the   |                                       |
| basis of race, color,        |                                       |
| religion, creed, sex, or     |                                       |
| national origin renders      |                                       |
| sites outside areas of       |                                       |
| minority concentration       |                                       |
| unavailable; or              |                                       |
+------------------------------+---------------------------------------+
| (ii)A racially mixed area if | Need to define term "racially mixed." |
| the project will cause a     | A task for FHEO.                      |
| significant increase in the  |                                       |
| proportion of minority to    |                                       |
| non-minority residents in    |                                       |
| the area.                    |                                       |
+------------------------------+---------------------------------------+
| \(2\) Notwithstanding any    | Delete.                               |
| other provision of this      |                                       |
| paragraph (c), public        |                                       |
| housing units constructed    |                                       |
| after demolition of public   |                                       |
| housing units may be built   |                                       |
| on the original public       |                                       |
| housing site, or in the same |                                       |
| neighborhood, if one of the  |                                       |
| following criteria is        |                                       |
| satisfied:                   |                                       |
+------------------------------+---------------------------------------+
| \(i\) The number of public   | 1.  There is concern about what       |
| housing units being          |     happens if/when one-for-one       |
| constructed is no more than  |     replacement comes back, as is     |
| 50 percent of the number of  |     expected on the legislative       |
| units in the original        |     front.                            |
| project;                     |                                       |
|                              | 2.  Delete.                           |
+------------------------------+---------------------------------------+
| \(ii\) In the case of        | Delete                                |
| replacement of a currently   |                                       |
| occupied project, the number |                                       |
| of public housing units      |                                       |
| being constructed is the     |                                       |
| minimum number needed to     |                                       |
| house current residents who  |                                       |
| want to remain at the site;  |                                       |
| or                           |                                       |
+------------------------------+---------------------------------------+
| \(iii\) The public housing   | Delete                                |
| units being constructed      |                                       |
| constitute no more than      |                                       |
| twenty-five units.           |                                       |
+------------------------------+---------------------------------------+
| \(d\) The site must\*        | \* Change "must" to "should".         |
| promote greater choice of    |                                       |
| housing opportunities and    | Delete:                               |
| avoid undue concentration of |                                       |
| assisted persons in areas    |                                       |
| containing a high proportion |                                       |
| of low-income persons.       |                                       |
+------------------------------+---------------------------------------+
| \(e\) The site must be free  | Add: "...as demonstrated in the       |
| from adverse environmental   | letter from the jurisdiction's chief  |
| conditions, natural or       | elected official certifying to this   |
| manmade, such as             | factor."                              |
| instability, flooding,       |                                       |
| septic tank back-ups, sewage |                                       |
| hazards or mudslides;        |                                       |
| harmful air pollution, smoke |                                       |
| or dust; excessive noise     |                                       |
| vibration, vehicular         |                                       |
| traffic, rodent or vermin    |                                       |
| infestation; or fire         |                                       |
| hazards. The neighborhood    |                                       |
| must not be one which is     |                                       |
| seriously detrimental to     |                                       |
| family life or in which      |                                       |
| substandard dwellings or     |                                       |
| other undesirable elements   |                                       |
| predominate, unless there is |                                       |
| actively in progress a       |                                       |
| concerted program to remedy  |                                       |
| the undesirable conditions.  |                                       |
+------------------------------+---------------------------------------+
| \(f\) The site must comply   | Delete.                               |
| with any applicable          |                                       |
| conditions in the local plan |                                       |
| approved by HUD.             |                                       |
+------------------------------+---------------------------------------+
| \(g\) The housing must be    | 1.  Too vague                         |
| accessible to social,        |                                       |
| recreational, educational,   | 2.  Add: ..."as demonstrated in the   |
| commercial, and health       |     letter from the jurisdiction's    |
| facilities and services, and |     chief elected official certifying |
| other municipal facilities   |     to this factor."                  |
| and services that are at     |                                       |
| least equivalent to those    |                                       |
| typically found in           |                                       |
| neighborhoods consisting     |                                       |
| largely of similar           |                                       |
| unassisted standard housing. |                                       |
+------------------------------+---------------------------------------+
| \(h\) Travel time and cost   | \*Add: "...as demonstrated in the     |
| via public transportation or | letter from the jurisdiction's chief  |
| private automobile, from the | elected official certifying to this   |
| neighborhood to places of    | factor"                               |
| employment providing a range |                                       |
| of jobs for low-income       |                                       |
| workers, must not be         |                                       |
| excessive \*. (While it is   |                                       |
| important that elderly       |                                       |
| housing not be totally       |                                       |
| isolated from employment     |                                       |
| opportunities, this          |                                       |
| requirement need not be      |                                       |
| adhered to rigidly for such  |                                       |
| projects.)                   |                                       |
+------------------------------+---------------------------------------+
| \(i\) The project may not be |                                       |
| built on a site that has     |                                       |
| occupants unless the         |                                       |
| relocation requirements      |                                       |
| referred to in Sec. 941.207  |                                       |
| are met.                     |                                       |
+------------------------------+---------------------------------------+
| \(j\) The project may not be | Delete "HUD standards"                |
| built in an area that has    |                                       |
| been identified by HUD as    |                                       |
| having special flood hazards |                                       |
| and in which the sale of     |                                       |
| flood insurance has been     |                                       |
| made available under the     |                                       |
| National Flood Insurance Act |                                       |
| of 1968, unless the project  |                                       |
| is covered by flood          |                                       |
| insurance as required by the |                                       |
| Flood Disaster Protection    |                                       |
| Act of 1973, and it meets    |                                       |
| any relevant HUD standards   |                                       |
| and local requirements.      |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.203 Design and    |                                       |
| construction standards.**    |                                       |
+------------------------------+---------------------------------------+
| \(a\) Physical structures    | 1.  "...shall strive to encourage..." |
| shall be designed,           |     is not a mandatory requirement;   |
| constructed and equipped so  |     suggestive, maybe additional      |
| as to improve or harmonize   |     points for achieving a design     |
| with the neighborhoods they  |     that accomplishes this.           |
| occupy, meet contemporary    |                                       |
| standards of modest comfort  | 2.  On 941.203(a), question arose as  |
| and livability, promote      |     to what "encourage in residents a |
| security, and be attractive  |     proprietary sense" meant. HUD     |
| and marketable to the people |     staff said the idea was           |
| they are intended to serve.  |     defensible space. Is visitability |
| Building design and          |     was an element of this; HUD staff |
| construction shall strive to |     indicated that was encouraged but |
| encourage in residents a     |     not a requirement.                |
| proprietary sense, whether   |                                       |
| or not homeownership is      | 3.  On 941.207,(b) and (e)(2), the    |
| intended or contemplated.    |     citations needed to be updated:   |
|                              |     24 CFR Part 913 no longer exists, |
|                              |     and the portion of 24 CFR Part    |
|                              |     960 referenced was no longer      |
|                              |     accurate. It was also worth       |
|                              |     looking at 941.207(c) to see if   |
|                              |     this is still accurate, since     |
|                              |     there have been URA-related       |
|                              |     changes and this was last revised |
|                              |     in 1994.                          |
|                              |                                       |
|                              | 4.  It was noted that 941.207(b)      |
|                              |     applies to situations where       |
|                              |     tenants were moving out and       |
|                              |     moving back in.                   |
|                              |                                       |
|                              | 5.  It was noted that where CDBG or   |
|                              |     HOME funding was also used, they  |
|                              |     might have additional             |
|                              |     requirements for relocation and   |
|                              |     replacement, and should be        |
|                              |     cross-referenced; might be ways   |
|                              |     to avoid duplicate review         |
|                              |     processes.                        |
|                              |                                       |
|                              | 6.  Someone asked if URA applied to   |
|                              |     HOPE VI; HUD said no, but there   |
|                              |     was a lot more tracking that      |
|                              |     would be involved under HOPE VI.  |
|                              |                                       |
|                              | 7.  In jurisdictions that grant       |
|                              |     building permits, receipt of the  |
|                              |     permit shall demonstrate that     |
|                              |     this standard has been met.       |
+------------------------------+---------------------------------------+
| \(b\) Projects must comply   |                                       |
| with:                        |                                       |
|                              |                                       |
| \(1\) A national building    |                                       |
| code, such as Uniform        |                                       |
| Building Code, Council of    |                                       |
| American Building Officials  |                                       |
| Code, or Building Officials  |                                       |
| Conference of America Code;  |                                       |
+------------------------------+---------------------------------------+
| \(2\) Applicable State and   |                                       |
| local laws, codes,           |                                       |
| ordinances, and regulations; |                                       |
| and                          |                                       |
+------------------------------+---------------------------------------+
| \(3\) Other Federal          | Delete                                |
| requirements, including any  |                                       |
| Federal fire-safety          |                                       |
| requirements and HUD minimum |                                       |
| property standards (e.g., 24 |                                       |
| CFR part 200, subpart S, and |                                       |
| Sec. 941.208).               |                                       |
+------------------------------+---------------------------------------+
| \(c\) Projects for families  | 1.  Questions arose regarding both    |
| with children shall consist  |     941.203(c) and (d). It was noted  |
| to the maximum extent        |     that the restriction on elevators |
| practicable of low-density   |     for family public housing came    |
| housing (e.g., non-elevator  |     from 42 USC 1437d(a), but that    |
| structures, scattered sites  |     there might be cases where        |
| or other types of            |     density was part of a local       |
| low-density developments     |     affordable housing development    |
| appropriate in the           |     strategy, such as smart growth    |
| community).                  |     near a transportation hub, and    |
|                              |     that 203(c) should be looked at   |
|                              |     separately.                       |
|                              |                                       |
|                              | 2.  In response to the question of    |
|                              |     which office would determine if   |
|                              |     there was a "practical            |
|                              |     alternative" to a high-rise       |
|                              |     elevator building, HUD staff      |
|                              |     indicated this would be by DC,    |
|                              |     rather than the Field Office.     |
|                              |                                       |
|                              | 3.  It was suggested that the issues  |
|                              |     of lower density and              |
|                              |     deconcentration of poverty were   |
|                              |     two separate issues, and they     |
|                              |     should be broken apart. The PBV   |
|                              |     regulations should be looked at   |
|                              |     to see if there had been any      |
|                              |     useful consideration of these     |
|                              |     issues.                           |
|                              |                                       |
|                              | 4.  On the 2^nd^ sentence of          |
|                              |     941.203(d), why it should be      |
|                              |     necessary to provide all this     |
|                              |     documentation for elderly         |
|                              |     buildings to have elevators. HUD  |
|                              |     staff noted it was appropriate to |
|                              |     consider emergency evacuation     |
|                              |     issues for the elderly.           |
+------------------------------+---------------------------------------+
| \(d\) High-rise elevator     | 1.  In large cities, if a PHA can't   |
| structures shall not be      |     put a parent with one child in an |
| provided for families with   |     elevator building, it would have  |
| children regardless of       |     to go way out to the suburbs,     |
| density, unless the PHA      |     away from public transit, to      |
| demonstrates and HUD         |     avoid an elevator building. This  |
| determines that there is no  |     standard generally conflicts with |
| practical alternative.       |     density standards, Smart Growth,  |
| High-rise buildings for the  |     etc.                              |
| elderly may be used if the   |                                       |
| PHA demonstrates and HUD     | 2.  Statutory language on this at     |
| determines that such         |     1437(d)(a) --- "no practical      |
| construction is appropriate, |     alternative" is in the statute    |
| taking into consideration    |                                       |
| land costs, the safety and   | 3.  There is a difference between     |
| security of the prospective  |     low-density and deconcentration   |
| occupants, and the           |     of poverty. Need to "unmuddle"    |
| availability of community    |     the concepts. Project-based       |
| services.                    |     voucher regs address this issue   |
|                              |     (recent SEVRA amendments).        |
+------------------------------+---------------------------------------+
| **Sec. 941.205 PHA           |                                       |
| contracts.**                 |                                       |
+------------------------------+---------------------------------------+
| \(a\) ACC requirements. In   | 1.  HUD approvals might be different  |
| order to be considered as    |     if a PHA was a poor performer or  |
| eligible project expenses,   |     troubled. Several people said     |
| all development related      |     that HUD approval shouldn't be    |
| contracts entered into by    |     necessary if there is no HUD      |
| the PHA shall provide for    |     money involved; HUD staff         |
| compliance with the          |     responded that this whole section |
| provisions of the ACC.       |     applied to a development method   |
|                              |     for public housing (although some |
|                              |     sections also apply to subpart    |
|                              |     F).                               |
+------------------------------+---------------------------------------+
| \(b\) Contract forms. HUD    |                                       |
| may prescribe the form of    |                                       |
| any development related      |                                       |
| contracts, and the PHA shall |                                       |
| use such forms. If a form is |                                       |
| not prescribed, the PHA may  |                                       |
| develop its own form;        |                                       |
| however, it must contain all |                                       |
| applicable federal           |                                       |
| requirements.                |                                       |
+------------------------------+---------------------------------------+
| \(c\) When HUD approval is   | The acquisition itself may not        |
| required. The PHA is         | involve HUD money; why should HUD     |
| authorized to execute all    | approval be required? Acquisitions    |
| development-related          | are not subject to the unit limit set |
| contracts without prior HUD  | out in 941.102(c)(1).                 |
| review or approval with the  |                                       |
| exception of:                |                                       |
|                              |                                       |
| > \(1\) All forms of site or |                                       |
| > property acquisition       |                                       |
| > contracts regardless of    |                                       |
| > development method; and    |                                       |
+------------------------------+---------------------------------------+
| \(2\) Contracts whose amount | 1.  Threshold is established for poor |
| exceeds a contract approval  |     performers, troubled properties,  |
| threshold established by HUD |     or where field office or HUD is   |
| for that PHA; and            |     concerned about the capability of |
|                              |     such actors.                      |
|                              |                                       |
|                              | 2.  Why is a Program Manager approval |
|                              |     required and not a developer?     |
+------------------------------+---------------------------------------+
| \(3\) A contract for the     | Delete                                |
| selection of a program       |                                       |
| manager to develop and       |                                       |
| implement the PHA\'s         |                                       |
| proposal (see Sec.           |                                       |
| 941.201(c)).                 |                                       |
+------------------------------+---------------------------------------+
| \(d\) Each PHA shall certify | Isn't this a left over FHA reg?       |
| before executing any         |                                       |
| contract with a contractor   |                                       |
| that the contractor is not   |                                       |
| suspended, debarred, or      |                                       |
| otherwise ineligible under   |                                       |
| 24 CFR part 24. The PHA also |                                       |
| shall ensure that all        |                                       |
| subgrantees, contractors,    |                                       |
| and subcontractors select    |                                       |
| only contractors who are not |                                       |
| listed as suspended,         |                                       |
| debarred, or otherwise       |                                       |
| ineligible under 24 CFR part |                                       |
| 24.                          |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.207 Displacement, |                                       |
| relocation, and              |                                       |
| acquisition.**               |                                       |
+------------------------------+---------------------------------------+
| \(a\) Minimizing             |                                       |
| displacement. Consistent     |                                       |
| with the other goals and     |                                       |
| objectives of this part, the |                                       |
| PHA shall assure that it has |                                       |
| taken all reasonable steps   |                                       |
| to minimize the displacement |                                       |
| of persons (households,      |                                       |
| businesses, nonprofit        |                                       |
| organizations, and farms) as |                                       |
| a result of a project        |                                       |
| assisted under this part.    |                                       |
+------------------------------+---------------------------------------+
| \(b\) Temporary relocation.  | There are some outmoded references to |
| Only residential tenants who | 913 (no longer exists as a            |
| are eligible under 24 CFR    | regulation) and 960.204, which has    |
| 913.103 and who meet the PHA | been changed to 960.203.              |
| standards for tenancy        |                                       |
| established pursuant to 24   | Reimbursement for moving people out   |
| CFR 960.204 will be          | and back in? Yes. Sometimes those who |
| permitted to continue in     | come back are less than projected,    |
| occupancy. Any residential   | which creates an "interesting" budget |
| tenant who (though not       | line item.                            |
| required to move             |                                       |
| permanently) must relocate   | Can we streamline with other          |
| temporarily (e.g., to permit | requirements (CDBG, for example)      |
| rehabilitation or major      | related to relocation? HOME funds     |
| reconstruction) shall be     | require one-for-one replacement.      |
| provided:                    |                                       |
|                              | HOPE VI deals have exemption from     |
| > \(1\) Reimbursement for    | URA? The deals require more tracking, |
| > all reasonable             | in any case.                          |
| > out-of-pocket expenses     |                                       |
| > incurred in connection     |                                       |
| > with the temporary         |                                       |
| > relocation, including the  |                                       |
| > cost of moving to and from |                                       |
| > the temporary housing, any |                                       |
| > increase in monthly        |                                       |
| > rent/utility costs and     |                                       |
| > incidental expenses        |                                       |
+------------------------------+---------------------------------------+
| \(2\) Appropriate advisory   |                                       |
| services, including          |                                       |
| reasonable advance written   |                                       |
| notice of:                   |                                       |
+------------------------------+---------------------------------------+
| (i) The date and approximate |                                       |
|     duration of the          |                                       |
|     temporary relocation;    |                                       |
+------------------------------+---------------------------------------+
| (ii) The location of the     |                                       |
|      suitable, decent, safe  |                                       |
|      and sanitary housing to |                                       |
|      be made available for   |                                       |
|      the temporary period;   |                                       |
+------------------------------+---------------------------------------+
| (iii) The terms and          |                                       |
|       conditions under which |                                       |
|       the tenant may lease   |                                       |
|       and occupy a suitable, |                                       |
|       decent, safe, and      |                                       |
|       sanitary dwelling in   |                                       |
|       the building/complex   |                                       |
|       following completion   |                                       |
|       of the project; and    |                                       |
+------------------------------+---------------------------------------+
| (iv) The provisions of       |                                       |
|      paragraph (b)(1) of     |                                       |
|      this section.           |                                       |
+------------------------------+---------------------------------------+
| \(c\) Relocation assistance  | May not be completely up-to-date.     |
| for displaced persons. A     |                                       |
| "displaced person\'\'        |                                       |
| (defined in paragraph (h) of |                                       |
| this section) must be        |                                       |
| provided relocation          |                                       |
| assistance at the levels     |                                       |
| described in, and in         |                                       |
| accordance with the          |                                       |
| requirements of, the Uniform |                                       |
| Relocation Assistance and    |                                       |
| Real Property Acquisition    |                                       |
| Policies Act of 1970, as     |                                       |
| amended (URA) (42 U.S.C.     |                                       |
| 4601-4655) and implementing  |                                       |
| regulations at 49 CFR part   |                                       |
| 24. A "displaced person\'\'  |                                       |
| shall be advised of his/her  |                                       |
| rights under the Fair        |                                       |
| Housing Act (42 U.S.C.       |                                       |
| 3601-19), and, if the        |                                       |
| representative comparable    |                                       |
| replacement dwelling used to |                                       |
| establish the amount of the  |                                       |
| replacement housing payment  |                                       |
| to be provided to a minority |                                       |
| person is located in an area |                                       |
| of minority concentration,   |                                       |
| such person also shall be    |                                       |
| given, if possible,          |                                       |
| referrals to comparable and  |                                       |
| suitable, decent, safe, and  |                                       |
| sanitary replacement         |                                       |
| dwellings not located in     |                                       |
| such areas.                  |                                       |
+------------------------------+---------------------------------------+
| \(d\) Real property          |                                       |
| acquisition requirements.    |                                       |
| The acquisition of real      |                                       |
| property for a project is    |                                       |
| subject to the URA and the   |                                       |
| requirements in 49 CFR part  |                                       |
| 24, subpart B. With respect  |                                       |
| to the Turnkey method of     |                                       |
| development (see 24 CFR      |                                       |
| 941.102(b)), 49 CFR          |                                       |
| 24.101(a) (1) and (2) apply  |                                       |
| to the PHA/developer and     |                                       |
| developer/owner              |                                       |
| transactions, respectively.  |                                       |
+------------------------------+---------------------------------------+
| \(e\) Notices.               |                                       |
|                              |                                       |
| \(1\) As soon as possible    |                                       |
| after the date described in  |                                       |
| paragraph (h)(1)(i) of this  |                                       |
| section, the PHA shall issue |                                       |
| a general information notice |                                       |
| (described in 49 CFR         |                                       |
| 24.203(a)) to each occupant  |                                       |
| of the property.             |                                       |
+------------------------------+---------------------------------------+
| \(2\) At the time of the     |                                       |
| initiation of negotiations   |                                       |
| (defined in paragraph (i) of |                                       |
| this section), the PHA shall |                                       |
| issue an appropriate written |                                       |
| notice to each person        |                                       |
| occupying the property.      |                                       |
| Those to be displaced shall  |                                       |
| be issued a notice of        |                                       |
| eligibility for relocation   |                                       |
| assistance. (This notice may |                                       |
| be combined with the 90-day  |                                       |
| notice under 49 CFR          |                                       |
| 24.203(c).) Tenants          |                                       |
| (eligible under 24 CFR       |                                       |
| 913.103 and the standards    |                                       |
| for tenancy established in   |                                       |
| accordance with 24 CFR       |                                       |
| 960.204) who will not be     |                                       |
| displaced shall be issued a  |                                       |
| notice offering the tenant   |                                       |
| the opportunity to enter     |                                       |
| into a lease to continue in  |                                       |
| occupancy of the property    |                                       |
| under reasonable terms and   |                                       |
| conditions. (Also, see       |                                       |
| paragraph (h)(1)(iii) of     |                                       |
| this section.)               |                                       |
+------------------------------+---------------------------------------+
| \(f\) Appeals. A person who  | Add: "...within xxx calendar days of  |
| disagrees with the PHA\'s    | notification of the PHA's decision"   |
| determination concerning     |                                       |
| whether the person qualifies |                                       |
| as a "displaced person,\'\'  |                                       |
| or the amount of relocation  |                                       |
| assistance for which the     |                                       |
| person is eligible, may file |                                       |
| a written appeal of that     |                                       |
| determination with the PHA.  |                                       |
| A person who is dissatisfied |                                       |
| with the PHA\'s              |                                       |
| determination on his or her  |                                       |
| appeal may submit a written  |                                       |
| request for review of that   |                                       |
| determination to the HUD     |                                       |
| Field Office.                |                                       |
+------------------------------+---------------------------------------+
| \(g\) Responsibility of PHA. |                                       |
|                              |                                       |
| > \(1\) The PHA shall        |                                       |
| > certify (i.e., provide     |                                       |
| > assurance of compliance,   |                                       |
| > as required by 49 CFR part |                                       |
| > 24) that it will comply    |                                       |
| > with the URA, the          |                                       |
| > regulations at 49 CFR part |                                       |
| > 24, and the requirements   |                                       |
| > of this section, and shall |                                       |
| > ensure such compliance     |                                       |
| > notwithstanding any third  |                                       |
| > party\'s contractual       |                                       |
| > obligation to the PHA to   |                                       |
| > comply. The certification  |                                       |
| > in the PHA\'s "Resolution  |                                       |
| > in Support of Public       |                                       |
| > Housing Project\'\' that   |                                       |
| > the PHA will comply with   |                                       |
| > all the requirements of 24 |                                       |
| > CFR part 941 shall         |                                       |
| > constitute the PHA\'s      |                                       |
| > certification of           |                                       |
| > compliance with the URA,   |                                       |
| > the implementing           |                                       |
| > regulations at 49 CFR part |                                       |
| > 24, and this section.      |                                       |
+------------------------------+---------------------------------------+
| \(2\) The cost of required   |                                       |
| assistance is an eligible    |                                       |
| project cost in the same     |                                       |
| manner and to the same       |                                       |
| extent as other project      |                                       |
| costs. Such costs may also   |                                       |
| be paid from funds available |                                       |
| from other sources.          |                                       |
+------------------------------+---------------------------------------+
| \(3\) The PHA must maintain  |                                       |
| records in sufficient detail |                                       |
| to demonstrate compliance    |                                       |
| with this section, including |                                       |
| data indicating the race,    |                                       |
| ethnic, gender and           |                                       |
| disability status of         |                                       |
| displaced persons.           |                                       |
+------------------------------+---------------------------------------+
| \(h\) Definition of          |                                       |
| displaced person.            |                                       |
|                              |                                       |
| > \(1\) For purposes of this |                                       |
| > section, the term          |                                       |
| > displaced person means a   |                                       |
| > person (household,         |                                       |
| > business, nonprofit        |                                       |
| > organization, or farm)     |                                       |
| > that moves from real       |                                       |
| > property, or moves         |                                       |
| > personal property from     |                                       |
| > real property,             |                                       |
| > permanently, as a direct   |                                       |
| > result of acquisition,     |                                       |
| > rehabilitation, or         |                                       |
| > demolition for a project   |                                       |
| > assisted under this part.  |                                       |
| > The term "displaced        |                                       |
| > person\'\' includes, but   |                                       |
| > may not be limited to:     |                                       |
+------------------------------+---------------------------------------+
| \(i\) A person who moves     | \* Add "or"                           |
| permanently from the real    |                                       |
| property after receiving a   |                                       |
| notice from the PHA or       |                                       |
| property owner that requires |                                       |
| such move, if the move       |                                       |
| occurs on or after:          |                                       |
|                              |                                       |
| \(A\) For conventional or    |                                       |
| acquisition projects, the    |                                       |
| date of approval by HUD of   |                                       |
| the PHA proposal             |                                       |
| incorporating the site, or   |                                       |
| for scattered sites, the     |                                       |
| date HUD approves the        |                                       |
| applicable site; \*          |                                       |
+------------------------------+---------------------------------------+
| \(B\) For turnkey projects,  |                                       |
| the date the PHA proposal is |                                       |
| submitted to HUD; or         |                                       |
+------------------------------+---------------------------------------+
| \(C\) For major              | Delete                                |
| reconstruction of obsolete   |                                       |
| public housing projects, the |                                       |
| date the PHA issues the      |                                       |
| invitation for bids for the  |                                       |
| project;                     |                                       |
+------------------------------+---------------------------------------+
| \(ii\) Any person, including | 1.  Too open-ended and subjective.    |
| a person who moves before    |                                       |
| the date described in        | 2.  Delete                            |
| paragraph (h)(1)(i) of this  |                                       |
| section, that the PHA or HUD |                                       |
| determines was displaced as  |                                       |
| a direct result of           |                                       |
| acquisition, rehabilitation, |                                       |
| or demolition for the        |                                       |
| assisted project; or         |                                       |
+------------------------------+---------------------------------------+
| \(iii\) A tenant-occupant of |                                       |
| a dwelling unit who moves    |                                       |
| from the building/complex,   |                                       |
| permanently, after the       |                                       |
| "initiation of               |                                       |
| negotiations,\'\' (defined   |                                       |
| in paragraph (i) of this     |                                       |
| section), 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 include a monthly |                                       |
| rent and estimated average   |                                       |
| monthly utility costs that   |                                       |
| do not exceed the amount     |                                       |
| determined in accordance     |                                       |
| with 24 CFR 913.107; or      |                                       |
+------------------------------+---------------------------------------+
| \(iv\) A tenant-occupant of  |                                       |
| a dwelling who is required   |                                       |
| to relocate temporarily, but |                                       |
| 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, any increased |                                       |
| housing costs and incidental |                                       |
| expenses; or                 |                                       |
+------------------------------+---------------------------------------+
| \(B\) Other conditions of    |                                       |
| the temporary relocation are |                                       |
| not reasonable; or           |                                       |
+------------------------------+---------------------------------------+
| \(v\) A tenant-occupant of a |                                       |
| dwelling who moves from the  |                                       |
| building/complex permanently |                                       |
| after he or she has been     |                                       |
| required to move to another  |                                       |
| dwelling unit in the same    |                                       |
| building/complex in order to |                                       |
| carry out the project, 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; or             |                                       |
+------------------------------+---------------------------------------+
| \(2\) Notwithstanding the    |                                       |
| provisions of paragraph      |                                       |
| (h)(1) of this section, a    |                                       |
| person does not qualify as a |                                       |
| "displaced person\'\' (and   |                                       |
| is not eligible for          |                                       |
| relocation assistance under  |                                       |
| the URA or this section),    |                                       |
| if:                          |                                       |
+------------------------------+---------------------------------------+
| \(i\) 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 the PHA           |                                       |
| determines that the eviction |                                       |
| was not undertaken for the   |                                       |
| purpose of evading the       |                                       |
| obligation to provide        |                                       |
| relocation assistance;       |                                       |
+------------------------------+---------------------------------------+
| \(ii\) The person moved into |                                       |
| the property after the date  |                                       |
| described in paragraph       |                                       |
| (h)(1)(i) of this section,   |                                       |
| but before commencing        |                                       |
| occupancy, received written  |                                       |
| notice of the project, its   |                                       |
| possible impact on the       |                                       |
| person (e.g., that the       |                                       |
| person may be displaced,     |                                       |
| temporarily relocated, or    |                                       |
| suffer a rent increase) and  |                                       |
| the fact that he or she      |                                       |
| would not qualify as a       |                                       |
| "displaced person\'\' (or    |                                       |
| for assistance under this    |                                       |
| section) as a result of the  |                                       |
| project;                     |                                       |
+------------------------------+---------------------------------------+
| \(iii\) The person is        |                                       |
| ineligible under 49 CFR      |                                       |
| 24.2(g)(2); or               |                                       |
+------------------------------+---------------------------------------+
| \(iv\) HUD determines that   | 1.  Too open-ended and subjective.    |
| the person was not displaced |                                       |
| as a direct result of        | 2.  Delete                            |
| acquisition, rehabilitation, |                                       |
| or demolition for the        |                                       |
| project.                     |                                       |
+------------------------------+---------------------------------------+
| \(3\) The PHA may, at any    | Add: "HUD shall respond to such       |
| time, ask HUD to determine   | requests within fourteen (14)         |
| whether a displacement is or | calendar days so as to not            |
| would be covered by this     | unnecessarily delay the development   |
| section.                     | process."                             |
+------------------------------+---------------------------------------+
| \(i\) Definition of          |                                       |
| initiation of negotiations.  |                                       |
| For purposes of this         |                                       |
| section, the term            |                                       |
| "initiation of               |                                       |
| negotiations\'\' means:      |                                       |
|                              |                                       |
| \(1\) For conventional or    |                                       |
| acquisition projects:        |                                       |
+------------------------------+---------------------------------------+
| \(i\) Where the PHA          | 1.  \* Delete                         |
| purchases the real property  |                                       |
| through an arm\'s-length     | 2.  Why have a standard sales form?   |
| transaction (as described in |                                       |
| 49 CFR 24.101(a)(1)), the    |                                       |
| seller\'s acceptance of the  |                                       |
| PHA\'s written offer to      |                                       |
| purchase the property \*     |                                       |
| **(i.e., the seller\'s       |                                       |
| execution of form            |                                       |
| HUD-51971-II)**, provided    |                                       |
| the PHA later purchases the  |                                       |
| property; or such other      |                                       |
| date, as may be determined   |                                       |
| by the PHA with the approval |                                       |
| of the HUD Field Office; or  |                                       |
+------------------------------+---------------------------------------+
| \(ii\) Where the PHA\'s      | \* Delete                             |
| purchase of the real         |                                       |
| property does not qualify as |                                       |
| an arm\'s-length transaction |                                       |
| under 49 CFR 24.101(a)(1),   |                                       |
| the delivery of the initial  |                                       |
| written purchase offer from  |                                       |
| the PHA to the Owner of the  |                                       |
| property \***(i.e., the PHA  |                                       |
| executed form                |                                       |
| HUD-51971-II).** However, if |                                       |
| the PHA issues a notice of   |                                       |
| intent to acquire the        |                                       |
| property, and a person moves |                                       |
| after that notice, but       |                                       |
| before the initial written   |                                       |
| purchase offer, the          |                                       |
| "initiation of               |                                       |
| negotiations\'\' is the      |                                       |
| actual move of the person    |                                       |
| from the property;           |                                       |
+------------------------------+---------------------------------------+
| \(2\) For turnkey projects,  |                                       |
| HUD Field Office approval of |                                       |
| the PHA\'s proposal          |                                       |
| incorporating the            |                                       |
| developer\'s proposal,       |                                       |
| provided the contract of     |                                       |
| sale is later executed; or   |                                       |
+------------------------------+---------------------------------------+
| \(3\) For major              | If there is any MROP money still      |
| reconstruction of obsolete   | outstanding, it should be declared a  |
| projects, the PHA\'s         | health hazard and immediately         |
| issuance of the invitation   | recaptured.                           |
| for bids for the project.    |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.208 Other Federal |                                       |
| requirements.**              |                                       |
+------------------------------+---------------------------------------+
| \(a\) General. The PHA shall | Is this a "gotcha" clause or what?    |
| be subject to all statutory, |                                       |
| regulatory, and executive    |                                       |
| order requirements           |                                       |
| applicable to public housing |                                       |
| development (see, e.g., 24   |                                       |
| CFR parts 5, 8, 35, 50, and  |                                       |
| 965), as may be more fully   |                                       |
| described by HUD in notices, |                                       |
| handbooks, or other          |                                       |
| guidance.                    |                                       |
+------------------------------+---------------------------------------+
| \(b\) Lead-based paint. The  |                                       |
| relevant requirements of the |                                       |
| Lead-Based Paint Poisoning   |                                       |
| Prevention Act (42 U.S.C.    |                                       |
| 4821-4846), the Residential  |                                       |
| Lead-Based Paint Hazard      |                                       |
| Reduction Act of 1992 (42    |                                       |
| U.S.C. 4851-4856), and       |                                       |
| implementing regulations at  |                                       |
| part 35, subparts A, B, L,   |                                       |
| and R of this title apply to |                                       |
| the program.                 |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.209 Audit.**      |                                       |
+------------------------------+---------------------------------------+
| All PHAs that receive funds  |                                       |
| under this part for the      |                                       |
| development of low-income    |                                       |
| housing shall comply with    |                                       |
| audit requirements in 24 CFR |                                       |
| part 44.                     |                                       |
+------------------------------+---------------------------------------+
| ### Subpart                  | This section applies to               |
| C---Application and Proposal | non-mixed-finance deals. Subpart F    |
|                              | deals with mixed-finance deals.       |
+------------------------------+---------------------------------------+
| **Sec. 941.301               |                                       |
| Application.**               |                                       |
+------------------------------+---------------------------------------+
| If funding is made available | 1.  Can be long, drawn-out process.   |
| for public housing           |                                       |
| development, HUD will        | 2.  Development handbook written a    |
| provide information about    |     long time ago, when FHA did       |
| fund allocation, application |     public housing development. Many  |
| deadline, and selection      |     of the specialists who are        |
| criteria and procedures      |     supposed to review proposals are  |
| through a Notice of Funding  |     no longer there; handbook is no   |
| Availability (NOFA).         |     longer accurate.                  |
|                              |                                       |
| Effective Date Note: At 61   | 3.  After new reg. is developed, HUD  |
| FR 38018, July 22, 1996,     |     will develop new handbook.        |
| Sec. 941.301 was revised.    |                                       |
| This section contains        | 4.  Problems with Field Offices not   |
| information collection and   |     acting within time limits.        |
| recordkeeping requirements   |     Suggestion: using a process       |
| and will not become          |     similar to 5-year plans. However, |
| effective until approval has |     if HUD then simply sends it back  |
| been given by the Office of  |     saying incomplete, etc. in order  |
| Management and Budget.       |     to meet the deadline... any way   |
|                              |     to avoid the back and forth?      |
|                              |                                       |
|                              | 5.  People described problems with    |
|                              |     FHEO Field Office approval, where |
|                              |     they had no vested stake in the   |
|                              |     deal happening by a particular    |
|                              |     date (asking for more documents   |
|                              |     to review, like the regulatory &  |
|                              |     operating agreement, admissions & |
|                              |     occupancy plan, lease, management |
|                              |     plan). Suggestion was to have     |
|                              |     someone from FHEO with some       |
|                              |     expertise tied to the Grants      |
|                              |     Manager.                          |
|                              |                                       |
|                              | 6.  Simply referring to FHEO in DC    |
|                              |     might not work, because you might |
|                              |     lose out on the expertise and/or  |
|                              |     institutional memory at the local |
|                              |     level about where there had been  |
|                              |     particular fair housing problems  |
|                              |     at particular PHAs. Or this could |
|                              |     be at Field Office, but with      |
|                              |     someone at FHEO brought up to     |
|                              |     speed about the need for action.  |
|                              |                                       |
|                              | 7.  PHAs again said this was          |
|                              |     primarily a concern for HOPE VI   |
|                              |     and mixed finance deals. HUD      |
|                              |     staff pointed out that Subpart C  |
|                              |     was for conventional development. |
|                              |                                       |
|                              | 8.  Some of the cross-references in   |
|                              |     941.303 needed to be reviewed as  |
|                              |     outmoded (such as the reference   |
|                              |     to energy in (j). HUD staff said  |
|                              |     that the draft Capital Fund rule  |
|                              |     would be making revisions. \[This |
|                              |     would be discussed in             |
|                              |     941.306.\]The question was        |
|                              |     raised, under 941.302, about      |
|                              |     allowing upfront draw-downs for   |
|                              |     predevelopment costs, and how     |
|                              |     this is different for mixed       |
|                              |     finance. Satinder indicated that  |
|                              |     in mixed finance, the draw-down   |
|                              |     was for 75% of the                |
|                              |     pre-development costs, and the    |
|                              |     limitation here was for a cap of  |
|                              |     3% of the TDC---a far different   |
|                              |     figure. He believed the 3%        |
|                              |     allowance for predevelopment      |
|                              |     costs was very liberal.On Subpart |
|                              |     D, Shawn asked if any of the PHAs |
|                              |     were having difficulty getting    |
|                              |     force account approval. Satinder  |
|                              |     said he hadn't heard of any       |
|                              |     problem, unless the PHA didn't    |
|                              |     have the capacity to do force     |
|                              |     account. He did indicate that use |
|                              |     of this was relatively rare.      |
+------------------------------+---------------------------------------+
| **Sec. 941.302 Annual        |                                       |
| contributions contract;      |                                       |
| drawdowns and advances.**    |                                       |
+------------------------------+---------------------------------------+
| \(a\) A PHA wishing to       |                                       |
| develop public housing shall |                                       |
| execute an ACC or ACC        |                                       |
| amendment covering the       |                                       |
| entire amount of reserved    |                                       |
| development funds or the     |                                       |
| amount of modernization      |                                       |
| funds (under section 14 of   |                                       |
| the Act, 42 U.S.C. 1437l) it |                                       |
| proposes to use in           |                                       |
| accordance with this part.   |                                       |
| This ACC or ACC amendment    |                                       |
| must be executed by both the |                                       |
| PHA and HUD before funds can |                                       |
| be provided to the PHA.      |                                       |
+------------------------------+---------------------------------------+
| \(b\) Until HUD has approved | 1.  This subsection should be as      |
| a PHA\'s full proposal, a    |     flexible as the mixed-finance     |
| PHA may only draw down funds |     section for the sake of           |
| under the ACC for            |     consistency.                      |
| pre-development costs for    |                                       |
| materials and services       | 2.  \* Add: "plus the cost of any     |
| related to proposal          |     land to be acquired"              |
| preparation and submission.  |                                       |
| Expenditures for             |                                       |
| pre-development costs shall  |                                       |
| not exceed three percent of  |                                       |
| the total development cost   |                                       |
| stated in the executed ACC   |                                       |
| \*.                          |                                       |
+------------------------------+---------------------------------------+
| \(c\) HUD may approve the    | 3.  Lots of discussion about whether  |
| following in writing:        |     cost of elevators can be included |
|                              |     in TDC for elderly buildings.     |
| > \(1\) Amounts in excess of |                                       |
| > three percent of TDC \*    | 4.  Some confusion re: 75 percent of  |
| > for pre-development costs; |     predevelopment costs (allowed     |
| > and/or                     |     under mixed-finance) versus 3     |
|                              |     percent of TDC.                   |
|                              |                                       |
|                              | 5.  Bottom line is that greater       |
|                              |     flexibility is needed to assure   |
|                              |     that predevelopment costs are     |
|                              |     realistically covered.            |
|                              |                                       |
|                              | 6.  \* Add: "plus the cost of any     |
|                              |     land to be acquired"              |
+------------------------------+---------------------------------------+
| \(2\) Drawdown of funds to   |                                       |
| enable a PHA to acquire a    |                                       |
| site after approval by HUD   |                                       |
| of the PHA\'s site           |                                       |
| acquisition proposal, in     |                                       |
| accordance with Sec.         |                                       |
| 941.303.                     |                                       |
+------------------------------+---------------------------------------+
| \(d\) After HUD approval of  |                                       |
| the full proposal, the PHA   |                                       |
| may draw down additional     |                                       |
| funds under the ACC to       |                                       |
| develop the public housing   |                                       |
| units in accordance with the |                                       |
| approved full proposal.      |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.303 Site          |                                       |
| acquisition proposal.**      |                                       |
+------------------------------+---------------------------------------+
| When a PHA determines that   | Add: "HUD shall act upon the          |
| it is necessary to acquire   | acquisition request with 45 days of   |
| land for development through | receipt of all the required           |
| new construction, it may     | documents"                            |
| spend funds authorized under |                                       |
| this part to acquire         |                                       |
| development sites. HUD must  |                                       |
| approve a PHA\'s proposed    |                                       |
| use of funds before it may   |                                       |
| acquire sites in this        |                                       |
| manner. A PHA must submit    |                                       |
| the following documents for  |                                       |
| HUD review and approval, in  |                                       |
| accordance with the          |                                       |
| standards set forth in Sec.  |                                       |
| 941.305:                     |                                       |
+------------------------------+---------------------------------------+
| \(a\) Justification. A       |                                       |
| justification for acquiring  |                                       |
| land prior to PHA proposal   |                                       |
| approval;                    |                                       |
+------------------------------+---------------------------------------+
| \(b\) Site information. An   |                                       |
| identification and           |                                       |
| description of the proposed  |                                       |
| site, site plan,             |                                       |
| neighborhood, and evidence   |                                       |
| of PHA control of the site   |                                       |
| for at least sixty (60) days |                                       |
| after proposal submission.   |                                       |
+------------------------------+---------------------------------------+
| \(c\) Zoning. Evidence that  |                                       |
| construction or              |                                       |
| rehabilitation is permitted  |                                       |
| by current zoning ordinances |                                       |
| or regulations or evidence   |                                       |
| to indicate that needed      |                                       |
| rezoning is likely and will  |                                       |
| not delay the project.       |                                       |
+------------------------------+---------------------------------------+
| \(d\) Development schedule.  |                                       |
| A copy of the PHA            |                                       |
| development schedule,        |                                       |
| including the PHA architect  |                                       |
| estimates of the time        |                                       |
| required to complete each    |                                       |
| major development stage.     |                                       |
+------------------------------+---------------------------------------+
| \(e\) Environmental          |                                       |
| assessment. All available    |                                       |
| environmental information on |                                       |
| the proposed development (to |                                       |
| expedite the HUD             |                                       |
| environmental review).       |                                       |
+------------------------------+---------------------------------------+
| \(f\) Appraisal. An          |                                       |
| appraisal of the proposed    |                                       |
| site by an independent,      |                                       |
| state-certified appraiser.   |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.304 Full proposal |                                       |
| content.**                   |                                       |
+------------------------------+---------------------------------------+
| Each full proposal shall     |                                       |
| include at a minimum the     |                                       |
| following:                   |                                       |
+------------------------------+---------------------------------------+
| \(a\) Project description. A |                                       |
| description of the housing,  |                                       |
| including the number of      |                                       |
| units, schematic drawings of |                                       |
| the proposed building and    |                                       |
| unit plans, outline          |                                       |
| specifications or            |                                       |
| rehabilitation work          |                                       |
| write-ups, and the types and |                                       |
| amounts of non-dwelling      |                                       |
| space to be provided;        |                                       |
+------------------------------+---------------------------------------+
| \(b\) Description of         | Delete: "and a demonstration by the   |
| development method. A        | PHA that it will be able to use this  |
| description of the PHA\'s    | method successfully to develop the    |
| proposed development method, | public housing units."                |
| and a demonstration by the   |                                       |
| PHA that it will be able to  |                                       |
| use this method successfully |                                       |
| to develop the public        |                                       |
| housing units. If the PHA    |                                       |
| proposes to use the turnkey  |                                       |
| method, it must submit a     |                                       |
| Board-approved certification |                                       |
| that the developer was       |                                       |
| selected as the result of a  |                                       |
| public solicitation for      |                                       |
| proposals and that the       |                                       |
| selection was based on an    |                                       |
| objective rating system,     |                                       |
| using such factors as site   |                                       |
| location, project design,    |                                       |
| price, and developer         |                                       |
| experience. If the PHA       |                                       |
| proposes to use the          |                                       |
| acquisition method, the PHA  |                                       |
| must submit a certification  |                                       |
| by the PHA and owner that    |                                       |
| the property was not         |                                       |
| constructed with the intent  |                                       |
| that it would be sold to the |                                       |
| PHA. If the PHA proposes to  |                                       |
| use the mixed-finance        |                                       |
| method, it should have       |                                       |
| consulted with HUD on its    |                                       |
| plans. If the PHA proposes   |                                       |
| to use the force account     |                                       |
| method to develop the public |                                       |
| housing units, it must have  |                                       |
| already received approval    |                                       |
| from HUD of its capability   |                                       |
| to carry out the development |                                       |
| successfully in this manner; |                                       |
+------------------------------+---------------------------------------+
| \(c\) Site information. An   | Does this substitute for 941.303?     |
| identification and           |                                       |
| description of the proposed  |                                       |
| site, site plan,             |                                       |
| neighborhood, and evidence   |                                       |
| of PHA or turnkey developer  |                                       |
| control of the site for at   |                                       |
| least sixty (60) days after  |                                       |
| proposal submission;         |                                       |
+------------------------------+---------------------------------------+
| \(d\) Project costs---       |                                       |
|                              |                                       |
| \(1\) Categories of cost.    |                                       |
| The detailed budget of the   |                                       |
| costs of developing the      |                                       |
| project, in accordance with  |                                       |
| the form prescribed by HUD.  |                                       |
| With respect to costs of     |                                       |
| demolition and relocation,   |                                       |
| the description must         |                                       |
| distinguish between costs    |                                       |
| related to existing public   |                                       |
| housing property and costs   |                                       |
| related to acquisition of a  |                                       |
| new public housing site;     |                                       |
+------------------------------+---------------------------------------+
| \(2\) Budget and payment     |                                       |
| schedule. A budget that      |                                       |
| identifies the sources of    |                                       |
| funding for relocation       |                                       |
| benefits, and a payment      |                                       |
| schedule anticipated to be   |                                       |
| provided under a             |                                       |
| construction contract;       |                                       |
+------------------------------+---------------------------------------+
| \(e\) Appraisal. An          |                                       |
| appraisal of the proposed    |                                       |
| site or property by an       |                                       |
| independent, state-certified |                                       |
| appraiser;                   |                                       |
+------------------------------+---------------------------------------+
| \(f\) Financial feasibility. |                                       |
| Identification of funds      |                                       |
| sufficient to complete the   |                                       |
| development, including a     |                                       |
| reasonable contingency;      |                                       |
+------------------------------+---------------------------------------+
| \(g\) Zoning. Evidence that  |                                       |
| construction or              |                                       |
| rehabilitation is permitted  |                                       |
| by current zoning ordinances |                                       |
| or regulations or evidence   |                                       |
| to indicate that needed      |                                       |
| rezoning is likely and will  |                                       |
| not delay the project;       |                                       |
+------------------------------+---------------------------------------+
| \(h\) Facilities. A          | 1.  Why is this in here?              |
| statement addressing the     |                                       |
| adequacy of existing         | 2.  Delete: "...and, if applicable, a |
| facilities and services for  |     statement addressing the minority |
| the prospective occupants of |     enrollment and capacity of the    |
| the project, a description   |     school system to absorb the       |
| of public improvements       |     number of school-aged children    |
| needed to ensure the         |     expected to reside in the         |
| viability of the proposed    |     project"                          |
| project with a description   |                                       |
| of the sources of funds      |                                       |
| available to carry out such  |                                       |
| improvements, and, if        |                                       |
| applicable, a statement      |                                       |
| addressing the minority      |                                       |
| enrollment and capacity of   |                                       |
| the school system to absorb  |                                       |
| the number of school-aged    |                                       |
| children expected to reside  |                                       |
| in the project;              |                                       |
+------------------------------+---------------------------------------+
| \(j\) Life-cycle analysis.   | N/A                                   |
| For new construction and     |                                       |
| substantial rehabilitation,  |                                       |
| the criteria to be used in   |                                       |
| equipping the proposed       |                                       |
| project(s) with heating and  |                                       |
| cooling systems, and which   |                                       |
| shall include a life-cycle   |                                       |
| cost analysis of the         |                                       |
| installation, maintenance    |                                       |
| and operating costs of such  |                                       |
| systems pursuant to section  |                                       |
| 13 of the Act (42 U.S.C.     |                                       |
| 1437k);                      |                                       |
+------------------------------+---------------------------------------+
| \(k\) Project development    |                                       |
| schedule. A copy of the PHA  |                                       |
| development schedule,        |                                       |
| including the PHA architect  |                                       |
| or turnkey developer         |                                       |
| estimates of the time        |                                       |
| required to complete each    |                                       |
| major development stage;     |                                       |
+------------------------------+---------------------------------------+
| \(l\) Environmental          | What does ". All available            |
| assessment. All available    | environmental information" mean?      |
| environmental information on |                                       |
| the proposed development (to |                                       |
| expedite the HUD             |                                       |
| environmental review);       |                                       |
+------------------------------+---------------------------------------+
| \(m\) Occupancy and          | What statute requires this?           |
| operation policies.          |                                       |
| Statement of all PHA         |                                       |
| policies and practices that  |                                       |
| will be used in occupancy    |                                       |
| and operation that           |                                       |
| contribute to an overall     |                                       |
| objective of ending the      |                                       |
| social and economic          |                                       |
| isolation of low income      |                                       |
| people and promoting their   |                                       |
| economic independence;       |                                       |
+------------------------------+---------------------------------------+
| \(n\) New construction       |                                       |
| certification. If a PHA\'s   |                                       |
| proposal involves new        |                                       |
| construction, evidence of    |                                       |
| compliance with section 6(h) |                                       |
| of the Act in one of the     |                                       |
| following two ways:          |                                       |
|                              |                                       |
| \(1\) Submission of a PHA    |                                       |
| comparison of the cost of    |                                       |
| new construction in the      |                                       |
| neighborhood where the PHA   |                                       |
| proposes to construct the    |                                       |
| housing and the cost of      |                                       |
| acquisition of existing      |                                       |
| housing (with or without     |                                       |
| rehabilitation) in the same  |                                       |
| neighborhood; or             |                                       |
+------------------------------+---------------------------------------+
| \(2\) Certification by the   |                                       |
| PHA, accompanied by          |                                       |
| supporting documentation,    |                                       |
| that there is insufficient   |                                       |
| existing housing in the      |                                       |
| neighborhood to develop      |                                       |
| public housing through       |                                       |
| acquisition; and             |                                       |
+------------------------------+---------------------------------------+
| \(o\) Additional             | This is too open-ended.               |
| HUD-requested information.   |                                       |
| Any additional information   |                                       |
| that may be needed for HUD   |                                       |
| to determine whether it can  |                                       |
| approve the proposal         |                                       |
| pursuant to Sec. 941.305.    |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.305 Technical     |                                       |
| processing and approval.**   |                                       |
+------------------------------+---------------------------------------+
| \(a\) Standards. HUD shall   | Add: "In any event, HUD shall act on  |
| review the full proposal,    | the PHA's application within 60       |
| submitted in accordance with | calendar days.                        |
| Sec. 941.304, and the site   |                                       |
| acquisition proposal,        |                                       |
| submitted in accordance with |                                       |
| Sec. 941.303, to determine   |                                       |
| whether each proposal        |                                       |
| complies with all statutory, |                                       |
| executive order, and         |                                       |
| regulatory requirements      |                                       |
| applicable to public housing |                                       |
| development including, if    |                                       |
| applicable, the comments     |                                       |
| received as a result of      |                                       |
| Intergovernmental Review. In |                                       |
| addition, HUD shall carry    |                                       |
| out any necessary statutory  |                                       |
| and executive order reviews  |                                       |
| with respect to the proposal |                                       |
| under review. If HUD         |                                       |
| determines that the proposal |                                       |
| under review is acceptable,  |                                       |
| it shall notify the PHA in   |                                       |
| writing and shall forward to |                                       |
| it for execution an ACC (or  |                                       |
| ACC amendment). If the PHA   |                                       |
| already has executed an ACC  |                                       |
| (or ACC amendment) for the   |                                       |
| entire reserved amount, HUD  |                                       |
| shall notify the PHA that it |                                       |
| is authorized to draw down   |                                       |
| funds in accordance with     |                                       |
| Sec. 941.302.                |                                       |
+------------------------------+---------------------------------------+
| \(b\) Approved proposal.     |                                       |
| Units developed under this   |                                       |
| part shall be developed only |                                       |
| in accordance with an        |                                       |
| approved proposal.           |                                       |
+------------------------------+---------------------------------------+
| \(c\) Approved amendments.   | Add: "...HUD within 7 calendar days   |
| Material changes in the      | of a request for clarification by a   |
| approved proposal, including | PHA."                                 |
| any increase in the budget   |                                       |
| or any change in the payment |                                       |
| schedule, require an         |                                       |
| amendment to the proposal,   |                                       |
| which must be approved by    |                                       |
| HUD. The determination of    |                                       |
| what constitutes a material  |                                       |
| change will be made by HUD.  |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.306 Maximum       |                                       |
| project cost.**              |                                       |
+------------------------------+---------------------------------------+
| \(a\) Calculation of maximum | 1.  There is a problem PHAs encounter |
| project cost. The maximum    |     with getting approval for         |
| project cost represents the  |     buildings with elevators in       |
| total amount of public       |     buildings for the elderly where   |
| housing capital assistance   |     the building had less than 4      |
| used in connection with the  |     stories, and PHAs have ended up   |
| development of a public      |     having to use non-HUD funding for |
| housing project, and         |     the elevator in a 3-story         |
| includes: (1) project costs  |     building.                         |
| that are subject to the TDC  |                                       |
| limit (i.e., Housing         | 2.  People thought this should be     |
| Construction Costs and       |     revisited, and was a question of  |
| Community Renewal Costs);    |     the development type allowed      |
| and (2) project costs that   |     under TDC. HUD staff advised that |
| are not subject to the TDC   |     buildings with elevators were     |
| limit (i.e., Additional      |     treated as a different structure  |
| Project Costs). The total    |     type under TDC and the suggestion |
| project cost to be funded    |     was made that for "elderly only", |
| with public housing capital  |     "disabled only", or "elderly and  |
| assistance, as set forth in  |     disabled only" being designated a |
| the proposal and as approved |     separate structure type.          |
| by HUD, becomes the maximum  |                                       |
| project cost stated in the   |                                       |
| ACC. Upon completion of the  |                                       |
| project, the actual project  |                                       |
| cost is determined based     |                                       |
| upon the amount of public    |                                       |
| housing capital assistance   |                                       |
| expended for the project,    |                                       |
| and this becomes the maximum |                                       |
| project cost for purposes of |                                       |
| the ACC.                     |                                       |
+------------------------------+---------------------------------------+
| \(b\) TDC limit.             | Comment that "public housing capital  |
|                              | assistance" should be listed in       |
| \(1\) Public housing capital | definitions.                          |
| assistance may not be used   |                                       |
| to pay for Housing           |                                       |
| Construction Costs and       |                                       |
| Community Renewal Costs in   |                                       |
| excess of the TDC limit, as  |                                       |
| determined under paragraph   |                                       |
| (b)(2) of this section.      |                                       |
| However, HOPE VI grantees    |                                       |
| will be eligible to request  |                                       |
| a TDC exception for public   |                                       |
| housing and HOPE VI funds    |                                       |
| awarded in Fiscal Year 1996  |                                       |
| and prior years. No          |                                       |
| exceptions to HCC limits     |                                       |
| will be granted within the   |                                       |
| TDC limit.                   |                                       |
+------------------------------+---------------------------------------+
| \(2\) Determination of TDC   |                                       |
| limit. HUD will determine    |                                       |
| the TDC for a public housing |                                       |
| project as follows:          |                                       |
|                              |                                       |
| \(i\) Step 1: Unit           |                                       |
| construction cost guideline. |                                       |
| HUD will first determine the |                                       |
| applicable "construction     |                                       |
| cost guideline\'\' averaging |                                       |
| the current construction     |                                       |
| costs as listed in two       |                                       |
| nationally recognized        |                                       |
| residential construction     |                                       |
| cost indices for publicly    |                                       |
| bid construction of a good   |                                       |
| and sound quality for        |                                       |
| specific bedroom sizes and   |                                       |
| structure types. The two     |                                       |
| indices HUD will use for     |                                       |
| this purpose are the R.S.    |                                       |
| Means cost index for         |                                       |
| construction of "average\'\' |                                       |
| quality and the Marshal &    |                                       |
| Swift cost index for         |                                       |
| construction of "good\'\'    |                                       |
| quality. HUD has the         |                                       |
| discretion to change the     |                                       |
| cost indices to other such   |                                       |
| indices that reflect         |                                       |
| comparable housing           |                                       |
| construction quality through |                                       |
| a notice published in the    |                                       |
| Federal Register.            |                                       |
+------------------------------+---------------------------------------+
| \(ii\) Step 2: Bedroom size  |                                       |
| and structure types. The     |                                       |
| construction cost guideline  |                                       |
| is then multiplied by the    |                                       |
| number of units for each     |                                       |
| bedroom size and structure   |                                       |
| type.                        |                                       |
+------------------------------+---------------------------------------+
| \(iii\) Step 3: Elevator and |                                       |
| non-elevator type            |                                       |
| structures. HUD will then    |                                       |
| multiply the resulting       |                                       |
| amounts from step 2 by 1.6   |                                       |
| for elevator type structures |                                       |
| and by 1.75 for non-elevator |                                       |
| type structures.             |                                       |
+------------------------------+---------------------------------------+
| \(iv\) Step 4: TDC limit.    |                                       |
| The TDC limit for a project  |                                       |
| is calculated by adding the  |                                       |
| resulting amounts from step  |                                       |
| 3 for all the public housing |                                       |
| units in the project.        |                                       |
+------------------------------+---------------------------------------+
| \(3\) Costs not subject to   |                                       |
| the TDC limit. Additional    |                                       |
| Project Costs are not        |                                       |
| subject to the TDC limit     |                                       |
| described in paragraph       |                                       |
| (b)(2) of this section.      |                                       |
+------------------------------+---------------------------------------+
| \(4\) Funds not subject to   |                                       |
| the TDC limit. A PHA may use |                                       |
| funding sources not subject  |                                       |
| to the TDC limit (e.g., CDBG |                                       |
| funds, HOME funds,           |                                       |
| low-income tax credits,      |                                       |
| private donations, private   |                                       |
| financing, etc.) to cover    |                                       |
| project costs that exceed    |                                       |
| the TDC limit or the Housing |                                       |
| Construction Cost limit      |                                       |
| described in paragraph (c)   |                                       |
| of this section. Such funds, |                                       |
| however, may not be used for |                                       |
| items that would result in   |                                       |
| substantially increased      |                                       |
| operating, maintenance or    |                                       |
| replacement costs, and must  |                                       |
| meet the requirements of     |                                       |
| section 102 of the HUD       |                                       |
| Reform Act (42 U.S.C. 3545). |                                       |
| These funds must be included |                                       |
| in the project development   |                                       |
| cost budget and legally      |                                       |
| acceptable written           |                                       |
| commitments for such funds   |                                       |
| must be provided by the PHA  |                                       |
| for HUD approval.            |                                       |
+------------------------------+---------------------------------------+
| \(c\) Housing Construction   |                                       |
| Costs---                     |                                       |
|                              |                                       |
| \(1\) General. A PHA may not |                                       |
| use public housing capital   |                                       |
| assistance to pay for        |                                       |
| Housing Construction Costs   |                                       |
| in excess of the amount      |                                       |
| determined under paragraph   |                                       |
| (c)(2) of this section.      |                                       |
+------------------------------+---------------------------------------+
| \(2\) Determination of       |                                       |
| Housing Construction Cost    |                                       |
| limit. HUD will determine    |                                       |
| the Housing Construction     |                                       |
| Cost limit as listed in at   |                                       |
| least two nationally         |                                       |
| recognized residential       |                                       |
| construction cost indices    |                                       |
| for publicly bid             |                                       |
| construction of a good and   |                                       |
| sound quality for specific   |                                       |
| bedroom sizes and structure  |                                       |
| types. The two indices HUD   |                                       |
| will use for this purpose    |                                       |
| are the R.S. Means cost      |                                       |
| index for construction of    |                                       |
| "average\'\' quality and the |                                       |
| Marshal & Swift cost index   |                                       |
| for construction of          |                                       |
| "good\'\' quality. HUD has   |                                       |
| the discretion to change the |                                       |
| cost indices to other such   |                                       |
| indices that reflect         |                                       |
| comparable housing           |                                       |
| construction quality through |                                       |
| a notice published in the    |                                       |
| Federal Register. The        |                                       |
| resulting construction cost  |                                       |
| guideline is then multiplied |                                       |
| by the number of public      |                                       |
| housing units in the project |                                       |
| based upon bedroom size and  |                                       |
| structure type. The Housing  |                                       |
| Construction Cost limit for  |                                       |
| a project is calculated by   |                                       |
| adding the resulting amounts |                                       |
| for all public housing units |                                       |
| in the project.              |                                       |
+------------------------------+---------------------------------------+
| \(3\) The Housing            |                                       |
| Construction Cost limit is   |                                       |
| not applicable to the        |                                       |
| acquisition of existing      |                                       |
| housing, whether or not such |                                       |
| housing will be              |                                       |
| rehabilitated. The Total     |                                       |
| Development Cost limit is    |                                       |
| applicable to such           |                                       |
| acquisition.                 |                                       |
+------------------------------+---------------------------------------+
| \(d\) Community Renewal      | Can a more descriptive term of what   |
| Costs. Public housing        | this is be substituted for CRC?       |
| capital assistance may be    |                                       |
| used to pay for Community    |                                       |
| Renewal Costs in an amount   |                                       |
| equivalent to the difference |                                       |
| between the Housing          |                                       |
| Construction Costs paid for  |                                       |
| with public housing capital  |                                       |
| assistance and the TDC       |                                       |
| limit.                       |                                       |
+------------------------------+---------------------------------------+
| \(e\) Rehabilitation of      |                                       |
| existing public housing      |                                       |
| projects. The HCC limit is   |                                       |
| not applicable and the TDC   |                                       |
| limit for modernization of   |                                       |
| existing public housing is   |                                       |
| 90% of the TDC limit as      |                                       |
| determined under Sec.        |                                       |
| 941.306(b)(2). This          |                                       |
| limitation does not apply to |                                       |
| the rehabilitation of any    |                                       |
| property acquired pursuant   |                                       |
| to Sec. 941.102.             |                                       |
+------------------------------+---------------------------------------+
| ### Sub                      |                                       |
| part D---Project Development |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.401 Site and      |                                       |
| property acquisition.**      |                                       |
+------------------------------+---------------------------------------+
| \(a\) Applicability. The     | 1.  Question of whether anyone is     |
| provisions of this section   |     having trouble getting force      |
| apply to projects being      |     account development approved. No  |
| developed under the          |     comment. Appears to be used       |
| conventional, acquisition,   |     infrequently.                     |
| and force account methods,   |                                       |
| and may apply to other       | 2.  Too open-ended.                   |
| development methods, as      |                                       |
| deemed appropriate by HUD.   |                                       |
+------------------------------+---------------------------------------+
| \(b\) Purchase agreement.    | When are the conditions established?  |
| The purchase agreement shall |                                       |
| reflect any conditions       |                                       |
| established by HUD, such as  |                                       |
| the site engineering studies |                                       |
| that must be completed to    |                                       |
| determine whether the site   |                                       |
| is suitable for development  |                                       |
| of the project.              |                                       |
+------------------------------+---------------------------------------+
| \(c\) Title.---              | 1.  An issue was identified on ACC    |
|                              |     and Declaration of Trust. A PHA   |
| \(1\) General. After HUD     |     might be putting public housing   |
| approves the site or         |     rental units in a market rate     |
| property acquisition         |     development (not yet condo-ized)  |
| contract and notifies the    |     but there was a problem because   |
| PHA that it is authorized to |     the declaration of trust applied  |
| take title, the PHA shall    |     to the entire building. Private   |
| obtain title in accordance   |     developers wouldn't agree to so   |
| with the following           |     affect the other units. HUD staff |
| certification. The PHA shall |     noted that this was a legal       |
| certify to HUD that it       |     question, about whether you could |
| obtained a title insurance   |     do a declaration of trust for     |
| policy that guaranteed that  |     just those units.                 |
| the title was good and       |                                       |
| marketable before taking     | 2.  It was indicated that some        |
| title and that it promptly   |     developments have a floating      |
| recorded the deed and        |     number of ACC units, where the    |
| declaration of trust in the  |     Declaration of Trust applies to   |
| form prescribed by HUD.      |     10 out or 100 units, but doesn't  |
|                              |     specify exactly which ones they   |
|                              |     are.                              |
|                              |                                       |
|                              | 3.  Deals being discussed here aren't |
|                              |     mixed finance development, but    |
|                              |     ACC-only units. Many of the       |
|                              |     private developers don't want to  |
|                              |     think about what will happen 30   |
|                              |     years later, but are only         |
|                              |     thinking about their exit         |
|                              |     strategy 5 years later, where     |
|                              |     they want to sell or condo-ize.   |
|                              |     Right now, if a declaration of    |
|                              |     trust was put on the property,    |
|                              |     you couldn't convert to           |
|                              |     condominiums.                     |
|                              |                                       |
|                              | 4.  It was noted that you could       |
|                              |     condoize up front (or make a      |
|                              |     statement of intent to do so a    |
|                              |     number of years down the line)    |
|                              |     and then put the declaration of   |
|                              |     trust. Some said that this wasn't |
|                              |     that different than Section 8     |
|                              |     project-based assistance issues.  |
|                              |     People thought that Declaration   |
|                              |     of Trust should be included in    |
|                              |     the definitions.                  |
|                              |                                       |
|                              | 5.  It was noted that another Focus   |
|                              |     Group was looking at the          |
|                              |     Declaration of Trust and ACC      |
|                              |     documents.                        |
+------------------------------+---------------------------------------+
| \(2\) Limitation. After HUD  | 1.  \* Too open-ended.                |
| notifies a PHA that has been |                                       |
| determined to be troubled or | 2.  "901" should be "902".            |
| modernization troubled in    |                                       |
| accordance with part 901 of  | 3.  Delete... "or a PHA that has for  |
| this chapter\*, or a PHA     |     other reasons been notified in    |
| that has for other reasons   |     writing that it may not use the   |
| been notified in writing     |     procedure specified in paragraph  |
| that it may not use the      |     (c)(1) of this section"           |
| procedure specified in       |                                       |
| paragraph (c)(1) of this     |                                       |
| section, that the site or    |                                       |
| property acquisition         |                                       |
| contract has been approved,  |                                       |
| the PHA shall submit to HUD  |                                       |
| evidence that title to the   |                                       |
| site or property is good and |                                       |
| marketable. If HUD approves  |                                       |
| the title evidence, it will  |                                       |
| inform the PHA that it is    |                                       |
| authorized to acquire title  |                                       |
| to the site or property. The |                                       |
| PHA shall record promptly    |                                       |
| the deed and declaration of  |                                       |
| trust in the form prescribed |                                       |
| by HUD, and HUD may require  |                                       |
| the PHA to submit evidence   |                                       |
| of such recordation.         |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.402 Project       |                                       |
| design and construction**.   |                                       |
+------------------------------+---------------------------------------+
| \(a\) Compliance with HUD    |                                       |
| construction standards and   |                                       |
| Federal procurement          |                                       |
| requirements---              |                                       |
|                              |                                       |
| \(1\) General. A PHA may     |                                       |
| certify that its proposed    |                                       |
| design and construction      |                                       |
| plans for the development    |                                       |
| are in accordance with       |                                       |
| HUD\'s design and            |                                       |
| construction standards at    |                                       |
| Sec. 941.203, and that its   |                                       |
| bidding procedures are in    |                                       |
| accordance with Federal      |                                       |
| procurement requirements.    |                                       |
+------------------------------+---------------------------------------+
| \(2\) Limitation. In the     | 1.  Delete: "...or a PHA that has for |
| case of a PHA determined to  |     other reasons been notified in    |
| be troubled or modernization |     writing that it may not use the   |
| troubled in accordance with  |     procedure specified in paragraph  |
| part 901 of this chapter or  |     (a)(1) of this section,"          |
| a PHA that has for other     |                                       |
| reasons been notified in     | 2.  "901" should be "902"             |
| writing that it may not use  |                                       |
| the procedure specified in   |                                       |
| paragraph (a)(1) of this     |                                       |
| section, the PHA must submit |                                       |
| the proposed design and      |                                       |
| construction plans and its   |                                       |
| bidding procedures (unless   |                                       |
| HUD notifies the PHA that it |                                       |
| may use the certification    |                                       |
| procedure specified in       |                                       |
| paragraph (a)(1) of this     |                                       |
| section).                    |                                       |
+------------------------------+---------------------------------------+
| \(b\) Contract               |                                       |
| administration. The PHA      |                                       |
| shall be responsible for     |                                       |
| contract administration and  |                                       |
| shall contract for the       |                                       |
| services of an architect, or |                                       |
| other person licensed under  |                                       |
| State law, to assist and     |                                       |
| advise the PHA in contract   |                                       |
| administration and           |                                       |
| inspections to assure that   |                                       |
| the work is done in          |                                       |
| accordance with HUD          |                                       |
| requirements. A HUD          |                                       |
| representative may           |                                       |
| periodically visit the       |                                       |
| project site to monitor PHA  |                                       |
| contract administration.     |                                       |
+------------------------------+---------------------------------------+
| \(c\) Prevailing wage rates. |                                       |
| See Sec. 965.101 of this     |                                       |
| chapter                      |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.403 Acceptance of |                                       |
| work and contract            |                                       |
| settlement**.                |                                       |
+------------------------------+---------------------------------------+
| \(a\) Notification of        |                                       |
| completion. The contractor   |                                       |
| or developer shall notify    |                                       |
| the PHA in writing when the  |                                       |
| contract work, including any |                                       |
| approved off-site work, will |                                       |
| be completed and ready for   |                                       |
| inspection.                  |                                       |
+------------------------------+---------------------------------------+
| \(b\) Acceptance---          |                                       |
|                              |                                       |
| \(1\) General. A PHA may     |                                       |
| carry out the final          |                                       |
| inspection of the work and   |                                       |
| may accept the completed     |                                       |
| work. If, upon inspection,   |                                       |
| the PHA determines that the  |                                       |
| work is complete and         |                                       |
| satisfactory, except for     |                                       |
| work that is appropriate for |                                       |
| delayed completion, the work |                                       |
| shall be accepted by the     |                                       |
| PHA. The PHA shall certify   |                                       |
| to HUD before it pays the    |                                       |
| contractor or developer that |                                       |
| it has inspected the work    |                                       |
| and determined that it is    |                                       |
| acceptable and in compliance |                                       |
| with the construction        |                                       |
| contract or contract of sale |                                       |
| and HUD requirements. The    |                                       |
| PHA shall determine any      |                                       |
| hold-back for items of       |                                       |
| delayed completion, and the  |                                       |
| amount due and payable for   |                                       |
| the work that has been       |                                       |
| accepted including any       |                                       |
| conditions precedent to      |                                       |
| payment that are stated in   |                                       |
| the construction contract or |                                       |
| contract of sale. The        |                                       |
| contractor or developer      |                                       |
| shall be paid for items of   |                                       |
| delayed construction only    |                                       |
| after inspection and         |                                       |
| acceptance of this work by   |                                       |
| the PHA.                     |                                       |
+------------------------------+---------------------------------------+
| \(2\) Limitation. In the     | 1.  "901" should be "902"             |
| case of a PHA determined to  |                                       |
| be troubled or modernization | 2.  Delete "chapter or a PHA that has |
| troubled in accordance with  |     for other reasons been notified   |
| part 901 of this chapter or  |     in writing that it may not use    |
| a PHA that has for other     |     the procedure specified in        |
| reasons been notified in     |     paragraph (b)(1) of this section" |
| writing that it may not use  |                                       |
| the procedure specified in   |                                       |
| paragraph (b)(1) of this     |                                       |
| section, the procedure       |                                       |
| described in paragraph       |                                       |
| (b)(1) of this section will  |                                       |
| be followed, except that HUD |                                       |
| must concur in the necessary |                                       |
| PHA determinations and       |                                       |
| approvals.                   |                                       |
+------------------------------+---------------------------------------+
| \(c\) Guarantees and         |                                       |
| warranties. The construction |                                       |
| contract or contract of sale |                                       |
| shall specify the project    |                                       |
| guaranty period and amounts  |                                       |
| to be withheld and shall     |                                       |
| provide for assignment to    |                                       |
| the PHA of all manufacturer  |                                       |
| and supplier warranties      |                                       |
| required by the construction |                                       |
| documents. The PHA shall     |                                       |
| inspect each dwelling unit   |                                       |
| and the overall project      |                                       |
| approximately three months   |                                       |
| after the beginning of the   |                                       |
| project guaranty period and  |                                       |
| three months before its      |                                       |
| expiration and also as may   |                                       |
| be necessary to exercise its |                                       |
| rights before expiration of  |                                       |
| any warranties. The PHA      |                                       |
| shall require repair or      |                                       |
| replacement, prior to the    |                                       |
| expiration of the guaranty   |                                       |
| or warranty periods, of any  |                                       |
| defective items.             |                                       |
+------------------------------+---------------------------------------+
| \(d\) Title to turnkey       |                                       |
| projects---                  |                                       |
|                              |                                       |
| \(1\) General. When the work |                                       |
| has been inspected and       |                                       |
| accepted on a turnkey        |                                       |
| project, in accordance with  |                                       |
| paragraph (b) of this        |                                       |
| section, the PHA is          |                                       |
| authorized to take title to  |                                       |
| the completed project in     |                                       |
| accordance with the          |                                       |
| following certification. The |                                       |
| PHA shall certify to HUD     |                                       |
| that it obtained a title     |                                       |
| insurance policy that        |                                       |
| guaranteed that the title    |                                       |
| was good and marketable      |                                       |
| before taking title and that |                                       |
| it promptly recorded the     |                                       |
| deed and declaration of      |                                       |
| trust in the form prescribed |                                       |
| by HUD.                      |                                       |
+------------------------------+---------------------------------------+
| \(2\) Limitation. After      | 1.  "901" should be "902"             |
| inspection and acceptance of |                                       |
| the work in accordance with  | 2.  Delete ", or a PHA that has for   |
| paragraph (b) of this        |     other reasons been notified in    |
| section, a PHA that has been |     writing that it may not use the   |
| determined to be troubled or |     procedure specified in paragraph  |
| modernization troubled in    |     (d)(1) of this section"           |
| accordance with part 901 of  |                                       |
| this chapter, or a PHA that  | 3.                                    |
| has for other reasons been   |                                       |
| notified in writing that it  |                                       |
| may not use the procedure    |                                       |
| specified in paragraph       |                                       |
| (d)(1) of this section shall |                                       |
| submit to HUD evidence that  |                                       |
| title to the completed       |                                       |
| project is good and          |                                       |
| marketable. If HUD approves  |                                       |
| the title evidence, it will  |                                       |
| inform the PHA that it is    |                                       |
| authorized to acquire title  |                                       |
| to the completed project.    |                                       |
| The PHA shall record         |                                       |
| promptly the deed and        |                                       |
| declaration of trust in the  |                                       |
| form prescribed by HUD, and  |                                       |
| HUD may require submission   |                                       |
| of evidence of such          |                                       |
| recordation.                 |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.404 Completion of |                                       |
| development**.               |                                       |
+------------------------------+---------------------------------------+
| \(a\) When all development   | 1.  Add: "after the units are         |
| has been completed and paid  |     occupied"                         |
| for, but not later than 12   |                                       |
| months after\* the end of    | 2.  Delete: "end of the initial       |
| the initial operating period |     operating period unless a longer  |
| unless a longer period is    |     period is approved by HUD"        |
| approved by HUD, the PHA     |                                       |
| shall submit a statement of  | 3.  Delete: ". For this purpose, the  |
| the actual development cost. |     initial operating period with     |
| For this purpose, the        |     respect to each project is the    |
| initial operating period     |     period commencing with the date   |
| with respect to each project |     of initiation of the project and  |
| is the period commencing     |     ending with the earliest of the   |
| with the date of initiation  |     following three dates: the end of |
| of the project and ending    |     the calendar quarter in which     |
| with the earliest of the     |     ninety-five percent of the        |
| following three dates: the   |     dwelling units in the project are |
| end of the calendar quarter  |     occupied; the end of the calendar |
| in which ninety-five percent |     quarter that is six, seven, or    |
| of the dwelling units in the |     eight months after the date of    |
| project are occupied; the    |     full availability of the project; |
| end of the calendar quarter  |     or the end of the calendar        |
| that is six, seven, or eight |     quarter next preceding the date   |
| months after the date of     |     of physical completion of the     |
| full availability of the     |     project" as EIOP will not be used |
| project; or the end of the   |     in the future.                    |
| calendar quarter next        |                                       |
| preceding the date of        |                                       |
| physical completion of the   |                                       |
| project.                     |                                       |
+------------------------------+---------------------------------------+
| \(b\) HUD shall review the   |                                       |
| statement and establish the  |                                       |
| actual development cost of   |                                       |
| the project, which becomes   |                                       |
| the maximum total            |                                       |
| development cost for         |                                       |
| purposes of the ACC.         |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.501 HUD review of |                                       |
| PHA performance;             |                                       |
| sanctions**.                 |                                       |
+------------------------------+---------------------------------------+
| \(a\) HUD determination. HUD |                                       |
| shall carry out such reviews |                                       |
| of the performance of each   |                                       |
| PHA as may be necessary or   |                                       |
| appropriate to make the      |                                       |
| determinations required by   |                                       |
| this paragraph (a), taking   |                                       |
| into consideration all       |                                       |
| available evidence.          |                                       |
+------------------------------+---------------------------------------+
| \(1\) Conformity with PHA    |                                       |
| proposal. HUD shall          |                                       |
| determine whether the PHA    |                                       |
| has carried out its          |                                       |
| activities under this        |                                       |
| subpart in a timely manner   |                                       |
| and in accordance with its   |                                       |
| approved proposal.           |                                       |
+------------------------------+---------------------------------------+
| \(i\) In making this         |                                       |
| determination, HUD shall     |                                       |
| review the PHA\'s            |                                       |
| performance under previous   |                                       |
| inspections, audit findings  |                                       |
| and other sources to         |                                       |
| determine whether the        |                                       |
| development activities       |                                       |
| undertaken during the period |                                       |
| under review conform         |                                       |
| substantially to the         |                                       |
| activities specified in the  |                                       |
| approved PHA proposal. HUD   |                                       |
| also shall review a PHA\'s   |                                       |
| development schedule to      |                                       |
| determine whether the PHA    |                                       |
| has carried out its          |                                       |
| development activities in a  |                                       |
| timely manner;               |                                       |
+------------------------------+---------------------------------------+
| \(ii\) HUD shall review a    |                                       |
| PHA\'s performance to        |                                       |
| determine whether the        |                                       |
| activities carried out       |                                       |
| comply with the requirements |                                       |
| of the Act, and other        |                                       |
| applicable laws and          |                                       |
| regulations.                 |                                       |
+------------------------------+---------------------------------------+
| \(2\) Continuing capacity.   |                                       |
| HUD shall determine whether  |                                       |
| the PHA has a continuing     |                                       |
| capacity to carry out its    |                                       |
| development plan in a timely |                                       |
| manner. The primary factors  |                                       |
| to be considered in arriving |                                       |
| at a determination that a    |                                       |
| PHA has a continuing         |                                       |
| capacity are those described |                                       |
| in paragraph (a)(1) of this  |                                       |
| section ("conformity with    |                                       |
| PHA proposal\'\'). HUD shall |                                       |
| give particular attention to |                                       |
| PHA efforts to accelerate    |                                       |
| the progress of the program  |                                       |
| and to prevent the           |                                       |
| recurrence of past           |                                       |
| deficiencies or              |                                       |
| noncompliance with           |                                       |
| applicable laws and          |                                       |
| regulations.                 |                                       |
+------------------------------+---------------------------------------+
| \(b\) Notice of deficiency.  |                                       |
| Based on HUD reviews of PHA  |                                       |
| performance and findings of  |                                       |
| any of the deficiencies in   |                                       |
| paragraph (d) of this        |                                       |
| section, HUD may issue to    |                                       |
| the PHA a notice of          |                                       |
| deficiency stating the       |                                       |
| specific program             |                                       |
| requirements that the PHA    |                                       |
| has violated and requesting  |                                       |
| the PHA to take any of the   |                                       |
| actions specified in         |                                       |
| paragraph (e) of this        |                                       |
| section.                     |                                       |
+------------------------------+---------------------------------------+
| \(c\) Corrective action      |                                       |
| order.                       |                                       |
+------------------------------+---------------------------------------+
| \(1\) Based on HUD reviews   |                                       |
| of PHA performance and       |                                       |
| findings of any of the       |                                       |
| deficiencies in paragraph    |                                       |
| (d) of this section, HUD may |                                       |
| issue to the PHA a           |                                       |
| corrective action order,     |                                       |
| whether or not a notice of   |                                       |
| deficiency has been issued   |                                       |
| previously with respect to   |                                       |
| the specific deficiency on   |                                       |
| which the corrective action  |                                       |
| order is based. HUD may      |                                       |
| order corrective action at   |                                       |
| any time by notifying the    |                                       |
| PHA of the specific program  |                                       |
| requirements that the PHA    |                                       |
| has violated, and specifying |                                       |
| that any of the corrective   |                                       |
| actions listed in paragraph  |                                       |
| (e) of this section must be  |                                       |
| taken. HUD shall design      |                                       |
| corrective action to prevent |                                       |
| a continuation of the        |                                       |
| deficiency, mitigate any     |                                       |
| adverse effects of the       |                                       |
| deficiency to the extent     |                                       |
| possible, or prevent a       |                                       |
| recurrence of the same or    |                                       |
| similar deficiencies;        |                                       |
+------------------------------+---------------------------------------+
| \(2\) Before ordering        |                                       |
| corrective action, HUD shall |                                       |
| notify the PHA and give it   |                                       |
| an opportunity to consult    |                                       |
| with HUD regarding the       |                                       |
| proposed action;             |                                       |
+------------------------------+---------------------------------------+
| \(3\) Any corrective action  |                                       |
| ordered by HUD shall become  |                                       |
| a condition of the grant     |                                       |
| agreement (ACC);             |                                       |
+------------------------------+---------------------------------------+
| \(d\) Basis for corrective   |                                       |
| action. HUD may order a PHA  |                                       |
| to take corrective action    |                                       |
| only if it determines:       |                                       |
|                              |                                       |
| \(1\) The PHA has not        |                                       |
| carried out its activities   |                                       |
| under the development        |                                       |
| program in a timely manner   |                                       |
| and in accordance with its   |                                       |
| approved proposal, or HUD    |                                       |
| requirements, as determined  |                                       |
| in paragraph (a)(l) of this  |                                       |
| section;                     |                                       |
+------------------------------+---------------------------------------+
| \(2\) The PHA does not have  |                                       |
| a continuing capacity to     |                                       |
| carry out its proposal in a  |                                       |
| timely manner or in          |                                       |
| accordance with its proposal |                                       |
| or HUD requirements, as      |                                       |
| determined in paragraph      |                                       |
| (a)(2) of this section;      |                                       |
+------------------------------+---------------------------------------+
| \(3\) The PHA has failed to  |                                       |
| repay HUD for amounts        |                                       |
| awarded under the            |                                       |
| development programs that    |                                       |
| were improperly expended;    |                                       |
+------------------------------+---------------------------------------+
| \(e\) Types of corrective    |                                       |
| action. HUD may direct a PHA |                                       |
| to take one or more of the   |                                       |
| following corrective         |                                       |
| actions:                     |                                       |
+------------------------------+---------------------------------------+
| \(1\) Submit additional      |                                       |
| information:                 |                                       |
|                              |                                       |
| \(i\) Concerning the PHA\'s  |                                       |
| administrative, planning,    |                                       |
| budgeting, accounting,       |                                       |
| management, and evaluation   |                                       |
| functions to determine the   |                                       |
| cause for a PHA not meeting  |                                       |
| the standards in paragraphs  |                                       |
| (a)(1) or (a)(2) of this     |                                       |
| section;                     |                                       |
+------------------------------+---------------------------------------+
| > \(ii\) Explaining any      |                                       |
| > steps the PHA is taking to |                                       |
| > correct the deficiencies;  |                                       |
+------------------------------+---------------------------------------+
| iii\) Documenting that PHA   |                                       |
| activities were not          |                                       |
| inconsistent with the PHA\'s |                                       |
| proposal or other applicable |                                       |
| laws, regulations or program |                                       |
| requirements; and            |                                       |
+------------------------------+---------------------------------------+
| \(iv\) Demonstrating that    |                                       |
| the PHA has a continuing     |                                       |
| capacity to carry out the    |                                       |
| proposal in a timely manner; |                                       |
+------------------------------+---------------------------------------+
| \(2\) Submit schedules for   |                                       |
| completing the work          |                                       |
| identified in its proposal   |                                       |
| and report periodically on   |                                       |
| its progress in meeting the  |                                       |
| schedules;                   |                                       |
+------------------------------+---------------------------------------+
| \(3\) Notwithstanding 24 CFR |                                       |
| 941.205(c), 24 CFR           |                                       |
| 941.402(a) and 24 CFR        |                                       |
| 85.36(g), submit to HUD      |                                       |
| documents for prior          |                                       |
| approval, which may include, |                                       |
| but are not limited to:      |                                       |
|                              |                                       |
| > \(i\) Complete design,     |                                       |
| > construction and bid       |                                       |
| > documents (prior to        |                                       |
| > soliciting bids);          |                                       |
+------------------------------+---------------------------------------+
| \(ii\) Complete              |                                       |
| rehabilitation               |                                       |
| drawings/specifications or   |                                       |
| work write-ups;              |                                       |
+------------------------------+---------------------------------------+
| \(iii\) Development budgets, |                                       |
| including modifications;     |                                       |
+------------------------------+---------------------------------------+
| \(iv\) Proposed award of     |                                       |
| contracts, including         |                                       |
| construction contracts,      |                                       |
| turnkey contracts of sale,   |                                       |
| letters of commitment, and   |                                       |
| contracts with the           |                                       |
| architect/engineer (prior to |                                       |
| execution);                  |                                       |
+------------------------------+---------------------------------------+
| \(4\) Submit additional      |                                       |
| material in support of one   |                                       |
| or more of the statements,   |                                       |
| resolutions, and             |                                       |
| certifications submitted as  |                                       |
| part of the PHA proposal, or |                                       |
| periodic performance report; |                                       |
+------------------------------+---------------------------------------+
| \(5\) Not incur financial    |                                       |
| obligations, or to suspend   |                                       |
| payments for one or more     |                                       |
| activities;                  |                                       |
+------------------------------+---------------------------------------+
| \(f\) Failure to take        |                                       |
| corrective action. In cases  |                                       |
| where HUD has ordered        |                                       |
| corrective action and the    |                                       |
| PHA has failed to take the   |                                       |
| required actions within a    |                                       |
| reasonable time, as          |                                       |
| specified by HUD, HUD may    |                                       |
| take one or more of the      |                                       |
| following steps:             |                                       |
+------------------------------+---------------------------------------+
| \(1\) Terminate future draw  |                                       |
| downs and/or advances to the |                                       |
| PHA. In such case, the       |                                       |
| amount of advances made to   |                                       |
| the PHA shall be repaid by   |                                       |
| the PHA from any funds or    |                                       |
| assets available for that    |                                       |
| purpose;                     |                                       |
+------------------------------+---------------------------------------+
| > \(2\) Require alternative  |                                       |
| > management of development  |                                       |
| > functions by an entity     |                                       |
| > other than the PHA;        |                                       |
+------------------------------+---------------------------------------+
| \(3\) Cancel the fund        |                                       |
| reservation if the PHA fails |                                       |
| to start (begin construction |                                       |
| or rehabilitation), or       |                                       |
| complete (acquisition)       |                                       |
| within 30 months from the    |                                       |
| date of the fund reservation |                                       |
| pursuant to section 5(k) of  |                                       |
| the Act;                     |                                       |
+------------------------------+---------------------------------------+
| \(4\) Recapture for good     |                                       |
| cause any grant amounts      |                                       |
| previously provided to a     |                                       |
| PHA, based upon a            |                                       |
| determination that the PHA   |                                       |
| has failed to comply with    |                                       |
| the requirements of the      |                                       |
| development program.         |                                       |
+------------------------------+---------------------------------------+
| \(g\) Right to appeal.       |                                       |
| Before taking any of the     |                                       |
| actions described in         |                                       |
| paragraph (f) of this        |                                       |
| section, HUD shall notify    |                                       |
| the PHA and give it an       |                                       |
| opportunity, within a        |                                       |
| prescribed period of time,   |                                       |
| to present any arguments or  |                                       |
| additional facts and data    |                                       |
| concerning the proposed      |                                       |
| action.                      |                                       |
+------------------------------+---------------------------------------+
| ### Subpart F---P            | 1.  Subpart F crosscuts subparts A -- |
| ublic/Private Partnerships f |     E in certain areas and it is      |
| or the Mixed Finance Develop |     worth looking at this and seeing  |
| ment of Public Housing Units |     if it could be streamlined        |
|                              |     further.                          |
| [TEXT HIGHLIGHTED IN YELLOW  |                                       |
| IS FROM THE PROPOSED RULE    | 2.  A number of people commended HUD  |
| DATED DECEMBER 27, 2006.     |     on the changes to 941.606(k).     |
| SOME OF THE LANGUAGE IS      |                                       |
| EXPLANATORY AND IS SIMPLY    | 3.  For mixed finance development,    |
| HIGHLIGHTED IN YELLOW. SOME  |     the process should be more like   |
| OF THE LANGUAGE MODIFIES THE |     HOME or CDBG. HUD's concerns      |
| CURRENT RULE AND IS INSERTED |     should be about leveraging the    |
| USING "TRACK CHANGES" AND IS |     resources (enforcement of total   |
| ALSO HIGHLIGHTED IN          |     development costs) and making     |
| YELLOW.]{.mark}              |     sure that it's a sound real       |
|                              |     estate deal. But if there is tax  |
|                              |     credit financing at 4% or 9%,     |
|                              |     others are already looking at     |
|                              |     that and making sure it's a sound |
|                              |     deal. Not sure we need safe       |
|                              |     harbors, design standards,        |
|                              |     provisions on neighborhood        |
|                              |     placement---HFAs \[housing        |
|                              |     finance agencies?\] already have  |
|                              |     them. Instead, HUD can meet with  |
|                              |     HFAs and establish with the HFA   |
|                              |     that it's a sound deal.           |
+------------------------------+---------------------------------------+
| ### Sec. 941.600 Purpose.    |                                       |
+------------------------------+---------------------------------------+
| \(a\)                        | Use "instrumentality(ies)" in lieu of |
|                              | "partners".                           |
| \(1\) This subpart           |                                       |
| authorizes a PHA to use a    |                                       |
| combination of private       |                                       |
| financing and public housing |                                       |
| development funds to develop |                                       |
| public housing units, and is |                                       |
| designed to enable PHAs and  |                                       |
| their partners to structure  |                                       |
| transactions that make use   |                                       |
| of private and/or public     |                                       |
| sources of financing. Many   |                                       |
| potential scenarios for      |                                       |
| ownership and transaction    |                                       |
| structures exist, ranging    |                                       |
| from the PHA or its          |                                       |
| partner(s) holding no        |                                       |
| ownership interest, a        |                                       |
| partial ownership interest,  |                                       |
| or 100 percent of the        |                                       |
| ownership interest of the    |                                       |
| public housing units that    |                                       |
| are to be developed. PHAs    |                                       |
| and/or their partner(s) may  |                                       |
| choose to enter into a       |                                       |
| partnership or other         |                                       |
| contractual arrangement with |                                       |
| a third-party entity for the |                                       |
| mixed-finance development    |                                       |
| and/or ownership of public   |                                       |
| housing units. If this       |                                       |
| entity has primary           |                                       |
| responsibility along with    |                                       |
| the PHA for the development  |                                       |
| of these units, it is        |                                       |
| referred to for purposes of  |                                       |
| this subpart as the PHA\'s   |                                       |
| "partner.\'\' The entity     |                                       |
| that ultimately owns the     |                                       |
| public housing units,        |                                       |
| whether or not the PHA       |                                       |
| retains an ownership         |                                       |
| interest, is referred to as  |                                       |
| the "owner entity.\'\' The   |                                       |
| resulting "mixed-finance\'\' |                                       |
| developments may consist of  |                                       |
| 100 percent public housing   |                                       |
| units, or may consist of     |                                       |
| public housing and           |                                       |
| non-public housing units.    |                                       |
+------------------------------+---------------------------------------+
| \(2\) This subpart sets      |                                       |
| forth the requirements that  |                                       |
| must be met by the PHA and   |                                       |
| its partner(s) before HUD    |                                       |
| can approve a proposal for   |                                       |
| mixed-finance development,   |                                       |
| and also sets forth          |                                       |
| continuing requirements that |                                       |
| apply throughout the         |                                       |
| development and operation of |                                       |
| the development by the owner |                                       |
| entity.                      |                                       |
+------------------------------+---------------------------------------+
| \(b\) Under this subpart,    |                                       |
| public housing units that    |                                       |
| are built in a mixed-finance |                                       |
| development must be          |                                       |
| comparable in size,          |                                       |
| location, external           |                                       |
| appearance, and distribution |                                       |
| to the non-public housing    |                                       |
| units within the             |                                       |
| development.                 |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.602 Applicability |                                       |
| of other requirements.**     |                                       |
+------------------------------+---------------------------------------+
| \(a\) Relationship of this   |                                       |
| subpart to other             |                                       |
| requirements in 24 CFR part  |                                       |
| 941. The requirements        |                                       |
| contained in this subpart    |                                       |
| apply only to the            |                                       |
| development of public        |                                       |
| housing units using          |                                       |
| mixed-finance development    |                                       |
| methods under this subpart   |                                       |
| and to the operation of      |                                       |
| public housing units that    |                                       |
| are owned, or that will be   |                                       |
| owned, by an owner entity    |                                       |
| under this subpart. Other    |                                       |
| requirements for the         |                                       |
| development of public        |                                       |
| housing, as set forth in     |                                       |
| subparts A through E of this |                                       |
| part, shall not apply to the |                                       |
| development of public        |                                       |
| housing units pursuant to    |                                       |
| this subpart, except as may  |                                       |
| be required by HUD.          |                                       |
| Applicable requirements      |                                       |
| include, but shall not be    |                                       |
| limited to, the following:   |                                       |
+------------------------------+---------------------------------------+
| \(1\) Section 941.103        |                                       |
| ("Definitions\'\')           |                                       |
| (definitions of the          |                                       |
| following terms only shall   |                                       |
| apply to this subpart:       |                                       |
| "Annual Contributions        |                                       |
| Contract (ACC),\'\'          |                                       |
| "cooperation agreement,\'\'  |                                       |
| "design documents,\'\'       |                                       |
| "reformulation,\'\' and      |                                       |
| "Total Development Cost      |                                       |
| (TDC).\'\'                   |                                       |
+------------------------------+---------------------------------------+
| \(2\) Section 941.201 ("PHA  |                                       |
| eligibility\'\') (except     |                                       |
| that specific requirements   |                                       |
| governing the cooperation    |                                       |
| agreement, as set forth in   |                                       |
| Sec. 941.201(c), shall be    |                                       |
| determined in accordance     |                                       |
| with this subpart);          |                                       |
+------------------------------+---------------------------------------+
| > \(3\) Section 941.202      |                                       |
| > ("Site and neighborhood    |                                       |
| > standards\'\');            |                                       |
+------------------------------+---------------------------------------+
| \(4\) Section 941.203        |                                       |
| ("Design and construction    |                                       |
| standards\'\');              |                                       |
+------------------------------+---------------------------------------+
| \(5\) Section 941.205 ("PHA  |                                       |
| contracts\'\') (except that  |                                       |
| the reference to             |                                       |
| "development related         |                                       |
| contracts entered into by    |                                       |
| the PHA\'\' shall be         |                                       |
| construed to mean            |                                       |
| "development related         |                                       |
| contracts entered into by    |                                       |
| the PHA or the owner         |                                       |
| entity\'\');                 |                                       |
+------------------------------+---------------------------------------+
| \(6\) Section 941.207        |                                       |
| ("Relocation and             |                                       |
| acquisition\'\');            |                                       |
+------------------------------+---------------------------------------+
| \(7\) Section 941.208        |                                       |
| ("Other Federal              |                                       |
| requirements\'\');           |                                       |
+------------------------------+---------------------------------------+
| \(8\) Section 941.209        |                                       |
| ("Audit\'\');                |                                       |
+------------------------------+---------------------------------------+
| \(9\) Section 941.306        |                                       |
| ("Maximum development        |                                       |
| cost\'\');                   |                                       |
+------------------------------+---------------------------------------+
| > \(10\) Section 941.402     |                                       |
| > ("Project design and       |                                       |
| > construction\'\');         |                                       |
+------------------------------+---------------------------------------+
| \(11\) Section 941.403       |                                       |
| ("Acceptance of work and     |                                       |
| contract settlement\'\');    |                                       |
+------------------------------+---------------------------------------+
| \(12\) Section 941.404       |                                       |
| ("Completion of              |                                       |
| development\'\'); and        |                                       |
+------------------------------+---------------------------------------+
| \(13\) Section 941.501 ("HUD |                                       |
| review of PHA performance;   |                                       |
| sanctions\'\').              |                                       |
+------------------------------+---------------------------------------+
| \(b\) Procedure in the event | Add: "...before the affected action   |
| of a conflict between        | either required or prohibited occurs. |
| requirements. In the event   |                                       |
| of a conflict between a      |                                       |
| requirement contained in     |                                       |
| this subpart and an          |                                       |
| applicable requirement set   |                                       |
| forth in subparts A through  |                                       |
| E of this part, the          |                                       |
| requirements of this subpart |                                       |
| shall apply, unless HUD      |                                       |
| otherwise so determines in   |                                       |
| writing.                     |                                       |
+------------------------------+---------------------------------------+
| \(c\) HUD approval. For      |                                       |
| purposes of this subpart     |                                       |
| only, any action or approval |                                       |
| that is required to be taken |                                       |
| or provided by HUD or by the |                                       |
| HUD field office, pursuant   |                                       |
| to a requirement set forth   |                                       |
| in subparts A through F of   |                                       |
| this part, shall be          |                                       |
| construed to mean that HUD   |                                       |
| Headquarters shall take such |                                       |
| action or provide such       |                                       |
| approval, unless the field   |                                       |
| office is authorized in      |                                       |
| writing by Headquarters to   |                                       |
| carry out a specific         |                                       |
| function under this subpart. |                                       |
+------------------------------+---------------------------------------+
| \(d\) Applicability of       |                                       |
| requirements pursuant to 24  |                                       |
| CFR part 85. The             |                                       |
| requirements of 24 CFR part  |                                       |
| 85 are applicable to this    |                                       |
| subpart, subject to the      |                                       |
| following two provisos:      |                                       |
+------------------------------+---------------------------------------+
| \(1\) A PHA may select a     |                                       |
| partner using competitive    |                                       |
| proposal procedures for      |                                       |
| qualifications-based         |                                       |
| procurement (subject to      |                                       |
| negotiation of fair and      |                                       |
| reasonable compensation,     |                                       |
| including TDC and other      |                                       |
| applicable cost              |                                       |
| limitations);                |                                       |
+------------------------------+---------------------------------------+
| \(2\) An owner entity        |                                       |
| (which, as a private entity, |                                       |
| would normally not be        |                                       |
| subject to part 24 CFR part  |                                       |
| 85) shall be required to     |                                       |
| comply with 24 CFR part 85   |                                       |
| if HUD determines that the   |                                       |
| PHA or PHA instrumentality   |                                       |
| exercises significant        |                                       |
| functions within the owner   |                                       |
| entity with respect to       |                                       |
| managing the development of  |                                       |
| the proposed units. HUD may, |                                       |
| on a case-by-case basis,     |                                       |
| exempt such an owner entity  |                                       |
| from the need to comply with |                                       |
| 24 CFR part 85 if it         |                                       |
| determines that the owner    |                                       |
| entity has developed an      |                                       |
| acceptable alternative       |                                       |
| procurement plan.            |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.604               |                                       |
| Definitions.**               |                                       |
+------------------------------+---------------------------------------+
| In addition to the           | Add definitions of "instrumentality"  |
| definitions set forth in     | and "affiliate"                       |
| Sec. 941.602(a)(1), the      |                                       |
| following definitions are    |                                       |
| applicable to this subpart:  |                                       |
+------------------------------+---------------------------------------+
| Development. A housing       |                                       |
| facility consisting of       |                                       |
| public housing units, and    |                                       |
| that may also consist of     |                                       |
| non-public housing units,    |                                       |
| that has been developed, or  |                                       |
| that will be developed,      |                                       |
| using mixed-finance          |                                       |
| strategies under this        |                                       |
| subpart.                     |                                       |
+------------------------------+---------------------------------------+
| Mixed-finance. The combined  |                                       |
| use of publicly and          |                                       |
| privately financed sources   |                                       |
| of funds for the development |                                       |
| of public housing units      |                                       |
| under this subpart.          |                                       |
+------------------------------+---------------------------------------+
| Owner Entity. The entity     | \* Add: "...or its instrumentality."  |
| that will own the public     |                                       |
| housing units, if the PHA    |                                       |
| holds less than one hundred  |                                       |
| percent of the ownership     |                                       |
| interest; or the lessee      |                                       |
| under a ground lease from    |                                       |
| the PHA. The owner entity    |                                       |
| may be a partnership that    |                                       |
| includes the PHA\*.          |                                       |
+------------------------------+---------------------------------------+
| Participating party. Any     |                                       |
| person, firm, corporation,   |                                       |
| or public or private entity  |                                       |
| that:                        |                                       |
+------------------------------+---------------------------------------+
| \(1\) Agrees to provide      |                                       |
| financial or other resources |                                       |
| to carry out the approved    |                                       |
| proposal, or specified       |                                       |
| activities contained in the  |                                       |
| proposal; or                 |                                       |
+------------------------------+---------------------------------------+
| \(2\) Otherwise participates |                                       |
| in the development and/or    |                                       |
| operation of the public      |                                       |
| housing units and will       |                                       |
| receive funds derived from   |                                       |
| HUD with respect to such     |                                       |
| participation. The term      |                                       |
| "participating party\'\'     |                                       |
| includes an owner entity or  |                                       |
| partner.                     |                                       |
+------------------------------+---------------------------------------+
| Partner. A third party       |                                       |
| entity with whom the PHA has |                                       |
| entered into a partnership   |                                       |
| or other contractual         |                                       |
| arrangement to provide for   |                                       |
| the mixed- finance           |                                       |
| development of public        |                                       |
| housing units pursuant to    |                                       |
| this subpart, and that has   |                                       |
| primary responsibility with  |                                       |
| the PHA for the development  |                                       |
| of the housing units under   |                                       |
| the terms of the approved    |                                       |
| proposal.                    |                                       |
+------------------------------+---------------------------------------+
| Proposal. For purposes of    |                                       |
| this subpart only, the term  |                                       |
| "proposal\'\' means a        |                                       |
| detailed PHA submission of   |                                       |
| information under Sec.       |                                       |
| 941.606.                     |                                       |
+------------------------------+---------------------------------------+
| Public Housing Agency (PHA). |                                       |
| Any State, county,           |                                       |
| municipality, or other       |                                       |
| governmental entity or       |                                       |
| public body (or agency or    |                                       |
| instrumentality thereof)     |                                       |
| which is authorized to       |                                       |
| engage in or assist in the   |                                       |
| development or operation of  |                                       |
| low-income housing under     |                                       |
| this part. For purposes of   |                                       |
| this subpart, the term       |                                       |
| "PHA\'\' also encompasses    |                                       |
| any agency or                |                                       |
| instrumentality of the PHA.  |                                       |
+------------------------------+---------------------------------------+
| Public housing unit. A unit  |                                       |
| that is eligible to receive  |                                       |
| operating subsidy pursuant   |                                       |
| to section 9 of the Act (42  |                                       |
| U.S.C. 1437g).               |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.606 Proposal.**   |                                       |
+------------------------------+---------------------------------------+
| [This proposed rule would    |                                       |
| streamline the mixed-finance |                                       |
| application process by       |                                       |
| reducing the number of       |                                       |
| closing documents that must  |                                       |
| be submitted to HUD to       |                                       |
| receive these approvals.     |                                       |
| This rule would revise the   |                                       |
| proposal submissions in 24   |                                       |
| CFR 941.606 to include       |                                       |
| certifications of compliance |                                       |
| with applicable public       |                                       |
| housing requirements. Under  |                                       |
| this rulemaking, PHAs would  |                                       |
| be required to submit their  |                                       |
| proposals along with         |                                       |
| certifications required by   |                                       |
| 24 CFR 941.606(l) (formerly  |                                       |
| Sec. 941.606(n)). The        |                                       |
| certifications listed in     |                                       |
| this section would also act  |                                       |
| as guidance for PHAs         |                                       |
| submitting a proposal to     |                                       |
| ensure the PHA\'s            |                                       |
| comprehensive regulatory     |                                       |
| compliance.]{.mark}          |                                       |
|                              |                                       |
| [The proposed new Sec.       |                                       |
| 941.606(l)(1)(iv) is         |                                       |
| intended to ensure that the  |                                       |
| PHA obtains all of the       |                                       |
| project documents relative   |                                       |
| to development and operation |                                       |
| that are required to be kept |                                       |
| on file and available for    |                                       |
| HUD review. This proposed    |                                       |
| new regulatory section also  |                                       |
| would provide HUD with       |                                       |
| assurances that the PHA has  |                                       |
| properly reviewed the        |                                       |
| closing documents to ensure  |                                       |
| that they are consistent     |                                       |
| with the public housing      |                                       |
| requirements. The proposed   |                                       |
| new Sec. 941.606(l)(1)(v)    |                                       |
| would assure that operating  |                                       |
| funds provided under section |                                       |
| 9 of the 1937 Act will only  |                                       |
| be used for eligible         |                                       |
| activities. The proposed new |                                       |
| Sec. 941.606(l)(1)(vi) would |                                       |
| require PHAs to comply with  |                                       |
| the provisions of section 30 |                                       |
| of the 1937 Act relating to  |                                       |
| mortgages and security       |                                       |
| interests. The proposed new  |                                       |
| Sec. 941.606(l)(1)(viii)     |                                       |
| would require PHAs to keep   |                                       |
| records in accordance with   |                                       |
| 24 CFR 85.20. The proposed   |                                       |
| new Sec. 941.606(l)(1)(ix)   |                                       |
| would ensure that none of    |                                       |
| the parties participating in |                                       |
| a mixed-finance proposal and |                                       |
| development under this rule  |                                       |
| are suspended, debarred, or  |                                       |
| subject to a limited denial  |                                       |
| of participation under 24    |                                       |
| CFR part 24, subtitle A. The |                                       |
| proposed new Sec.            |                                       |
| 941.606(l)(1)(x) would       |                                       |
| ensure that any              |                                       |
| transformation remedies      |                                       |
| included in the project      |                                       |
| documents are consistent     |                                       |
| with section 35(h) of the    |                                       |
| 1937 Act, and that such      |                                       |
| remedies may not be          |                                       |
| implemented until such time  |                                       |
| as HUD establishes           |                                       |
| procedures or requirements   |                                       |
| developed by                 |                                       |
| regulations.]{.mark}         |                                       |
|                              |                                       |
| [...]{.mark}                 |                                       |
|                              |                                       |
| [Additionally, this rule     |                                       |
| would update the legal       |                                       |
| authority for 24 CFR part    |                                       |
| 941 to include the           |                                       |
| requirements of section 35   |                                       |
| of the 1937 Act (42 U.S.C.   |                                       |
| 1437z-7) and section 102(d)  |                                       |
| of the HUD Reform Act (42    |                                       |
| U.S.C. 3545(d)) on subsidy   |                                       |
| layering, and would also     |                                       |
| update 24 CFR 941.606 to     |                                       |
| reflect statutory changes.   |                                       |
| Specifically, the            |                                       |
| requirement for a life-cycle |                                       |
| analysis of heating and      |                                       |
| cooling systems reflects     |                                       |
| authority that was removed   |                                       |
| and replaced by section 515  |                                       |
| of the Quality Housing and   |                                       |
| Work Responsibility Act of   |                                       |
| 1998 (QHWRA) (Pub. L         |                                       |
| 105-276). Accordingly, this  |                                       |
| rule removes 24 CFR          |                                       |
| 941.606(k).]{.mark}          |                                       |
|                              |                                       |
| [The provision for the       |                                       |
| section 213 clearance of new |                                       |
| public housing by local      |                                       |
| government officials in      |                                       |
| current 24 CFR 941.606(l)    |                                       |
| references a provision that  |                                       |
| was repealed by section 551  |                                       |
| of QHWRA. Accordingly, this  |                                       |
| rule also removes            |                                       |
| 941.606(l).]{.mark}          |                                       |
+------------------------------+---------------------------------------+
| Each proposal shall be       | 1.  \* Add: "Prior to submitting a    |
| prepared in the form         |     proposal, a PHA can request that  |
| prescribed by HUD and shall  |     HUD determine what documentation  |
| include some or all of the   |     it desires from the agency and    |
| following documentation, as  |     rely on this response."           |
| deemed necessary by HUD\*.   |                                       |
| In determining the amount of | 2.  \*\* Change to read: "as          |
| information to be submitted  |     demonstrated by its overall score |
| by the PHA under this        |     in 24 CFR 902 . The proposal may  |
| section, HUD shall consider  |     include as deemed necessary by    |
| whether the documentation is |     HUD:"                             |
| required for HUD to carry    |                                       |
| out mandatory statutory or   | 3.  Delete: "PHMAP".                  |
| executive order reviews, the |                                       |
| quality of the PHA\'s past   |                                       |
| performance in implementing  |                                       |
| development projects under   |                                       |
| this part, and the PHA\'s    |                                       |
| demonstrated administrative  |                                       |
| capability\*\*, as           |                                       |
| demonstrated by its overall  |                                       |
| score on the PHMAP. The      |                                       |
| proposal includes:           |                                       |
+------------------------------+---------------------------------------+
| \(a\) Activities;            | \* Add: "and responsibilities"        |
| relationship of              |                                       |
| participating parties. An    |                                       |
| identification of the        |                                       |
| participating parties and a  |                                       |
| description of the           |                                       |
| activities\* to be           |                                       |
| undertaken by each of the    |                                       |
| participating parties and    |                                       |
| the PHA, and the legal and   |                                       |
| business relationships       |                                       |
| between the PHA and each of  |                                       |
| the participating parties.   |                                       |
+------------------------------+---------------------------------------+
| \(b\) Financing. A detailed  | 1.  \* Delete "operating pro formas   |
| description of all financing |     relating to the viability of the  |
| (including public housing    |     development" (the deletion is     |
| development funds) necessary |     covered bi (i))                   |
| for the implementation of    |                                       |
| the proposal, specifying the |                                       |
| sources (with respect to     |                                       |
| each of the proposed         |                                       |
| categorical uses of all such |                                       |
| financing), together with a  |                                       |
| ten-year operating pro forma |                                       |
| for the development          |                                       |
| (including all underlying    |                                       |
| assumptions). In addition,   |                                       |
| the PHA may be required to   |                                       |
| submit to HUD, for such      |                                       |
| review and approval as HUD   |                                       |
| deems necessary, all         |                                       |
| documents (including         |                                       |
| applications for financing)  |                                       |
| relating to the financing of |                                       |
| the proposal, including, but |                                       |
| not limited to, any loan     |                                       |
| agreements, notes, mortgages |                                       |
| or deeds of trust, use       |                                       |
| restrictions, \*operating    |                                       |
| pro formas relating to the   |                                       |
| viability of the             |                                       |
| development, and other       |                                       |
| agreements or documents      |                                       |
| pertaining to the financing  |                                       |
| of the proposal.             |                                       |
+------------------------------+---------------------------------------+
| \(c\) Methodology. If the    | How does this comport with Asset      |
| PHA proposes to provide      | Management? Won't the subsidy floe to |
| public housing operating     | the property directly? Should this be |
| subsidy for the public       | deleted?                              |
| housing units, it must       |                                       |
| submit a methodology         |                                       |
| acceptable to HUD for the    |                                       |
| distribution of a portion of |                                       |
| its operating subsidy to     |                                       |
| such units;                  |                                       |
+------------------------------+---------------------------------------+
| \(d\) Development            |                                       |
| description. A description   |                                       |
| of the housing, including    |                                       |
| the number and type (with    |                                       |
| bedroom count) of public     |                                       |
| housing units and, if        |                                       |
| applicable, the number and   |                                       |
| type of non-public housing   |                                       |
| units (with bedroom count)   |                                       |
| to be developed; schematic   |                                       |
| drawings and designs of the  |                                       |
| proposed building and unit   |                                       |
| plans; outline               |                                       |
| specifications; and the      |                                       |
| types and amounts of         |                                       |
| non-dwelling space to be     |                                       |
| provided.                    |                                       |
+------------------------------+---------------------------------------+
| \(e\) Site information. An   |                                       |
| identification and           |                                       |
| description of the proposed  |                                       |
| site, site plan, and         |                                       |
| neighborhood.                |                                       |
+------------------------------+---------------------------------------+
| \(f\) Market analysis. An    |                                       |
| analysis of the projected    |                                       |
| market for the proposed      |                                       |
| development.                 |                                       |
+------------------------------+---------------------------------------+
| \(g\) Development            | \* Delete: ", including the architect |
| construction cost estimate.  | or contractor estimate of the time    |
| A preliminary development    | required to complete each major       |
| construction cost estimate   | development stage."                   |
| based on the schematic       |                                       |
| drawings and outline         |                                       |
| specifications and current   |                                       |
| construction costs           |                                       |
| prevailing in the area. In   |                                       |
| addition, a copy of the PHA  |                                       |
| development schedule,        |                                       |
| including the architect or   |                                       |
| contractor estimate of the   |                                       |
| time required to complete    |                                       |
| each major development       |                                       |
| stage.                       |                                       |
+------------------------------+---------------------------------------+
| \(h\) Facilities. A          |                                       |
| statement addressing the     |                                       |
| adequacy of existing or      |                                       |
| proposed facilities and      |                                       |
| services for the prospective |                                       |
| occupants of the             |                                       |
| development.                 |                                       |
+------------------------------+---------------------------------------+
| \(i\) Relocation.            |                                       |
| Information concerning any   |                                       |
| displacement of site         |                                       |
| occupants, including         |                                       |
| identification of each       |                                       |
| displacee, the distribution  |                                       |
| plan for notices, and the    |                                       |
| anticipated cost and source  |                                       |
| of funding for relocation    |                                       |
| benefits.                    |                                       |
+------------------------------+---------------------------------------+
| \(j\) Operating feasibility. | \* Add: "...assuming level operating  |
| A demonstration of the       | subsidy appropriations in future      |
| operating feasibility of the | years."                               |
| development, which shall be  |                                       |
| accomplished by the PHA\'s   |                                       |
| showing that the estimated   |                                       |
| operating expenses of the    |                                       |
| development will not exceed  |                                       |
| its estimated operating      |                                       |
| income \*.                   |                                       |
+------------------------------+---------------------------------------+
| []{.mark}                    | []{.mark}                             |
+------------------------------+---------------------------------------+
| > [(k)]{.mark} New           |                                       |
| > construction. If a         |                                       |
| > proposal involves new      |                                       |
| > construction, the PHA must |                                       |
| > comply with section 6(h)   |                                       |
| > of the Act (42 U.S.C.      |                                       |
| > 1437d). This may be        |                                       |
| > accomplished by the PHA\'s |                                       |
| > submission of a comparison |                                       |
| > of the cost of new         |                                       |
| > construction in the        |                                       |
| > neighborhood where the     |                                       |
| > housing is proposed to be  |                                       |
| > constructed and the cost   |                                       |
| > of acquisition of existing |                                       |
| > housing (with or without   |                                       |
| > rehabilitation) in the     |                                       |
| > same neighborhood          |                                       |
| > (including estimated costs |                                       |
| > of lead-based paint        |                                       |
| > activities).               |                                       |
| > Alternatively, the PHA may |                                       |
| > submit a certification,    |                                       |
| > accompanied by supporting  |                                       |
| > documentation, that there  |                                       |
| > is insufficient existing   |                                       |
| > housing in the             |                                       |
| > neighborhood to develop    |                                       |
| > public housing through     |                                       |
| > acquisition.               |                                       |
+------------------------------+---------------------------------------+
| \(1\) Certifications and     |                                       |
| assurances. The PHA shall    |                                       |
| submit, as part of its       |                                       |
| proposal, certifications and |                                       |
| assurances warranting that   |                                       |
| it:                          |                                       |
+------------------------------+---------------------------------------+
| \(i\) Has the legal          |                                       |
| authority under State and    |                                       |
| local law to develop public  |                                       |
| housing units through the    |                                       |
| establishment or selection   |                                       |
| of an owner entity, and to   |                                       |
| enter into all agreements    |                                       |
| and provide all assurances   |                                       |
| required under this subpart. |                                       |
| In addition, the PHA shall   |                                       |
| warrant that it has the      |                                       |
| legal authority necessary to |                                       |
| enter into any proposed      |                                       |
| partnership and to fulfill   |                                       |
| its obligations as a partner |                                       |
| thereunder, and that it has  |                                       |
| obtained all necessary       |                                       |
| approvals for this purpose;  |                                       |
+------------------------------+---------------------------------------+
| \(ii\) Will use an open and  |                                       |
| competitive process to       |                                       |
| select the partner and/or    |                                       |
| the owner entity and shall   |                                       |
| ensure that there is no      |                                       |
| conflict of interest         |                                       |
| involved in the PHA\'s       |                                       |
| selection of the partner     |                                       |
| and/or owner entity to       |                                       |
| develop and operate the      |                                       |
| proposed public housing      |                                       |
| units. In addition, the PHA  |                                       |
| shall ensure that:           |                                       |
+------------------------------+---------------------------------------+
| \(A\) Any selected partner   |                                       |
| and/or owner entity complies |                                       |
| with all applicable State    |                                       |
| and local procurement and    |                                       |
| conflict of interest         |                                       |
| requirements with respect to |                                       |
| its selection of entities to |                                       |
| assist in the development,   |                                       |
| and uses a competitive       |                                       |
| process consistent with the  |                                       |
| requirements set forth in    |                                       |
| this subpart; and            |                                       |
+------------------------------+---------------------------------------+
| \(B\) If the partner and/or  | Add: "...or HUD has previously        |
| owner entity (or any other   | approved the identity of interest     |
| entity with an identity of   | construction contract in its approval |
| interests with such parties) | of the proposal;                      |
| wants to serve as the        |                                       |
| general contractor for the   |                                       |
| project or development, it   |                                       |
| may award itself the         |                                       |
| construction contract only   |                                       |
| if it can demonstrate to     |                                       |
| HUD\'s satisfaction that its |                                       |
| bid is the lowest bid        |                                       |
| submitted in response to a   |                                       |
| public request for bids\*;   |                                       |
+------------------------------+---------------------------------------+
| \(iii\) Will be responsible  |                                       |
| to HUD for ensuring that the |                                       |
| public housing units are     |                                       |
| developed and operated in    |                                       |
| accordance with all          |                                       |
| applicable public housing    |                                       |
| requirements, including the  |                                       |
| ACC, and all pertinent       |                                       |
| statutory, regulatory, and   |                                       |
| executive order              |                                       |
| requirements, as those       |                                       |
| requirements may be amended  |                                       |
| from time to time. The PHA   |                                       |
| must also warrant that it    |                                       |
| will provide for a mechanism |                                       |
| to assure, to HUD\'s         |                                       |
| satisfaction, that the       |                                       |
| public housing units will    |                                       |
| remain available for use by  |                                       |
| low-income families for the  |                                       |
| maximum period required by   |                                       |
| law. In addition, the PHA    |                                       |
| must warrant that any        |                                       |
| agreement providing for the  |                                       |
| management of the public     |                                       |
| housing units by an entity   |                                       |
| other than the PHA shall     |                                       |
| require that the units be    |                                       |
| operated in accordance with  |                                       |
| all applicable requirements  |                                       |
| under this subpart for the   |                                       |
| full term of any low-income  |                                       |
| use restrictions.            |                                       |
+------------------------------+---------------------------------------+
| [(iv) Has obtained or will   | What about any market rate portion of |
| obtain any documents needed  | a mixed finance deal?                 |
| to establish its rights and  |                                       |
| responsibilities associated  | What about any market rate portion of |
| with the development and     | a mixed finance deal?                 |
| operation of the project,    |                                       |
| and that such documents will |                                       |
| be consistent with the       |                                       |
| applicable public housing    |                                       |
| requirements. Such documents |                                       |
| shall include, but not be    |                                       |
| limited to:]{.mark}          |                                       |
|                              |                                       |
| [(A) A regulatory and        |                                       |
| operating agreement between  |                                       |
| the PHA and owner entity     |                                       |
| that provides binding        |                                       |
| assurances that the          |                                       |
| operation of the public      |                                       |
| housing units will be in     |                                       |
| accordance with applicable   |                                       |
| public housing               |                                       |
| requirements;]{.mark}        |                                       |
|                              |                                       |
| [(B) A partnership           |                                       |
| agreement, membership        |                                       |
| agreement, development       |                                       |
| agreement, or other          |                                       |
| agreement between any of the |                                       |
| participating parties,       |                                       |
| including an agreement       |                                       |
| between the agency and the   |                                       |
| owner entity, its partner,   |                                       |
| or other participating       |                                       |
| parties, that establishes    |                                       |
| the rights and liabilities   |                                       |
| (financial and otherwise) of |                                       |
| the parties;]{.mark}         |                                       |
|                              |                                       |
| [(C) A management agreement  |                                       |
| for the public housing units |                                       |
| if the units will be managed |                                       |
| by an entity other than the  |                                       |
| agency;]{.mark}              |                                       |
|                              |                                       |
| [(D) An opinion of counsel   |                                       |
| for the applicable           |                                       |
| jurisdiction that the        |                                       |
| existing cooperation         |                                       |
| agreement between the        |                                       |
| jurisdiction and the agency  |                                       |
| includes the project or      |                                       |
| development, or a            |                                       |
| certification from the       |                                       |
| jurisdiction that the        |                                       |
| project is consistent with   |                                       |
| the jurisdiction\'s          |                                       |
| Comprehensive Housing        |                                       |
| Affordability                |                                       |
| Strategy;]{.mark}            |                                       |
|                              |                                       |
| [(E) All financing           |                                       |
| documents, including notes,  |                                       |
| mortgages, deeds of trust,   |                                       |
| loan agreements, bond        |                                       |
| documents, or such other     |                                       |
| documents that evidence the  |                                       |
| availability of the          |                                       |
| participating party(ies)     |                                       |
| financing, and the amount    |                                       |
| and source of financing      |                                       |
| committed to the             |                                       |
| development;]{.mark}         |                                       |
|                              |                                       |
| [(F) The organizational      |                                       |
| documents of the owner       |                                       |
| entity;]{.mark}              |                                       |
|                              |                                       |
| [(G) Evidence of control of  |                                       |
| the site by the agency,      |                                       |
| partner, or owner entity for |                                       |
| such a period of time as may |                                       |
| be required by HUD;          |                                       |
| and]{.mark}                  |                                       |
|                              |                                       |
| [(H) Evidence that all       |                                       |
| applicable permits and       |                                       |
| zoning requirements are in   |                                       |
| place or, if not in place, a |                                       |
| certification that permits   |                                       |
| and zoning will be in place  |                                       |
| prior to start of            |                                       |
| construction, along with an  |                                       |
| explanation of the process   |                                       |
| and barriers to obtaining    |                                       |
| such permits and zoning,     |                                       |
| which may be in the form of  |                                       |
| a certification from the     |                                       |
| owner entity or its          |                                       |
| counsel.]{.mark}             |                                       |
|                              |                                       |
| [(v) Will ensure that        |                                       |
| operating funds provided     |                                       |
| under section 9 of the 1937  |                                       |
| Act will be used only for    |                                       |
| the eligible activities      |                                       |
| identified in the agency\'s  |                                       |
| Mixed Finance ACC Amendment. |                                       |
| It will also ensure that     |                                       |
| operating funds will not be  |                                       |
| used for exit taxes in       |                                       |
| connection with any          |                                       |
| low-income housing tax       |                                       |
| credit program or to         |                                       |
| initially fund any operating |                                       |
| reserve account, and that    |                                       |
| operating funds must not be  |                                       |
| used for the payment of debt |                                       |
| service without prior HUD    |                                       |
| approval;]{.mark}            |                                       |
|                              |                                       |
| [(vi) Will not, without      |                                       |
| HUD\'s prior written         |                                       |
| approval, authorize any      |                                       |
| mortgages or otherwise grant |                                       |
| a security interest in the   |                                       |
| development, including under |                                       |
| section 30 of the 1937       |                                       |
| Act;]{.mark}                 |                                       |
|                              |                                       |
| [(vii) Will ensure that the  |                                       |
| ownership entity will not    |                                       |
| make, without HUD\'s prior   |                                       |
| written approval, any        |                                       |
| transfer or grant any        |                                       |
| security interest in the     |                                       |
| ownership entity;]{.mark}    |                                       |
|                              |                                       |
| [(viii) Will keep records in |                                       |
| accordance with 24 CFR 85.20 |                                       |
| and facilitate an audit to   |                                       |
| determine compliance with    |                                       |
| program requirements. All    |                                       |
| records must be available at |                                       |
| all times for HUD inspection |                                       |
| and review;]{.mark}          |                                       |
|                              |                                       |
| [(ix) Will ensure that, to   |                                       |
| the greatest extent          |                                       |
| feasible, none of the        |                                       |
| parties participating in     |                                       |
| this mixed-finance proposal  |                                       |
| and development are          |                                       |
| suspended, debarred, or      |                                       |
| subject to a limited denial  |                                       |
| of participation under 24    |                                       |
| CFR, part 24, subtitle A;    |                                       |
| and]{.mark}                  |                                       |
|                              |                                       |
| > [(x) Will ensure that any  |                                       |
| > transformation remedies    |                                       |
| > made available to the      |                                       |
| > owner-entity are           |                                       |
| > consistent with section    |                                       |
| > 35(h) of the 1937          |                                       |
| > Act.]{.mark}               |                                       |
+------------------------------+---------------------------------------+
| \(2\) The PHA shall submit a |                                       |
| certification of previous    |                                       |
| participation in accordance  |                                       |
| with procedures set forth in |                                       |
| 24 CFR part 200, subpart H,  |                                       |
| and shall ensure that a      |                                       |
| similar certification is     |                                       |
| submitted to HUD by the      |                                       |
| participating parties.       |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.608 Technical     |                                       |
| processing and approval.**   |                                       |
+------------------------------+---------------------------------------+
| \(a\) Initial screening. HUD | \* Add: " ... within 14 calendar      |
| shall perform an initial     | days"                                 |
| screening to determine that  |                                       |
| all documentation required   |                                       |
| as part of the proposal      |                                       |
| under Sec. 941.606 has been  |                                       |
| submitted. HUD will advise   |                                       |
| the PHA of any deficiencies  |                                       |
| in the proposal\* and        |                                       |
| indicate that additional     |                                       |
| information will be accepted |                                       |
| if it is received by a       |                                       |
| specified date.              |                                       |
+------------------------------+---------------------------------------+
| \(b\) Technical processing.  |                                       |
| Upon determining that a      |                                       |
| proposal is acceptable for   |                                       |
| technical processing, HUD    |                                       |
| will evaluate the proposal   |                                       |
| to determine:                |                                       |
+------------------------------+---------------------------------------+
| \(1\) Whether the PHA has    |                                       |
| the legal authority          |                                       |
| necessary to develop public  |                                       |
| housing units through the    |                                       |
| establishment of an owner    |                                       |
| entity and the use of        |                                       |
| mixed-finance strategies in  |                                       |
| accordance with this         |                                       |
| subpart;                     |                                       |
+------------------------------+---------------------------------------+
| \(2\) Whether the proposed   |                                       |
| sources and uses of funds    |                                       |
| set forth in the proposal    |                                       |
| are eligible and reasonable, |                                       |
| and whether HUD\'s           |                                       |
| preliminary assessment of    |                                       |
| the financing and other      |                                       |
| documentation establishes to |                                       |
| HUD\'s satisfaction that the |                                       |
| mixed-finance development is |                                       |
| viable and is structured so  |                                       |
| as to adequately protect the |                                       |
| Federal investment of funds  |                                       |
| in the development. For this |                                       |
| purpose, HUD will consider   |                                       |
| (among other factors) the    |                                       |
| PHA\'s proposed methodology  |                                       |
| for allocating operating     |                                       |
| subsidies on behalf of the   |                                       |
| public housing units; the    |                                       |
| projected revenues to be     |                                       |
| generated by any non-public  |                                       |
| housing units in a           |                                       |
| mixed-finance development;   |                                       |
| and the 10-year operating    |                                       |
| pro forma and other          |                                       |
| information contained in the |                                       |
| proposal;                    |                                       |
+------------------------------+---------------------------------------+
| \(3\) If applicable, whether |                                       |
| the public housing units in  |                                       |
| the proposed development     |                                       |
| will be comparable in size,  |                                       |
| location, external           |                                       |
| appearance and distribution  |                                       |
| within the development to    |                                       |
| the non-public housing       |                                       |
| units;                       |                                       |
+------------------------------+---------------------------------------+
| \(4\) If public housing      |                                       |
| development funds are to be  |                                       |
| used to pay for more than    |                                       |
| the pro rata cost of common  |                                       |
| area improvements, whether   |                                       |
| the proposal ensures that:   |                                       |
|                              |                                       |
| \(i\) On a per unit basis    |                                       |
| (taking into consideration   |                                       |
| the number of public housing |                                       |
| units for which funds have   |                                       |
| been reserved) the PHA will  |                                       |
| not exceed TDC limits; and   |                                       |
+------------------------------+---------------------------------------+
| \(ii\) Any common area       |                                       |
| improvements will benefit    |                                       |
| all residents of the         |                                       |
| development;                 |                                       |
+------------------------------+---------------------------------------+
| \(5\) Whether the proposal   | 1.  Not clear whether this            |
| complies with all program    |     incorporates process for tenant   |
| requirements including, if   |     review/comment. Doesn't mention   |
| applicable, any comments     |     Resident Advisory Board comments, |
| received from the unit of    |     for example. (was written before  |
| general local government     |     QHWRA?)                           |
| pursuant to section 213 of   |                                       |
| the Housing and Community    | 2.  Q: Question of whether this       |
| Development Act of 1974 (42  |     section is even needed, assuming  |
| U.S.C. 1439) (see 24 CFR     |     the PHA is reporting annually. A: |
| part 791, subpart C); and    |     Needed if doing this mid-year.    |
|                              |     Response: Needs to be clarified.  |
+------------------------------+---------------------------------------+
| \(6\) Whether the proposal   |                                       |
| is approvable following      |                                       |
| completion by HUD of an      |                                       |
| environmental review in      |                                       |
| accordance with the          |                                       |
| requirements of 24 CFR part  |                                       |
| 50.                          |                                       |
+------------------------------+---------------------------------------+
| [This proposed rule would    |                                       |
| add a statement to 24 CFR    |                                       |
| 941.608(b) that HUD will     |                                       |
| perform a subsidy layering   |                                       |
| review. This new paragraph   |                                       |
| would not be a change in     |                                       |
| legal requirements, as       |                                       |
| section 102(d) of the        |                                       |
| Department of Housing and    |                                       |
| Urban Development Reform Act |                                       |
| (HUD Reform Act) (42 U.S.C.  |                                       |
| 3545(d)), requires HUD to    |                                       |
| certify (after taking into   |                                       |
| account other government     |                                       |
| assistance) that any HUD     |                                       |
| assistance to any housing    |                                       |
| project shall not be more    |                                       |
| than is necessary to provide |                                       |
| affordable housing. This     |                                       |
| paragraph would be included  |                                       |
| in order to make the         |                                       |
| requirement explicit for     |                                       |
| this program.]{.mark}        |                                       |
|                              |                                       |
| [(7) Subsidy layering        |                                       |
| analysis. After the PHA      |                                       |
| submits the proposal, HUD    |                                       |
| (or its designee) shall      |                                       |
| carry out a subsidy layering |                                       |
| analysis pursuant to section |                                       |
| 102(d) of the Department of  |                                       |
| Housing and Urban            |                                       |
| Development Reform Act of    |                                       |
| 1989 (42 U.S.C. 3545) (See   |                                       |
| 24 CFR part 4) to determine  |                                       |
| whether the aggregate amount |                                       |
| of assistance being provided |                                       |
| for the development is more  |                                       |
| than necessary to make the   |                                       |
| assisted activity            |                                       |
| feasible.]{.mark}            |                                       |
+------------------------------+---------------------------------------+
| \(c\) Proposal approval. HUD | \* Add: "...within 30 calendar days   |
| shall send a notification    | of receipt of a complete proposal"    |
| letter to the PHA stating    |                                       |
| that the proposal has been   |                                       |
| approved or disapproved \*.  |                                       |
| For approved proposals, the  |                                       |
| letter shall indicate the    |                                       |
| approved total development   |                                       |
| cost of the public housing   |                                       |
| units in the development.    |                                       |
| HUD will also send to the    |                                       |
| PHA for execution an ACC     |                                       |
| amendment and/or a grant     |                                       |
| agreement. If the PHA has    |                                       |
| already executed a front-end |                                       |
| ACC amendment, HUD will send |                                       |
| to the PHA for execution a   |                                       |
| special ACC amendment for    |                                       |
| the mixed-finance            |                                       |
| development (and/or a grant  |                                       |
| agreement). The PHA shall    |                                       |
| execute these documents and  |                                       |
| return them to HUD for       |                                       |
| execution.                   |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.610 Evidentiary   |                                       |
| materials and other          |                                       |
| documents.**                 |                                       |
+------------------------------+---------------------------------------+
| [Currently, as part of its   | #11 (below): too open ended.          |
| initial proposal,            |                                       |
| pre-closing submission, a    |                                       |
| PHA submits a complete       |                                       |
| evidentiary package required |                                       |
| by 24 CFR 941.610 for HUD    |                                       |
| review prior to closing.     |                                       |
| This proposal submission     |                                       |
| includes all necessary       |                                       |
| programmatic, underwriting,  |                                       |
| and legal documents,         |                                       |
| including a formal           |                                       |
| mixed-finance proposal,      |                                       |
| partnership documents,       |                                       |
| management documents, ground |                                       |
| leases, development          |                                       |
| agreements, title policies   |                                       |
| showing lien priority, land  |                                       |
| surveys, financing           |                                       |
| agreements, subordinate loan |                                       |
| documentation, and other     |                                       |
| drafts of all                |                                       |
| project-specific             |                                       |
| documentation. After         |                                       |
| receiving HUD\'s approval    |                                       |
| for this submission, the PHA |                                       |
| may go to closing and record |                                       |
| all necessary documentation. |                                       |
| Thereafter, prior to release |                                       |
| of federal funds, the PHA    |                                       |
| must resubmit final, fully   |                                       |
| executed, and recorded       |                                       |
| copies of all closing        |                                       |
| documentation to             |                                       |
| HUD.]{.mark}                 |                                       |
|                              |                                       |
| [With the **streamlined**    |                                       |
| review, the project will     |                                       |
| continue to be subject to    |                                       |
| this two-stage review        |                                       |
| process prior to release of  |                                       |
| funds, including a proposal  |                                       |
| review and a post closing    |                                       |
| review. However, the         |                                       |
| documentation submission     |                                       |
| requirements will be         |                                       |
| substantially reduced at     |                                       |
| each stage. The proposal     |                                       |
| review will include a        |                                       |
| limited legal review and     |                                       |
| review by the program office |                                       |
| prior to closing, to         |                                       |
| safeguard the interests of   |                                       |
| HUD. This limited review     |                                       |
| will ensure that the         |                                       |
| documents submitted are      |                                       |
| acceptable to HUD prior to   |                                       |
| the execution and recording  |                                       |
| of the documents. In         |                                       |
| addition to the              |                                       |
| mixed-finance proposal (the  |                                       |
| rental term sheet form       |                                       |
| (HUD-50031) and additional   |                                       |
| submissions), the proposal   |                                       |
| review submission will       |                                       |
| include the following: A     |                                       |
| draft Declaration of         |                                       |
| Restrictive Covenants for    |                                       |
| review by the Office of      |                                       |
| General Counsel (OGC); a     |                                       |
| draft mixed-finance          |                                       |
| amendment to the PHA\'s ACC  |                                       |
| with HUD (Mixed-Finance ACC  |                                       |
| Amendment); and lastly, a    |                                       |
| certification to HUD that    |                                       |
| all closing documents, those |                                       |
| submitted to HUD, and those  |                                       |
| retained by the PHA are in   |                                       |
| conformance with all laws,   |                                       |
| regulatory and statutory     |                                       |
| requirements, and executive  |                                       |
| orders that are applicable   |                                       |
| to the project. HUD has also |                                       |
| made available sample        |                                       |
| provisions to assist PHAs in |                                       |
| developing closing           |                                       |
| documentation that conform   |                                       |
| to the program requirements. |                                       |
| These provisions are         |                                       |
| available on HUD\'s Web      |                                       |
| site,                        |                                       |
| [http://www.hud.gov](h       |                                       |
| ttp://www.hud.gov/).]{.mark} |                                       |
|                              |                                       |
| [The post-closing review     |                                       |
| follows execution and        |                                       |
| recording of documents, but  |                                       |
| is conducted prior to HUD    |                                       |
| approval of the release of   |                                       |
| public housing funds for     |                                       |
| development. This proposed   |                                       |
| rule would shorten the list  |                                       |
| of required post-closing     |                                       |
| submissions in 24 CFR        |                                       |
| 941.610(a). The PHA would be |                                       |
| required to provide the      |                                       |
| following additional         |                                       |
| materials for HUD review:    |                                       |
| (1) An executed              |                                       |
| Mixed-Finance ACC Amendment, |                                       |
| in the form approved by HUD  |                                       |
| prior to closing; (2) an     |                                       |
| executed Declaration of      |                                       |
| Restrictive Covenants        |                                       |
| date-stamped by the          |                                       |
| appropriate land records     |                                       |
| office; (3) a Final Title    |                                       |
| Policy evidencing the        |                                       |
| Declaration\'s recordation   |                                       |
| priority in the first lien   |                                       |
| position, unless another     |                                       |
| order or recording is        |                                       |
| approved by the Department;  |                                       |
| (4) a written opinion from   |                                       |
| legal counsel for the PHA    |                                       |
| stating that the entities    |                                       |
| that executed the closing    |                                       |
| documents have the legal     |                                       |
| authority to enter into them |                                       |
| as required by 24 CFR        |                                       |
| 941.606(n)(1)(i) of the      |                                       |
| current rule (this section   |                                       |
| would be redesignated Sec.   |                                       |
| 941.606(l)(1)(i) by this     |                                       |
| proposed rule), that the     |                                       |
| documents are legally        |                                       |
| binding instruments, and     |                                       |
| that the documents comply    |                                       |
| with all applicable public   |                                       |
| housing requirements; (5)    |                                       |
| the revised and updated      |                                       |
| mixed-finance proposal; and  |                                       |
| (6) evidence, which may be   |                                       |
| in the form of a             |                                       |
| certification stating that   |                                       |
| all necessary closing        |                                       |
| documents were executed and  |                                       |
| recorded, that all funds     |                                       |
| necessary for the            |                                       |
| development (as outlined in  |                                       |
| the mixed-finance proposal)  |                                       |
| have been committed to the   |                                       |
| project, and that all        |                                       |
| project documents will be    |                                       |
| retained by the PHA and made |                                       |
| available for inspection     |                                       |
| upon request.]{.mark}        |                                       |
|                              |                                       |
| [Section 941.610(b) of this  |                                       |
| proposed rule would require  |                                       |
| a PHA to submit various      |                                       |
| certifications and           |                                       |
| assurances. These            |                                       |
| submissions would include    |                                       |
| assurances that the          |                                       |
| Mixed-Finance ACC Amendment  |                                       |
| and related materials are    |                                       |
| complete, remain in the form |                                       |
| and with the content         |                                       |
| approved by HUD at closing,  |                                       |
| and are consistent with the  |                                       |
| mixed-finance proposal. In   |                                       |
| addition, the PHA would be   |                                       |
| required to submit a         |                                       |
| certification that the       |                                       |
| Declaration of Restrictive   |                                       |
| Covenants required under     |                                       |
| Sec. 941.610(a)(2) of this   |                                       |
| proposed rule is             |                                       |
| enforceable, has priority    |                                       |
| over all other liens, and is |                                       |
| the first recorded document, |                                       |
| unless otherwise approved by |                                       |
| HUD. Prior to closing, the   |                                       |
| PHA may request a HUD review |                                       |
| of the pro-forma title       |                                       |
| policy if there are certain  |                                       |
| circumstances that may       |                                       |
| prohibit recordation of the  |                                       |
| Declaration of Restrictive   |                                       |
| Covenants in first lien      |                                       |
| position. The terms of the   |                                       |
| Declaration of Restrictive   |                                       |
| Covenants must include that  |                                       |
| there must be no disposition |                                       |
| of the public housing units  |                                       |
| or of the ownership          |                                       |
| entity\'s partnership or     |                                       |
| membership interests without |                                       |
| HUD\'s approval during the   |                                       |
| entire operating subsidy     |                                       |
| period plus 10 years; and    |                                       |
| that for a 40-year period,   |                                       |
| which may be extended by an  |                                       |
| additional 10 years, the     |                                       |
| public housing units must be |                                       |
| operated in accordance with  |                                       |
| all applicable public        |                                       |
| housing                      |                                       |
| requirements.]{.mark}        |                                       |
|                              |                                       |
| [The certifications and      |                                       |
| assurances required in Sec.  |                                       |
| 941.610(b)(4) of this        |                                       |
| proposed rule would be       |                                       |
| generally similar to those   |                                       |
| required under Sec.          |                                       |
| 941.610(a)(8) of the current |                                       |
| regulations. These include   |                                       |
| certifications regarding the |                                       |
| number or percentage of      |                                       |
| public housing units in the  |                                       |
| project; and an              |                                       |
| acknowledgment that the      |                                       |
| transfer of development      |                                       |
| funds from the PHA to the    |                                       |
| partner or other owner       |                                       |
| entity shall not be deemed   |                                       |
| an assignment. The           |                                       |
| certifications would also    |                                       |
| include an acknowledgment    |                                       |
| that the ACC, Mixed-Finance  |                                       |
| ACC Amendment, and other     |                                       |
| contracts involved shall not |                                       |
| create any third-party       |                                       |
| rights or any partnership,   |                                       |
| joint venture, principal and |                                       |
| agent relationship, or any   |                                       |
| other business relationship  |                                       |
| involving HUD. They would    |                                       |
| include: (1) An assurance    |                                       |
| that all agreements and      |                                       |
| contracts are legally        |                                       |
| binding on the owner entity  |                                       |
| or partner and contain an    |                                       |
| agreement by the PHA to take |                                       |
| any necessary enforcement    |                                       |
| action; (2) a certification  |                                       |
| of compliance with           |                                       |
| Davis-Bacon wage rate        |                                       |
| requirements; (3) an         |                                       |
| assurance that the PHA will  |                                       |
| take all steps necessary to  |                                       |
| ensure, in the event of a    |                                       |
| foreclosure or other adverse |                                       |
| action brought against the   |                                       |
| owner entity, that the       |                                       |
| operation of the public      |                                       |
| housing units in the project |                                       |
| will not be adversely        |                                       |
| affected; and (4) any        |                                       |
| details or additional        |                                       |
| documentation HUD may        |                                       |
| require.]{.mark}             |                                       |
|                              |                                       |
| [...]{.mark}                 |                                       |
|                              |                                       |
| [Material on common area     |                                       |
| improvements currently under |                                       |
| Sec. 941.610(a)(8)(i)(B)     |                                       |
| would be removed from the    |                                       |
| rule as unnecessary, but not |                                       |
| to change the basic          |                                       |
| requirement that common area |                                       |
| improvements benefit all     |                                       |
| residents. Section           |                                       |
| 941.608(b)(4)(ii) (which is  |                                       |
| unaffected by this           |                                       |
| rulemaking) requires HUD, as |                                       |
| part of its technical        |                                       |
| processing, to ensure that   |                                       |
| common area improvements     |                                       |
| will benefit all residents   |                                       |
| of the development. As a     |                                       |
| policy matter, HUD applies a |                                       |
| pro rata test to ensure that |                                       |
| the amount spent on the      |                                       |
| project from public housing  |                                       |
| funds reflects the           |                                       |
| appropriate share of public  |                                       |
| housing units in the         |                                       |
| project.]{.mark}             |                                       |
|                              |                                       |
| [The proposed rule would add |                                       |
| Sec. 941.610(c) to provide   |                                       |
| the Department access to the |                                       |
| development documents.       |                                       |
| Although this regulatory     |                                       |
| change would remove the      |                                       |
| requirement to submit        |                                       |
| certain documents to the     |                                       |
| Department for review, the   |                                       |
| PHAs would be required to    |                                       |
| provide HUD with copies of   |                                       |
| any or all of the            |                                       |
| development documents        |                                       |
| immediately upon written     |                                       |
| request from HUD.]{.mark}    |                                       |
|                              |                                       |
| [(a) Submission              |                                       |
| requirements. After the      |                                       |
| closing but prior to the     |                                       |
| disbursement of grant funds  |                                       |
| under 24 CFR 941.612, the    |                                       |
| PHA must submit the          |                                       |
| materials listed in this     |                                       |
| section to HUD for approval. |                                       |
| The materials must be in the |                                       |
| form as approved by HUD at   |                                       |
| the time of the approval of  |                                       |
| the proposal under 24 CFR    |                                       |
| 941.606, or in a form        |                                       |
| approved by HUD prior to     |                                       |
| release of funds. These      |                                       |
| required materials include,  |                                       |
| but shall not be limited     |                                       |
| to:]{.mark}                  |                                       |
|                              |                                       |
| [(1) The PHA-executed        |                                       |
| Mixed-Finance ACC Amendment  |                                       |
| to the PHA\'s ACC, along     |                                       |
| with any required exhibits,  |                                       |
| as applicable;]{.mark}       |                                       |
|                              |                                       |
| [(2) A Declaration of        |                                       |
| Restrictive Covenants in the |                                       |
| form and recorded in the     |                                       |
| order approved by HUD. The   |                                       |
| restriction must assure that |                                       |
| the public housing units     |                                       |
| will be available for use by |                                       |
| eligible low-income families |                                       |
| in accordance with all       |                                       |
| applicable public housing    |                                       |
| requirements for the maximum |                                       |
| period required by           |                                       |
| law;]{.mark}                 |                                       |
|                              |                                       |
| [(3) A Final Title Policy    |                                       |
| showing HUD\'s Declaration   |                                       |
| in a first lien priority     |                                       |
| position against the fee     |                                       |
| estate of the Project, or    |                                       |
| other order of recording     |                                       |
| approved by HUD;]{.mark}     |                                       |
|                              |                                       |
| [(4) A legal opinion         |                                       |
| prepared by PHA counsel      |                                       |
| after due diligence and      |                                       |
| based on information that    |                                       |
| is, to the knowledge of      |                                       |
| counsel, true and correct,   |                                       |
| warranting that the PHA has  |                                       |
| the legal authority under    |                                       |
| federal, state, and local    |                                       |
| law to take all actions and  |                                       |
| enter into all agreements    |                                       |
| referenced or required       |                                       |
| under, or executed pursuant  |                                       |
| to, Sec. 941.606(l)(1)(i) of |                                       |
| this subpart and that all    |                                       |
| such agreements are in       |                                       |
| accordance with federal,     |                                       |
| state, and local law,        |                                       |
| including the 1937 Act and   |                                       |
| all HUD regulations;]{.mark} |                                       |
|                              |                                       |
| [(5) A revised and updated   |                                       |
| proposal consistent with the |                                       |
| Mixed-Finance ACC Amendment; |                                       |
| and]{.mark}                  |                                       |
|                              |                                       |
| [(6) The certifications and  |                                       |
| assurances required by HUD,  |                                       |
| including, but not limited   |                                       |
| to, those described in       |                                       |
| paragraph (b) of this        |                                       |
| section.]{.mark}             |                                       |
|                              |                                       |
| [(b) Certifications and      |                                       |
| assurances. The PHA\'s       |                                       |
| certification must include   |                                       |
| the following statements, as |                                       |
| well as any others that HUD  |                                       |
| may deem necessary to the    |                                       |
| proper operation of the      |                                       |
| program. The PHA must        |                                       |
| certify that:]{.mark}        |                                       |
|                              |                                       |
| [(1) The PHA is responsible  |                                       |
| for ensuring that the public |                                       |
| housing units are developed, |                                       |
| operated, and maintained in  |                                       |
| accordance with all          |                                       |
| applicable public housing    |                                       |
| requirements, including the  |                                       |
| 1937 Act, the ACC (as        |                                       |
| amended by the Mixed Finance |                                       |
| Amendment) and all pertinent |                                       |
| statutory, regulatory, and   |                                       |
| executive order              |                                       |
| requirements, as those       |                                       |
| requirements may be amended  |                                       |
| from time to time;]{.mark}   |                                       |
|                              |                                       |
| [(2) These certifications    |                                       |
| are made under penalty of    |                                       |
| perjury and subject to       |                                       |
| HUD\'s authority to          |                                       |
| prosecute false claims or    |                                       |
| statements;]{.mark}          |                                       |
|                              |                                       |
| [(3) The submissions under   |                                       |
| paragraph (a)(1) of this     |                                       |
| section are consistent with  |                                       |
| the mixed-finance proposal   |                                       |
| and any other legal          |                                       |
| documents or representations |                                       |
| related to the               |                                       |
| project;]{.mark}             |                                       |
|                              |                                       |
| [(4) HUD\'s declaration of   |                                       |
| restrictive covenants is     |                                       |
| legally enforceable and      |                                       |
| recorded in the order        |                                       |
| approved by HUD. The terms   |                                       |
| of the restriction must      |                                       |
| include the                  |                                       |
| following:]{.mark}           |                                       |
|                              |                                       |
| [(i) There shall be no       |                                       |
| disposition of the public    |                                       |
| housing units without the    |                                       |
| prior written approval of    |                                       |
| HUD during, and for 10 years |                                       |
| after the end of, the period |                                       |
| in which the public housing  |                                       |
| units receive operating      |                                       |
| subsidy from the PHA;        |                                       |
| and]{.mark}                  |                                       |
|                              |                                       |
| [(ii) During a 40-year       |                                       |
| period (which may be         |                                       |
| extended for 10 years after  |                                       |
| the end of the period in     |                                       |
| which the public housing     |                                       |
| units receive operating      |                                       |
| subsidy from the PHA, or as  |                                       |
| may be otherwise required by |                                       |
| law), the public housing     |                                       |
| units shall be maintained    |                                       |
| and operated in accordance   |                                       |
| with all applicable public   |                                       |
| housing requirements         |                                       |
| (including the ACC), as      |                                       |
| those requirements may be    |                                       |
| amended from time to         |                                       |
| time;]{.mark}                |                                       |
|                              |                                       |
| [(5) The PHA shall develop   |                                       |
| at least the same number of  |                                       |
| public housing units as were |                                       |
| approved by HUD as part of   |                                       |
| the PHA\'s proposal, and     |                                       |
| will do so within the total  |                                       |
| development cost (TDC) and   |                                       |
| housing construction cost    |                                       |
| (HCC) limits;]{.mark}        |                                       |
|                              |                                       |
| [(6) If the PHA\'s proposal  |                                       |
| provides that public housing |                                       |
| units within a development   |                                       |
| will not be specifically     |                                       |
| designated as public housing |                                       |
| units (i.e., floating        |                                       |
| units), but shall instead    |                                       |
| constitute a fixed           |                                       |
| percentage of the housing    |                                       |
| units and number of bedrooms |                                       |
| developed under the          |                                       |
| proposal, the PHA shall      |                                       |
| assure that, at a minimum,   |                                       |
| the percentage of public     |                                       |
| housing units, as approved   |                                       |
| by HUD, will be maintained   |                                       |
| as public housing by the     |                                       |
| owner entity, and that all   |                                       |
| of the requirements of this  |                                       |
| subpart will be satisfied    |                                       |
| with respect to those        |                                       |
| units;]{.mark}               |                                       |
|                              |                                       |
| [(7) The PHA shall include,  |                                       |
| or cause to be included, in  |                                       |
| all agreements or contracts  |                                       |
| with the partner, owner      |                                       |
| entity, or any other         |                                       |
| participating parties        |                                       |
| receiving funds under this   |                                       |
| subpart:]{.mark}             |                                       |
|                              |                                       |
| [(i) An acknowledgement that |                                       |
| a transfer of the            |                                       |
| development funds by the PHA |                                       |
| to the partner, the owner    |                                       |
| entity, or other             |                                       |
| participating party, shall   |                                       |
| not be deemed to be an       |                                       |
| assignment of development    |                                       |
| grant funds and that,        |                                       |
| accordingly, the partner,    |                                       |
| the owner entity, or other   |                                       |
| participating party shall    |                                       |
| not succeed to any rights or |                                       |
| benefits of the PHA under    |                                       |
| the ACC, or ACC amendment,   |                                       |
| nor shall it attain any      |                                       |
| privileges, authorities,     |                                       |
| interests, or rights in or   |                                       |
| under the ACC or ACC         |                                       |
| amendment;]{.mark}           |                                       |
|                              |                                       |
| [(ii) A provision stating    |                                       |
| that nothing in the ACC or   |                                       |
| ACC amendment providing such |                                       |
| funds, nor any agreement or  |                                       |
| contract between the         |                                       |
| parties, shall be deemed to  |                                       |
| create a relationship of     |                                       |
| third-party beneficiary,     |                                       |
| principal, and agent;        |                                       |
| limited or general           |                                       |
| partnership; joint venture;  |                                       |
| or any association or        |                                       |
| relationship involving       |                                       |
| HUD;]{.mark}                 |                                       |
|                              |                                       |
| [(iii) A provision to ensure |                                       |
| that the requirements of     |                                       |
| this subpart are binding     |                                       |
| upon the owner entity and    |                                       |
| any partner of the PHA and   |                                       |
| upon any other participating |                                       |
| party. In addition, in the   |                                       |
| event of any noncompliance   |                                       |
| with the requirements of     |                                       |
| this subpart by any          |                                       |
| participating party, the PHA |                                       |
| agrees to take all necessary |                                       |
| enforcement action to ensure |                                       |
| such compliance or,          |                                       |
| alternatively, to pursue any |                                       |
| legal or equitable remedies  |                                       |
| that HUD deems               |                                       |
| appropriate;]{.mark}         |                                       |
|                              |                                       |
| [(8) The PHA shall ensure    |                                       |
| that the development of the  |                                       |
| public housing units will be |                                       |
| in compliance with labor     |                                       |
| standards applicable to the  |                                       |
| development of public        |                                       |
| housing including, but not   |                                       |
| limited to, wage rates under |                                       |
| the Davis-Bacon Act (40      |                                       |
| U.S.C. 276a et seq.) and     |                                       |
| that wherever HUD financial  |                                       |
| assistance is expended for   |                                       |
| housing or community         |                                       |
| development, economic        |                                       |
| opportunities will be made   |                                       |
| available, to the greatest   |                                       |
| extent feasible, to low- and |                                       |
| very low-income persons and  |                                       |
| businesses pursuant to       |                                       |
| section 3 of the Housing and |                                       |
| Urban Development Act of     |                                       |
| 1968. If the proposed        |                                       |
| development will include     |                                       |
| public housing units that    |                                       |
| are not specifically         |                                       |
| designated units, the PHA    |                                       |
| shall ensure that such labor |                                       |
| requirements are met with    |                                       |
| respect to the development   |                                       |
| of all units that may, at    |                                       |
| any time, be used as the     |                                       |
| public housing               |                                       |
| units;]{.mark}               |                                       |
|                              |                                       |
| [(9) The PHA shall take all  |                                       |
| steps necessary to ensure    |                                       |
| that, in the event of a      |                                       |
| foreclosure or other adverse |                                       |
| action brought against the   |                                       |
| owner entity with respect to |                                       |
| the housing units            |                                       |
| (including, but not limited  |                                       |
| to, the public housing       |                                       |
| units), the operation of the |                                       |
| public housing units         |                                       |
| developed under this subpart |                                       |
| shall not be adversely       |                                       |
| affected;]{.mark}            |                                       |
|                              |                                       |
| [(10) The PHA shall certify  |                                       |
| that it has ensured and      |                                       |
| shall ensure the             |                                       |
| availability of the          |                                       |
| participating party or       |                                       |
| parties\' financing, the     |                                       |
| amount and source of         |                                       |
| financing committed to the   |                                       |
| proposal by the              |                                       |
| participating party or       |                                       |
| parties, and the             |                                       |
| irrevocability of those      |                                       |
| funds. Irrevocability of     |                                       |
| funds means that binding     |                                       |
| legal documents, such as     |                                       |
| loan agreements,             |                                       |
| mortgages/deeds of trust,    |                                       |
| partnership agreements,      |                                       |
| operating agreements, or     |                                       |
| similar documents committing |                                       |
| funds have been executed by  |                                       |
| the applicable parties,      |                                       |
| though disbursement of such  |                                       |
| funds may be subject to      |                                       |
| meeting progress milestones, |                                       |
| avoiding default, and        |                                       |
| meeting other commercially   |                                       |
| reasonable conditions        |                                       |
| precedent under such         |                                       |
| documents. For projects      |                                       |
| involving revolving loan     |                                       |
| funds, the irrevocability of |                                       |
| funds means that funds in an |                                       |
| amount identified to HUD as  |                                       |
| the maximum revolving loan   |                                       |
| have been committed pursuant |                                       |
| to legally binding           |                                       |
| documents, though            |                                       |
| disbursement of such funds   |                                       |
| may be subject to meeting    |                                       |
| progress milestones, the     |                                       |
| absence of default, and      |                                       |
| meeting other commercially   |                                       |
| reasonable conditions        |                                       |
| precedent under such         |                                       |
| documents. The PHA has       |                                       |
| ensured the commitment of    |                                       |
| funds by the participating   |                                       |
| parties through reviewing    |                                       |
| the legal documents          |                                       |
| described above, confirming  |                                       |
| the terms of the documents   |                                       |
| committing the funds as      |                                       |
| described above, and         |                                       |
| confirming that such         |                                       |
| documents are duly executed  |                                       |
| by the participating         |                                       |
| parties. The PHA is not      |                                       |
| required to ensure the       |                                       |
| availability of funds by     |                                       |
| enforcing documents to which |                                       |
| it is not a party. The PHA   |                                       |
| may certify as to the        |                                       |
| irrevocability of funds      |                                       |
| through the submission of an |                                       |
| opinion of the PHA\'s        |                                       |
| counsel attesting that       |                                       |
| counsel has examined the     |                                       |
| availability of the          |                                       |
| participating party or       |                                       |
| parties\' financing, has     |                                       |
| examined the amount and      |                                       |
| source of financing          |                                       |
| committed to the proposal by |                                       |
| the participating party or   |                                       |
| parties, has determined that |                                       |
| such financing has been      |                                       |
| irrevocably committed by the |                                       |
| participating party or       |                                       |
| parties for use in carrying  |                                       |
| out the proposal, and has    |                                       |
| determined that such         |                                       |
| commitment is in the amount  |                                       |
| required under the terms of  |                                       |
| the proposal;]{.mark}        |                                       |
|                              |                                       |
| [(11) The PHA shall provide  |                                       |
| such additional              |                                       |
| certifications as may be     |                                       |
| required by HUD.]{.mark}     |                                       |
|                              |                                       |
| [(c) Recordkeeping. The PHA  |                                       |
| must retain for inspection,  |                                       |
| upon request by HUD, all     |                                       |
| documentation of the         |                                       |
| mixed-finance closing        |                                       |
| including, but not limited   |                                       |
| to: all development          |                                       |
| agreements, related          |                                       |
| management agreements,       |                                       |
| surveys, title policies,     |                                       |
| zoning assurances,           |                                       |
| environmental reports and    |                                       |
| approvals, partnership       |                                       |
| agreements, ground leases,   |                                       |
| regulatory agreements,       |                                       |
| project financing documents, |                                       |
| and any recorded documents   |                                       |
| encumbering the use of the   |                                       |
| land. The documentation      |                                       |
| should be retained in one    |                                       |
| comprehensive binder for the |                                       |
| period required by           |                                       |
| law.]{.mark}                 |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.612 Disbursement  |                                       |
| of grant funds**.            |                                       |
+------------------------------+---------------------------------------+
| \(a\) Front-end drawdowns. A |                                       |
| PHA may request front-end    |                                       |
| assistance for both          |                                       |
| scattered or non-scattered   |                                       |
| site development in          |                                       |
| accordance with the          |                                       |
| following requirements:      |                                       |
+------------------------------+---------------------------------------+
| \(1\) Front-end assistance   | \* Add: "...related to the relocation |
| may be used to pay for       | of existing residents,"               |
| materials and services       |                                       |
| related to\* proposal        |                                       |
| development, and may also be |                                       |
| used to pay for costs        |                                       |
| related to the demolition of |                                       |
| existing units on a proposed |                                       |
| site or for preliminary      |                                       |
| development work;            |                                       |
+------------------------------+---------------------------------------+
| \(2\) HUD shall determine on |                                       |
| a case-by-case basis the     |                                       |
| maximum amount that may be   |                                       |
| drawn down by a PHA to pay   |                                       |
| for preliminary development  |                                       |
| costs, based upon a          |                                       |
| consideration of the nature  |                                       |
| and scope of activities      |                                       |
| proposed to be carried out   |                                       |
| by the PHA;                  |                                       |
+------------------------------+---------------------------------------+
| \(3\) Before a request for   |                                       |
| front-end assistance may be  |                                       |
| approved, the PHA must       |                                       |
| provide HUD with such        |                                       |
| information and              |                                       |
| documentation as HUD deems   |                                       |
| appropriate from the list    |                                       |
| set forth at Sec. 941.606.   |                                       |
| In determining the extent of |                                       |
| the PHA\'s submissions under |                                       |
| this paragraph (a), HUD      |                                       |
| shall ensure that it has     |                                       |
| adequate information or      |                                       |
| documentation to enable it   |                                       |
| to carry out any statutory,  |                                       |
| executive order, or other    |                                       |
| mandatory upfront reviews    |                                       |
| under this subpart. These    |                                       |
| reviews shall include, but   |                                       |
| shall not be limited to,     |                                       |
| environmental reviews        |                                       |
| (including NEPA and historic |                                       |
| preservation),               |                                       |
| intergovernmental review,    |                                       |
| section 213 clearance (24    |                                       |
| CFR part 791, subpart C),    |                                       |
| and subsidy layering. If,    |                                       |
| upon completing these        |                                       |
| reviews, HUD determines that |                                       |
| the proposed development is  |                                       |
| approvable, it may execute   |                                       |
| with the PHA a front-end ACC |                                       |
| amendment and the special    |                                       |
| mixed-finance amendment to   |                                       |
| the ACC (and/or grant        |                                       |
| agreement) to provide        |                                       |
| advances for the purposes,   |                                       |
| and in the amounts, approved |                                       |
| by HUD.                      |                                       |
+------------------------------+---------------------------------------+
| [This proposed rule would    |                                       |
| make a technical revision to |                                       |
| 24 CFR 941.612(b) on         |                                       |
| standard drawdown            |                                       |
| requirements. This change    |                                       |
| would be to remove the term  |                                       |
| "evidentiary materials\'\'   |                                       |
| in the relevant paragraph    |                                       |
| and replace it with language |                                       |
| that reflects the fact that  |                                       |
| HUD will accept              |                                       |
| certifications in lieu of    |                                       |
| many of these                |                                       |
| materials.]{.mark}           |                                       |
+------------------------------+---------------------------------------+
| \(b\) Standard drawdown      |                                       |
| requirements. HUD will       |                                       |
| review the documents and     |                                       |
| certifications submitted     |                                       |
| pursuant to Sec. 941.610,    |                                       |
| and, upon determining that   |                                       |
| such documents and           |                                       |
| certifications are           |                                       |
| satisfactory, may approve a  |                                       |
| drawdown of development      |                                       |
| funds, consistent with the   |                                       |
| following requirements:      |                                       |
+------------------------------+---------------------------------------+
| \(1\) A PHA may only draw    |                                       |
| down public housing          |                                       |
| development funds in an      |                                       |
| approved ratio to other      |                                       |
| public and private funds, in |                                       |
| accordance with a draw       |                                       |
| schedule prepared by the PHA |                                       |
| and approved by HUD. The PHA |                                       |
| and its partner shall        |                                       |
| certify, in a form           |                                       |
| prescribed by HUD, prior to  |                                       |
| the initial drawdown of      |                                       |
| public housing development   |                                       |
| funds that the PHA will not  |                                       |
| draw down and the partner    |                                       |
| will not request more public |                                       |
| housing grant funds than     |                                       |
| necessary to meet the PHA\'s |                                       |
| pro rata share of the        |                                       |
| development costs. The PHA   |                                       |
| shall draw down public       |                                       |
| housing development funds    |                                       |
| only when payment is due and |                                       |
| after inspection and         |                                       |
| acceptance of work covered   |                                       |
| by the draw. The PHA shall   |                                       |
| release funds to its partner |                                       |
| promptly, normally within    |                                       |
| two working days of receipt  |                                       |
| of the funds from HUD, and   |                                       |
| only in accordance with the  |                                       |
| ratio approved by HUD. The   |                                       |
| PHA\'s partner shall take    |                                       |
| prompt action to distribute  |                                       |
| the funds, normally within   |                                       |
| two working days of receipt  |                                       |
| of the funds from the PHA;   |                                       |
+------------------------------+---------------------------------------+
| \(2\) Each drawdown of       |                                       |
| public housing development   |                                       |
| funds constitutes a          |                                       |
| certification by the PHA     |                                       |
| that:                        |                                       |
+------------------------------+---------------------------------------+
| \(i\) All the                |                                       |
| representations and          |                                       |
| warranties of the PHA, as    |                                       |
| submitted in accordance with |                                       |
| this subpart, continue to be |                                       |
| valid, true, and in full     |                                       |
| force and effect;            |                                       |
+------------------------------+---------------------------------------+
| \(ii\) The PHA is in full    |                                       |
| compliance with all of the   |                                       |
| PHA\'s obligations pursuant  |                                       |
| to this part which, by their |                                       |
| terms, are applicable at the |                                       |
| time of the drawdown of the  |                                       |
| public housing development   |                                       |
| funds, and that to the best  |                                       |
| of the PHA\'s knowledge, it  |                                       |
| is not in default under the  |                                       |
| ACC, as amended;             |                                       |
+------------------------------+---------------------------------------+
| \(iii\) All conditions       |                                       |
| precedent to the PHA\'s      |                                       |
| authority to draw down the   |                                       |
| public housing grant funds   |                                       |
| have been satisfied;         |                                       |
+------------------------------+---------------------------------------+
| \(iv\) The public housing    |                                       |
| grant funds to be drawn down |                                       |
| will be used for eligible    |                                       |
| costs actually incurred or   |                                       |
| to be incurred in accordance |                                       |
| with the provisions of this  |                                       |
| subpart and the approved     |                                       |
| proposal; and                |                                       |
+------------------------------+---------------------------------------+
| \(v\) The ratio for the draw |                                       |
| down of funds is satisfied.  |                                       |
+------------------------------+---------------------------------------+
| \(c\) The standard drawdown  |                                       |
| requirements set forth in    |                                       |
| paragraph (b) of this        |                                       |
| section (including the       |                                       |
| requirement that public      |                                       |
| housing development funds    |                                       |
| must be drawn down in an     |                                       |
| approved ratio to other      |                                       |
| public and private funds) do |                                       |
| not apply to front-end       |                                       |
| assistance approved by HUD   |                                       |
| pursuant to paragraph (a) of |                                       |
| this section.                |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.614 HUD           |                                       |
| monitoring and review**.     |                                       |
+------------------------------+---------------------------------------+
| HUD shall monitor and review | Add: "Any failure on the part of the  |
| the implementation of the    | development shall be HUD's fault due  |
| PHA\'s approved proposal in  | to insufficient monitoring."          |
| accordance with requirements |                                       |
| prescribed by HUD in a       |                                       |
| special mixed-finance        |                                       |
| amendment to the ACC (and/or |                                       |
| grant agreement). \*         |                                       |
+------------------------------+---------------------------------------+
| **Sec. 941.616 Sanctions**.  |                                       |
+------------------------------+---------------------------------------+
| [Lastly, 24 CFR 941.616,     | Should there be notice to tenants and |
| which addresses sanctions,   | Resident Advisory Board (RAB) where   |
| would be revised to include  | HUD is taking a sanction activity?    |
| certifications and           | For other types of sanctions,         |
| assurances. The resulting    | resident/RABs are usually notified.   |
| provision would state that   |                                       |
| if the public housing units  | 1.  Reg. and Op. may talk about       |
| are not developed in         |     procedures for notifying          |
| accordance with all          |     residents/RABs.                   |
| applicable requirements,     |                                       |
| including all certifications | 2.  No reg. yet on transformation     |
| and assurances, the PHA may  |     activities, but PHA may be        |
| be liable for                |     required to undertake them as     |
| sanctions.]{.mark}           |     part of the sanction. Residents   |
|                              |     should be notified.               |
| [In the event the public     |                                       |
| housing units that are       | 3.  It might be useful to include     |
| proposed to be developed     |     notice to residents and the RAB   |
| under this part are not      |     where HUD was taking sanctions    |
| developed in accordance with |     against the PHA for               |
| the projected development    |     noncompliance, as a "heads up" so |
| schedule, with the approved  |     that residents were aware of what |
| proposal, with all           |     was happening before they had to  |
| certifications and           |     go into PHA plan process (or      |
| assurances, and with all     |     consider transformation           |
| applicable federal           |     remedies). A number of PHAs       |
| requirements, or if the      |     weren't sure about this, but it   |
| units are not operated in    |     was noted that this was just an   |
| accordance with applicable   |     idea                              |
| certifications, assurances,  |                                       |
| and requirements, HUD may    | 4.  \* Add: "Conversely, if HUD delay |
| impose sanctions on the PHA  |     in processing appropriate         |
| or seek other legal or       |     requests by the PHA, HUD shall be |
| equitable relief, or both,   |     liable to the PHA for reasonable  |
| in accordance with the       |     damages.                          |
| requirements prescribed by   |                                       |
| HUD in the Mixed-Finance ACC |                                       |
| Amendment\*.]{.mark}         |                                       |
|                              |                                       |
| []{.mark}                    |                                       |
+------------------------------+---------------------------------------+