U.S. Department of Housing and Urban Development

PUBLIC AND INDIAN HOUSING

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Special Attention: Notice PIH 95-10 (HUD)

Secretary Representatives; State and

Area Coordinators; Public Housing Issued: February 22, 1995

Directors; FHEO Directors; Expires: February 28, 1996

HOPE VI-eligible PHAs

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Subject: HOPE VI - Urban Revitalization Demonstration (HOPE VI)

Program Notice.

1\. Purpose. This Notice provides guidance for HUD Field

Offices and HOPE VI eligible PHAs on the HOPE VI-Urban

Revitalization Demonstration Program (HOPE VI). This

demonstration program has been authorized by the Departments

of Veterans Affairs and Housing and Urban Development, and

Independent Agencies Appropriations Act for FY 1993 (the

1993 Appropriations Act, Public Law 102-389, approved

October 6, 1992), the Appropriations Act for FY 1994 (Public

Law 103-124, approved October 28, 1993), and the

Appropriations Act for FY 1995 (Public Law 103-327, approved

September 28, 1994).

The HOPE VI program was created for the purpose of

revitalizing severely distressed or obsolete public housing

developments. Permitted activities under the program

include funding of the capital costs of major

reconstruction, rehabilitation and other physical

improvements, the provision of replacement housing,

management improvements, planning and technical assistance,

implementation of community service programs and supportive

services, and the planning for any such activities.

HUD intends for HOPE VI to be the laboratory for the

reinvention of public housing. The program is expected to

produce models for ending the isolation of the public

housing agency, by encouraging partnerships with actors from

the broader community, and the isolation of public housing

developments and residents, by blending public housing units

into more diverse and mixed-income communities.

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PT: Distribution: W-3-1, W-2(H), R-6, R-7, R-3-1(PIH&FHEO), HOPE VI
Grantees

This Notice contains information on program requirements, processing

instructions and monitoring responsibilities. It promotes technical

assistance, partnerships and innovation. This Notice also provides

information on grant awards; the financial procedures; Line of Credit

Control System-Voice Response System (LOCCS-VRS), including

clarifications to Notice PIH 94-35 (HUD) dated June 10, 1994;

reporting requirements; and grant close out. It also clarifies the

respective roles at this time of HUD Headquarters and Field Offices in

administering the HOPE VI program, and the role of the Corporation for

National Service (CNS).

This demonstration is limited to public housing agencies (PHAs) chosen

in accordance with (i) the Notice of Funding Availability (NOFA)

published in the Federal Register on January 5, 1993, and revised and

restated on March 29, 1993 (as amended on May 4, 1993); (ii) the

requirements set forth in the 1994 Appropriations Act mentioned above;

and (iii) any announcement of grant availability under the 1995

Appropriations Act.

2\. Applicability. This Notice is applicable to the public housing

developments (or portions thereof) specified in the HOPE VI grant

agreements (individually \"Grant Agreement\") between HUD and the PHAs

chosen to participate in the HOPE VI program.

3\. Conformance. This Notice reflects the conformance of certain program

standards and procedures with those set forth in subsequent

authorization legislation by authority granted in the Appropriations

Acts. By this authority, HUD has chosen to incorporate certain

provisions of section 24 of the U.S. Housing Act of 1937, as added by

section 120 of the Housing and Community Development Act of 1992

(Public Law 102-550, approved October 28, 1992).

4\. Other Requirements. In addition to the HOPE VI program requirements

set forth in the Grant Agreement, the administration of grant and

sub-grant funds are subject to applicable rules, regulations, and

policies issued by the Office of Management and Budget (OMB), the

General Accounting Office (GAO) and HUD, and to other applicable state

and Federal laws and regulations.

5\. Points of Contact. The points of contact for Field Offices and PHAs

are:

Headquarters - HOPE VI Division, Office of Distressed and Troubled

Housing Recovery (ODTHR), PIH.

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Field Office - Office of Public Housing (PHD).

FHEO Matters - FHEO Office of Program Standards and

Evaluation (OPSE) in Headquarters, and

FHEO Director in the Field Offices.

Corporation for National Service (CNS) - HOPE VI Staff

1201 New York Avenue, N.W.

Washington, DC 20525

6\. Headquarters Contact for LOCCS-VRS. The Headquarters point of
contact

for PHAs and Field Offices is the Office of the PIH Comptroller at

202-708-0099. Within the ODTHR, HOPE VI Division, the contact person

is G. Dewayne Kimbrough at 202-708-5114.

7\. Background.

A. HOPE VI is intended to foster innovative and comprehensive

approaches to the problems of severely distressed public housing

developments and their residents, including new ways for PHAs and

HUD to work together, in collaboration with residents. The

intention is to address the current problems and pursue

successful solutions in the boldest and most effective manner

possible.

Public housing is at a critical juncture. Low-income families

residing in severely distressed public housing developments are

suffering from enormous stress. Many of the communities in which

these developments are situated are severely stressed as well.

HOPE VI presents an opportunity to redress the problems of

severely distressed public housing and to produce attractive

communities which will inspire their residents and their

neighbors, and compare favorably with the private market.

B. The developments to be revitalized under HOPE VI do not suffer

from a single set of problems and will not be revitalized by a

single set of measures. Effective solutions will grow from local

experience and the effective collaboration of the PHA with

residents, neighbors, local governments, service providers and

others. Further, effective solutions will grow out of

creativity, innovation and diverse approaches.

HUD staff, at both Headquarters and Field levels, are partners

with the PHA in devising innovative and effective solutions to

the problems of severely distressed properties. HUD and the PHA

share a joint interest in creating attractive dwellings that will

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appeal to residents and community alike. HUD intends to respect

local decisions to the fullest extent possible under existing

laws. At the same time, however, the PHA recognizes that HUD has

the obligation to ensure that Federal funds are spent in

accordance with law and in a manner reasonably calculated to

develop revitalized communities sustainable over a long term.

C. HOPE VI is intended to address the condition of people in public

housing developments, and not merely of the bricks and mortar.

The parties will emphasize community and supportive services, as

well as other means appropriate to each community, so as to have

the broadest possible effect in meeting the social and economic

needs of the residents and the surrounding community.

D. HOPE VI is different from all other PIH programs. It is a high

visibility demonstration program funded with ample Federal

resources (\$1.6 billion in three years) that is being watched

very closely by the Congress, the Administration, and the public.

HUD and the public housing community have been given the

opportunity and mandate to revitalize some of the most distressed

public housing developments in the Nation and transform them into

models of affordable housing for the 21st century.

E. If the Congress should enact legislation that affects HOPE VI,

the program may be conformed further to other authorizing

legislation. In such event, the PHA may have the opportunity to

pursue avenues not currently available under applicable laws.

HUD will notify the Field Office and the PHA in writing of any

such legislation and will accord the PHA full opportunity

(consistent with the progress already made) to amend its HOPE VI

Revitalization Plan to take advantage of such opportunities.

8\. Approach. HOPE VI is changing the face of public housing. It is

testing new ideas and solutions that could positively impact standard

operating procedures of the future. It is both a laboratory

experiment and a mandate to correct deplorable situations. With \$1.6

billion appropriated, the Administration and Congress are expecting

demonstrable results at every HOPE VI site, not just a few.

A. The HOPE VI-Urban Revitalization Demonstration Program is much

more than another modernization or reconstruction program.

Various creative or innovative solutions, including total

demolition of obsolete properties and provision of replacement

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housing of contemporary design in locations that will attract

and meet the needs of low income households, are encouraged.

B. Public housing will not be treated in isolation from the larger

neighborhood and community of which it is a vital part.

Community and supportive services will foster opportunity for

resident self-improvement, including economic self-sufficiency.

Residents will be screened with greater care and in some cases

required by the lease to perform community service and accept

civic responsibility.

C.In this Demonstration, HUD seeks to develop solutions which

\"leverage\" HOPE VI funds and use other private or governmental

funds in order to create additional affordable and/or market rate

housing in which the HOPE VI units may be blended. HUD seeks to

increase the opportunity of public housing residents to live in

communities of choice, including settings offering diversity with

respect to income and race. HUD also seeks to develop solutions

which utilize efficient and economical methods of development,

program or construction management, finance, and housing

management, including methods not typically employed in public

housing. PHAs will be encouraged to seek a broad spectrum of

participation and assistance from local and state governments,

community organizations, businesses, nonprofit corporations,

social service agencies, philanthropic organizations and

residents of the developments, and to enter into public-private

partnerships.

D.The Secretary\'s REINVENTION BLUEPRINT places even greater

importance on the HOPE VI program. With the prospect that in a

few years PHAs will have to rely solely on rental income for

their operating revenue, it is even more urgent that they convert

their most distressed properties into attractive communities that

households with and without rental assistance will want to live

in. Developments with units that are too small, poorly designed,

badly maintained or crime-infested will find it difficult to

attract certificate holders or market rate renters.

Each development has assets and liabilities and the greatest

challenge facing housing authorities is to take a dispassionate

and realistic look at each HOPE VI property to determine:

\* whether it can be made marketable to people who

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have other choices of housing assistance;

\* what it would cost and how long it would take to bring the

property to a marketable condition;

\*whether the HOPE VI funding will be adequate to make the

repairs or revitalization needed;

\*exactly how much rent the units are worth in their current

condition and after revitalization;

\*whether the rents the existing vs. revitalized units can

command will cover realistic operating costs plus a deposit

to a replacement reserve; and

\*finally, whether the rents that can reasonably be expected

are so low that the only real alternative is demolition and,

possibly, disposition of the site.

This analysis is necessary to avoid investing HOPE VI funding in

properties that after revitalization can not be sustained as

affordable housing due to the disparity between market rent income and

cost of operation.

9.Partnerships. Because this is a unique and important demonstration

limited to certain specific public housing developments,

responsibility for the HOPE VI program has been retained in

Headquarters, and has been assigned to the Office of Distressed and

Troubled Housing Recovery (ODTHR). However, even though Headquarters

is responsible for the program, Field Office Public Housing Divisions

(PHD) are a full partner with ODTHR staff in implementing the HOPE VI

program and working with PHAs to assure successful outcomes.

Additionally, the HOPE VI sites are beneficiaries of numerous other

grants and programs for which the Field Public Housing Directors have

been delegated responsibility, and which require skillful coordination

with HOPE VI funding and activities.

HUD\'s partnership with HOPE VI PHAs also includes the Corporation for

National Service (CNS), which has the responsibility for defining and

approving HOPE VI community service plans, and, as appropriate, the

FHEO Headquarters and Field Office staff.

Although the Field Offices were not directly involved in the selection

of HOPE VI grant recipients, selected Field Office staff participated

as members of application review teams responsible for rating and

ranking the proposals received by HUD. The Field Offices, however,

now will have a specific role in the HOPE VI program. This Notice

will outline the

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future roles of the Field Office PHD and Headquarters in working with

PHAs under their HOPE VI Grant Agreements.

The HOPE VI program only can be successful if Headquarters and Field

personnel work in a cooperative and coordinated partnership with the

PHAs which have received HOPE VI grants and residents of the

designated HOPE VI sites. HOPE VI will not work in a vacuum. At this

time, 12 of the 32 HOPE VI Grantees are designated as \"Troubled PHAs\"

and will need additional assistance and guidance in carrying out this

program. They are expected to design and carry out an unprecedented

transformation of their most distressed developments, at the same time

they seek recovery from broad-based management deficiencies.

10.Highlights of this Notice

OProvide the HUD Field Offices with information regarding the

status of the HOPE VI program and an outline of the program

requirements which must be met during the implementation of the

program.

OOutline the responsibilities of the Field and Headquarters

Offices during the implementation of the program, including

document review and program monitoring, technical assistance and

creative problem solving.

OThe funding for Fiscal Years 1993 and 1994 totals

\$1,078,240,000. The Department has selected 34 proposals from 32

PHAs to participate in the demonstration program. Two PHAs have

been selected for both a planning grant and an implementation

grant, for different housing developments.

OThe \$500,000,000 of new HOPE VI funding for FY 1995 will be used

to fund implementation grants for the eight PHAs that previously

received planning grants, and to invite all HOPE VI-eligible PHAs

to apply for a new planning grant, a new implementation grant

(funds will only be sufficient to award up to 3 new

implementation grants), and/or amendment funds for a prior

implementation grant.

OThe Department was authorized a total of \$5 million in the

appropriations for FYs 1994 and 1995 with which to provide

technical assistance to HOPE VI PHAs, and intends to use outside

experts as well as staff to meet this need.

We believe HOPE VI can dramatically transform distressed developments
and

help lead those PHAs that are troubled into

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standard or superior performance, but it will take dedicated and highest

priority participation by all parties concerned, including the
residents.

I challenge each PIH office and employee assigned to work with a HOPE VI

program to give it their very best effort and ingenuity, and to work in

close coordination at all levels so that we can meet the expectations
for

the HOPE VI program and create new communities of hope and opportunity.

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Assistant Secretary for Public

and Indian Housing

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TABLE OF CONTENTS

A. Grant Awards . . . . . . . . . . . . . . . . . . . . 2

B. Site Visits . . . . . . . . . . . . . . . . . . . . 3

C. Eligible Activities . . . . . . . . . . . . . . . . 3

D. Program Requirements . . . . . . . . . . . . . . . . 8

E. Cost Guidelines . . . . . . . . . . . . . . . . . . 12

F. Implementation Strategies . . . . . . . . . . . . . 12

G. Grant Agreement Preparation . . . . . . . . . . . . 13

H. Grant Agreement Execution . . . . . . . . . . . . . 14

I. HUD Roles and Responsibilities under HOPE VI . . . . 16

J. Grantee Reporting Requirements . . . . . . . . . . . 24

K. HUD Review and Approval of PHA Submissions . . . . . 27

L. LOCCS-VRS Procedures for HOPE VI . . . . . . . . . . 33

APPENDIX A - HOPE VI Legislation

APPENDIX B - HOPE VI NOFA dated March 29, 1993

APPENDIX C - List of FY 93 and 94 Grantees

APPENDIX D - Letter of January 9, 1995 to eight

prior Planning Grant recipients

APPENDIX E - Letter of February 3, 1995 to all

HOPE VI-eligible PHAs

APPENDIX F - Standard Implementation Grant Agreement for

FY 95 Grantees

APPENDIX G - A/S Shuldiner\'s Memorandum of August 8, 1994:

\"Modifications to Public Housing Development

Processing Requirements\"

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A.Grant Awards.

The total amount of funds available, under the HOPE VI appropriations

for Fiscal Year (FY) 1993, 1994, and 1995, is \$1,578,240,000.

FY 1993 - \$300,000,000

FY 1994 - \$778,240,000

FY 1995 - \$500,000,000

1.NOFA. A Notice of Funding Availability (NOFA) was published,

under the 1993 Appropriations Act, in the Federal Register on

January 5, 1993, revised and restated on March 29, 1993, and

amended on May 4, 1993. (See APPENDIX \"B\") (No NOFA was

necessary under the 1994 Appropriations Act because funding

thereunder was limited to applications received in response to

the earlier NOFA.) Announcements of fund availability recently

have been sent to eligible applicants under the 1995

Appropriations Act (The \"1995 Announcements\").

2.Submission of Applications. Eligible PHAs submitted applications

for funding under the above NOFA on or before May 26, 1993 to HUD

Headquarters. Congress limited eligibility to PHAs located in

the 40 most populous United States cities based on 1990 Census

data, or PHAs on the Department\'s Troubled Housing Authority list

as of 3-31-92, with certain exclusions (see APPENDIX \"A\" of the

NOFA).

3.Review and Selection of Applications. HUD Headquarters selected

32 PHAs under the NOFA and the 1994 Appropriations Act to

participate in the HOPE VI demonstration. (See APPENDIX \"C\")

HUD anticipates that additional participants will be chosen

pursuant to the 1995 Announcements.

4.FY 1995 Awards. FY 1995 funds were offered to all potentially

eligible PHAs through the 1995 Announcements. The first letter,

dated January 9, 1995 (see APPENDIX \"D\"), invited all eight PHAs

that had previously received HOPE VI planning grants to apply for

implementation grants. (The Congress had instructed that these

PHAs receive first funding from FY 95 appropriations.) On the

basis of their eight applications, \$350 million of FY 1995

funding was awarded on January 19, 1995.

A second letter, dated February 3, 1995 (see APPENDIX \"E\"),

invited all potentially eligible PHAs with one or more severely

distressed developments to apply for a new planning grant of up

to \$400,000, a new implementation

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grant of up to \$49.6 million, and/or amendment funds for a prior

HOPE VI implementation grant. (New HOPE VI grants funded from FY

1995 appropriations are not limited to 500 units.)

B.Site Visits. Site visits have been conducted for all PHAs selected

for implementation grants during the FY 1993 and FY 1994 funding

cycles. The purpose of the site visits, among other things, was to

verify assertions made in the original HOPE VI applications and gather

information for the Special Conditions article in each Implementation

Grant Agreement.

C.Eligible Activities.

1.Planning Grants. A planning grant may be used to plan for the

revitalization of severely distressed public housing developments

consistent with the requirements of Article II of the

Implementation Grant Agreement attached as APPENDIX \"F\" hereto,

and the 1995 Announcements, as applicable, including:

a.Studies of the different options for revitalization,

including rehabilitation or replacement, and including the

feasibility, costs, effectiveness and neighborhood impact of

such options;

b.Providing technical or organizational support (including

stipends) to ensure resident involvement in all phases of

the planning and implementation processes;

c.Ascertaining the concerns and attitudes, as regards the

existing development and its proposed revitalization, of the

neighboring community and the needs of the broader urban

community; providing technical or organizational support to

facilitate community involvement in the planning and

implementation processes; developing planning partnerships

with groups and entities whose support will assist the

revitalization;

d.Preliminary site planning and architectural and engineering

work;

e.Financial feasibility studies, including the identification

of financial sources, market studies, and other studies

appropriate to the development of mixed-income housing at

the development to be revitalized or at the sites of

replacement housing;

f.Planning for supportive services, including economic

development, job training and self-sufficiency

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activities that promote the economic self-sufficiency of

residents under the revitalization program;

g.Planning for community service opportunities;

h.Designing a suitable replacement housing plan in situations

where partial or total demolition is considered;

i.Planning for necessary management improvements;

j.Conducting environmental studies; and

k.Improvements to stabilize the development, including

security investments.

2.Implementation Grants. An implementation grant may be used for

the revitalization of severely distressed public housing

developments consistent with the following:

a\. At least 80% of the funds awarded under each implementation

grant must be used for any combination of the following

activities and the related administrative expenses (to the

extent permitted by OMB Circular A-87 and the Grant

Agreement): capital costs of major reconstruction,

rehabilitation and other physical improvements, including

energy retrofit; capital costs of replacement units;

certificates under Section 8(b) used for replacement housing

(unless funded separately by the A/S for PIH); relocation

costs; management improvements for the reconstructed

development; and planning and technical assistance. Funds

may be used for total or partial demolition and/or

disposition of units. The following costs may be included:

(1)Capital costs may include temporary relocation

necessary for reconstruction, rehabilitation,

demolition or disposition.

(2)Administrative costs may include the annual premium of

LBP insurance incident to approved HOPE VI work.

(3)Physical improvements may include, with prior HUD

approval, site infrastructure and land and structures

primarily intended to contribute to the revitalization

of the development by facilitating the delivery of

supportive services, economic development, and

community service support.

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b.Not more than 20% of funding awarded under each

implementation grant may be used for any combination of the

following activities and the related administrative expenses

(to the extent permitted by OMB Circular A-87 and the Grant

Agreement):

(1)Community service programs, as defined and approved for

the HOPE VI program by the Corporation for National

Service (CNS); specifically, programs organized,

administered, overseen or funded by a public housing

agency, or its designated sub-grantees, engaging

individuals in meaningful service on a volunteer basis

or through limited stipends to address unmet human,

environmental, educational, and/or public safety needs

through youth service and conservation corps,

residents\' associations, community-based organizations,

K-12 schools, institutions of higher education,

churches or other religious entities and other such

similar organizations. Such programs must comply with

the requirements stated in Appendix B of the March 29,

1993 NOFA, as the same may be updated by CNS.

(2)Supportive services, including but not limited to,

resident capacity building, literacy training, day

care, youth activities, economic development, and

resident employment and job training activities such as

the Step-Up apprenticeship program (see Federal

Register Notice, October 8, 1992, 57 FR 46398);

(3)Economic development, which may include a setaside for

a revolving loan fund established and operated in

accordance with 24 CFR part 85 (with specific reference

to 85.21 and 85.25), and

(4)Permissive and mandatory services authorized under the

Gateway Program (established in the Family Support

Centers demonstration program under 42 U.S.C. 11485e-f)

including: outreach and information services designed

to make eligible individuals aware of available

services; literacy and bilingual education services;

remedial education and basic skills training;

employment training and personal management skill

development or referrals for such services; child care

or dependent care for dependents of eligible

individuals during those times when training services

are being provided;

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pre-employment skills training; employment counsel and

application assistance; job development services; job

training; Federal employment-related activity services;

completion of high school or GED program services;

transitional assistance, including child care for up to

6 months to enable such individual to successfully

secure unsubsidized employment; substance abuse

prevention and education; and other support services

deemed to be important by the Secretary of Health and

Human Services.

c.The City in which the PHA is located must provide

contributions (required match) for supportive services in an

amount equal to 15% (or such greater amount as specified in

the HOPE VI Application) of the HOPE VI grant funds awarded

to the PHA for supportive services under the HOPE VI

Revitalization Plan. This contribution must be from

non-federal sources, which may include funding under the

Community Development Block Grant Program, and may only be

in the form of cash contributions, administrative costs and

the reasonable value of in-kind contributions (as provided

in 24 CFR 85.24). The Grantee will use such contributions

for eligible supportive services under the HOPE VI

Revitalization Plan.

3.Innovative Public Housing. In developing a Revitalization Plan,

a PHA should be aware that HUD intends to provide additional

guidance on the availability of operating subsidy, for units

which are operated as public housing although developed and owned

by an entity other than the PHA. Such units must be subject to

the requirements of an Annual Contributions Contract (ACC) and

otherwise operated as public housing.

Accordingly, where appropriate conditions to be established by

HUD are met, including ensuring that units are available for long

term use as public housing by low income families, housing

operating subsidies may be available for housing units owned by

private or public-private entities. It will be possible for such

units, upon conditions to be established by HUD, to be intermixed

with non-public housing units and included in developments which

are financed using a variety of public and private financing

sources including low income housing tax credits, taxable or

tax-exempt bonds, private mortgage debt, CDBG funds, and other

means which leverage the available public financing; and may

otherwise take advantage of innovative financial and legal

structures.

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4.Use of Other Sources of Funds. HOPE VI funds may be used in

conjunction with any other funds available to the PHA, so long as

a\) the usage of HOPE VI funds complies with the requirements set

forth in the funding announcement (see APPENDIX \"E\") and the

grant agreement to be executed with the Department (see APPENDIX

\"F\"); b) the usage of other funds complies with any restrictions

applicable to them; and c) the Department\'s \"subsidy-layering\"

guidelines, including those found at 24 CFR part 12.50 are

complied with. PHAs are strongly encouraged to utilize HOPE VI

grant funds to leverage other funds, and to design their

Revitalization Plans around partnerships with other public or

private entities, whether for-profit or not-for-profit.

5.Optional Revitalization Measures. The developments to be

revitalized with the HOPE VI grants are public housing

developments. Accordingly, certain activities under each HOPE VI

Revitalization Plan are subject to statutory requirements

applicable to public housing developments under the 1937 Act,

other statutes and the Annual Contributions Contract (ACC).

Within such restrictions, HUD seeks innovative solutions under

HOPE VI to the long-standing problems of distressed developments.

For those reasons, HOPE VI is conformed with section 24(e) of the

1937 Act (as added by section 120 of the Housing and Community

Development Act of 1992; \"Section 24\").

Section 24 permits the Secretary to waive or revise regulations

governing rents, income eligibility and other areas of public

housing management to permit PHAs to undertake measures that

enhance the long-term viability of severely distressed public

housing developments revitalized under such program. Therefore,

in order to satisfy any particular statutory requirement, the PHA

may take measures as described in implementing regulations or,

upon request to HUD for a different approach, as otherwise

approved in writing by HUD.

Various issues have been raised by PHAs in their HOPE VI

applications as areas in which innovation is sought. All

requests for waivers of existing requirements or approvals of

methods or innovations not contemplated or permitted by existing

regulations must be directed to the ODTHR, HOPE VI Division, with

a copy to the Field Office PHD. Any approvals granted will be

under the signature of the Assistant Secretary for PIH after

consultation with the Field Office and coordination with the

appropriate offices in Headquarters. As appropriate, approvals

will be granted after consultation and coordination with other

Assistant Secretaries, e.g., FHEO.

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General guidance is provided in Article X of the Implementation

Grant Agreement on the following topics:

d.Total Development Costs.

e.Modest Design Requirements.

f.Air Conditioning.

g.Ceiling Rents.

h.Designated Housing.

i.Site and Neighborhood Standards for Replacement Housing.

j.Admission to Redeveloped HOPE VI Units.

(1)Preferences for Admission.

(2)Resident Screening.

(3)Income Limits.

k.Definition of Income

l.Sub-jurisdictional Waiting Lists.

Each request to waive or revise regulations that is approved will be

shared with all HOPE VI PHAs and Field Offices for possible

consideration in their HOPE VI projects. HUD will monitor and track

each revision or waiver, and share with all HOPE VI PHAs and Field

Offices the impacts achieved by the action.

D.Program Requirements.

The PHA must comply with all of the following program requirements, as

may be amended from time to time, consistent with the Appropriations

Acts, the Grant Agreement, and the NOFA (as applicable), to the extent

that activities under the PHA\'s HOPE VI Revitalization Plan are

governed by such requirements (see APPENDICES \"A\", \"B\", and \"F\").
The

PHA may not deviate from these requirements, unless written approval

(together with any necessary waivers) is obtained from HUD as provided

above.

1.Demolition/Disposition Activity. PHAs should be objective about

the long term viability of their distressed developments, and

consider the alternatives of demolition or disposition and the

subsequent replacement of units in competitive locations

throughout their market

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area. Demolition/disposition activity under the grant is

governed by section 18 of the U.S. Housing Act of 1937 (\"1937

Act\"), as implemented at 24 CFR part 970 (see new Final Rule

published in the Federal Register on January 18, 1995), AND as

modified by the FY 1993 Appropriations Act;

2.Replacement Housing. In accordance with section 18 of the 1937

Act as amended, each unit lost through demolition or disposition

must be replaced and units for at least the same number of

individuals must be provided. Under HOPE VI, any PHA may replace

units required to be replaced under section 18, in accordance

with the provisions of Section 18 \[see Sec 18(b)(3)\], and/or

using a combination of the following replacement resources:

a.acquisition or development of conventional public housing

units in accordance with 24 CFR part 941, or as otherwise

approved in writing by HUD.

b.Section 8 rental certificates, as governed by 24 CFR part

882;

c.units acquired or otherwise provided for home ownership

under section 5(h) of the 1937 Act, as governed by 24 CFR

part 906, except that no further replacement of 5(h) units

which are sold under the 5(h) plan will be required under

HOPE VI because the replacement housing provisions of the FY

1993 Appropriations Act superseded the provisions of section

5(h) with respect to replacement housing;

d.units provided through homeownership opportunity programs of

construction or substantial rehabilitation of homes, as

governed by 24 CFR part 280 (the Nehemiah Program);

e.units provided through HOPE II, as governed by 24 CFR

Subtitle A, Appendix B;

f.units provided through HOPE III, as governed by 24 CFR

Subtitle A, Appendix C;

HOPE VI PHAs are encouraged to plan for replacement housing that

directly attacks the isolation of public housing developments and

residents, and creates new opportunities for choice in housing,

by blending public housing units into economically integrated

communities. PHAs are challenged to seek public/private

partnerships that will leverage Federal funds and develop

mixed-income properties that will appeal to assisted and market

rate tenants alike. (see APPENDIX \"E\")

9

3.Rehabilitation and Physical Improvement. Rehabilitation and

physical improvement activities may be accomplished in accordance

with 24 CFR 968.310(b),(d),(e) and (g)-(n) and 24 CFR 968.335(b)

and (c), or as otherwise approved in writing by HUD.

4.Physical Accessibility. Physical accessibility activities must

meet the requirements of Section 504.

a.Modernization activities under HOPE VI must meet the

requirement for 5% and 2%, respectively, for physical

accessibility and visually and hearing impaired. If the

Section 504 Needs Assessment shows a need of more than 5%,

then additional handicapped accessible units are required to

meet the identified need.

b.The Department provided additional guidance on other

alterations (see 24 CFR 8.23 (b)) in Notice PIH 90-48(P)

dated September 27, 1990.

5.Lead-based paint (LBP). The requirements for LBP testing and

abatement apply to any work performed under a HOPE VI grant where

the painted surface will be disturbed. LBP testing and abatement

shall be performed when the work involves removal of walls, doors

and windows, or otherwise results in the breaking of painted

surfaces.

a.LBP insurance is an eligible HOPE VI cost for units approved

for testing and abatement activities. However, this

insurance does not take the place of the PHA\'s general

liability coverage, nor does it replace any of the types of

insurance required of the contractor for construction.

Also, this coverage is limited to the pollution hazards

associated with the testing, abatement, clean-up and

disposal of lead-based paint on applicable surfaces in the

family developments funded through HOPE VI.

b.The PHA also will comply with 24 CFR parts 35 and 965

(subpart H) and section 968.110(k), as they may be amended

or revised from time to time.

6.Section 3. Under Section 3 of the Housing and Urban Development

Act of 1968, as amended, the PHA shall require that, to the

greatest extent feasible, training, employment, and contracting

opportunities generated by the expenditure of housing assistance,

be directed to low and very low income persons and business

concerns owned by low and very low income persons, or which

employ low and very low income persons residing in the

metropolitan area or non-metropolitan county in which the

development is located. The business concern seeking this

preference

10

must provide evidence or certification that the business:

-is 51 percent or more owned by Section 3 residents; or

-has permanent, full-time employees at least 30 percent of

whom are currently Section 3 residents, or within three

years of the date of first employment with the business

concern were Section 3 residents; or

-has a commitment to subcontract in excess of 25 percent of

dollar award of all subcontracts to be awarded to such

businesses described above.

7.Duplicate Funding. The PHA shall not receive duplicate funding

for the same work item or activity under any circumstance and

shall establish controls to assure that an activity, program, or

project that is funded under any other HUD program (or with any

other source of funds) shall not be funded by HOPE VI.

Accordingly, under the Grant Agreement the PHA agrees to ensure

that HOPE VI funds are not used to duplicate work which is funded

under any other Federal program and to establish controls to

assure non-duplication of funding.

8.Comprehensive Grant Program (CGP) Reporting. The next Annual

Statement and revised Five-Year Action Plan submitted by the PHA

for funding under the CGP (in accordance with 24 CFR part 968,

subpart C) will reflect the use of HOPE VI grant funds for the

HOPE VI Revitalization Plan. Costs of activities funded under

the HOPE VI grant will not be duplicated in the PHA\'s Annual

Statement and revised Five-Year Action Plan submitted under the

CGP. However, there is no prohibition against using CGP funds to

supplement HOPE VI grant funds, or to fund improvements for

dwellings at a HOPE VI development that were not included in the

HOPE VI budget as items to be paid for with HOPE VI funds.

9.Environmental Review. For each development selected to

participate, the Field Office Public Housing Division (PHD) shall

determine or achieve compliance with the National Environmental

Policy Act (NEPA) and related environmental laws, orders and

regulations, as stated in 24 CFR part 50 and 51, based on the

physical changes proposed in the PHA\'s HOPE VI Implementation

Plan or Revised Revitalization Plan, as appropriate. If the

Field Office identifies or is informed of any condition that

might hinder or alter the proposed revitalization, the ODTHR

should be notified at once.

11

10.Funds Distribution. Although all 32 PHAs are already using the

LOCCS-VRS payment system for their Comprehensive Grant Program,

the Field Office should provide the PHA\'s HOPE VI staff with a

copy of Part I of the LOCCS User Guide for their information and

guidance. The Field Office should also advise the PHAs that a

LOCCS-VRS video tape, which explains the system and the

initialization procedures, is available for loan. Since both the

Field Office and the PHA will need to establish a new access to

LOCCS-VRS for the HOPE VI program, the Field Office should

provide any of the following items that might be needed by the

PHA and their HOPE VI staff:

oLOCCS-Voice Response Access Authorization \-- Form HUD-27054

and instructions;

oDirect Deposit Sign-Up form \-- Form SF-1199A and

instructions;

oPayment Voucher \-- Form HUD-50080-URP;

oLOCCS-VRS Change of Address \-- Form HUD-27056 and

instructions; and

oLOCCS User Guide.

E.Cost Guidelines.

While the Department is concerned about the high cost of revitalizing

these most severely distressed developments, it also recognizes the

need to go beyond traditional approaches to modernization. Therefore,

under the HOPE VI grant PHAs may exceed Total Development Costs (TDC)

limits after written approval from Headquarters on a case by case

basis with sufficient justification of good cause for the higher

costs.

HUD does not expect the PHA to adhere to standards of design and

construction which have prevailed in the past, but instead will

evaluate each Replacement Housing Plan for cost reasonableness in

light of the standards set forth in the Grant Agreement. In order to

provide additional flexibility and discretion to the PHA under the

HOPE VI program, the calculation for the HOPE VI hard cost limit will

be changed to 100% of the Total Development Cost limit for both

elevator and non-elevator buildings. The provisions of CIAP Handbook

7485.1 Rev 4, paragraph 2-2a shall remain in effect relative to the

calculation of the cost limits with the exception of this change.

F.Implementation Strategies. The 34 HOPE VI developments selected to

participate in the program from FY 1993 and 1994 funding fall into

three broad categories:

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oPlanning Grants (8). These PHAs will be planning for

revitalization and preparing a full HOPE VI Revitalization

Plan for implementation with funds specifically provided for

this purpose by the FY 1995 HUD Appropriations Act;

oImplementation Grants (6). These proposals articulated, in

the initial application in response to the NOFA, a

sufficiently complete and innovative concept to permit the

PHA to proceed with their original HOPE VI Revitalization

Plan, with some supplementation and revision; and

oImplementation Grants (20). These PHAs, due to their desire

to revise their plans subsequent to the initial application

because of a better understanding of the unique

opportunities available under HOPE VI, have been authorized

to use up to six months following execution of the Grant

Agreement, and a limited portion of their implementation

grant funds, to prepare a Revised Revitalization Plan and

supporting documentation.

The processing procedures set forth in this Notice will be followed in

reviewing and approving (1) all Revised Revitalization Plans and

supporting documentation, (2) the Revitalization Plans to be submitted

by the eight PHAs which were awarded planning grants in 1993 and 1994,

\(3\) any proposed amendments to the Revitalization Plans which require

HUD approval, and (4) any Revitalization Plans to be submitted by

awardees of new implementation grants under the 1995 Appropriation.

G.Grant Agreement Preparation.

HUD and each PHA have executed, or will execute, a Grant Agreement for

each planning grant and each implementation grant. The Grant

Agreement articulates the terms and conditions with which the PHA must

comply in carrying out the proposed activities. The Office of

Distressed and Troubled Housing Recovery, HOPE VI Division, will

prepare the HOPE VI Grant Agreements.

1.General Conditions. There were two formats for FY 93 and 94

awards, one for implementation grants and another for planning

grants. These formats have been updated for FY 95 funding

awards. The most recent and comprehensive version of the Grant

Agreement is attached hereto as APPENDIX \"F\".

2.Special Conditions. All Implementation Grant Agreements for FY

93 and 94 awards contain Special Conditions, in Article XXI,

articulating additional requirements for each PHA in addition to

the general conditions provided

13

under Articles I through XX. Special Conditions are based on the

site visits and any strengths and/or weaknesses identified during

the review of the original proposal and will set forth any

special instructions and deadlines (e.g., submit a revised plan,

budget and/or schedule, or provide clarification to resolve

eligibility or reasonableness of costs).

3.Exhibits to the Grant Agreement. The Grant Agreement includes

Form HUD-1044 (Assistance Award/Amendment), the body of the Grant

Agreement, and the following five Exhibits:

Exhibit A - Plan for Implementation (provided by the PHA)

Exhibit B - Sub-Grantee List (provided by the PHA)

Exhibit C - Form for Sub-Grantee/Contractor/Subcontractor

Certifications and Assurances

(form provided by the HOPE VI Division)

Exhibit D - HOPE VI Budget, Form HUD 52825, Part I and II

(provided by the PHA)

Exhibit E - Form for Financial Status Report, SF 269A

(form provided by the HOPE VI Division)

4.Review and Comment. After the Implementation Grant Agreement

including the Special Conditions was prepared in draft, it was

(or will be) distributed to the Field Office and PHA for review

and comment prior to execution. Once the HOPE VI Implementation

Grant Agreement is finalized for execution, Headquarters will

send the Grant Agreement to the PHA with instructions for

execution and a cover letter. Planning Grant Agreements do not

have Special Conditions and will be prepared in final form for

execution.

H.Grant Agreement Execution.

1.PHA Approval. Upon receipt of the Grant Agreement, the PHA shall

have its Board of Commissioners approve the Grant Agreement and

authorize the Executive Director to sign it. The PHA must

complete blocks 10 and 19 of Form HUD-1044. In addition, the PHA

must sign all three copies of Form HUD-1044 and forward them to

HUD Headquarters.

2.HUD Processing. Once the Board of Commissioners has approved and

the Executive Director has signed the Grant Agreement, the PHA

shall send the entire Grant Agreement packet back to HUD

Headquarters, Office of Distressed and

14

Troubled Housing Recovery (ODTHR). Upon receipt from the PHA,

the HOPE VI Division staff will check for the following:

a.Ensure that the tax identification number (TIN) matches the

TIN on Form HUD-27054 and agrees with the LOCCS query screen

Q05 data. Any discrepancy must be resolved.

b.Check that the authorized user and the approving official on

the LOCCS-VRS Access Authorization Form HUD-27054 are

different, and that the form is complete and notarized;

c.Check that all other forms are properly completed as part of

the Grant Agreement, as required in accordance with the

instructions for execution; and

d.Check that the Form SF-1199A was completed and that the

grantee information is in accordance with the LOCCS User

Guide instructions (note the instructions on the reverse of

the printed Form SF-1199A) that a canceled check was

provided, and that the TIN agrees with the TIN on Form

HUD-1044. The PHA must have one bank depository account for

all HUD PIH funds.

e.Check to ensure that an official direct deposit account has

been established in accordance with the procedures

established in the LOCCS-VRS User\'s Guide.

3.HUD Approval. The Secretary shall sign each HUD-1044 in block

20, and staff shall enter the HOPE VI project number in block 3

and the effective date in block 5. After execution of the Grant

Agreement, the ODTHR, HOPE VI Division shall distribute the

executed Grant Agreement as follows:

a.Transmit one signed copy of the executed Grant Agreement to

the Field Office.

b.Transmit one signed copy of the HUD-1044 and a copy of the

IRS document with the TIN for new grantees to the Office of

Finance and Accounting (OFA) and retain one copy in the

grant file.

c.Send one copy of the Grant Agreement to the Grantee when the

grant payment system is operational. The grant system is

operational when the following are completed:

(1)HOPE VI Division staff have verified the

15

obligation of funds by OFA;

(2)HOPE VI Division staff have entered the grant budget

line item entries into LOCCS-VRS system;

(3)HOPE VI Division staff have verified that the correct

banking information has been entered into LOCCS using

query screen Q05 and that the TIN agrees with the Grant

Agreement Form HUD-1044; and

(4)HOPE VI Division staff have assured that the PHA has

LOCCS-VRS access by query of LOCCS, confirming that the

PHA has been provided a LOCCS-VRS user authorization

project number and initial password.

4.Project Number. Each PHA has been assigned a project number for

each grant it has been awarded, which has been entered in the PAS

data module. The project number identifies the application

selected for funding and is also used as the Grant Agreement

number. The project number contains 14 characters (e.g.,

TX16URD003I193, no hyphens), for example:

State/FO/Prog.Code/HA/Type of Grant/Increment/Funding Yr

TX 16 \*URD 003 I or P 1 or 2 93

\* URD: Urban Revitalization Demonstration Program

I.HUD Roles and Responsibilities under HOPE VI. It is recognized and

appreciated that the PHDs have a complex set of on-going relationships

with each PHA that pre-dates the enactment of the HOPE VI Program in

1992\. The PHD staff also have a unique understanding of the PHA

staff, Board of Commissioners, resident councils and leaders, and

other organizations that together form the local public housing

community. This wealth of local knowledge, history, and contacts

within the local PHD is essential to the success of the HOPE VI

program.

PHAs were not selected for funding under HOPE VI on the basis of the

excellence of their performance or administrative capacity, but rather

on the critical need of the distressed site(s) and its residents, and

the potential of the proposed revitalization for solving the problems.

HOPE VI offers new flexibility and new approaches that have not been

available to either the PHD or the PHA in the past. However, success

will depend on effective cooperation, coordination and communication

among all parties engaged in the revitalization program.

Headquarters is looking to the PHD for compliance monitoring,

16

but even more important, the PHD can help the PHA with timely

responses, technical assistance and creative ideas, innovations and

solutions from the collective experience of the HUD staff.

Headquarters and PHD staff must join with the PHA as partners in a

combined commitment to success. Each partner can contribute essential

resources to the total effort.

1.Delegation of Authority. Headquarters has not as yet delegated

approval or disapproval authority to the Field Office for any

HOPE VI document, budget, or request for waiver of existing

procedures submitted by the PHAs under the HOPE VI program.

Although it is the intent of ODTHR to consult with the Field

Office on all such actions, all final decisions for approval and

disapproval presently rest with the ODTHR. However, on a case by

case basis, authority to review and approve selected documents or

actions may be delegated in writing to a Field Office.

2.Points of Contact.

a.Field Office - Each PHD Director with one or more PHAs

selected for HOPE VI funding will assign, in consultation

with Headquarters, one Public Housing staff person as a HOPE

VI point of contact (HOPE VI Coordinator), and one alternate

point of contact. These staff persons will be responsible

for coordinating all HOPE VI activity within the Field

Office. The HOPE VI Coordinator shall communicate and

coordinate activities with the FHEO staff, as appropriate.

The PHD HOPE VI Coordinators should be familiar with this

Notice and each of its Appendices, Notice PIH 94-35, and the

Grant Agreements executed with their HOPE VI PHAs. There

are no Handbooks or other regulations or issuances specific

to HOPE VI at this time.

b.Headquarters - Headquarters has established a HOPE VI

Division within the Office of Distressed and Troubled

Housing Recovery (ODTHR), under the oversight of a Deputy

Assistant Secretary. ODTHR, HOPE VI Division, has been

assigned responsibility for the overall implementation of

the HOPE VI program. The HOPE VI Division has several

Grants Managers who serve as points of contact and technical

assistance to the HOPE VI PHAs and the Field Offices.

ODTHR also expects to have several outstationed HOPE VI

Program Advisors, who will represent the HOPE VI Division

and be able to work closely with the PHD in

17

providing support and technical assistance to the PHAs.

c.Corporation for National Service. The FY 1993

Appropriations Act, that initially funded the HOPE VI

program, mandated that each revitalization plan contain a

community service component, that the Commission on National

and Community Service (now called the Corporation for

National Service \[CNS\]) define a community service program,

and that the Commission approve each community service

program before any HOPE VI funds can be released to the PHA.

The CNS has established a special HOPE VI staff in their

headquarters office in Washington, DC, to provide technical

assistance to HOPE VI PHAs, residents and HUD staff, and to

execute Agreements with the PHAs approving their community

service plans. The CNS is also relying on its network of

State Directors and State Commissions to provide assistance

and program resources such as AmeriCorps and RSVP to HOPE VI

projects. The phone number of the CNS HOPE VI staff is

202-606-5000, extension 218 or 482.

3.Program Implementation and Monitoring. This Demonstration

program is designed to give the PHAs selected for participation

the greatest degree of flexibility while still ensuring that the

basic program requirements are met. PHAs are responsible for

complying with the requirements set forth in this Notice as well

as the requirements articulated in the NOFA and Grant Agreement.

For purposes of the HOPE VI Program, the PHA will be a client of

both the Field Office and HUD Headquarters, and of the

Corporation for National Service.

While many of the funding and policy issues will be addressed at

HUD Headquarters, the ultimate success of the program depends in

large measure on the active participation of the Field Office

staff.

a.Technical Assistance. The PHD and ODTHR, HOPE VI Division,

share the responsibility for providing technical assistance

to PHAs and residents. Since policy and procedures for this

innovative demonstration program are being developed in

Headquarters, it is incumbent on ODTHR to share information

with the Field Offices and keep them abreast of rapidly

changing guidelines for the program.

18

(1)The Field Office staff will be the primary source of

assistance to the PHAs and residents on:

OCoordination of HOPE VI with other management

improvement and capital funds, such as CIAP, CGP,

MROP, Development Programs, Vacancy Reduction

grants, Family Investment Centers, etc.;

OAllocation of personnel costs and other

administrative expense among available funding

sources;

OPreparation of demolition/disposition

applications;

OOrganization and involvement of viable resident

councils at HOPE VI developments;

OCoordination of HOPE VI with RMC/TAG, TOP, HOPE I,

DEP, and other resident initiative grants that may

have been approved for HOPE VI developments;

OPlanning for maximum implementation of Section 3

training, employment and contracting

opportunities, including STEP-UP;

OUsing HOPE VI activities to raise PHMAP scores;

and

ODetermining when the collective responsibilities

of the PHA and other factors make use of

alternative administration of the HOPE VI program

preferable to in-house administration.

(2)The outstationed Program Advisors will be trained to

provide technical assistance to the 28 PHDs and 32 PHAs

presently involved in the HOPE VI Program. These

numbers will grow as FY 1995 funding is awarded. The

Advisors will become the field liaison for the ODTHR,

HOPE VI Division, and will be able to spend the time

giving technical assistance that is not possible for

HOPE VI staff stationed in Headquarters.

(3)ODTHR has contracted with the Housing Resource

Foundation (HRF), a non-profit affiliate of the Council

of Large Public Housing Authorities

19

(CLPHA), to assess the capability and needs of each

HOPE VI PHA for accomplishing its HOPE VI program.

Once these assessments have been completed, HUD may

utilize HRF or other contractor resources to provide

personnel and training as needed to supplement and

strengthen the PHAs\' resources. HRF will also be

publishing a monthly HOPE VI newsletter for all

interested parties, that should be an effective vehicle

for information exchange and guidance to HUD and local

participants.

(4)HOPE VI Division staff will make at least one technical

assistance on-site visit per year to each HOPE VI PHA,

and to the extent possible will coordinate the timing

so that the PHD HOPE VI Coordinator and outstationed

Program Advisor can participate. ODTHR staff will be

the primary source of assistance to the PHAs on:

O Waivers of existing regulations;

OMaking substantial changes to previously approved

Revitalization Plans;

OObtaining supplemental funding for replacement

housing, such as Section 8 certificates; and

OStructuring innovative HOPE VI \"PLUS\" arrangements

for replacement housing, including leveraged

financing, public/private financing, tax credits,

mixed income developments, etc.

(5)CNS representatives (staff and/or consultants) will

also make one or more technical assistance and

monitoring visits annually to each PHA to observe the

community service programs and determine compliance

with the Agreement executed between the CNS and the

PHA. CNS is informing ODTHR, HOPE VI Division, of

their scheduled visits to PHAs; they have been asked to

also contact the PHD for coordination of visits. Most

of the information and resources that the CNS has to

offer are appropriate for other developments at the

HOPE VI PHA, and for other PHAs in the PHD\'s

jurisdiction. Each PHD will want to establish a

relationship with the CNS State Director and State

Commission, as well as the CNS HOPE VI staff in their

Headquarters.

20

(6)ODTHR, HOPE VI Division, is planning at least one

technical assistance conference each year for all HOPE

VI PHAs and HUD practitioners.

b.Solving Problems. The most important reason for HUD\'s

partnership with PHAs in the HOPE VI program is to help make

it happen! By definition, HOPE VI is attempting to do the

\"impossible\": to completely transform severely distressed

properties where all previous efforts and programs have

fallen short. Furthermore, the Congress and the

Administration expect success in every case, not just a few.

Success can only happen if all participants, including HUD,

PHA, CNS, residents, City, and community interests, join

forces in unprecedented cooperation and mutual support.

Although adherence to many existing regulations is

necessary, the challenge to all participants is to find

answers and solutions to the numerous impediments that will

inevitably occur in a project of this magnitude. HUD staff,

field and Headquarters alike, should be constantly alert to

any problems or obstacles that may delay the PHA\'s HOPE VI

program, and take the initiative to offer suggestions and

solutions. HUD Field Staff are in an excellent position to

support the PHAs and their residents with expertise and

ideas gained from working with other programs and other

clients. HUD\'s partnership with the HOPE VI PHAs should

provide service and support with timely and creative

solutions to problems as they occur.

c.On-site Monitoring. HUD Field Office staff will make

on-site monitoring visits to each HOPE VI site at least once

a year and prepare a report in a format prescribed by ODTHR.

Additional monitoring or follow-up visits may be needed, and

should be scheduled by the PHD on a risk management basis.

The outstationed Program Advisor will participate in the

annual monitoring review. FHEO staff shall be invited to

participate in the on-site monitoring review as well. The

report will be provided to the HOPE VI Division in final

draft form and will be issued to the PHA over the joint

signatures of the Deputy Assistant Secretary and the Field

Office Public Housing Director.

In those cases where the HOPE VI monitoring visits require

PHD staff to remain away from their duty station on

overnight travel, the PHD may request travel cost

reimbursement from the HOPE VI Division.

21

d.Coverage of On-Site Review. In consultation with the ODTHR,

HOPE VI Division, the Field Office will be responsible for

making recommendations on whether the PHA has adequate

systems and controls in place to ensure its own compliance

with program requirements during the implementation of the

Revitalization Plan, and for monitoring the PHA\'s adherence

to its systems and controls. The Field Office, to include

FHEO staff, as appropriate, shall review the PHA\'s systems

and test whether those systems are working by reviewing

random samples of the activities in the following areas

during the on-site review:

(1)PHA inspection reports, to determine whether the PHA or

its architect has adequately inspected its

revitalization activities to ensure that the physical

work is being carried out in accordance with the plans

and specifications;

(2)Inspection of the physical work completed and in

progress to ensure that the activities undertaken are

consistent with the approved budget and Revitalization

Plan and are eligible activities;

(3)Supporting documentation, maintained on file at the PHA

in support of any minor changes to the Revitalization

Plan and or approved budget;

(4)Inspection of evidence of resident consultation in

accordance with the Grant Agreement and any approved

plan for resident involvement;

(5)Compliance with requirements for procurement and

contract administration;

(6)Compliance with HUD financial management and accounting

requirements with respect to the PHA\'s internal

controls for its HOPE VI program, including proration

and allocation of charges, and correction of any

pertinent deficiencies identified in annual fiscal

audits;

(7)Compliance with other statutory and regulatory

requirements, such as displacement, relocation and

acquisition requirements;

(8)Review the PHA\'s progress in obligating and expending

funds and completing the work set forth in the

Revitalization Plan, and assessment of additional need

for monitoring;

22

(9)PHA\'s accomplishments in carrying-out the community

service portion of the Revitalization Plan (the primary

review of the community service plan and Agreement will

be performed by the CNS);

(10)PHA\'s accomplishments in carrying-out the supportive

service portion of the Revitalization Plan;

(11)Compliance with the statutory requirement of the 15%

match from the City for the provision of supportive

services.

(12)Compliance with fair housing and equal opportunity

requirements, to include Section 3. This is done

either by PIH staff in consultation with FHEO or by

FHEO staff directly.

e.Monitoring Reports. Reports should document accomplishments

and successes of the PHA, consultants, contractors, service

providers and residents, as well as any deficiencies that

need to be addressed. Special attention should be given to

the results of any waivers of regulations and unique

innovations. Reports should present a balanced picture of

the HOPE VI program, and should indicate how HOPE VI

activities are impacting on the PHA\'s PHMAP score. The

emphasis of monitoring reports should be to offer solutions

to the problems noted during the visit, and should identify

follow-on actions to be taken by HUD staff as well as the

PHA. To the extent possible, each recommendation and

follow-up action should have a specific target date for its

accomplishment. If necessary, the reports should also

recommend that HUD issue formal Letters of Deficiencies,

Corrective Action Orders, or Declaration of Default if the

situation so warrants.

f.Off-Site Monitoring. In addition to the one or more formal

on-site monitoring reviews each year, Field Offices shall be

alert and sensitive at all times to progress and problems

associated with the PHA\'s HOPE VI program. Any need for

assistance shall be responded to at once. On-going

information can be obtained from:

O Regular meetings with PHA top management;

O HOPE VI progress meetings at the PHA;

O Attending resident council meetings;

23

OMeeting with consultants, contractors, sub-grantees,

and service providers;

OCommunications with representatives of the Corporation

for National Service;

O Media coverage of the local HOPE VI program;

OComplaints from contractors, residents, community

organizations, and others;

OObserving procurement and competitive selection

proceedings;

OBudgets, financial statements and reports received from

the PHA on other programs and grants;

OAudit reports and the PHA\'s actions to resolve any

audit findings or deficiencies;

OCommunication with the State or Area Coordinator, and

other program divisions in the Field Office concerning

their interaction with the PHA.

4.HUD Recordkeeping. The Field Office shall ensure that

documentation and other information written on each PHA as the

result of any review or monitoring visit, including any letters

of deficiency or corrective action orders, are retained in an

official file. As appropriate, matters relating to FHEO shall be

sent to the FHEO Headquarters Office of Program Standards and

Evaluation (OPSE). The Field Office shall make this material

available for public inspection for a three-year period; it shall

also be available in accordance with the Freedom of Information

Act (5 U.S.C. 552) and HUD\'s implementing regulations at 24 CFR

Part 15.

Copies of correspondence initiated by the PHD on matters

pertaining to the HOPE VI program shall be provided promptly to

ODTHR, HOPE VI Division, and to the outstationed Program Advisor.

Likewise, the HOPE VI Division will copy the PHD on its

correspondence with PHAs.

J.PHA Reporting Requirements Under HOPE VI. The Department has chosen

to utilize three of the reporting formats (HUD-52825, HUD-50070, and

HUD-52820) provided for in the Comprehensive Improvements Assistance

Program (CIAP). These requirements have been approved by the Office

of Management and Budget (OMB) under OMB number 2577-0044. In

addition, the

24

Department is attempting to streamline the review and approval times

for documents submitted to HUD for review. Therefore, unless

otherwise stated in this Notice, any reference to the submission of

any documents to HUD shall mean that these documents shall be

submitted simultaneously to Headquarters, Office of Distressed and

Troubled Housing Recovery, HOPE VI Division, and the Field Office

Public Housing Division. The PHD will provide a copy of the Quarterly

Narrative Report and the Post-Grant Report to FHEO for review and

comment.

1.Field Office Actions. Because of its first-hand information

about the PHA, the Field Office shall review all reports required

under the Grant Agreement for acceptability to assure information

is accurate, complete and consistent with records on file and

information otherwise known to staff. The Field Office shall

take appropriate actions to obtain acceptable reports, including

any past due reports and revisions to unacceptable reports.

2.Quarterly Narrative Report. The PHA shall submit to HUD a

quarterly narrative performance report (ordinarily not to exceed

five pages in length unless deemed necessary by the PHA). This

report is due no later than 30 calendar days after the end of

each quarter. It shall describe the current status of the work

activities under the Revitalization Plan, including community

service and supportive services, set forth on Form HUD-52825,

Comprehensive Assessment/Program Budget. In this narrative, the

PHA will describe significant actions taken during the quarter

towards accomplishment of its stated goals under the

Revitalization Plan (comparing actual accomplishments to the

objectives established for the period) and explain any lack of

progress or actions if the established objectives were not met.

The PHA shall also discuss its progress in meeting fair housing

objectives in its Revitalization Plan, including those set forth

in an affirmative marketing strategy, a local preference plan, or

otherwise. The PHA shall also certify that it is not in default

under the Grant Agreement except as may be disclosed specifically

in the report. The PHA should also identify any problems or

issues on which it needs assistance or answers from HUD.

HUD shall determine the Grantee\'s progress based upon a

comparison of the Grantee\'s actual performance with the

performance objectives, tasks, time lines and costs established

in the Revitalization Plan, and specifically in the Plan for

Implementation, as the same may be amended from time to time with

HUD approval or as required to be modified or amended by HUD

pursuant to

25

Article XII, paragraph 4 or Article XXI, Special Conditions, of

the Grant Agreement.

HUD will enter receipt of the PHA\'s quarterly narrative report in

LOCCS-VRS; at the present time this entry is being made by ODTHR,

HOPE VI Division. A PHA\'s failure to submit its report by the

due date could result in a stop payment action in LOCCS that

would preclude the PHA from drawing any additional funds until

the block is removed.

3.Quarterly Obligation Amounts. The PHA must enter amounts

obligated into the Line of Credit Control/Voice Response System

(LOCCS-VRS) no less than once a quarter in accordance with

instructions issued in Notice PIH 94-63 (HA). If the PHA fails

to enter this information into the system as required, the system

will prevent the PHA from further requisitioning funds until the

obligated amounts have been entered.

4\. Semi-Annual Financial Status Report. The PHA shall submit a

financial status report SF-269A, Financial Status Report, every

six months (for the periods ending June 30 and December 31),

showing all outlays for the HOPE VI program. This is the only

report that captures the total amount of funds from all sources

that the PHA is spending on the HOPE VI project, including the

required City match and the value of in-kind contributions. A

financial report is required pursuant to 24 CFR Part 85.41(b).

The semi-annual reports are due 30 days after the reporting

period. PHAs should use the CGP development accounts and

accounting procedures for HOPE VI (Handbook 7485.3, chapter

4-20), unless otherwise directed.

5.Final Financial Report. The PHA shall submit, within 90 calendar

days following completion of all activities to be performed

utilizing HOPE VI grant funds, Form SF-269A, Final Financial

Report to the Field Office and ODTHR, HOPE VI Division. The

report is a cumulative summary of expenditures and must indicate

the exact balance of unexpended funds. After consultation between

the Field and ODTHR staff, the ODTHR staff will notify the PHA to

remit any excess funds to HUD by wire if \$2,000 or more, or send

a check for lesser amounts made payable to the U.S. Department of

HUD. The checks to HUD should be sent to the following address:

Dept. of Housing and Urban Development

Office of Finance and Accounting

Cash & Credit Management Branch

ATTN: Cash & Securities Section, Room 3112

26

451 Seventh Street, SW

Washington, D.C. 20410

When the final Form SF-269A is approved, it will be sent by the

ODTHR staff along with the closeout letter to the Office of

Finance and Accounting (OFA). The OFA will establish an account

receivable for the amount due to HUD or de-obligate any unused

grant funds based on a Grant Agreement Amendment to be prepared

and executed by the Field Office. When executing an Amendment to

de-obligate unused funds remaining under the grant, the HUD

office (HOPE VI Division or Field Office staff depending on

delegation authority at the time of final close-out) must suspend

payments using LOCCS Screen M01 to stop further drawdown requests

by the PHA under the HOPE VI grant.

6.Post-Grant Report. The Grantee shall submit a Post-Grant Report

in accordance with 24 CFR Part 961.4 to both the Field Office and

ODTHR within 90 days of completion of all activities under the

Revitalization Plan (including activities not performed with HOPE

VI grant funds). The report must describe the activities carried

out by the PHA, the impact of the activities toward achieving the

program objectives, and the PHA\'s plan for continuing the

activities, if and as appropriate.

K.HUD Review and Approval of PHA Submissions. In addition to the

periodic reporting requirements, each PHA is responsible for providing

HUD with current information concerning revisions to its

Revitalization Plan, including amendments and deletions, and

completion of requirements stated in the Grant Agreement (including

the Special Conditions). Documents covered under this section shall

be submitted simultaneously to Headquarters, Office of Distressed and

Troubled Housing Recovery, HOPE VI Division, and the Field Office

Public Housing Division. As appropriate, matters relating to FHEO

shall be sent to the FHEO Headquarters Office of Program Standards and

Evaluation (OPSE).

In order to facilitate an orderly and expeditious review and approval

of various documents required to be submitted to HUD, both the Field

Office staff designated by the PHD Director and the HOPE VI Division

staff must coordinate their review and recommendation for approval to

the Deputy Assistant Secretary for ODTHR. The process for document

review and approval is under review for selective delegation to Field

Offices.

1.Review and Approval of Contract Documents. The Department has

chosen to utilize for HOPE VI the basic framework established for

the Comprehensive Grant Program (CGP), specifically Chapters 4,

11 and 13 of Handbook

27

7485.3, unless otherwise approved. Any procurement and

contracting documents that the PHA is required by PHD Corrective

Action Order to submit to the Field Office on its CGP shall also

be submitted on its HOPE VI program. Any dollar thresholds

imposed by the Field Office on the PHA\'s CGP shall also apply to

the HOPE VI program. Most HOPE VI PHAs are not under a

corrective action order, and do not need to submit their

contracting documents for prior HUD approval except under the

circumstances detailed in Handbook 7460.8, REV. 1, section 11.1.

a.Special Approvals. Headquarters has not created any

additional or unusual procurement or contract approval

requirements for the HOPE VI program, other than ODTHR

approval of sub-grantee agreements. The PHD retains its

authority to impose, modify and remove corrective action

orders for the CGP, MROP and other capital programs.

However, any such remedial actions imposed on the HOPE VI

program directly shall be approved and issued by the ODTHR.

Any required procurement or contract submissions for HOPE VI

shall be sent by the PHA to both the Field Office and ODTHR

for simultaneous review. After a coordinated review by both

Offices, the ODTHR HOPE VI Division will prepare an

appropriate response to the PHA.

b.Previous Participation. Some of the HOPE VI Grant

Agreements were written before the recent change in previous

participation clearance procedures, so they ask the PHAs to

submit form HUD-2530 to HUD. Pursuant to changes in 24 CFR

941 and 968 published in the Federal Register on June 20,

1994, even though the HUD-2530 forms are no longer required

to be submitted to HUD, PHAs are still expected to

determine, pursuant to 24 CFR 85.36, if a contractor is

responsible, based on its own records, the GSA Debarred and

Suspended list, the HUD Limited Denial of Participation

List, and any other information available to the PHA. These

provisions have also been extended to the HOPE VI program.

c.Selection of Development Partners. The Department

encourages PHAs to consider opportunities for partnership

with other public and private for-profit and non-profit

entities as implementers for housing development. However,

to the extent that 1) these partners are not non-profit

entities intended to be sub-grantees, and 2) they will

receive fees or have other financial interests in the

project, HUD must require PHAs to demonstrate that they have

selected development partners in accordance with the

requirements of 24 CFR part 85. In all instances,

28

selection must be by a publicly advertised and procedurally

fair competition, even if the proposed relationship is such

that the PHA requests a ruling from HUD that either a waiver

from part 85 is justified or that part 85 is inapplicable.

In addition, compensation of such partners must be

reasonable and in accordance with market norms.

2.Review of Documents Required by the Grant Agreement. Each Grant

Agreement requires the PHA to prepare and submit to HUD a series

of documents related to the implementation and administration of

the HOPE VI program and its Revitalization Plan (see Article II

of APPENDIX \"F\"). These documents will be submitted

simultaneously to the ODTHR HOPE VI Division and the Field Office

Public Housing Division. After a coordinated review by both

Offices, and the Office of Fair Housing and Equal Opportunity, as

appropriate, the ODTHR HOPE VI Division will prepare appropriate

responses to the PHA.

3.Budget Revisions. All activities to be undertaken in this

program are provided for in general terms in the program budget

HUD 52825, Parts I and II, which is attached as an Exhibit to the

executed Grant Agreement signed by the Secretary. Substantial

revisions to the approved budgets must be submitted to HUD (Field

Office and ODTHR in Headquarters) for ODTHR approval, in

accordance with the Grant Agreement. Minor changes to the budget

do not require prior HUD approval. However, all minor changes

shall be documented by the PHA and incorporated in a subsequent

or final budget revision for HUD approval.

4.Sub-grantee Agreements. A PHA may enter into one or more

sub-grantee agreements in accordance with Article IV, section 12,

of the HOPE VI Grant Agreement between HUD and the PHA, provided

that the PHA submits the sub-grant agreements for prior HUD

approval. Sub-grant agreements do not have to be competitively

solicited or awarded, but costs must be reasonable and

proportionate to the services provided to residents of HOPE VI

developments. PHD knowledge about prospective sub-grantees is

critically important in making a determination on whether the

agreements should be approved as submitted by the PHAs.

5.Demolition/Disposition Applications. Execution of a Grant

Agreement does not constitute approval of any demolition or

disposition activity. All PHAs which contemplate demolition

and/or disposition and replacement housing (which is subject to

section 18 of the 1937 Act, as modified by the 1993

Appropriations Act) are required

29

to submit a demolition and/or disposition application for HUD

approval within 6 months from the date of the execution of the

Grant Agreement. (See Article IV, section 5, of the Grant

Agreement). Each application must meet the requirements set

forth in the Demolition/Disposition regulations in 24 CFR Part

970 (see new Final Rule published in the Federal Register on

January 18, 1995) and Federal Register Notice (57 FR 46074),

dated October 6, 1992.

HOPE VI encourages demolition and replacement of obsolete public

housing, and both ODTHR staff in Headquarters and Field staff

should be proactive in helping the PHA prepare and submit an

approvable application and work cooperatively to process such

application to prompt approval. Final approval of HOPE VI

demolition and/or disposition applications will be made by the

ODTHR. The PHA shall submit its demolition/disposition

application directly to ODTHR, with a courtesy copy to the

appropriate Field Office PHD and the Office of FHEO. ODTHR staff

will coordinate all review and approval activities with the PHD

and the Office of FHEO; the PHD will be provided with copies of

all correspondence to the PHA regarding its application. The

Field Office PH and FHEO staffs will perform the environmental

and site and neighborhood standards reviews. Article X, section

6, of the Implementation Grant Agreement (see APPENDIX \"F\") sets

forth the site and neighborhood standards that will be used for

HOPE VI projects.

6.Replacement Housing Plans. Consistent with the review and

approval of the demolition application, HUD will process the

Replacement Housing Plan in a similar fashion, including

coordination with FHEO.

a.If the PHA intends to replace units in accordance with

section 18 of the 1937 Act by the development of public

housing units, the PHA may accomplish such development in

accordance with 24 CFR part 941, or as otherwise approved in

writing by HUD.

b.The Assistant Secretary for PIH may be able to provide

separate funding for tenant-based Section 8 certificates for

up to one-half of the required replacement units. (Up to

one-half if total replacement is 200 units or more, and up

to one-third if total replacement is less than 200 units.)

The approval of any Section 8 certificates that the PHA may

request as part of its replacement housing plan must wait

until after final approval of their demolition or

disposition plan. The PHA does not need to submit an

application for the Section 8

30

certificates other than its replacement housing plan.

(1)Upon approval of the PHA\'s replacement housing plan, a

request for Section 8 Existing Housing certificates

will be made by the Deputy Assistant Secretary for

ODTHR to the Office of Assisted Housing.

(2)Upon approval of the request by the Director, Office of

Assisted Housing, a form HUD-185 is prepared to

allocate funding authority for the replacement units.

After processing by the PIH Budget Division, the

HUD-185 is forwarded to the Field Office Public Housing

Division.

(3)After reserving the Section 8 funding, the PHD performs

the required administrative procedures for funding a

new Section 8 allocation, including preparing and

issuing the Congressional notification, the HUD

notification letter to the PHA, and the ACC. The PHD

and the PHA follow normal procedures for placing the

Section 8 funding under Annual Contributions Contract,

as outlined in HUD Handbook 7420.3.

(4)A copy of the PHD\'s notification letter to the PHA

should be sent to the ODTHR, HOPE VI Division.

7.Public Housing Development. As indicated in sub-paragraph K.6.a.

above, PHAs may choose to use public housing development as a

form of replacement housing. PHAs may opt to use HOPE VI funds,

rather than specifically targeted public housing development

funds, to provide their replacement public housing. HOPE VI

funds are subject to processing under the guidance provided in 24

CFR Part 941 and the Public Housing Development Handbook, 7417.1

REV-1, as modified by A/S Shuldiner\'s memorandum of August 8,

1994 (see APPENDIX \"G\"), or as otherwise approved by HUD, ODTHR.

ODTHR encourages PHAs to be innovative in their approach to

public housing development and requests to deviate from 24 CFR

Part 941 and Handbook 7417.1 REV-1 will be considered. PHAs may

use any one or combination of three development methods:

conventional, turnkey, and acquisition (with or without

rehabilitation). PHAs will follow the submission requirements

set forth in Chapter 6 of 7417.1 REV-1, or as otherwise approved

by HUD, ODTHR.

Notice PIH 94-30 (HA) sets forth public housing

31

development cost limits. However, the guidelines for the HOPE VI

hard cost will be 100% of the Total Development Cost for both

elevator and non-elevator buildings. ODTHR will approve PHA

requests to exceed the TDC limits on a case by case basis upon

submission of appropriate and sufficient justification for the

higher costs.

Submissions for public housing development using HOPE VI funds

are to be made directly to the ODTHR with a courtesy copy to the

appropriate Field Office. ODTHR will coordinate processing with

the Field Office to ensure that appropriate local reviews (i.e.,

cost, design, environmental, and site and neighborhood standards,

etc.) are completed. Once a public housing development

application has been approved, the Field Office PHD will assume

lead responsibility for processing and monitoring, just as with

any other development program.

Grantees who wish to use HOPE VI funds to leverage public/private

and mixed-income development opportunities should consult

directly with ODTHR. There may be ways in which funds allocated

for replacement housing can be leveraged to produce a larger

number of affordable housing units than were demolished. HUD is

encouraging innovative public/private financing of mixed-income

housing that provides new opportunities and choices to low income

households.

8.Plan for Resident Consultation. Section I.E.7. of the NOFA (page

16593 of APPENDIX \"B\" hereto) establishes the broad requirement

for resident consultation in developing, implementing, and

monitoring of a local urban revitalization program. Furthermore,

Article XIX of the Implementation Grant Agreement and Article XVI

of the Planning Grant Agreement set forth in more specific terms

the frequency and type of resident consultation for each

development under the HOPE VI program.

In addition to these requirements, some PHAs are required, by the

terms of the Special Conditions of their Grant Agreement, to

prepare formal Plans for Resident Consultation establishing the

method and manner of consultation with residents. Any Plan for

Resident Consultation also must be consistent with the Final Rule

published in the Federal Register on August 24, 1994, dealing

with tenant participation and tenant opportunities in public

housing (24 CFR Parts 913, 964 and 990).

Although Article XXI identifies specific points that must be

addressed in the Plan for Resident Consultation, it is expected

that each Plan for Resident Consultation will be

32

unique and somewhat different from other such plans due to the

wide diversity of circumstances at the HOPE VI developments.

Once the Plan for Resident Consultation is submitted to the

ODTHR, HOPE VI Division, with a courtesy copy to the Field

Office, HOPE VI Division staff will coordinate closely with the

Field Office in evaluating the Plan for Resident Consultation to

ensure that the PHA is in compliance with the spirit as well as

the written guidance related to resident participation and

consultation. Local knowledge and experience of the PHD will be

essential in assessing the merits of each Plan for Resident

Consultation.

L.LOCCS-VRS Procedures for HOPE VI.

Notice PIH 94-35 (HUD) was issued on June 10, 1994 to establish

LOCCS-VRS procedures for the HOPE VI program. Further guidance is

also contained in Notice PIH 94-63 (HA) issued on September 14, 1994.

At the present time, each PHD with a HOPE VI PHA should obtain

authorization to query LOCCS-VRS so as to monitor obligations,

expenditures and draw downs. However, all BLI spreads, releases and

budget changes in LOCCS-VRS for the HOPE VI program are being made in

ODTHR, HOPE VI Division. The contact for LOCCS in the HOPE VI

Division is G. DeWayne Kimbrough, at 202-708-5114.

The following are clarifications to Notice PIH 94-35 (HUD):

1.Data entry and budget line item (BLI) changes have not been

delegated to the Field. These entries are being made by the

ODTHR, HOPE VI Division.

2.Since a majority of the PHAs have been given the opportunity to

revise their initial Revitalization Plans, only a limited amount

of funds have been spread for their use pending HUD approval of

their Revised Revitalization Plan. This limited amount has been

spread in BLIs 1410 and 1430. The balance of each grant is being

held in a new BLI 2000. Upon approval of the PHA\'s Revised

Revitalization Plan, the HOPE VI Division will spread the rest of

the grant into the appropriate BLIs.

3.Certain HOPE VI Program Budget changes and revisions, as

specified by the Grant Agreement, must be approved by the ODTHR,

HOPE VI Division, after consultation with the Field Office. The

Field Office should determine if the PHA\'s requests are

justifiable and make a recommendation to the HOPE VI Division.

4.Headquarters has established both soft and hard edits in

33

LOCCS-VRS for the HOPE VI Program. Until further notice, any

request by a PHA to exceed the edit limits can only be approved

by ODTHR, HOPE VI Division; the HOPE VI Division will make the

entries to LOCCS-VRS to override all edits. This changes the

instructions in section G and I of Notice 94-35.

5.The 5% soft edit limit on total cumulative amount any PHA can

draw down in a current month applies to both HOPE VI planning and

implementation grants. Since it is anticipated that the Planning

grants will be fully expended in 6 to 12 months, most draw downs

will exceed the 5% limitation and will require a manual release

by HOPE VI Division staff.

6.Section G.1.(b) of Notice 94-35 makes reference to \"the approved

Revised Annual Statement\". This is an error; the HOPE VI program

does not have an Annual Statement. PHAs will be submitting

quarterly narrative reports and semi-annual financial reports on

SF 269A.

7.All suspension and resumption of payments will be approved by the

ODTHR, HOPE VI Division, after consultation with the Field

Office. This changes section G.2.(c) of Notice 94-35.

8.The HUD review of PHA reports discussed in section H.l.(b) will

be conducted by both the Field Office and the ODTHR, HOPE VI

Division. The two offices must consult with each other and agree

on a joint position before the Field Office prepares any

notification of deficiencies.

9.Section H.1.(c) requires that HUD monitor the quarterly

disbursement report that the PHA must enter into LOCCS-VRS. Both

the Field Office and HOPE VI Division staff should monitor PHA

reports to determine where draw downs exceed reported

disbursements. The Field Office is requested to recommend

recapture of any amount it considers appropriate. After

consultation between Field and HOPE VI Division, a decision will

be made by the HOPE VI Division on when to require the PHA to

remit the excess amount, how much should be remitted, and which

office will issue the letter to the PHA.

10.Section L.2. has a parenthetical date of January 3. This is a

typographical error. The date should be January 31.

34

APPENDIX \"A\"

HOPE VI LEGISLATION

HOPE VI Appropriations for

FYs 1993, 1994 and 1995

APPROPRIATIONS ACTS FUNDING THE

HOPE VI-URBAN REVITALIZATION DEMONSTRATION PROGRAM

H.R. 5679 (FY 1993)

Public Law 102-389

TITLE II

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Housing Programs

HOMEOWNERSHIP AND OPPORTUNITY FOR PEOPLE EVERYWHERE

GRANTS (HOPE GRANTS)

Furthermore, \$300,000,000 shall be for grants to carry out an urban

revitalization demonstration program involving major reconstruction of

severely distressed or obsolete public housing projects, to be
administered

by local public housing agencies:

Provided, That such funding shall be made available to up to 15 cities

selected from either the 40 most populous United States cities or, from
any

city whose housing authority was considered to have been on the

Department\'s troubled housing authorities list as of March 31, 1992:

Provided further, That no more than \$50,000,000 shall be provided to
each

participating municipality:

Provided further, That no more than 500 units shall be funded for each

participating city and such units shall be located in up to 3 separately

defined areas containing the community\'s most severely distressed
projects,

including family high-rise projects:

Provided further, That at least 80 per centum of the funding provided to

each participating public housing agency shall be used for the capital

costs of major reconstruction, rehabilitation and other physical

improvements, for the capital costs of replacement units and for

certificates under section 8(b) used for replacement and for management

improvements for the reconstructed project and for planning and
technical

assistance purposes and not more than 20 per centum shall be used for

community service programs (as defined by the Commission on National and

Community Service) and for supportive services, including, but not
limited

to, literacy training, job training, day care, youth activities,

administrative expenses, and the permissive and mandatory services

authorized under the Gateway Program established in the Family Support

Centers demonstration program, provided for in 42 U.S.C. 11485e-f:

Provided further, That each participating city shall make contributions
for

supportive services in an amount equal to 15

1

per centum of the funding provided for supportive services pursuant to
the

immediately preceding proviso:

Provided further, That all such contributions from participating

jurisdictions for supportive services shall be derived from non-Federal

sources:

Provided further, That each participating community shall submit a plan
for

program implementation which is consistent with the local comprehensive

housing affordability strategy prepared pursuant to section 105 of the

Cranston-Gonzalez National Affordable Housing Act and which has the

approval of the local governing body:

Provided further, That each plan shall include a community services

component, but no funds are to be disbursed pursuant to this paragraph

until such community services program has been approved by the
Commission

on National and Community Service:

Provided further, That funds made available pursuant to this paragraph
may

be used in conjunction with, but not in lieu of, funding provided under
the

head \"Modernization of Low-Income Housing Projects\" for the
modernization

of existing public housing projects pursuant to section 14 of the Act
(42

U.S.C. 14371); for construction or major reconstruction of obsolete
public

housing, other than for Indian families; for the replacement of public

housing units pursuant to section 18 of the Act; and for the HOPE for

Public and Indian Housing Homeownership program as authorized under
title

III of the Act:

Provided further, That notwithstanding the provisions of section
18(b)(3)

of the Act, units demolished, disposed of or otherwise eliminated under

this demonstration may be replaced as follows: one-third by certificates

under section 8(b) and the balance by any combination of conventional

public housing and units acquired or otherwise provided for
homeownership

under section 5(h) of the Act, housing made available through housing

opportunity programs of construction or substantial rehabilitation of
homes

meeting essentially the same eligibility requirements as those
established

pursuant to sections 603-607 of the Housing and Community Development
Act

of 1987 (Public Law 100-242), or under the HOPE II or III programs, as

established under sections 421 and 441 of the Cranston-Gonzalez National

Affordable Housing Act; persons displaced by the reconstruction
activities

provided for herein shall be eligible for these replacement units:

Provided further, That, in order to be eligible for funding under this

paragraph, applications for funding must be received within 180 days
from

the date the Notice of Funds Availability is published in the Federal

Register:

2

Provided further, That the Secretary of the Department of Housing and
Urban

Development shall issue a notice of funds availability within 90 days of

enactment of this paragraph:

Provided further, That the Secretary shall determine which cities have
been

selected to participate in the program within 90 days of the timely
receipt

of the last eligible application:

Provided further, That housing authorities, in submitting their
application

for funds under this paragraph, shall identify all severely distressed

public housing developments, using the criteria set forth by the
National

Commission on Severely Distressed Public Housing:

Provided further, That nothing in this paragraph shall prohibit the

Secretary from conforming the program standards and criteria set forth

herein, with subsequent authorization legislation that may be enacted
into

law:

Provided further, That the authority in the immediately preceding
proviso

shall not apply to any legislation that excludes or otherwise limits

self-sufficiency or community service activities set forth in this

paragraph, or authorize reallocation of amounts available for obligation

which are included in this paragraph:

Provided further, That any troubled housing authority that applies for

funds under this paragraph, shall not be eligible if the Secretary

certifies to the Congress that they are not making substantial progress
to

eliminate their troubled status in accordance with section 6(j) of the

Housing Act of 1937, as amended:

Provided further, That in the event that communities applying for
funding

under this paragraph also request funding under any other HOPE program

authorized under title III or title IV of the Cranston-Gonzalez National

Affordable Housing Act, the Secretary shall process such applications

concurrently and in an expeditious manner:

Provided further, That, in the event that any application received from
the

cities initially selected to participate in this program is determined
to

be unacceptable, the Secretary shall select another city from the 40
most

populous United States cities to receive funding under this paragraph:

Provided further, That, in the event that communities selected to
receive

funding do not proceed in a manner consistent with the plan approved for

that community, the Secretary may withdraw any unobligated balances of

funding made available pursuant to this paragraph and distribute such
funds

to other eligible communities.

3

H.R. 2491 (FY 1994)

Public Law 103-124, Approved on 10-28-93

SEVERELY DISTRESSED PUBLIC HOUSING PROJECTS

For the urban revitalization demonstration program under the third

paragraph under the head \"Homeownership and Opportunity for People

Everywhere grants (HOPE grants)\" in the Departments of Veterans Affairs
and

Housing and Urban Development, and Independent Agencies Appropriations
Act,

1993, Public Law 102-389, 106 Stat. 1571, 1579, \$778,240,000, to remain

available until expended:

Provided, That notwithstanding the first proviso in such third
paragraph,

the Secretary shall have discretion to approve funding for more than

fifteen applicants:

Provided further, That no part of the foregoing amount that is used for
the

urban revitalization demonstration program shall be made available for
an

application that was not submitted to the Secretary by May 26, 1993:

Provided further, That of the foregoing \$778,240,000, the Secretary may
use

up to \$2,500,000 for technical assistance under such urban
revitalization

demonstration, to be made available directly, or indirectly under
contracts

or grants, as appropriate:

Provided further, That nothing in this paragraph shall prohibit the

Secretary from conforming the program\'s standards and criteria set
forth

herein, with subsequent authorization legislation that may be enacted
into

law:

Provided further, That of the \$778,240,000 made available under this

heading, \$20,000,000 shall be made to eligible grantees under the urban

revitalization demonstration program, to implement programs authorized

under subtitle D of title IV, and of which, \$10,000,000 shall be made
for

youth apprenticeship training activities for joint labor-management

organizations pursuant to section 3(c)(2)(B) of the Housing and Urban

Development Act of 1968, as amended.

4

H.R. 4626 (FY 1995)

Public Law 103-327, Approved on 9-28-94

SEVERELY DISTRESSED PUBLIC HOUSING

For the HOPE VI/urban revitalization demonstration program under the

third paragraph under the head \"Homeownership and Opportunity for
People

Everywhere grants (HOPE grants)\" in the Department of Veterans Affairs
and

Housing and Urban Development, and Independent Agencies Appropriations
Act,

1993, Public Law 102-389, 106 Stat. 1571, 1579, \$500,000,000, to remain

available until expended:

Provided, That notwithstanding the first proviso of such third
paragraph,

the Secretary shall have discretion to approve funding for more than

fifteen applicants:

Provided further, That notwithstanding the third proviso of such third

paragraph, the Secretary may provide funds for more than 500 units for
each

participating city:

Provided further, That in selecting HOPE VI implementation grants

recipients in fiscal year 1995, the Secretary must first award such
grants

to those cities or jurisdictions which have received HOPE VI planning

grants in fiscal year 1993 or fiscal year 1994:

Provided further, That the requirement of the immediately proceeding

proviso shall not limit the Secretary\'s discretion to limit funding to

amounts he deems appropriate, nor shall it prevent the Secretary from

guaranteeing that all implementation grant recipients conform with the

requirements of the HOPE VI/ urban revitalization demonstration program:

Provided further, That of the foregoing \$500,000,000, the Secretary may
use

up to \$2,500,000 for technical assistance under such urban
revitalization

demonstration, to be made available directly, or indirectly, under

contracts or grants, as appropriate:

Provided further, That nothing in this paragraph shall prohibit the

Secretary from conforming the program standards and criteria set forth

herein, with subsequent authorization legislation that may be enacted
into

law.

5

APPENDIX \"B\"

HOPE VI NOTICE OF FUNDING AVAILABILITY (NOFA)

dated

March 29, 1993

APPENDIX B

REVISED NOTICE OF FUNDING AVAILABILITY FOR THE URBAN REVITALIZATION

PROGRAM IS A FEDERAL REGISTER DOCUMENT. CHECK THAT DATABASE.

APPENDIX \"C\"

LIST OF FY 1993 AND 1994 HOPE VI GRANTEES

Urban Revitalization Demonstration (URD)

Implementation and Planning Grants

PHAs Selected to Participate

FY 1993 and FY 1994

============================================================

Development Amount

PHA Name Name Requested

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

IMPLEMENTATION GRANTS

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

Atlanta HA Techwood/ \$ 42,412,635

Clarke Howell

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

Baltimore HA Lafayette Courts \$ 49,663,600

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

Boston HA Mission Main \$ 49,992,350

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

Camden HA McGuire Gardens \$ 42,177,229

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

Charlotte N.C. HA Earle Village \$ 34,685,155

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

Chicago HA Cabrini Homes Ext \$ 50,000,000

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

Columbus Metro HA Windsor Terrace \$ 41,053,408

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

Cuyahoga Co. HA Outhwaite Homes \$ 50,000,000

(Cleveland) King Kennedy

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

Dallas HA Lakewest \$ 26,600,000

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

Denver HA Quigg Newton \$ 20,189,288

Homes

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

Detroit HA Jeffries Homes \$ 39,807,342

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

Houston HA Allen Parkway \$ 36,302,761

Village

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

Kansas City MO HA Guinotte Manor \$ 47,579,800

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

Los Angeles HA Pico Gardens \$ 50,000,000

Aliso South

Aliso North

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

Milwaukee HA Hillside Terrace \$ 40,003,646

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

Newark HA Walsh Homes \$ 49,996,000

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

New Haven HA Elm Haven \$ 45,331,593

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

New Orleans HA Desire \$ 44,255,908

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

Oakland HA Lockwood Gardens \$ 25,510,020

Coliseum Gardens

Lower Fruitvale

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

============================================================

Development Amount

PHA Name Name Requested

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

Philadelphia HA Richard Allen \$ 50,000,000

Homes

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

Pittsburgh HA Allequippa Terrace \$ 31,564,190

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

Puerto Rico HA Crisantimos \$ 50,000,000

Manuel A. Perez

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

San Antonio HA Springview Apts. \$ 48,810,294

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

San Francisco HA Bernal Dwellings \$ 49,992,377

Yerba Buena Homes

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

Springfield IL HA John Hay Homes \$ 19,775,000

Charles Grandon Apt

Johnson Park

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

Washington DC - Ellen Wilson \$ 15,671,911

(DPAH) Dwellings

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

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

PLANNING GRANTS

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

Detroit HA Parkside Homes \$ 499,922

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

El Paso HA Kennedy Brothers \$ 500,000

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

Indianapolis HA Concord Village \$ 500,000

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

Memphis HA Le Moyne Gardens \$ 481,000

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

New York HA Beach 41st Street \$ 500,000

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

San Antonio HA Mirasol Homes \$ 244,550

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

Seattle HA Holly Park Apts \$ 500,000

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

St. Louis HA Darst-Webbe \$ 500,000

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

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

Total Approved Implementation Grant \$1,051,374,507

Requests

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

Total Approved Planning Grant Requests \$ 3,725,472

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

Total Grants Approved \$1,055,099,979

============================================================

APPENDIX \"D\"

Letter of Invitation to Apply for Funding

to

Eight Planning Grantees

dated

January 9, 1995

U.S. Department of Housing and Urban Development

Washington, D.C. 20410-5000

OFFICE OF THE ASSISTANT SECRETARY

FOR PUBLIC AND INDIAN HOUSING JAN - 9 1995

Dear

Congress in the 1995 Appropriations Act appropriated \$500,000,000

for the HOPE VI (Urban Revitalization Demonstration) Program.

Congress directed the Department of Housing and Urban Development

(HUD) to first fund implementation grants to public housing

authorities (PHAs), like yours, which had received planning grants in

the prior funding round, subject to HUD\'s discretion to provide only

such amounts as are appropriate and subject as well to HUD\'s

discretion to enforce program requirements. This letter invites your

PHA to apply for such an implementation grant.

Because each of the prior planning grant recipients is at a

different stage in its planning efforts, we have established

relatively abbreviated application requirements, as set forth below.

HUD will issue grant agreements promptly for PHA approval, execution

and return together with various required certifications. This grant

agreement will require the PHA to submit a detailed Revitalization

Plan within a specified time. The Plan must satisfy program

requirements and justify the amount initially funded.

The Department makes this award at a time when the basic

framework of public housing is being challenged; indeed, the

Department itself has proposed a sweeping \"reinvention\" of public

housing. Accordingly, the burden is heavy on HOPE VI grantees to

demonstrate not merely that they are not repeating the mistakes of the

past, but that they are genuinely building for the future. The

Department has grown convinced that the most promising revitalization

strategies are those which most directly attack both the isolation of

the public housing authority, by proceeding in partnership with actors

from the broader community, and the isolation of public housing

developments and residents, by blending public housing units into

mixed-income communities.

The Department\'s approach to this Demonstration is also shaped by

the growing belief that direct appropriations for public housing must

be combined with other federal, state, local and public finance

efforts to be successful. Indeed, the

targeted support for public housing developments and move entirely to

tenant-based subsidies. Accordingly, grantees are encouraged to explore

the feasibility of, to plan for, and to use monies other than this
targeted

federal grant for development. Grantees will also necessarily be
required

to attempt, to the extent possible, to plan against the uncertainties of

future subsidy mechanisms.

In their Revitalization Plans, therefore, grantees are encouraged to

develop solutions which \"leverage\" HOPE VI funds and use other private
or

governmental funds in order to create additional affordable and/or
market

rate housing in which the HOPE VI units may be blended. Grantees should

increase the opportunity of public housing residents to live in
communities

of choice, including settings offering diversity with respect to income
and

race. Grantees should pursue solutions which utilize efficient and

economical methods of development, program or construction management,

finance, and housing management, including methods not typically
employed

in public housing. Grantees are also encouraged to seek a broad spectrum

of participation and assistance from local and state governments,
community

organizations, businesses, nonprofit corporations, social service
agencies,

philanthropic organizations and residents of the developments, and to
enter

into public-private partnerships.

Please note that the conflict-of-interest provisions set forth in the

planning grant agreement will continue to apply as your PHA proceeds to

implementation.

To apply for an implementation grant, please submit a letter

requesting an implementation grant in a specified amount not to exceed

\$50,000,000, which letter should include or have attached:

1\. An identification of the Targeted Units (which must conform to those

covered by the prior planning grant and need not be limited to 500
units);

2\. A brief narrative which sets forth the status of the planning
process

and a projected completion date;

3\. An identification of the partners who have been involved in the

planning process, including community organizations, educational

institutions, nonprofits, philanthropic organizations, state and local

government entities, and representatives of the business community;

4\. A brief summary of the plan which the grantee expects to submit as a

Revitalization Plan Statement, including a statement as to whether the

Revitalization Plan is expected to include mixed-income housing and
whether

HOPE VI funds are expected to \"leverage\" other funds;

5\. An estimated implementation budget. The budget amounts should a)

represent grantee\'s preliminary estimate of funds needed for the

implementation of the revitalization activities which are projected to
be

finally selected, b) identify projected or exemplary sources of funds
other

than HOPE VI, and c) should comply with the statutory requirement that
no

more than 20% of the HOPE VI funds be spent on supportive services and

community service activities;

6\. A projection of HUD resources other than HOPE VI funds, such as

Section 8 certificates, which the grantee expects to need for
replacement

housing;

7.Certifications as listed on the attached sheet.

Applications must be submitted to the HUD Headquarters Office, 451

Seventh St., SW., room 4138, Washington, DC 20410. Attention: Director,

HOPE VI Division, Office of Distressed and Troubled Housing Recovery, no

later than February 10, 1995. Hand delivery or express mail service will

ensure prompt receipt. The grantee should ensure that all local

requirements for the submission of an application of this sort are met.

I look forward to the contribution you will make to the future of

public housing, through your HOPE VI efforts.

Sincerely,

Kevin Emanuel Marchman

Deputy Assistant Secretary

Office of Distressed and

Troubled Housing Recovery

APPENDIX \"E\"

Letter of Invitation to Apply for Funding

to

All HOPE VI-eligible PHAs

dated

February 3, 1995

With Attachments:

1\. Grant Specifications

2\. PHAs eligible to apply for HOPE VI funds in FY 1995

3\. Further information concerning Planning Grant availability

for the Urban Revitalization Demonstration

4\. HOPE VI Planning Grant Eligibility Determination

Worksheet (and instructions)

U.S. Department of Housing and Urban Development

Washington, D.C. 20410-5000

FEB - 3 1995

OFFICE OF THE ASSISTANT SECRETARY

FOR PUBLIC AND INDIAN HOUSING

Dear

I am writing to you to announce the availability of up to \$19

million in planning funds and approximately \$129 million in

implementation and amendment funds (made up of both new FY 1995 money

and remaining funds from FY 1993 and FY 1994) for urban revitalization

under the HOPE VI program.

With the FY 1995 funding of the HOPE VI program, the Department

seeks to promote innovative public housing transactions which leverage

HOPE VI funds with other public and private sources of capital and

pursue our FY 1995 program goals, described in detail below.

Each eligible PHA with one or more severely distressed projects

may receive a planning grant of up to \$400,000. In addition, eligible

PHAs may submit proposals for new implementation grants. The

Department will also consider requests for amendments to existing HOPE

VI implementation grants. In no case, however, may a PHA receive more

than \$50 million in one fiscal year, or by amendment of one grant,

under the HOPE VI program.

The attached Grant Specifications provide the necessary

information on eligibility, application procedures and selection

processes. Please note that the submission deadline for planning

grants is February 28, 1995.

As you well know, I write at a time when the environment in which

your authority operates is becoming more and more challenging. The

Department of Housing and Urban Development has proposed to transform

the public housing system as part of a sweeping \"reinvention\". The

proposed system will subject public housing developments to market

forces by shifting project-based assistance to tenant-based subsidies.

The Department has also proposed an orderly transition for the public

housing system, during which project-based capital and operating funds

will be available. PHAs with severely distressed developments must

work especially quickly and strategically during this period in order

to secure viable inventories which will be competitive in the coming

market. The Department has designed its HOPE VI funding round for FY

1995 to help you prepare for this new competitive environment.

The Department has grown convinced that the most promising

revitalization strategies are those which most directly attack the

isolation of public housing developments and residents, by blending
public

housing units into economically integrated communities. These strategies

can also help to break the isolation of public housing authorities by

working in partnership with members of the broader community. The

Department encourages grantees to plan for viable, competitive, and

marketable units that will appeal to both subsidized and unsubsidized

renters and homeowners. You should also be objective about the long term

viability of your distressed developments, and consider the alternative
of

demolition, disposition and the subsequent replacement of units in

competitive locations throughout your market area.

The Department seeks solutions through the HOPE VI Demonstration which

\"leverage\" Federal funds. Grantees should seek to increase the
opportunity

of public housing residents to live in communities of choice, including

settings offering diversity with respect to income and race. One avenue
we

encourage you to explore is that of transactions using multiple sources
of

funds, which can simultaneously develop affordable and/or market rate

housing into which new public housing units may be dispersed, creating

economically integrated neighborhoods.

The Department also encourages you to explore new kinds of

relationships for implementing your plans, including partnerships with

other housing developers and managers. We support your beginning or

continuing conversations with a broad spectrum of potential partners,

including local and state governments, community organizations,
businesses,

nonprofit corporations, social service agencies, philanthropic

organizations and residents of public housing developments. You have an

opportunity to use the planning process to engage these entities in a

constructive dialogue. Through this process you can identify areas for

collaboration that can lead to the creation of attractive, well
designed,

safe affordable housing, in economically integrated neighborhoods, with

appropriate amenities and services.

I know that this is a very challenging prospect, and that local

relationships and conditions will in part dictate the strategies you

develop for your authority during this critical time. However,

collaborative projects can produce the kind of housing that the
Department

anticipates will be the most competitive over the long term. I am
hopeful

that the planning, amendment and implementation grant opportunities

announced by this letter will assist you in your efforts.

Should you have any questions about the HOPE VI program, the planning

grant application, or applications for amendment funds, please call me

directly, or call Milan Ozdinec, HOPE VI Division Director, at (202)

401-8812. For further information on leveraging HOPE VI funding or on
new

implementation grants, you may again speak with me directly, or call
Mindy

Turbov, Public Housing Partnerships Division Director, at (202)
708-0282.

I look forward to the contribution you will make to the future of

public housing through your HOPE VI efforts.

Sincerely,

Kevin Emanuel Marchman

Deputy Assistant Secretary

Office of Distressed and Troubled

Housing Recovery

Enclosures

1

GRANT SPECIFICATIONS

Amounts and Eligibility

Congress in the 1995 Appropriations Act provided \$500,000,000 for the

HOPE VI (Urban Revitalization Demonstration) Program. Additionally, HUD

has \$640,021 in unspent funds from the FY 1993 and FY 1994 HOPE VI

appropriations. After setting aside technical assistance funds and
funding

implementation projects for recipients of FY 1993 and 1994 planning
grants,

the Department has determined to use up to \$19 million of the remainder
of

this money to support planning grants. These grants will provide up to

\$400,000 to enable each eligible public housing authority (PHA) to plan
for

the revitalization of not more than three severely distressed
developments

which have not been the subject of a prior HOPE VI grant. HUD will make

available any remaining HOPE VI funds (approximately \$129 million) for
new

implementation grants in amounts not to exceed \$49,600,000 and/or for

amendments to prior implementation grants, as described on subsequent

pages. Available funds will be allocated between new implementation
grants

and amendment funds, at HUD\'s discretion.

In order to be eligible, a PHA must have one or more severely

distressed development(s), and be either: 1) located in one of the 40
most

populous cities, or 2) a large PHA (having more than 1,250 units) on the

Department\'s Troubled PHA List as of 12/31/94. A full listing of PHAs

eligible to participate in the program in FY 1995 is provided in
Appendix

A.

You may use funds provided under a FY 1995 planning grant to develop

an implementation grant proposal (although very few can be awarded this

year), as well as plan for other severely distressed developments in
your

inventory. However, you may only receive funding for up to three areas
of

your jurisdiction. Due to a statutory limitation of the program, you may

not receive more than \$50 million in HOPE VI funding, including your

planning grant and any implementation grants or amendment funds you may

have received, or may receive, in FY 1995.

Planning Grants

A planning grant will be made available on a non-competitive basis to

each eligible PHA.

Two documents are attached to assist you in applying for a planning

grant. The Further Information document (Appendix B) provides
background,

highlights certain program information and sets forth the submissions
which

must be made in order to apply for and receive a HOPE VI planning grant.

The second document is

2

a copy of the implementation grant agreement (Appendix D) used in the
prior

funding round and is provided to familiarize you with many of the
standard

provisions which will be in your planning grant agreement. Your planning

grant agreement will set forth the applicable terms and conditions of
your

grant, as established by the Department, and will be the contractual

agreement between you and the Department, which must be fully executed

before you can receive any planning grant funds.

Applications for planning grants must be submitted to the HUD

Headquarters Office, 451 Seventh St., SW., room 4138, Washington, DC
20410;

Attention: Director, HOPE VI Division, Office of Distressed and Troubled

Housing Recovery, no later than 4 p.m. February 28, 1995. Hand delivery
or

express mail service will help ensure prompt receipt. The PHA should

ensure that all local requirements for the submission of an application
of

this sort are met.

Implementation Grants

The Department seeks proposals for implementation grants which have

the potential to provide models of innovation in addressing the needs of

severely distressed public housing and its residents, as well as
innovation

in the relationships with other public, private and non-profit partners

developed to implement these strategies.

If your PHA would like to apply for an implementation grant, you must

submit a proposal for the use of the funds which specifies the
developments

to be assisted using HOPE VI implementation funds. Developments
specified

for implementation funds may be located in up to three areas of your

jurisdiction containing the community\'s most severely distressed public

housing.

The proposal must include supportive service and community service

components as well as capital activities. You may target up to 20
percent

of the proposed implementation funding for community and supportive
service

components of your project; and no less than 80 percent must be used for

capital expenses, as provided in accordance with the 1993 Appropriations

Act.

The Department encourages you to consider opportunities for

partnership with other public and private for-profit and non-profit

entities as implementers for your partnership. However, to the extent
that

1\) these partners are not non-profit entities intended to be
subgrantees

and 2) will receive fees or have other financial interests in the
project,

HUD must require you to demonstrate that you have selected them in

accordance with the requirements of 24 CFR Part 85, if applicable, and
if

not applicable by a publicly-advertised and procedurally fair

3

competition. In addition, the compensation of such partners must be

reasonable and in accordance with market norms.

In selecting recipients for FY 1995 implementation grants, the

Department will consider the degree of innovation in the proposed
capital

and operating structures, the degree of leverage proposed for HOPE VI

funds, the severity of distress of the units, residents, developments
and

neighborhoods affected by the proposed revitalization activities, and
other

factors. The Department presently intends to consider the merits of

requests for amendments together with the proposals for new
implementation

grants, so that it may determine the best use of the available HOPE VI

funds. As part of this determination, the Department will take into

account the goals for the program, the factors for selecting proposals
for

new implementation grants and requests for amendments, and the funds

available. The Department will also consider the extent to which

individual applicants have made substantial progress toward the
development

and/or implementation of their Revitalization Plan or Revised

Revitalization Plan. However, the Department reserves the discretion to

award amendment funds prior to the submission date for proposals for new

implementation grants, if it determines that one or more amendment
requests

are sufficiently worthy of being funded and it would be in the best

interests of the grantee(s) and/or the program to do so without delay.

A package providing detailed information on the process for submitting

a proposal for a HOPE VI implementation grant, including program

requirements, required submissions with your proposal, and factors that
the

Department will take into consideration in selecting grantees, will be
sent

to you shortly. The package will include a deadline date for the

submission of your proposal for an implementation grant.

Amendment Funds

The Department recognizes that some PHAs which previously received

HOPE VI implementation grants have expanded the vision of their

Revitalization Plans or have otherwise encountered a shortfall of funds.

The Department will entertain requests for amendment funds which
requests

satisfy all of the following general conditions: 1) no expansion of the

units specified for revitalization under the original HOPE VI

implementation grant (Targeted Units) is involved; 2) the sum of the

original implementation grant and the requested amendment funds does not

exceed \$50 million; 3) the additional funds are necessary to the
successful

revitalization of the Targeted Units and not otherwise available to the

PHA; and 4) the grant of amendment funds, together with all other HOPE
VI

funds awarded to the grantee in 1995, would not cause the grantee to

receive more than \$50 million in 1995.

4

PHAs wishing to apply for amendment funds may do so at any time

between now and the submission date for new implementation grant
proposals,

which will be announced in a subsequent letter to you. It is the

Department\'s present intention not to award amendment funds until after
the

submission deadline for new implementation grant proposals, at which
time

the merits of all proposals for amendments and new implementation grants

will be considered altogether so that the Department may determine the

best use of the available HOPE VI funds. As part of this determination,

the Department will take into account the goals for the program, the

factors that it will consider in selecting proposals for new
implementation

grants, and the funds available. The Department will also consider the

extent to which individual applicants have made substantial progress
toward

the development and/or implementation of their Revitalization Plan or

Revised Revitalization Plan. However, the Department reserves the

discretion to award amendment funds at an earlier date, if it determines

that one or more amendment fund applications are worthy of being funded
and

it would be in the best interests of the applicant(s) and/or the program
to

do so.

HOPE VI grantees may request amendment funds, so long as all of the

above-stated general conditions are satisfied, by submitting to the

Department\'s HOPE VI Division a letter of request stating: 1) the
amount

of amendment funds requested; 2) the proposed use of such funds; 3) a

demonstration that the requested funds are necessary to the
revitalization

of the HOPE VI site or will significantly increase the prospects for

successful revitalization; 4) a certification that no expansion of the

Targeted Units is involved; and 5) a demonstration that the applicant
has

no other funds available for the purpose (in light of other demonstrated

needs of the PHA).

In accordance with its program goals for FY 1995, the Department

encourages PHAs to consider developing proposals for amendment fund
usage

which derive from PHA efforts to modify an earlier-conceived HOPE VI
plan

to include or expand mixed-income, leveraged, and/or partnership aspects

similar to those encouraged in the new implementation grant proposals.

Appendices

The following appendices are attached:

Appendix A: PHAs Eligible to Apply for HOPE VI Funds in FY 1995

Appendix B: Further Information Concerning Planning Grant

Availability

Appendix C: HOPE VI Planning Grant Eligibility Worksheet

Appendix D: HOPE VI Implementation Grant Agreement

1

APPENDIX A:

PHAs ELIGIBLE TO APPLY FOR HOPE VI FUNDS IN FY 1995

Forty Most Populous U.S. Cities

New York, NY

Los Angeles, CA

Chicago, IL

Houston, TX

Philadelphia, PA

San Diego, CA

Detroit, MI

Dallas, TX

Phoenix, AZ

San Antonio, TX

San Jose, CA

Baltimore, MD

Indianapolis, IN

San Francisco, CA

Jacksonville, FL

Columbus, OH

Milwaukee, WI

Memphis, TN

Washington, DC

Boston, MA

Seattle, WA

El Paso, TX

Cleveland, OH

New Orleans, LA

Nashville-Davidson, TN

Denver, CO

Austin, TX

Fort Worth, TX

Oklahoma City, OK

Portland, OR

Kansas City, MO

Long Beach, CA

Tucson, AZ

St. Louis, MO

Charlotte, NC

Atlanta, GA

Virginia Beach, VA

Albuquerque, NM

Oakland, CA

Pittsburgh, PA

2

Large PHAs on the Troubled PHA List as of 12/31/94

Atlanta, GA

Chester, PA

Chicago, IL

Detroit, MI

Jacksonville, FL

Kansas City, MO

Memphis, TN

New Orleans, LA

Philadelphia, PA

Pittsburgh, PA

Puerto Rico

Spartansburg, SC

Springfield, IL

Washington, DC

1

APPENDIX B:

FURTHER INFORMATION CONCERNING PLANNING GRANT AVAILABILITY

FOR THE URBAN REVITALIZATION DEMONSTRATION

This document provides further information concerning the

availability of up to \$19 million in funding for planning grants

under the Urban Revitalization Demonstration (also known as the

HOPE VI Program), funded by the Departments of Veterans Affairs

and Housing and Urban Development, and Independent Agencies

Appropriations Act, 1995 (Pub. L. 103-327, approved on September

28, 1994; \"1995 Appropriations Act\"). A planning grant of up to

\$400,000 will be made to each eligible public housing authority

(PHA) which applies.

I.Background and Program Purpose

The HOPE VI Program was created by the 1993 Appropriations

Act (Pub. L. 102-389, approved on October 6, 1992; \"1993

Appropriations Act\") for the purpose of revitalizing severely

distressed or obsolete public housing developments. Permitted

activities under the HOPE VI Program include funding of the

capital costs of major reconstruction, rehabilitation and other

physical improvements, the provision of replacement housing,

management improvements, planning and technical assistance, and

creation or enhancement of supportive services and community

service programs, or the planning of such activities. The 1994

and 1995 Appropriations Acts continued the HOPE VI Program with

2

certain, limited modifications. The terms \"Urban Revitalization

Demonstration\", \"Demonstration\" or \"HOPE VI Program\" refer to the

program created by the 1993 Appropriations Act, as modified by

the 1994 and 1995 Appropriations Acts (all three Acts being

hereafter collectively called the \"Appropriations Acts\"), and as

implemented by the Department through its grant agreement with

each grant recipient.

In carrying out this Demonstration, the Department has

chosen to exercise the authority granted in the Appropriations

Acts to conform certain program standards and criteria with those

set forth in subsequent authorization legislation. For this

purpose, the Department has chosen to incorporate certain

provisions of Section 24 of the U.S. Housing Act of 1937 (\"1937

Act\"), as added by Section 120 of the Housing and Community

Development Act of 1992 (Pub. L. 102-550, approved October 28,

1992\) (Revitalization of Severely Distressed Public Housing).

The Department recognizes the successful revitalization of

the nation\'s severely distressed public housing as one of its

most difficult and pressing challenges. While most public

housing developments continue to provide decent, modest housing

for low-income families within a broader community, others have

become emblematic of a failed system by virtue of their

deterioration, isolation and hopelessness. For a multitude of

contributing reasons ranging from initial design and

3

construction, to poor management, to changes in urban social and

economic factors, to unintended consequences of federal policy,

severely distressed public housing developments have become

warehouses for low-income persons which drag down the communities

around them.

The Department has grown convinced that the most promising

revitalization strategies are those which most directly attack

both the isolation of the public housing authority, by proceeding

in partnership with actors from the broader community, and the

isolation of public housing developments and residents, by

blending public housing units into mixed-income communities.

Planning grant recipients will be required, as a condition of the

grant, to enlist community partners in the planning process, as

described below. While they are free to explore any promising

revitalization strategy, they are required to devote a

substantial part of their planning efforts to strategies which

would result in revitalized units being set in mixed-income

communities.

II\. Program Requirements

HOPE VI Program requirements are set forth in the HOPE VI

Implementation Grant Agreement attached hereto as Appendix D

(which was utilized most recently for prior planning grant

recipients which received implementation grants under the 1995

Appropriations Act). The attached Implementation Grant Agreement

4

should be reviewed carefully by any prospective applicant.

Certain additional requirements of particular application to this

Announcement for planning grants are set forth below.

A.Eligible Applicants

Applications for planning grants under this Announcement may

be filed by:

a.PHAs located in the 40 most populous United States cities

based on 1990 Census data (See appendix A); or

b.Large PHAs (over 1250 units) on the Department\'s Troubled

Housing Authority list as of 12/31/94 (See Appendix A),

except that any such PHA will not be eligible if the

Secretary certifies to the Congress that the PHA is not

making substantial progress to eliminate its troubled status

in accordance with Section 6(j) of the 1937 Act.

B.Eligible Developments.

1.To be eligible for assistance under the Demonstration, a

development must be severely distressed based upon the results of

the attached worksheet (Appendix C) or as otherwise justified in

writing in the application. For each development the eligible

applicant is considering as a site for revitalization, the

planning for which may be accomplished with funds under this

grant, the applicant shall complete a separate worksheet in the

form of Appendix C. To be eligible for consideration under this

planning grant award, each development must either (a) meet the

5

criteria in at least four of the 11 categories of Appendix C, or

\(b\) be justified by the applicant, by means of a narrative

description, more fully described in paragraph 2 below, as

\"severely distressed,\" using the four categories more fully

described below which were set forth in The Final Report of the

National Commission on Severely Distressed Public Housing, dated

August 10, 1992: families living in distress, incidence of

serious crimes in the development, barriers to managing the

environment, and physical deterioration of buildings.

2.In order to establish the eligibility of a development

for a planning grant award, if the development fails to meet at

least four of the criteria identified in Appendix C, the

applicant must demonstrate that the development is severely

distressed and is among the most severely distressed developments

in the PHA\'s inventory. The applicant must document this finding

by comparing information about the development to comparable

information about the PHA\'s general occupancy (family)

developments, about the city as a whole, and about urban

neighborhoods or public housing developments nationally. Such

demonstration must be made by means of a narrative description

containing qualitative information on the categories below and

must include specific supporting data relevant to the category

where such data is reasonably available to the PHA. The

Department fully recognizes that the relevant data may not be

available in all cases. Information should be presented in real

6

numbers or percentages as well as percentages of PHA-wide or

citywide data, wherever possible. Examples of relevant data are

presented below under each category.

a.Families living in distress. Information and data on

barriers to self-sufficiency for the families in the

development, such as percentage with no earned income, level

of average income in the development as a percentage of area

median income, or educational data.

b.Incidence of serious crime. Information and data on the

frequency of criminal acts of various types (drug-related,

violent crime, thefts, etc.) or total crimes such as data

from Federal, State or local law enforcement agencies, or

information from the applicant\'s records on crime in the

development including number of lease terminations or

evictions for criminal activity, number of police calls to

the development, incidence of vandalism or opinions and

observations of individuals having direct knowledge of the

nature and frequency of crime in the development as compared

to the PHA\'s family developments and the city as a whole.

These individuals may include law enforcement officials,

youth anti-crime workers, and security personnel.

c.Barriers to managing the environment. Information and

data which reflect lack of management control of the site or

failure of the development to meet the needs of residents or

would-be applicants, such as the vacancy rate in the

7

development, the turnover rate, the percent of rent

collected monthly, and the rate of units rejected by

applicants.

d.Physical deterioration of buildings and sites.

Information and data which shows the extent of physical

problems at the development, such as the cost of

rehabilitation/reconstruction as a percentage of Total

Development Cost, the density of the development as measured

in units per acre, the level of deferred maintenance as

measured by annual average work order backlog and number of

units that do not meet Housing Quality Standards (HQS)

pursuant to 24 CFR 882.109 as amended by the Lead Based

Paint regulation at 24 CFR part 35, major system

deficiencies, including peeling and chipping lead-based

paint in greater than 20% of units, lack of reliable and

reasonably efficient heat and hot water, major structural

deficiencies, electrical system under code, poor site

conditions, leaking roof, deteriorated laterals and sewers,

and high number of plumbing leaks.

3.The applicant must also list in its application the total

number of developments in its inventory which the applicant

regards as severely distressed. No documentation is required,

however, unless a development is one which the applicant is

considering as a site for its HOPE VI planning efforts.

8

C.Funding Limitations.

1.There is no maximum number of units for which planning funds

may be provided in a single grant. However, no more than three

areas of a city, containing the community\'s most severely

distressed developments, may be funded under a HOPE VI grant.

2.For planning grants, each city will receive up to \$400,000.

Funding of a planning grant does not bind the Department to the

future funding of any plans and/or recommendations formulated

thereunder (and no assumptions with respect thereto shall arise).

3.A city may receive both an implementation and planning grant

and amendment funds under HOPE VI from FY 1995 funds, but in no

case will total funding exceed \$50 million.

D.Innovative Public Housing. In developing a Revitalization

Plan, a PHA should be aware that HUD intends to provide

additional guidance on the availability of operating subsidy,

for units which are operated as public housing although developed

and owned by an entity other than the PHA. Such units must be

subject to the requirements of an Annual Contributions Contract

(ACC) and otherwise operated as public housing. Accordingly,

where appropriate conditions to be established by HUD are met,

including ensuring that units are available for long term use as

public housing by low income families, housing operating

subsidies may be available for housing units owned by private or

9

public-private entities. It will be possible for such units, upon

conditions to be established by HUD, to be intermixed with

non-public housing units and included in developments which are

financed using a variety of public and private financing sources

including low income housing tax credits, taxable or tax-exempt

bonds, private mortgage debt, CDBG funds, and other means which

leverage the available public financing; and may otherwise take

advantage of innovative financial and legal structures.

E.Use of Other Sources of Funds. HOPE VI funds may be used in

conjunction with any other funds available to the applicant, so

long as a) the usage of HOPE VI funds complies with the

requirements set forth in this Announcement and the grant

agreement to be executed with the Department; b) the usage of

other funds complies with any restrictions applicable to them;

and c) the Department\'s \"subsidy-layering\" guidelines, including

those found at 24 CFR 12.50 are complied with. Applicants are

strongly encouraged to utilize HOPE VI grant funds to leverage

other funds, and to design their Revitalization Plans around

partnerships with other public or private entities, whether

for-profit or not-for-profit.

III\. Planning Grant Terms

The Department will award a planning grant to any eligible

applicant which has one or more severely distressed housing

developments, as established by the documentation submitted with

10

the application, on the terms and conditions set forth herein and

in the grant agreement to be executed with the Department. The

grant agreement will provide, among other things, that the grant

recipient will comply with all terms and conditions as the

Department may establish for the purposes of administering,

monitoring and evaluating the program in an effective and

efficient manner and will include sanctions for violation of the

agreement. The attached Implementation Grant Agreement (Appendix

D\) is provided to familiarize you with many of the standard

provisions which will be in your planning grant agreement.

A.Eligible Activities

A planning grant may be used to plan for the revitalization

of severely distressed developments consistent with the

requirements of this Announcement and the grant agreement,

including:

1.Studies of the different options for revitalization, including

rehabilitation or replacement, and including the feasibility,

costs, effectiveness and neighborhood impact of such options;

2.Providing technical or organizational support (including

stipends) to ensure resident involvement in all phases of the

planning and implementation processes;

3.Ascertaining the concerns and attitudes, as regards the

11

existing development and its proposed revitalization, of the

neighboring community and the needs of the broader urban

community; providing technical or organizational support to

facilitate community involvement in the planning and

implementation processes; developing planning partnerships with

groups and entities whose support will assist the revitalization;

4.Preliminary site planning and architectural and engineering

work;

5.Financial feasibility studies, including the identification

of financing sources, market studies, and other studies

appropriate to the development of mixed-income housing at the

development to be revitalized or at the sites of replacement

housing;

6.Planning for supportive services, including economic

development, job training and self-sufficiency activities that

promote the economic self-sufficiency of residents under the

revitalization program;

7.Designing a suitable replacement housing plan in situations

where partial or total demolition is considered;

8.Planning for community service opportunities;

12

9.Planning for necessary management improvements;

10\. Conducting environmental studies; and

11\. Improvements to stabilize the development, including security

investments.

B.Specific Terms and Conditions of Planning Grant

A planning grant agreement for HOPE VI funds under the 1995

Appropriations Act also will contain terms and conditions to the

following effect:

1.Planning Partnerships. Within three months of grant

execution, grantees will be required to demonstrate to the

satisfaction of HUD that they have assembled, in order to proceed

with planning, a working form of partnership which will help to

end the isolation of the public housing community. Partners may

include, but are not restricted to, community organizations,

educational institutions, nonprofits, philanthropic

organizations, state and local government entities, and

representatives of the business community. Partnership

involvement by non-PHA entities may be demonstrated by financial

commitments to expand the scope of planning; the donation of

staff time to the planning effort; leadership involvement; or

otherwise as HUD may find acceptable.

13

2.Within four months of grant execution, the grantees will be

required to specify which of the eligible developments discussed

in their applications will be the subjects of the planning

efforts. (No more than three areas of a city, containing the

community\'s most severely distressed developments, may be funded

for planning purposes.)

3.Revitalization Options. In light of the unique

characteristics of each distressed development and the various

sources of future revitalization funding, planning grants may be

used to investigate any strategies holding promise of

successfully addressing the causes of distress. However,

grantees will be required to devote a substantial part of their

planning efforts to plans for renovating the existing site(s) as

mixed-income communities and/or demolishing or disposing of part

or all of the targeted units and replacing them within

mixed-income communities either on-site or off. Such plans will

necessarily include identifying sources of funding, other than

public housing funds, for the non-public housing units.

IV\. Application Submission Requirements

An application for a planning grant pursuant to this

Announcement must contain a description of each of the

developments under consideration and the proposed activities,

submissions to demonstrate compliance with various program

requirements, and various required certifications, as follows:

14

A.A request for a planning grant, specifying a plan for the

activities proposed, the schedule for completing the activities,

the personnel necessary to complete the activities and the amount

of the grant requested;

B.A completed worksheet in the form of Appendix C for each

development under consideration.

C.Demonstration that the developments meet the description of

severely distressed as described in section II.B of this document

and are among the most severely distressed under the PHA\'s

jurisdiction, either by satisfying at least four of the 11

categories of the worksheet (Appendix C) for each development or

by a written narrative justifying the designation, as described

in Section II.B.2.

D.A list of the total number of severely distressed

developments under the applicant\'s jurisdiction;

E.A plan for resident involvement during the planning period,

including the selection of sites from among the eligible

developments;

F.A plan for involvement of local public and private entities

during the planning period;

15

G.A description of the process to be used in the development of

the community service component;

H.A certification by the public official responsible for

submitting the Comprehensive Housing Affordability Strategy under

section 105 of NAHA that the proposed activities are consistent

with the approved housing strategy of the State or unit of

general local government within which the development is located;

I.A budget for the planning process;

J.A certification that the applicant will comply with the

requirements of the Fair Housing Act, title VI of the Civil

Rights Act of 1964, section 504 of the Rehabilitation Act of

1973, and the Age Discrimination Act of 1975, and will

affirmatively further fair housing;

K.Form HUD-50070, Certification for a Drug-Free Workplace;

L.Anti-Lobbying Certification for Contracts, Grants, Loans and

Cooperative Agreements if request for grant exceeds \$100,000;

M.SF-LLL, Disclosure of Lobbying Activities only where any

funds, other than federally appropriated funds, will be or have

been used to lobby the Executive or Legislative branches of the

Federal government regarding specific grants or contracts;

16

N.Disclosures required by section 102 of the HUD Reform Act of

1989\. Subpart C of 24 CFR part 12 requires applicants that seek

assistance from HUD for a specific project or activity to make

the disclosures required under 12.32. Each applicant must

complete form HUD 2880, Applicant/Recipient Disclosure/Update

Report, and submit the completed form with its application;

O.A certification that the applicant has not and will not

receive assistance from the Federal government, a State, or a

unit of local government, or any agency or instrumentality

thereof, for the specific activities for which funding is

requested in the application.

V.Application Processing

A.Schedule for Submission and Approval

Applications under this Announcement must be received on or

before 4 p.m. E.S.T. on February 28, 1995. Failure to submit the

application by said time and date will result in the application

being disqualified, except that HUD may grant an extension of up

to 30 days for good cause shown. HUD will select grant

recipients for planning grants within 5 days of receipt of an

application complying with the requirements set forth herein, and

announcements will be made shortly thereafter.

17

B.Corrections to Deficient Applications

Applications will be screened immediately upon receipt. If

such applications are deficient in any manner, the Department

will notify the grantee in writing and the grantee will have 14

days to correct the deficiency, or such longer time as the

Department may agree to in writing for good cause shown. If the

PHA does not submit the items to be corrected within the required

time period, as it may be extended by HUD in writing, the

application will be ineligible for further processing.

1

APPENDIX C:

HOPE VI PLANNING GRANT ELIGIBILITY DETERMINATION WORKSHEET

A development will qualify as severely distressed if it is a family

development larger than 120 units that meets at least 4 of the following
11

thresholds. Please complete this form for each project you wish to
include

as part of your planning grant. To the extent information is available,

please complete all items even if your site does not meet the minimum

threshold in that category:

Development Project Number (ex. IL002003):

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

Development name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

===========================================================================

1\. Relative Density to Neighborhood Threshold = Greater than 175%

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

A. Number of units at development

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

B. Number of acres at development

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

C. Number of residential units in

same census tract(s) as development.

Specify Census Tracts:

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

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

D. Number of square kilometers in

census tract(s)

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

A \* \[(D\*247.1) - B\]

Percent = \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \* 100 %

B \* (C-A)

===========================================================================

2\. Single Female with Children Threshold = Greater than 50%

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

A. Number of households with one female

adult and one or more children

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

B. Total number of households

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

Percent (A/B \* 100) %

===========================================================================

3\. Earned Income Threshold = less than 30%

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

A. Number of households with earned income

greater than 0 that have head between 18

and 65 years of age

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

B. Number of households with head between 18

and 65

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

Percent (A/B \* 100) %

===========================================================================

2

===========================================================================

4\. Total Tenants Delinquent on Rent Threshold = Greater than 20%

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

A. Number of households delinquent on rent

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

B. Number of households

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

Percent (A/B \* 100) %

===========================================================================

5\. Turnover Rate Threshold = Greater than 20%

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

A. Number of new admits in 12 months

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

B. Average number of units occupied in 12

months

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

Percent (A/B \* 100) %

===========================================================================

6\. Vacancy Rate Threshold = Greater than 15%

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

A. Number of units available for occupancy

that are vacant

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

B. Number of units available for occupancy

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

Percent (A/B \* 100) %

===========================================================================

7\. Violent Crime Rate Threshold = Greater than 120%

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

A. Number of violent crimes reported last 12

months in development or smallest reported

geography (specify)

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

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

B. Number of persons in development or smallest

reported geography

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

C. Number of violent crimes reported last 12

months in city

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

D. Number of persons in city

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

Percent = (A\*D)/(B\*C) \* 100 %

===========================================================================

8\. Drug Crime Rate Threshold-greater than 120%

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

A. Number of drug crime arrests last 12 months

in development or smallest reported geography

(specify)

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

===========================================================================

3

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

B. Number of persons in development or smallest

reported geography

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

C. Number of drug crime arrests last 12 months

in city

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

D. Number of persons in city

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

Percent = (A\*D)/(B\*C) \* 100 %

===========================================================================

9\. Modernization Need Per Unit Threshold = greater than 30,000

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

A. From form 52832 in 5 year Comprehensive

Grant Plan for this development - Total

Preliminary Hard Cost for Needed Improvement

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

B. Total modernization dollars expended on

development since 1992 - modernization includes

CIAP, MROP, CGP

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

C. Number of units in development

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

Modernization need per unit:

(A - B)/C \$ per unit

===========================================================================

10\. Lead Based Paint Threshold = greater than 20%

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

A. Number of units with peeling Lead Based

Paint

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

B. Total number of units

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

Percent (A/B \* 100) %

===========================================================================

11\. HQS Threshold = greater than 30%

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

A. Total number of units failing HQS

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

B. Total number of units

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

Percent (A/B \* 100) %

===========================================================================

4

Instructions for form:

General instructions - Fill in this form for every data element you have

information available. If you can not obtain the data for one of the

elements, indicate the problem in writing. All of the items require some

math calculations:

\'/\' = divide

\'\*\' = multiply

\'()\' = do the calculations within the parenthesis first

1\. Relative Density to Neighborhood - Measure of Neighborhood Mix

A.Number of units in development. Use administrative records to count

all units in development, including those that are vacant for

modernization or some other reason.

B.Number of acres at development. Use development records to determine

the number of acres of land at the development.

C.Number of residential units in same census tract(s) as development.

Identify the Census Tract(s) the development is located and any other

Census Tracts that are generally considered to be part of the

neighborhood. Specify in the space on the form the Census Tract(s)

you use. Use data from the 1990 U.S. Census books or tapes/CD-ROM for

total housing units in the Census Tract. (This is from Table 32 in

the Census Publication Population and Housing Characteristics for

Census Tracts and Block Numbering Areas, (name of your) MSA.)

D.Number of square kilometers in census tract(s)(to 3 decimal points).

The Census Tract data book and the Census data tapes/CD-ROM all have

this information (on the CD-ROM, it is \"AREALAND\"). (This is in Table

1 in the Census Publication Population and Housing Characteristics for

Census Tracts and Block Numbering Areas, (name of your) MSA.)

Percent: The \'247.1\' in this equation converts square kilometers to
acres.

2\. Single Female With Children - Measure of Families in Distress

A.Number of households with one female adult and one or more children.

Use the 50058 data for the development to determine the number of

households that only have only one adult, that adult is female, and

she has one or more children living with her.

B.Total number of households. Use 50058 data to determine the number of

households living in the development that you have data.

3\. Earned Income - Measure of Families in Distress

A.Number of households with earned income greater than 0 that have head

between 18 and 65 years of age. Use the 50058 data and identify all

households with a head of household between the age of 18 and 65 and

is not handicapped. Count the number of these households with total

household wages greater than \$0.

B.Number of households with head between 18 and 65. Use the 50058 data

and count all households with a head of household between the age of

18 and 65 and is not handicapped.

4\. Total Tenants Delinquent on Rent - Measure of Management Problems

A.Number of households delinquent on rent. Use rent records to count

the number of households who are delinquent in rent payments for one

month or more.

B.Number of households. Total number of households living in the

development.

5\. Turnover Rate - Measure of Management Problems

A.Number of new admits in 12 months. Total number of households that

are newly admitted to the development in a 12 month period.

B.Average number of units occupied in 12 months. This variable is

calculated by adding the total units occupied at the end of each month

for the past 12 months and dividing by 12.

5

6\. Vacancy Rate - Measure of Management Problems

A.Number of units available for occupancy that are vacant. Total number

of units at the development that are available for occupancy by have

not been rented.

B.Number of units available for occupancy. Total number of units at the

development that are available for occupancy.

7\. Violent Crime Rate - Crime Measure

A.Number of violent crimes reported last 12 months in development or

smallest reported geography. Use PHA police or local police records

to identify the number of Type 1 violent crimes that have been

reported over the past 12 months for either: a) the development

(preferred) or b) the smallest level of geography which includes the

development (for example, the area served by a police substation).

Specify on the form the level of geography that is being used.

B.Number of persons in development or smallest reported geography. If

the crime data is not available at the development level and another

level of geography is used, use the best available estimate of the

number of persons living in the area the crime data are reported.

C.Number of violent crimes reported last 12 months in city. Use city

records or Uniform Crime Report data from the Federal Bureau of

Investigation (FBI).

D.Number of persons in city. Use 1990 U.S. Census Data or recent year

update.

8\. Drug Crime Rate - Crime Measure

A.Number of drug crime arrests last 12 months in development or smallest

reported geography. Use PHA police or local police records to

identify the number of drug crime arrests over the past 12 months for

either: a) the development (preferred) or b) the smallest level of

geography which includes the development (for example, the area served

by a police substation). Specify on the form the level of geography

that is being used.

B.Number of persons in development or smallest reported geography. If

the crime data is not available at the development level and another

level of geography is used, use the best available estimate of the

number of persons living in the area the crime data are reported.

C.Number of drug crime arrests last 12 months in city. Use city records

or Uniform Crime Report data from the Federal Bureau of Investigation

(FBI).

D.Number of persons in city. Use 1990 U.S. Census Data or recent year

update.

9\. Modernization Need Per Unit - Physical Distress Measure

A.From form 52832 in 5 year Comprehensive Grant Plan - Total Preliminary

Hard Cost for Needed Improvement.

B.Total modernization dollars expended on development since 1992 -

modernization includes CIAP, MROP, CGP.

C.Number of units in development.

10\. Lead Based Paint - Physical Distress Measure

A.Number of units with peeling Lead Based Paint

B.Total number of units

11\. HQS - Physical Distress Measure

A.Total number of units failing HQS

B.Total number of units

APPENDIX \"F\"

IMPLEMENTATION GRANT AGREEMENT

for

FY 95 HOPE VI Grantees

URBAN REVITALIZATION DEMONSTRATION PROGRAM

(HOPE VI)

IMPLEMENTATION GRANT AGREEMENT

This Grant Agreement is made by and between the United States

Department of Housing and Urban Development (\"HUD\") and the recipient

(\"Grantee\") identified in block 7 of the cover sheet (\"Cover Sheet\")
of

this Grant Agreement (Form HUD-1044). The Grantee received a HOPE VI

planning grant, either in fiscal year 1993 or 1994, for the public
housing

development that is the subject of this Grant Agreement
(\"Development\"),

and which is identified in block 16 of the Cover Sheet.

HUD agrees, subject to the terms of this Grant Agreement, to provide

grant funds to the Grantee, in the total amount listed in block 14 of
the

Cover Sheet for the revitalization activities described in the

Revitalization Plan (as defined in Article II hereof). The assistance

which is the subject of this Grant Agreement is made under the urban

revitalization demonstration program (\"HOPE VI\"), authorized by the
1993

Appropriations Act (Pub. L. 102-389, approved on October 6, 1992;
\"Act\").

This assistance is funded under the 1995 Appropriations Act (Pub. L.

103-327, approved on September 28, 1994; \"FY 95 Act\").

This Grant Agreement is governed by, and the Revitalization Plan is

subject to the following: (a) the Act and the FY 95 Act, as the same may

be amended or revised from time to time; and (b) any authorization

legislation enacted into law to the extent that the standards and
criteria

of HOPE VI are conformed therewith pursuant to the Act or the FY 95 Act.

In addition, all activities under the Revitalization Plan which are

funded with HOPE VI grant funds or required matching funds also will be

subject to the following: (a) any regulations, Handbooks or Notices

hereafter issued by HUD relating to HOPE VI, any authorization
legislation

to which HOPE VI is conformed, or the revitalization activities for
which

grant funds will be expended; (b) 24 CFR part 85 (administrative

requirements) as hereinafter provided; (c) the cost principles of Office
of

Management and Budget (\"OMB\") Circular A-87; (d) the audit
requirements of

OMB Circular A-128 implemented at 24 CFR part 44; and (e) all other

applicable Federal requirements, including, without limitation, those
set

forth in Article XVI. All of the foregoing requirements in this
paragraph

and the immediately preceding paragraph (as they may govern or relate to

various activities under the Revitalization Plan) are hereinafter

collectively referred to as \"HOPE VI Requirements\".

The Grantee\'s HOPE VI Application (as defined in Article II hereof) is

hereby incorporated into this Grant Agreement. The

Grant Agreement also incorporates the Cover Sheet and the Exhibits
attached

hereto.

HUD and the Grantee hereby agree to be bound by the following terms

and conditions of this Grant Agreement:

ARTICLE I. Overall Program Objectives and Approach.

1\. HOPE VI is intended to foster innovative and comprehensive

approaches to the problems of severely distressed public housing

developments and their residents, including new ways for public housing

authorities and HUD to work together, in collaboration with residents.
The

intention is to address the current problems and pursue successful

solutions in the boldest and most effective manner possible. Public

housing is at a critical juncture. Low-income families residing in

severely distressed public housing developments are suffering from
enormous

stress. Many of the communities in which these developments are sited
are

severely stressed as well. The parties to this Grant Agreement
understand

that HOPE VI and the Grantee\'s Revitalization Plan present an
opportunity

to redress the problems of severely distressed public housing and to

produce public housing communities which will inspire their residents
and

their neighbors.

2\. The developments to be revitalized under HOPE VI do not suffer

from a single set of problems and will not be revitalized by a single
set

of measures. Effective solutions will grow from local experience and the

effective collaboration of the Grantee with residents, neighbors, local

governments, service providers and others. Further, effective solutions

will grow out of innovation and diverse approaches. HUD intends to
respect

local decisions to the fullest extent possible under existing laws. At
the

same time, however, the Grantee recognizes that HUD has the obligation
to

ensure that federal funds are spent in accordance with law and in a
manner

reasonably calculated to develop revitalized communities sustainable
over a

long term.

3\. HOPE VI is intended to address the condition of people in public

housing developments, and not merely of the bricks and mortar
themselves.

The parties will emphasize community and supportive services, as well as

other means appropriate to each community, so as to have the broadest

possible effect in meeting the social and economic needs of the
residents

and the surrounding community.

4\. The parties to this Grant Agreement concur in the importance of

an ongoing and open dialog with the purpose of identifying problems as
they

arise and developing solutions.

2

5\. HOPE VI may be conformed to other authorizing legislation. In

such event, the Grantee may have the opportunity to pursue avenues not

currently available under applicable laws. HUD will notify the Grantee
in

writing of any such legislation and will accord the Grantee full

opportunity (consistent with the progress already made) to amend its

Revitalization Plan to take advantage of such opportunities.

6\. HUD, in collaboration with grantees under HOPE VI, may develop

improved or simplified procedures to be utilized during the term of this

Grant Agreement.

7\. Grantees are encouraged to develop solutions which \"leverage\"

HOPE VI funds and use other private or governmental funds in order to

create additional affordable and/or market rate housing in which the
HOPE

VI units may be blended. Grantees should increase the opportunity of

public housing residents to live in communities of choice, including

settings offering diversity with respect to income and race. Grantees

should pursue solutions which utilize efficient and economical methods
of

development, program or construction management, finance, and housing

management, including methods not typically employed in public housing,
if

applicable. Grantees are also encouraged to seek a broad spectrum of

participation and assistance from local and state governments, community

organizations, businesses, nonprofit corporations, social service
agencies,

philanthropic organizations and residents of the developments, and to
enter

into public-private partnerships.

Article II. HOPE VI Application/Revitalization Plan

1\. For purposes of this Grant Agreement, the term \"HOPE VI

Application\" means the Grantee\'s application submissions made in
response

to the letter, dated January 9, 1995, from the Deputy Assistant
Secretary,

Office of Distressed and Troubled Housing Recovery, requesting
submission

of an implementation grant application, under the FY 95 Act, from each

recipient of a HOPE VI planning grant in fiscal years 1993 and 1994;

together with submissions permitted after the application deadline

(including, without limitation, the Revitalization Plan Statement,
defined

below, and any demolition or disposition application and replacement

housing plan), waiver requests, certifications, approvals, assurances
and

any information or documentation required to meet any terms and
conditions

of this Grant Agreement, and includes the Revitalization Plan.

2\. For the purposes of this Grant Agreement, the term

\"Revitalization Plan\" means the activities to be carried out under the
HOPE

VI Application (to the extent activities requested to be funded under
the

HOPE VI grant are eligible under the Act, the FY 95 Act and this Grant

Agreement), as such activities are,

3

or may be, supplemented, modified or amended from time to time in

accordance with: (1) the Revitalization Plan Statement (as defined
below),

\(2\) the provisions of this Grant Agreement, (3) any agreement with the

Community Service Corporation (as hereinafter defined in Article IV,

paragraph 1) with respect to the community services component, or (4)
any

other written approval by HUD; which activities are necessary to rectify

the distress in the units to be revitalized with HOPE VI grant funds,
and

the distress in the surrounding area which has a significant effect on

those units, whether those activities are funded from the HOPE VI grant
or

from other sources. At any point in time the term \"Revitalization
Plan\"

refers to the Revitalization Plan as amended or supplemented (with
HUD\'s

approval as necessary) through that point in time.

3\. (a) The Grantee must submit to HUD, within 180 days from the

effective date of this Grant Agreement, a Revitalization Plan Statement

(\"Revitalization Plan Statement\"), for approval by HUD.

\(b\) The Revitalization Plan Statement must include the following

seven elements:

i\. A description of the Development prior to revitalization,

including:

A. the number of units, by unit size; a site plan; a statement

of the number and location of vacant units; and identification of

the units to be revitalized, if less than the entire Development;

B. the socio-economic and demographic characteristics of the

residents; and

C. the surrounding neighborhood, identifying its strengths and

weaknesses.

ii\. A description of the Development and all replacement housing

units after revitalization, including:

A. the treatment of the existing Development, including a

narrative description of the extent of

rehabilitation/reconstruction of existing units, specifying all

changes in the sizes and shapes of units and other changes in the

use of interior space (including any reduction in the number of

units due to reconfiguration or changes in the utilization of

interior space), and/or the extent of demolition, in accordance

with the Demolition,

4

Disposition, and Conversion Handbook, 7486.1, Chapter 7;

B. alterations, improvements, and/or additions to the community

space;

C. the use of the site, and a post-revitalization site plan;

D. replacement housing units, including the number, type and

size of units, tenure, source of funding, the nature and a

description of the programs to be used, and the ownership

structure. If the replacement housing is not to be developed,

financed, owned and operated by the Grantee as conventional

public housing, such description must include a full description

of how it is to be developed, financed, owned and operated,

including, without limitation:

\(1\) the structure, responsibilities of, and relationships

among, the ownership, development and management entities, with a

disclosure of all fee arrangements;

\(2\) the nature and sources of the projected construction

and permanent financing, and the nature and sources of equity,

tax credit or other subsidy programs used;

\(3\) the projected development and operating budgets;

\(4\) the unit mix, special features or services, proposed

rents, any rent or occupancy limitations or classifications;

\(5\) provisions for the operation of all public housing

units (including the basis for providing operating subsidies, if

applicable), in compliance with all applicable laws and

regulations; and

\(6\) the protections and guaranties necessary to establish

the inviolate rights and obligations under such laws and

regulations for the required time periods, including, but not

limited to, the requirements under the United States Housing Act

of 1937 (the \"1937 Act\") that public housing units be leased to

eligible persons, at permissible rents, for at least forty years

and that such

5

units not be disposed of within ten years of the cessation of

receipt of operating subsidies.

E. If off-site replacement housing is to be developed, any

commitment the Grantee is prepared to make regarding the location

of such housing and the racial and demographic characteristics of

the proposed site(s) and neighborhood(s). A Grantee which

expects to locate replacement housing in neighborhoods which

primarily house minority and poor persons should explain why that

is unavoidable or desirable in connection with other attractive

features of the proposed plan.

iii\. A management plan, including a detailed description of the

interim management for the Development during the revitalization

period (including plans for maintenance and security) and the proposed

long term management of the Development after revitalization. The

following information must be included in (but is not a limitation of)

the detailed description of the post-revitalization component of the

management plan:

A. the proposed type of management entity (PHA, private,

resident or other) to be responsible for site management, and the

relationship between the Grantee and the management entity. (The

Grantee must consider the use of a private management entity and

evaluate the cost and experience benefits of private management

as compared with management by the Grantee, whether centralized

or decentralized, as applicable.)

B. how the proposed management will operate and how that

differs from the management process utilized prior to

revitalization (for example, resident selection, rent collection,

maintenance or decentralization of activities), and a discussion

of which functions will be maintained on a centralized or

site-based level;

C. whether additional or reduced management and maintenance

costs will result from the revitalization of the Development and

any replacement units;

6

D. the security plan or program for the Development and any

replacement units, together with the proposed costs therefor;

E. the methodology for integrating management and security

plans for the revitalized portions, the remaining portions of the

Development and replacement units, as applicable, so that the

Development and replacement units will be sustainable over the

long term; and

F. a description of proposed admission and occupancy standards

and practices for the development and any replacement units,

including, but not restricted to, screening procedures, waiting

list establishment and maintenance, preference rules, unit

transfer policies, and the like.

iv\. A description of the community service and supportive service

needs of the Development and relocated residents, and the proposed

solutions, including:

A. the proposed treatment of any neighborhood problems,

including physical, economic, and security;

B. a plan for supportive services, including the kinds of

services to be provided, the means of providing them, the names

of the organizations to provide such services and the persons who

will be eligible for such services;

C. a description of any revolving loan fund for economic

development (which must be established and operated in accordance

with 24 CFR part 85, with specific reference to sections 85.21

and 85.25), including but not limited to the purpose of the

loans, borrower eligibility, and the entity which will administer

the fund;

D. a plan for community services, which complies with the

provisions of Appendix B to the Revised Notice of Funding

Availability (\"93 NOFA\"), published on March 29, 1993 at 58 FR

16590 et. seq., as amended, (Program Requirements for Community

Service Component), as the same may be amended, which must

separately be approved by the Corporation for National Service

before funds

7

under this Grant Agreement may be drawn down and expended;

E. if the Development is substantially or completely vacant on

the effective date of this Grant Agreement, identification of the

residents who will receive the supportive services and

participate in community service, and a statement of how such

residents will be selected to participate and the reasons why

these residents are appropriate, and how this plan relates to the

physical work planned to be undertaken in connection with this

HOPE VI grant; and

F. if the Grantee intends to provide dispersed, off-site

replacement housing (e.g. scattered site, small developments, or

mixed-income developments), a discussion of how residents of such

housing will be involved in the community service and supportive

service programs.

v.A description of the revitalization process, including:

A. a budget for the Revitalization Plan (\"Budget\"), including

sources and uses of all funds for the HOPE VI project (not only

HOPE VI funds);

B. a plan for resident consultation, describing the methods and

manner of consultation with residents during preparation of the

Revitalization Plan Statement and in the implementation and

monitoring of the Revitalization Plan, prepared in consultation

with the residents;

C. a plan for community partnership, including a description of

the involvement of local public and private entities and

community representatives in the development of the

Revitalization Plan Statement and their expected involvement in,

and commitments to, the implementation and monitoring of the

Revitalization Plan;

D. a plan for implementation (\"Plan for Implementation\"),

providing an outline of all significant tasks and activities

under the Revitalization Plan (including, without limitation, the

supportive and community services), establishing the dates, or

time periods, by which they will be initiated and completed. The

Plan for Implementation should

8

demonstrate the relative timing of the tasks and activities,

showing their progression and which will be conducted

simultaneously. The Plan for Implementation must be approved by

the local governing body, prior to submission of the

Revitalization Plan Statement;

E. a staffing and time allocation plan, setting forth for the

implementation of the Revitalization Plan the staff positions

(and names, to the extent available) responsible for implementing

each aspect of the Revitalization Plan and the percentage of each

staff member\'s time to be spent administering the program. In

addition, the Grantee must state whether it proposes to

accomplish the revitalization directly or through an agency or

partnership relationship;

F. if the Grantee proposes or is committed to implementing the

Revitalization Plan in partnership with one or more entities, or

through a contractual or subgrant relationship (such as a program

management or alternative administrator agreement), a complete

description of such relationship, including but not restricted

to:

\(1\) the identity, nature and qualifications of such other

entity,

\(2\) the respective responsibilities and obligations of each

party; and

\(3\) the financial relationship, including the basis and

source of compensation to non-grantee parties.

vi\. A justification of Revitalization Plan, including an assessment

of the causes of distress; an explanation of how the proposed physical

changes, management improvements, supportive services, and community

service component will remedy the distress; an explanation of how the

plan for management after revitalization will correct previous

problems; a discussion of why the proposed Revitalization Plan is

likely to be successful. If the proposed Revitalization Plan

maintains a substantial concentration of public housing residents in

isolation from other classes and/or races, the Grantee should explain

and justify its decision to do so.

9

vii\. Other required documentation, statements and/or certifications

(to the extent not submitted originally with the HOPE VI Application)

are as follows:

A. certification that the Development remains severely

distressed, as demonstrated in the HOPE VI planning grant

application for the Development;

B. a statement of the percentages of funding to be used (not

less than 80% for certain categories and not more than 20% for

other categories of activities), consistent with the Act;

C. a description of the amount and nature of the supportive

service funding from non-federal sources to be provided by the

city in which the Grantee is located and the percentage of the

total supportive services funding that this represents; together

with a commitment from the city to provide such required

contribution for supportive services;

D. in order to ensure that these HOPE VI grant funds are not

used in lieu of otherwise available modernization funds, a

demonstration that the funds reasonably expected to be available

to the Grantee over the period of the CGP Five-Year Action Plan

are not adequate to address the total modernization needs of the

Grantee;

E. a certification that the Grantee will comply with the

requirements of the Fair Housing Act, title VI of the Civil

Rights Act of 1964, section 504 of the Rehabilitation Act of

1973, and the Age Discrimination Act of 1975, and will

affirmatively further fair housing;

F. Form HUD-52820, PHA Board Resolution(s) approving execution

of this Grant Agreement and the Revitalization Plan Statement.

(This form is to be modified by: changing all references to

\"CIAP\" and \"modernization\" to the term \"HOPE VI;\" and, striking

all references to \"IHA.\" All references to chapters or

paragraphs in the CIAP Handbook, 7485.1 REV-4, are to be changed

to \"the HOPE VI 1993 NOFA.\");

10

G. Anti-Lobbying Certification for Contracts, Grants, Loans and

Cooperative Agreements;

H. SF-LLL, Disclosure of Lobbying Activities only where any

funds, other than federally appropriated funds, will be or have

been used to lobby the Executive or Legislative branches of the

Federal government regarding specific grants or contracts;

I. disclosures required by section 102 of the HUD Reform Act of

1989;

J. a certification that the Grantee has not and will not

receive assistance from the Federal government, a State, or a

unit of local government, or any agency or instrumentality

thereof, for the specific activities for which funding is awarded

under this Grant Agreement;

K. local government certifications consisting of:

\(1\) a certification by the public official responsible for

submitting the comprehensive housing affordability strategy under

section 105 of NAHA that the proposed activities are consistent

with the approved housing strategy of the State or unit of

general local government within which the Development and any

replacement units are located;

\(2\) a letter from the Mayor of the applicable jurisdiction

in support of the Revitalization Plan Statement;

\(3\) approval by the local governing body of the Plan for

Implementation;

L. the following submissions which are necessary only in

applicable circumstances:

\(1\) if the total number of severely distressed developments

under the Grantee\'s jurisdiction has changed since the date of

submission of its planning grant application for the Development,

a list of the total

11

number of such severely distressed developments;

\(2\) any request for HUD\'s approval of a proposed method of

complying with an applicable public housing statute (including

statutes governing rents, income eligibility, and other areas of

public housing management), other than by taking measures

described in HUD\'s regulations implementing such statute, which

the Grantee believes will enhance the long term viability of the

Development. Any such request must:

(aa) identify the specific statute;

(bb) state specifically how the Grantee proposes to comply

with such statute;

\(cc\) identify any portion of an implementing regulation with

which the Grantee proposes not to comply; and

(dd) state how the proposed method of statutory compliance

will contribute to the success of the Revitalization Plan.

\(3\) if the Grantee intends to demolish or dispose of units

(or property) under the Revitalization Plan, an approvable

Demolition/Disposition Application must be submitted with the

Revitalization Plan Statement (as further required under Article

IV, paragraph 5 of this Grant Agreement), including a replacement

housing plan (approved by the unit of local government) providing

for replacement housing in accordance with section 18 of the 1937

Act, as modified by the Act. In demolition/ disposition cases

where the requirements of the Section 412 Notice (57 FR 44074)

are applicable, the Demolition/Disposition Applications must

include a certification of lack of resident interest in acquiring

the property;

\(4\) any commitments from public or private entities, other

than the Grantee, for any contribution to the Development or the

surrounding neighborhood, which constitutes part of the

Revitalization Plan;

12

\(5\) if the Grantee is proposing to revitalize only a

portion of the Development, a description of the actions to be

taken to revitalize the portions which are not funded under this

HOPE VI grant, including alternate sources of funding which may

be utilized (e.g. Comprehensive Grant Program funds or

reprogrammed Comprehensive Improvement Assistance Programs

funds); and the basis for the conclusion that the revitalization

of the Development will be sustainable over the long term;

\(6\) if the average per unit costs for all hard costs will

exceed 100% of total development costs (\"TDC\"), for the public

housing units (from HOPE VI grant funds and any other public

housing funds), a justification of the need for higher costs.

\(c\) In the event that the Grantee does not believe it has made

sufficient progress under its planning grant to submit the
Revitalization

Plan Statement within 180 days from the effective date of this Grant

Agreement, the Grantee may request an extension of not more than 90 days

within which to submit the Revitalization Plan Statement.

\(d\) Failure to submit to HUD a complete Revitalization Plan

Statement, which includes all of the information and documentation
required

under this paragraph 3 within the time period specified may result in
all

future draw downs under this Grant Agreement being withheld, or
termination

of this Grant Agreement, in accordance with Article XVIII. Upon approval

by HUD, the Revitalization Plan Statement and all documentation received

pursuant to this paragraph which supplements or revises the
Revitalization

Plan (or is required as part of the Revitalization Plan Statement) will
be

incorporated by this reference into the Revitalization Plan, the HOPE VI

Application and this Grant Agreement.

\(e\) HUD may approve conditionally the Revitalization Plan Statement,

and, if the Grantee is a troubled housing authority, will have the right
to

require the Grantee to engage an alternate administrator if in HUD\'s

opinion the Grantee has not demonstrated in its Revitalization Plan

Statement that it has made necessary arrangements, through staffing
and/or

contracts, to implement its Revitalization Plan.

ARTICLE III. Amendments and Approvals.

1\. Subsequent to submission and approval of the Revitalization Plan

Statement, as revitalization activities

13

proceed, it is anticipated that the Grantee will refine and amend

components of the Revitalization Plan. The Grantee is encouraged to
refine

and amend the Revitalization Plan, as appropriate, to accomplish the
goals

of the HOPE VI program.

2\. No prior approval by HUD is required for revisions to the

Revitalization Plan, except for the following types of revisions:

\(a\) any substantial change in the performance objectives or

activities under the Revitalization Plan to be carried out in accordance

with this Grant Agreement (including, without limitation, any
substantial

change in the performance objectives or activities caused by revisions
to

the Plan for Implementation, resident consultation procedures,
management

plan, replacement housing plan, relocation plan, demolition plan, or to
the

dwelling count or bedroom distribution), whether or not there is an

associated budgetary revision requiring prior approval;

\(b\) an increase or decrease in any line item of the Budget, other

than as permitted by Article XI, paragraph 1;

\(c\) any extension of the period of availability of the HOPE VI grant

funds; and

\(d\) changes in the entities or individuals specified in the HOPE VI

Application (or in the Revitalization Plan Statement), or in accordance

with this Grant Agreement, as having key responsibilities for carrying
out

the Revitalization Plan or components thereof (including, without

limitation, the management plan, supportive services component or
community

services component). Subgranting, subcontracting or otherwise obtaining

the services of a third party (unless such party is listed in Exhibit B

hereto) to perform activities that are central to the purposes of the

Revitalization Plan will constitute such a change in entities or

individuals.

3\. A request for prior approval must be submitted in writing by the

Grantee to HUD in the manner provided for in 24 CFR 85.30(f).

4\. The Grantee also will obtain HUD\'s approval before it approves a

change requested by a subgrantee which falls within any of the itemized

categories listed in paragraph 2 above.

5\. Approved changes will be effected by execution of an amendment to

this Grant Agreement, consisting of a revised Form HUD-1044 cover sheet
and

any attached documents needed to define the changes.

6\. The Grantee will consult with residents of the Development prior

to seeking approval of any amendment to the

14

Revitalization Plan for which HUD approval is required hereunder. HUD
will

not unreasonably withhold its approval of any amendment concurred in by

residents and which is consistent with governing law and this Grant

Agreement.

7\. Wherever this Grant Agreement requires prior HUD approval, HUD

will use its best efforts to do one of the following, in writing, within
30

days of the receipt of the request for approval by the Office of
Distressed

and Troubled Housing: 1) approve the request, with or without
conditions;

2\) disapprove the request and specify the reasons for its disapproval;
3)

notify the Grantee that HUD requires specified further information or

justification, or 4) notify the Grantee that HUD, because of its
workload

or other good cause, has been unable to fully address the request and

requires an additional 15 days to do so. The Grantee will have the

opportunity to discuss any request with HUD prior to HUD\'s
determination

with respect to the request. Notwithstanding the foregoing, any approval

under this Grant Agreement must be issued in writing.

ARTICLE IV. Covenants and Conditions.

1\. The Grantee will carry out the Revitalization Plan in accordance

with the provisions of the Revitalization Plan and in compliance with
this

Grant Agreement, the HOPE VI Application, the HOPE VI Requirements, and
any

other applicable State and local laws, regulations, and requirements.
The

Grantee additionally agrees to carry out the community services
component

of the Revitalization Plan in accordance with any agreement with the

Corporation for National Service (the successor agency to the Commission
on

National and Community Service) approved by HUD. The Grantee accepts

responsibility for requiring, and monitoring, such compliance by all
other

entities to which it makes grant funds available.

2\. The Grantee agrees that the units which are the subject of the

Revitalization Plan are expected to be sustainable over the long term
and

will carry out the Revitalization Plan with said expectation as a
primary

objective.

3\. The Grantee will provide suitable, decent, safe and sanitary

housing to each resident required to relocate temporarily to permit work
to

be carried out at the Development and also will provide relocation

assistance to such residents. The Grantee may satisfy these requirements

by taking measures as described in 24 CFR 968.108 and the Tenant

Assistance, Relocation and Real Property Acquisition Handbook 1378,
Changes

1 and 2 (as the same may be modified or amended from time to time), or
as

otherwise approved in writing by HUD.

15

4\. The Grantee will ensure that persons displaced by reconstruction

activities funded under the HOPE VI grant will be eligible under the

Revitalization Plan for occupancy of the replacement units.

5\. If the Revitalization Plan includes demolition or disposition

which is subject to the provisions of section 18 of the 1937 Act:

\(a\) the Grantee will comply with the provisions of section 18, as

modified by the Act, by submitting to HUD an approvable application,

including, without limitation, a resident relocation plan, and
replacement

housing plan, as part of the Revitalization Plan Statement. The
relocation

plan must comply with the provisions of Article IV, paragraph 3 and
Article

XVI, paragraph 11 of this Grant Agreement and be prepared in accordance

with the Relocation Handbook (Tenant Assistance, Relocation and Real

Property Acquisition Handbook 1378, Changes 1 & 2), as the same may be

modified or amended from time to time. The Grantee may satisfy this

requirement by taking measures as described in 24 CFR part 970 (as the
same

may be amended) or as otherwise approved in writing by HUD.

\(b\) the Grantee will fund all units replaced under the replacement

housing plan with (i) conventional public housing from HOPE VI grant
funds

or public housing development funds, (ii) Section 8 certificates from

either HOPE VI grant funds or a Section 8 allocation requested from HUD
and

\(iii\) other types of acceptable replacement housing units from HOPE VI
or

other sources;

\(c\) the Grantee will not take, or permit to be taken, any action to

demolish or dispose of the Development or any portion thereof until (i)
the

demolition/disposition application required to be submitted pursuant to

subparagraph (a) above is approved in writing by HUD, and (ii) approval
of

demolition has been obtained from any other agencies and/or governmental

bodies from which approval to demolish may be required.

6\. The next annual statement and revised five-year action plan

submitted by the Grantee for funding under the comprehensive grant
program

(24 CFR part 968, subpart C) will reflect the use of HOPE VI grant funds

for the Revitalization Plan. Costs of activities funded under the HOPE
VI

grant will not be duplicated in the Grantee\'s annual statement and
revised

five-year action plan submitted under the comprehensive grant program.

7\. In its accounts and recordkeeping, the Grantee will not commingle

HOPE VI grant funds with funds from any other sources including, but not

limited to, other HUD program funds or funds from other Federal, State
or

local government agencies. (Such other funds may be used to carry out
the

Revitalization Plan, so

16

long as they are not commingled in the Grantee\'s accounts and

recordkeeping.) The Grantee also will ensure that HOPE VI grant funds
are

not used to duplicate work which is funded under any other Federal
program,

and will establish controls to assure non-duplication of funding.

8\. The Grantee will use its best efforts to pursue and enforce any

commitment (including commitments for services) from any public or
private

entity for any contribution or commitment to the Development or
surrounding

area which was described in the HOPE VI Application.

9\. No HOPE VI grant funds may be used to pay (or provide

reimbursement for payment of) the salary of a consultant at more than
the

daily equivalent of the maximum rate paid to level IV of the Executive

Schedule for Federal Employees. Consultant services provided under an

independent contractor relationship are governed by the procurement

requirements in 24 CFR 85.36 and the principles of cost reasonableness

contained in OMB Circular A-87.

10\. The Grantee will comply with, and be subject to, the

requirements, policies and standards set forth in 24 CFR part 85

(administrative requirements), the cost principles of OMB Circular A-87
and

the audit requirements of OMB Circular A-128 implemented at 24 CFR part
44

(except as any of the above-mentioned requirements are specifically

modified by the provisions of this Grant Agreement pursuant to
regulations

applicable to the Revitalization Plan) as the same may be amended.

11\. (a) The Grantee is permitted to enter into subgrants for the

performance of community service or supportive service activities under
the

Revitalization Plan, with non-profit entities or state or local
governments

(as defined in 24 CFR part 85) which were named in the HOPE VI
Application,

or are listed in Exhibit A hereto, subject to the provisions of this

Article and Article XV. (The Grantee must obtain HUD approval prior to

entering into any other subgrants.)

\(b\) The Grantee will be responsible for ensuring that subgrantees are

aware of the requirements imposed upon them by Federal statutes and

regulations, this Grant Agreement and the HOPE VI Application and for

ensuring that subgrants include any clauses required by Federal statutes

and executive orders, and their implementing regulations. The Grantee
will

monitor such compliance by all subgrantees. As a condition of HUD\'s

execution of this Grant Agreement, and prior to the draw down of any
funds

for payment to a subgrantee, the Grantee will submit to HUD for approval
a

copy of any subgrant agreement executed between the Grantee and any

subgrantee intended to receive HOPE VI implementation grant funds.

17

\(c\) The Grantee will submit to HUD an executed copy of Exhibit B to

this Grant Agreement (\"Subgrantee/Contractor/ Subcontractor
Certifications

and Assurances\") at the time the Grantee executes any contract with any

subgrantee or contractor, and at the time any contractor executes any

contract with any subcontractor, to provide goods or services under this

Grant Agreement.

\(d\) State or local government subgrantees are subject to, and

required to comply with, the uniform administrative requirements
contained

in HUD regulations at 24 CFR part 85; the cost principles of OMB
Circular

A-87; and the audit requirements of 24 CFR part 44.

\(e\) Non-profit subgrantees are subject to, and required to comply

with, the provisions and standards set forth in OMB Circular A-110 on

administrative requirements (a final revision of which was published in
the

Federal Register on November 29, 1993) and the regulations at 24 CFR
part

87; OMB Circular A-122 on cost principles; and OMB Circular A-133 for
audit

requirements.

12\. The Grantee, in performance of work at, or in connection with,

the Development, agrees to comply with the Davis-Bacon or HUD-determined

prevailing wage rate requirements, as applicable, in accordance with

section 12 of the 1937 Act. The provisions of 24 CFR part 70, as they
may

be amended from time to time, will apply to the use of volunteers for

activities covered by section 12 of the 1937 Act. In addition, if funds

from other Federal programs are used in performance of the
Revitalization

Plan, the Grantee agrees to comply with all applicable requirements of
such

programs relating to labor standards. (For example, if community

development block grant funds are used in connection with the

Revitalization Plan, the labor standards requirements of that program
would

apply with respect to the portion of work funded thereby.)

13\. The Grantee will comply with lead-based paint testing and

abatement requirements for HUD-associated housing, as provided for under

the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et.
seq.).

The Grantee also will comply with 24 CFR parts 35 and 965 (subpart H)
and

section 968.110(k), as they may be amended or revised from time to time.

Unless otherwise provided, the Grantee will be responsible for testing
and

abatement activities.

14\. The Grantee hereby certifies that no HOPE VI grant funds have

been expended, and that none will be expended, for lobbying activities,
as

prohibited by Section 319 of Public Law 101-121 (which prohibits
recipients

of Federal contracts, grants, and loans from using appropriated funds
for

lobbying the Executive or Legislative Branches of the Federal
Government),

and

18

implemented for HUD at 24 CFR part 87, as the same may be amended from
time

to time. The Grantee will disclose promptly any commitment or
expenditure

of non-appropriated funds for lobbying activities if those activities
would

be prohibited if paid with appropriated funds.

15\. The Grantee hereby certifies that neither the Development nor any

property identified in the Revitalization Plan for replacement housing
is

located in an area identified by the Federal Emergency Management Agency

(FEMA) as having special flood hazards. HUD has relied upon this

certification in executing the Grant Agreement in order to comply with
the

Flood Disaster Protection Act of 1973 (42 U.S.C. 4001-4128). The Grantee

also will ensure that no property which hereinafter is identified for

replacement housing will be in an area identified by FEMA as having
special

flood hazards unless:

\(a\) the community in which the replacement housing is situated is

participating in the National Flood Insurance program (see 44 CFR parts
59

through 79), or less than one year has passed since FEMA notification

regarding such hazards; and

\(b\) flood insurance is obtained as a condition of approval of the

demolition or disposition application.

16\. The Grantee hereby certifies that neither the Development nor any

property identified in the Revitalization Plan for replacement housing
is

located in the Coastal Barrier Resources System. HUD has relied upon
this

certification in executing the Grant Agreement in order to comply with
the

Coastal Barrier Resources Act (16 U.S.C. 3601). The Grantee also will

ensure that no property which hereinafter is identified for replacement

housing will be in the Coastal Barrier Resources System.

17\. The Grantee will deliver to HUD written approval of the community

services component of the Revitalization Plan from the Community
Services

Corporation no later than nine months after the effective date of this

Grant Agreement.

18\. The Grantee acknowledges that the Development currently is

subject to an Annual Contributions Contract (\"ACC\") with HUD and that
the

ACC will remain in full force and effect with respect to the
Development.

19\. The Grantee must either designate a full-time staff member, or

hire a full-time professional project manager or consultant, as the HOPE
VI

project manager, within 45 days from the effective date of this Grant

Agreement, to coordinate and oversee the activities of all parties
involved

in preparation of the Revitalization Plan Statement and in implementing
the

19

Revitalization Plan. The Grantee promptly will provide written notice to

HUD of its compliance with this provision.

20\. The Grantee will comply with all other terms and conditions HUD

may establish to administer, monitor or evaluate the HOPE VI program in
an

effective and efficient manner. Notwithstanding the foregoing, however,

except as provided in Article XVIII, HUD hereafter will not establish
any

additional terms and conditions without (i) consideration of the burden

imposed on the Grantee by such conditions or requirements; (ii)

consideration of the availability of less burdensome conditions or

requirements; and (iii) in the case of a term or condition applicable

solely to the Grantee, prior consultation with the Grantee.

21\. The Grantee will ensure that a Cooperation Agreement is executed

or remains in effect (as it may be amended) with regard to the
Development

and any replacement units developed as public housing.

ARTICLE V. Period for Expending Grant Funds.

All activities funded under a HOPE VI implementation grant must be

carried out within the time periods specified in the Plan for

Implementation (as the same may be modified or extended with the written

approval of HUD).

ARTICLE VI. Environmental Review.

The Grantee will not carry out activities with respect to the

Development under this Grant Agreement, except for activities described
in

24 CFR 50.19(b)-(h) or 50.20, until written approval under the
applicable

environmental requirements of 24 CFR part 50 is received from HUD.

ARTICLE VII. Supportive Services.

The Grantee will use no more than 20% of grant funds, in accordance

with the Revitalization Plan and as permitted under the Act, for any

combination of community service programs, supportive services and the

permissive and mandatory services authorized under the Gateway Program

(established in the Family Support Centers demonstration program,
provided

for in 42 U.S.C. 11485e-f, as the same may be amended from time to
time).

ARTICLE VIII. Matching Requirements.

20

The Grantee will use best efforts to cause the City in which the

Grantee is located to provide contributions for supportive services in
an

amount equal to 15% (or such greater amount as specified in the HOPE VI

Application) of the HOPE VI grant funds awarded to the Grantee for

supportive services under the Revitalization Plan. The Grantee

acknowledges that HUD has relied upon the Grantee\'s representations and

certifications in the HOPE VI Application that the matching funds will
be

provided by the City, as required by the Act. Such contributions must be

from non-federal sources (which include funding under the community

development block grant program) and only may be in the form of cash

contributions, administrative costs and the reasonable value of in-kind

contributions (as provided in 24 CFR 85.24). The Grantee will use such

contributions for eligible supportive services under the Revitalization

Plan.

ARTICLE IX. Design, Construction, Reconstruction, Rehabilitation,

and New Development.

1\. The units which are the subject of the Revitalization Plan are

expected to be sustainable over the long term. Therefore, the Grantee is

encouraged to develop both institutional and physical structures which

serve the needs of public housing residents over the long term and which

have the lowest possible life-cycle costs, taking into account future

operating and replacement costs as well as original capital investments.

Physical structures also should be designed, constructed and equipped so
as

to improve or harmonize with the neighborhoods they occupy, meet

contemporary standards of modest comfort and liveability, and be
attractive

and marketable to the people they are intended to serve. Building design

and construction should strive to encourage in the residents a
proprietary

sense, whether or not homeownership is intended or contemplated.

2\. HUD does not expect the Grantee to adhere to standards of design

and construction which have prevailed in the past, but instead will

evaluate each Revitalization Plan for cost-reasonableness in light of
the

standards set forth herein. Therefore, if the Grantee intends to replace

units in accordance with section 18 of the 1937 Act by the development
of

public housing units, the Grantee may accomplish such development in

accordance with 24 CFR part 941, or as otherwise approved in writing by

HUD. If the Grantee intends to conduct rehabilitation and physical

improvement activities, the Grantee may accomplish such activities in

accordance with 24 CFR 968.310(b),(d),(e) and (g)-(n) and 24 CFR
968.335(b)

and (c), or as otherwise approved in writing by HUD.

3\. The Grantee will submit to HUD, for informational purposes, the

final and complete plans and specifications for

21

rehabilitation or new construction prior to entering into a construction

contract or initiating site work.

4\. The Grantee will submit to HUD, for prior approval, the following

documents related to contracting activities, as required pursuant to any

thresholds established for the Grantee under the comprehensive grant

program: (a) architectural/ engineering/construction contracts before

award; (b) solicitations before issuance; (c) contract modifications
before

issuance; (d) construction contract settlement documents; (e) management

improvement requests for proposals (RFPs) before issuance; (f)
management

improvement contracts before award; (g) management improvement contract

modifications before issuance; (h) contracts with any entity or
individual

who has substantial and significant responsibility for carrying out the

Revitalization Plan, or a major component thereof, before award; (i) and

modifications to any contract specified in subparagraph; (h) above
before

issuance.

5\. The Grantee will ensure that expenditures for physical

improvements constitute eligible costs. Eligible costs include

alterations, betterments, additions, replacements, and non-routine

maintenance that are necessary to meet HUD\'s modernization and energy

conservation standards; provided however that these standards may be

exceeded when the Grantee determines that it is necessary or highly

desirable for the long term viability of the Development.

6\. Prior to executing any contract, the Grantee is required to

determine, in accordance with 24 CFR 85.36, if the contractor is a

responsible party, based upon the Grantee\'s own records and its review
of

the GSA Disbarred and suspended List, the HUD Limited Denial of

Participation List and any other information available to the Grantee.

ARTICLE X. Revitalized Public Housing.

The Development to be revitalized is a public housing development.

Accordingly, certain activities under the Revitalization Plan are
subject

to statutory requirements applicable to public housing developments
under

the 1937 Act, other statutes and the ACC. Within such restrictions, HUD

seeks innovative solutions under HOPE VI to the long-standing problems
of

distressed developments. For these reasons, HOPE VI is conformed with

section 24(e) of the 1937 Act (as added by section 120 of the Housing
and

Community Development Act of 1992; \"Section 24\"). Section 24 permits
the

Secretary to waive or revise regulations governing rents, income

eligibility and other areas of public housing management to permit
Grantees

to undertake measures that enhance the long-term viability of severely

distressed public housing developments revitalized under

22

HOPE VI. (At this point in time, however, the Secretary has not issued
any

revised regulations or rules under HOPE VI or regulations implementing

Section 24.) Therefore, if the Grantee chooses not to comply with the

requirements of existing regulations, as permitted under this Grant

Agreement, the Grantee must obtain HUD\'s approval, in writing, of its

alternate, proposed method for complying with statutory requirements.

In order to obtain HUD\'s approval to satisfy any particular statutory

requirement, without taking the measures described in implementing

regulations, the Grantee must submit a request with sufficient
information

and justification to enable HUD to make a determination of good cause
for

granting any such request to deviate from existing regulations. Until
such

time as the Grantee requests and HUD, in its discretion, approves any
such

requests in writing, the Grantee does not have authority to implement
the

activities described in the HOPE VI Application to which the request for

approval applies (or for which a request for approval is needed). For
the

purposes of this Grant Agreement, such activities are ineligible and
deemed

removed from the Revitalization Plan until such time, if at all, as (i)
HUD

approves a request as provided above or (ii) the regulations are
modified

to permit the activities as described in the HOPE VI Application.
Grantees

will be permitted greater latitude if, in the future, Congress
determines

to reduce or modify such statutory restrictions affecting either public

housing in general or the developments to be revitalized with HOPE VI
funds

in particular.

Various issues have been raised by grantees in their HOPE VI

Applications as areas in which innovation is sought. To facilitate these

efforts, HUD is providing the following general guidance. Specific

requests made by grantees in their Revitalization Plan Statements will
be

responded to in writing by HUD, in the letter approving the
Revitalization

Plan Statement or otherwise.

1\. Total Development Costs. A grantee is permitted, with HUD

approval, to exceed 100% of the published total development costs (\"TDC

Standard\") for the developments under HOPE VI, where justified as
necessary

to meet the standards articulated in Article IX.

2\. Modest Design Requirements. A grantee is permitted the maximum

possible flexibility regarding amenities and design of public housing

developments under HOPE VI where justified as necessary to meet the

standards articulated in Article IX. (This approach is consistent with

current HUD policy, detailed in PIH Notice 94-1, for public housing.)

3\. Air Conditioning. A grantee is permitted to air condition

residential units under HOPE VI. (Guidance concerning

23

the allocation of costs associated with air conditioning in residential

public housing is provided in Notice PIH 93-40.)

4\. Ceiling Rents. A grantee will be permitted to deviate from the

requirements of 24 CFR 913.107 in order to establish limitations on
total

tenant payments (\"ceiling rents\") upon approval by HUD of a waiver
request

which: (a) is in accordance with the requirements set forth in the March

15, 1989 Federal Register Notice for Policy on Establishment of Ceiling

Rents for Public Housing (54 FR 10733), or (b) otherwise calculates
ceiling

rents in accordance with 3(a)(2)(A)(iii) of the 1937 Act, as amended (by

section 102(a) of the Housing and Community Development Act of 1987),
which

permits the establishment of ceiling rents that are not less than the

average monthly amount of debt service and operating expenses
attributable

to dwelling units of similar size in public housing projects owned and

operated by the Grantee. (No implementing regulations for section

3(a)(2)(A)(iii) as amended have been published at this time. The March
15,

1989 Notice set forth the requirements for waiving 24 CFR 913.107,

applicable to public housing units, prior to the effective date of

implementing regulations.)

5\. Designated Housing. Section 7 of the 1937 Act, as amended by

section 622(a) of the Housing and Community Development Act of 1992,
allows

designation of a public housing project or portion of a project as only

\"elderly\" or \"disabled\" by compliance with specified conditions,
including

submission of an \"Allocation Plan.\" HUD only may permit designated

housing in accordance with the statute. The Grantee may comply with the

statute by taking the measures described in HUD\'s regulations
implementing

section 7 for public housing, or as otherwise approved in writing by
HUD.

(Final regulations were published on April 13, 1994 in 59 FR 17652.)

6\. Site and Neighborhood Standards for Replacement Housing.

\(a\) The HOPE VI demonstration program provides resources to address

the needs of severely distressed public housing developments within an

administrative framework of less intrusive federal oversight and
increased

reliance on informed local decision making. HOPE VI grants are made so

that grantees may develop and implement comprehensive strategies that

address not only the physical and management needs of the developments,
but

also the social and economic needs of the residents and surrounding

community. Grantees are expected to ensure that their Revitalization
Plans

will expand assisted housing opportunities in non-poor and non-minority

neighborhoods and/or will accomplish substantial revitalization in the

Development and its surrounding neighborhood. Grantees are also expected

to ensure that eligible households of all races and ethnic groups will
have

equal and meaningful access to the housing.

24

\(b\) The fundamental goal of HUD\'s fair housing policy is to make full

and free housing choice a reality, so that households of all races can

freely decide between minority and white neighborhoods, when minority

neighborhoods are no longer deprived of essential public and private

resources, and when stable, racially mixed neighborhoods are available
as a

meaningful choice for all. To make full and free housing choice a
reality,

sites for HUD-assisted housing investment should be selected so as to

advance two complementary goals:

1\) expand assisted housing opportunities in non-minority

neighborhoods, opening up choices throughout the metropolitan area for

all assisted households; and

2\) reinvest in minority neighborhoods, improving the quality and

affordability of housing there to represent a real choice for assisted

households.

\(c\) A grantee must comply with the Fair Housing Act and Title VI of

the Civil Rights Act of 1964, and regulations thereunder, in determining

the location of any replacement housing. A grantee may, at its election,

separately with regard to each site it proposes, comply with the

development regulations regarding site and neighborhood standards (24
CFR

941.202 (b) - (d)), or with the site and neighborhood standards
contained

in this section 6.

\(d\) Because the objective of the HOPE VI program is to alleviate

distressed conditions at the Development and in the surrounding

neighborhood, replacement housing under HOPE VI which is located on the

site of the existing Development or in its surrounding neighborhood will

not require independent approval under site and neighborhood standards.

\(e\) Unless the grantee demonstrates that there are already

significant opportunities in the metropolitan area for assisted
households

to choose non-minority neighborhoods (or these opportunities are under

development), HOPE VI replacement housing not covered by paragraph (d)
may

not be located in an area of minority concentration (as hereinafter

defined) without the prior approval of HUD. Such approval may be granted

if the grantee demonstrates to the satisfaction of HUD that:

1\) the HOPE VI grantee has made determined and good faith efforts, and

found it impossible with the resources available, to acquire an

appropriate site(s) in an area not of minority concentration.

2\) the replacement housing, taking into consideration both the

community and supportive services or other revitalizing activities

included in the Revitalization Plan, and any other revitalization

activities in operation or firmly

25

planned, will contribute to the stabilization or improvement of the

neighborhood in which it is located, by addressing any serious

deficits in services, safety, economic opportunity, educational

opportunity, and housing stock; or

3\) the replacement housing is located in a neighborhood which is not

an area of high poverty rate (30 percent or more)

\(f\) HUD recognizes that in some metropolitan areas, factors including

the cost of land, jurisdictional limits or political opposition may make
it

extremely difficult for grantees to acquire and develop non-impacted
sites.

A grantee seeking approval under condition (e)(1) above should detail
its

efforts with sufficient specificity that HUD may determine whether it
can

contribute other resources, such as additional funding or legal
assistance,

to assist the grantee in utilizing a non-impacted site. Grantees

experiencing or anticipating difficulty are strongly encouraged to
consult

with HUD prior to concluding that they have demonstrated impossibility.

\(g\) An \"area of minority concentration\" is any neighborhood in which

the percentage of households in a particular racial or ethnic minority

group is at least 20 points higher than the percentage for the housing

market area as a whole or in which the neighborhood\'s total percentage

minority is at least 20 points higher than the percentage for the
housing

market area as a whole.

\(h\) A replacement housing plan submitted under Section 18 of the 1937

Act which provides for replacement housing not at the Development or in
the

surrounding neighborhood need not identify a site or census tract. Such

identification must be given at the time approval is sought under
paragraph

(e).

7\. Admission to Redeveloped HOPE VI Units. The 1937 Act applies to

public housing units, including the Development to be revitalized and
any

replacement units developed as public housing. One intent of the HOPE VI

demonstration is to explore alternative methods for operating
successfully

revitalized public housing within the statutory restrictions, including
the

Fair Housing Act and Title VI of the Civil Rights Act of 1964.

\(a\) Preferences for Admission. (i) A grantee is permitted to

establish a local system of preferences. For these purposes, Hope VI is

conformed to section 24(e)(2) of the 1937 Act (as added by section 120
of

the Housing and Community Development Act 6f 1992). Therefore, a grantee

may select tenants pursuant to a local system of preferences, in lieu of

selecting tenants pursuant to the preferences specified under section

6(c)(4)(A)(i) of the 1937 Act, provided the grantee complies with the

requirements of Section 24(e)(2), including establishing such

26

local system in writing and holding one or more public hearings. A copy
of

any written local system shall be provided to HUD, upon adoption.

\(ii\) Alternatively, a grantee may establish preferences in accordance

with section 6 of the 1937 Act (as amended by section 501 of the
National

Affordable Housing Act of 1990 and section 112 of the Housing and
Community

Development Act of 1992). The Grantee may comply with section 6 by
taking

the measures described in HUD\'s final regulations implementing section
6,

as amended, for public housing, published on July 18, 1994, in 59 FR
36616)

or as otherwise approved by HUD.

\(iii\) Grantees are reminded that they must comply with the Fair

Housing Act and Title VI of the Civil Rights Act of 1964 and regulations

thereunder in adopting any local preference. Because of the overriding

importance of fair housing rights and the likelihood of private
litigation

or a public enforcement action if fair housing laws are violated,
grantees

are strongly encouraged to consult with HUD (including Fair Housing
staff)

prior to establishing preferences which may involve fair housing issues

(such as neighborhood preferences).

\(b\) Resident Screening. A grantee is permitted to implement a

screening process which utilizes a resident advisory board. However, a

grantee must establish objective and reasonable criteria to determine if
an

applicant is a suitable resident and must develop adequate procedures to

verify information concerning each applicant. A grantee also should
amend

its admissions policies to reflect any such changes in its procedures.

\(c\) Income Limits. Section 16(b)(2) of the 1937 Act provides that

not more than 25% of the dwelling units in any project will be available

for occupancy by low-income families other than very low-income
families.

HUD does not have the authority to waive this statutory provision.

8\. Definition of Income. Section 3(b)(4) of the 1937 Act grants the

Secretary of HUD the authority to define income for residents of public

housing. For the purposes of excluding certain stipends from income,
Hope

VI is conformed to section 24(e)(1) of the 1937 Act (as added by section

120 of the Housing and Community Development Act of 1992). Section

24(e)(1) grants the Secretary certain authority to waive or revise rules

governing rents, income eligibility and other areas of public housing

management. HUD has determined to revise the definition of income to

exclude certain stipends under limited circumstances. HUD will issue

further guidance concerning the terms and conditions of such exclusion
of

stipends from income.

27

HUD does not have the authority to modify the definition of income to

any significant extent, however, without statutory approval. Under
HUD\'s

current definition, the earned income received by a resident who was

previously unemployed, must be included.

9\. Sub-jurisdictional Waiting Lists. A grantee may establish a

separate, site-based (sub-jurisdictional) waiting list provided that the

method of establishment and operation complies with the Fair Housing Act

and Title VI of the Civil Rights Act of 1964 and regulations thereunder.
A

grantee which utilizes a sub-jurisdictional waiting list shall adopt, in

writing, a strategy for affirmatively marketing the site, which strategy

shall include specific steps to inform potential applicants and solicit

applications from eligible families in the housing market area who are

least likely to apply for the program without special outreach. A copy
of

such affirmative marketing strategy shall be provided to HUD, upon

adoption. Because of the overriding importance of fair housing rights
and

the likelihood of private litigation or a public enforcement action if
fair

housing laws are violated, grantees are strongly encouraged to consult
with

HUD (including Fair Housing staff), in advance, regarding the
establishment

and operation of a separate site-based waiting list.

ARTICLE XI. Project Budget/Draw downs.

1\. (a) The Grantee will ensure that grant funds are expended for

the Revitalization Plan in accordance with the Budget, submitted as part
of

the Revitalization Statement, and the HOPE VI Requirements.

\(b\) The Grantee, without HUD approval, may increase or decrease the

amount for any budget line item set forth in the Budget provided that
such

change does not cause, or result from, a revision to the scope or

objectives of the Revitalization Plan and that when taking into

consideration such modification:

\(i\) HUD\'s total grant obligation will not thereby be increased,

\(ii\) the Grantee will comply with the requirements of the Act relating

to the percentage of funding (not less than 80% and not more than 20%)

which may be expended for specified purposes, and

\(iii\) the average per unit hard costs for units to be reconstructed or

rehabilitated will not exceed 100% of the TDC Standard, except as

permitted in Article X, paragraph 1.

28

2\. (a) Notwithstanding any contrary provisions of 24 CFR 85.21, the

Grantee will request all draw downs of grant funds under the Line of
Credit

Control System - Voice Response System (LOCCS-VRS), unless and until

another payment system is designated by HUD. The Grantee will comply
with

all rules, guidelines and notices established for HOPE VI under the

LOCCS-VRS system, or any substitute system, in connection with any draw

down of HOPE VI grant funds. If HUD designates a different payment
system,

it will be based upon the provisions of section 85.21 (subject to the

provisions of Article XVIII).

\(b\) HUD may withhold payments, in accordance with 24 CFR 85.21(g).

\(c\) The Grantee agrees that each draw down request by the Grantee

will constitute, and be deemed to be, a representation that the Grantee
is

not in default under this Grant Agreement (except as the Grantee
previously

may have disclosed to HUD in writing).

\(d\) After the execution of the Grant Agreement, the Grantee may

request a draw down, under the Budget, for costs incurred under the

Revitalization Plan prior to execution of this Grant Agreement provided

that such costs (i) have not, and will not, been funded under the HOPE
VI

planning grant for the Development, (ii) are eligible and allowable
under

this Grant Agreement, (iii) were incurred after the notification of
award

of this HOPE VI implementation grant was made by HUD and (iv) are
directly

associated with activities to be funded with HOPE VI grant funds under
the

Revitalization Plan, except that with respect to direct administrative

costs, only costs which are allocable to employees of the Grantee who
have

devoted at least 25% of their work hours to HOPE VI activities may be

considered.

\(e\) The Grantee may utilize grant funds, in accordance with the

Budget, for publication costs of reports or other media relating to
grant

program accomplishments or results, which will be allowable costs under

this Grant Agreement (pursuant to OMB Circular A-87, Schedule B,
paragraph

23).

3\. No grant funds may be drawn down under this Grant Agreement until

all of the following have occurred:

\(a\) the Grantee has submitted the Revitalization Plan Statement

required under Article II hereof and received written approval of its

Revitalization Plan from HUD;

\(b\) HUD has received written approval of the community services

component of the Revitalization Plan Statement from the Corporation for

National Service; and

29

\(c\) HUD has notified the Grantee in writing of its approval of the

Revitalization Plan under applicable environmental requirements pursuant
to

24 CFR part 50, as required by Article VI of this Grant Agreement.

(Notwithstanding the foregoing, prior to receipt of such written
approval,

the Grantee will be permitted to draw down HOPE VI grant funds for the

limited purposes of carrying out the activities specified in Article VI

hereof.)

4\. No grant funds may be drawn down during any period in which the

Grantee has failed to file with HUD any overdue financial report.

ARTICLE XII. Reporting Requirements.

1\. (a) The Grantee will submit to HUD, quarterly, a narrative

performance report (ordinarily not to exceed five pages in length unless

deemed necessary by the Grantee) no later than 30 calendar days after
the

end of each quarter, describing the current status of the work
activities

under the Revitalization Plan, including (but not restricted to)
community

services, supportive services, rehabilitation or development work,

marketing, and resident selection. In this narrative, the Grantee will

describe the actions taken during the quarter towards accomplishment of
its

stated goals under the Revitalization Plan (comparing actual

accomplishments to the objectives established for the period) and
explain

any lack of progress or actions if the established objectives were not
met.

The Grantee should also address its progress in meeting fair housing

objectives in its Revitalization Plan, including those set forth in an

affirmative marketing strategy, a local preference plan, or otherwise.

\(b\) The Grantee agrees that each quarterly performance report

submitted under subparagraph (a) above will constitute, and be deemed to

be, a representation that the Grantee is not in default under this Grant

Agreement except as disclosed therein.

2\. Within 90 calendar days following completion of all activities to

be performed utilizing HOPE VI grant funds under the Revitalization
Plan,

the Grantee must submit to HUD a Final Financial Report (Form SF-269A,

attached hereto as Exhibit F), which contains a cumulative summary of

expenditures to date and indicates the exact balance of unexpended
funds.

3\. Within 90 calendar days after completion of all activities under

the Revitalization Plan, including those activities not performed with
HOPE

VI grant funds, the Grantee must submit a post-grant report to HUD. The

report must describe the activities carried out; the impact of the

activities toward

30

achieving the program objectives; and the Grantee\'s plan for continuing
the

activities, if and as appropriate.

4\. In addition to the reporting requirements set forth in paragraphs

1 - 3 above, the Grantee must inform HUD immediately, in writing, of any

problems, delays or adverse conditions which will impair materially the

Grantee\'s ability to comply with the Plan for Implementation, as the
same

may be revised from time to time as required by HUD or with HUD\'s
approval.

Such disclosure must include a statement of action taken, or proposed to
be

taken, and any assistance needed to resolve the situation.

5\. Subject to Article IV, paragraph 20, the Grantee will comply with

all other reporting requirements from time to time established by HUD,
in

its sole discretion, in connection with the HOPE VI demonstration
program.

The Grantee understands that this is a demonstration program and will
fully

cooperate with all reasonable information gathering requests made by
HUD\'s

Office of Policy Development and Research in connection with its
evaluation

of the program, including, without limitation, all post-closeout and

post-revitalization reports, in the forms prescribed by HUD, for the
period

of years designated by HUD. Likewise, the Grantee will cooperate with

reporting requirements established by the Office of Fair Housing and
Equal

Opportunity regarding the racial, ethnic or other characteristic of the

applicants, participants and beneficiaries of the HOPE VI program.

Provided however, that in establishing any such requirements, HUD will

consider the burden imposed on the grantees and the availability of less

burdensome requirements.

ARTICLE XIII. Recordkeeping/Access Requirements/Audits.

1\. The Grantee will keep records in accordance with 24 CFR 85.20

that facilitate an effective audit to determine compliance with program

requirements, and which fully disclose:

\(a\) the amount and disposition of funds received under this HOPE VI

grant, including sufficient records that document the reasonableness and

necessity of each expenditure;

\(b\) the amount and nature of any other assistance, including cash,

services, or other items contributed in accordance with the HOPE VI

Application or as a condition of receiving this HOPE VI grant;

\(c\) the cost or other value of all in-kind non-Federal contributions

towards the supportive services match required by Article VIII;

\(d\) any other proceeds received for, or otherwise used in connection

with, the Revitalization Plan; and

31

\(e\) fair housing and equal opportunity data including racial and

ethnic beneficiary data, information on the affirmative marketing
strategy

and any other information to demonstrate compliance with the fair
housing

and equal opportunity requirements of this program as identified in
Article

XVI\.

2\. The Grantee will comply with and be subject to (a) the provisions

of OMB Circular A-128, implemented at 24 CFR part 44, (b) the retention
and

access requirements for records under 24 CFR 85.41 and (c) the
non-Federal

audit requirements under 24 CFR 85.26, including, without limitation,
the

requirements relating to each subgrantee to which the Grantee provides

\$25,000 or more of HOPE VI grant funds in any fiscal year.

3\. For the purpose of audit, examination, monitoring, and

evaluation, the Grantee will give HUD (including any duly authorized

representatives and the Inspector General) access to any books,
documents,

papers, and records of the Grantee that are pertinent to assistance

received under this HOPE VI grant or under the Revitalization Plan,

including all records required to be kept by paragraph 1 of this
Article.

4\. The Grantee acknowledges and agrees that HUD, or its designees,

may conduct site visits as deemed necessary by HUD based upon the
Grantee\'s

needs under the Revitalization Plan or the needs of the HOPE VI program.

Technical assistance site visits may be provided by HUD or its designees

\(a\) in response to requests from the Grantee, (b) based upon
demonstrated

needs of the HOPE VI program, or (c) as provided in Article XVIII.

ARTICLE XIV. Project Closeout.

1\. The Grantee will initiate grant fund closeout (\"Grant Fund

Closeout\") in accordance with procedures established by HUD within 30
days

after completion of all activities to be performed utilizing HOPE VI
grant

funds under the Revitalization Plan. At HUD\'s option, the Grantee may

delay initiation of Grant Fund Closeout until the resolution of any HUD

monitoring findings. If HUD exercises this option, the Grantee must

promptly resolve the findings.

2\. The Grantee acknowledges that the Grant Fund Closeout process may

entail a review by HUD to determine the Grantee\'s compliance with the
Grant

Agreement. The Grantee will cooperate with any review, including by
making

available records requested by HUD and facilitating on-site inspection
of

the Development.

3\. Within 90 days after completion of all activities under the

Revitalization Plan in accordance with the Plan for Implementation
(which

may occur after Grant Fund Closeout), the Grantee will provide to HUD
the

following (in the formats

32

approved by HUD) together with any other reports hereinafter specified
by

HUD in any Notice affecting HOPE VI:

(a)a certification of project completion;

\(b\) a certification of compliance with all requirements of the Grant

Agreement;

\(c\) a Final Financial Report (Form SF-269A), as described in Article

XII, paragraph 2 of this Grant Agreement, (if not previously delivered
at

the time of Grant Fund Closeout); and

\(d\) a Post-Grant Report, as described in Article XII, paragraph 3 of

this Grant Agreement.

4\. The Grantee agrees that the expenditure of grant funds is

allowable only for expended project costs, meeting the standards of OMB

Circular A-87, and only to the extent that other sources of funds

identified in the HOPE VI Application are not available for payment of
such

project costs.

5\. When HUD has determined to its satisfaction that the expenditure

of grant funds was allowable, the activities to be completed utilizing
HOPE

VI grant funds were completed as required by the Grant Agreement, and
all

Federal requirements were satisfied, HUD and the Grantee will execute
the

Grant Fund Closeout Agreement.

6\. The Grant Fund Closeout Agreement will include the Grantee\'s

agreement to abide by any continuing Federal requirements, including,

without limitation, submission of all post-closing and
post-revitalization

reports, completion of any activities under the Revitalization Plan
which

were funded from sources other than HOPE VI grant funds and submission
of

all documentation required pursuant to paragraph 3 above which could not
be

submitted prior to Grant Fund Closeout because of utilization of such
other

sources of funds.

ARTICLE XV. Conflict of Interest.

1\. In addition to the conflict of interest requirements in 24 CFR

part 85, no person who is an employee, agent, consultant, officer, or

elected or appointed official of the Grantee and who exercises or has

exercised any functions or responsibilities with respect to activities

assisted under this HOPE VI grant, or who is in a position to
participate

in a decision-making process or gain inside information with regard to
such

activities, may obtain a financial interest or benefit from the
activity,

or have an interest in any contract, subcontract, or agreement with
respect

thereto, or the proceeds thereunder, either for himself

33

or herself or for those with whom he or she has family or business ties,

during his or her tenure or for one year thereafter.

2\. HUD may grant an exception to the exclusion in paragraph 1 of

this Article on a case-by-case basis when it determines that such an

exception will serve to further the purposes of HOPE VI and its
effective

and efficient administration. An exception may be considered only after

the Grantee has provided a disclosure of the nature of the conflict,

accompanied by (i) an assurance that there has been public disclosure of

the conflict, (ii) a description of how the public disclosure was made
and

\(iii\) an opinion of the Grantee\'s attorney that the interest for
which the

exception is sought does not violate State or local laws. In determining

whether to grant a requested exception, HUD will consider the cumulative

effect of the following factors, where applicable:

\(a\) whether the exception would provide a significant cost benefit or

an essential degree of expertise to the Revitalization Plan that would

otherwise not be available;

\(b\) whether an opportunity was provided for open competitive bidding

or negotiation;

\(c\) whether the person affected is a member of a group or class

intended to be the beneficiaries of the Revitalization Plan and the

exception will permit such person to receive generally the same
interests

or benefits as are being made available or provided to the group or
class;

\(d\) whether the affected person has withdrawn from his or her

functions or responsibilities, or the decision making process, with
respect

to the specific activity in question;

\(e\) whether the interest or benefit was present before the affected

person was in a position as described in paragraph 1 of this Article;

\(f\) whether undue hardship will result either to the Grantee or the

person affected when weighed against the public interest served by
avoiding

the prohibited conflict; and

(g)any other relevant considerations.

ARTICLE XVI. Applicability of Other Federal Requirements.

The following Federal requirements are applicable to HOPE VI. The

Grantee will comply with all of the applicable requirements of the

following, as the same may be amended from time to time:

34

1\. the Fair Housing Act (42 U.S.C. 3601-19) and regulations pursuant

thereto (24 CFR part 100); Executive Order 11063 (Equal Opportunity in

Housing) and regulations pursuant thereto (24 CFR part 107); the fair

housing poster regulations (24 CFR part 110) and advertising guidelines
(24

CFR part 109);

2\. Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and

regulations pursuant thereto (24 CFR part 1) relating to
non-discrimination

in housing;

3\. the prohibitions against discrimination on the basis of age under

the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and regulations

issued pursuant thereto (24 CFR part 146);

4\. the prohibitions against discrimination against handicapped

individuals under Section 504 of the Rehabilitation Act of 1973 (29
U.S.C.

794\) and regulations issued pursuant thereto (24 CFR part 8); the
Americans

with Disabilities Act (Public Law 101-336) and its implementing
regulation

at 28 CFR part 36; and the Architectural Barriers Act of 1968, as
amended

(42 U.S.C. 4151) and regulations issued pursuant thereto (24 CFR part
40);

5\. the Fair Housing Act and Section 504 of the Rehabilitation Act of

1973, relating to disabilities. The Grantee must comply with the

reasonable modification and accommodation requirements of the Fair
Housing

Act and the accessibility requirements of the Fair Housing Act and
Section

504 of the Rehabilitation Act of 1973, as amended;

6\. section 3 of the Housing and Urban Development Act of 1968 (12

U.S.C. 1701u) (Employment Opportunities for Lower Income Persons in

Connection with Assisted Projects) and its implementing regulation at 24

CFR part 135;

7\. Executive Orders 11246, 11625, 12432, and 12138. Consistent with

HUD\'s responsibilities under these Orders, the Grantee must make
efforts to

encourage the use of minority and, women\'s business enterprises in

connection with funded activities;

8\. section 102 of the Department of Housing and Urban Development

Reform Act of 1989, as implemented at 24 CFR part 12, which contains

provisions designed to ensure greater accountability and integrity in
the

provision of certain types of assistance administered by HUD;

9\. section 13 of the Department of Housing and Urban Development Act

of 1974, as amended by section 112 of the HUD Reform Act of 1989, and as

implemented at 24 CFR part 86;

35

10\. 24 CFR part 24, which applies to the employment, engagement of

services, awarding of contracts, subgrants, or funding of any
recipients,

or contractors or subcontractors, during any period of debarment,

suspension, or placement in ineligibility status; and

11\. the Uniform Relocation Assistance and Real Property Acquisition

Policies Act of 1970 and government-wide implementing regulations at 49
CFR

part 24.

ARTICLE XVII. Technical Assistance and Training Requirements.

The Grantee will use best efforts to attend any training or accept any

technical assistance provided by HUD, and will obtain any technical

assistance required by HUD, with respect to carrying out the
Revitalization

Plan pursuant to this Grant Agreement. HUD intends to consult with

grantees to determine their technical assistance and training needs.

ARTICLE XVIII. Unsatisfactory Performance/Default.

1\. (a) The Grantee acknowledges and agrees that HUD may impose

special conditions or restrictions upon the Grantee in accordance with
this

paragraph 1, with which the Grantee will comply, in order to ensure that

all activities and expenditures of grant funds under the Revitalization

Plan are properly and efficiently carried out. HUD may impose such

conditions or restrictions if HUD determines that the performance of the

Grantee, or any subgrantee, under this Grant Agreement is unsatisfactory

(whether or not the Grantee is in default in accordance with paragraph 2

below).

\(b\) The special conditions or restrictions which HUD may impose

include the following:

\(i\) withholding authority to proceed to the next phase of activities

until receipt of evidence of acceptable performance within a given

funding period;

\(ii\) requiring additional, more detailed financial reports;

\(iii\) additional project monitoring;

\(iv\) requiring the Grantee (or subgrantee) to obtain technical or

management assistance; or

(v)establishing additional prior approvals.

36

\(c\) If HUD decides to impose any such conditions or restrictions upon

the Grantee (or subgrantee), HUD will notify the Grantee (or subgrantee)
in

writing, as early as possible. Such notice will contain the following

information:

\(i\) a description of the special conditions or restrictions;

\(ii\) the nature of the unsatisfactory performance and the reason for

imposing such special conditions or restrictions;

\(iii\) the corrective actions which must be taken before the conditions

or restrictions will be removed, and the time allowed for completing

the corrective actions; and

\(iv\) the method for requesting reconsideration of the conditions or

restrictions imposed.

2\. Each of the following events or occurrences, to the extent it

constitutes a material breach or occurrence, will constitute a default
by

the Grantee under this Grant Agreement:

\(a\) use of grant funds for any purpose, in any manner or at any time,

other than as authorized by this Grant Agreement;

\(b\) failure to comply with the HOPE VI Requirements or any other

Federal, State or local laws, regulations or requirements applicable in

implementing the Revitalization Plan;

\(c\) failure to make any submission, perform any obligation or

otherwise comply with any requirement under Article II, paragraph 3
within

the specified time period;

\(d\) failure to proceed in a manner consistent with the Revitalization

Plan;

\(e\) any material misrepresentation in the HOPE VI Application or

under this Grant Agreement, including, without limitation, any

misrepresentations under Article XI, paragraph 2(c) or Article XII,

paragraph 1(b);

\(f\) failure of the City in which the Grantee is located to provide

contributions for supportive services in an amount equal to 15% (or such

greater amount as specified in the HOPE VI Application) of the HOPE VI

grant funds awarded to the Grantee for supportive services under the

Revitalization Plan.

\(g\) failure to comply with, or any material breach of, any other

covenants, conditions or terms of this Grant Agreement; or

37

\(h\) a default by the Grantee under the ACC, which default relates to

the Development or the Grantee\'s ability to perform all of its
obligations

under this Grant Agreement.

3\. (a) HUD will give the Grantee written notice of any default.

The Grantee will have the opportunity to cure such default within 30
days

of the date of said notice, or to demonstrate within said time period,
by

submitting substantial evidence satisfactory to HUD, that it is not in

default. If the default is not susceptible of being cured within said 30

day period, the Grantee will demonstrate, to HUD\'s satisfaction, that
the

Grantee has taken actions necessary to cure the default and that the

default is curable within 90 days from the date of the default notice.

Additionally, the Grantee must covenant to prosecute such cure
diligently

and complete such cure within said 90 day period.

\(b\) Notwithstanding the provisions of subparagraph (a) above

concerning the opportunity to cure defaults, if HUD determines, in
HUD\'s

sole discretion, that there is an imminent threat that the Grantee will

expend additional grant funds in violation of the provisions of this
Grant

Agreement, HUD may implement the remedial action provided for under

subparagraph 4(c) of this Article to prevent any such unauthorized

expenditure until such time as the Grantee has complied with the cure

provisions set forth above. HUD will implement such remedial action by

written notice set forth either in the notice of default given under

subparagraph 3(a) above or by subsequent written notice to the Grantee.

4\. If the Grantee fails to cure all defaults specified in the notice

of default within the time periods set forth in subparagraph 3(a) above,
or

fails to diligently pursue or complete any cure as provided in
subparagraph

3(a), HUD may take any of the following remedial actions, upon written

notice to the Grantee:

\(a\) require the Grantee, within a time period established by HUD, to

prepare a revised Plan for implementation, obtain HUD\'s approval
thereto

and follow such revised Plan for implementation to complete the
activities

under the Revitalization Plan;

\(b\) require the Grantee, within a time period established by HUD, to

revise its management plan (including, without limitation, changing the

managing entity), relocation plan, demolition or disposition
application,

resident consultation plan or any other activity under the
Revitalization

Plan in order to successfully complete the revitalization of the

Development in a manner satisfactory to HUD, including, without
limitation,

exclusion or revision of affected activities, revision of the

38

Budget as necessary, and substitution of other eligible activities;

\(c\) temporarily suspend the Grantee\'s authority to draw down grant

funds for affected activities, or at HUD\'s sole discretion for all

activities, for not more than ninety (90) days, pending action to cure
the

defaults;

\(d\) suspend the Grantee\'s authority to draw down grant funds under

the Line of Credit Control System - Voice Response System (or any

subsequent method of disbursement) and prohibit payment or reimbursement

for all grant activities or, if more appropriate (in HUD\'s sole

discretion), only for those activities affected by the default, for an

unspecified period of time pending final remedial action by HUD;

\(e\) disallow use of grant funds for all or part of the cost of the

activity or action not in compliance;

\(f\) recapture amounts determined by HUD to have been improperly

expended;

\(g\) require reimbursement by the Grantee for grant funds improperly

expended; and

\(h\) require the Grantee to contract with an alternate administrator,

acceptable to HUD in its sole discretion, for the Revitalization Plan.

5\. If HUD determines that the remedial actions taken by HUD under

paragraph 4 above have not been effective in curing the default, or if
the

Grantee has not complied with the requirements imposed by HUD under

paragraph 4 and has not otherwise cured the default, HUD may take any of

the following remedial or enforcement actions (in addition to any of the

remedies permitted under paragraph 4) upon written notice to the
Grantee:

\(a\) petition for the appointment of a receiver (which may be a public

housing agency, a private management corporation, or some other entity)
for

the HOPE VI Development to any district court of the United States or to

any court of the State in which the Development is located;

\(b\) change the method of payment from Line of Credit Control System -

Voice Response System to some other available method of payment (e.g.,

payments involving HUD manual review and approval of every draw request,
or

one which permits draws only on a reimbursement basis);

\(c\) reduce the HOPE VI grant in the amount affected by the default;

39

\(d\) terminate the HOPE VI grant as to all further activities and

initiate close-out procedures;

(e)withdraw any unobligated balances of funding;

\(f\) take action against the Grantee under 24 CFR part 24 and

Executive Order 12549 with respect to future HUD or Federal grant
awards;

and

\(g\) take any other available legal or equitable remedial action,

including, but not limited to, any remedial actions available under the

Grantee\'s ACC.

ARTICLE XIX. Resident Consultation Requirements.

1\. The Grantee will notify residents of the Development, and any

representative organizations for the Development, of the approval of the

HOPE VI grant and the availability of the Revitalization Plan for
reading

in the management office. The Grantee also will provide the resident

organization with a copy of the Plan for Implementation, and any
amendments

thereto or restatements thereof as may be permitted or required under
this

Grant Agreement.

2\. (a) The Grantee will consult with the residents of the

Development (or if the Development is substantially vacant, with

representative residents or resident organizations throughout the
Grantee)

in the manner provided for in the HOPE VI Application, but in no event
less

frequently than once every two months. Notwithstanding the foregoing,
HUD

will have the option at any time, based upon HUD\'s determination that
the

existing method of resident participation is substantially inadequate or

insufficient, to require the Grantee to prepare a memorandum of

understanding with the residents setting forth the manner and frequency
of

consultation, the method (if any) for designating resident participants,

the issues with respect to which resident involvement will be sought,
and

any other matters deemed advisable by HUD or the Grantee.

\(b\) The purpose of the resident consultations is to assure that

residents are fully briefed and meaningfully involved in implementing
and

monitoring the Revitalization Plan. Therefore, the resident
consultations

must (i) inform the residents of the Grantee\'s progress in carrying out
the

Revitalization Plan and (ii) provide for meaningful resident
participation

concerning Grantee\'s progress in carrying out the Revitalization Plan
and

open issues pertinent to the Revitalization Plan.

3\. The Grantee and HUD are the sole parties to this Grant Agreement

and do not intend to create any third party beneficiaries to this Grant

Agreement. Notwithstanding the

40

provisions set forth in this Grant Agreement requiring consultations
with

residents and dissemination of information to residents, nothing in this

Grant Agreement may be construed as conferring the status of third party

beneficiary upon the residents.

4\. The Grantee will provide the residents with written notice of the

time and place of consultations. The Grantee will maintain accurate

records of the resident consultations required hereunder.

ARTICLE XX. Effective date.

The effective date of this agreement is the date that HUD executes the

cover sheet to this Grant Agreement, Form HUD-1044.

41

APPENDIX \"G\"

Assistant Secretary Joseph Shuldiner\'s Memorandum

of August 8, 1994

MODIFICATIONS TO PUBLIC HOUSING DEVELOPMENT

PROCESSING REQUIREMENTS

U.S. Department of Housing and Urban Development

Washington, D.C. 20410-5000

AUG - 8 1994

OFFICE OF THE ASSISTANT SECRETARY

FOR PUBLIC AND INDIAN HOUSING

MEMORANDUM FOR: All Field Office Directors of Public Housing

Divisions

FROM: Joseph Shuldiner, Assistant Secretary

SUBJECT: Modifications to Public Housing Development Processing

Requirements

In order to expedite public housing development processing, the

following changes are in effect as of the date of this memorandum:

1.Appraisals. All appraisals will be performed by a State

certified appraiser selected by a Public Housing Agency (PHA) in

accordance with 24 CFR 85.36. The cost of such services are to

be charged to the project\'s development budget. Appraisals will

not be reviewed by a Field Office appraiser. If the value is

challenged by either the buyer or seller, the Field Office may

instruct the PHA to obtain a second appraisal using a different

State certified appraiser acceptable to the PHA and seller or the

Corps of Engineers. In-office reviews of appraisal documents

should consist of determining that the appraisal was performed by

a State certified appraiser and is acceptable to the parties,

which will be deemed sufficient to \"determine the appraised value

of the site or property\" as required by 24 CFR 941.405(b)(4).

The above is in lieu of the appraisal process set forth in HUD

Handbook 7417.1 REV-1 (Public Housing Development), paragraphs

7-95 through 7-99, the process for determining whether appraisals

are performed by staff as specified in paragraph 3-15, and the

review requirements specified at paragraph 8-63.

2.Historic Preservation. Field Offices are encouraged to implement

Memorandums of Agreement with State Historic Preservation Offices

(SHPO) to have \"acquisition of properties\" placed on the \"No

Effect\" list; thereby allowing completion of the environmental

review without SHPO consultation. Rehabilitation is to be

addressed after the property is purchased by the PHA, at which

time the SHPO consultation occurs for the rehabilitation, if

necessary. This process meets the requirements specified in

7417.1 REV-1 paragraph 3-93.

2

3.On-site Reviews. Eliminate on-site inspections of proposed properties

under the acquisition and rehabilitation development methods. The PHA

must submit interior and exterior photos, and information sufficient

for the Field Office to complete the environmental review. For

properties constructed or rehabilitated before 1978, the PHA must

furnish a certification that the property was tested for lead-based

paint; and, if appropriate, an estimate of the cost of abatement. The

PHA must also furnish a certification from a qualified architect,

rehabilitation specialist, or engineer that each dwelling is

structurally sound. (On-site inspections must continue to be made for

new construction.)

4.Condominiums, Cooperatives, and Properties Involving Homeowner

Associations. The PHA\'s attorney must certify that the

condominium/cooperative/homeowner association organizational documents

have been reviewed and (1) there are no conflicts with the Annual

Contributions Contract, (2) the units comply with State and local

laws, and (3) the issues addressed in paragraph 3-113 of Handbook

7417.1 REV-1 (Public Housing Development) have been addressed. With

such a certification, the requirements of paragraph 3-113 will be

satisfied.

5.Eliminate Construction Document Review. If the Field Office has

approved interim or preliminary design documents, obtain a

certification from the PHA as part of the certification required by

paragraph 10-25 of HB 7417.1 REV-1 that any Field Office changes noted

during the design document stage were incorporated into the

construction documents. The review of the design documents and the

PHA certification shall be deemed sufficient to meet the requirement

for construction document review specified in 24 CFR 941.502;

submission instructions in HB 7417.1 REV-1, paragraph 10-3 and

paragraphs 10-11 through 10-24; and review instructions in paragraphs

10-43, et seq.

6.Change Orders. In accordance with 24 CFR 941.503(b), the Field Office

may establish a \"threshold\" amount under which the Field Office would

not review and approve change orders, if the change order would not

result in a budget overrun or involve a major change in the scope of

work. The Field Office may establish similar thresholds for increases

in contracts with professionals (architects, engineers, development

managers, etc.), if appropriate.

7.Cost Analysis. Eliminate the preparation and review of form HUD 92264

(Rental Housing Project Income Analysis and Appraisal), FHA 2324 (Cost

Processing Work Sheet), and FHA 2326 (Project Cost Estimate). The

requirement for cost analysis (24 CFR 941.502) shall be deemed to have

been met

3

if the bid selected by the PHA (conventional), or the developer\'s

price (turnkey) does not result in a maximum total development cost in

excess of that approvable by the Field Office.

8.Demonstration of Financial Feasibility. The PHA shall certify that

the project, when completed, will be economically and efficiently

managed. Where possible, it shall also certify that operating

expenses will not exceed operating income for the first fiscal year of

operation. Where such certification cannot be provided due to

expenses exceeding income, the provisions of 24 CFR 941.404(g)

relating to operating subsidy apply.

If public housing development processing is the responsibility of the

Housing Division in your Office, this memorandum should be shared with
the

Housing Division Director.