U.S. Department of Housing and Urban Development

**Office of Public and Indian Housing**

**Notice**: PIH 2004-15

**Special Attention of**:

Public Housing Agencies;

All Public Housing Directors;

HUD Field Offices; HOPE VI

Coordinators

> **Issued: August 9, 2004**
>
> **Expires: August 31, 2005**
>
> **Cross References: Notices: PIH 2003-10 (HA),**

**SUBJECT:** Fiscal Year 2004 Capital Fund Grants Processing Notice

1.  **Purpose**: The purpose of the Notice is to provide public housing
    agencies (PHAs) with information and guidance on the Fiscal Year
    (FY) 2004 Capital Fund. This Notice also provides guidance on the
    Replacement Housing Factor (RHF) grants.

2.  **Appropriations**. President Bush signed the HUD Appropriations Act
    for FY 2004 on January 23, 2004. The Act provided \$2,712,255,000
    for the Capital Fund. A rescission provision in the Appropriations
    Act reduced that amount to 2,696,253,000.

The Act also contained a number of set-asides for items such as
technical assistance, emergencies and natural disasters, working capital
fund, and Neighborhood Networks. Note that Congress did not include a
set-aside for timely obligators in the FY 2004 Appropriations Act.[^1]
The sum total of these statutory set-asides is \$170,101,000. The
set-asides are identified in Table 1 on the following page.

A total of approximately \$2,526,152,000 is available for the Capital
Fund formula. An additional \$570,989 in recaptured funds is also
available for redistribution to Public Housing Assessment System (PHAS)
High Performers.

PHAs designated as High Performers under PHAS, will receive a 3 percent
bonus (24 CFR 905.10(j)), along with their share of the redistributed
recaptured funds (24 CFR 905.120(c)(3)).

The table below shows the appropriated amount, the Congressionally
mandated set-asides to be funded from the Capital Fund appropriation and
the amount of funds for redistribution as of July 15, 2004.

> **Table 1**

  ----------------------------------------------- -----------------------
  **Total Set-asides Adjusted by Rescission**     **\$ 170,101,000**

  ----------------------------------------------- -----------------------

3.  **Formula Calculation**. The Capital Fund formula regulation at 24
    CFR Section 905.10(f) gives the Department the authority to
    establish a date for reporting PHA building and unit data for the
    purpose of calculating the formula. Additionally,

> 24 CFR Section 905.10(f)(4) states as follows: ***"For developments
> losing units as a result of demolition and disposition, the number of
> units on which capital funding is based will be the number of units
> reported as eligible for capital funding as of the reporting date."***
>
> The FY 2004 Capital Fund formula was computed based on building and
> unit data under management in PIH Information Center (PIC) system
> (adjusted for demolition or disposition) as of **September 30, 2003**.

4.  **FY 2004 Capital Fund and Sanctions for Failure to Obligate in
    Accordance with the Statute.**

> Section 9(j) of the United States Housing Act of 1937, as amended,
> (the Act) and
>
> 24 CFR Section 905.120 provides sanctions for PHAs that do not
> obligate in a timely manner. Specifically, HUD is to withhold its next
> Capital Fund grant until the PHA obligates 90 percent of its past due
> FY 2002 grant. If the PHA cures its obligation failure to comply
> during the year, HUD will release the new Capital Fund grant, but HUD
> is to impose a penalty by reducing the grant 1/12 for every month the
> PHA was in noncompliance. Although this requirement was established in
> 1998, the Department was delayed in implementing this provision by
> other requirements in the FYs 2002 and 2003 HUD Appropriations Acts.
>
> The FY 2004 Appropriations Act does not contain the requirement to
> recapture Capital Fund grants that do not meet the [obligation
> deadline,]{.underline} which was in the
>
> FY 2002 and 2003 Appropriations Acts. As a result, the withholding,
> and penalty sanctions mentioned above will start with FY 2004 Capital
> Fund grants.

For example, in FY 2002 any PHA whose fiscal year began in January or
April was given an obligation start date not later than May 31, 2002.
The XYZ Housing Authority received a \$10,000 Capital Fund grant in FY
2002. The FY 2002 grant had an obligation start of May 31, 2002 and
obligation end date of May 30, 2004. The XYZ Housing Authority obligated
\$8,000 or 80 percent of the FY 2002 grant by May 30, 2004.

  ------------------------------- --------------- ------------------------
  **XYZ Housing Authority -- FY                   
  2002 Capital Fund**                             

                                  \$ Obligated    \% Obligated

  Grant Amt Obligated - \$10,000                  

  Obligation Start Date --                        
  5/31/02                                         

  Obligation End Date - 5/30/04   \$8,000         80%

  Compliance Date -- 7/30/04      \$9,000         90%
  ------------------------------- --------------- ------------------------

> The Housing Authority's FY 2004 Capital Fund grant of \$12,000 would
> be withheld until the Housing Authority was in compliance on its FY
> 2002 grant. On July 30, 2004, two months after the obligation deadline
> for the FY 2002 grant, the XYZ Housing Authority reported in LOCCS
> that it obligated an additional \$1,000 of the FY 2002 grant bringing
> the cumulative obligation for the FY 2002 grant to \$9,000 or 90
> percent of the grant.
>
> The FY 2002 Capital Fund grant is now in compliance with Section 9(j)
> of the Act. The Department can release the XYZ Housing Authority\'s FY
> 2004 Capital Grant. As a penalty for slow obligation of its Capital
> Fund, the Department awards the XYZ Housing Authority a \$10,000
> Capital Fund grant in FY 2004. Ten thousand dollars is the amount,
> which results, when you subtract \$2,000 (i.e., 2/12 of the grant)
> from \$12,000, the original amount of the FY 2004 grant.

5.  **Capital Fund Funding Sheets**. The Funding Sheets identify Capital
    Fund grants provided for FY 2004 including a formula grant, and
    where appropriate, first and/or a second increment RHF grants. In FY
    2004, PHAs will have a funding sheet for each grant.

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A.  [Formula Grant]{.underline}.

> The primary grant identified is the PHA's annual formula allocation.
> Components of the annual formula grant include:

(1) The Capital Fund formula grant,

(2) As applicable, the Public Housing Assessment System (PHAS) bonus of

3 percent for High Performers

(3) High Performers Redistribution[^2] of recaptured funds

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B.  [RHF Grant - First Increment]{.underline}.

> If the PHA is eligible for a first increment RHF grant, a separate
> Annual Contributions Contract (ACC) Amendment for the RHF grant will
> be provided.

C.  [RHF Grant - Second Increment]{.underline}.

> If the PHA is eligible for a second increment RHF grant, a separate
> Annual Contributions Contract (ACC) Amendment for the RHF grant will
> be provided. Public and Indian Housing's Office of Capital
> Improvements website has a listing of PHAs that are eligible to apply
> for second increment RHF grants in FY 2004. The website is found at:

**[http://www.hud.gov/offices/pih/programs/ph/capfund/index.cfm]{.underline}**

See paragraph 19 of this Notice for more information on RHF.

6.  **Data Errors.** Capital Fund grants are calculated based on data
    available at a certain point in time. HUD is not authorized by the
    FY 2004 Appropriations Act to make adjustments to prior year
    obligations with FY 2004 funds. As such, there will be no additional
    funding to correct data errors from prior year Capital Fund grants.
    This includes data errors in building/unit characteristics. PHAs are
    responsible to ensure that the data in the PIC system is accurate.

7.  **FY 2004 Funding Package.**

> In FY 2004 the Department **[will not mail]{.underline}** the PHAs'
> Capital Fund funding packages via U.S. mail. The FY 2004 funding
> package will be available electronically on HUD.gov. See the link
> address below:

**[http://www.hud.gov/offices/pih/programs/ph/capfund/index.cfm]{.underline}**

> The Department is also sending each PHA an e-mail (based on PHA
> addresses in the PIC system) with the link to this website.
>
> The PHA is to access the funding package via the internet and print
> it. The FY 2004 Capital Fund funding package will include the
> following: a letter to the executive director, a funding sheet for
> each grant, and an ACC Amendment for each grant.

8.  **FY 2005 Capital Fund Formula**. PHAs must update their PIC data no
    later than, September 30, 2004, in anticipation of calculating the
    FY 2005 Capital Fund.

9.  **Obligation and Expenditure Deadlines for FY 2004 Capital Fund
    Grants**. In FY 2004, HUD will make Capital Funds available to all
    PHAs at the same time and have a single commencement date for
    obligation and expenditure deadlines. This date will be reflected as
    the effective date on the ACC Amendment. The single commencement
    date enables PHAs to address unmet housing needs in a timely manner
    without delaying availability based upon the start of a PHA's fiscal
    year.

10. **Timetable for Submission of FY 2004 ACC Amendments to HUD**. The
    following timeline will be followed to establish a single
    commencement date for **ALL** PHAs. The date on which HUD approves
    the PHA Plan does not effect the "single commencement date" for the
    purposes of obligating its FY 2004 Capital Fund grant.

####### 

####### Table 2

+--------------------------------------------+-------------------------+
| ##                                         | ##                      |
|                                            |                         |
| ## Activity -- Formula and RHF Grants      | ## Action Date(s)       |
+--------------------------------------------+-------------------------+
| HUD e-mails PHAs link to FY 2004 Capital   | August 5, 2004          |
| Fund funding package at HUD.gov and posts  |                         |
| to HUD's website                           |                         |
+--------------------------------------------+-------------------------+
| Signed & dated ACC Amendments & amended    | No later than August    |
| PHA Annual Plan for FY 2004                | 26, 2004                |
| [received]{.underline} at HUD Field Office |                         |
+--------------------------------------------+-------------------------+
| Field Offices Execute ACC Amendments       | September 7, 2004       |
|                                            |                         |
| -   Funds Available for obligation and     | September 7, 2004       |
|     expenditure for ALL PHAs[^3]           |                         |
|     (obligation start date)                |                         |
+--------------------------------------------+-------------------------+
| Field Offices forward Data File and        | September 7, 2004       |
| Certification to Headquarters              |                         |
+--------------------------------------------+-------------------------+
| Headquarters forwards certification to CFO | September 21, 2004      |
| and obligates funds in PAS.                |                         |
+--------------------------------------------+-------------------------+
| Field Offices spread PHA's Budget Line     | September 21 -- October |
| Items (BLIs) in LOCCS                      | 4, 2004                 |
+--------------------------------------------+-------------------------+

11. **Capital Fund Approval Requirement.** The Act and the regulations,
    24 CFR Part 903, require that a PHA prepare an annual and a
    five-year PHA Plan. The PHA Plan must include a description of how
    the PHA proposes to use its Capital Funds including its RHF grant
    funds. The FY 2004 Capital Funds will be available to all PHAs that
    have an approved Capital Fund Five-Year Action Plan. The PHA can,
    therefore, obligate Capital Funds for any activity in its Capital
    Fund Five-Year Action Plan. In some instances, the PHA will have an
    approved Capital Fund Five-Year Action Plan but not an approved
    Annual PHA Plan for the current fiscal year. PHAs shall continue to
    work with their local Field Offices to get their Annual PHA Plan
    approved as required by 24 CFR Part 903.

The Line of Credit Control System (LOCCS) has been programmed to
automatically spread the budget among the BLIs referenced in Table 4 for
all PHAs with an executed ACC in accordance with the percentages
described in the following table. (See Table 4)

> **Table 4**

+-----------------------------------------------------------------------+
| BLIs Used to for Spread Entire Budget in                              |
|                                                                       |
| LOCCS -- All PHAs                                                     |
+-----------------------------------------------------------------------+
| []{.mark}                                                             |
|                                                                       |
| -   BLI 1408 Management Improvement --20% of the grant authorized     |
|     amount                                                            |
|                                                                       |
| -   BLI 1410 Administration --10% of the grant authorized amount      |
|                                                                       |
| -   BLI 0110 Initial Budget - input the remainder of grant authorized |
|     amount                                                            |
|                                                                       |
| > i.e., 70%                                                           |
+-----------------------------------------------------------------------+

BLI 0110 is an account established as a general location to put the
balance of the funding. When a PHA reports obligation and expenditures,
the items or activity must be entered into LOCCS using the appropriate
BLI (e.g., a signed contract for demolition of a portion of the
development is to be entered under BLI 1485 (Demolition) pursuant to the
Comprehensive Grant Guidebook, 7485.3). For PHA's that have an approved
FY 2004 Annual PHA Plan and budget, the Field Office can proceed to
spread he approved budget in the LOCCS Web. PHAs may exercise
fungibility between work items but will be required to reflect these
work items in their FY 2004 Annual Plan submissions.

Since the Department anticipates using this approach in future years,
PHAs should include as many work items in its 5-Year Action Plan as
necessary, so that they will be able to proceed fully on approved work
items when their Capital Fund grant is made available.

12. **Submission of the ACC Amendments.** PHAs must **[sign and
    date]{.underline}** three ACC Amendments for each grant and send
    them to the local HUD Field Offices. (See paragraph 7 for a
    discussion of the FY 2004 Capital Fund funding package.) The local
    HUD Field Offices [must receive]{.underline} the ACC Amendments
    along with the amended Annual Statement based on the actual Capital
    Fund grant no later than August 26, 2004.

> All HUD Field Offices (FOs) **must execute all FY 2004 Capital Fund
> ACC Amendments for formula grants**[^4] **on September 7, 2004.** The
> FY 2004 funds are available for obligation by the PHA on, September 7,
> 2004**,** which is the commencement date for obligation and
> expenditure for all PHAs. The obligation deadline for the FY 2004
> grants is September 6, 2006. The expenditure deadline for FY 2004
> formula grants is September 5, 2008.
>
> The Department will electronically obligate the FY 2004 Capital Funds
> through the Office of the Chief Financial Officer. [FOs are not to
> send copies of the ACC Amendment(s) to the Fort Worth Accounting
> Center]{.underline}. A copy of the properly **signed and dated**
> ACC(s) should be kept on file at the local Field Office. A copy of the
> properly **signed and dated** ACC Amendment(s) must be sent to the
> PHA.

13. **PHAs That Fail to Submit an ACC Amendment or Refuse the Capital
    Fund Grant(s).**

> If a PHA chooses [not to participate]{.underline} in the Capital Fund
> Program this fiscal year, the PHA is to advise its local HUD Field
> Office [in writing]{.underline} no later than August 26, 2004. Any
> PHA, regardless of its intent, that does not submit a signed and dated
> FY 2004 Capital Fund ACC by August 26, 2004 will not receive its FY
> 2004 Capital Fund grant. These funds are [not held]{.underline} for
> the PHA. To the extent provided by law, a PHA will still be eligible
> to receive Capital Funds in subsequent fiscal years following
> submission and approval of all required documents.

14. **Obligations Deadlines for FY 2002 and Extensions of Obligation
    Deadlines.**

> [Obligation deadline for FY 2002 grants]{.underline}. If your PHA,'s
> fiscal year began on
>
> January 1, or April 1, 2002, the obligation deadline for your FY 2002
> Capital Fund grant is 24 months from the execution date of the ACC by
> the Field Office but no PHA should have an obligation deadline date
> [later than]{.underline} May 30, 2004**.** If your PHA's fiscal year
> began on either July 1, or October 1, 2002, your PHA's obligation
> deadline is 24 months from the execution date of the ACC by the Field
> Office but no PHA should have an obligation deadline date [later
> than]{.underline} June 30, 2004 or September 30, 2004
> respectively.[^5] If your PHA fails to obligate 90 percent of your
> Capital Fund grant by the respective deadline, it will be in
> noncompliance with the Act and the regulations. However, the Act and
> the regulations allow your agency to continue to obligate those grant
> funds past the deadline. The regulations impose penalties for failure
> to meet the obligation deadlines. See paragraph 4 of this Notice for a
> discussion of penalties for failure to meet obligation deadlines.
>
> Note that some Moving to Work (MTW) PHAs are exempt from the Capital
> Fund obligation and expenditure deadlines during the term of their MTW
> Agreements. (See Attachment 1 of this Notice for more discussion on
> MTW participants.)
>
> [Requests for Extensions of the Obligation Deadline]{.underline}. Only
> the Secretary or Deputy Secretary can approve extensions of the
> obligation deadline for Capital Fund grants. Extensions of the
> obligation deadlines shall only be justified based on the criteria in
> Section 9(j) of the Act. Specifically, extensions may be granted if
> failure of the agency to obligate in a timely manner is attributable
> to the following:

-   Litigation;

-   Obtaining approvals of the Federal Government or a State or local
    government;

-   Complying with environmental assessment and abatement requirements;

-   Relocating residents;

-   An event beyond the control of the public housing agency; and

-   Any other reason established by the Secretary by Notice in the
    [*Federal Register*.]{.underline} (Note: HUD has not established
    other reasons under this authorization.)

> The Secretary or Deputy Secretary may extend the time period under
> 9(j)(1) of the Act for an additional period not to exceed 12 months,
> based on the following:

-   The size of the public housing agency;

-   The complexity of capital program of the public housing agency;

-   Any limitations on the ability of the public housing agency to
    obligate the amounts allocated for the agency from the Capital Fund
    in a timely manner as a result of State or local law; or

-   Such other factors as the Secretary determines to be relevant.

> All requests, **regardless of fiscal year**, for extensions of the
> deadlines must be received in Headquarters **[no later than 30 days
> prior to the obligation deadline]{.underline}** for the grant in
> question. Requests submitted after that date will be denied. Requests
> are to be submitted to William C. Thorson, Director, Office of Capital
> Improvements, 451 7^th^ Street SW, Room 4146, Washington, DC 20410. A
> copy of the extension request should be sent to the local Field Office
> as a reference. The PHA should fax the extension request to (202)
> 401-3997. All fax submissions must be followed by mailing a hard copy.

15. **Expenditures Deadlines for FY 2000 - Recaptures and Extensions**.

> [Expenditure Deadline for FY 2000]{.underline}. The expenditure
> deadline date for Capital Funds awarded in FY 2000 is September 30,
> 2004. If PHAs fail to fully expend the Capital Fund grants by the
> deadline, HUD will immediately recapture any funds not obligated by
> the deadline. [There is no provision in the Act to extend the
> expenditure deadline date, except where the Secretary or the Deputy
> Secretary has approved an extension of the obligation
> deadline]{.underline}.
>
> Note that some MTW PHAs are exempt from the Capital Fund obligation
> and expenditure deadlines during the term of their MTW Agreements.
> (See Attachment 1 of this Notice for more discussion on MTW
> participants.)

16. **Monthly Obligation and Expenditure Reporting**.

> PHAs must report cumulative obligation and expenditures monthly in the
> LOCCS for each open grant or grants that have not been audited. The
> Department uses LOCCS to monitor compliance with the obligation and
> expenditure deadlines. If a PHA is late reporting obligation and
> expenditure information, eLOCCS will prevent drawdowns for all grants
> in those program areas. Furthermore, failure to report accurately
> and/or in a timely manner will effectively delay the Department
> providing the PHA with its FY 2004 grant once the PHA is in compliance
> with its obligation and expenditure requirements. Appeals of sanctions
> (e.g., withholding, grant reduction or recapture) will not be
> entertained where a PHA failed to accurately and/or timely report on
> obligations and expenditures.

###### Limitations on Encumbering Public Housing Projects.

> Note that Section 7 of the ACC states that *"...the HA shall not in
> any way encumber any such project, or portion thereof, without the
> prior approval of HUD. In addition, the HA shall not pledge as
> collateral for a loan, the assets of any project covered under this
> ACC." Project is defined by the ACC to mean "public and Indian housing
> developed, acquired, or assisted by HUD under the Act, other than
> under section 8 of the Act, and the improvement of such housing. The
> term shall include all real and personal property, tangible and
> intangible, which is acquired or held by an HA in connection with a
> project covered under this ACC."* Furthermore, Section 30 of the Act
> authorizes only the Secretary of HUD, or his duly delegated
> representatives, to approve transactions authorized under Section 30.
>
> HUD has begun implementing the Capital Funds Financing Program, which
> typically involves PHAs borrowing funds through direct loans from
> banks or through bond transactions, with security being provided
> through a pledge of future year Capital Funds, subject to the
> availability of Congressional appropriations. Written HUD approval,
> from the Assistant Secretary for Public and Indian Housing, is
> required before PHAs may enter into such loan agreements or issue such
> bonds or otherwise encumber public housing projects (as defined above)
> or portions thereof, or pledge them as collateral. Failure to obtain
> written HUD approval may result in sanctions against PHA Executive
> Directors, employees or their Boards and could also result in
> ineligible costs and other sanctions. The Office of Capital
> Improvement is available to provide technical assistance and
> additional information to PHAs.

###### Emergency/Disaster Grants.

> In FY 2004, Congress appropriated \$40 million for grants for
> emergencies and natural disasters under the Capital Fund. The post
> rescission amount available for emergencies and natural disasters is
> \$39,764,000.
>
> The Department may only fund emergencies and/or natural disasters from
> funds made available by Congress in the Federal Fiscal Year in which
> that emergency or natural disaster occurs. For example, if a hurricane
> damages a public housing project, on May 1, 2003, HUD may provide
> funding only from FY 2003 Appropriations. All requests for funding for
> emergencies and natural disasters must be submitted within [90
> days]{.underline} of the incident occurring.
>
> Requests must be fully documented. An independent third party must
> prepare all damage estimates. A copy of the insurance report must also
> be provided.
>
> The Department approves funding for these grants in the order that
> applications are determined approvable. An incomplete application
> lacking documentation to support a request will be returned
> unapproved.

17. **Replacement Housing Factor (RHF) Grants.**

> **A. [General.]{.underline}**
>
> The Capital Fund formula rule at 24 CFR 905.10(i) provides that a PHA
> may receive RHF funding initially for a period of up to 5 years. A PHA
> may be given RHF funding if the PHA did not receive funding for public
> housing units under public housing development, Major Reconstruction
> of Obsolete Public Housing (MROP), HOPE VI or other programs that
> would otherwise provide replacement housing. RHF funding can only be
> used for replacement public housing.
>
> A PHA may request funding for an additional 5 years if it will be
> leveraging substantial additional funding from sources other than
> public housing funds. A PHA seeking the additional funding must also
> have received its first five years of funding, all required PHA Plans
> must have been approved, and the PHA must be in compliance with
> statutory obligation and expenditure deadlines**.** Section
> 905.10(i)(7) provides that RHF funds must be obligated:

-   within 24 months from the date that the funds become available, or

-   with specific HUD approval, 24 months from the date the PHA
    accumulates adequate funds to undertake replacement housing.

> All replacement housing must be undertaken in accordance with the
> public housing development regulations found at 24 CFR Part 941. All
> PHAs[^6] must (1) submit an RHF Plan, (2) submit a development
> proposal as described below and (3) proceed in accordance with their
> plan upon receiving the 5th year of funding. If the PHA requests an
> additional 5 years of funding, it must proceed with the development of
> the first 5-year increment and submit a plan for a second, discrete,
> development based on the second increment of funding provided in years
> 6 through 10.
>
> In submitting its development proposal[^7] pursuant to 24 CFR Part
> 941, PHAs must comply with Section 9(g)(3) of the Act. Section 9(g)(3)
> provides that a PHA may not construct any new units if the
> construction would result in a net increase from the number of public
> housing units owned, assisted or operated by the PHA on October 1,
> 1999, including any public housing units demolished as a part of any
> revitalization effort. This provision does not apply to the
> development of additional public housing through the acquisition (with
> or without rehabilitation) of units from the open market.
>
> The PHA may construct new units in excess of the number of units in
> its inventory on October 1, 1999, but will not be eligible for
> additional funding under the Capital or Operating Fund formulas. The
> PHA may also construct new units in excess of the number of units in
> its inventory on October 1, 1999, if the units are part of a
> mixed-finance project or otherwise leverage significant additional
> private or public investments and the estimated cost of the useful
> life of the project is less than the estimated cost of providing
> tenant-based assistance under Section 8(o) of the Act for the same
> period.
>
> Field Offices will be responsible for reviewing each development
> proposal, in accordance with Section 9(g)(3). The Public Housing
> Information Center (PIC) is being modified to provide data elements to
> reflect these requirements. Field Offices will be responsible for
> ensuring that PIC contains the appropriate data for each development
> proposal approved that is to be excluded from the Capital or Operating
> Fund formula.
>
> **B. [RHF Grants Calculation Methodology]{.underline}**.
>
> The amount of RHF funding a PHA receives each year is based on a
> number of factors including the:
>
> 1\. number of units removed from the inventory;
>
> 2\. project(s) associated with the removed units;
>
> 3\. number of years the PHA has been receiving RHF funding.
>
> Removing units from multiple projects in the inventory over time adds
> layers to the calculation. The following is a table giving an example
> for a hypothetical PHA receiving RHF. Table 5 shows project
> distribution on an annual basis. In Table 5, "1-1" signifies that the
> project is receiving the first year of 1^st^ increment funding; "1-2"
> signifies that the project is receiving funding for the second year of
> the first increment and so on.
>
> **Table 5 - RHF Funding- by Project**
>
> **First Increment Only**

  ---------------------- --------- --------- --------- ---------- ----------
  Project Name           1998      1999      2000      2001       2002

  Project A              1-1       1-2       1-3       1-4        1-5

  Project B                        1-1       1-2       1-3        1-4

  Project C                                  1-1       1-2        1-3
  ---------------------- --------- --------- --------- ---------- ----------

> In the Table 5 above, as of FY 2002 Project A has received 5 years of
> first increment RHF funding (1-5); Project B has received 4 years of
> first increment funding (1-4); and Project C has received 3 years of
> first increment funding (1-3). Using the table above, the first
> increment RHF grant for the PHA in Fiscal Year 2002 was a combined
> total of RHF funds for the three developments, Projects A+ Project B+
> Project C as identified in the last column.
>
> Table 6 below shows the combined effect of both first and second
> increments. Project D qualifies for second increment funding in FY
> 2003 and Project E qualifies for second increment funding in FY 2004.
> Project F was not approved for second increment funding. Also note
> that in FY 2003 and FY 2004 the PHA could be receiving two RHF grants,
> a first increment grant of \$600 for Projects E and F and a second
> increment grant of \$500 for Project D. In FY 2005, the second
> increment grant will be \$730; a combination of the RHF amounts for
> Projects D and E. The PHA will not have a first increment grant in FY
> 2005
>
> **Table 6 - RHF Funding-Multiple Tiers by Project for AJAX PHA**
>
> **First and Second Increment**

+---------------------+----+----+----+----+-----+----+-----+------+
| Project Name        | 19 | 19 | 20 | 20 | 2   | 20 | 2   | 2005 |
|                     | 98 | 99 | 00 | 01 | 002 | 03 | 004 |      |
+---------------------+----+----+----+----+-----+----+-----+------+
| Project D           | *  | *  | *  | *  | *   | 2  | 2-2 | 2-3  |
|                     | *1 | *1 | *1 | *1 | *1- | -1 | \$  |      |
|                     | -1 | -2 | -3 | -4 | 5** |    | 500 | \    |
|                     | ** | ** | ** | ** |     | \  |     | $525 |
|                     |    |    |    |    | **\ | $5 |     |      |
|                     | *  | *  | ** | *  | $58 | 00 |     |      |
|                     | *\ | *\ | \$ | *\ | 0** |    |     |      |
|                     | $5 | $5 | 5  | $5 |     |    |     |      |
|                     | 00 | 00 | 25 | 50 |     |    |     |      |
|                     | ** | ** | ** | ** |     |    |     |      |
+---------------------+----+----+----+----+-----+----+-----+------+
| Project E           |    | *  | *  | *  | *   | *  | 2-1 | 2-2  |
|                     |    | *1 | *1 | *1 | *1- | *1 |     |      |
|                     |    | -1 | -2 | -3 | 4** | -5 | \$  | \    |
|                     |    | ** | ** | ** |     | ** | 200 | $205 |
|                     |    |    |    |    | **\ |    |     |      |
|                     |    | *  | *  | *  | $30 | *  |     |      |
|                     |    | *\ | *\ | *\ | 0** | *\ |     |      |
|                     |    | $2 | $2 | $2 |     | $3 |     |      |
|                     |    | 00 | 10 | 40 |     | 75 |     |      |
|                     |    | ** | ** | ** |     | ** |     |      |
+---------------------+----+----+----+----+-----+----+-----+------+
| Project F           |    |    | *  | *  | *   | *  | *   |      |
|                     |    |    | *1 | *1 | *1- | *1 | *1- |      |
|                     |    |    | -1 | -2 | 3** | -4 | 5** |      |
|                     |    |    | ** | ** |     | ** |     |      |
|                     |    |    |    |    | **\ |    | **\ |      |
|                     |    |    | *  | *  | $12 | *  | $10 |      |
|                     |    |    | *\ | *\ | 5** | *\ | 0** |      |
|                     |    |    | $1 | $1 |     | $2 |     |      |
|                     |    |    | 00 | 10 |     | 25 |     |      |
|                     |    |    | ** | ** |     | ** |     |      |
+---------------------+----+----+----+----+-----+----+-----+------+
| Subtotal - 1^st^    | *  | *  | *  | *  | **  | *  | **\ | \$0  |
| Increment Grant     | *\ | *\ | *\ | *\ | \$1 | *\ | $10 |      |
|                     | $5 | $7 | $8 | $9 | ,00 | $6 | 0** |      |
|                     | 00 | 00 | 35 | 00 | 5** | 00 |     |      |
|                     | ** | ** | ** | ** |     | ** |     |      |
+---------------------+----+----+----+----+-----+----+-----+------+
| Subtotal - 2^nd^    | 0  | 0  | 0  | 0  | 0   | \  | \$  | \    |
| Increment Grant     |    |    |    |    |     | $5 | 700 | $730 |
|                     |    |    |    |    |     | 00 |     |      |
+---------------------+----+----+----+----+-----+----+-----+------+
| Total RHF Funding   |    |    |    |    |     | \$ | \$  | \    |
|                     |    |    |    |    |     | 11 | 800 | $730 |
|                     |    |    |    |    |     | 00 |     |      |
+---------------------+----+----+----+----+-----+----+-----+------+

> The shaded portion of the table identifies all of the PHA's first
> increment grants. These should be included in the PHA's RHF Plan for
> the first increment. In the example below, as the result of having
> multiple projects receiving RHF funding in different years the first
> increment spans from FYs 1998 -2004. The non-shaded portion of the
> table FY 2003-2005 is all of the PHA's second increment grants that
> should be included in the RHF Plan for the second increment.
>
> A table showing each PHAs RHF calculation for FY 2003 and FY 2004 is
> available electronically on HUD.gov internet. Public and Indian
> Housing's Office of Capital Improvements Web site can be found at:
>
> **[http://www.hud.gov/offices/pih/programs/ph/capfund/index.cfm]{.underline}**
>
> **C. RHF Plans.**
>
> An RHF Plan is a description of the steps that a PHA will carry out to
> provide replacement housing. A PHA must submit a separate RHF Plan for
> the first and the second increment of funding as illustrated in Table
> 6. RHF Plans must contain the following information:

1)  **[A Brief Description.]{.underline}**

> In some instances a PHA will propose developing more than one new
> project with its first or second increment funds. As a result, the RHF
> Plan should contain a description and schedule for each new proposed
> project. Also note that descriptions of the PHA's proposals to use RHF
> funds should be contained in the PHA Plan. At a minimum the
> description shall include:

a.  The total units to be developed,

b.  The development method (e.g., new construction, acquisition with or
    without rehabilitation), and

c.  Structure type (single family, row, walk-up, etc.).

```{=html}
<!-- -->
```
2)  **[Schedule]{.underline}**. A schedule of major development
    milestones (e.g., hire the architect, prepare plans and
    specifications, etc.), through and including the date the PHA plans
    to submit its development proposal to the HUD Field Office, and the
    Date of Full Availability (DOFA). The latest date that a PHA can
    submit a development proposal for a PHA's first 5 years of RHF
    funding is 90 days after execution of the ACC by the HUD Field
    Office, or the due date of the PHA's Annual Plan for that year (the
    5^th^ year), whichever is later. The latest date that a PHA can
    submit a development proposal, for the second 5-year increment of
    RHF funding, is 90 days after execution of the ACC by the HUD Field
    Office, or the due date of the PHA's Annual Plan for the 7^th^ year,
    whichever is later. However, a PHA may submit a development plan
    earlier.

> Where a PHA is receiving RHF funds because of the demolition or
> disposition of more than one project, the RHF Plans (both first and
> second increments) must cover all the RHF grants for all of the
> projects. A PHA may be able to develop more than one development with
> the accumulation of funds from an increment. In some instances a PHA
> may want to combine the RHF funds from one or two projects to fund one
> new development and use the remainder of the RHF funds from other
> projects to fund a second new development. The PHA will need a
> schedule in the RHF Plan that includes the milestones described in the
> preceding paragraph for each new project being developed. The deadline
> for submission of the development proposal for each new project is the
> due date of the PHA Plan for the fifth year for the project that has
> been receiving RHF grants the longest. For example in Table 7 below,
> if the PHA elects to develop a replacement project with the grant
> funds from Projects AA and BB, the development proposal for the first
> increment would be due in FY 2002, the fifth year of the first
> increment for Project AA. Project AA has been receiving RHF funding
> longer than Project BB. If the PHA proposes a second new development
> using first increment RHF grants from Projects CC and DD, the
> development proposal for the second new project is due FY 2004, the
> fifth year of RHF funding for project CC. Between the two projects
> receiving RHF funds to be used for the second new project, Project CC
> has been receiving RHF funding longer than Project DD.

######### Table 7 

  ------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
  **Project**   **1998**   **1999**   **2000**   **2001**   **2002**   **2003**   **2004**   **2005**   **2006**   **2007**   **2008**

  **AA**        1-1        1-2        1-3        1-4        **1-5**    2-1        2-2        2-3        2-4        2-5        

  **BB**                   1-1        1-2        1-3        1-4        1-5        2-1        2-2        2-3        2-4        2-5

  **CC**                              1-1        1-2        1-3        1-4        **1-5**    2-1        2-2        2-3        2-4

  **DD**                                         1-1        1-2        1-3        1-4        1-5        2-1        2-1        2-3
  ------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

3)  [Amount and Sources of Funding]{.underline}. The RHF Plan must
    include information describing the amount and sources of funding for
    the replacement housing. The PHA must analyze the cost of the
    proposed housing against the Total Development Cost (TDC) limits.

4)  [Leveraging for 2^nd^ Increment Plans]{.underline}. In accordance
    with HUD regulations at 24 CFR 905.10(i)(2)(ii), as a prior
    condition of a PHA's receipt of the second increment of RHF funding,
    a PHA must obtain a firm commitment of substantial additional funds,
    other than public housing funds, for replacement housing, as
    determined by HUD.

> A PHA must document the resources it proposes to use as leverage,
> including the name of the organization providing the resource, the
> dollar value of the proposed resource, and the proposed use. PHAs must
> use funds other than public housing funds for leveraging. Examples
> include: Community Development Block Grant (CDBG) funds, tax credits,
> State or local grants, private mortgage-secured loans and other debt,
> donations and contributions, and housing trust funds.
>
> In addition, leveraging may include funds borrowed by the PHA through
> such sources as bank loans and bond issuances that are to be repaid
> with RHF funds. When borrowing funds, PHAs may pledge up to 100
> percent of the RHF funds towards payment of debt service. (For
> reference, HUD has typically permitted PHAs to pledge up to one-third
> of their annual Capital Fund grants for financing.) Headquarters must
> approve any pledge of RHF funds or other Capital Funds by a PHA.
>
> *[Definition of Substantial Additional Funds]{.underline}. As stated
> above, a PHA's RHF Plan must demonstrate "substantial leveraging".
> This standard is met where a PHA leverages an amount of non-public
> housing funds at least equal to one-third of the total RHF funds in
> the first 5-year increment. For example, a PHA receiving \$105,000 in
> RHF funding in each of the first 5 years, would have received a total
> of \$525,000 in RHF funds. One-third of \$525,000 is \$175,000.
> Therefore, the PHA must leverage funding from non-public housing
> sources totaling at least \$175,000 to qualify for a second 5-year
> increment of RHF funds.*
>
> *Firm Financial Commitment. For each resource you list, you must
> provide a commitment document, such as a letter, memorandum of
> understanding, agreement to participate, city council resolution, or
> other evidence of the resource to be committed as part of your RHF
> Plan. The commitment cannot be condition on anything other than the
> receipt of the RHF grant. An official of the organization legally
> authorized to make commitments on behalf of the organization must sign
> the commitment document.*

5)  [PHA Plan and Obligation/Expenditure Status for 2^nd^ Increment
    Plans]{.underline}. Second Increment RHF plans must include a
    statement addressing: (1) the approval status of the 5-year PHA Plan
    and all annual plans (FY 1998 -- FY 2004), and (2) compliance with
    obligation and expenditure deadlines in FY's 1998-2003.

> **D. RHF Plan Submission**.

1)  **[First RHF Funding Received in FY 2004]{.underline}**. PHAs
    receiving their first RHF grants in FY 2004, must submit their RHF
    Plan to the HUD Field Office by October 21, 2004. Field Offices are
    to review and approve or disapprove the RHF Plans within 30 days.

2)  **[First RHF Second Increment Plan Beginning in FY
    2004]{.underline}**. PHAs that began receiving RHF funding for the
    first time in FY 1999, may be eligible for a second increment
    beginning in FY 2004. In order to request a second increment, those
    PHAs must submit a Second Increment RHF Plan as outlined in
    paragraph 19(C).

> The Second Increment RHF Plan must be received by the HUD Field Office
> no later than October 21, 2004. If no RHF Plan is received or the Plan
> is received after the deadline, it will be deemed ineligible. Field
> Offices are to review and approve or disapprove these plans within 30
> days of the application deadline. Field Offices are to notify the
> Office of Capital Improvements in Headquarters within 45 days of the
> application deadline of PHAs with approved second increment RHF Plans.
>
> Beginning in FY 2005 and there after, any PHA that is eligible for a
> second increment during in a particular fiscal year must submit an RHF
> Plan to the Field Office no later than October 1 of the fiscal year in
> which they become eligible. For example, a PHA that becomes eligible
> for a second increment of RHF funding for the first time in FY 2005,
> must submit an RHF Second Increment Plan to the HUD Field Office by
> October 1, 2004. If a PHA is eligible for second increment of RHF in
> FY 2006, the RHF Plan must be received by October 1, 2005.

3)  **[Modifications to Previously Approved RHF Plans]{.underline}.**
    Modifications to first or second increment RHF Plans that were
    previously approved must be submitted to the local HUD Field Office
    by October 21, 2004. Field Offices have 30 days to review and
    approve or disapprove of the PHA's RHF Plan.

4)  **[Approval/Disapproval]{.underline}.** HUD will review plans to
    determine if they meet the requirements of paragraph C above. If the
    Field Office finds that the RHF Plan meets the requirements of
    paragraph C above, the Field Office approves the Plan. If not,
    approved, the Field Office notifies the PHA of its deficiencies. PHA
    revision must be received within 60 days. If the RHF Plan is still
    not approvable, the obligation start date is 24 months from the date
    funds were made available for each year of the RHF funding. (See
    paragraph E below for more details.)

> **E.** **Obligation and Expenditure Commencement Dates.**
>
> For both the first and second increments, if a PHA fails to submit a
> RHF Plan as described in paragraphs C and D, the obligation start date
> of the RHF grant will automatically be 24 months from the date that
> the funds became available for each year of RHF funding. If the RHF
> Plan is submitted and approved as required, the obligation and
> expenditure start dates will be established 30 days from the date the
> PHA proposed to submit its development proposal to the local HUD Field
> Office. The obligation start date is the basis for establishing the
> statutory obligation and expenditure deadlines.
>
> For PHAs only developing the first 5-year increment, all funds must be
> obligated within 2 years and expended within 4 years from the start
> date established in their HUD approved RHF Plan. If the PHA fails to
> meet the 2-year obligation deadline for the development funded from
> the first 5-year increment, the PHA will receive no further RHF
> funding for the second increment, and any grants provided for the
> second increment will be recaptured. For PHAs requesting a second
> increment of RHF funding, HUD will require as a condition for
> receiving grants in years 6-10, notwithstanding any other requirement
> of this Notice, that all funding (increments one and two) be fully
> expended by the end of the 10^th^ year of funding.

18. **Regulatory Requirements.** HUD plans to issue a Capital Fund
    Program regulation in the near future. Until a final rule is
    published, PHAs should proceed in accordance with 24 CFR Part 968
    for modernization activities, except where statutory requirements
    prevail (e.g., amendments to the Act and various HUD FY
    Appropriations Acts). For example, PHAs must comply with 24-month
    obligation and 48-month expenditure requirements of section 9(j) of
    the Act and 24 CFR 905.120. In addition, all development activities
    must be processed in accordance with 24 CFR Part 941, which requires
    the submission of a Development Proposal (§941.304) and a Site
    Proposal (§941.303).

19. **Paperwork Reduction.** The information collection requirements
    contained in this notice have been approved by the Office of
    Management and Budget (OMB) under the Paperwork Reduction Act of
    1995 (44 U.S.C. 3501-3520) and assigned OMB control numbers
    2577-0226 and 2577-0033. In accordance with the Paperwork Reduction
    Act, HUD may not conduct or sponsor, and a person is not required to
    respond to, a collection of information unless the collection
    displays a currently valid OMB control number.

20. **Office of Capital Improvements Web Site and Important Dates.**

> To enhance communication with the public housing agencies the Office
> of Capital Improvements has established a web site on the HUD.gov
> internet site. Please check the website to ensure that you have
> received the latest communications. The Public and Indian Housing's
> Office of Capital Improvements Web site can be found at:

**[http://www.hud.gov/offices/pih/programs/ph/capfund/index.cfm]{.underline}**

> To enable the Office to send messages via e-mail and direct mailing,
> PHAs must be responsible for maintaining an up-to-date e-mail address
> and mailing address in the PIC system.

**Attachment 1**

**Guidance for Moving to Work (MTW) Participants**:

The guidance in this Notice may not be applicable for some PHAs
currently participating in the Moving to Work (MTW) Demonstration. MTW
participants must consider the specific terms of their MTW Agreements
regarding the following as it applies to their FY 2004 Capital Fund
grant(s).

# Obligation and Expenditure Deadlines

MTW participants whose MTW Agreement [does not waive]{.underline} them
from the obligation and expenditure requirements must comply with the
provisions of section 9(j) of the Act and 24 CFR Section 905.120. PHAs
that fail to comply with the obligation and expenditure deadlines as
stated in the statute and regulations will incur penalties, which are
described in paragraphs 4, 13,14 and 15 of the Notice. However, MTW
participants whose Agreement provides a waiver of the obligation and
expenditure deadlines are exempt from these requirements. Please take
note of the applicability of the obligation and expenditure deadlines
throughout this Notice.

# Eligibility for 3 Percent PHAS Bonus

There are currently eleven PHAs with MTW Agreements that exempt the PHAs
from the Public Housing Assessment System (PHAS) but requires that they
be entitled to any and all incentives, including bonus points which may
be applicable to competitive proposals. As a result, these eleven MTW
PHAs will automatically receive the 3 percent PHAS bonus in the FY 2004
Capital Fund. All other MTW participants will be eligible for the 3
percent PHAS bonus only if they are designated as a "High Performer".

# Relationship to PHA Plan Requirement

PHAs with MTW Agreements that exempt the PHAs from the annual and
five-year PHA Plan and instead require an MTW Annual Plan, are eligible
for FY 2004 Capital Funds. These PHAs [are not required to have a
Capital Fund five-year action plan]{.underline}, but can obligate
Capital Funds for any activity in its MTW Annual Plan. All other MTW
participants must meet the requirements of paragraph 11 of this Notice.

# 

# Replacement Housing Factor Funds

According to paragraph 19(D), PHAs that receive their RHF grants in FY
2004, and PHAs making modifications to previously approved first and/or
second increment RHF Plans must submit their RHF Plans to the local HUD
Field Office by October 21, 2004. See paragraph 19(C) of the Notice for
a description of the contents of first and second increment RHF Plans.

A PHA that has received 5 years of RHF grants is eligible to receive a
second increment of RHF Funding. As the Notice specifies, to receive
second increment RHF funding a PHA must meet certain requirements for
planning, leveraging, and compliance with obligation and expenditure
deadlines. The PHA must submit a RHF Plan for the second 5-Year
Increment to HUD Field Office by October 21, 2004. The RHF Plans must
detail how the PHA meets the three requirements (See paragraph 19(a))
for continued RHF Funding in addition to other information.

The attached chart details how each category of MTW PHA can satisfy each
of the three requirements to continue to receive RHF Funding. If a PHA
is an MTW Plan and Report Agency (2^nd^ column), for the first five-year
increment of RHF Funding, the PHA need not submit an RHF Plan, but must
meet and report obligation and expenditure deadlines in required MTW
Plans and Reports, and, [make a request in writing for continued
funding]{.underline}. The same PHA, for a second five-year increment of
RHF Funding, must follow the same procedures, but must, in addition,
demonstrate leveraged funding for the second increment, equivalent to
one-third of the total RHF Funding received during the first increment,
and make a letter request for a second five-year increment of RHF
Funding.

If a PHA is exempt from one or more of the required components by
provisions of the PHA's MTW agreement, the PHA should request the
continued RHF Funding in writing to the U.S. Department of Housing and
Urban Development, Office of Capital Improvements, 451 Seventh Street,
SW, Washington, Room 4146, DC 20410, with a copy to the HUD Field
Office. The letter should detail how the PHA fulfills each of the three
requirements, or how and why the PHA is exempt from meeting particular
requirements of the Notice. This letter request should be submitted to
the Office of Capital Improvements by October 21, 2004.

If you have any questions, please contact Mr. William C. Thorson,
Director, Office of Capital Improvements at 202-708-1640 extension 4999.

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

Michael Liu, Assistant Secretary

For Public and Indian Housing

![](media/image1.png){width="7.285416666666666in"
height="8.694444444444445in"}

######## Attachment 2

#### Highlights of Important Dates 

+-----------------------------------------+-----------+----------------+
| **Action(s)**                           | **Si      | ##### Cita     |
|                                         | gnificant | tion in Notice |
|                                         | Date(s)** |                |
+-----------------------------------------+-----------+----------------+
| ##### Expenditure                       | 9/30/04   | Page 8,        |
| Deadline -- FY 2000 Capital Fund Grants |           | paragraph 15   |
+-----------------------------------------+-----------+----------------+
| # FY 2004 Capital Fu                    | 8/05/04   | Page 4,        |
| nd Funding Packages on HUD.gov internet |           | paragraph 7    |
+-----------------------------------------+-----------+----------------+
| 1.  Signed & dated ACC amendments &     | No later  | Page 5, Table  |
|     amended PHA Annual Plan for FY 2004 | Than      | 2 &            |
|     received at FO                      |           |                |
|                                         | 8/26/04   | Page 6         |
|                                         |           | paragraph 12   |
+-----------------------------------------+-----------+----------------+
| 2.  PHAs Refusing Capital Fund or RHF   | No later  | Page 7,        |
|     Grants Notify FOs                   | Than      | paragraph 13   |
|                                         |           |                |
|                                         | 8/26/04   |                |
+-----------------------------------------+-----------+----------------+
| 3.  FOs Execute FY 2004 ACC amendments  | > 9/7/04  | Page 5, Table  |
|                                         |           | 2 &            |
|                                         |           |                |
|                                         |           | Page 6         |
|                                         |           | paragraph 12   |
+-----------------------------------------+-----------+----------------+
| 4.  Obligation and Expenditure Start    | > 9/7/04  | Page 4         |
|     Date for FY 2004 Grants             |           | paragraph 7 &  |
|                                         |           |                |
|                                         |           | Page 6         |
|                                         |           | paragraph 12   |
+-----------------------------------------+-----------+----------------+
| 5.  FOs send obligation data file &     | > 9/7/04  | > Page 5,      |
|     certification to Headquarters       |           | > Table 2      |
+-----------------------------------------+-----------+----------------+
| 6.  CFO Obligates FY 2004 CF Grants     | > 9/21/04 | > Page 5,      |
|                                         |           | > Table 2      |
+-----------------------------------------+-----------+----------------+
| 7.  FOs Spread BLIs for FY 2004 CF      | 9/21      | > Page 5,      |
|     Grants                              | -10/04/04 | > Table 2      |
+-----------------------------------------+-----------+----------------+
| 8.  FY 2002 Obligation End Dates        | Varied    | Page 7,        |
|                                         |           | paragraph 14   |
+-----------------------------------------+-----------+----------------+
| 9.  Request for Secretarial or DAS      | 30 days   | Page 7,        |
|     Extension of Obligation for FY 2002 | prior to  | paragraph 14   |
|     Grants                              | o         |                |
|                                         | bligation |                |
|                                         | end date  |                |
+-----------------------------------------+-----------+----------------+
| 10. PHA Deadline to Update PIC for FY   | 9/30/04   | Page 5,        |
|     2005 Capital Fund Formula           |           | paragraph 8    |
+-----------------------------------------+-----------+----------------+
| 11. PHAs Submit RHF Plans & FO Approval | 10/21/04  | Page 15,       |
|                                         |           | paragraph D    |
| ```{=html}                              | 10/21/04  |                |
| <!-- -->                                |           | Attachment 1   |
| ```                                     | 11/21/04  |                |
| a.  PHA submit RHF Plans (1^st^ & 2^nd^ |           | Page 15,       |
|     increment) and Modifications to     |           | paragraph D    |
|     previously approved RHF Plans - 45  |           |                |
|     days after 9/6/04 ;                 |           |                |
|                                         |           |                |
| b.  MTWs send Letter on RHF to          |           |                |
|     Headquarters                        |           |                |
|                                         |           |                |
| c.  FO review in 30 days                |           |                |
+-----------------------------------------+-----------+----------------+

[^1]: In FY 2002 and FY 2003 Congress included in the respective
    Appropriations Acts a set-aside for PHAs that obligated Capital
    Funds in a timely manner for specific fiscal years.

[^2]: Section 9(j)(3)(C) of the Act includes a requirement to assign
    amounts not allocated (due to obligation failures) to PHAs that are
    designated as High Performers under section 6(j) of the Act (PHAS).

[^3]: See paragraph 19 of this Notice for a discussion on obligation
    start dates of RHF grants.

[^4]: The start dates for a RHF grants are described in paragraph 19 of
    this Notice.

[^5]: As identified in the April 12, 2002, executive director letter,
    the obligation start dates for PHAs with fiscal year beginning
    January 2002 and April 2002 was the execution date of the ACC by the
    Field Office but not later than May 31, 2002. The obligation start
    dates for PHAs with fiscal year beginning July 2002 and October 2002
    was the execution date of the ACC by the Field Office but not later
    than July 1, 2002 or October 1, 2002 respectively.

[^6]: Specific guidance on the applicability of the RHF Plan to Moving
    to Work participants is provided in Attachment 1 of this Notice.

[^7]: A development proposal is separate and distinct from a PHA Plan
    required under 24 CFR Part 903 or a RHF Plan required by this
    Notice. Submission of a development proposal to the Field Office for
    approval is a required any time a PHA proposes to build or acquire
    new public housing units to add to the inventory.