CHAPTER 3. APPLICATION PROCESSING

\* 3-1. INTRODUCTION. This Chapter sets forth the application

process for PHAs and HUD field staff. Regional and Field

Offices shall use the CIAP Application Processing System

(CAPS), a HUD microcomputer system, to process CIAP

applications.

3-2. FUND ASSIGNMENT. On the basis of an assignment plan

approved by the Secretary, the Assistant Secretary for

Public and Indian Housing assigns CIAP funds to the Regional

Offices on Form HUD-185, Regional Fund Assignment, for

subassignment to the Field Offices on Form HUD-185.1,

Regional Fund Subassignment.

a\. After the Regional Office sets aside the amount assigned

for non-Indian, large Troubled PHAs and for which the

Regional Administrator has funding decision authority,

the Regional Office shall immediately subassign the

remaining amounts for which the Field Office Manager or

Regional Administrator in co-located offices has funding

decision authority.

b\. After the Regional Administrator makes the funding

decisions for the Troubled PHAs, the Regional Office

shall subassign these funds to the Field Offices to

complete the fund reservation process.

c\. Any funds remaining after the funding decisions are made

for the Troubled PHAs also shall be subassigned to the

Field Offices either on a fair share basis if there are

sufficient funds or, if there are insufficient funds, to

fund the next highest ranked projects, based on a

consolidated Regional ranking of projects produced from

merging the Field Office rankings. See paragraph 3-23.

d\. The Field Office is responsible for controlling the

obligation of budget authority to ensure that the

subassigned amounts are not exceeded. See paragraph

4-2. \*

3-3. NOTIFICATION OF FUND AVAILABILITY. When CIAP funds become

available, Headquarters shall notify in writing all PHAs as

to the amount of available funds, the requirements and time

frame for submission of the CIAP Application, and other

pertinent information.

3-4. CONSULTATION.

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\* a. With HUD. Before preparing the CIAP Application, the

PHA should contact the Field Office to discuss its

modernization needs and obtain information on HUD

policies and procedures. See paragraph 3-19c for

up-front funding of planning costs for financially

distressed PHAs.

b\. With Residents/Homebuyers. Before submitting its CIAP

Application, the PHA shall consult with residents/

homebuyers, as required in Chapter 5.

c\. With Local Officials. Before submitting its CIAP

Application, the PHA shall consult with appropriate

local officials regarding whether the proposed

modernization, excluding emergency, is financially

feasible and will result in long-term physical and

social viability at the project, assuming timely

maintenance and replacements. The PHA shall request

comments on how the proposed modernization may be

coordinated with any local plans for neighborhood

revitalization, economic development, drug elimination,

and expenditure of local funds, such as Community

Development Block Grant (CDBG) funds. In addition, the

PHA shall contact the local Health Department to request

information on whether any child under seven years old

living in a PHA-owned unit has been identified as having

an elevated blood lead (EBL) level.

3-5. COMPREHENSIVE PLAN FOR MODERNIZATION (CPM). In order

for a non-Indian PHA with 500 or more units in

management to be eligible to submit a CIAP Application

for other than emergencies, the PHA shall have an

approved CPM in accordance with Appendix 22. Before

developing its CIAP Application, the PHA shall review

its approved CPM. Where the CPM requires updating due

to prior funding, changed conditions, or other

circumstances, the PHA shall update the CPM and submit

the updated CPM, preferably with its CIAP Application,

but no later than the end of the Joint Review period.

The Field Office shall not continue processing a CIAP

Application which is not consistent with the approved

CPM after the Joint Review period (see paragraph 3-7b).

Non-Indian PHAs with under 500 units and IHAs are

considered to meet planning requirements by submitting

Form HUD-52824, Five-Year Funding Request Plan, as part

of the CIAP Application (see paragraph 3-6a). The CPM

includes the following:

a\. General Statement of Physical and Management Needs. A

general statement of current physical and management \*

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\* needs for each project in the PHA\'s inventory. For

physical needs, it is not necessary to conduct a

detailed, comprehensive needs assessment against the

mandatory standards, using Form HUD-52827, Physical

Needs Assessment; such detailed needs assessment is not

required until Joint Review. For management needs, the

assessment shall be against the criteria in paragraph

2-3b and may be both project specific and PHA-wide.

b\. Five-Year Rolling Base. The five-year rolling base is

reflected on Form HUD-52824, Five-Year Funding Request

Plan, updated annually, and submitted as part of the

CIAP Application. It shows the PHA\'s plan to request

funds which reasonably can be expected to be made

available over a five-year period, listing projects in

priority order by modernization type with estimated

costs.

c\. Viability Reviews. A viability review, as set forth in

paragraph 3-9, for each project in the PHA\'s inventory.

If a project is to be proposed for funding other than

emergencies and comprehensive modernization in progress

in the current FFY, the PHA shall review its existing

viability review to determine if any revisions are

required and to ensure that the project will still have

long-term viability after the proposed modernization.

3-6. CIAP APPLICATION. Within the established time frame, the

PHA shall submit to the Field Office, Attention: Chief,

Assisted Housing Management Branch (AHMB), the CIAP

Application in an original and two copies (or any lesser

number of copies as specified by the Field Office). The PHA

also shall send a copy of the CIAP Application to the chief

executive officer, as well as any other appropriate local

officials. See Chapter 5 for resident/homebuyer

notification requirements. The CIAP Application is

comprised of the following documents:

a\. Form HUD-52824, Five-Year Funding Request Plan, sets

forth the PHA\'s plan to request funds which reasonably

can be expected to be made available over a five-year

period, listing projects in priority order by

modernization type with estimated costs for each year

covered by the plan. For non-Indian PHAs with 500 or

more units, the five-year plan is a component of the CPM

and, therefore, must be consistent with the CPM. For

non-Indian PHAs with under 500 units and IHAs which are

not required to develop the CPM, the five-year plan is a

free-standing document. In all cases, the five-year

plan must be consistent, where applicable, with \*

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\* the Comprehensive Occupancy Plan (COP). The five-year

plan covers a rolling five years and is annually

updated. For each project proposed for modernization in

the current FFY, attach to the five-year plan a general

statement of physical and management improvement needs,

which may be excerpted from the approved CPM. Complete

instructions for preparing Form HUD-52824 are contained

in Appendix 5, along with a completed sample of the form

which may be used as a guide in preparation.

b\. A narrative statement addressing each of the technical

review factors in paragraph 3-10.

c\. For each project proposed for comprehensive

modernization in the current FFY, an identification of

and an estimate of the total costs of replacement of the

equipment, systems or structural elements which would

normally be replaced (assuming routine and timely

maintenance is performed) over a 30-year period. This

estimate shall include an estimate of the costs accrued

for the period which ends upon the date of the PHA\'s

next fiscal year ending date and an estimate of the

costs which will accrue during each subsequent 12-month

period. The estimate should be based on current costs

without taking inflation into account.

d\. For each project proposed for homeownership

modernization in the current FFY, a listing of the units

to be included in the modernization program and, where

applicable, the estimated cost attributed to each home.

e\. For modernization proposed for funding in the current

FFY, excluding projects in Group 1, a Modernization

Organization and Staffing Plan, stating the proposed

organization, staffing and inspection of the

modernization program and including the following:

\(1\) Whether a separate modernization unit has been or

will be established within the PHA and the

proposed duration of the unit; if so, the

relationship of the unit to the existing PHA

organizational structure;

\(2\) The staffing of the modernization unit or

function; number, titles and salaries of technical

and non-technical PHA personnel to be assigned

full-time or part-time to modernization, and

additional personnel to be hired; designation

of a \*

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\* modernization coordinator or contract

administrator/construction manager, if necessary;

and lines of authority; and

\(3\) Plans for periodic inspections by an

architect/engineer (A/E), independent contractor

or PHA staff to ensure work quality and progress.

f\. For IHAs and non-Indian PHAs with less than 500 units,

for each project proposed for funding in the current

FFY, excluding emergency and comprehensive modernization

in progress, the IHA\'s/PHA\'s viability review in

accordance with paragraph 3-9.

g\. PHA Report, on compliance by the local governing body

with the terms of the Cooperation Agreement, or as

embodied by Article VIII of the Tribal Ordinance as

applicable for certain IHAs, and any additional services

or facilities that the PHA plans to request from the

local governing body.

h\. Form HUD-50070, Certification for a Drug-Free Workplace,

as contained in Appendix 6.

i\. Form HUD-52820, PHA/IHA Board Resolution Approving CIAP

Application, as contained in Appendix 7.

3-7. ELIGIBILITY REVIEW. After the CIAP Application has been

logged in, the Housing Management Specialist (HMS) shall

check the application for completeness before routing it to

the General Engineer and other AHMB staff, as appropriate.

The Field Office eligibility review shall determine if the

application meets the following basic eligibility

requirements and is eligible for processing or fund

reservation.

a\. Eligibility for Processing.

\(1\) PHA Modernization Capability. The PHA must have

at least minimal modernization capability to carry

out its proposed modernization. The Field Office

shall consider the PHA\'s modernization pipeline of

previously approved, but unobligated funds and

whether the PHA can administer any additional

funds.

\(a\) Beginning in FFY 1991, PHAs which miss any

deadline date, as set forth in the latest

HUD-approved Project Implementation

Schedule, without a valid reason, will be

eligible only for modernization under

Group 1. \*

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\* (b) For IHAs, the Indian Field Office shall

review IHA performance under the

Administrative Capabilities Assessment (ACA),

using criteria stated in the Field Office

Monitoring of Indian Housing Authorities

Handbook 7440.3 REV, and supplementary

issuances.

\(2\) Work Item Eligibility and Need. Based on the

general statement of physical and management

improvement needs and the Field Office\'s knowledge

of the project\'s conditions, the work items,

particularly emergency work items, must appear to

be eligible and and needed.

\(3\) End of Initial Operating Period (EIOP). The

project must be at least three years old from EIOP

to be eligible for funding.

\(4\) Status of Fiscal Audit. If award of the contract

for the fiscal audit is overdue (more than 90 days

after the PHA\'s fiscal year end) and contracting

for the audit is within the PHA\'s control, the

Field Office shall suspend further processing

until the PHA has initiated the audit.

\(5\) Lack of Available Funding. Where the PHA has

requested funding for more projects than

realistically can be funded in the current FFY,

the Field Office may process only a portion of the

application which has a reasonable chance of being

funded and is consistent with the PHA\'s

priorities.

\(6\) Lack of Approved CPM. Where the PHA is required,

but does not have an approved CPM under paragraph

3-5, the Field Office shall suspend further

processing.

b\. Eligibility for Fund Reservation.

\(1\) Lack of Consistency with CPM. Where the CIAP

Application is not consistent with the PHA\'s CPM,

the Field Office shall notify the PHA that

although the Field Office will continue

processing, the PHA must submit an updated CPM

before the end of the Joint Review period in order

to be eligible for funding. \*

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\* 3-8. PROCESSING GROUPS. The Field Office shall batch the

eligible projects into the following processing groups. A

PHA proposing all types of modernization may have projects

included in each group; the same project may be in more than

one group or in the same group, but for different types of

modernization. For batching purposes, the Field Office \*

may extract emergency or special purpose work items from

comprehensive modernization proposals.

a\. Group 1. Projects having conditions that pose an

immediate threat (i.e., must be corrected within one

year of funding approval) to resident health or safety.

Funding is limited to correction of emergency

conditions, including those related to fire safety, and

may not be used for substantial rehabilitation.

Emergency conditions include all lead-based paint

testing and abatement of units housing children under

seven years old with elevated blood lead levels. Group

1 includes emergency modernization and emergency work

under homeownership modernization. Group 1 projects are

not subject to the viability review.

b\. Group 2. Projects (1) having conditions which threaten

resident health or safety or having a significant number

(10 percent or more) of vacant or substandard units, and

\(2\) located in PHAs which have demonstrated a capability

of carrying out the proposed modernization activities

under comprehensive, special purpose or homeownership

modernization. Within Group 2, funding preference shall

be given to:

\(1\) Group 2A projects involving the correction of

physical disparities under the nondiscrimination

funding preference, either separately or as part

\* of a comprehensive modernization. Specific

instructions on this processing group are provided

in the annual notification of CIAP fund

availability. Group 2A does not apply to IHAs. \*

\(2\) Group 2B projects involving the subsequent stage

of multi-stage comprehensive modernization, an

amendment to single stage comprehensive

modernization, or additional modernization after

\* completion of comprehensive modernization. See

paragraphs 3-19 and 3-20. \*

\(3\) Group 2C projects which are all other projects

meeting the basic criteria in subparagraph b.

NOTE: All projects which meet the basic criteria of

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Group 2 are considered for funding under Group 2,

regardless of whether they have lead-based paint

abatement needs. Group 2B projects are not

subject to the viability review. Groups 2A and 2C

projects are subject to the viability review.

c\. Group 3. All other projects not in Groups 1 and

2, located in PHAs which have demonstrated a

capability of carrying out the proposed

modernization activities under comprehensive,

special purpose or homeownership modernization.

Group 3 projects are subject to the viability

review.

\* 3-9 PROJECT VIABILITY REVIEW. For PHAs/projects that pass the

eligibility review, the Field Office shall review the PHA\'s

own viability review, as set forth in the CPM for larger

non-Indian PHAs or in the CIAP Application for IHAs or

smaller non-Indian PHAs, of each project being considered

for funding in the current FFY, except projects in Groups 1

and 2B. In all cases, the Field Office shall undertake its

own viability review, which consists of three Steps. \*

Step 1 is conducted during application review, Step 2 is

conducted during application review or Joint Review, and

Step 3 is conducted during or after Joint Review.

a\. Step 1. Determine and document whether any of the

following gross indicators are present for the project:

\(1\) Vacancies of 15 percent or more of the units

available for occupancy in a project;

\(2\) Estimated modernization \"hard costs\" for any

project exceeding 25 percent of the cost guideline

limit for nonelevator units (28 percent for

elevator units) for construction of similar units

in the area; or

\(3\) Serious locational or structural conditions which

indicate that the long-term viability of the

project is questionable.

NOTE: If none of these gross indicators are present,

the viability review is complete; continue processing

and do not go to Step 2. If any of these gross

indicators are present, go to Step 2. At this point,

the Field Office shall not eliminate any project for

further processing solely on the basis of high costs or

the need to go to Step 2 or 3 of the viability review.

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b\. Step 2. To assess the extent and severity of the

project\'s problems identified in Step 1, examine, rate

and document the magnitude of the following problems as

\"severe,\" \"moderate,\" \"mild,\" or \"none\". Where the

Field Office has sufficient information, the Field

Office may complete this step before Joint Review; if

not, the Field Office may complete this step during

Joint Review.

\(1\) Major problems as to physical condition, as

indicated by such factors as unit

uninhabitability, density, faulty construction,

inappropriateness of design for current use,

structural deficiencies and major physical site

flaws (e.g., erosion, flooding);

\(2\) Major problems as to location (neighborhood), as

indicated by such factors as concentration of

assisted housing, physical deterioration of

neighborhood, industrial or commercial development

which jeopardizes the suitability of the site for

residential use, and adverse environmental

conditions, such as air pollution; and

\(3\) Other factors that tend to show that the project

is unsuitable for housing purposes, such as

resident dissatisfaction as evidenced by vacant

units (high number, long duration) or a high

incidence of transfer requests, lack of

marketability, crime and vandalism, or other

specifically identified conditions.

NOTE: If there are severe problems in one or more of

the three areas described above, or moderate problems in

two or more of these areas, continue the viability

review and go to Step 3. Otherwise, the viability

review is complete; continue processing and do not go to

Step 3.

c\. Step 3. Step 3 of this review is an in-depth analysis

in which pertinent information may not be readily

available at the Field Office. Therefore, the Field

Office may perform this step during Joint Review. The

Field Office shall determine and document the following

factors:

\(1\) Primary causes of any problems identified in Step

2 and whether such problems will be corrected by

the proposed modernization and other efforts in

the neighborhood;

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\(2\) How the proposed modernization will correct those

physical deficiencies of the project that

currently render it obsolete as to physical

condition;

\(3\) Whether, after the proposed modernization, the

project will be suitable for operation as public

housing, in accordance with applicable program

standards, for a period of at least 20 years,

assuming timely maintenance and replacements;

\(4\) Whether the proposed modernization is financially

feasible, as defined in paragraph 1-3;

\(5\) If there is a demonstrated willingness and ability

on the part of the PHA and local government to

correct any management or operational problems

necessary to ensure the long-term viability of the

project;

\(6\) If the project received substantial modernization

funding in the past which has failed to resolve

problems at the project, how this proposal will

overcome the factors that led to the failure of

the previous modernization efforts; and

\(7\) If there is a realistic potential for the

elimination or modification of neighborhood or

environmental conditions that jeopardize the

long-term viability of the project or for the

alteration of the project to cope effectively with

such conditions. Federal, State, local or private

actions or commitment of funds that have been

specifically committed for such neighborhood

improvements will be considered in evaluating this

factor.

NOTE: See paragraphs 3-23b and c and 3-25b for further

processing instructions.

\* 3-10. TECHNICAL REVIEW.

a\. Assessment of PHA\'s Management Capability. As part of

its technical review of the CIAP Application, the AHMB

shall evaluate the PHA\'s management capability against

the criteria in paragraph 2-3b, including whether the

PHA has managed its projects in a manner that appears to

meet equal opportunity objectives. This assessment may

be based on occupancy audits, engineering surveys,

management reviews, etc., which are currently available

within the AHMB, as well as the Annual Performance

Review. \*

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\* b. FHEO Review. The AHMB shall provide to the Fair Housing

and Equal Opportunity (FHEO) Division a list of

non-Indian PHAs submitting CIAP Applications, as well as

any equal opportunity-related problems, identified by

the AHMB. After consulting with Regional FHEO, as

appropriate, and reviewing its own files, the FHEO

Division shall identify each PHA on the list in

accordance with the following categories and provide

information to the AHMB by the requested time:

\(1\) There are no known equal opportunity-related

problems;

\(2\) There are known equal opportunity-related

problems, as identified; or

\(3\) There are circumstances as set forth in paragraph

6-1b.

c\. Determination of PHA\'s Management Capability. The Field

Office shall determine whether any identified management

deficiencies, including those related to equal

opportunity, are:

\(1\) so serious as to warrant rejection of further

processing, except for emergencies; or

\(2\) may be corrected during CIAP processing or after

fund reservation, where approved for funding; or

\(3\) may limit the initiation of a new comprehensive

modernization to first stage funding.

d\. Technical Review. After batching, the Field Office

shall review and rate each eligible project for each

type of modernization within Groups 2 and 3 on the

following factors, in accordance with the point range

specified, with one point being low.

Technical Review Factor Point Range

Extent and urgency of need, including lead-based

paint abatement and physical accessibility needs 1-20

Extent of vacancies 1-10

PHA\'s modernization capability 1-10

PHA\'s management capability 1-10 \*

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\* Adequacy of PHA\'s maintenance systems, including

preventive and routine maintenance 1-10

Degree of cost-savings 1-5

Degree of resident involvement in PHA operations 1-5

Degree of PHA activity in resident initiatives,

including resident management, economic development

activities on behalf of residents, and drug

elimination efforts 1-5

Degree of PHA-wide resident employment 1-5

Local government and resident/homebuyer support

for proposed modernization 1-5

Total Maximum Score 85 points

e\. Ranking and Recommendations. After technical review,

the AHMB shall prepare its recommendations for Joint

Review, based on project ranking within processing

groups. For non-Troubled PHAs, the AHMB shall make its

recommendations to the Field Office Manager or to the

Regional Administrator in co-located offices. For

Troubled PHAs, the AHMB shall make its recommendations

through the Field Office Manager to the Regional

Administrator. The AHMB shall identify any PHAs

identified by FHEO as being in nonconformance or

noncompliance and any projects required to complete

Steps 2 or 3 of the viability review. In addition, the

Field Office shall prepare brief comments as follows:

\(1\) For each project in Group 1, justification of the

emergency work items;

\(2\) For each project in Groups 2A, 2C and 3,

justification of each project\'s inclusion in the

group; and

\(3\) For each project in Group 2B, explanation of the

implementation status of previously approved

stages and recommendation regarding current FFY

funding.

3-11. JOINT REVIEW SELECTIONS.

a\. Percentage Limit on Special Purpose Modernization. To

ensure that more funds are available for comprehensive \*

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\* modernization, Headquarters may limit the percentage of

the Regional and Field Office\'s allocations that may be

approved for special purpose modernization.

b\. Field Office Selections. For non-Troubled PHAs, the

Field Office Manager shall review the rankings and

comments submitted by the AHMB and select PHAs/projects

and types of modernization for Joint Review. In making

the selections, the Field Office Manager shall give

preference to projects in Groups 1 and 2, assuming

adequate PHA management and modernization capability.

The Field Office shall not exclude projects from Joint

Review solely on the basis of high CIAP costs or the

need to go to Step 2 or 3 of the viability review.

c\. Regional Office Selections. For Troubled PHAs, the

Regional Administrator shall review the rankings and

comments submitted by the Field Office and select

PHAs/projects and types of modernization for Joint

Review. In making the selections, the Regional

Administrator shall give preference to projects in

Groups 1 and 2, assuming adequate progress in developing

or implementing the Memorandum of Agreement. The

Regional Office shall notify the Field Offices in

writing of its selections and give appropriate guidance

on projects requiring Steps 2 or 3 of the viability

review. The Regional Office shall not exclude projects

from Joint Review solely on the basis of high CIAP costs

or the need to go to Step 2 or 3 of the viability

review.

d\. Notification to FHEO. Each Field Office shall forward a

listing of all PHAs selected for Joint Review to the

Regional Public Housing Director for forwarding to the

Regional FHEO Director.

3-12. PHA NOTIFICATION. After the Regional and Field Office

selections for Joint Review, the HMS shall prepare a letter

to the PHA for the signature of the Field Office Manager or

Regional Administrator in co-located offices, advising \*

whether the PHA will be considered for funding in the

current FFY, as follows:

a\. Where the PHA will be considered for funding in the

current FFY, the letter shall: confirm the date of the

Joint Review, if already scheduled, indicate an intent

to schedule the Joint Review as soon as possible, or

state that the requirement for the Joint Review is being

waived under paragraph 3-14; state which

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project(s) for which type(s) of modernization will be

reviewed and request that the PHA contact the Field

Office if the PHA disagrees with the defined scope of

the Joint Review; outline required PHA activities to

prepare for the Joint Review; indicate whether the

project(s) is subject to Step 2 or 3 of the viability

review; and list outstanding monitoring findings or

\* management concerns which must be resolved or addressed

as management improvements either before or after

funding approval. \*

b\. Where the PHA will not be considered for funding in the

current FFY, the letter shall state the reasons, such as

the relatively low priority of its physical improvement

needs. Where the reason is lack of management or

modernization capability, the letter shall state the

specific deficiencies and what actions the PHA will have

to take or what level of management or modernization

capability the PHA will have to achieve by a specified

time to be considered for funding in a subsequent FFY.

In addition to these reasons, if a project had

questionable viability and failed Steps 1 and 2 of the

viability review, the Field Office shall alert the PHA

to the fact that if the same application is submitted

and selected in the future for a Joint Review, it will

be subjected to Step 3 of the viability review. The

Field Office may informally discuss the preliminary

viability review findings with the PHA in order to

suggest constructive alternatives for future CIAP

Applications.

3-13. STATE NOTIFICATION.

a\. Under paragraph 1-7, where the State has established a

review process and has selected the CIAP to review, the

Field Office shall provide the State with an opportunity

to comment on all CIAP Applications proposing

substantial rehabilitation, but only if the project

being substantially rehabilitated involves: (1) a

change in the use of the land; (2) an increase in

project density; or (3) a change from rental to

homeownership. CIAP Applications proposing emergency,

special purpose or homeownership modernization and from

IHAs are excluded from the State notification

requirements.

b\. The Field Office shall prepare one Standard Form (SF)

424, Federal Assistance, Section I only, for each

covered CIAP Application. The Field Office shall batch

and forward copies of the covered CIAP

12/89 3-14

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Applications and SF 424\'s to the State single point of

contact (SPOC) for review. The comment period begins on

the day after the CIAP Applications are mailed. The

comment period is 60 days, plus an additional 5 days for

mailing, for a total of 65 days.

c\. After the Joint Reviews, the Field Office shall submit

the State comments, if any, to the Regional Office with

its funding recommendations for Troubled PHAs. In

response to an official State process recommendation

(comments submitted by a State, but not as an official

State process recommendation, need not be addressed),

the Regional or Field Office must either:

\(1\) Accept the recommendation;

\(2\) Reach a mutually agreeable solution with the

parties preparing the recommendation; or

\(3\) Provide the State SPOC with a written explanation

for not accepting the recommendation or reaching a

mutually agreeable solution; i.e.,

nonaccommodation. If there is a nonaccommodation,

including not funding PHAs/projects prioritized by

the State, the Regional or Field Office shall wait

15 days after sending an explanation of the

nonaccommodation to the State SPOC before making

any funding decisions.

3-14. SCHEDULING AND WAIVER OF JOINT REVIEWS.

a\. Scheduling and Notification. The HUD Modernization

Coordinator is responsible for coordinating the

scheduling of the Joint Reviews and for notifying the

\* FHEO Division and, where relocation is involved, the

Community Planning and Development (CPD) Division of the

specific dates of the Joint Reviews. If the FHEO and

CPD Divisions are unable to participate in the Joint

Reviews, they may inform the AMHB staff in writing of

their specific concerns. The HMS shall check with the \*

Modernization Coordinator before contacting the PHA

about a tentative date or establishing a firm date for

the Joint Review.

b\. Waiver. The Regional or Field Office may waive the

requirement for a Joint Review only where emergency,

special purpose or homeownership modernization is

involved if the Field Office has current knowledge of

the specialized need(s) and proposed physical

improvement(s). The Regional or Field Office may not

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3-15

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waive the requirement for a Joint Review where

comprehensive modernization, including the subsequent

stage, is involved, except in the case of an amendment

to single stage comprehensive modernization where the

estimated additional cost is incidental.

3-15. PHA PREPARATION FOR JOINT REVIEW. The PHA shall prepare for

the Joint Review by taking the following actions:

a\. Reach agreement with the Field Office on the specific

project(s) to be covered during the Joint Review;

b\. Consult with residents/homebuyers as required in Chapter

5; and

\* c. Needs Assessments. The PHA shall complete the detailed

physical and management needs assessments. If these

detailed needs assessments are not consistent with the

more general statement of needs set forth in the CPM,

the PHA shall update the CPM and forward it to the Field

Office (see Appendix 22). The CPM does not apply to

IHAs or non-Indian PHAs with under 500 units.

\(1\) Physical Needs Assessment. For each project

proposed for funding in the current FFY, the PHA

shall complete Form HUD-52827, Physical Needs

Assessment, as set forth in the Modernization

Standards Handbook 7485.2 REV-1. The PHA shall

identify each project\'s current physical needs and

the physical improvements necessary to meet the

mandatory standards in Handbook 7485.2 REV-1 for

those needs, as well as any project specific work

which is necessary or highly desirable for

long-term viability. In addition, the PHA shall

identify any work items necessary to comply with

lead-based paint testing or abatement requirements

and with physical accessibility and

nondiscrimination requirements.

\(a\) For proposed new comprehensive modernization

and special purpose modernization involving

replacement or repair of major equipment

systems, upgrading of security, or reduction

of vacant units, the PHA shall identify the

project\'s current total physical needs on

Form HUD-52827.

\(b\) For proposed modernization, excluding

Group 1, the PHA shall update the energy

audit as \*

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\* required in paragraph 6-7.

\(c\) For proposed emergency, homeownership and

special purpose modernization involving

increasing accessibility for elderly and

handicapped families or energy efficiency,

the PHA shall identify the project\'s current

specialized physical needs, as they are

eligible under the proposed type of

modernization, on Form HUD-52827. For

special purpose modernization involving

increasing accessibility or energy

efficiency, where the Field Office determines

that there is evidence indicating that the

project has major problems that justify a

comprehensive assessment, the PHA shall

identify the project\'s current total physical

needs on Form HUD-52827.

\(d\) The PHA that lacks the in-house capability to

perform the assessment should contact the

Field Office. In such case, the Field Office

may advise the PHA, unless approved for

advance planning funds, to hire an outside

architect/engineer (A/E), subject to

reimbursement only if the modernization is

approved, or encourage small PHAs to group

together for hiring outside assistance.

\(2\) Management Needs Assessment. For each project

proposed for new comprehensive modernization in

the current FFY, the PHA shall complete a

Management Needs Assessment. The PHA shall

identify each project\'s current management needs,

as assessed against the management areas set forth

in paragraph 2-3b, and the management improvements

necessary to meet those needs. Some management

deficiencies require little or no additional funds

to correct. Regardless of whether CIAP funds are

required for correction, the PHA shall include any

management items identified by the PHA as

problems. For projects with comprehensive

modernization in progress, the Field Office may

require the PHA to update the management needs

assessment. For a designated non-Indian Troubled

PHA, management improvement needs shall be

consistent with those identified in its Memorandum

of Agreement. Where the Field Office identified

outstanding monitoring findings or management

concerns in its letter before Joint \*

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\* Review, the PHA shall develop a plan and timetable

to resolve those findings or address those

concerns.

d\. For each project proposed for modernization,

including emergency, in the current FFY, a copy of

resident recommendations and the PHA\'s evaluation

of those recommendations (see paragraph 5-1). \*

e\. Review the other points to be covered during the

Joint Review as set forth in paragraph 3-18.

3-16. FIELD OFFICE PREPARATION FOR JOINT REVIEW.

a\. AHMB Participation. Where comprehensive modernization

is involved, both the HMS and the General Engineer shall

represent the Field Office on the Joint Review. Based

upon PHA size and prior knowledge of PHA management

problems, other AHMB staff, as appropriate, shall

\* participate. The Regional Office representative may

participate in the Joint Review for a Troubled PHA. In

all cases, the HMS shall serve as the team leader of the

Field Office representatives. Differences of opinion

between the HMS and the General Engineer shall be

resolved by the Chief, AHMB. \*

b\. Review of Files. In preparing for the Joint Review, the

Field Office representatives shall review the PHA\'s

files, with special attention to open findings from the

latest fiscal audit, management review, occupancy audit,

maintenance review and utilities review. Field Office

representatives should be thoroughly familiar with the

status of all previously approved modernization programs

and the overall operation of the PHA.

c\. Confirmation with PHA. Before the Joint Review, the HMS

shall check with the PHA to confirm that the PHA is

ready for the Joint Review; i.e., has taken all of the

actions required in paragraph 3-15. If the PHA is not

ready, the HMS shall cancel the Joint Review and

reschedule only if time permits.

3-17. PURPOSE, CONDUCT AND DURATION OF JOINT REVIEW.

a\. Purpose. The purpose of the on-site Joint Review is to

discuss the proposed modernization program, as set forth

in the CIAP Application, and reach agreement on PHA

needs and approach.

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b\. Initial Meeting. The Field Office and the PHA

representatives should meet briefly to discuss the

prearranged agreements concerning the scope of the Joint

Review, PHA staff availability and other logistical

matters. They also should review the CIAP Application

and discuss how the proposed management improvements, if

any, relate to the proposed physical improvements, the

appropriateness of work items and project priorities,

and the degree of cost benefits.

c\. Duration. The duration of the Joint Review will vary,

depending upon such factors as PHA size and management

capability, type and complexity of the proposed

modernization program, Field Office knowledge of and

familiarity with the PHA\'s operations and management

practices, status of any previously approved

modernization programs, and extent to which the Joint

Review would duplicate any open findings of a fiscal

audit, management review, occupancy audit, maintenance

review or utilities review conducted within the

preceding 12 months.

d\. Close-Out Meeting. The Field Office and the PHA

representatives should meet to discuss HUD\'s findings

and recommendations on the proposed modernization

program. The close-out meeting shall include specific

treatment of previously approved modernization programs

where revisions to the Project Implementation Schedule

may be warranted (see paragraph 7-2). Where

appropriate, the Field Office representatives also may

meet with the PHA Board of Commissioners.

3-18. JOINT REVIEW COVERAGE. The Joint Review shall include an

on-site inspection of the property and coverage of the

following points. The Field Office shall document the Joint

Review by using the Joint Review Checklist in Appendix 8.

The Field Office may modify the Checklist, by adding

additional information where appropriate.

\* a. Based on the PHA\'s physical needs assessment(s), the

Field Office shall review the following:

\(1\) Eligibility, need and appropriateness of the

physical work items as measured against the

mandatory standards, including energy conservation

measures, and the project specific work items (see

paragraph 3-15c(1)).

\(2\) Accuracy of cost estimates and any required

contingencies; reasonableness of PHA\'s \*

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\* preliminary thoughts about the Project

Implementation Schedule(s) which will be due 60

days after notification of CIAP application

approval (see paragraph 7-2); and adequacy of

method of PHA inspection of the physical work.

\(3\) Where demolition, disposition or conversion is

proposed, refer to the Public Housing Demolition,

Disposition and Conversion Handbook 7486.l.

b\. Appropriateness of method of accomplishment (contract or

force account labor). The Field Office will approve the

use of force account labor only on an individual project

basis, where: it is cost-effective and appropriate to

the scope and type of physical improvements; and the PHA

has the capacity to serve as its own main contractor and

to maintain an adequate level of routine maintenance

during force account activity. Under Section 107(D) of

the ACC, use of force account labor requires prior HUD

(Field office) approval. Since the method of

accomplishment is set forth on Form HUD-52825,

Comprehensive Assessment/Program Budget, this approval

is given at the time of funding approval. If the PHA

wishes to use force account labor after original budget

approval of contract labor, the PHA must request a

budget revision or the force account labor costs will be

disallowed (see paragraph 10-12a).

c\. Based on the PHA\'s management needs assessment(s), the

Field Office shall review the following:

\(1\) Thoroughness of the PHA\'s identification of

management problems, causes and solutions under

paragraph 3-15c(2), the status of PHA actions

taken to correct any previously identified

management deficiencies, and the eligibility, need

and appropriateness of the management work items

as measured against the criteria in paragraph

2-3b. In addition, any outstanding monitoring

findings or management concerns previously

identified by the Field Office shall be reviewed.

\(2\) Accuracy of cost estimates and reasonableness of

PHA\'s preliminary thoughts about the Project

Implementation Schedule(s) which will be due 60

days after notification of CIAP application

approval (see paragraph 7-2). \*

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\* (3) Although the PHA is not required to prepare the

management needs assessment for projects proposed

for emergency, special purpose or homeownership

modernization, the Field Office may discuss

management improvement needs with the PHA during

the Joint Review and subsequently require the PHA

to address those needs without CIAP funding, as a

condition of funding the physical improvements.

See subparagraph u. for instructions on Troubled

PHAs.

d\. Adequacy of PHA\'s maintenance systems, including

preventive and routine maintenance, particularly as

evidenced by the physical condition of projects

previously modernized.

e\. Whether the proposed modernization is financially

feasible and will result in long-term physical and

social viability at the project.

f\. Availability of operating funds or reserves or excess

Section 8 administrative fees to fund proposed work.

Where the such funds will be used, including use of

residual receipts, the PHA shall note these on Line 01

of Form HUD-52825. The residual receipts may only be

kept for two years and are assigned to a specific

Modernization Project. The Field Office shall not

require reserve drawdown to the point where the PHA

becomes financially troubled, without Headquarters

approval. The Field Office also shall determine that

there are no duplicative items in the PHA\'s operating

budget and the proposed modernization budget.

g\. PHA need for the professional services of an A/E and/or

a management consultant in further planning, designing \*

and implementing all or part of the proposed physical

and management improvements. See paragraph 2-6a(2)

regarding incurring A/E fees for detailed design work

before funding approval.

h\. PHA plan for organizing and staffing the modernization

program, including PHA need for a full-time

modernization coordinator or contract

administrator/construction manager, assignment of

regular PHA staff, and hiring of additional personnel

(see paragraph 7-3).

i\. PHA performance in administering previously approved

programs, if applicable (see paragraph 7-2).

j\. PHA need for additional modernization funds to complete

previously approved modernization programs

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(see paragraph 3-19).

k\. PHA compliance with requirements for consultation with

local officials and residents/homebuyers under Chapter 5

and local support for the proposed modernization. If it

is questionable whether a project has local support or,

once modernized, will have long-term physical and social

viability, the Field Office shall require the PHA to

consult more thoroughly with local officials, including

obtaining a letter of support from local officials

before the funding decision is made.

l\. PHA compliance with civil rights statutes, executive

orders and regulations, as applicable, under paragraph

\* 6-1. Where there is an outstanding finding of

noncompliance, the FHEO Division shall keep the AHMB

informed of any change in status, as previously reported

during technical review of the CIAP Application. \*

m\. PHA plans to hire residents under paragraph 6-1c and

provide minority and women\'s business or Indian

enterprise opportunity under paragraph 6-2.

n\. Applicability of environmental and historic preservation

requirements under paragraph 6-3.

o\. PHA compliance with flood insurance requirements under

paragraph 6-4.

p\. PHA compliance with requirements to inspect, test for

and eliminate lead-based paint hazards under paragraph

6-5.

\* q. PHA compliance with requirements to provide physical

accessibility and to not discriminate based on

handicapped under paragraph 6-6.

r\. PHA compliance with relocation and acquisition

requirements under paragraph 6-7.

s\. PHA compliance with requirements to update the energy

audits and undertake cost-effective energy \*

conservation measures under paragraph 6-8.

t\. Step 3 of the project viability review, if applicable,

under paragraph 3-9c.

u\. Additional review of Troubled PHAs, to determine whether

all major management deficiencies are being

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satisfactorily addressed. Where such a determination

cannot be made, such PHAs will be considered only for

staged comprehensive modernization funding, with the

first stage focusing on funding of management

improvements, or for emergency modernization. In

addition, before approval of a subsequent stage of

comprehensive modernization, the Field and Regional

Offices shall determine that the PHA is demonstrating

satisfactory progress in correcting management

deficiencies. Where a Troubled PHA may have been

approved in previous years for staged comprehensive

modernization without having addressed its management

deficiencies, such applications shall be amended to

allow for any necessary funding of management

improvements.

3-19. COMPREHENSIVE MODERNIZATION APPROACH. After Joint Review,

the Regional Office for Troubled PHAs and the Field Office

for non-Troubled PHAs shall consider funding the proposed

comprehensive modernization in one stage, or on an

\* exception basis, in more than one stage, not to exceed a

total of five stages. Bases for exception include a PHA\'s

lack of management capability, as defined in paragraph 1-3,

which necessitates multi-stage funding, or a total funding

requirement which is large in magnitude, relative to the

funding available to the Regional or Field Office.

a\. Single Stage Funding. Under single-stage funding, the

total amount of CIAP funds for all required physical and

management improvements at the project shall be approved

at one time, from funds for a single FFY, under one CIAP

Application; this type of modernization is known as

COMP/SS/NEW (comprehensive/single stage/new). An

amendment to previously approved single stage

comprehensive modernization may be necessary due to

lead-based paint testing, new work items which were

inadvertently omitted or unknown due to hidden

conditions, or inadequate funding of previously approved

work items; this type of modernization is known as

COMP/SS/AMEND (comprehensive/single stage/amendment).

The amendment will be under a different Modernization

Project.

b\. Multi-Stage Funding. Under multi-stage funding, the

total amount of CIAP funds for all required physical and

management improvements at the project shall be approved

in the fewest number of stages that are feasible, over

several different years FFYs, under different

Modernization Projects, with the total number of stages

not to exceed five. The first stage \*

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\* shall include funds for A/E work and/or a portion of the

physical improvements. Management improvements may be

included in the first stage to the extent they are

eligible costs under paragraph 2-3. To the maximum

extent feasible, all equal opportunity concerns shall be

addressed in the first stage.

\(1\) First Stage. The CIAP Application shall address

all required physical and management improvements

at the project. Before funding approval, the PHA

shall prepare Form HUD-52825 to address only the

work items to be completed during this stage (see

paragraph 3-24). This type of modernization is

known as COMP/MS/1/2 (comprehensive/multistage/

first of two stages) through COMP/MS/1/5

(comprehensive/multi-stage/first of five stages).

When approving the first stage, the Regional or

Field Office shall indicate the approximate

balance of funds required to complete the

comprehensive modernization, but also indicate

that future funding will be subject to the

availability of future funds, satisfactory

progress by the PHA in obligating and expending

first stage funds, PHA submission of any required

additional documents, and PHA compliance with HUD

regulatory and statutory requirements (see

paragraph 3-25a(8)). Where the Comprehensive

Grant Program is implemented before staged

comprehensive modernization is completely funded,

the PHA will be responsible for completing the

comprehensive modernization.

\(2\) Subsequent Stages. Where the PHA is requesting

funding for a subsequent stage of a multi-stage

comprehensive modernization, the Regional or Field

Office shall determine whether the PHA has made

satisfactory progress in obligating and expending

prior stage funds, has submitted any required

additional documents, and has complied with HUD

regulatory and statutory requirements. If the PHA

has not satisfied these conditions, the Regional

or Field Office shall not approve the subsequent

stage of funding at this time. The PHA submission

for any subsequent stage should not duplicate

items previously submitted. This type of

modernization is known as COMP/MS/2/2

(comprehensive/multi-stage/second of two stages)

through COMP/MS/5/5 (comprehensive/multistage/

fifth of five stages).

\(3\) Implementation. After the application for each \*

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\* stage is approved, the PHA and the Field Office

shall agree on an implementation period that is

appropriate for that funding stage, not to exceed

five years for any stage from the date on which

that stage is first funded. See paragraph 7-2

regarding the Project Implementation Schedule. \*

c\. Advance Funding of Planning Costs. Where a financially

distressed PHA requests advance funding of planning

costs, as defined in paragraph 2-6, for comprehensive

modernization, the Regional or Field Office may approve

such costs as a separate Modernization Project. Such

approval may occur in a different FFY from when the

comprehensive modernization is approved. When the

comprehensive modernization will be approved in the same

FFY, the Regional or Field Office shall expedite

approval of the planning costs early in the processing

cycle. The CIAP Application shall be limited to Form

HUD-52825 covering only the planning costs to be funded

and the Board Resolution. When approving planning costs

as a separate Modernization Project, the Regional or

Field Office shall indicate the estimated total funding

that will be required for the project and its intent to

approve that amount, subject to the availability of

future funds, satisfactory completion of the planning,

PHA submission of the CIAP Application as set forth in

paragraph 3-6, and PHA compliance with HUD regulatory

and statutory requirements.

d\. Treatment of Scattered Site Projects. Since a scattered

site project is composed of dwelling units which are

unrelated geographically, structurally or socially and

which are grouped together solely for accounting

purposes, the Regional or Field Office may consider

comprehensive modernization for selected units within a

scattered site project, provided that all physical and

management improvement needs for those units are

addressed.

e\. Treatment of Contiguous Projects. Two or more separate,

but contiguous, projects may be funded together for

comprehensive modernization.

3-20. ADDITIONAL FUNDS FOR PREVIOUSLY APPROVED COMPREHENSIVE

MODERNIZATION. Under the following circumstances, the

Regional or Field Office may approve additional funds for

projects previously approved for comprehensive

modernization. However, this flexibility may not be used to

circumvent the statutory requirements for the PHA to

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undertake a thorough assessment of its physical and

management improvement needs and for the AHMB to review

those assessments and fund modernization in a comprehensive

manner.

a\. Comprehensive Modernization in Progress. For single

stage or multi-stage comprehensive modernization in

progress, the Regional or Field Office may approve

additional funds under a single stage amendment or an

additional stage, respectively, to ensure that the

project will meet the mandatory standards or have

long-term viability. This includes funding for new work

items which were inadvertently omitted or unknown due to

hidden conditions or for previously approved work items

which were inadequately funded, provided that:

\(1\) the work items are necessary to meet the mandatory

standards or for long-term viability;

\(2\) funding is not available from PHA operating funds

or reserves or other sources; and

\(3\) there is documentation, subject to post-review by

\* the Regional Office or Headquarters, in the Field

Office files as to the reason for approval and

that the above conditions have been met.

b\. Comprehensive Modernization Completed. Where

comprehensive modernization has been completed (all

funds expended), the Regional or Field Office may

approve additional modernization necessary to meet new

physical needs which would have been eligible for

funding had the needs existed at the time the

comprehensive modernization was originally funded and to

comply with HUD regulatory and statutory requirements;

this type of modernization is known as COMP/COMPLETED

(comprehensive completed) and will be used sparingly.

3-21. LIMITATIONS ON SPECIAL PURPOSE MODERNIZATION. For each of

the three types of special purpose modernization relating to

major equipment systems or structural elements, security,

and reduction of vacant, substandard units, the PHA may

obtain special purpose modernization funding only once for a

project that has not been comprehensively modernized.

Subsequent funding for the same project for any additional

physical improvements of these types may be provided only as

part of a program which addresses all of the physical and

management improvement needs of the project under a

comprehensive modernization program. This \*

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\* limitation does not apply to a project which has been

comprehensively modernized.

3-22. ENVIRONMENTAL REVIEW. After Joint Review, the HMS or the

General Engineer shall conduct the appropriate environmental

review required under HUD regulations (24 CFR Part 50,

Procedures for Protection and Enhancement of Environmental

Quality), implementing the National Environmental Policy Act

(NEPA) of 1969 (see paragraph 6-3). For a project being

funded for the first stage of a multi-stage comprehensive

modernization, the Field Office Representative shall conduct

the appropriate review on the total physical needs (all

stages). For a project being funded for a subsequent stage

of comprehensive modernization or a single stage amendment,

include a copy of the original review in the file and

indicate no update is required. These review requirements \*

are summarized below:

a\. An environmental assessment is required for all

modernization programs involving up to 2,500 units

except where all of the following criteria are

satisfied:

\(1\) Does not increase the number of dwelling units in

\* the affected buildings by more than 20 percent. \*

Increases will occur where larger size units are

converted into smaller size units;

\(2\) Does not change land uses from residential to

nonresidential or vice versa. The conversion of

dwelling units to community, management or

maintenance space or new construction of such

space does not change the basic residential nature

of the land use;

\(3\) Does not cost 75 percent or more of the

replacement cost of the project after

modernization; and

\(4\) Does not involve the demolition of a building, or

parts of a building, containing dwelling units.

b\. Where an environmental assessment is required, the HMS

or the General Engineer shall complete Form HUD-4128,

Environmental Assessment for Subdivision and Multifamily

Projects (known as the long form), which must be signed

by the Director, Housing Management Division, before

fund reservation. Where more than 200 units are

involved, the Field Office Environmental Clearance

Officer (ECO) also must sign the Form

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HUD-4128. Where 200 or fewer units are involved, a copy

is sent to the ECO for informational purposes.

c\. Where an environmental assessment is not required under

subparagraph a, the HMS or the General Engineer shall

complete Form HUD-4128.1, Compliance and LAC Conditions

Report (known as the short form), which must be signed

by the Chief, AHMB. The HMS shall mark \"N/A\" those

parts that are not applicable to an existing project.

d\. An Environmental Impact Statement (EIS) must be prepared

for modernization programs where called for as a result

of the environmental assessment. An EIS also must he

prepared for modernization programs involving 2,500 or

more units, unless: (1) an environmental assessment

would not be required under subparagraph a; or (2) it is

determined, as a result of an environmental assessment

or in preparing a draft EIS, that the program will not

have a significant impact on the human environment; in

that case, the HMS or the General Engineer shall contact

the Field Office ECO for procedures.

\* 3-23. FUNDING DECISIONS.

a\. Field Office Rerating and Reranking. After Joint

Review, the AHMB shall review, rerate and rerank each

eligible project for each type of modernization within

Groups 2 and 3 on the technical review factors in

paragraph 3-10. At this time, the Field Office may

change the modernization type or processing group for a

project. As a result of Joint Review, the AHMB may

determine that the project does not meet the basic

eligibility requirements in paragraph 3-7 or, for other

reasons, determine that the project should not be

recommended for funding.

b\. Field Office Decisions. For non-Troubled PHAs, after

reranking the projects, the AHMB shall forward its

funding recommendations, as well as any State comments

under paragraph 3-13c, to the Field Office Manager, who

will make the funding decisions. The AHMB shall limit

its funding recommendations for special purpose

modernization to the percentage limit, if any,

prescribed by Headquarters (see paragraph 3-11a). The

same project may be recommended for both emergency and

special purpose modernization. Where a project is

recommended for comprehensive modernization, it cannot

be recommended for any other type of modernization \*

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\* because emergency and special purpose work items are

included in the comprehensive modernization. The AHMB

shall identify any PHAs identified by the FHEO Division

as meeting the criteria of paragraph 6-1b and,

therefore, eligible only for emergency modernization.

In the event that projects are ranked equally, the Field

Office Manager in making the funding decisions shall

give further priority to projects with large family

units. In addition, the AHMB shall prepare brief

comments as follows:

\(1\) For each project in Group 1, justification of the

emergency work items;

\(2\) For each project in Groups 2A, 2C and 3,

justification of each project\'s inclusion in the

group;

\(3\) For each project in Group 2B, explanation of the

implementation status of previously approved

stages or need for additional funding if

comprehensive modernization is completed, and

recommendation regarding current FFY funding; and

\(4\) Results of Step 3 of the viability review for any

project and conclusions regarding project

viability.

c\. Regional Office Decisions. For Troubled PHAs, the

Regional Office shall familiarize itself with the

proposed modernization to the maximum extent possible.

After considering Field Office comments and

recommendations, the Regional Administrator shall make

the funding decisions.

\(1\) Viability Review. The Regional Office shall

review all results of Step 3 of the viability

review for a Troubled PHA project and the Field

Office\'s conclusions regarding project viability.

If the Regional Office wishes to change the

viability determination of any project as made by

the Field Office (e.g., from viable to nonviable

or vice versa), the Regional Office shall document

its reasons.

\(2\) Additional Funding. If, due to lack of progress

under the Memorandum of Agreement or other

reasons, the Regional Administrator is unable to

use all of the funds in the Regional Office\'s

allocation for Troubled PHAs, the Regional Office\*

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\* shall:

\(a\) subassign the remaining funds, where they are

sufficient, to the Field Offices on a fair

share basis for funding decisions by the

Field Office Manager under subparagraph b; or

\(b\) retain the remaining funds, where they are

insufficient to fair share, and request the

Field Offices to forward a list of unfunded,

but still recommended projects, ranked within

processing group. In ranking the unfunded

projects, the Field Office shall give double

weight to three technical review factors:

PHA\'s modernization capability; PHA\'s

management capability; and adequacy of PHA\'s

maintenance systems, including preventive and

routine maintenance. The Regional Office

shall merge all Field Office rankings into a

consolidated Regional list and select for

funding the top-ranked projects within

processing group.

\(3\) Notification to Field Offices. The Regional

Office shall notify in writing the Field Offices

of its funding decisions and viability

determinations for the Troubled PHAs and any other

funding decisions under subparagraph c(2)(b). The

Regional Office shall subassign these funds to the

Field Offices to complete the fund reservation

process.

d\. Non-Viable Projects. The Regional or Field Office shall

not rank or approve for further processing any project

which it determines to have any negative factors from

Step 3 of the viability review. Such projects are

considered to be nonviable and, therefore, ineligible

for modernization funding. See paragraph 3-25b(4)

regarding required consultation with Headquarters where

the Regional or Field Office wishes to fund nonviable

projects.

e\. Notification to CPD. After the Regional and Field

Office funding decisions, the AHMB shall notify the CPD

Division of any PHAs with programs being approved which

involve relocation and acquisition under paragraph 6-7.

3-24. SUBMISSION OF BUDGET. After the Regional and Field Office \*

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\* funding decisions, the Field Office shall request the funded

PHA to submit the following:

a\. Form HUD-52825, Comprehensive Assessment/Program Budget

(Parts I and II), which sets forth the physical and

management work items identified by the needs

assessments and mutually agreed to by the PHA and the

Field Office at Joint Review for each project proposed

for funding in the current FFY. Complete instructions

for preparing Form HUD-52825 are contained in Appendix

9, along with a completed sample of the form which may

be used as a guide in preparation.

b\. For each project proposed for comprehensive

modernization in the current FFY, Form HUD-52823,

Project Financial Forecast. Complete instructions for

preparing Form HUD-52823 are contained in Appendix 10.

\* 3-25. FIELD OFFICE APPROVAL/DISAPPROVAL LETTER. After Field

Office approval of the budget, the HMS shall prepare, in

consulation with other AHMB staff, a letter to each PHA for

the signature of the Field Office Manager or Regional

Administrator in co-located offices. The letter shall

indicate that PHA is being funded or inform the PHA of the

reasons why it is not being funded.

a\. Where the PHA is being funded, the letter shall include

the following:

\(1\) Identify each project being funding under the

Modernization Project in the current FFY by type

of modernization and amount;

\(2\) Explain any revisions to Form HUD-52825, including

any change in the approved method of

accomplishment (contract or force account labor);

\(3\) Provide other advice and guidance, such as

understandings reached at the Joint Review on the

organization and staffing of the modernization

program and the Project Implementation Schedule;

\(4\) Indicate that the PHA should proceed with

procurement of A/E services for work which is

being funded in the current FFY; \*

\(5\) Specify actions, if-any, that must be taken within

a specified time to correct any

3-31 12/89

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outstanding monitoring findings or management

concerns.

\* (6) State the extent to which the PHA is being allowed

to certify under paragraph 7-1;

\(7\) Where the Field Office is approving advance

planning costs for financially distressed PHAs as

a separate Modernization Project, see paragraph

3-19c; and

\(8\) Where the Field Office is approving the first

stage of a multi-stage comprehensive

modernization, state the following: \*

Our review has indicated that the total CIAP funds

required for all currently needed physical and

management Improvements at project \_\_\_\_\_\_\_\_\_

\_\_\_\_is \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_. Of this amount, we are

approving \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ for the first stage

of the multi-stage comprehensive modernization.

While we cannot presently make any legal

commitment of funds for subsequent FFYs, we will

make a good faith effort to provide the CIAP

funding required for the next stage in a

subsequent year. This good faith effort is

dependent upon the availability of future funds,

your satisfactory progress in obligating and

expending first stage funds, your submission of

additional documents as may be required in

paragraph 3-6, and your compliance with HUD

regulatory and statutory requirements. Your

agency must not incur any liabilities in reliance

on our approval of future funding.

b\. Where the PHA is not being funded, the letter shall

include the following:

\(1\) An explanation of the reason for the decision.

\(2\) For a project determined to be nonviable,

suggestions for alternatives for the future of the

project. With regard to the submission of a

revised proposal in the next FFY, these may

include, but are not limited to:

\(a\) Emergency modernization only;

\(b\) Changes in basic design, unit distribution,

or household type (elderly/nonelderly);

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\(c\) Partial demolition under 24 CFR Part 970; or

\(d\) Disposition of the entire project under 24

CFR Part 970.

\(3\) For a project determined to be nonviable, inform

the PHA that it may request reconsideration of the

proposal if:

\(a\) Relocation is infeasible because of the lack

of other decent, safe, sanitary and

affordable housing, including other public

housing units or units in the private market

affordable with Section 8 or voucher

assistance; and

\(b\) No other financially feasible program of

modernization available as an alternative

would overcome or deal more successfully with

the problem identified in the viability

review.

\(4\) If a PHA does request reconsideration on the

grounds set forth in subparagraph b(3) and the

\* Regional or Field Office wishes to approve, the

Regional Office shall request Headquarters

approval to fund, with appropriate justification.

If approved by Headquarters, the Regional or Field

Office shall reconsider the project for funding in

the current or subsequent FFY.

3-26. FAST-TRACKING EMERGENCIES. The PHA may apply for CIAP

funding for emergencies at any time during the FFY. When

funds are available, the Regional or Field Office may

fast-track the Application to fund reservation, without

holding the Application for processing in accordance with

the regular processing schedule. \*

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