U.S. Department of Housing and Urban Development

Office of Housing

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Special Attention of: Notice H 94-43 (HUD)

All Secretary\'s Representatives

All State Coordinators Issued: JUNE 14, 1994

All Area Coordinators Expires: JUNE 30, 1995

All Housing Directors
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All Directors of Housing Management Cross References:

All CPD Division Directors s. 1407, Pub. L. 102-550;

All Chief Property Officers 24 CFR Part 291,

All Homeless Coordinators Subpart E (as revised);

Housing Notices 91-91, 92-5,

92-83, 93-84 and 94-7.

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Subject: Revisions to the SFPD Homeless Initiative Program

This Notice provides guidance for the implementation of Section 1407

of the Housing and Community Development Act of 1992, and 24 CFR Part
291,

Subpart E, as published in the Federal Register on June 7, 1994. It

supplements, but does not replace, other program notices referenced
above.

It also revises the procedure for any Field Office wishing to request

permission to exceed its 10 percent of inventory leasing cap, and

establishes a new preapproval certification requirement related to

nondiscrimination and equal opportunity. Sales procedures, where the
buyer

is a homeless provider, remain unchanged and should be consistent with

Housing Notice 93-82.

Implementation of Section 1407(a) and (b): Notification for Homeless

Providers of HUD Properties Available for Lease

Subsection 1407(a) of the Act prohibits HUD from making a property

available for lease under the Homeless Initiative Program unless the

property has first been listed and made generally available for sale to
the

public for at least 30 days. Subsection 1407(b) provides an exception
with

respect to any area in which HUD determines that there will not be a

sufficient quantity of properties available for use under the program,
if

properties located in the area are first made generally available to the

public. In such exception cases, HUD will make available to preapproved

program participants up to 10 percent of the total number of properties
in

the HUD inventory for the area before offering those properties to the

general public.

The exception provision of 1407(b) shall apply to all Field Offices

having 200, or fewer, properties in inventory as of October 1. Field

Offices qualifying under this exception provision will be notified on an

annual basis by the Assistant Secretary for Housing-Federal Housing

Commissioner; however, any Field Office starting the fiscal year with an

inventory at or under 200 total properties according to the SAMS
Acquired

Properties Monthly Summary Report, or its successor, should immediately

implement the exception procedures unless it is already at or over its
10

percent leasing cap. In these offices, properties shall be offered, upon

request, for lease to prequalified homeless providers before being
offered

for public sale, until 10 percent of the office\'s total inventory as of

October 1 of that fiscal year has been leased.

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HSIP: Distribution: W-3-1, W-2(OGC)(H)(Z), W-3(A)(H)(ZAOO), W-4(H), R-1,

R-2, R-3, R-3-1(H)(RC), R-3-2, R-3-3, R-6, R-6-1,

R-6-2, R-7, R-7-1, R-7-2, R-8, R-8-1

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2

Jurisdictions under the following 30 Field Offices are considered

exception areas for the balance of Fiscal Year 1994; however, only those

with an asterisk (\*) were not already at or above their leasing cap as
of

the date of this Notice:

Providence\* Albuquerque Anchorage

New York Des Moines Boise\*

Newark\* Omaha\* Portland

Charleston Fargo Seattle

Pittsburgh\* Helena Spokane

Hato Ray Salt Lake City

Louisville Honolulu

Knoxville\* Reno

Cincinnati\* Sacramento

Columbus San Diego\*

Grand Rapids\* San Francisco

Milwaukee\* Tucson\*

Flint

The 11 offices designated by an asterisk (\*) above shall offer their

inventory first to homeless providers for the balance of Fiscal Year
1994

until their 10 percent leasing cap is reached. Other Field Offices
listed

above will not use the exception procedures for the balance of Fiscal
Year

1994 unless the number of properties currently under lease falls below
10

percent of their 10/1/93 inventory. All other Field Offices shall

immediately adopt the mandatory new procedures, and not offer properties

for lease until after 30 days of market exposure, calculated from the
date

when a property was first offered to \"owner-occupants\".

After the mandatory 30-day public sale period for most Field Offices,

or before public listing in exception Field Offices, the CPD Homeless

Coordinator for the area shall advise homeless providers of eligibile

properties available for lease in ZIP code areas previously designated
by

them. Notification may be, at the Field Office option, by direct mail

(SAMS report or BIR) or by relying upon the newspaper listing. If the

method of notification is being changed, adequate prior notice of such

change must be provided. Exception offices listed above that have not
yet

reached their 10 percent leasing cap must offer properties entering
their

inventory first to homeless providers for a 10 day period. Other offices

must hold specific properties off market for a 10-day consideration and

inspection period beginning to run upon notification of property
selection

by the provider to the Field Office after 30 days of market exposure.
(See

Attachment A for a program flow chart.)

Where the Field Office\'s list of available properties is sent to the

provider by mail, the consideration period will begin to run five days

after mailing. Only those properties for which the provider has
submitted

a written expression of interest will be held off market. In the
interest

of time, providers are encouraged but not required, to transmit their

interest in a property via facsimile where feasible.

If a signed lease is not received from the provider by the end of the

10 day consideration period, the Field Office will offer the property
for

sale. If a provider expresses an interest in leasing a property during
or

after the 30-day public sale period, the Field Office will offer the

property to the organization for 10 days after the public sale period,

provided the property is unsold, no offer from the public has been

accepted, and the property is not in a public bid offering period or

committed to another purpose. Signed leases may be transitted via

facsimile, followed by submission of the original. Properties are
leased,

or sold, to providers on a first come-first served basis.

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3

In notifying providers of available properties, Field Office staff

will coordinate the dissemination of the information to ensure that
where

more than one provider designates the same ZIP code area(s), those

providers receive property lists simultaneously and at the same regular

interval. This interval shall be based on a time period agreed upon

between the local HUD Office and the providers. Further, once a Field

Office has leased up to its 10 percent cap, the Chief Property Officer
must

notify the CPD Homeless Coordinator responsible for the area, and
request

that all participating homeless providers be notified of the pending
change

in notification procedures.

Basis for Limitation of Properties Held Off Market for One Provider

Field Office staff may limit the number of properties held off market

for a provider at any one time based upon that agency\'s financial
capacity

and past performance as determined by information provided in the

preapproval process and observations made during monitoring of a program
in

progress. The Chief Property Officer must consult with appropriate

Community Planning and Development (CPD) staff before the provider is

notified in writing that lists will no longer be made available on a

regular basis. The provider should be informed as to the basis for
HUD\'s

decision, and given an opportunity to respond.

Consultation with Local Governments

In those Field Offices subject to the exception procedures, CPD staff

must consult with units of general local government to identity parts of

the area where there is a particular need for units to serve homeless

persons, and make this information available to homeless providers
serving

the jurisdiction. This consultation should be on an annual basis, where

the program is active, unless the City includes information about areas

where supportive services for the homeless will be targeted in its
current

Comprehensive Housing Affordability Strategy (CHAS), or a successor
housing

and community development plan. However, local governments will not have

veto power over where properties used by the homeless are located.

Review of HUD Obligations Under Section 1407(c) Concerning State and
Local

Property Taxes

This provision of the Act was considered self-executing and was

implemented by Housing Notice 92-99 issued December 18, 1992. It

stipulates that HUD shall, upon request, provide information on State
and

local taxes by jurisdiction to homeless providers. Such information must

identity and describe any exemptions, or reductions, relating to payment
of

property taxes under State and local laws for the jurisdictions within

which the provider may be leasing properties from HUD.

Further, to the extent a provider has been exempted from a requirement

to pay State or local taxes, or a reduction in the amount of such taxes,

Field Office staff may not require the provider to pay or deposit such

amounts for the payment of taxes in an escrow account. CPD staff in the

appropriate HUD Office is responsible for researching State and local
tax

exemption procedures and providing the information to all program

participants requesting it.

Certification of Nondiscrimination and Equal Opportunity

In response to public comments received on the Proposed Rule, the

Department has decided to require a certification of nondiscrimination
and

equal opportunity from agencies applying to participate in the Homeless

Initiative Program. 24 CFR 291.435 expressly makes providers subject to

the Fair Housing Act, the Americans With Disabilities Act, as well as
other

nondiscrimination and equal opportunity requirements. In future, this

certification will be requested as a part of the preapproval process.
(See

Attachment B for a sample certification.)

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4

New Procedure for Requesting Permission to Exceed the 10% Cap

For Fiscal Year 1994 the nationwide leasing cap has been set at 3,062

properties based on total inventory in hand as of October 1, 1993. As of

April 1, 1994, a total of 2,415 properties were leased to homeless

providers, with 27 Field Offices at or over their 10 percent leasing
cap.

Where authorization to exceed the cap has already been given, or
existing

leases exceed 10 percent of an office\'s beginning Fiscal Year 1994

inventory, it is not necessary to make a reduction in leasing to conform
to

program guidelines. However, before a request to exceed the 10 percent
cap

is made, it is important to consider that the purpose of the Single
Family

Property Disposition Program is to reduce the inventory of acquired

properties through sale. It is not anticipated that any Field Office
will

have such a large percentage of its inventory under lease to homeless

providers that its ability to offer properties for sale is adversely

impacted. Therefore, prior to requesting approval to exceed the 10
percent

cap, Field Offices should encourage homeless providers to exercise their

purchase option under existing leases.

Where a Field Office does request approval to exceed its 10 percent

leasing cap by executing new leases, it is no longer appropriate to
request

approval from the Regional Director of Housing because of HUD\'s recent

re-organization. Therefore, when such permission is needed, the Director

of Housing Management should contact the Director of Single Family
Property

Disposition in Headquarters via facsimile, at 202/708-4006, stating the

number of additional properties proposed for leasing, and any special

rationale for the request. The Headquarters\' response will usually be

forthcoming within two working days, and will also be transmitted via

facsimile. In future, it is anticipated that SAMS II will develop

sufficient capacity for each Field Office to make its own determination

regarding the status of the nationwide cap; however, in the interim,

consultation with Headquarters is required.

Any questions regarding this Notice may be directed to the Single

Family Property Disposition Division at 202/708-0740 or CPD\'s Program

Management Division at 202/708-1226.

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Assistant Secretary for Housing Assistant Secretary for

\- Federal Housing Commissioner Community Planning & Development

Attachments

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PROCESSING FLOW CHART FOR HOMELESS PROGRAM

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ATTACHMENT A

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SAMPLE EQUAL HOUSING

OPPORTUNITY

Fair Housing & Equal Opportunity Certifications

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The homeless provider certifies that:

\"The applicant will comply with the Fair Housing Act (42 U. S. C.

3601-19) and regulations issued pursuant thereto

(24 CFR Part 100) which prohibit discrimination in housing on the

basis of race, color, religion, sex, handicap, familial status or

national origin, and administer its programs and activities

relating to housing in a manner to affirmatively further fair

housing.\"

\"The applicant will comply with Executive Order 11063 on Equal

Opportunity in Housing which prohibits discrimination because of

race color, creed or national origin in housing and related

facilities provided with Federal financial assistance and HUD

regulations (24 CFR Part 107).\"

\"The applicant will comply with Section 504 of the Rehabilitation

Act of 1973 (29 U.S.C. 794) and regulations issued pursuant

thereto (24 CFR Part 8) which state that no otherwise qualified

individual with disabilities in the United States shall solely by

reason of the disability be excluded from participation in, be

denied the benefits of, or be subjected to discrimination under

any program or activity receiving Federal financial assistance.\"

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Name of Homeless Provider Date

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Signature of Agency Representative Title

ATTACHMENT B