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CHAPTER 4. IMPLEMENTATION OF THE AFFIRMATIVE MARKETING

PLAN - APPLICANT\'S RESPONSIBILITIES

SECTION 1: INTRODUCTION

4-1. INTRODUCTION. This Chapter outlines the specific

obligations of both the applicant and any management or

sales agents of the applicant for implementing the

HUD-approved AFHM Plan. It applies to all programs covered by

the AFHM Regulations (24 CFR Part 200, Subpart M). It

discusses the steps the applicant takes during each phase

of the Plan\'s implementation. These steps include:

A. Outreach to those groups identified in the AFHM Plan as

least likely to apply for the proposed housing and to

the general public; and

B. Submission to the Field Office of documents related to

the Plan, e.g., copies of media advertising, letters to

community contacts, and HUD-approved reports such as

the Report on Applicants for Multifamily Rental

Housing, Form HUD-935.5 (Appendix 15) which is

submitted at certain stages of the application taking

cycle.

This Chapter also outlines activities relating to

continued marketing of multifamily projects after initial

rent-up has been completed and the Field office\'s role in

assisting the applicant during the initial occupancy

period.

SECTION 2: APPLICANT\'S ROLE IN IMPLEMENTING THE PLAN

4-2. NOTIFICATION OF INTENT TO BEGIN MARKETING. The Compliance

Procedures for AFHM Regulation (24 CFR 108.15) require the

applicant to submit to the Field Office having jurisdiction

over the area in which the proposed housing is located a

Notice of Intent to Begin Marketing no later than 90 days

prior to the commencement of any sales or rental marketing

activities. The notification shall be in writing and shall

state the date on which the applicant proposes to commence

such marketing activities.

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4-3. PREOCCUPANCY CONFERENCE. The Compliance Procedures for

AFHM Regulations (24 CFR 108.15) state that upon receipt of

the notification of intent to begin marketing, the FHEO

Director may schedule a preoccupancy conference with the

applicant and its advertising firm, rental and/or sales

agent. The FHEO Division should coordinate its

preoccupancy activities with those of Housing Management,

e.g., by holding a joint conference. At this conference,

according to Part 108, the previously approved AFHM Plan

shall be reviewed with the applicant to determine if the

Plan and/or its proposed implementation require

modification prior to initiation of marketing activities.

4-4. INITIATION OF MARKETING. Regardless of whether a

preoccupancy conference takes place, the applicant shall

commence the actual implementation of the Affirmative

Marketing Plan no later than 90 days prior to the

commencement of initial occupancy. Purchasers of HUD-owned

projects with mortgage insurance shall commence the

implementation of the AFHM Plan upon assuming control of

the property.

4-5. MARKETING FOR INITIAL SALES OR RENT-UP. In carrying out

the provisions of the HUD approved Plan, the Applicant

shall implement the following procedures:

A. Pre-Marketing Activities. Prior to initiating general

marketing, contact the commercial media, fair housing

groups, employment centers, civil rights organizations

and the community contacts which have been identified

in the Plan as resources for attracting persons who are

\"least likely to apply\" for the housing.

B. Outreach Documentation. Establish a system for

documenting outreach activities and for maintaining

records which provide racial, ethnic and gender data on

all applicants for the proposed housing. The system

should be consistent with any reporting and

recordkeeping requirements stated in the Regulations

governing HUD-assisted housing programs to which the

AFHM requirements apply. It should include all

documentation pertaining to:

1\. How the groups considered least likely to apply

were identified;

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2\. The special outreach activities undertaken to

attract these groups and the general public to the

housing;

3\. The training given to staff on Federal, State and

local civil rights laws;

4\. The selection of the community contacts who

assisted in implementing the AFHM program;

5\. The implementation of the Department\'s Fair Housing

Advertising Regulations stated at 24 CFR Part 109;

6\. Race and ethnicity of all applicants for the

housing; and

7\. Race and ethnicity of all individuals who visit the

project or subdivision in person.

C. Fair Housing Training. During the 90-day period prior

to the commencement of taking applications or sales,

provide training to all management or sales staff in

Federal, State and local fair housing laws, AFHM

objectives and the HUD-approved AFHM Plan. The timing

of the training is entirely at the discretion of the

applicant.

D. Submission of Materials to HUD. Submit materials to

the Field Office which document activities taken to

implement the approved AFHM Plan. These submissions are

required pursuant to the Regulations at 24 CFR

108.20(a) and include:

1\. Copies of advertisements, brochures, leaflets, and

letters to community contacts (community

organizations, fair housing groups, major

employment centers, referral services, and other

contacts) utilized as part of the marketing

program;

2\. Photographs of project signs;

3\. A copy of the instructions used to train

sales/rental staff on Fair Housing laws; and

4\. Anticipated dates of advertising and occupancy.

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E. Listing of Visitors. Prior to initiation of marketing,

the applicant may compile a list of those persons who

indicated an interest in applying for the housing by

race, ethnicity and gender of the head of household.

Such persons shall not be considered applicants and

placed in the applicant pool until they have filed a

formal application during the regular, publicized

application taking period.

SECTION 3: ACTIVITIES DURING INITIAL MARKETING

4-6. OVERVIEW. This section discusses the activities to be

undertaken by the applicant after the commencement of

marketing activities. These tasks include evaluation

of both the Plan\'s effectiveness during and after

implementation and the need for modification where

appropriate; and recordkeeping and reporting.

4-7. ASSESSMENT OF THE PLAN\'S IMPLEMENTATION. The applicant

shall monitor and carefully evaluate the results of the

special outreach and general marketing activities

undertaken during the initial sales or rent-up period.

Through such evaluation the applicant can determine whether

the provisions of the Plan have been successfully

implemented and how effectively the affirmative marketing

program has helped attract buyers or tenants of majority

and minority groups and, where appropriate, disabled

persons and families with children. Examples of factors to

be examined include:

A. The racial/ethnic composition of the population that

responded to the advertising used as part of the

special outreach activities.

1\. Definition. This population consists of all

persons who responded to the outreach activities

connected with the project or subdivision by:

a\. Visiting or inquiring about the project, and

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b\. Basing a decision to apply formally for the

project on that visit or inquiry. This data is

recorded on the Form HUD-935.5 which is

submitted periodically during the marketing

period. (See paragraph 4-9A. for more detailed

instruction on submitting these forms.)

2\. Comparison with Designations of \"Least Likely to

Apply\" Groups. The applicant should compare this

data with the designations of the groups identified

as least likely to apply without special outreach.

If this group of respondents does not include

significant numbers from those groups identified as

least likely to apply, the marketing program should

be carefully reviewed to determine:

a\. Whether the designations of the groups as least

likely to apply were appropriate in light of

marketing experience related to the project in

question; and

b\. Whether the outreach effort was insufficient

and adjustments in the advertising strategy or

other outreach efforts are warranted.

B. Measures relating directly to special outreach and

other advertising techniques used in the marketing

program. Such measures can include a running

tabulation of responses to questions relating to the

manner in which the prospective buyer or renter had

heard about the housing. Through such techniques the

applicant can determine whether:

1\. Foreign language or minority media are effective

marketing mechanisms;

2\. The Equal Housing Opportunity Logotype effectively

conveys to such buyers or renters the message that

they are welcome to apply and will not encounter

discrimination;

3\. Community contacts used by the applicant are

advertising housing effectively; and

4\. Members of groups targeted for special outreach

activities are learning about the housing through

informal means rather than commercial media.

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C. Consultation on changes. If the applicant concludes

that changes to the Plan are necessary, it should, as

early in the marketing process as possible, discuss

such changes with the Director of FHEO and submit them

for the Director\'s review and approval.

4-8. MODIFICATION OF THE HUD-APPROVED AFHM PLAN. Modifications

to the HUD-approved AFHM Plan may be appropriate under

certain circumstances prior to initial marketing, after

commencement of initial marketing, or after rent-up is

completed. Circumstances which may generate modifications

in the HUD-approved AFHM Plan include:

A. Significant changes in the parties implementing the

Plan, e.g., sales company, management company or owner.

If such changes occur, the owner should identify the

new parties and inform HUD of such changes.

B. Significant changes in the demographic, e.g.,

racial/ethnic characteristics of the neighborhood in

which the housing is located. Such changes can affect

the direction of outreach activities, i.e., the group

or groups within the eligible population that have been

identified as least likely to apply. For example, in a

market area whose population was essentially Black and

white at the time of application, in the original AFHM

Plan, the applicant may have selected non-minorities

(whites) as the group least likely to apply for a

project located within a predominantly Black area.

During the year in which the Department had been

considering the applicant\'s request for project

mortgage insurance, the locality had acquired a

significant Hispanic population which did not exist

even one year before. The applicant had to change its

AFHM Plan in response to this demographic change by

selecting Hispanics and non-minority whites as the

groups considered least likely to apply and by

translating its advertising materials into Spanish.

C. New information with respect to community contacts

which may be helpful in reaching the target groups,

e.g., establishment of a Community Housing Resource

Board since HUD approval of the Plan, or the

dissolution of a housing referral service previously

listed in the HUD-approved Plan.

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4-9. RECORDKEEPING AND REPORTING REQUIREMENTS. The Compliance

Procedures for Affirmative Fair Housing Marketing (24 CFR

Part 108), the Fair Housing Act, Section 504 of the

Rehabilitation Act of 1973, as amended, Executive Order

11063 and the reporting and recordkeeping requirements

stated in regulations for programs to which AFHM

requirements apply all require the applicants to furnish

certain data, in order that HUD may carry out its

monitoring responsibilities under applicable civil rights

laws. Accordingly, each applicant shall collect and

maintain information relating to sales and rental activity,

including documentation connected with the outreach

program, and data by race, ethnicity, handicap and gender

for both occupants and prospective renters/buyers. The

applicant shall maintain this data for the most recent

three-year period of operation or portion thereof, if the

project or subdivision has not been in operation for more

than three years. In addition, the applicant shall submit

periodic reports on the progress of the regular and special

outreach activities (Form HUD-935.5) to the Field Office as

part of the documentation required by 24 CFR Part 108.

Reporting instructions follow:

A. Applicants for Multifamily Rental Housing, HUD-935.5

(Appendix 15). Form HUD-935.5 is applicable to all

projects with a HUD-approved AFHM Plan that are

conducting initial marketing activities. The report

must be filed during the initial project rent-up period

(following submission of the Notice of Intent to Begin

Marketing\--see Paragraph 4-2) as soon as either:

NOTE: Data on applications rejected (Section F of the

form) is required only for insured subsidized projects.

1\. The number of applications received is no more than

one-half the number of units in the project;

2\. One-half the application taking time period has

passed; or

3\. The application period has closed. (This may

occur, at times, with such speed as to preclude a

prior filing under paragraphs 4-9A.1. or 4-9A.2.

above, as, for instance, when the number of

applications received on the first day of an

offering meets the maximum number needed to close

the applicant pool).

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B. Amended Reports. Amended reports are necessary when

initial reports are filed pursuant to:

1\. Paragraphs 4-9A.1. or 4-9A.2. above. Applicants

file an amended report when the application period

has closed, screening is completed or all

eligibility determinations have been made; or

2\. Paragraph 4-9A.3. above. Screening and eligibility

determinations were not included on the initial

report (Section E of Form HUD-935.5, and, where

applicable, Section F). While this process

provides a flexible schedule for filing a report, a

final HUD-935.5 must be filed with HUD when 95

percent of the units are occupied.

C. Section 8 New Construction and Substantial

Rehabilitation Projects. Entities managing Section 8

New Construction, Substantial Rehabilitation and State

Agency projects whose Housing Assistance Payments

Contracts are still in force shall maintain, in

addition to the types of data noted previously, data on

the place of previous residency of applicants and

approved eligible families. This data is collected in

accordance with Section 8 Housing Assistance Payments

Program for New Construction Regulation (24 CFR

880.603(b)(4) and 881.603(b)(4)) on the Form HUD-50059,

Certification and Recertification of Tenant

Eligibility.

D. Documentation Relating to the Outreach Program

(See paragraph 2-9).

E. Annual Occupancy Reports. The applicant for mortgage

insurance under insured unsubsidized multifamily

programs submits Form HUD-949, Civil Rights Tenant

Characteristics/Occupancy Report, Insured Unsubsidized

Housing Programs, upon completion of initial occupancy

activities. This report is due by the third Friday in

October of each year.

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4-10. SELECTION OF HOMEOWNERS FOR FHA-INSURED SALES HOUSING.

The applicant for single family mortgage insurance shall

select homeowners in a manner consistent with the

provisions of the Fair Housing Act, Executive Order 11063,

Section 527 of the National Housing Act (which prohibits

discrimination in the granting of Federally-insured

mortgage loans based on sex and requires lenders to

consider on an equal basis the income of both husband and

wife in determining the creditworthiness of prospective

buyers), and the provisions of the AFHM Plan. If the

applicant employs a third party such as a sales agent or

real estate broker to conduct the applicant\'s sales

activities, the applicant may be directly responsible for

the results achieved by the sales agent. Thus, the

applicant should be aware of acts which may adversely

affect ability of homeseekers to obtain housing of their

choice and impair the achievement of the objectives of the

AFHM Plan. The Regulations at 24 CFR 100, Discriminatory

Conduct Under the Fair Housing Act, enumerate many illegal

and discriminatory real estate marketing practices for

which the applicant can be held legally responsible if

they are committed by its brokers or sales agents.

4-11. FUTURE MARKETING ACTIVITIES FOR RENTAL PROJECTS BUILT

PRIOR TO 1988. Upon completion of initial rent-up, the

applicant initiates appropriate marketing activities for

filling vacancies resulting from normal turnover. The

applicant may utilize the remaining list of prospective

renter/buyers from the initial marketing effort as the

waiting list for the project. The applicant is encouraged

to contact the Field Office for assistance in adapting the

AFHM Plan to the post initial occupancy period. The

nature of this adaptation would normally depend on factors

such as:

A. Waiting List. The size and racial/ethnic composition

of the waiting list, if one is maintained;

B. Overall Assessment. The assessment by HUD and the

applicant of the effectiveness of the initial

marketing program, especially with respect to

participation by members of those groups identified as

least likely to apply; and

C. Demographic. Any changes in the demographic and

socioeconomic composition of the project area and the

housing market area which occurred after the

completion of the initial rent-up cycle.

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