**Authority:**   25 U.S.C. 4101 *et seq. *; 42 U.S.C. 3535(d).

**Source:**   63 FR 12349, Mar. 12, 1998, unless otherwise noted.

24 CFR Code of Federal Regulations, Revised as of April 1, 2008

##### Part 1000 -- Native American Housing Activities

**[T]{.underline}[ABLE OF CONTENTS]{.underline}**

Subpart A\--GENERAL

**§**1000.1 - What is the applicability and scope of these regulations?

**§**1000.2 - What are the guiding principles in the implementation of
NAHASDA?

**§**1000.4 - What are the objectives of NAHASDA?

**§**1000.6 - What is the nature of the IHBG program?

**§**1000.8 - May provisions of these regulations be waived?

**§**1000.10 - What definitions apply in these regulations?

**§**1000.12 - What nondiscrimination requirements are applicable?

**§**1000.14 - What relocation and real property acquisition policies
are applicable?

**§**1000.16 - What labor standards are applicable?

**§**1000.18 - What environmental review requirements apply?

**§**1000.20 - Is an Indian tribe required to assume environmental
review responsibilities?

**§**1000.22 - Are the costs of the environmental review an eligible
cost?

**§**1000.24 - If an Indian tribe assumes environmental review
responsibility, how will HUD assist the Indian tribe in performing the
environmental review?

**§**1000.26 - What are the administrative requirements under NAHASDA?

**§**1000.28 - May a self-governance Indian tribe be exempted from the
applicability of 1000.26?

**§**1000.30 - What prohibitions regarding conflict of interest are
applicable?

**§**1000.32 - May exceptions be made to the conflict of interest
provisions?

**§**1000.34 - What factors must be considered in making an exception to
the conflict of interest provisions?

**§**1000.36 - How long must a recipient retain records regarding
exceptions made to the conflict of interest provisions?

**§**1000.38 - What flood insurance requirements are applicable?

**§**1000.40 - Do lead-based paint poisoning prevention requirements
apply to affordable housing activities under NAHASDA?

**§**1000.42 - Are the requirements of section 3 of the Housing and
Urban Development Act of 1968 applicable?

**§**1000.44 - What prohibitions on the use of debarred, suspended, or
ineligible contractors apply?

**§**1000.46 - Do drug-free workplace requirements apply?

**§**1000.48 - Are Indian preference requirements applicable to IHBG
activities?

**§**1000.50 - What Indian preference requirements apply to IHBG
administration activities?

**§**1000.52 - What Indian preference requirements apply to IHBG
procurement?

**§**1000.54 - What procedures apply to complaints arising out of any of
the methods of providing for Indian preference?

**§**1000.56 - How are NAHASDA funds paid by HUD to recipients?

**§**1000.58 - Are there limitations on the investment of IHBG funds?

**§**1000.60 - Can HUD prevent improper expenditure of funds already
disbursed to a recipient?

**§**1000.62 - What is considered program income and what restrictions
are there on its use?

Subpart B\--AFFORDABLE HOUSING ACTIVITIES

**§**1000.101 - What is affordable housing?

**§**1000.102 - What are eligible affordable housing activities?

**§**1000.103 - How may IHBG funds be used for tenant-based or
project-based rental assistance?

**§**1000.104 - What families are eligible for affordable housing
activities?

**§**1000.106 - What families receiving assistance under title II of
NAHASDA require HUD approval?

**§**1000.108 - How is HUD approval obtained by a recipient for housing
for non low-income Indian families and model activities?

**§**1000.110 - Under what conditions may non low-income Indian families
participate in the program?

**§**1000.112 - How will HUD determine whether to approve model housing
activities?

**§**1000.114 - How long does HUD have to review and act on a proposal
to provide assistance to non low-income Indian families or a model
housing activity?

**§**1000.116 - What should HUD do before declining a proposal to
provide assistance to non low-income Indian families or a model housing
activity?

**§**1000.118 - What recourse does a recipient have if HUD disapproves a
proposal to provide assistance to non low-income Indian families or a
model housing activity?

**§**1000.120 - May a recipient use Indian preference or tribal
preference in selecting families for housing assistance?

**§**1000.122 - May NAHASDA grant funds be used as matching funds to
obtain and leverage funding, including any Federal or state program and
still be considered an affordable housing activity?

**§**1000.124 - What maximum and minimum rent or homebuyer payment can a
recipient charge a low-income rental tenant or homebuyer residing in
housing units assisted with NAHASDA grant amounts?

**§**1000.126 - May a recipient charge flat or income-adjusted rents?

**§**1000.128 - Is income verification required for assistance under
NAHASDA?

**§**1000.130 - May a recipient charge a non low-income family rents or
homebuyer payments which are more than 30 percent of the family\'s
adjusted income?

**§**1000.132 - Are utilities considered a part of rent or homebuyer
payments?

**§**1000.134 - When may a recipient (or entity funded by a recipient)
demolish or dispose of current assisted stock?

**§**1000.136 - What insurance requirements apply to housing units
assisted with NAHASDA grants?

**§**1000.138 - What constitutes adequate insurance?

**§**1000.139 - What are the standards for insurance entities owned and
controlled by recipients?

**§**1000.140 - May a recipient use grant funds to purchase insurance
for privately owned housing to protect NAHASDA grant amounts spent on
that housing?

**§**1000.142 - What is the \'\'useful life\'\' during which low-income
rental housing and low-income homebuyer housing must remain affordable
as required in sections 205(a)(2) and 209 of NAHASDA?

**§**1000.144 - Are Mutual Help homes developed under the 1937 Act
subject to the useful life provisions of section 205(a)(2)?

**§**1000.146 - Are homebuyers required to remain low-income throughout
the term of their participation in a housing program funded under
NAHASDA?

**§**1000.150 - How may Indian tribes and TDHEs receive criminal
conviction information on adult applicants or tenants?

**§**1000.152 - How is the recipient to use criminal conviction
information?

**§**1000.154 - How is the recipient to keep criminal conviction
information confidential?

**§**1000.156 - Is affordable housing developed, acquired, or assisted
under the IHBG program subject to limitations on cost or design
standards?

**§**1000.158 - How will a NAHASDA grant recipient know that the housing
assisted under the IHBG program meets the requirements of 1000.156?

**§**1000.160 - Are non-dwelling structures developed, acquired or
assisted under the IHBG program subject to limitations on cost or design
standards?

**§**1000.162 - How will a recipient know that non-dwelling structures
assisted under the IHBG program meet the requirements of 1000.160?

Subpart C\--INDIAN HOUSING PLAN (IHP)

**§**1000.201 - How are funds made available under NAHASDA?

**§**1000.202 - Who are eligible recipients?

**§**1000.204 - How does an Indian tribe designate itself as recipient
of the grant?

**§**1000.206 - How is a TDHE designated?

**§**1000.208 - What happens if an Indian tribe had two IHAs as of
September 30, 1996?

**§**1000.210 - What happens to existing 1937 Act units in those
jurisdictions for which Indian tribes do not or cannot submit an IHP?

**§**1000.212 - Is submission of an IHP required?

**§**1000.214 - What is the deadline for submission of an IHP?

**§**1000.216 - What happens if the recipient does not submit the IHP to
the Area ONAP by July 1?

**§**1000.218 - Who prepares and submits an IHP?

**§**1000.220 - What are the minimum requirements for the IHP?

**§**1000.222 - Are there separate IHP requirements for small Indian
tribes and small TDHEs?

**§**1000.224 - Can any part of the IHP be waived?

**§**1000.226 - Can the certification requirements of section 102(c)(5)
of NAHASDA be waived by HUD?

**§**1000.228 - If HUD changes its IHP format will Indian tribes be
involved?

**§**1000.230 - What is the process for HUD review of IHPs and IHP
amendments?

**§**1000.232 - Can an Indian tribe or TDHE amend its IHP?

**§**1000.234 - Can HUD\'s determination regarding the non-compliance of
an IHP or a modification to an IHP be appealed?

**§**1000.236 - What are eligible administrative and planning expenses?

**§**1000.238 - What percentage of the IHBG funds can be used for
administrative and planning expenses?

**§**1000.240 - When is a local cooperation agreement required for
affordable housing activities?

**§**1000.242 - When does the requirement for exemption from taxation
apply to affordable housing activities?

Subpart D\--ALLOCATION FORMULA

**§**1000.301 - What is the purpose of the IHBG formula?

**§**1000.302 - What are the definitions applicable for the IHBG
formula?

**§**1000.304 - May the IHBG formula be modified?

**§**1000.306 - How can the IHBG formula be modified?

**§**1000.308 - Who can make modifications to the IHBG formula?

**§**1000.310 - What are the components of the IHBG formula?

**§**1000.312 - What is current assisted stock?

**§**1000.314 - What is formula current assisted stock?

**§**1000.315 - Is a recipient required to report changes to the Formula
Current Assisted Stock (FCAS) on the Formula Response Form?

**§**1000.316 - How is the Formula Current Assisted Stock (FCAS)
Component developed?

**§**1000.317 - Who is the recipient for funds for current assisted
stock which is owned by state-created Regional Native Housing
Authorities in Alaska?

**§**1000.318 - When do units under Formula Current Assisted Stock cease
to be counted or expire from the inventory used for the formula?

**§**1000.319 - What would happen if a recipient misreports or fails to
correct Formula Current Assisted Stock (FCAS) information on the Formula
Response Form?

**§**1000.320 - How is Formula Current Assisted Stock adjusted for local
area costs?

**§**1000.322 - Are IHA financed units included in the determination of
Formula Current Assisted Stock?

**§**1000.324 - How is the need component developed?

**§**1000.325 - How is the need component adjusted for local area costs?

**§**1000.326 - What if a formula area is served by more than one Indian
tribe?

**§**1000.327 - What is the order of preference for allocating the IHBG
formula needs data for Indian tribes in Alaska not located on
reservations due to the unique circumstances in Alaska?

**§**1000.328 - What is the minimum amount that an Indian tribe may
receive under the need component of the formula?

**§**1000.330 - What are the data sources for the need variables?

**§**1000.332 - Will data used by HUD to determine an Indian tribe\'s or
TDHE\'s formula allocation be provided to the Indian tribe or TDHE
before the allocation?

**§**1000.334 - May Indian tribes, TDHEs, or HUD challenge the data from
the U.S. Decennial Census or provide an alternative source of data?

**§**1000.336 - How may an Indian tribe, TDHE, or HUD challenge data or
appeal HUD formula determinations?

**§**1000.340 - What if an Indian tribe is allocated less funding under
the IHBG Formula than it received in Fiscal Year (FY) 1996 for operating
subsidy and modernization?

Subpart E\--FEDERAL GUARANTEES FOR FINANCING OF TRIBAL HOUSING
ACTIVITIES

**§**1000.401 - What terms are used throughout this subpart?

**§**1000.402 - Are State recognized Indian tribes eligible for
guarantees under title VI of NAHASDA?

**§**1000.404 - What lenders are eligible for participation?

**§**1000.406 - What constitutes tribal approval to issue notes or other
obligations under title VI of NAHASDA?

**§**1000.408 - How does an Indian tribe or TDHE show that it has made
efforts to obtain financing without a guarantee and cannot complete such
financing in a timely manner?

**§**1000.410 - What conditions shall HUD prescribe when providing a
guarantee for notes or other obligations issued by an Indian tribe?

**§**1000.412 - Can an issuer obtain a guarantee for more than one note
or other obligation at a time?

**§**1000.414 - How is an issuer\'s financial capacity demonstrated?

**§**1000.416 - What is a repayment contract in a form acceptable to
HUD?

**§**1000.418 - Can grant funds be used to pay costs incurred when
issuing notes or other obligations?

**§**1000.420 - May grants made by HUD under section 603 of NAHASDA be
used to pay net interest costs incurred when issuing notes or other
obligations?

**§**1000.422 - What are the procedures for applying for loan guarantees
under title VI of NAHASDA?

**§**1000.424 - What are the application requirements for guarantee
assistance under title VI of NAHASDA?

**§**1000.426 - How does HUD review a guarantee application?

**§**1000.428 - For what reasons may HUD disapprove an application or
approve an application for an amount less than that requested?

**§**1000.430 - When will HUD issue notice to the applicant if the
application is approved at the requested or reduced amount?

**§**1000.432 - Can an amendment to an approved guarantee be made?

**§**1000.434 - How will HUD allocate the availability of loan guarantee
assistance?

**§**1000.436 - How will HUD monitor the use of funds guaranteed under
this subpart?

Subpart F\--RECIPIENT MONITORING, OVERSIGHT AND ACCOUNTABILITY

**§**1000.501 - Who is involved in monitoring activities under NAHASDA?

**§**1000.502 - What are the monitoring responsibilities of the
recipient, the grant beneficiary and HUD under NAHASDA?

**§**1000.504 - What are the recipient performance objectives?

**§**1000.506 - If the TDHE is the recipient, must it submit its
monitoring evaluation/results to the Indian tribe?

**§**1000.508 - If the recipient monitoring identifies programmatic
concerns, what happens?

**§**1000.510 - What happens if tribal monitoring identifies compliance
concerns?

**§**1000.512 - Are performance reports required?

**§**1000.514 - When must the annual performance report be submitted?

**§**1000.516 - What reporting period is covered by the annual
performance report?

**§**1000.518 - When must a recipient obtain public comment on its
annual performance report?

**§**1000.520 - What are the purposes of HUD review?

**§**1000.521 - After the receipt of the recipient\'s performance
report, how long does HUD have to make recommendations under section
404(c) of NAHASDA?

**§**1000.522 - How will HUD give notice of on-site reviews?

**§**1000.524 - What are HUD\'s performance measures for the review?

**§**1000.526 - What information will HUD use for its review?

**§**1000.528 - What are the procedures for the recipient to comment on
the result of HUD\'s review when HUD issues a report under section
405(b) of NAHASDA?

**§**1000.530 - What corrective and remedial actions will HUD request or
recommend to address performance problems prior to taking action under
1000.532 or 1000.538?

**§**1000.532 - What are the adjustments HUD makes to a recipient\'s
future year\'s grant amount under section 405 of NAHASDA?

**§**1000.534 - What constitutes substantial noncompliance?

**§**1000.536 - What happens to NAHASDA grant funds adjusted, reduced,
withdrawn, or terminated under 1000.532 or 1000.538?

**§**1000.538 - What remedies are available for substantial
noncompliance?

**§**1000.540 - What hearing procedures will be used under NAHASDA?

**§**1000.542 - When may HUD require replacement of a recipient?

**§**1000.544 - What audits are required?

**§**1000.546 - Are audit costs eligible program or administrative
expenses?

**§**1000.548 - Must a copy of the recipient\'s audit pursuant to the
Single Audit Act relating to NAHASDA activities be submitted to HUD?

**§**1000.550 - If the TDHE is the recipient, does it have to submit a
copy of its audit to the Indian tribe?

**§**1000.552 - How long must the recipient maintain program records?

**§**1000.554 - Which agencies have right of access to the recipient\'s
records relating to activities carried out under NAHASDA?

§1000.556 - Does the Freedom of Information Act (FOIA) apply to
recipient records?

§1000.558 - Does the Federal Privacy Act apply to recipient records?

Appendix Appendix A to Part 1000 \--Indian Housing Block Grant Formula
Mechanics

Appendix Appendix B to Part 1000 \--IHBG Block Grant Formula Mechanisms

**Authority:**   25 U.S.C. 4101 *et seq. *; 42 U.S.C. 3535(d).

**Source:**   63 FR 12349, Mar. 12, 1998, unless otherwise noted.

24 CFR Code of Federal Regulations, Revised as of April 1, 2008

##### Part 1000 -- Native American Housing Activities

##### Subpart A---General

**§ 1000.1   What is the applicability and scope of these regulations?**

Under the Native American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4101 *et seq. *) (NAHASDA) the Department of Housing
and Urban Development (HUD) provides grants, loan guarantees, and
technical assistance to Indian tribes and Alaska Native villages for the
development and operation of low-income housing in Indian areas. The
policies and procedures described in this part apply to grants to
eligible recipients under the Indian Housing Block Grant (IHBG) program
for Indian tribes and Alaska Native villages. This part also applies to
loan guarantee assistance under title VI of NAHASDA. The regulations in
this part supplement the statutory requirements set forth in NAHASDA.
This part, as much as practicable, does not repeat statutory language.

##### § 1000.2   What are the guiding principles in the implementation of NAHASDA?

\(a\) The Secretary shall use the following Congressional findings set
forth in section 2 of NAHASDA as the guiding principles in the
implementation of NAHASDA:

\(1\) The Federal government has a responsibility to promote the general
welfare of the Nation:

\(i\) By using Federal resources to aid families and individuals seeking
affordable homes in safe and healthy environments and, in particular,
assisting responsible, deserving citizens who cannot provide fully for
themselves because of temporary circumstances or factors beyond their
control;

\(ii\) By working to ensure a thriving national economy and a strong
private housing market; and

\(iii\) By developing effective partnerships among the Federal
government, state, tribal, and local governments, and private entities
that allow government to accept responsibility for fostering the
development of a healthy marketplace and allow families to prosper
without government involvement in their day-to-day activities.

\(2\) There exists a unique relationship between the Government of the
United States and the governments of Indian tribes and a unique Federal
responsibility to Indian people.

\(3\) The Constitution of the United States invests the Congress with
plenary power over the field of Indian affairs, and through treaties,
statutes, and historical relations with Indian tribes, the United States
has undertaken a unique trust responsibility to protect and support
Indian tribes and Indian people.

\(4\) The Congress, through treaties, statutes, and the general course
of dealing with Indian tribes, has assumed a trust responsibility for
the protection and preservation of Indian tribes and for working with
Indian tribes and their members to improve their housing conditions and
socioeconomic status so that they are able to take greater
responsibility for their own economic condition.

\(5\) Providing affordable homes in safe and healthy environments is an
essential element in the special role of the United States in helping
Indian tribes and their members to improve their housing conditions and
socioeconomic status.

\(6\) The need for affordable homes in safe and healthy environments on
Indian reservations, in Indian communities, and in Native Alaskan
villages is acute and the Federal government should work not only to
provide housing assistance, but also, to the extent practicable, to
assist in the development of private housing finance mechanisms on
Indian lands to achieve the goals of economic self-sufficiency and
self-determination for Indian tribes and their members.

\(7\) Federal assistance to meet these responsibilities should be
provided in a manner that recognizes the right of Indian
self-determination and tribal self-governance by making such assistance
available directly to the Indian tribes or tribally designated entities
under authorities similar to those accorded Indian tribes in Public Law
93--638 (25 U.S.C. 450 *et seq. *).

\(b\) Nothing in this section shall be construed as releasing the United
States government from any responsibility arising under its trust
responsibilities towards Indians or any treaty or treaties with an
Indian tribe or nation.

##### § 1000.4   What are the objectives of NAHASDA?

The primary objectives of NAHASDA are:

\(a\) To assist and promote affordable housing activities to develop,
maintain and operate affordable housing in safe and healthy environments
on Indian reservations and in other Indian areas for occupancy by
low-income Indian families;

\(b\) To ensure better access to private mortgage markets for Indian
tribes and their members and to promote self-sufficiency of Indian
tribes and their members;

\(c\) To coordinate activities to provide housing for Indian tribes and
their members and to promote self-sufficiency of Indian tribes and their
members;

\(d\) To plan for and integrate infrastructure resources for Indian
tribes with housing development for Indian tribes; and

\(e\) To promote the development of private capital markets in Indian
country and to allow such markets to operate and grow, thereby
benefiting Indian communities.

##### § 1000.6   What is the nature of the IHBG program?

The IHBG program is formula driven whereby eligible recipients of
funding receive an equitable share of appropriations made by the
Congress, based upon formula components specified under subpart D of
this part. IHBG recipients must have the administrative capacity to
undertake the affordable housing activities proposed, including the
systems of internal control necessary to administer these activities
effectively without fraud, waste, or mismanagement.

##### § 1000.8   May provisions of these regulations be waived?

Yes. Upon determination of good cause, the Secretary may, subject to
statutory limitations, waive any provision of this part and delegate
this authority in accordance with section 106 of the Department of
Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3535(q)).

##### § 1000.10   What definitions apply in these regulations?

Except as noted in a particular subpart, the following definitions apply
in this part:

\(a\) The terms " *Adjusted income *," " *Affordable housing *," "
*Drug-related criminal activity *," " *Elderly families and near-elderly
families *," " *Elderly person *," " *Grant beneficiary *," " *Indian
*," " *Indian housing plan (IHP) *," " *Indian tribe *," " *Low-income
family *," " *Near-elderly persons *," " *Nonprofit *," " *Recipient *,"
*Secretary *," " *State *," and " *Tribally designated housing entity
(TDHE) *" are defined in section 4 of NAHASDA.

\(b\) In addition to the definitions set forth in paragraph (a) of this
section, the following definitions apply to this part:

*Affordable housing activities *are those activities identified in
section 202 of NAHASDA.

*Annual Contributions Contract (ACC) *means a contract under the 1937
Act between HUD and an IHA containing the terms and conditions under
which HUD assists the IHA in providing decent, safe, and sanitary
housing for low-income families.

*Annual income *has one of the following meanings, as determined by the
Indian tribe:

\(1\) "Annual income" as defined for HUD\'s Section 8 programs in 24 CFR
part 5, subpart F (except when determining the income of a homebuyer for
an owner-occupied rehabilitation project, the value of the homeowner\'s
principal residence may be excluded from the calculation of Net Family
assets); or

\(2\) Annual income as reported under the Census long-form for the most
recent available decennial Census. This definition includes:

\(i\) Wages, salaries, tips, commissions, etc.;

\(ii\) Self-employment income;

\(iii\) Farm self-employment income;

\(iv\) Interest, dividends, net rental income, or income from estates or
trusts;

\(v\) Social security or railroad retirement;

\(vi\) Supplemental Security Income, Aid to Families with Dependent
Children, or other public assistance or public welfare programs;

\(vii\) Retirement, survivor, or disability pensions; and

\(viii\) Any other sources of income received regularly, including
Veterans\' (VA) payments, unemployment compensation, and alimony; or

\(3\) Adjusted gross income as defined for purposes of reporting under
Internal Revenue Service (IRS) Form 1040 series for individual Federal
annual income tax purposes.

*Assistant Secretary *means the Assistant Secretary for Public and
Indian Housing.

*Department or HUD *means the Department of Housing and Urban
Development.

*Family *includes, but is not limited to, a family with or without
children, an elderly family, a near-elderly family, a disabled family, a
single person, as determined by the Indian tribe.

*Homebuyer payment *means the payment of a family purchasing a home
pursuant to a lease purchase agreement.

*Homeless family *means a family who is without safe, sanitary and
affordable housing even though it may have temporary shelter provided by
the community, or a family who is homeless as determined by the Indian
tribe.

*IHBG *means Indian Housing Block Grant.

*Income *means annual income as defined in this subpart.

*Indian Area *means the area within which an Indian tribe operates
affordable housing programs or the area in which a TDHE is authorized by
one or more Indian tribes to operate affordable housing programs.
Whenever the term "jurisdiction" is used in NAHASDA it shall mean
"Indian Area" except where specific reference is made to the
jurisdiction of a court.

*Indian Housing Authority (IHA) *means an entity that:

\(1\) Is authorized to engage or assist in the development or operation
of low-income housing for Indians under the 1937 Act; and

\(2\) Is established:

\(i\) By exercise of the power of self government of an Indian tribe
independent of state law; or

\(ii\) By operation of state law providing specifically for housing
authorities for Indians, including regional housing authorities in the
State of Alaska.

*Median income *for an Indian area is the greater of:

\(1\) The median income for the counties, previous counties, or their
equivalent in which the Indian area is located; or

\(2\) The median income for the United States.

*NAHASDA *means the Native American Housing Assistance and
Self-Determination Act of 1996 (25 U.S.C. 4101 *et seq. *).

*1937 Act *means the United States Housing Act of 1937 (42 U.S.C. 1437
*et seq. *).

*Office of Native American Programs (ONAP) *means the office of HUD
which has been delegated authority to administer programs under this
part. An "Area ONAP" is an ONAP field office.

*Person with Disabilities *means a person who---

\(1\) Has a disability as defined in section 223 of the Social Security
Act;

\(2\) Has a developmental disability as defined in section 102 of the
Developmental Disabilities Assistance and Bill of Rights Act;

\(3\) Has a physical, mental, or emotional impairment which-

\(i\) Is expected to be of long-continued and indefinite duration;

\(ii\) Substantially impedes his or her ability to live independently;
and

\(iii\) Is of such a nature that such ability could be improved by more
suitable housing conditions.

\(4\) The term "person with disabilities" includes persons who have the
disease of acquired immunodeficiency syndrome or any condition arising
from the etiologic agent for acquired immunodeficiency syndrome.

\(5\) Notwithstanding any other provision of law, no individual shall be
considered a person with disabilities, for purposes of eligibility for
housing assisted under this part, solely on the basis of any drug or
alcohol dependence. The Secretary shall consult with Indian tribes and
appropriate Federal agencies to implement this paragraph.

\(6\) For purposes of this definition, the term " *physical, mental or
emotional impairment *" includes, but is not limited to:

\(i\) Any physiological disorder or condition, cosmetic disfigurement,
or anatomical loss affecting one or more of the following body systems:
Neurological, musculoskeletal, special sense organs, respiratory,
including speech organs; cardiovascular; reproductive; digestive;
genito-urinary; hemic and lymphatic; skin; and endocrine; or

\(ii\) Any mental or psychological condition, such as mental
retardation, organic brain syndrome, emotional or mental illness, and
specific learning disabilities.

\(iii\) The term " *physical, mental, or emotional impairment *"
includes, but is not limited to, such diseases and conditions as
orthopedic, visual, speech, and hearing impairments, cerebral palsy,
autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart
disease, diabetes, Human Immunodeficiency Virus infection, mental
retardation, and emotional illness.

##### § 1000.12   What nondiscrimination requirements are applicable?

\(a\) The requirements of the Age Discrimination Act of 1975 (42 U.S.C.
6101--6107) and HUD\'s implementing regulations in 24 CFR part 146.

\(b\) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and
HUD\'s regulations at 24 CFR part 8 apply.

\(c\) The Indian Civil Rights Act (Title II of the Civil Rights Act of
1968; 25 U.S.C. 1301--1303), applies to Federally recognized Indian
tribes that exercise powers of self-government.

\(d\) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and
title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 *et seq. *)
apply to Indian tribes that are not covered by the Indian Civil Rights
Act. However, the Title VI and Title VIII requirements do not apply to
actions by Indian tribes under section 201(b) of NAHASDA.

##### § 1000.14   What relocation and real property acquisition policies are applicable?

The following relocation and real property acquisition policies are
applicable to programs developed or operated under NAHASDA:

\(a\) *Real Property acquisition requirements. *The acquisition of real
property for an assisted activity is subject to 49 CFR part 24, subpart
B. Whenever the recipient does not have the authority to acquire the
real property through condemnation, it shall:

\(1\) Before discussing the purchase price, inform the owner:

\(i\) Of the amount it believes to be the fair market value of the
property. Such amount shall be based upon one or more appraisals
prepared by a qualified appraiser. However, this provision does not
prevent the recipient from accepting a donation or purchasing the real
property at less than its fair market value.

\(ii\) That it will be unable to acquire the property if negotiations
fail to result in an amicable agreement.

\(2\) Request HUD approval of the proposed acquisition price before
executing a firm commitment to purchase the property if the proposed
acquisition payment exceeds the fair market value. The recipient shall
include with its request a copy of the appraisal(s) and a justification
for the proposed acquisition payment. HUD will promptly review the
proposal and inform the recipient of its approval or disapproval.

\(b\) *Minimize displacement. *Consistent with the other goals and
objectives of this part, recipients shall assure that they have taken
all reasonable steps to minimize the displacement of persons
(households, businesses, nonprofit organizations, and farms) as a result
of a project assisted under this part.

\(c\) *Temporary relocation. *The following policies cover residential
tenants and homebuyers who will not be required to move permanently but
who must relocate temporarily for the project. Such residential tenants
and homebuyers shall be provided:

\(1\) Reimbursement for all reasonable out-of-pocket expenses incurred
in connection with the temporary relocation, including the cost of
moving to and from the temporarily occupied housing and any increase in
monthly housing costs (e.g., rent/utility costs).

\(2\) Appropriate advisory services, including reasonable advance
written notice of:

\(i\) The date and approximate duration of the temporary relocation;

\(ii\) The location of the suitable, decent, safe and sanitary dwelling
to be made available for the temporary period;

\(iii\) The terms and conditions under which the tenant may occupy a
suitable, decent, safe, and sanitary dwelling in the building/complex
following completion of the repairs; and

\(iv\) The provisions of paragraph (c)(1) of this section.

\(d\) *Relocation assistance for displaced persons. *A displaced person
(defined in paragraph (g) of this section) must be provided relocation
assistance at the levels described in, and in accordance with the
requirements of, the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as amended (URA) (42 U.S.C.
4601--4655) and implementing regulations at 49 CFR part 24.

\(e\) *Appeals to the recipient. *A person who disagrees with the
recipient\'s determination concerning whether the person qualifies as a
"displaced person," or the amount of relocation assistance for which the
person is eligible, may file a written appeal of that determination with
the recipient.

\(f\) *Responsibility of recipient. *(1) The recipient shall certify
that it will comply with the URA, the regulations at 49 CFR part 24, and
the requirements of this section. The recipient shall ensure such
compliance notwithstanding any third party\'s contractual obligation to
the recipient to comply with the provisions in this section.

\(2\) The cost of required relocation assistance is an eligible project
cost in the same manner and to the same extent as other project costs.
However, such assistance may also be paid for with funds available to
the recipient from any other source.

\(3\) The recipient shall maintain records in sufficient detail to
demonstrate compliance with this section.

\(g\) *Definition of displaced person. *(1) For purposes of this
section, the term "displaced person" means any person (household,
business, nonprofit organization, or farm) that moves from real
property, or moves his or her personal property from real property,
permanently, as a direct result of rehabilitation, demolition, or
acquisition for a project assisted under this part. The term "displaced
person" includes, but is not limited to:

\(i\) A tenant-occupant of a dwelling unit who moves from the
building/complex permanently after the submission to HUD of an IHP that
is later approved.

\(ii\) Any person, including a person who moves before the date
described in paragraph (g)(1)(i) of this section, that the recipient
determines was displaced as a direct result of acquisition,
rehabilitation, or demolition for the assisted project.

\(iii\) A tenant-occupant of a dwelling unit who moves from the
building/complex permanently after the execution of the agreement
between the recipient and HUD, if the move occurs before the tenant is
provided written notice offering him or her the opportunity to lease and
occupy a suitable, decent, safe and sanitary dwelling in the same
building/complex, under reasonable terms and conditions, upon completion
of the project. Such reasonable terms and conditions include a monthly
rent and estimated average monthly utility costs that do not exceed the
greater of:

\(A\) The tenant-occupant\'s monthly rent and estimated average monthly
utility costs before the agreement; or

\(B\) 30 percent of gross household income.

\(iv\) A tenant-occupant of a dwelling who is required to relocate
temporarily, but does not return to the building/complex, if either:

\(A\) The tenant-occupant is not offered payment for all reasonable
out-of-pocket expenses incurred in connection with the temporary
relocation, including the cost of moving to and from the temporarily
occupied unit, any increased housing costs and incidental expenses; or

\(B\) Other conditions of the temporary relocation are not reasonable.

\(v\) A tenant-occupant of a dwelling who moves from the
building/complex after he or she has been required to move to another
dwelling unit in the same building/complex in order to carry out the
project, if either:

\(A\) The tenant-occupant is not offered reimbursement for all
reasonable out-of-pocket expenses incurred in connection with the move;
or

\(B\) Other conditions of the move are not reasonable.

\(2\) Notwithstanding the provisions of paragraph (g)(1) of this
section, a person does not qualify as a "displaced person" (and is not
eligible for relocation assistance under the URA or this section), if:

\(i\) The person moved into the property after the submission of the IHP
to HUD, but, before signing a lease or commencing occupancy, was
provided written notice of the project, its possible impact on the
person (e.g., the person may be displaced, temporarily relocated or
suffer a rent increase) and the fact that the person would not qualify
as a "displaced person" or for any assistance provided under this
section as a result of the project.

\(ii\) The person is ineligible under 49 CFR 24.2(g)(2).

\(iii\) The recipient determines the person is not displaced as a direct
result of acquisition, rehabilitation, or demolition for an assisted
project. To exclude a person on this basis, HUD must concur in that
determination.

\(3\) A recipient may at any time ask HUD to determine whether a
specific displacement is or would be covered under this section.

\(h\) *Definition of initiation of negotiations. *For purposes of
determining the formula for computing the replacement housing assistance
to be provided to a person displaced as a direct result of
rehabilitation or demolition of the real property, the term "initiation
of negotiations" means the execution of the agreement covering the
rehabilitation or demolition (See 49 CFR part 24).

##### § 1000.16   What labor standards are applicable?

\(a\) *Davis-Bacon wage rates. *(1) As described in section 104(b) of
NAHASDA, contracts and agreements for assistance, sale or lease under
NAHASDA must require prevailing wage rates determined by the Secretary
of Labor under the Davis-Bacon Act (40 U.S.C. 276a--276a--5) to be paid
to laborers and mechanics employed in the development of affordable
housing.

\(2\) When NAHASDA assistance is only used to assist homebuyers to
acquire single family housing, the Davis-Bacon wage rates apply to the
construction of the housing if there is a written agreement with the
owner or developer of the housing that NAHASDA assistance will be used
to assist homebuyers to buy the housing.

\(3\) Prime contracts not in excess of \$2000 are exempt from
Davis-Bacon wage rates.

\(b\) *HUD-determined wage rates. *Section 104(b) also mandates that
contracts and agreements for assistance, sale or lease under NAHASDA
require that prevailing wages determined or adopted (subsequent to a
determination under applicable state, tribal or local law) by HUD shall
be paid to maintenance laborers and mechanics employed in the operation,
and to architects, technical engineers, draftsmen and technicians
employed in the development, of affordable housing.

\(c\) *Contract Work Hours and Safety Standards Act. *Contracts in
excess of \$100,000 to which Davis-Bacon or HUD-determined wage rates
apply are subject by law to the overtime provisions of the Contract Work
Hours and Safety Standards Act (40 U.S.C. 327).

\(d\) *Volunteers. *The requirements in 24 CFR part 70 concerning
exemptions for the use of volunteers on projects subject to Davis-Bacon
and HUD-determined wage rates are applicable.

\(e\) *Other laws and issuances. *Recipients, contractors,
subcontractors, and other participants must comply with regulations
issued under the labor standards provisions cited in this section, other
applicable Federal laws and regulations pertaining to labor standards,
and HUD Handbook 1344.1 (Federal Labor Standards Compliance in Housing
and Community Development Programs).

##### § 1000.18   What environmental review requirements apply?

The environmental effects of each activity carried out with assistance
under this part must be evaluated in accordance with the provisions of
the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321)
and the related authorities listed in HUD\'s implementing regulations at
24 CFR parts 50 and 58. An environmental review does not have to be
completed prior to HUD approval of an IHP.

##### § 1000.20   Is an Indian tribe required to assume environmental review responsibilities?

\(a\) No. It is an option an Indian tribe may choose. If an Indian tribe
declines to assume the environmental review responsibilities, HUD will
perform the environmental review in accordance with 24 CFR part 50. The
timing of HUD undertaking the environmental review will be subject to
the availability of resources. A HUD environmental review must be
completed for any NAHASDA assisted activities not excluded from review
under 24 CFR 50.19(b) before a recipient may acquire, rehabilitate,
convert, lease, repair or construct property, or commit HUD or local
funds used in conjunction with such NAHASDA assisted activities with
respect to the property.

\(b\) If an Indian tribe assumes environmental review responsibilities:

\(1\) Its certifying officer must certify that he/she is authorized and
consents on behalf of the Indian tribe and such officer to accept the
jurisdiction of the Federal courts for the purpose of enforcement of the
responsibilities of the certifying officer as set forth in section
105(c) of NAHASDA; and

\(2\) The Indian tribe must follow the requirements of 24 CFR part 58.

\(3\) No funds may be committed to a grant activity or project before
the completion of the environmental review and approval of the request
for release of funds and related certification required by sections
105(b) and 105(c) of NAHASDA, except as authorized by 24 CFR part 58
such as for the costs of environmental reviews and other planning and
administrative expenses.

\(c\) Where an environmental assessment (EA) is appropriate under 24 CFR
part 50, instead of an Indian tribe assuming environmental review
responsibilities under paragraph (b) of this section or HUD preparing
the EA itself under paragraph (a) of this section, an Indian tribe or
TDHE may prepare an EA for HUD review. In addition to complying with the
requirements of 40 CFR 1506.5(a), HUD shall make its own evaluation of
the environmental issues and take responsibility for the scope and
content of the EA in accordance with 40 CFR 1506.5(b).

##### § 1000.22   Are the costs of the environmental review an eligible cost?

Yes, costs of completing the environmental review are eligible.

##### § 1000.24   If an Indian tribe assumes environmental review responsibility, how will HUD assist the Indian tribe in performing the environmental review?

As set forth in section 105(a)(2)(B) of NAHASDA and 24 CFR 58.77, HUD
will provide for monitoring of environmental reviews and will also
facilitate training for the performance for such reviews by Indian
tribes.

##### § 1000.26   What are the administrative requirements under NAHASDA?

\(a\) Except as addressed in §1000.28, recipients shall comply with the
requirements and standards of OMB Circular No. A--87, "Principles for
Determining Costs Applicable to Grants and Contracts with State, Local
and Federally recognized Indian Tribal Governments," and with the
following sections of 24 CFR part 85 "Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local
Governments." For purposes of this part, "grantee" as defined in 24 CFR
part 85 has the same meaning as "recipient."

\(1\) Section 85.3, "Definitions."

\(2\) Section 85.6, "Exceptions."

\(3\) Section 85.12, "Special grant or subgrant conditions for 'high
risk' grantees."

\(4\) Section 85.20, "Standards for financial management systems,"
except paragraph (a).

\(5\) Section 85.21, "Payment."

\(6\) Section 85.22, "Allowable costs."

\(7\) Section 85.26, "Non-federal audits."

\(8\) Section 85.32, "Equipment," except in all cases in which the
equipment is sold, the proceeds shall be program income.

\(9\) Section 85.33, "Supplies."

\(10\) Section 85.35, "Subawards to debarred and suspended parties."

\(11\) Section 85.36, "Procurement," except paragraph (a). There may be
circumstances under which the bonding requirements of §85.36(h) are
inconsistent with other responsibilities and obligations of the
recipient. In such circumstances, acceptable methods to provide
performance and payment assurance may include:

\(i\) Deposit with the recipient of a cash escrow of not less than 20
percent of the total contract price, subject to reduction during the
warranty period, commensurate with potential risk;

\(ii\) Letter of credit for 25 percent of the total contract price,
unconditionally payable upon demand of the recipient, subject to
reduction during any warranty period commensurate with potential risk;
or

\(iii\) Letter of credit for 10 percent of the total contract price
unconditionally payable upon demand of the recipient subject to
reduction during any warranty period commensurate with potential risk,
and compliance with the procedures for monitoring of disbursements by
the contractor.

\(12\) Section 85.37, "Subgrants."

\(13\) Section 85.40, "Monitoring and reporting program performance,"
except paragraphs (b) through (d) and paragraph (f).

\(14\) Section 85.41, "Financial reporting," except paragraphs (a), (b),
and (e).

\(15\) Section 85.44, "Termination for convenience."

\(16\) Section 85.51 "Later disallowances and adjustments."

\(17\) Section 85.52, "Collection of amounts due."

(b)(1) With respect to the applicability of cost principles, all items
of cost listed in Attachment B of OMB Circular A--87 which require prior
Federal agency approval are allowable without the prior approval of HUD
to the extent that they comply with the general policies and principles
stated in Attachment A of this circular and are otherwise eligible under
this part, except for the following:

\(i\) Depreciation methods for fixed assets shall not be changed without
specific approval of HUD or, if charged through a cost allocation plan,
the Federal cognizant agency.

\(ii\) Fines and penalties are unallowable costs to the IHBG program.

\(2\) In addition, no person providing consultant services in an
employer-employee type of relationship shall receive more than a
reasonable rate of compensation for personal services paid with IHBG
funds. In no event, however, shall such compensation exceed the
equivalent of the daily rate paid for Level IV of the Executive
Schedule.

##### § 1000.28   May a self-governance Indian tribe be exempted from the applicability of §1000.26?

Yes. A self-governance Indian tribe shall certify that its
administrative requirements, standards and systems meet or exceed the
comparable requirements of §1000.26. For purposes of this section, a
self-governance Indian tribe is an Indian tribe that participates in
tribal self-governance as authorized under Public Law 93--638, as
amended (25 U.S.C. 450 *et seq. *).

##### § 1000.30   What prohibitions regarding conflict of interest are applicable?

\(a\) *Applicability. *In the procurement of supplies, equipment, other
property, construction and services by recipients and subrecipients, the
conflict of interest provisions of 24 CFR 85.36 shall apply. In all
cases not governed by 24 CFR 85.36, the following provisions of this
section shall apply.

\(b\) *Conflicts prohibited. *No person who participates in the
decision-making process or who gains inside information with regard to
NAHASDA assisted activities may obtain a personal or financial interest
or benefit from such activities, except for the use of NAHASDA funds to
pay salaries or other related administrative costs. Such persons include
anyone with an interest in any contract, subcontract or agreement or
proceeds thereunder, either for themselves or others with whom they have
business or immediate family ties. Immediate family ties are determined
by the Indian tribe or TDHE in its operating policies.

\(c\) The conflict of interest provision does not apply in instances
where a person who might otherwise be included under the conflict
provision is low-income and is selected for assistance in accordance
with the recipient\'s written policies for eligibility, admission and
occupancy of families for housing assistance with IHBG funds, provided
that there is no conflict of interest under applicable tribal or state
law. The recipient must make a public disclosure of the nature of
assistance to be provided and the specific basis for the selection of
the person. The recipient shall provide the appropriate Area ONAP with a
copy of the disclosure before the assistance is provided to the person.

##### § 1000.32   May exceptions be made to the conflict of interest provisions?

\(a\) Yes. HUD may make exceptions to the conflict of interest
provisions set forth in §1000.30(b) on a case-by-case basis when it
determines that such an exception would further the primary objective of
NAHASDA and the effective and efficient implementation of the
recipient\'s program, activity, or project.

\(b\) A public disclosure of the conflict must be made and a
determination that the exception would not violate tribal laws on
conflict of interest (or any applicable state laws) must also be made.

##### § 1000.34   What factors must be considered in making an exception to the conflict of interest provisions?

In determining whether or not to make an exception to the conflict of
interest provisions, HUD must consider whether undue hardship will
result, either to the recipient or to the person affected, when weighed
against the public interest served by avoiding the prohibited conflict.

##### § 1000.36   How long must a recipient retain records regarding exceptions made to the conflict of interest provisions?

A recipient must maintain all such records for a period of at least 3
years after an exception is made.

##### § 1000.38   What flood insurance requirements are applicable?

Under the Flood Disaster Protection Act of 1973, as amended (42 U.S.C.
4001--4128), a recipient may not permit the use of Federal financial
assistance for acquisition and construction purposes (including
rehabilitation) in an area identified by the Federal Emergency
Management Agency (FEMA) as having special flood hazards, unless the
following conditions are met:

\(a\) The community in which the area is situated is participating in
the National Flood Insurance Program in accord with section 202(a) of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4106(a)), or less
than a year has passed since FEMA notification regarding such flood
hazards. For this purpose, the "community" is the governmental entity,
such as an Indian tribe or authorized tribal organization, an Alaska
Native village, or authorized Native organization, or a municipality or
county, that has authority to adopt and enforce flood plain management
regulations for the area; and

\(b\) Where the community is participating in the National Flood
Insurance Program, flood insurance on the building is obtained in
compliance with section 102(a) of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012(a)); provided, that if the financial assistance is
in the form of a loan or an insurance or guaranty of a loan, the amount
of flood insurance required need not exceed the outstanding principal
balance of the loan and need not be required beyond the term of the
loan.

##### § 1000.40   Do lead-based paint poisoning prevention requirements apply to affordable housing activities under NAHASDA?

Yes, lead-based paint requirements apply to housing activities assisted
under NAHASDA. The applicable requirements for NAHASDA are HUD\'s
regulations at part 35, subparts A, B, H, J, K, M and R of this title,
which implement the Lead-Based Paint Poisoning Prevention Act (42 U.S.C.
4822--4846) and the Residential Lead-Based Paint Hazard Reduction Act of
1992 (42 U.S.C. 4851--4856).

\[64 FR 50230, Sept. 15, 1999; 65 FR 3387, Jan. 21, 2000\]

##### § 1000.42   Are the requirements of section 3 of the Housing and Urban Development Act of 1968 applicable?

\(a\) *General. *Yes. Recipients shall comply with section 3 of the
Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and HUD\'s
implementing regulations in 24 CFR part 135, to the maximum extent
feasible and consistent with, but not in derogation of, compliance with
section 7(b) of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450e(b)). Section 3 provides job training, employment,
and contracting opportunities for low-income individuals.

\(b\) *Threshold requirement. *The requirements of section 3 apply only
to those section 3 covered projects or activities for which the amount
of assistance exceeds \$200,000.

##### § 1000.44   What prohibitions on the use of debarred, suspended, or ineligible contractors apply?

In addition to any tribal requirements, the prohibitions in 2 CFR part
2424 on the use of debarred, suspended, or ineligible contractors apply.

\[72 FR 73497, Dec. 27, 2007\]

##### § 1000.46   Do drug-free workplace requirements apply?

Yes. In addition to any tribal requirements, the Drug-Free Workplace Act
of 1988 (41 U.S.C. 701, *et seq. *) and HUD\'s implementing regulations
in 24 CFR part 21 apply.

\[72 FR 73497, Dec. 27, 2007\]

##### § 1000.48   Are Indian preference requirements applicable to IHBG activities?

\(a\) *Applicability. *Grants under this part are subject to section
7(b) of the Indian Self-Determination and Education Assistance Act (25
U.S.C. 450e(b). Section 7(b) provides that any contract, subcontract,
grant or subgrant pursuant to an act authorizing grants to Indian
organizations or for the benefit of Indians shall require that, to the
greatest extent feasible:

\(1\) Preference and opportunities for training and employment shall be
given to Indians, and

\(2\) Preference in the award of contracts and subcontracts shall be
given to Indian organizations and Indian-owned economic enterprises as
defined in section 3 of the Indian Financing Act of 1974 (25 U.S.C.
1452).

\(b\) *Definitions. *

\(1\) The Indian Self-Determination and Education Assistance Act defines
"Indian" to mean a person who is a member of an Indian tribe and defines
"Indian tribe" to mean any Indian tribe, band, nation, or other
organized group or community including any Alaska Native village or
regional or village corporation as defined or established pursuant to
the Alaska Native Claims Settlement Act, which is recognized as eligible
for the special programs and services provided by the United States to
Indians because of their status as Indians.

\(2\) In section 3 of the Indian Financing Act of 1974 "economic
enterprise" is defined as any Indian-owned commercial, industrial, or
business activity established or organized for the purpose of profit,
except that Indian ownership must constitute not less than 51 percent of
the enterprise. This act defines "Indian organization" to mean the
governing body of any Indian tribe or entity established or recognized
by such governing body.

##### § 1000.50   What Indian preference requirements apply to IHBG administration activities?

To the greatest extent feasible, preference and opportunities for
training and employment in connection with the administration of grants
awarded under this part shall be given to Indians.

##### § 1000.52   What Indian preference requirements apply to IHBG procurement?

To the greatest extent feasible, recipients shall give preference in the
award of contracts for projects funded under this part to Indian
organizations and Indian-owned economic enterprises.

\(a\) Each recipient shall:

\(1\) Certify to HUD that the polices and procedures adopted by the
recipient will provide preference in procurement activities consistent
with the requirements of section 7(b) of the Indian Self-Determination
and Education Assistance Act (25 U.S.C.450e(b)) (An Indian preference
policy which was previously approved by HUD for a recipient will meet
the requirements of this section); or

\(2\) Advertise for bids or proposals limited to qualified Indian
organizations and Indian-owned enterprises; or

\(3\) Use a two-stage preference procedure, as follows:

\(i\) *Stage 1. *Invite or otherwise solicit Indian-owned economic
enterprises to submit a statement of intent to respond to a bid
announcement or request for proposals limited to Indian-owned firms.

\(ii\) *Stage 2. *If responses are received from more than one Indian
enterprise found to be qualified, advertise for bids or proposals
limited to Indian organizations and Indian-owned economic enterprises.

\(b\) If the recipient selects a method of providing preference that
results in fewer than two responsible qualified organizations or
enterprises submitting a statement of intent, a bid or a proposal to
perform the contract at a reasonable cost, then the recipient shall:

\(1\) Re-advertise the contract, using any of the methods described in
paragraph (a) of this section; or

\(2\) Re-advertise the contract without limiting the advertisement for
bids or proposals to Indian organizations and Indian-owned economic
enterprises; or

\(3\) If one approvable bid or proposal is received, request Area ONAP
review and approval of the proposed contract and related procurement
documents, in accordance with 24 CFR 85.36, in order to award the
contract to the single bidder or offeror.

\(c\) Procurements that are within the dollar limitations established
for small purchases under 24 CFR 85.36 need not follow the formal bid or
proposal procedures of paragraph (a) of this section, since these
procurements are governed by the small purchase procedures of 24 CFR
85.36. However, a recipient\'s small purchase procurement shall, to the
greatest extent feasible, provide Indian preference in the award of
contracts.

\(d\) All preferences shall be publicly announced in the advertisement
and bidding or proposal solicitation documents and the bidding and
proposal documents.

\(e\) A recipient, at its discretion, may require information of
prospective contractors seeking to qualify as Indian organizations or
Indian-owned economic enterprises. Recipients may require prospective
contractors to provide the following information before submitting a bid
or proposal, or at the time of submission:

\(1\) Evidence showing fully the extent of Indian ownership and
interest;

\(2\) Evidence of structure, management and financing affecting the
Indian character of the enterprise, including major subcontracts and
purchase agreements; materials or equipment supply arrangements; and
management salary or profit-sharing arrangements; and evidence showing
the effect of these on the extent of Indian ownership and interest; and

\(3\) Evidence sufficient to demonstrate to the satisfaction of the
recipient that the prospective contractor has the technical,
administrative, and financial capability to perform contract work of the
size and type involved.

\(f\) The recipient shall incorporate the following clause (referred to
as the section 7(b) clause) in each contract awarded in connection with
a project funded under this part:

\(1\) The work to be performed under this contract is on a project
subject to section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450e(b)) (the Indian Act). Section 7(b)
requires that to the greatest extent feasible:

\(i\) Preferences and opportunities for training and employment shall be
given to Indians; and

\(ii\) Preferences in the award of contracts and subcontracts shall be
given to Indian organizations and Indian-owned economic enterprises.

\(2\) The parties to this contract shall comply with the provisions of
section 7(b) of the Indian Act.

\(3\) In connection with this contract, the contractor shall, to the
greatest extent feasible, give preference in the award of any
subcontracts to Indian organizations and Indian-owned economic
enterprises, and preferences and opportunities for training and
employment to Indians.

\(4\) The contractor shall include this section 7(b) clause in every
subcontract in connection with the project, and shall, at the direction
of the recipient, take appropriate action pursuant to the subcontract
upon a finding by the recipient or HUD that the subcontractor has
violated the section 7(b) clause of the Indian Act.

##### § 1000.54   What procedures apply to complaints arising out of any of the methods of providing for Indian preference?

The following procedures are applicable to complaints arising out of any
of the methods of providing for Indian preference contained in this
part, including alternate methods. Tribal policies that meet or exceed
the requirements of this section shall apply.

\(a\) Each complaint shall be in writing, signed, and filed with the
recipient.

\(b\) A complaint must be filed with the recipient no later than 20
calendar days from the date of the action (or omission) upon which the
complaint is based.

\(c\) Upon receipt of a complaint, the recipient shall promptly stamp
the date and time of receipt upon the complaint, and immediately
acknowledge its receipt.

\(d\) Within 20 calendar days of receipt of a complaint, the recipient
shall either meet, or communicate by mail or telephone, with the
complainant in an effort to resolve the matter. The recipient shall make
a determination on a complaint and notify the complainant, in writing,
within 30 calendar days of the submittal of the complaint to the
recipient. The decision of the recipient shall constitute final
administrative action on the complaint.

##### § 1000.56   How are NAHASDA funds paid by HUD to recipients?

\(a\) Each year funds shall be paid directly to a recipient in a manner
that recognizes the right of Indian self-determination and tribal
self-governance and the trust responsibility of the Federal government
to Indian tribes consistent with NAHASDA.

\(b\) Payments shall be made as expeditiously as practicable.

##### § 1000.58   Are there limitations on the investment of IHBG funds?

\(a\) A recipient may invest IHBG funds for the purposes of carrying out
affordable housing activities in investment securities and other
obligations as provided in this section.

\(b\) The recipient may invest IHBG funds so long as it demonstrates to
HUD:

\(1\) That there are no unresolved significant and material audit
findings or exceptions in the most recent annual audit completed under
the Single Audit Act or in an independent financial audit prepared in
accordance with generally accepted auditing principles; and

\(2\) That it is a self-governance Indian tribe or that it has the
administrative capacity and controls to responsibly manage the
investment. For purposes of this section, a self-governance Indian tribe
is an Indian tribe that participates in tribal self-governance as
authorized under Public Law 93--638, as amended (25 U.S.C. 450 *et seq.
*).

\(c\) Recipients shall invest IHBG funds only in:

\(1\) Obligations of the United States; obligations issued by Government
sponsored agencies; securities that are guaranteed or insured by the
United States; mutual (or other) funds registered with the Securities
and Exchange Commission and which invest only in obligations of the
United States or securities that are guaranteed or insured by the United
States; or

\(2\) Accounts that are insured by an agency or instrumentality of the
United States or fully collateralized to ensure protection of the funds,
even in the event of bank failure.

\(d\) IHBG funds shall be held in one or more accounts separate from
other funds of the recipient. Each of these accounts shall be subject to
an agreement in a form prescribed by HUD sufficient to implement the
regulations in this part and permit HUD to exercise its rights under
§1000.60.

\(e\) Expenditure of funds for affordable housing activities under
section 204(a) of NAHASDA shall not be considered investment.

\(f\) A recipient may invest its IHBG annual grant in an amount equal to
the annual formula grant amount less any formula grant amounts allocated
for the operating subsidy element of the Formula Current Assisted
Housing Stock (FCAS) component of the formula (see §§1000.316(a) and
1000.320) multiplied by the following percentages, as appropriate:

\(1\) 50% in Fiscal Years 1998 and 1999;

\(2\) 75% in Fiscal Year 2000; and

\(3\) 100% in Fiscal Years 2001 and thereafter.

\(g\) Investments under this section may be for a period no longer than
two years.

##### § 1000.60   Can HUD prevent improper expenditure of funds already disbursed to a recipient?

Yes. In accordance with the standards and remedies contained in
§1000.538 relating to substantial noncompliance, HUD will use its powers
under a depository agreement and take such other actions as may be
legally necessary to suspend funds disbursed to the recipient until the
substantial noncompliance has been remedied. In taking this action, HUD
shall comply with all appropriate procedures, appeals and hearing rights
prescribed elsewhere in this part.

##### § 1000.62   What is considered program income and what restrictions are there on its use?

\(a\) Program income is defined as any income that is realized from the
disbursement of grant amounts. Program income does not include any
amounts generated from the operation of 1937 Act units unless the units
are assisted with grant amounts and the income is attributable to such
assistance. Program income includes income from fees for services
performed from the use of real or rental of real or personal property
acquired with grant funds, from the sale of commodities or items
developed, acquired, etc. with grant funds, and from payments of
principal and interest earned on grant funds prior to disbursement.

\(b\) Any program income can be retained by a recipient provided it is
used for affordable housing activities in accordance with section 202 of
NAHASDA. If the amount of income received in a single year by a
recipient and all its subrecipients, which would otherwise be considered
program income, does not exceed \$25,000, such funds may be retained but
will not be considered to be or treated as program income.

\(c\) If program income is realized from an eligible activity funded
with both grant funds as well as other funds (i.e., funds that are not
grant funds), then the amount of program income realized will be based
on a percentage calculation that represents the proportional share of
funds provided for the activity generating the program income.

\(d\) Costs incident to the generation of program income shall be
deducted from gross income to determine program income.

##### Subpart B---Affordable Housing Activities

##### § 1000.101   What is affordable housing?

Eligible affordable housing is defined in section 4(2) of NAHASDA and is
described in title II of NAHASDA.

##### § 1000.102   What are eligible affordable housing activities?

Eligible affordable housing activities are those described in section
202 of NAHASDA.

##### § 1000.103   How may IHBG funds be used for tenant-based or project-based rental assistance?

\(a\) IHBG funds may be used for project-based or tenant-based rental
assistance.

\(b\) IHBG funds may be used for project-based or tenant-based rental
assistance that is provided in a manner consistent with section 8 of the
United States Housing Act of 1937 (42 U.S.C. 1437f).

\(c\) IHBG funds used for project-based or tenant-based rental
assistance must comply with the requirements of NAHASDA and this part.

\[72 FR 59004, Oct. 18, 2007\]

##### § 1000.104   What families are eligible for affordable housing activities?

The following families are eligible for affordable housing activities:

\(a\) Low income Indian families on a reservation or Indian area.

\(b\) A non-low income Indian family may receive housing assistance in
accordance with §1000.110, except that non low-income Indian families
residing in housing assisted under the 1937 Act do not have to meet the
requirements of §1000.110 for continued occupancy.

\(c\) A non-Indian family may receive housing assistance on a
reservation or Indian area if the non-Indian family\'s housing needs
cannot be reasonably met without such assistance and the recipient
determines that the presence of that family on the reservation or Indian
area is essential to the well-being of Indian families, except that
non-Indian families residing in housing assisted under the 1937 Act do
not have to meet these requirements for continued occupancy.

##### § 1000.106   What families receiving assistance under title II of NAHASDA require HUD approval?

\(a\) Housing assistance for non low-income Indian families requires HUD
approval only as required in §§1000.108 and 1000.110.

\(b\) Assistance under section 201(b)(3) of NAHASDA for non-Indian
families does not require HUD approval but only requires that the
recipient determine that the presence of that family on the reservation
or Indian area is essential to the well-being of Indian families and the
non-Indian family\'s housing needs cannot be reasonably met without such
assistance.

##### § 1000.108   How is HUD approval obtained by a recipient for housing for non low-income Indian families and model activities?

Recipients are required to submit proposals to operate model housing
activities as defined in section 202(6) of NAHASDA and to provide
assistance to non low-income Indian families in accordance with section
201(b)(2) of NAHASDA. Assistance to non low-income Indian families must
be in accordance with §1000.110. Proposals may be submitted in the
recipient\'s IHP or at any time by amendment of the IHP, or by special
request to HUD at any time. HUD may approve the remainder of an IHP
notwithstanding disapproval of a model activity or assistance to non
low-income Indian families.

##### § 1000.110   Under what conditions may non low-income Indian families participate in the program?

\(a\) A family who is purchasing housing under a lease purchase
agreement and who was low income at the time the lease was signed is
eligible without further conditions.

\(b\) A recipient may provide the following types of assistance to non
low-income Indian families under the conditions specified in paragraphs
(c), (d) and (e) of this section:

\(1\) Homeownership activities under section 202(2) of NAHASDA, which
may include assistance in conjunction with loan guarantees under the
Section 184 program (see 24 CFR part 1005);

\(2\) Model activities under section 202(6) of NAHASDA; and

\(3\) Loan guarantee activities under title VI of NAHASDA.

\(c\) A recipient must determine and document that there is a need for
housing for each family which cannot reasonably be met without such
assistance.

\(d\) A recipient may use up to 10 percent of its annual grant amount
for families whose income falls within 80 to 100 percent of the median
income without HUD approval. HUD approval is required if a recipient
plans to use more than 10 percent of its annual grant amount for such
assistance or to provide housing for families with income over 100
percent of median income.

\(e\) Non low-income Indian families cannot receive the same benefits
provided low-income Indian families. The amount of assistance non
low-income Indian families may receive will be determined as follows:

\(1\) The rent (including homebuyer payments under a lease purchase
agreement) to be paid by a non low-income Indian family cannot be less
than: (Income of non low-income family/Income of family at 80 percent of
median income) × (Rental payment of family at 80 percent of median
income), but need not exceed the fair market rent or value of the unit.

\(2\) Other assistance, including down payment assistance, to non
low-income Indian families, cannot exceed: (Income of family at 80
percent of median income/Income of non low-income family) × (Present
value of the assistance provided to family at 80 percent of median
income).

\(f\) The requirements set forth in paragraph (e) of this section do not
apply to non low-income Indian families which the recipient has
determined to be essential to the well-being of the Indian families
residing in the housing area.

##### § 1000.112   How will HUD determine whether to approve model housing activities?

HUD will review all proposals with the goal of approving the activities
and encouraging the flexibility, discretion, and self-determination
granted to Indian tribes under NAHASDA to formulate and operate
innovative housing programs that meet the intent of NAHASDA.

##### § 1000.114   How long does HUD have to review and act on a proposal to provide assistance to non low-income Indian families or a model housing activity?

Whether submitted in the IHP or at any other time, HUD will have sixty
calendar days after receiving the proposal to notify the recipient in
writing that the proposal to provide assistance to non low-income Indian
families or for model activities is approved or disapproved. If no
decision is made by HUD within sixty calendar days of receiving the
proposal, the proposal is deemed to have been approved by HUD.

##### § 1000.116   What should HUD do before declining a proposal to provide assistance to non low-income Indian families or a model housing activity?

HUD shall consult with a recipient regarding the recipient\'s proposal
to provide assistance to non low-income Indian families or a model
housing activity. To the extent resources are available, HUD shall
provide technical assistance to the recipient in amending and modifying
the proposal if necessary. In case of a denial, HUD shall give the
specific reasons for the denial.

##### § 1000.118   What recourse does a recipient have if HUD disapproves a proposal to provide assistance to non low-income Indian families or a model housing activity?

\(a\) Within thirty calendar days of receiving HUD\'s denial of a
proposal to provide assistance to non low-income Indian families or a
model housing activity, the recipient may request reconsideration of the
denial in writing. The request shall set forth justification for the
reconsideration.

\(b\) Within twenty calendar days of receiving the request, HUD shall
reconsider the recipient\'s request and either affirm or reverse its
initial decision in writing, setting forth its reasons for the decision.
If the decision was made by the Assistant Secretary, the decision will
constitute final agency action. If the decision was made at a lower
level, then paragraphs (c) and (d) of this section will apply.

\(c\) The recipient may appeal any denial of reconsideration by filing
an appeal with the Assistant Secretary within twenty calendar days of
receiving the denial. The appeal shall set forth the reasons why the
recipient does not agree with HUD\'s decision and set forth
justification for the reconsideration.

\(d\) Within twenty calendar days of receipt of the appeal, the
Assistant Secretary shall review the recipient\'s appeal and act on the
appeal, setting forth the reasons for the decision.

##### § 1000.120   May a recipient use Indian preference or tribal preference in selecting families for housing assistance?

Yes. The IHP may set out a preference for the provision of housing
assistance to Indian families who are members of the Indian tribe or to
other Indian families if the recipient has adopted the preference in its
admissions policy. The recipient shall ensure that housing activities
funded under NAHASDA are subject to the preference.

##### § 1000.122   May NAHASDA grant funds be used as matching funds to obtain and leverage funding, including any Federal or state program and still be considered an affordable housing activity?

There is no prohibition in NAHASDA against using grant funds as matching
funds.

##### § 1000.124   What maximum and minimum rent or homebuyer payment can a recipient charge a low-income rental tenant or homebuyer residing in housing units assisted with NAHASDA grant amounts?

A recipient can charge a low-income rental tenant or homebuyer rent or
homebuyer payments not to exceed 30 percent of the adjusted income of
the family. The recipient may also decide to compute its rental and
homebuyer payments on any lesser percentage of adjusted income of the
family. This requirement applies only to units assisted with NAHASDA
grant amounts. NAHASDA does not set minimum rents or homebuyer payments;
however, a recipient may do so.

##### § 1000.126   May a recipient charge flat or income-adjusted rents?

Yes, providing the rental or homebuyer payment of the low-income family
does not exceed 30 percent of the family\'s adjusted income.

##### § 1000.128   Is income verification required for assistance under NAHASDA?

\(a\) Yes, the recipient must verify that the family is income eligible
based on anticipated annual income. The family is required to provide
documentation to verify this determination. The recipient is required to
maintain the documentation on which the determination of eligibility is
based.

\(b\) The recipient may require a family to periodically verify its
income in order to determine housing payments or continued occupancy
consistent with locally adopted policies. When income verification is
required, the family must provide documentation which verifies its
income, and this documentation must be retained by the recipient.

##### § 1000.130   May a recipient charge a non low-income family rents or homebuyer payments which are more than 30 percent of the family\'s adjusted income?

Yes. A recipient may charge a non low-income family rents or homebuyer
payments which are more than 30 percent of the family\'s adjusted
income.

##### § 1000.132   Are utilities considered a part of rent or homebuyer payments?

Utilities may be considered a part of rent or homebuyer payments if a
recipient decides to define rent or homebuyer payments to include
utilities in its written policies on rents and homebuyer payments
required by section 203(a)(1) of NAHASDA. A recipient may define rents
and homebuyer payments to exclude utilities.

##### § 1000.134   When may a recipient (or entity funded by a recipient) demolish or dispose of current assisted stock?

\(a\) A recipient (or entity funded by a recipient) may undertake a
planned demolition or disposal of current assisted stock owned by the
recipient or an entity funded by the recipient when:

\(1\) A financial analysis demonstrates that it is more cost-effective
or housing program-effective for the recipient to demolish or dispose of
the unit than to continue to operate or own it; or

\(2\) The housing unit has been condemned by the government which has
authority over the unit; or

\(3\) The housing unit is an imminent threat to the health and safety of
housing residents; or

\(4\) Continued habitation of a housing unit is inadvisable due to
cultural or historical considerations.

\(b\) No action to demolish or dispose of the property other than
performing the analysis cited in paragraph (a) of this section can be
taken until HUD has been notified in writing of the recipient\'s intent
to demolish or dispose of the housing units consistent with section
102(c)(4)(H) of NAHASDA. The written notification must set out the
analysis used to arrive at the decision to demolish or dispose of the
property and may be set out in a recipient\'s IHP or in a separate
submission to HUD.

\(c\) In any disposition sale of a housing unit, a sale process designed
to maximize the sale price will be used. However, where the sale is to a
low-income Indian family, the home may be disposed of without maximizing
the sale price so long as such price is consistent with a recipient\'s
IHP. The sale proceeds from the disposition of any housing unit are
program income under NAHASDA and must be used in accordance with the
requirements of NAHASDA and these regulations.

##### § 1000.136   What insurance requirements apply to housing units assisted with NAHASDA grants?

\(a\) The recipient shall provide adequate insurance either by
purchasing insurance or by indemnification against casualty loss by
providing insurance in adequate amounts to indemnify the recipient
against loss from fire, weather, and liability claims for all housing
units owned or operated by the recipient.

\(b\) The recipients shall not require insurance on units assisted by
grants to families for privately owned housing if there is no risk of
loss or exposure to the recipient or if the assistance is in an amount
less than \$5000, but will require insurance when repayment of all or
part of the assistance is part of the assistance agreement.

\(c\) The recipient shall require contractors and subcontractors to
either provide insurance covering their activities or negotiate adequate
indemnification coverage to be provided by the recipient in the
contract.

\(d\) These requirements are in addition to applicable flood insurance
requirements under §1000.38.

##### § 1000.138   What constitutes adequate insurance?

Insurance is adequate if it is a purchased insurance policy from an
insurance provider or a plan of self-insurance in an amount that will
protect the financial stability of the recipient\'s IHBG program.
Recipients may purchase the required insurance without regard to
competitive selection procedures from nonprofit insurance entities which
are owned and controlled by recipients and which have been approved by
HUD.

##### § 1000.139   What are the standards for insurance entities owned and controlled by recipients?

\(a\) *General. *A recipient may provide insurance coverage required by
section 203(c) of NAHASDA and §§1000.136 and 1000.138 through a
self-insurance plan, approved by HUD in accordance with this section,
provided by a nonprofit insurance entity that is wholly owned and
controlled by IHBG recipients.

\(b\) *Self-insurance plan. *An Indian housing self-insurance plan must
be shown to meet the requirements of paragraph (c) of this section.

\(c\) *Application. *For a self-insurance plan to be approved by HUD, an
application and supporting materials must be submitted containing the
information specified in paragraphs (c)(1) through (c)(9) of this
section. Any material changes made to these documents after initial
approval must be submitted to HUD. Adverse material changes may cause
HUD to revoke its approval of a self-insurance entity. The application
submitted to HUD must show that:

\(1\) The plan is organized as an insurance entity, tribal
self-insurance plan, tribal risk retention group, or Indian housing
self-insurance risk pool;

\(2\) The plan limits participation to IHBG recipients;

\(3\) The plan operates on a nonprofit basis;

(4)(i) The plan employs or contracts with a third party to provide
competent underwriting and management staff;

\(A\) The underwriting staff must be composed of insurance professionals
with an average of at least five years of experience in large risk
commercial underwriting exceeding \$100,000 in annual premiums or at
least five years of experience in underwriting risks for public entity
plans of self-insurance;

\(B\) The management staff must have at least one senior manager who has
a minimum of five years of insurance experience at the level of vice
president of a property or casualty insurance entity; as a senior branch
manager of a branch office with annual property or casualty premiums
exceeding five million dollars; or as a senior manager of a public
entity self-insurance risk pool;

\(ii\) Satisfaction of this requirement may be demonstrated by evidence
such as résumés and employment history of the underwriting staff for the
plan and of the key management staff with day-to-day operational
oversight of the plan;

\(5\) The plan maintains internal controls and cost containment
measures, as shown by the annual budget;

\(6\) The plan maintains sound investments consistent with its articles
of incorporation, charter, bylaws, risk pool agreement, or other
applicable organizational document or agreement concerning investments;

\(7\) The plan maintains adequate surplus and reserves, as determined by
HUD, for undischarged liabilities of all types, as shown by a current
audited financial statement and an actuarial review conducted in
accordance with paragraph (e) of this section;

\(8\) The plan has proper organizational documentation, as shown by
copies of the articles of incorporation, charter, bylaws, subscription
agreement, business plan, contracts with third-party administrators, and
other organizational documents; and

\(9\) A plan\'s first successful application for approval under this
section must also include an opinion from the plan\'s legal counsel that
the plan is properly chartered, incorporated, or otherwise formed under
applicable law.

\(d\) *HUD consideration of plan. *HUD will consider an application for
approval of a self-insurance plan submitted under this section and
approve or disapprove that application no later than 90 days from the
date of receipt of a complete application. If an application is
disapproved, HUD shall notify the applicant of the reasons for
disapproval and may offer technical assistance to a recipient to help
the recipient correct the deficiencies in the application. The recipient
may then resubmit the application under this section.

\(e\) *Annual reporting. *An approved plan must undergo an audit and
actuarial review annually. In addition, an evaluation of the plan\'s
management must be performed by an insurance professional every three
years. These audits, actuarial reviews, and management reviews must be
submitted to HUD within 90 days after the end of the insuring entity\'s
fiscal year and be prepared in accordance with the following standards:

\(1\) The annual financial statement must be prepared in accordance with
generally accepted accounting principles (GAAP) and audited by an
independent auditor in accordance with generally accepted government
auditing standards. The independent auditor shall state in writing an
opinion on whether the plan\'s financial statement is presented fairly,
in accordance with GAAP;

\(2\) The actuarial review of the plan shall be done consistently with
requirements established by the Association of Governmental Risk Pools
and conducted by an independent property or casualty actuary who is a
member of a recognized professional actuarial organization, such as the
American Academy of Actuaries. The report issued and submitted to HUD
must include the actuary\'s written opinion on any over- or
under-reserving and the adequacy of the reserve maintained for open
claims and for incurred but unreported claims;

\(3\) The management review must be prepared by an independent insurance
consultant who has received the professional designation of a chartered
property/casualty underwriter (CPCU), associate in risk management
(ARM), or associate in claims (AIC), and must cover the following:

\(i\) The efficiency of the management or third-party administrator of
the plan;

\(ii\) Timeliness of the claim payments and reserving practices; and

\(iii\) The adequacy of reinsurance or excess insurance coverage.

\(f\) *Revocation of approval. *HUD may revoke its approval of a plan
under this section when the plan no longer meets the requirements of
this section. The plan\'s management will be notified in writing of the
proposed revocation of its approval and of the manner and time in which
to request a hearing to challenge the determination, in accordance with
the dispute resolution procedures set forth in this part for model
housing activities (§1000.118).

\(g\) *Preemption. *In order that tribally owned Indian housing
insurance entities that provide insurance for IHBG-assisted housing will
not be subject to conflicting state laws and widely varying and costly
requirements, any self-insurance plan under this section that meets the
requirements of this section and that has been approved by HUD shall be
governed by the regulations of this subpart in its provision of
insurance for IHBG-assisted housing.

\[72 FR 29740, May 29, 2007\]

##### § 1000.140   May a recipient use grant funds to purchase insurance for privately owned housing to protect NAHASDA grant amounts spent on that housing?

Yes. All purchases of insurance must be in accordance with §§1000.136
and 1000.138.

##### § 1000.142   What is the "useful life" during which low-income rental housing and low-income homebuyer housing must remain affordable as required in sections 205(a)(2) and 209 of NAHASDA?

Each recipient shall describe in its IHP its determination of the useful
life of each assisted housing unit in each of its developments in
accordance with the local conditions of the Indian area of the
recipient. By approving the plan, HUD determines the useful life in
accordance with section 205(a)(2) of NAHASDA and for purposes of section
209.

##### § 1000.144   Are Mutual Help homes developed under the 1937 Act subject to the useful life provisions of section 205(a)(2)?

No.

##### § 1000.146   Are homebuyers required to remain low-income throughout the term of their participation in a housing program funded under NAHASDA?

No. The low-income eligibility requirement applies only at the time of
purchase. However, families purchasing housing under a lease purchase
agreement who are not low-income at the time of purchase are eligible
under §1000.110.

##### § 1000.150   How may Indian tribes and TDHEs receive criminal conviction information on adult applicants or tenants?

\(a\) As required by section 208 of NAHASDA, the National Crime
Information Center, police departments, and other law enforcement
agencies shall provide criminal conviction information to Indian tribes
and TDHEs upon request. Information regarding juveniles shall only be
released to the extent such release is authorized by the law of the
applicable state, Indian tribe or locality.

\(b\) For purposes of this section, the term " *tenants *" includes
homebuyers who are purchasing a home pursuant to a lease purchase
agreement.

##### § 1000.152   How is the recipient to use criminal conviction information?

The recipient shall use the criminal conviction information described in
§1000.150 only for applicant screening, lease enforcement and eviction
actions. The information may be disclosed only to any person who has a
job related need for the information and who is an authorized officer,
employee, or representative of the recipient or the owner of housing
assisted under NAHASDA.

##### § 1000.154   How is the recipient to keep criminal conviction information confidential?

\(a\) The recipient will keep all the criminal conviction record
information it receives from the official law enforcement agencies
listed in §1000.150 in files separate from all other housing records.

\(b\) These criminal conviction records will be kept under lock and key
and be under the custody and control of the recipient\'s housing
executive director/lead official and/or his designee for such records.

\(c\) These criminal conviction records may only be accessed with the
written permission of the Indian tribe\'s or TDHE\'s housing executive
director/lead official and/or his designee and are only to be used for
the purposes stated in section 208 of NAHASDA and these regulations.

##### § 1000.156   Is affordable housing developed, acquired, or assisted under the IHBG program subject to limitations on cost or design standards?

Yes. Affordable housing must be of moderate design. For these purposes,
moderate design is defined as housing that is of a size and with
amenities consistent with unassisted housing offered for sale in the
Indian tribe\'s general geographic area to buyers who are at or below
the area median income. The local determination of moderate design
applies to all housing assisted under an affordable housing activity,
including development activities ( *e.g., *acquisition, new
construction, reconstruction, moderate or substantial rehabilitation of
affordable housing and homebuyer assistance) and model activities.
Acquisition includes assistance to a family to buy housing. Units with
the same number of bedrooms must be comparable with respect to size,
cost and amenities.

\[66 FR 49790, Sept. 28, 2001\]

##### § 1000.158   How will a NAHASDA grant recipient know that the housing assisted under the IHBG program meets the requirements of §1000.156?

\(a\) A recipient must use one of the methods specified in paragraph (b)
or (c) of this section to determine if an assisted housing project meets
the moderate design requirements of §1000.156. For purposes of this
requirement, a project is one or more housing units, of comparable size,
cost, amenities and design, developed with assistance provided by the
Act.

\(b\) The recipient may adopt written standards for its affordable
housing programs that reflect the requirement specified in §1000.156.
The standards must describe the type of housing, explain the basis for
the standards, and use similar housing in the Indian tribe\'s general
geographic area. For each affordable housing project, the recipient must
maintain documentation substantiating compliance with the adopted
housing standards. The standards and documentation substantiating
compliance for each activity must be available for review by the general
public and, upon request, by HUD. Prior to awarding a contract for the
construction of housing or beginning construction using its own
workforce, the recipient must complete a comparison of the cost of
developing or acquiring/rehabilitating the affordable housing with the
limits provided by the TDC discussed in paragraph (c) of this section
and may not, without prior HUD approval, exceed by more than 10 percent
the TDC maximum cost for the project. In developing standards under this
paragraph, the recipient must establish, maintain, and follow policies
that determine a local definition of moderate design which considers:

\(1\) Gross area;

\(2\) Total cost to provide the housing;

\(3\) Environmental concerns and mitigations;

\(4\) Climate;

\(5\) Comparable housing in geographical area;

\(6\) Local codes, ordinances and standards;

\(7\) Cultural relevance in design;

\(8\) Design and construction features that are reasonable, and
necessary to provide decent, safe, sanitary and affordable housing; and

\(9\) Design and construction features that are accessible to persons
with a variety of disabilities.

\(c\) If the recipient has not adopted housing standards specified in
paragraph (b) of this section, Total Development Cost (TDC) limits
published periodically by HUD establish the maximum amount of funds
(from all sources) that the recipient may use to develop or
acquire/rehabilitate affordable housing. The recipient must complete a
comparison of the cost of developing or acquiring/rehabilitating the
affordable housing with the limits provided by the TDC and may not,
without prior HUD approval, exceed the TDC maximum cost for the project.

\[66 FR 49790, Sept. 28, 2001\]

##### § 1000.160   Are non-dwelling structures developed, acquired or assisted under the IHBG program subject to limitations on cost or design standards?

Yes. Non-dwelling structures must be of a design, size and with features
or amenities that are reasonable and necessary to accomplish the purpose
intended by the structures. The purpose of a non-dwelling structure must
be to support an affordable housing activity, as defined by the Act.

\[66 FR 49790, Sept. 28, 2001\]

##### § 1000.162   How will a recipient know that non-dwelling structures assisted under the IHBG program meet the requirements of 1000.160?

\(a\) The recipient must use one of the methods described in paragraph
(b) or (c) of this section to determine if a non-dwelling structure
meets the limitation requirements of §1000.160. If the recipient
develops, acquires, or rehabilitates a non-dwelling structure with funds
from NAHASDA and other sources, then the cost limit standard established
under these regulations applies to the entire structure. If funds are
used from two different sources, the standards of the funding source
with the more restrictive rules apply.

(b)(1) The recipient may adopt written standards for non-dwelling
structures. The standards must describe the type of structures and must
clearly describe the criteria to be used to guide the cost, size,
design, features, amenities, performance or other factors. The standards
for such structures must be able to support the reasonableness and
necessity for these factors and to clearly identify the affordable
housing activity that is being provided.

\(2\) When the recipient applies a standard to particular structures, it
must document the following: (i) Identification of targeted population
to benefit from the structures;

\(ii\) Identification of need or problem to be solved;

\(iii\) Affordable housing activity provided or supported by the
structures;

\(iv\) Alternatives considered;

\(v\) Provision for future growth and change;

\(vi\) Cultural relevance of design;

\(vii\) Size and scope supported by population and need;

\(viii\) Design and construction features that are accessible to persons
with a variety of disabilities;

\(ix\) Cost; and

\(x\) Compatibility with community infrastructure and services.

\(c\) If the recipient has not adopted program standards specified in
paragraph (b) of this section, then it must demonstrate and document
that the non-dwelling structure is of a cost, size, design and with
amenities consistent with similarly designed and constructed structures
in the recipient\'s general geographic area.

\[66 FR 49790, Sept. 28, 2001\]

##### Subpart C---Indian Housing Plan (IHP)

##### § 1000.201   How are funds made available under NAHASDA?

Every fiscal year HUD will make grants under the IHBG program to
recipients who have submitted to HUD for that fiscal year an IHP in
accordance with §1000.220 to carry out affordable housing activities.

##### § 1000.202   Who are eligible recipients?

Eligible recipients are Indian tribes, or TDHEs when authorized by one
or more Indian tribes.

##### § 1000.204   How does an Indian tribe designate itself as recipient of the grant?

\(a\) By resolution of the Indian tribe; or

\(b\) When such authority has been delegated by an Indian tribe\'s
governing body to a tribal committee(s), by resolution or other written
form used by such committee(s) to memorialize the decisions of that
body, if applicable.

##### § 1000.206   How is a TDHE designated?

(a)(1) By resolution of the Indian tribe or Indian tribes to be served;
or

\(2\) When such authority has been delegated by an Indian tribe\'s
governing body to a tribal committee(s), by resolution or other written
form used by such committee(s) to memorialize the decisions of that
body, if applicable.

\(b\) In the absence of a designation by the Indian tribe, the default
designation as provided in section 4(21) of NAHASDA shall apply.

##### § 1000.208   What happens if an Indian tribe had two IHAs as of September 30, 1996?

Indian tribes which had established and were operating two IHAs as of
September 30, 1996, under the 1937 Act shall be allowed to form and
operate two TDHEs under NAHASDA. Nothing in this section shall affect
the allocation of funds otherwise due to an Indian tribe under the
formula.

##### § 1000.210   What happens to existing 1937 Act units in those jurisdictions for which Indian tribes do not or cannot submit an IHP?

NAHASDA does not provide the statutory authority for HUD to grant
NAHASDA grant funds to an Indian housing authority, Indian tribe or to a
default TDHE which cannot obtain a tribal certification, if the
requisite IHP is not submitted by an Indian tribe or is determined to be
out of compliance by HUD. There may be circumstances where this may
happen, and in those cases, other methods of tribal, Federal, or private
market support may have to be sought to maintain and operate those 1937
Act units.

##### § 1000.212   Is submission of an IHP required?

Yes. An Indian tribe or, with the consent of its Indian tribe(s), the
TDHE, must submit an IHP to HUD to receive funding under NAHASDA, except
as provided in section 101(b)(2) of NAHASDA. If a TDHE has been
designated by more than one Indian tribe, the TDHE can submit a separate
IHP for each Indian tribe or it may submit a single IHP based on the
requirements of §1000.220 with the approval of the Indian tribes.

##### § 1000.214   What is the deadline for submission of an IHP?

IHPs must be initially sent by the recipient to the Area ONAP no later
than July 1. Grant funds cannot be provided until the plan is submitted
and determined to be in compliance with section 102 of NAHASDA and funds
are available.

##### § 1000.216   What happens if the recipient does not submit the IHP to the Area ONAP by July 1?

If the IHP is not initially sent by July 1, the recipient will not be
eligible for IHBG funds for that fiscal year. Any funds not obligated
because an IHP was not received before the deadline has passed shall be
distributed by formula in the following year.

##### § 1000.218   Who prepares and submits an IHP?

An Indian tribe, or with the authorization of a Indian tribe, in
accordance with section 102(d) of NAHASDA a TDHE may prepare and submit
a plan to HUD.

##### § 1000.220   What are the minimum requirements for the IHP?

The minimum IHP requirements are set forth in sections 102(b) and 102(c)
of NAHASDA. In addition, §§1000.56, 1000.108, 1000.120, 1000.134,
1000.142, 1000.238, 1000.328, and 1000.504 require or permit additional
items to be set forth in the IHP for HUD determinations required by
those sections. Recipients are only required to provide IHPs that
contain these minimum elements in a form prescribed by HUD. If a TDHE is
submitting a single IHP that covers two or more Indian tribes, the IHP
must contain a separate certification in accordance with section 102(d)
of NAHASDA and IHP Tables for each Indian tribe when requested by such
Indian tribes. However, Indian tribes are encouraged to perform
comprehensive housing needs assessments and develop comprehensive IHPs
and not limit their planning process to only those housing efforts
funded by NAHASDA. An IHP should be locally driven.

##### § 1000.222   Are there separate IHP requirements for small Indian tribes and small TDHEs?

No. HUD requirements for IHPs are reasonable.

##### § 1000.224   Can any part of the IHP be waived?

Yes. HUD has general authority under section 101(b)(2) of NAHASDA to
waive any IHP requirements when an Indian tribe cannot comply with IHP
requirements due to circumstances beyond its control. The waiver
authority under section 101(b)(2) of NAHASDA provides flexibility to
address the needs of every Indian tribe, including small Indian tribes.
The waiver may be requested by the Indian tribe or its TDHE (if such
authority is delegated by the Indian tribe).

##### § 1000.226   Can the certification requirements of section 102(c)(5) of NAHASDA be waived by HUD?

Yes. HUD may waive these certification requirements as provided in
section 101(b)(2) of NAHASDA.

##### § 1000.228   If HUD changes its IHP format will Indian tribes be involved?

Yes. HUD will first consult with Indian tribes before making any
substantial changes to HUD\'s IHP format.

##### § 1000.230   What is the process for HUD review of IHPs and IHP amendments?

HUD will conduct the IHP review in the following manner:

\(a\) HUD will conduct a limited review of the IHP to ensure that its
contents:

\(1\) Comply with the requirements of section 102 of NAHASDA which
outlines the IHP submission requirements;

\(2\) Are consistent with information and data available to HUD;

\(3\) Are not prohibited by or inconsistent with any provision of
NAHASDA or other applicable law; and

\(4\) Include the appropriate certifications.

\(b\) If the IHP complies with the provisions of paragraphs (a)(1),
(a)(2), and (a)(3) of this section, HUD will notify the recipient of IHP
compliance within 60 days after receiving the IHP. If HUD fails to
notify the recipient, the IHP shall be considered to be in compliance
with the requirements of section 102 of NAHASDA and the IHP is approved.

\(c\) If the submitted IHP does not comply with the provisions of
paragraphs (a)(1), and (a)(3) of this section, HUD will notify the
recipient of the determination of non-compliance. HUD will provide this
notice no later than 60 days after receiving the IHP. This notice will
set forth:

\(1\) The reasons for noncompliance;

\(2\) The modifications necessary for the IHP to meet the submission
requirements; and

\(3\) The date by which the revised IHP must be submitted.

\(d\) If the recipient does not submit a revised IHP by the date
indicated in the notice provided under paragraph (c) of this section,
the IHP will be determined by HUD to be in non-compliance unless a
waiver is requested and approved under section 101(b)(2) of NAHASDA. If
the IHP is determined by HUD to be in non-compliance and no waiver is
granted, the recipient may appeal this determination following the
appeal process in §1000.234.

(e)(1) If the IHP does not contain the certifications identified in
paragraph (a)(4) of this section, the recipient will be notified within
60 days of submission of the IHP that the plan is incomplete. The
notification will include a date by which the certification must be
submitted.

\(2\) If the recipient has not complied or cannot comply with the
certification requirements due to circumstances beyond the control of
the Indian tribe(s), within the timeframe established, the recipient can
request a waiver in accordance with section 101(b)(2) of NAHASDA. If the
waiver is approved, the recipient is eligible to receive its grant in
accordance with any conditions of the waiver.

##### § 1000.232   Can an Indian tribe or TDHE amend its IHP?

Yes. Section 103(c) of NAHASDA specifically provides that a recipient
may submit modifications or revisions of its IHP to HUD. Unless the
initial IHP certification provided by an Indian tribe allowed for the
submission of IHP amendments without further tribal certifications, a
tribal certification must accompany submission of IHP amendments by a
TDHE to HUD. HUD\'s review of an amendment and determination of
compliance will be limited to modifications of an IHP which adds new
activities or involve a decrease in the amount of funds provided to
protect and maintain the viability of housing assisted under the 1937
Act. HUD will consider these modifications to the IHP in accordance with
§1000.230. HUD will act on amended IHPs within 30 days.

##### § 1000.234   Can HUD\'s determination regarding the non-compliance of an IHP or a modification to an IHP be appealed?

\(a\) Yes. Within 30 days of receiving HUD\'s disapproval of an IHP or
of a modification to an IHP, the recipient may submit a written request
for reconsideration of the determination. The request shall include the
justification for the reconsideration.

\(b\) Within 21 days of receiving the request, HUD shall reconsider its
initial determination and provide the recipient with written notice of
its decision to affirm, modify, or reverse its initial determination.
This notice will also contain the reasons for HUD\'s decision.

\(c\) The recipient may appeal any denial of reconsideration by filing
an appeal with the Assistant Secretary within 21 days of receiving the
denial. The appeal shall set forth the reasons why the recipient does
not agree with HUD\'s decision and include justification for the
reconsideration.

\(d\) Within 21 days of receipt of the appeal, the Assistant Secretary
shall review the recipient\'s appeal and act on the appeal. The
Assistant Secretary will provide written notice to the recipient setting
forth the reasons for the decision. The Assistant Secretary\'s decision
constitutes final agency action.

##### § 1000.236   What are eligible administrative and planning expenses?

\(a\) Eligible administrative and planning expenses of the IHBG program
include, but are not limited to:

\(1\) Costs of overall program and/or administrative management;

\(2\) Coordination monitoring and evaluation;

\(3\) Preparation of the IHP including data collection and transition
costs;

\(4\) Preparation of the annual performance report; and

\(5\) Challenge to and collection of data for purposes of challenging
the formula.

\(b\) Staff and overhead costs directly related to carrying out
affordable housing activities can be determined to be eligible costs of
the affordable housing activity or considered administration or planning
at the discretion of the recipient.

##### § 1000.238   What percentage of the IHBG funds can be used for administrative and planning expenses?

The recipient can use up to 20 percent of its annual grant amount for
administration and planning. The recipient shall identify the percentage
of grant funds which will be used in the IHP. HUD approval is required
if a higher percentage is requested by the recipient. When HUD approval
is required, HUD must take into consideration any cost of preparing the
IHP, challenges to and collection of data, the recipient\'s grant
amount, approved cost allocation plans, and any other relevant
information with special consideration given to the circumstances of
recipients receiving minimal funding.

##### § 1000.240   When is a local cooperation agreement required for affordable housing activities?

The requirement for a local cooperation agreement applies only to rental
and lease-purchase homeownership units assisted with IHBG funds which
are owned by the Indian tribe or TDHE.

##### § 1000.242   When does the requirement for exemption from taxation apply to affordable housing activities?

The requirement for exemption from taxation applies only to rental and
lease-purchase homeownership units assisted with IHBG funds which are
owned by the Indian tribe or TDHE.

##### Subpart D---Allocation Formula

##### § 1000.301   What is the purpose of the IHBG formula?

The IHBG formula is used to allocate equitably and fairly funds made
available through NAHASDA among eligible Indian tribes. A TDHE may be a
recipient on behalf of an Indian tribe.

##### § 1000.302   What are the definitions applicable for the IHBG formula?

*Allowable Expense Level (AEL) factor. *In rental projects, AEL is the
per-unit per-month dollar amount of expenses which was used to compute
the amount of operating subsidy used prior to October 1, 1997 for the
Low Rent units developed under the 1937 Act. The "AEL factor" is the
relative difference between a local area AEL and the national weighted
average for AEL.

*Date of Full Availability (DOFA) *means the last day of the month in
which substantially all the units in a housing development are available
for occupancy.

*Fair Market Rent (FMR) factors *are gross rent estimates; they include
shelter rent plus the cost of all utilities, except telephones. HUD
estimates FMRs on an annual basis for 354 metropolitan FMR areas and
2,355 non-metropolitan county FMR areas. The "FMR factor" is the
relative difference between a local area FMR and the national weighted
average for FMR.

*Formula Annual Income. *For purposes of the IHBG formula, annual income
is a household\'s total income as currently defined by the U.S. Census
Bureau.

*Formula area. *(1) Formula areas are:

\(i\) Reservations for federally recognized Indian tribes, as defined by
the U.S. Census;

\(ii\) Trust lands;

\(iii\) Department of the Interior Near-Reservation Service Areas;

\(iv\) Former Indian Reservation Areas in Oklahoma Indian Areas, as
defined by the U.S. Census as Oklahoma Tribal Statistical Areas (OTSAs);

\(v\) Congressionally Mandated Service Areas;

\(vi\) State Tribal Areas as defined by the U.S. Census as State
Designated American Indian Statistical Areas (SDAISAs);

\(vii\) Tribal Designated Statistical Areas (TDSAs);

\(viii\) California Tribal Jurisdictional Areas established or
reestablished by federal court judgment; and

\(ix\) Alaska formula areas described in paragraph (4) of this
definition.

(2)(i) For a geographic area not identified in paragraph (1) of this
definition, and for expansion or re-definition of a geographic area from
the prior year, including those identified in paragraph (1) of this
definition, the Indian tribe must submit, on a form agreed to by HUD,
information about the geographic area it wishes to include in its
Formula Area, including proof that the Indian tribe, where applicable,
has agreed to provide housing services pursuant to a Memorandum of
Agreement (MOA) with the tribal and public governing entity or entities
of the area, or has attempted to establish such an MOA; and either:

\(A\) Could exercise court jurisdiction; or

\(B\) Is providing substantial housing services and will continue to
expend or obligate funds for substantial housing services, as reflected
in the form agreed to by HUD for this purpose.

\(ii\) Upon receiving a request for recognition of a geographic area not
identified in paragraph (1) of this definition, HUD shall make a
preliminary determination. HUD shall notify all potentially affected
Indian tribes of the basis for its preliminary determination by
certified mail and provide the Indian tribes with the opportunity to
comment for a period of not less than 90 days. After consideration of
the comments, HUD shall announce its final determination throughFederal
Registernotice.

\(iii\) No Indian tribe may expand or redefine its Formula Area without
complying with the requirements of paragraphs (2)(i) and (ii) of this
definition, notwithstanding any changes recognized by the U.S. Census
Bureau.

\(iv\) The geographic area into which an Indian tribe may expand under
this paragraph (2) shall be the smallest U.S. Census unit or units
encompassing the physical location where substantial housing services
have been provided by the Indian tribe.

\(3\) Subject to a challenge by an Indian tribe with a Formula Area
described under paragraph (1)(iv) of this definition, any federally
recognized Indian tribe assigned Formula Area geography in Fiscal Year
2003 not identified in paragraphs (1) and (2) of this definition, shall
continue to be assigned such Formula Area in subsequent fiscal years,
provided that the Indian tribe continues to provide an appropriate level
of housing services within the Formula Area as monitored by HUD using
the definition of substantial housing services contained in this section
as a guideline but not as a requirement.

\(4\) Notwithstanding paragraphs (1), (2), and (3) of this definition,
Alaska needs data shall be credited as set forth in §1000.327 to the
Alaska Native Village (ANV), the regional Indian tribe, or to the
regional corporation established pursuant to the Alaska Native Claims
Settlement Act (33 U.S.C. 1601 *et seq. *) (ANCSA). For purposes of
§1000.327 and this definition:

\(i\) The formula area of the ANV shall be the geographic area of the
village or that area delineated by the TDSA established for the ANV for
purposes of the 1990 U.S. Census or the Alaska Native Village
Statistical Area (ANVSA) established for the ANV. To the extent that the
area encompassed by such designation may substantially exceed the actual
geographic area of the village, such designation is subject to challenge
pursuant to §1000.336. If the ANVSA or the TDSA is determined pursuant
to such challenge to substantially exceed the actual area of the
village, then the geographic formula area of the ANV for purposes of
§1000.327 shall be such U.S. Census designation as most closely
approximates the actual geographic area of the village.

\(ii\) The geographic formula area of the regional corporation shall be
the area established for the corporation by the ANCSA.

\(iii\) An Indian tribe may seek to expand its Alaska formula area
within its ANCSA region pursuant to the procedures set out in paragraph
(2) of this definition. Formula Area added in this way shall be treated
as overlapping pursuant to §1000.326, unless the Indian tribe\'s members
in the expanded area are less than 50 percent of the AIAN population. In
cases where the Indian tribe is not treated as overlapping, the Indian
tribe shall be credited with population and housing data only for its
own tribal member residents within the new or added area. All other
population and housing data for the area shall remain with the Indian
tribe or tribes previously credited with such data.

\(5\) In some cases the population data for an Indian tribe within its
Formula Area is greater than its tribal enrollment. In general, to
maintain fairness for all Indian tribes, the tribe\'s population data
will not be allowed to exceed twice an Indian tribe\'s enrolled
population. However, an Indian tribe subject to this cap may receive an
allocation based on more than twice its total enrollment if it can show
that it is providing housing assistance to substantially more non-member
Indians and Alaska Natives who are members of another federally
recognized Indian tribe than it is to members. For state-recognized
Indian tribes, the population data and formula allocation shall be
limited to their tribal enrollment figures as determined under
enrollment criteria in effect in 1996.

\(6\) In cases where an Indian tribe is seeking to receive an allocation
more than twice its total enrollment, the tribal enrollment multiplier
will be determined by the total number of Indians and Alaska Natives to
whom the Indian tribe is providing housing assistance (on July 30 of the
year before funding is sought) divided by the number of members to whom
the Indian tribe is providing housing assistance. For example, an Indian
tribe that provides housing to 300 Indians and Alaska Natives, of which
100 are members, the Indian tribe would then be able to receive an
allocation for up to three times its tribal enrollment if the Indian and
Alaska Native population in the area is three or more times the tribal
enrollment.

*Formula Median Income. *For purposes of the formula median income is
determined in accordance with section 567 of the Housing and Community
Development Act of 1987 (42 U.S.C. 1437a note).

*Formula Response Form *is the form recipients use to report changes to
their Formula Current Assisted stock, formula area, and other formula
related information before each year\'s formula allocation.

*Indian Housing Authority (IHA) financed *means a homeownership program
where title rests with the homebuyer and a security interest rests with
the IHA.

*Mutual Help Occupancy Agreement (MHOA) *means a lease with option to
purchase contract between an IHA and a homebuyer under the 1937 Act.

*National per unit subsidy *is the Fiscal Year 1996 national per unit
subsidy (adjusted to full funding level) multiplied by an adjustment
factor for inflation.

*Overcrowded *means households with more than 1.01 persons per room as
defined by the U.S. Decennial Census.

*Section 8 *means the making of housing assistance payments to eligible
families leasing existing housing pursuant to the provisions of the 1937
Act.

*Section 8 unit *means the contract annualized housing assistance
payments (certificates, vouchers, and project based) under the Section 8
program.

*Substantial housing services *are:

\(1\) Affordable housing activities funded from any source provided to
AIAN households with incomes 80 percent of the median income as defined
in NAHASDA (25 U.S.C. 4103 (14)) or lower, equivalent to 100 percent or
more of the increase in the IHBG formula allocation that the Indian
tribe would receive as a result of adding the proposed geography; or

\(2\) Affordable housing activities funded with IHBG funds provided to
AIAN households with incomes 80 percent of the median income as defined
in NAHASDA (25 U.S.C. 4104(14)) or lower, equivalent to 51 percent or
more of the Indian tribe\'s current total IHBG grant; and either:

\(i\) Fifty-one percent or more of the Indian tribe\'s official
enrollment resides within the geographic area; or

\(ii\) The Indian tribe\'s official enrollment constitutes 51 percent or
more of the total AIAN persons within the geography.

\(3\) HUD shall require that the Indian tribe annually provide written
verification, on a form approved by HUD, that the affordable housing
activities it is providing meet the definition of substantial housing
services.

*Total Development Cost (TDC) *is the sum of all costs for a project
including all undertakings necessary for administration, planning, site
acquisition, demolition, construction or equipment and financing
(including payment of carrying charges) and for otherwise carrying out
the development of the project, excluding off site water and sewer.
Total Development Cost amounts will be based on a moderately designed
house and will be determined by averaging the current construction costs
as listed in not less than two nationally recognized residential
construction cost indices.

*Without kitchen or plumbing *means, as defined by the U.S. Decennial
Census, an occupied house without one or more of the following items:

\(1\) Hot and cold piped water;

\(2\) A flush toilet;

\(3\) A bathtub or shower;

\(4\) A sink with piped water;

\(5\) A range or cookstove; or

\(6\) A refrigerator.

\[63 FR 12349, Mar. 12, 1998, as amended at 72 FR 20023, Apr. 20, 2007\]

##### § 1000.304   May the IHBG formula be modified?

Yes, as long as any modification does not conflict with the requirements
of NAHASDA.

##### § 1000.306   How can the IHBG formula be modified?

\(a\) The IHBG formula can be modified upon development of a set of
measurable and verifiable data directly related to Indian and Alaska
Native housing need. Any data set developed shall be compiled with the
consultation and involvement of Indian tribes and examined and/or
implemented not later than 5 years from the date of issuance of these
regulations and periodically thereafter.

\(b\) The IHBG Formula shall be reviewed not later than May 21, 2012 to
determine if a subsidy is needed to operate and maintain NAHASDA units
or if any other changes are needed in respect to funding under the
Formula Current Assisted Stock component of the formula.

\(c\) During the five year review of housing stock for formula purposes,
the Section 8 units shall be reduced by the same percentage as the
current assisted rental stock has diminished since September 30, 1999.

\[63 FR 12349, Mar. 12, 1998, as amended at 72 FR 20024, Apr. 20, 2007\]

##### § 1000.308   Who can make modifications to the IHBG formula?

HUD can make modifications in accordance with §1000.304 and §1000.306
provided that any changes proposed by HUD are published and made
available for public comment in accordance with applicable law before
their implementation.

##### § 1000.310   What are the components of the IHBG formula?

The IHBG formula consists of two components:

\(a\) Formula Current Assisted Housing Stock (FCAS); and

\(b\) Need.

##### § 1000.312   What is current assisted stock?

Current assisted stock consists of housing units owned or operated
pursuant to an ACC. This includes all low rent, Mutual Help, and Turnkey
III housing units under management as of September 30, 1997, as
indicated in the Formula Response Form.

##### § 1000.314   What is formula current assisted stock?

Formula current assisted stock is current assisted stock as described in
§1000.312 plus 1937 Act units in the development pipeline when they
become owned or operated by the recipient and are under management as
indicated in the Formula Response Form. Formula current assisted stock
also includes Section 8 units when their current contract expires and
the Indian tribe continues to manage the assistance in a manner similar
to the Section 8 program, as reported on the Formula Response Form.

##### § 1000.315   Is a recipient required to report changes to the Formula Current Assisted Stock (FCAS) on the Formula Response Form?

\(a\) A recipient shall report changes to information related to the
IHBG formula on the Formula Response Form, including corrections to the
number of Formula Current Assisted Stock (FCAS), during the time period
required by HUD. This time period shall be not less than 60 days from
the date of the HUD letter transmitting the form to the recipient.

\(b\) The Formula Response Form is the only mechanism that a recipient
shall use to report changes to the number of FCAS.

\[72 FR 20025, Apr. 20, 2007\]

##### § 1000.316   How is the Formula Current Assisted Stock (FCAS) Component developed?

The Formula Current Assisted Stock component consists of two elements.
They are:

\(a\) *Operating subsidy. *The operating subsidy consists of three
variables which are:

\(1\) The number of low-rent FCAS units multiplied by the national per
unit subsidy;

\(2\) The number of Section 8 units whose contract has expired but had
been under contract on September 30, 1997, multiplied by the FY 1996
national per unit subsidy; and

\(3\) The number of Mutual Help and Turnkey III FCAS units multiplied by
the national per unit subsidy.

\(b\) *Modernization allocation. *(1) For Indian tribes with an Indian
Housing Authority that owned or operated 250 or more public housing
units on October 1, 1997, the modernization allocation equals the number
of Low Rent, Mutual Help, and Turnkey III FCAS units multiplied by the
national per-unit amount of allocation for FY 1996 modernization
multiplied by an adjustment factor for inflation.

\(2\) For Indian tribes with an Indian Housing Authority that owned or
operated fewer than 250 public housing units on October 1, 1997, the
modernization allocation equals the average amount of funds received
under the assistance program authorized by section 14 of the 1937 Act
(not including funds provided as emergency assistance) for FYs 1992
through 1997.

\[63 FR 12349, Mar. 12, 1998, as amended at 72 FR 20025, Apr. 20, 2007\]

##### § 1000.317   Who is the recipient for funds for current assisted stock which is owned by state-created Regional Native Housing Authorities in Alaska?

If housing units developed under the 1937 Act are owned by a
state-created Regional Native Housing Authority in Alaska, and are not
located on an Indian reservation, then the recipient for funds allocated
for the current assisted stock portion of NAHASDA funds for the units is
the regional Indian tribe.

##### § 1000.318   When do units under Formula Current Assisted Stock cease to be counted or expire from the inventory used for the formula?

\(a\) Mutual Help and Turnkey III units shall no longer be considered
Formula Current Assisted Stock when the Indian tribe, TDHE, or IHA no
longer has the legal right to own, operate, or maintain the unit,
whether such right is lost by conveyance, demolition, or otherwise,
provided that:

\(1\) Conveyance of each Mutual Help or Turnkey III unit occurs as soon
as practicable after a unit becomes eligible for conveyance by the terms
of the MHOA; and

\(2\) The Indian tribe, TDHE, or IHA actively enforce strict compliance
by the homebuyer with the terms and conditions of the MHOA, including
the requirements for full and timely payment.

\(b\) Rental units shall continue to be included for formula purposes as
long as they continue to be operated as low income rental units by the
Indian tribe, TDHE, or IHA.

\(c\) Expired contract Section 8 units shall continue as rental units
and be included in the formula as long as they are operated as low
income rental units as included in the Indian tribe\'s or TDHE\'s
Formula Response Form.

##### § 1000.319   What would happen if a recipient misreports or fails to correct Formula Current Assisted Stock (FCAS) information on the Formula Response Form?

\(a\) A recipient is responsible for verifying and reporting changes to
their Formula Current Assisted Stock (FCAS) on the Formula Response Form
to ensure that data used for the IHBG Formula are accurate (see
§1000.315). Reporting shall be completed in accordance with requirements
in this Subpart D and the Formula Response Form.

\(b\) If a recipient receives an overpayment of funds because it failed
to report such changes on the Formula Response Form in a timely manner,
the recipient shall be required to repay the funds within 5 fiscal
years. HUD shall subsequently distribute the funds to all Indian tribes
in accordance with the next IHBG Formula allocation.

\(c\) A recipient will not be provided back funding for any units that
the recipient failed to report on the Formula Response Form in a timely
manner.

\(d\) HUD shall have 3 years from the date a Formula Response Form is
sent out to take action against any recipient that fails to correct or
make appropriate changes on that Formula Response Form. Review of FCAS
will be accomplished by HUD as a component of A--133 audits, routine
monitoring, FCAS target monitoring, or other reviews.

\[72 FR 20025, Apr. 20, 2007\]

##### § 1000.320   How is Formula Current Assisted Stock adjusted for local area costs?

There are two adjustment factors that are used to adjust the allocation
of funds for the Current Assisted Stock portion of the formula. They
are:

\(a\) Operating Subsidy as adjusted by the greater of the AEL factor or
FMR factor (AELFMR); and

\(b\) Modernization as adjusted by TDC.

##### § 1000.322   Are IHA financed units included in the determination of Formula Current Assisted Stock?

No. If these units are not owned or operated at the time (September 30,
1997) pursuant to an ACC then they are not included in the determination
of Formula Current Assisted Stock.

##### § 1000.324   How is the need component developed?

After determining the FCAS allocation, remaining funds are allocated by
need component. The need component consists of seven criteria. They are:

\(a\) American Indian and Alaskan Native (AIAN) Households with housing
cost burden greater than 50 percent of formula annual income weighted at
22 percent;

\(b\) AIAN Households which are overcrowded or without kitchen or
plumbing weighted at 25 percent;

\(c\) Housing Shortage which is the number of AIAN households with an
annual income less than or equal to 80 percent of formula median income
reduced by the combination of current assisted stock and units developed
under NAHASDA weighted at 15 percent;

\(d\) AIAN households with annual income less than or equal to 30
percent of formula median income weighted at 13 percent;

\(e\) AIAN households with annual income between 30 percent and 50
percent of formula median income weighted at 7 percent;

\(f\) AIAN households with annual income between 50 percent and 80
percent of formula median income weighted at 7 percent;

\(g\) AIAN persons weighted at 11 percent.

##### § 1000.325   How is the need component adjusted for local area costs?

The need component is adjusted by the TDC.

##### § 1000.326   What if a formula area is served by more than one Indian tribe?

\(a\) If an Indian tribe\'s formula area overlaps with the formula area
of one or more other Indian tribes, the funds allocated to that Indian
tribe for the geographic area in which the formula areas overlap will be
divided based on:

\(1\) The Indian tribe\'s proportional share of the population in the
overlapping geographic area; and

\(2\) The Indian tribe\'s commitment to serve that proportional share of
the population in such geographic area.

\(3\) In cases where a State recognized Indian tribe\'s formula area
overlaps with a Federally recognized Indian tribe, the Federally
recognized Indian tribe receives the allocation for the overlapping
area.

\(b\) Tribal membership in the geographic area (not to include dually
enrolled tribal members) will be based on data that all Indian tribes
involved agree to use. Suggested data sources include tribal enrollment
lists, the U.S. Census, Indian Health Service User Data, and Bureau of
Indian Affairs data.

\(c\) If the Indian tribes involved cannot agree on what data source to
use, HUD will make the decision on what data will be used to divide the
funds between the Indian tribes by August 1.

\[63 FR 12349, Mar. 12, 1998, as amended at 72 FR 20025, Apr. 20, 2007\]

##### § 1000.327   What is the order of preference for allocating the IHBG formula needs data for Indian tribes in Alaska not located on reservations due to the unique circumstances in Alaska?

\(a\) Data in areas without reservations. The data on population and
housing within an Alaska Native Village is credited to the Alaska Native
Village. Accordingly, the village corporation for the Alaska Native
Village has no needs data and no formula allocation. The data on
population and housing outside the Alaska Native Village is credited to
the regional Indian tribe, and if there is no regional Indian tribe, the
data will be credited to the regional corporation.

\(b\) Deadline for notification on whether an IHP will be submitted. By
September 15 of each year, each Indian tribe in Alaska not located on a
reservation, including each Alaska Native village, regional Indian
tribe, and regional corporation, or its TDHE must notify HUD in writing
whether it or its TDHE intends to submit an IHP. If an Alaska Native
village notifies HUD that it does not intend either to submit an IHP or
to designate a TDHE to do so, or if HUD receives no response from the
Alaska Native village or its TDHE, the formula data which would have
been credited to the Alaska Native village will be credited to the
regional Indian tribe, or if there is no regional Indian tribe, to the
regional corporation.

##### § 1000.328   What is the minimum amount that an Indian tribe may receive under the need component of the formula?

\(a\) Subject to the eligibility criteria described in paragraph (b) of
this section, the minimum allocation in any fiscal year to an Indian
tribe under the need component of the IHBG Formula shall equal 0.007826
percent of the available appropriations for that fiscal year after set
asides.

\(b\) To be eligible for the minimum allocation described in paragraph
(a) of this section, an Indian tribe must:

\(1\) Receive less than \$200,000 under the FCAS component of the IHBG
Formula for the fiscal year; and

\(2\) Demonstrate the presence of any households at or below 80 percent
of median income.

\[72 FR 20025, Apr. 20, 2007\]

##### § 1000.330   What are the data sources for the need variables?

\(a\) The sources of data for the need variables shall be data available
that is collected in a uniform manner that can be confirmed and verified
for all AIAN households and persons living in an identified area.
Initially, the data used are U.S. Decennial Census data.

\(b\) The data for the need variables shall be adjusted annually
beginning the year after the need data is collected, using Indian Health
Service projections based upon birth and death rate data as provided by
the National Center for Health Statistics.

\(c\) Indian tribes may challenge the data described in paragraphs (a)
and (b) of this section pursuant to §1000.336.

\[63 FR 12349, Mar. 12, 1998, as amended at 72 FR 20025, Apr. 20, 2007\]

##### § 1000.332   Will data used by HUD to determine an Indian tribe\'s or TDHE\'s formula allocation be provided to the Indian tribe or TDHE before the allocation?

Yes. HUD shall provide notice to the Indian tribe or TDHE of the data to
be used for the formula and projected allocation amount by August 1.

##### § 1000.334   May Indian tribes, TDHEs, or HUD challenge the data from the U.S. Decennial Census or provide an alternative source of data?

Yes. Provided that the data are gathered, evaluated, and presented in a
manner acceptable to HUD and that the standards for acceptability are
consistently applied throughout the Country.

##### § 1000.336   How may an Indian tribe, TDHE, or HUD challenge data or appeal HUD formula determinations?

\(a\) An Indian tribe, TDHE, or HUD may challenge data used in the IHBG
Formula and HUD formula determinations regarding:

\(1\) U.S. Census data;

\(2\) Tribal enrollment;

\(3\) Formula area;

\(4\) Formula Current Assisted Stock (FCAS);

\(5\) Total Development Cost (TDC);

\(6\) Fair Market Rents (FMRs); and

\(7\) Indian Health Service projections based upon birth and death rate
data provided by the National Center for Health Statistics.

\(b\) An Indian tribe or TDHE may not challenge data or HUD formula
determinations regarding Allowable Expense Level (AEL) and the inflation
factor.

\(c\) The challenge and the collection of data and the appeal of HUD
formula determinations is an allowable cost for IHBG funds.

\(d\) An Indian tribe or TDHE that seeks to appeal data or a HUD formula
determination, and has data in its possession that are acceptable to
HUD, may submit the data and proper documentation to HUD. Data used to
challenge data contained in the U.S. Census must meet the requirements
described in §1000.330(a). Further, in order for a census challenge to
be considered for the upcoming fiscal year allocation, documentation
must be submitted by March 30th.

\(e\) HUD shall respond to all challenges or appeals not later than 45
days after receipt and either approve or deny the validity of such data
or challenge to a HUD formula determination in writing, setting forth
the reasons for its decision. Pursuant to HUD\'s action, the following
shall apply:

\(1\) In the event HUD challenges the validity of the submitted data,
the Indian tribe or TDHE and HUD shall attempt in good faith to resolve
any discrepancies so that such data may be included in the formula
allocation.

\(2\) Should the Indian tribe or TDHE and HUD be unable to resolve any
discrepancy within 30 calendar days of receipt of HUD\'s denial, the
Indian tribe or TDHE may request reconsideration of HUD\'s denial in
writing. The request shall set forth justification for reconsideration.

\(3\) Within 20 calendar days of receiving the request, HUD shall
reconsider the Indian tribe or TDHE\'s submission and either affirm or
reverse its initial decision in writing, setting forth HUD\'s reasons
for the decision.

\(4\) Pursuant to resolution of the dispute:

\(i\) If the Indian tribe or TDHE prevails, an adjustment to the Indian
tribe\'s or TDHE\'s subsequent allocation for the subsequent year shall
be made retroactive to include only the disputed fiscal year(s); or

\(ii\) If HUD prevails, it shall issue a written decision denying the
Indian tribe or TDHE\'s petition for reconsideration, which shall
constitute final agency action.

\(f\) In the event HUD questions that the data contained in the formula
does not accurately represent the Indian tribe\'s need, HUD shall
request the Indian tribe to submit supporting documentation to justify
the data and to provide a commitment to serve the population indicated
in the geographic area.

\[72 FR 20025, Apr. 20, 2007\]

##### § 1000.340   What if an Indian tribe is allocated less funding under the IHBG Formula than it received in Fiscal Year (FY) 1996 for operating subsidy and modernization?

\(a\) If an Indian tribe is allocated less funding under the
modernization allocation of the formula pursuant to §1000.316(b)(2) than
the calculation of the number of Low Rent, Mutual Help, and Turnkey III
FCAS units multiplied by the national per-unit amount of allocation for
FY 1996 modernization multiplied by an adjustment factor for inflation,
the Indian tribe\'s modernization allocation is calculated under
§1000.316(b)(1). The remaining grants are adjusted to keep the
allocation within available appropriations.

\(b\) If an Indian tribe is allocated less funding under the formula
than an IHA received on its behalf in FY 1996 for operating subsidy and
modernization, its grant is increased to the amount received in FY 1996
for operating subsidy and modernization. The remaining grants are
adjusted to keep the allocation within available appropriations.

\[72 FR 20026, Apr. 20, 2007\]

##### Subpart E---Federal Guarantees for Financing of Tribal Housing Activities

##### § 1000.401   What terms are used throughout this subpart?

As used throughout title VI of NAHASDA and in this subpart:

*Applicant *means the entity that requests a HUD guarantee under the
provisions of this subpart.

*Borrower *means an Indian tribe or TDHE that receives funds in the form
of a loan with the obligation to repay in full, with interest, and has
executed notes or other obligations that evidence that transaction.

*Issuer *means an Indian tribe or TDHE that issues or executes notes or
other obligations. An issuer can also be a borrower.

##### § 1000.402   Are State recognized Indian tribes eligible for guarantees under title VI of NAHASDA?

Those State recognized Indian tribes that meet the definition set forth
in section 4(12)(C) of NAHASDA are eligible for guarantees under title
VI of NAHASDA.

##### § 1000.404   What lenders are eligible for participation?

Eligible lenders are those approved under and meeting the qualifications
established in this subpart, except that loans otherwise insured or
guaranteed by an agency of the United States, or made by an organization
of Indians from amounts borrowed from the United States, shall not be
eligible for guarantee under this part. The following lenders are deemed
to be eligible under this subpart:

\(a\) Any mortgagee approved by HUD for participation in the single
family mortgage insurance program under title II of the National Housing
Act;

\(b\) Any lender whose housing loans under chapter 37 of title 38,
United States Code, are automatically guaranteed pursuant to section
1802(d) of such title;

\(c\) Any lender approved by the Department of Agriculture to make
guaranteed loans for single family housing under the Housing Act of
1949;

\(d\) Any other lender that is supervised, approved, regulated, or
insured by any agency of the United States; and

\(e\) Any other lender approved by the Secretary.

##### § 1000.406   What constitutes tribal approval to issue notes or other obligations under title VI of NAHASDA?

Tribal approval is evidenced by a written tribal resolution that
authorizes the issuance of notes or obligations by the Indian tribe or a
TDHE on behalf of the Indian tribe.

##### § 1000.408   How does an Indian tribe or TDHE show that it has made efforts to obtain financing without a guarantee and cannot complete such financing in a timely manner?

The Indian tribe or TDHE shall submit a certification that states that
the Indian tribe has attempted to obtain financing and cannot complete
such financing consistent with the timely execution of the program plans
without such guarantee. Written documentation shall be maintained by the
Indian tribe or TDHE to support the certification.

##### § 1000.410   What conditions shall HUD prescribe when providing a guarantee for notes or other obligations issued by an Indian tribe?

HUD shall provide that:

\(a\) Any loan, note or other obligation guaranteed under title VI of
NAHASDA may be sold or assigned by the lender to any financial
institution that is subject to examination and supervision by an agency
of the Federal government, any State, or the District of Columbia
without destroying or otherwise negatively affecting the guarantee; and

\(b\) Indian tribes and housing entities are encouraged to explore
creative financing mechanisms and in so doing shall not be limited in
obtaining a guarantee. These creative financing mechanisms include but
are not limited to:

\(1\) Borrowing from private or public sources or partnerships;

\(2\) Issuing tax exempt and taxable bonds where permitted; and

\(3\) Establishing consortiums or trusts for borrowing or lending, or
for pooling loans.

\(c\) The repayment period may exceed twenty years and the length of the
repayment period cannot be the sole basis for HUD disapproval; and

\(d\) Lender and issuer/borrower must certify that they acknowledge and
agree to comply with all applicable tribal laws.

##### § 1000.412   Can an issuer obtain a guarantee for more than one note or other obligation at a time?

Yes. To obtain multiple guarantees, the issuer shall demonstrate that:

\(a\) The issuer will not exceed a total for all notes or other
obligations in an amount equal to five times its grant amount, excluding
any amount no longer owed on existing notes or other obligations; and

\(b\) Issuance of additional notes or other obligations is within the
financial capacity of the issuer.

##### § 1000.414   How is an issuer\'s financial capacity demonstrated?

An issuer must demonstrate its financial capacity to:

\(a\) Meet its obligations; and

\(b\) Protect and maintain the viability of housing developed or
operated pursuant to the 1937 Act.

##### § 1000.416   What is a repayment contract in a form acceptable to HUD?

\(a\) The Secretary\'s signature on a contract shall signify HUD\'s
acceptance of the form, terms and conditions of the contract.

\(b\) In loans under title VI of NAHASDA, involving a contract between
an issuer and a lender other than HUD, HUD\'s approval of the loan
documents and guarantee of the loan shall be deemed to be HUD\'s
acceptance of the sufficiency of the security furnished. No other
security can or will be required by HUD at a later date.

##### § 1000.418   Can grant funds be used to pay costs incurred when issuing notes or other obligations?

Yes. Other costs that can be paid using grant funds include but are not
limited to the costs of servicing and trust administration, and other
costs associated with financing of debt obligations.

##### § 1000.420   May grants made by HUD under section 603 of NAHASDA be used to pay net interest costs incurred when issuing notes or other obligations?

Yes. Other costs that can be paid using grant funds include but are not
limited to the costs of servicing and trust administration, and other
costs associated with financing of debt obligations, not to exceed 30
percent of the net interest cost.

##### § 1000.422   What are the procedures for applying for loan guarantees under title VI of NAHASDA?

\(a\) The borrower applies to the lender for a loan using a guarantee
application form prescribed by HUD.

\(b\) The lender provides the loan application to HUD to determine if
funds are available for the guarantee. HUD will reserve these funds for
a period of 90 days if the funds are available and the applicant is
otherwise eligible under this subpart. HUD may extend this reservation
period for an extra 90 days if additional documentation is necessary.

\(c\) The borrower and lender negotiate the terms and conditions of the
loan in consultation with HUD.

\(d\) The borrower and lender execute documents.

\(e\) The lender formally applies for the guarantee.

\(f\) HUD reviews and provides a written decision on the guarantee.

##### § 1000.424   What are the application requirements for guarantee assistance under title VI of NAHASDA?

The application for a guarantee must include the following:

\(a\) An identification of each of the activities to be carried out with
the guaranteed funds and a description of how each activity qualifies as
an affordable housing activity as defined in section 202 of NAHASDA.

\(b\) A schedule for the repayment of the notes or other obligations to
be guaranteed that identifies the sources of repayment, together with a
statement identifying the entity that will act as the borrower.

\(c\) A copy of the executed loan documents, if applicable, including,
but not limited to, any contract or agreement between the borrower and
the lender.

\(d\) Certifications by the borrower that:

\(1\) The borrower possesses the legal authority to pledge and that it
will, if approved, make the pledge of grants required by section
602(a)(2) of NAHASDA.

\(2\) The borrower has made efforts to obtain financing for the
activities described in the application without use of the guarantee;
the borrower will maintain documentation of such efforts for the term of
the guarantee; and the borrower cannot complete such financing
consistent with the timely execution of the program plans without such
guarantee.

\(3\) It possesses the legal authority to borrow or issue obligations
and to use the guaranteed funds in accordance with the requirements of
this subpart.

\(4\) Its governing body has duly adopted or passed as an official act a
resolution, motion, or similar official action that:

\(i\) Identifies the official representative of the borrower, and
directs and authorizes that person to provide such additional
information as may be required; and

\(ii\) Authorizes such official representative to issue the obligation
or to execute the loan or other documents, as applicable.

\(5\) The borrower has complied with section 602(a) of NAHASDA.

\(6\) The borrower will comply with the requirements described in
subpart A of this part and other applicable laws.

##### § 1000.426   How does HUD review a guarantee application?

The procedure for review of a guarantee application includes the
following steps:

\(a\) HUD will review the application for compliance with title VI of
NAHASDA and these implementing regulations.

\(b\) HUD will accept the certifications submitted with the application.
HUD may, however, consider relevant information that challenges the
certifications and require additional information or assurances from the
applicant as warranted by such information.

##### § 1000.428   For what reasons may HUD disapprove an application or approve an application for an amount less than that requested?

HUD may disapprove an application or approve a lesser amount for any of
the following reasons:

\(a\) HUD determines that the guarantee constitutes an unacceptable
risk. Factors that will be considered in assessing financial risk shall
include, but not be limited to, the following:

\(1\) The ratio of the expected annual debt service requirements to the
expected available annual grant amount, taking into consideration the
obligations of the borrower under the provisions of section 203(b) of
NAHASDA;

\(2\) Evidence that the borrower will not continue to receive grant
assistance under this part during the proposed repayment period;

\(3\) The borrower\'s inability to furnish adequate security pursuant to
section 602(a) of NAHASDA; and

\(4\) The amount of program income the proposed activities are
reasonably estimated to contribute toward repayment of the guaranteed
loan or other obligations.

\(b\) The loan or other obligation for which the guarantee is requested
exceeds any of the limitations specified in sections 601(d) or section
605(d) of NAHASDA.

\(c\) Funds are not available in the amount requested.

\(d\) Evidence that the performance of the borrower under this part has
been determined to be unacceptable pursuant to the requirements of
subpart F of this part, and that the borrower has failed to take
reasonable steps to correct performance.

\(e\) The activities to be undertaken are not eligible under section 202
of NAHASDA.

\(f\) The loan or other obligation documents for which a guarantee is
requested do not meet the requirements of this subpart.

##### § 1000.430   When will HUD issue notice to the applicant if the application is approved at the requested or reduced amount?

\(a\) HUD shall make every effort to approve a guarantee within 30 days
of receipt of a completed application including executed documents and,
if unable to do so, will notify the applicant within the 30 day
timeframe of the need for additional time and/or if additional
information is required.

\(b\) HUD shall notify the applicant in writing that the guarantee has
either been approved, reduced, or disapproved. If the request is reduced
or disapproved, the applicant will be informed of the specific reasons
for reduction or disapproval.

\(c\) HUD shall issue a certificate to guarantee the debt obligation of
the issuer subject to compliance with NAHASDA including but not limited
to sections 105, 601(a), and 602(c) of NAHASDA, and such other
reasonable conditions as HUD may specify in the commitment documents in
a particular case.

##### § 1000.432   Can an amendment to an approved guarantee be made?

\(a\) Yes. An amendment to an approved guarantee can occur if an
applicant wishes to allow a borrower/issuer to carry out an activity not
described in the loan or other obligation documents, or substantially to
change the purpose, scope, location, or beneficiaries of an activity.

\(b\) Any changes to an approved guarantee must be approved by HUD.

##### § 1000.434   How will HUD allocate the availability of loan guarantee assistance?

\(a\) Each fiscal year HUD may allocate a percentage of the total
available loan guarantee assistance to each Area ONAP equal to the
percentage of the total NAHASDA grant funds allocated to the Indian
tribes in the geographic area of operation of that office.

\(b\) These allocated amounts shall remain exclusively available for
loan guarantee assistance for Indian tribes or TDHEs in the area of
operation of that office until committed by HUD for loan guarantees or
until the end of the second quarter of the fiscal year. At the beginning
of the third quarter of the fiscal year, any residual loan guarantee
commitment amount shall be made available to guarantee loans for Indian
tribes or TDHEs regardless of their location. Applications for residual
loan guarantee money must be submitted on or after April 1.

\(c\) In approving applications for loan guarantee assistance, HUD shall
seek to maximize the availability of such assistance to all interested
Indian tribes or TDHEs. HUD may limit the proportional share approved to
any one Indian tribe or TDHE to its proportional share of the block
grant allocation based upon the annual plan submitted by the Indian
tribe or TDHE indicating intent to participate in the loan guarantee
allocation process.

##### § 1000.436   How will HUD monitor the use of funds guaranteed under this subpart?

HUD will monitor the use of funds guaranteed under this subpart as set
forth in section 403 of NAHASDA, and the lender is responsible for
monitoring performance with the documents.

##### Subpart F---Recipient Monitoring, Oversight and Accountability

##### § 1000.501   Who is involved in monitoring activities under NAHASDA?

The recipient, the grant beneficiary and HUD are involved in monitoring
activities under NAHASDA.

##### § 1000.502   What are the monitoring responsibilities of the recipient, the grant beneficiary and HUD under NAHASDA?

\(a\) The recipient is responsible for monitoring grant activities,
ensuring compliance with applicable Federal requirements and monitoring
performance goals under the IHP. The recipient is responsible for
preparing at least annually: a compliance assessment in accordance with
section 403(b) of NAHASDA; a performance report covering the assessment
of program progress and goal attainment under the IHP; and an audit in
accordance with the Single Audit Act, as applicable. The recipient\'s
monitoring should also include an evaluation of the recipient\'s
performance in accordance with performance objectives and measures. At
the request of a recipient, other Indian tribes and/or TDHEs may provide
assistance to aid the recipient in meeting its performance goals or
compliance requirements under NAHASDA.

\(b\) Where the recipient is a TDHE, the grant beneficiary (Indian
tribe) is responsible for monitoring programmatic and compliance
requirements of the IHP and NAHASDA by requiring the TDHE to prepare
periodic progress reports including the annual compliance assessment,
performance and audit reports.

\(c\) HUD is responsible for reviewing the recipient as set forth in
§1000.520.

\(d\) HUD monitoring will consist of on-site as well as off-site review
of records, reports and audits. To the extent funding is available, HUD
or its designee will provide technical assistance and training, or funds
to the recipient to obtain technical assistance and training. In the
absence of funds, HUD shall make best efforts to provide technical
assistance and training.

##### § 1000.504   What are the recipient performance objectives?

Performance objectives are developed by each recipient. Performance
objectives are criteria by which the recipient will monitor and evaluate
its performance. For example, if in the IHP the recipient indicates it
will build new houses, the performance objective may be the completion
of the homes within a certain time period and within a certain budgeted
amount.

##### § 1000.506   If the TDHE is the recipient, must it submit its monitoring evaluation/results to the Indian tribe?

Yes. The Indian tribe as the grant beneficiary must receive a copy of
the monitoring evaluation/results so that it can fully carry out its
oversight responsibilities under NAHASDA.

##### § 1000.508   If the recipient monitoring identifies programmatic concerns, what happens?

If the recipient\'s monitoring activities identify areas of concerns,
the recipient will take corrective actions which may include but are not
limited to one or more of the following actions:

\(a\) Depending upon the nature of the concern, the recipient may obtain
additional training or technical assistance from HUD, other Indian
tribes or TDHEs, or other entities.

\(b\) The recipient may develop and/or revise policies, or ensure that
existing policies are better enforced.

\(c\) The recipient may take appropriate administrative action to remedy
the situation.

\(d\) The recipient may refer the concern to an auditor or to HUD for
additional corrective action.

##### § 1000.510   What happens if tribal monitoring identifies compliance concerns?

The Indian tribe shall have the responsibility to ensure that
appropriate corrective action is taken.

##### § 1000.512   Are performance reports required?

Yes. An annual report shall be submitted by the recipient to HUD and the
Indian tribe being served in a format acceptable by HUD. Annual
performance reports shall contain:

\(a\) The information required by sections 403(b) and 404(b) of NAHASDA;

\(b\) Brief information on the following:

\(1\) A comparison of actual accomplishments to the objectives
established for the period;

\(2\) The reasons for slippage if established objectives were not met;
and

\(3\) Analysis and explanation of cost overruns or high unit costs; and

\(c\) Any information regarding the recipient\'s performance in
accordance with HUD\'s performance measures, as set forth in section
§1000.524.

##### § 1000.514   When must the annual performance report be submitted?

The annual performance report must be submitted within 90 days of the
end of the recipient\'s program year. If a justified request is
submitted by the recipient, the Area ONAP may extend the due date for
submission of the annual performance report.

\[72 FR 41213, July 26, 2007\]

##### § 1000.516   What reporting period is covered by the annual performance report?

For the first annual performance report to be submitted under NAHASDA,
the period to be covered is October 1, 1997, through September 30, 1998.
This first report must be submitted by January 31, 1999. Subsequent
annual performance reports must cover the period that coincides with the
recipient\'s program year.

\[64 FR 3015, Jan. 20, 1999\]

##### § 1000.518   When must a recipient obtain public comment on its annual performance report?

The recipient must make its report publicly available to tribal members,
non-Indians served under NAHASDA, and other citizens in the Indian area,
in sufficient time to permit comment before submission of the report to
HUD. The recipient determines the manner and times for making the report
available.

The recipient shall include a summary of any comments received by the
grant beneficiary or recipient from tribal members, non-Indians served
under NAHASDA, and other citizens in the Indian area.

##### § 1000.520   What are the purposes of HUD review?

At least annually, HUD will review each recipient\'s performance to
determine whether the recipient:

\(a\) Has carried out its eligible activities in a timely manner, has
carried out its eligible activities and certifications in accordance
with the requirements and the primary objective of NAHASDA and with
other applicable laws and has a continuing capacity to carry out those
activities in a timely manner;

\(b\) Has complied with the IHP of the grant beneficiary; and

\(c\) Whether the performance reports of the recipient are accurate.

##### § 1000.521   After the receipt of the recipient\'s performance report, how long does HUD have to make recommendations under section 404(c) of NAHASDA?

60 days.

##### § 1000.522   How will HUD give notice of on-site reviews?

HUD shall generally provide a 30 day written notice of an impending
on-site review to the Indian tribe and TDHE. Prior written notice will
not be required in emergency situations. All notices shall state the
general nature of the review.

##### § 1000.524   What are HUD\'s performance measures for the review?

HUD has the authority to develop performance measures which the
recipient must meet as a condition for compliance under NAHASDA. The
performance measures are:

\(a\) Within 2 years of grant award under NAHASDA, no less than 90
percent of the grant must be obligated.

\(b\) The recipient has complied with the required certifications in its
IHP and all policies and the IHP have been made available to the public.

\(c\) Fiscal audits have been conducted on a timely basis and in
accordance with the requirements of the Single Audit Act, as applicable.
Any deficiencies identified in audit reports have been addressed within
the prescribed time period.

\(d\) Accurate annual performance reports were submitted to HUD in
accordance with §1000.514.

\(e\) The recipient has met the IHP goals and objectives in the 1-year
plan and demonstrated progress on the 5-year plan goals and objectives.

\(f\) The recipient has substantially complied with the requirements of
24 CFR part 1000 and all other applicable Federal statutes and
regulations.

\[63 FR 12349, Mar. 12, 1998, as amended at 72 FR 41213, July 26, 2007\]

##### § 1000.526   What information will HUD use for its review?

In reviewing each recipient\'s performance, HUD may consider the
following:

\(a\) The approved IHP and any amendments thereto;

\(b\) Reports prepared by the recipient;

\(c\) Records maintained by the recipient;

\(d\) Results of HUD\'s monitoring of the recipient\'s performance,
including on-site evaluation of the quality of the work performed;

\(e\) Audit reports;

\(f\) Records of drawdown(s) of grant funds;

\(g\) Records of comments and complaints by citizens and organizations
within the Indian area;

\(h\) Litigation; and

\(i\) Any other reliable relevant information which relates to the
performance measures under §1000.524.

##### § 1000.528   What are the procedures for the recipient to comment on the result of HUD\'s review when HUD issues a report under section 405(b) of NAHASDA?

HUD will issue a draft report to the recipient and Indian tribe within
thirty (30) days of the completion of HUD\'s review. The recipient will
have at least thirty (30) days to review and comment on the draft report
as well as provide any additional information relating to the draft
report. HUD shall consider the comments and any additional information
provided by the recipient. HUD may also revise the draft report based on
the comments and any additional information provided by the recipient.
HUD shall make the recipient\'s comments and a final report readily
available to the recipient, grant beneficiary, and the public not later
than thirty (30) days after receipt of the recipient\'s comments and
additional information.

##### § 1000.530   What corrective and remedial actions will HUD request or recommend to address performance problems prior to taking action under §1000.532 or §1000.538?

\(a\) The following actions are designed, first, to prevent the
continuance of the performance problem(s); second, to mitigate any
adverse effects or consequences of the performance problem(s); and
third, to prevent a recurrence of the same or similar performance
problem. The following actions, at least one of which must be taken
prior to a sanction under paragraph (b), may be taken by HUD singly or
in combination, as appropriate for the circumstances:

\(1\) Issue a letter of warning advising the recipient of the
performance problem(s), describing the corrective actions that HUD
believes should be taken, establishing a completion date for corrective
actions, and notifying the recipient that more serious actions may be
taken if the performance problem(s) is not corrected or is repeated;

\(2\) Request the recipient to submit progress schedules for completing
activities or complying with the requirements of this part;

\(3\) Recommend that the recipient suspend, discontinue, or not incur
costs for the affected activity;

\(4\) Recommend that the recipient redirect funds from affected
activities to other eligible activities;

\(5\) Recommend that the recipient reimburse the recipient\'s program
account in the amount improperly expended; and

\(6\) Recommend that the recipient obtain appropriate technical
assistance using existing grant funds or other available resources to
overcome the performance problem(s).

\(b\) Failure of a recipient to address performance problems specified
in paragraph (a) above may result in the imposition of sanctions as
prescribed in §1000.532 (providing for adjustment, reduction, or
withdrawal of future grant funds, or other appropriate actions), or
§1000.538 (providing for termination, reduction, or limited availability
of payments, or replacement of the TDHE).

##### § 1000.532   What are the adjustments HUD makes to a recipient\'s future year\'s grant amount under section 405 of NAHASDA?

\(a\) HUD may, subject to the procedures in paragraph (b) below, make
appropriate adjustments in the amount of the annual grants under NAHASDA
in accordance with the findings of HUD pursuant to reviews and audits
under section 405 of NAHASDA. HUD may adjust, reduce, or withdraw grant
amounts, or take other action as appropriate in accordance with the
reviews and audits, except that grant amounts already expended on
affordable housing activities may not be recaptured or deducted from
future assistance provided on behalf of an Indian tribe.

\(b\) Before undertaking any action in accordance with paragraphs (a)
and (c) of this section, HUD will notify the recipient in writing of the
actions it intends to take and provide the recipient an opportunity for
an informal meeting to resolve the deficiency. In the event the
deficiency is not resolved, HUD may take any of the actions available
under paragraphs (a) and (c) of this section. However, the recipient may
request, within 30 days of notice of the action, a hearing in accordance
with §1000.540. The amount in question shall not be reallocated under
the provisions of §1000.536, until 15 days after the hearing has been
held and HUD has rendered a final decision.

\(c\) Absent circumstances beyond the recipient\'s control, when a
recipient is not complying significantly with a major activity of its
IHP, HUD shall make appropriate adjustment, reduction, or withdrawal of
some or all of the recipient\'s subsequent year grant in accordance with
this section.

##### § 1000.534   What constitutes substantial noncompliance?

HUD will review the circumstances of each noncompliance with NAHASDA and
the regulations on a case-by-case basis to determine if the
noncompliance is substantial. This review is a two step process. First,
there must be a noncompliance with NAHASDA or these regulations. Second,
the noncompliance must be substantial. A noncompliance is substantial
if:

\(a\) The noncompliance has a material effect on the recipient meeting
its major goals and objectives as described in its Indian Housing Plan;

\(b\) The noncompliance represents a material pattern or practice of
activities constituting willful noncompliance with a particular
provision of NAHASDA or the regulations, even if a single instance of
noncompliance would not be substantial;

\(c\) The noncompliance involves the obligation or expenditure of a
material amount of the NAHASDA funds budgeted by the recipient for a
material activity; or

\(d\) The noncompliance places the housing program at substantial risk
of fraud, waste or abuse.

##### § 1000.536   What happens to NAHASDA grant funds adjusted, reduced, withdrawn, or terminated under §1000.532 or §1000.538?

Such NAHASDA grant funds shall be distributed by HUD in accordance with
the next NAHASDA formula allocation.

##### § 1000.538   What remedies are available for substantial noncompliance?

\(a\) If HUD finds after reasonable notice and opportunity for hearing
that a recipient has failed to comply substantially with any provisions
of NAHASDA, HUD shall:

\(1\) Terminate payments under NAHASDA to the recipient;

\(2\) Reduce payments under NAHASDA to the recipient by an amount equal
to the amount of such payments that were not expended in accordance with
NAHASDA;

\(3\) Limit the availability of payments under NAHASDA to programs,
projects, or activities not affected by the failure to comply; or

\(4\) In the case of noncompliance described in §1000.542, provide a
replacement TDHE for the recipient.

\(b\) HUD may, upon due notice, suspend payments at any time after the
issuance of the opportunity for hearing pending such hearing and final
decision, to the extent HUD determines such action necessary to preclude
the further expenditure of funds for activities affected by such failure
to comply.

\(c\) If HUD determines that the failure to comply substantially with
the provisions of NAHASDA is not a pattern or practice of activities
constituting willful noncompliance, and is a result of the limited
capability or capacity of the recipient, HUD may provide technical
assistance for the recipient (directly or indirectly) that is designed
to increase the capability or capacity of the recipient to administer
assistance under NAHASDA in compliance with the requirements under
NAHASDA.

\(d\) In lieu of, or in addition to, any action described in this
section, if HUD has reason to believe that the recipient has failed to
comply substantially with any provisions of NAHASDA, HUD may refer the
matter to the Attorney General of the United States, with a
recommendation that appropriate civil action be instituted.

##### § 1000.540   What hearing procedures will be used under NAHASDA?

The hearing procedures in 24 CFR part 26 shall be used.

##### § 1000.542   When may HUD require replacement of a recipient?

\(a\) In accordance with section 402 of NAHASDA, as a condition of HUD
making a grant on behalf of an Indian tribe, the Indian tribe shall
agree that, notwithstanding any other provisions of law, HUD may, only
in the circumstances discussed below, require that a replacement TDHE
serve as the recipient for the Indian tribe.

\(b\) HUD may require a replacement TDHE for an Indian tribe only upon a
determination by HUD on the record after opportunity for hearing that
the recipient for the Indian tribe has engaged in a pattern or practice
of activities that constitute substantial or willful noncompliance with
the requirements of NAHASDA.

##### § 1000.544   What audits are required?

The recipient must comply with the requirements of the Single Audit Act
and OMB Circular A--133 which require annual audits of recipients that
expend Federal funds equal to or in excess of an amount specified by the
U.S. Office of Management and Budget, which is currently set at
\$300,000.

##### § 1000.546   Are audit costs eligible program or administrative expenses?

Yes, audit costs are an eligible program or administrative expense. If
the Indian tribe is the recipient then program funds can be used to pay
a prorated share of the tribal audit or financial review cost that is
attributable to NAHASDA funded activities. For a recipient not covered
by the Single Audit Act, but which chooses to obtain a periodic
financial review, the cost of such a review would be an eligible program
expense.

##### § 1000.548   Must a copy of the recipient\'s audit pursuant to the Single Audit Act relating to NAHASDA activities be submitted to HUD?

Yes. A copy of the latest recipient audit under the Single Audit Act
relating to NAHASDA activities must be submitted with the Annual
Performance Report.

##### § 1000.550   If the TDHE is the recipient, does it have to submit a copy of its audit to the Indian tribe?

Yes. The Indian tribe as the grant beneficiary must receive a copy of
the audit report so that it can fully carry out its oversight
responsibilities with NAHASDA.

##### § 1000.552   How long must the recipient maintain program records?

\(a\) This section applies to all financial and programmatic records,
supporting documents, and statistical records of the recipient which are
required to be maintained by the statute, regulation, or grant
agreement.

\(b\) Except as otherwise provided herein, records must be retained for
three years from the date the recipient submits to HUD the annual
performance report that covers the last expenditure of grant funds under
a particular grant.

\(c\) If any litigation, claim, negotiation, audit or other action
involving the records has been started before the expiration of the
3-year period, the records must be retained until completion of the
action and resolution of all issues which arise from it, or until the
end of the regular 3-year period, whichever is later.

##### § 1000.554   Which agencies have right of access to the recipient\'s records relating to activities carried out under NAHASDA?

\(a\) HUD and the Comptroller General of the United States, and any of
their authorized representatives, shall have the right of access to any
pertinent books, documents, papers, or other records of recipients which
are pertinent to NAHASDA assistance, in order to make audits,
examinations, excerpts, and transcripts.

\(b\) The right of access in this section lasts as long as the records
are maintained.

##### § 1000.556   Does the Freedom of Information Act (FOIA) apply to recipient records?

FOIA does not apply to recipient records. However, there may be other
applicable State and tribal access laws or recipient policies which may
apply.

##### § 1000.558   Does the Federal Privacy Act apply to recipient records?

The Federal Privacy Act does not apply to recipient records. However,
there may be other applicable State and tribal access laws or recipient
policies which may apply.

##### Appendix A to Part 1000---Indian Housing Block Grant Formula Mechanics

This appendix shows the different components of the IHBG formula. The
following text explains how each component of the IHBG formula is
calculated.

1\. The Indian Housing Block Grant (IHBG) formula is calculated by
initially determining the amount a tribe receives for Formula Current
Assisted Stock (FCAS) (See §§1000.310 and 1000.312). FCAS funding is
comprised of two components, Operating subsidy (§1000.316(a)) and
Modernization (§1000.316(b)).

2\. The operating subsidy component is calculated based on the national
per unit subsidy (§1000.302 National Per Unit Subsidy) for operations
for each of the following types of programs---Low Rent, Homeownership
(Mutual Help and Turnkey III), and Section 8. A tribe\'s total count of
units in each of the above categories is multiplied by the relevant
national per unit subsidy. That amount is summed and multiplied by a
local area cost adjustment factor for management.

3\. The local area cost adjustment factor for management is called
AELFMR. AELFMR is the greater of a tribe\'s Allowable Expense Level
(AEL) or Fair Market Rent (FMR) factor, where the AEL and FMR factors
are determined by dividing each tribe\'s AEL and FMR by their respective
national weighted average (weighted on the unadjusted allocation under
FCAS operating subsidy). The adjustment made to the FCAS component of
the IHBG formula is then the new AELFMR factor divided by the national
weighted average of the AELFMR (See §1000.320).

4\. The Modernization component is determined using two methods
depending on the number of public housing units that a tribe\'s housing
authority operated prior to NAHASDA.

\(a\) For Indian tribes with an Indian housing authority (IHA) that
owned or operated 250 or more public housing units on October 1, 1997,
the modernization allocation equals the number of Low Rent, Mutual Help,
and Turnkey III FCAS units multiplied by the national per-unit amount of
allocation for FY 1996 modernization multiplied by an adjustment factor
for inflation (See §1000.316(b)(1)).

\(b\) For Indian tribes with an IHA that owned or operated fewer than
250 units on October 1, 1997, the modernization allocation equals the
average amount of funds received under the assistance program authorized
by section 14 of the 1937 Act (not including funds provided as emergency
assistance) for FYs 1992 through 1997 (See §1000.316(b)(2)).

\(c\) The modernization amount is then multiplied times a local area
cost adjustment factor for construction, the TDC. The construction
adjustment factor is the TDC for the area divided by the weighted
national average for TDC (weighted on the unadjusted allocation for
modernization (See §1000.320).

5\. After determining the total amount allocated under FCAS for each
tribe, it is summed for every tribe. The national total amount for FCAS
is subtracted from the remaining available funds to determine the total
amount to be allocated under the Need component of the IHBG formula.

6\. The Need component of the IHBG formula is calculated using seven
factors using data from sources defined in §1000.330 weighted as set
forth in §1000.324 as follows: 22 percent of the allocated funds will be
allocated by a tribe\'s share of the total Native American households
paying more than 50 percent of their income for housing and living in
the Indian tribe\'s formula area, 25 percent of the funds allocated
under Need will be allocated by a tribe\'s share of the total Native
American households overcrowded and/or without kitchen or plumbing
living in their formula area, and so on. The current national totals for
each of the need variables will be distributed annually by HUD with the
Formula Response Form (See §1000.332). The national totals will change
as tribes update information about their formula area and data for
individual areas are challenged (See §§1000.334 and 1000.336). The Need
component is then calculated by multiplying a tribe\'s share of housing
need by a local area cost adjustment factor for construction (the TDC)
(See §1000.338).

7\. Tribes that receive less than \$200,000 under the FCAS component of
the IHBG formula and that can demonstrate the presence of any households
at or below 80 percent of median income are guaranteed to receive no
less than a specified minimum under the Needs component of the formula.
The specified minimum amount shall equal .007826 percent of the
available appropriations for that FY after set asides. The increase in
funding for the tribes receiving the minimum need amount is funded by a
reallocation from other tribes whose needs allocation exceeds the
minimum need amount. This is necessary in order to keep the total
allocation within the appropriation level (See §1000.328).

8\. A tribe\'s preliminary grant is calculated by summing the FCAS and
Need allocations. This amount is subject to two final adjustments:

\(a\) If an Indian tribe with an IHA that owned or operated fewer than
250 units on October 1, 1997, is allocated less funding under the
averaging method (§1000.316(b)(2)) than the calculation of the number of
Low Rent, Mutual Help, and Turnkey III FCAS multiplied by the national
per-unit amount of allocation for FY 1996 modernization multiplied by an
adjustment factor for inflation, the Indian tribe\'s modernization
allocation is calculated under §1000.316(b)(1). The grants of all other
tribes are proportionately adjusted to keep the allocation within
available appropriations.

\(b\) Next, this preliminary grant is compared to how much a tribe
received in FY 1996 for operating subsidy and modernization. If a tribe
received more in FY 1996 for operating subsidy and modernization than it
does under the IHBG formula allocation, its grant is adjusted up to the
FY 1996 level (See §1000.340(b)). Indian tribes receiving more under the
IHBG formula than in FY 1996 "pay" for the upward adjustment for the
other tribes by having their own grants adjusted downward. Because many
more Indian tribes have grant amounts above the FY 1996 level than those
with grants below the FY 1996 level, each tribe contributes very little,
relative to their total grant, to fund the adjustment.

\[72 FR 20026, Apr. 20, 2007\]

##### Appendix B to Part 1000---IHBG Block Grant Formula Mechanisms

1\. The Indian Housing Block Grant (IHBG) formula consists of two
components, the Formula Current Assisted Stock (FCAS) and Need.
Therefore, the formula allocation before adjusting for the statutory
requirement that a tribe\'s minimum grant will not be less than the
tribe\'s Fiscal Year (FY) 1996 Operating Subsidy and Modernization
funding, can be represented by:

unadjGRANT = FCAS + NEED.

2\. NAHASDA requires that the FCAS be provided for before allocating
funds based on need. Therefore, FCAS must be calculated first. FCAS
consists of two components, Operating Subsidy (OPSUB) and Modernization
(MOD), such that:

FCAS = OPSUB + MOD.

3\. OPSUB consists of three main parts: number of Low-Rent units; number
of Section 8 units; and number of Mutual Help and Turnkey III units.
Each of these main parts are adjusted by the national per unit subsidy
(§1000.302 National Per Unit Subsidy) and local area costs as reflected
by the greater of the AEL factor or FMR factor. The AEL factor is
defined in §1000.302 as the relative difference between a local area
Allowable Expense Level (AEL) and the national weighted average for AEL
(NAEL). The FMR factor is also defined in §1000.302 as the relative
difference between a local area Fair Market Rent (FMR) and the national
weighted average for FMR.

OPSUB = \[LR \* LRSUB + (MH+TK) \* HOSUB + S8 \* S8SUB \] \* AELFMR

Where:

LR = number of Low-Rent units.

LRSUB = national per unit subsidy for Low-Rent units (\$2,440\*INF).

MH+TK = number of Mutual Help and Turnkey III units.

HOSUB = national per unit subsidy for Homeownership units (\$528\*INF).

S8 = number of Section 8 units.

S8SUB = national per unit subsidy for Section 8 units = (\$3,625\*INF).

AELFMR = greater of AEL Factor or FMR Factor weighted by national
average of AEL Factor and FRM Factor.

AEL FACTOR = AEL/NAEL.

AEL = local Allowable Expense Level.

NAEL = national weighted average for AEL.

FMR FACTOR = FMR/NFMR.

FMR = local Fair Market Rent.

NFMR = national weighted average for FMR.

NAELFMR = national weighted average for greater of AEL Factor or FMR
factor.

Where:

INF = adjustment for inflation since 1995, as determined by the Consumer
Price Index for housing.

4\. The modernization component, MOD, is calculated by two different
methods, depending on whether the tribe had an Indian housing authority
(IHA) that owned or operated more than 250 public housing units on
October 1, 1997.

a\. MOD1996 is calculated for all tribes and considers the number of
Low-Rent, and Mutual Help and Turnkey III FCAS units. Each of these is
adjusted by the national per-unit modernization amount in 1996 adjusted
for inflation.

MOD1996 = \[LR + MH+TK\] \*MODPU \*INF.

Where:

LR = number of Low-Rent units.

MH = number of Mutual Help units.

TK = number of Turnkey III units.

MODPU = national per-unit amount for modernization in 1996 (\$1,974).

INF = adjustment for inflation since 1995, as determined by the Consumer
Price Index for housing.

b\. MODAVG is calculated only for tribes that had an IHA that owned or
operated fewer than 250 public housing units on October 1, 1997, as the
annual average amount they received for FYs 1992 through 1997 under the
assistance program authorized by section 14 of the 1937 Act (not
including emergency assistance).

MODAVG = Average (FY 1992 to FY 1997) amount received by Section 14 of
the 1937 Act.

c\. For Indian tribes with an IHA that owned or operated 250 or more
public housing units on October 1, 1997, the modernization calculation
is based on MOD1996, adjusted for local area costs:

MOD = MOD1996\* TDC/NTDC.

Where:

TDC = Local Total Development Costs defined in §1000.302.

NTDC = weighted national average for TDC of tribes with CAS.

d\. For Indian tribes with an IHA that owned or operated fewer than 250
units on October 1, 1997, the modernization calculation is based on
MODAVG, adjusted for local area costs.

MOD = MODAVG\* TDC/NTDC.

5\. Now that calculation for FCAS is complete, funds available for
allocation using the Need component of the formula can be determined:

NEED FUNDS = APPROPRIATION − NATCAS.

Where:

APPROPRIATION = dollars provided for distribution through the IHBG
formula.

NATCAS = National summation of FCAS allocation for all tribes.

6\. Two iterations are necessary to compute the final Need allocation.
The first iteration consists of seven weighted criteria that allocate
need funds based on a tribe\'s population and housing data. This
allocation is then adjusted for local area cost differences based on TDC
relative to the national weighted average. This can be represented by:

NEED1 = \[(0.11 \* PER / NPER) + (0.13 \* HHLE30 / NHHLE30) + (0.07 \*
HH30T50 / NHH30T50) + (0.07 \* HH50T80 / NHH50T80) + (0.25 \* OCRPR /
NOCRPR) + (0.22 \* SCBTOT / NSCBTOT) + (0.15 \* HOUSHOR / NHOUSHOR)\] \*
NEED FUNDS \* (TDC/NATDC).

Where:

PER = American Indian and Alaskan Native (AIAN) persons.

NPER = national total of PER.

HHLE30 = AIAN households less than 30% of median income.

NHHLE30 = national total of HHLE30.

HH30T50 = AIAN households 30% to 50% of median income.

NHH30T50 = national total of HH30T50.

HH50T80 = AIAN households 50% to 80% of median income.

NHH50T80 = national total of HH50T80.

OCRPR = AIAN households crowded or without complete kitchen or plumbing.

NOCRPR = national total of OCRPR.

SCBTOT = AIAN households paying more than 50% of their income for
housing.

NSCBTOT = national total SCBTOT.

HOUSHOR = AIAN households with an annual income less than or equal to
80% of formula median income reduced by the combination of current
assisted stock and units developed under NAHASDA.

NHOUSHOR = national total of HOUSHOR.

TDC = Local Total Development Costs defined in §1000.302.

NATDC = weighted national average for TDC of tribes with need.

7\. The second iteration in computing the Need allocation consists of
adjusting the Need allocation computed above to take into account the
minimum needs provision. Tribes that receive less than \$200,000 under
the FCAS component of the IHBG formula and that can demonstrate the
presence of any households at or below 80 percent of median income are
guaranteed to receive no less than a specified minimum amount under the
Needs component of the formula. The specified minimum amount shall equal
.007826 percent of the available appropriations for that fiscal year
after set asides.

MINFUNDING = APPROPRIATION\* .00007826

If in the first Need computation, a qualified tribe is allocated less
than the minimum Needs funding level, its Need allocation will go up.
Other tribes whose Needs allocations are greater than the minimum needs
amount will have their allocations adjusted downward to keep the total
allocation within available funds:

If NEED1 \< MINFUNDING and FCAS \< \$200,000 and (HHLE30 + HH30T50 +
HH50T80) \> 0, then NEED 2 = MINFUNDING.

If NEED1 \> = MINFUNDING, then NEED2 = NEED1 − {UNDERMIN\$ \* \[(NEED1 −
MINFUNDING) / OVERMIN\$\]}.

Where:

MINFUNDING = minimum needs amount

UNDERMIN\$ = for all tribes qualifying for an increase under the minimum
needs provision, sum of the differences between MINFUNDING and NEED1.

OVERMIN\$ = for all tribes with needs allocations larger than the
minimum needs amount, the sum of the difference between NEED1 and
MINFUNDING.

8\. The next step is to compute a preliminary unadjusted grant
allocation (unadjGRANT) that will serve as the basis for further
adjustments called for in §1000.340.

unadjGRANT = FCAS + NEED, where both FCAS and NEED are calculated above.

9\. As required by §1000.340(a), if an Indian tribe with an IHA that
owned or operated fewer than 250 units on October 1, 1997, is allocated
less funding under the averaging method (§1000.316(b)(2)) than the
calculation of the number of Low-Rent, Mutual Help, and Turnkey III FCAS
is multiplied by the national per-unit amount of allocation for FY 1996
modernization multiplied by an adjustment factor for inflation, then,
the Indian tribe\'s modernization allocation is calculated under
§1000.316(b)(1). The grants of all other tribes are proportionately
adjusted to keep the allocation within available appropriations.

If MODAVG \< MOD1996,

then GRANT1 = unadjGRANT + (MOD1996\*(TDC/NTDC)) − (MODAVG\*
(TDC/NTDC)).

Otherwise,

GRANT1 = unadjGRANT − \[UNDERMOD\$ \* (unadjGRANT / OVERMODGRANT\$)\]

Where:

UNDERMOD\$ = for all tribes qualifying for an increase to modernization,
the sum of the differences between local cost adjusted MOD1996 and local
cost adjusted MODAVG.

OVERMODGRANT\$ = for all tribes not qualifying for an increase to
modernization, the sum of their unadjusted grant amounts.

10\. As called for in §1000.340(b), a final adjustment occurs to ensure
that no tribe is allocated less funding under the formula than an IHA
received on its behalf in FY 1996 for operating subsidy and
modernization. Indian tribes receiving more under the IHBG formula than
in FY 1996 "pay" for the upward adjustment for the other tribes by
having their grants adjusted downward, so long as the adjustment does
not reduce their grant below the minimum funding amount.

Let TEST = GRANT1 − OPMOD96.

If TEST is less than 0, then GRANT2 = OPMOD96.

If TEST is greater than 0 and GRANT1 \> MINFUNDING, then GRANT2 = GRANT1
− \[UNDER1996 \* (TEST / OVER1996)\].

Where:

OPMOD96 = funding received by tribe in FY 1996 for Operating Subsidy and
Modernization.

UNDER1996 = for all tribes with TEST less than 0, sum of the absolute
value of TEST.

OVER1996 = for all tribes with TEST greater than 0, sum of TEST.

GRANT2 is the approximate grant amount in any given year for any given
tribe.

\[72 FR 20026, Apr. 20, 2007\]