Title 24—Housing and Urban Development--Volume 1
PART 594—JOHN HEINZ NEIGHBORHOOD DEVELOPMENT PROGRAM
§ 594.1   Applicability and purpose.
(a) General. This part establishes as a permanent program the John Heinz Neighborhood Development Program, as authorized by section 832 of the Housing and Community Development Act of 1992. Previously, the program had been administered by the Department as a demonstration program under section 123 of the Housing and Urban-Rural Recovery Act of 1983 (42 U.S.C. 5318 note).
(b) Purpose. The program is intended to assist communities to become more viable, by providing incentive funds to carry out neighborhood development activities that benefit low- and moderate-income families. The program objectives are to increase the capacity of neighborhood organizations, promote long-term financial support for their neighborhood projects, and encourage greater participation of neighborhood organizations with private and public institutions.
§ 594.3   Definitions.
Empowerment zone means an area designated by HUD as an Empowerment Zone under 26 U.S.C. 1391-1393.
Enterprise community means an area designated by HUD as an Enterprise Community under 26 U.S.C. 1391-1393.
Grantee means an eligible neighborhood organization that executes a grant agreement with HUD under this part.
Low- and moderate-income persons means families and individuals whose incomes do not exceed 80 percent of the median income for the area, as determined by the Secretary of HUD in accordance with 42 U.S.C. 5302(a)(20).
Neighborhood development funding organization means:
(1) A depository institution, the accounts of which are insured pursuant to the Federal Deposit Insurance Act, 12 U.S.C. 1811 et seq., or the Federal Credit Union Act, 12 U.S.C. 1751 et seq., and any subsidiary (as such term is defined in 12 U.S.C. 1813(w)) thereof;
(2) A depository institution holding company and any subsidiary (as such term is defined in 12 U.S.C. 1813(w)) thereof; or
(3) A company at least 75 percent of the common stock of which is owned by one or more insured depository institutions or depository institution holding companies.
Neighborhood development organization means the same as the term is defined in § 594.5.
Rural neighborhoods. In small cities with under 10,000 in population and in rural areas, a neighborhood area can be the same unit as the unit of general local government.
Unit of general local government means a city, town, township, county, parish, village, or other general purpose political subdivision of a State; an urban county; the Federated States of Micronesia; the Marshall Islands; or a general purpose political subdivision thereof.
§ 594.5   Eligible applicants.
(a) General requirements. To be eligible under this program, a neighborhood development organization must be located within the neighborhood for which assistance is to be provided. It cannot be a city-wide consortium, or, in general, an organization serving a large area of the city. The applicant must meet all of the following requirements:
(1) The organization must be incorporated as a private, voluntary, nonprofit corporation under the laws of the State in which it operates;
(2) The organization must be responsible through a governing body to the residents of the neighborhood it serves, and not less than 51 percent of the members of the governing body must be residents of the neighborhood;
(3) The organization must have conducted business for at least one year;
(4) The organization must operate within an area that meets at least one of the following criteria:
(i) The area meets the requirements for Federal assistance under section 119 of the Housing and Community Development Act of 1974, 42 U.S.C. 5318;
(ii) The area is designated as an Enterprise Community or Empowerment Zone under Federal law as enacted;
(iii) The area is designated as an enterprise zone under State law and is recognized by the Secretary as a State enterprise zone for purposes of this part; or
(iv) The area is a qualified distressed community within the meaning of section 233(b)(1) of the Bank Enterprise Act of 1991, 12 U.S.C. 1834a(b)(1); and
(5) The organization must have conducted one or more eligible neighborhood development activities that primarily benefit low- and moderate-income persons.
(b) Special eligibility. Any facility that provides small entrepreneurial business with affordable shared support services and business development services and that meets the requirements of paragraph (a) of this section may also be eligible to participate in this program.
§ 594.7   Other threshold requirements.
In addition, an applicant must meet the following threshold requirements:
(a) Specify a management business plan for accomplishing one or more of the eligible activities specified in § 594.10;
(b) Specify a strategy for achieving greater long-term private sector support, especially in cooperation with a neighborhood development funding organization; and
(c) Specify a strategy for increasing the capacity of the applicant.
§ 594.10   Eligible activities.
Eligible activities include, but are not limited to, the following:
(a) Developing economic development activities that include:
(1) Creating permanent jobs in the neighborhood; or
(2) Establishing or expanding businesses within the neighborhood;
(b) Developing new housing, rehabilitating existing housing, or managing housing stock within the neighborhood;
(c) Developing delivery mechanisms for essential services that have lasting benefits to the neighborhood; and
(d) Planning, promoting, or financing voluntary neighborhood improvement efforts.
§ 594.15   Allocation amounts.
(a) Amounts and match requirement. HUD will make grants, in the form of matching funds, to eligible neighborhood development organizations. HUD reserves the right to make grants for less than the maximum amount established by statute, and to limit the number of times a previous grantee can receive funding. A Federal matching ratio will be established for each grantee in accordance with the statutory requirement that the highest ratios be established for neighborhoods having the greatest degree of economic distress or the smallest number of households.
(b) Administrative costs. The Secretary may use no more than 5 percent of the funds appropriated for the program for administrative or other expenses in connection with the program.
§ 594.17   General criteria for competitive selection.
(a) Criteria. HUD will use the following general criteria for selecting and ranking applications for all competitions for John Heinz Neighborhood Development Program funds. The relative values for the criteria will be indicated in each NOFA:
(1) The degree of economic distress and the benefit to low- and moderate-income residents of the neighborhood;
(2) The past performance in carrying out eligible activities, and staff capability;
(3) The quality of the Management/Business Plan;
(4) The evidence of coordination and resident participation; and
(5) The quality of the strategy to increase the capacity of the organization and the strategy developed for meeting long-term financial needs.
(b) Geographic diversity. The Department also reserves the right to fund applicants in other than rank order, for the purpose of achieving geographic balance.
§ 594.20   Submission procedures.
(a) Use of NOFAs. The Department will publish a Notice of Funding Availability (NOFA) in the Federal Register for each funding competition under this program, indicating the objective of the competition; the amount of funding available; the application procedures, including the eligible applicants and activities to be funded; and any special conditions applicable to the competition, including the requirements for the match. The NOFA also will describe the maximum points to be awarded under each evaluation criterion, for the purpose of ranking applications, and any special factors to be considered in assigning the points to each criterion.
(b) Applications shall be submitted in accordance with the time, place, and content described in the NOFA.
§ 594.23   Approval and certification procedures.
(a) Approval of application. HUD's acceptance of an application for review does not imply a commitment to provide funding. HUD will provide notification of whether a project will be funded in accordance with the criteria and procedures set out in the applicable NOFA.
(b) Certifications. In the absence of independent evidence that tends to challenge in a substantial manner the certifications made by the applicant pursuant to § 594.30, the required certifications will be accepted by HUD.
However, if independent evidence is available that tends to challenge in a substantial manner an applicant's certification, HUD may require further information or assurances to be submitted in order to determine whether the applicant's certification is satisfactory.
§ 594.25   Project administration.
Project administration will be governed by the terms of the grant agreement.
§ 594.28   Environmental reviews.
(a) For all proposed actions or activities that are not considered categorically excluded under 24 CFR 50.20, HUD will perform the appropriate environmental reviews under the National Environmental Policy Act (NEPA).
(b) Whether the action or activity is categorically excluded from NEPA review or not, HUD will comply also with other applicable requirements of environmental statutes, Executive Orders, and HUD standards listed in 24 CFR 50.4. The environmental reviews will be performed before award of a grant. Grantees shall adhere to all assurances applicable to environmental concerns as contained in the RFGA and grant agreements.
§ 594.30   Equal opportunity and other Federal requirements.
Each participating neighborhood development organization must certify that it will carry out activities assisted under the program in compliance with the nondiscrimination and equal opportunity requirements set forth in 24 CFR part 5 and:
(a) The requirements at 24 CFR part 200, subpart M;
(b) The prohibitions against discrimination and related requirements of section 109 of the Housing and Community Development Act of 1974 (42 U.S.C. 5309);
(c) The requirements of the Americans with Disabilities Act (42 U.S.C. 12181-12189) and implementing regulations at 28 CFR part 36, as applicable;
(d) The Consolidated Plan of the appropriate unit of general local government; and
(e) Other Federal requirements as specified in the applicable NOFA and application kit.