75418 Federal Register / Vol. 69, No. 241 / Thursday, December 16, 2004 / Notices 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–4955–N–01] 

Emergency Capital Repair Grants for 

Multifamily Housing Projects 

Designated for Occupancy by the 

Elderly

AGENCY: Office of the Assistant 

Secretary for Housing-Federal Housing 

Commissioner, HUD.

ACTION: Notice.

SUMMARY: This notice announces the 

availability of up to $10 million in grant 

funds to make emergency capital repairs 

to eligible multifamily projects that are 

owned by private nonprofit entities and 

designated for occupancy by elderly 

tenants. The capital repair needs must 

relate to items that present an 

immediate threat to the health, safety, 

and quality of life of the tenants. The 

intent of these grants is to provide onetime assistance for emergency items that 

could not be absorbed within the 

project’s operating budget, and where 

the tenants continued occupancy in the 

immediate near future would be called 

into question by a delay in initiating the 

proposed cure. The notice provides 

instructions for owners to request the 

funding and instructions for the HUD 

field offices to process the request.

DATES: Effective Date: December 16, 

2004.

FOR FURTHER INFORMATION CONTACT:

Aretha Williams, Director, Grant Policy 

and Management Division, Office of 

Housing, Room 6142, Department of 

Housing and Urban Development, 451 

Seventh Street, SW., Washington, DC 

20410; telephone 202–708–3000 (this is 

not a toll-free number). Persons with 

hearing or speech impairments may 

access this number via TTY by calling 

the toll-free Federal Information Relay 

Service at 800–877–8339.

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 202b of the Housing Act of 

1959 (12 U.S.C. 1701q–2) and the 

Consolidated Appropriations Act, 2004 

(Public Law 108–199, approved January 

23, 2004) authorize HUD to provide 

grants for substantial capital repairs to 

eligible multifamily projects with 

elderly tenants that are needed to 

rehabilitate, modernize, or retrofit aging 

structures, common areas or individual 

dwelling units. The Consolidated 

Appropriations Act, 2004 provides 

$25,000,000 for grants for conversion of 

eligible units to assisted living ‘‘and for 

emergency capital repairs as determined 

by the Secretary’’ of HUD. 

This notice announces the availability 

of up to $10 million in grant funds to 

make emergency capital repairs to 

eligible multifamily projects that are 

owned by private nonprofit entities. The 

capital repair needs must relate to items 

that present an immediate threat to the 

health, safety, and quality of life of the 

tenants. The intent of these grants is to 

provide one-time assistance for 

emergency items that could not be 

absorbed within the project’s operating 

budget, and where the tenants 

continued occupancy in the immediate 

near future would be called into 

question by a delay in initiating the 

proposed cure. The notice provides 

instructions for owners to request the 

funding and instructions for the HUD 

field offices to process the request. 

II. Definition of ‘‘Emergency Capital 

Repairs’’ 

For purposes of this notice, 

‘‘emergency capital repairs’’ are defined 

as repairs at a project to correct a 

situation that presents an immediate 

threat to the life, health and safety of 

project tenants. Assistance is limited to 

those projects with emergency problems 

that are of such a magnitude that: 

1. The problem poses an immediate 

threat to the quality of life of the 

tenants; and 

2. The continuation of the problem 

could potentially result in an evacuation 

of the tenants or long-term tenant 

displacement unless the repairs were 

rendered. 

III. Eligibility Requirements 

Only private nonprofit owners of 

eligible multifamily assisted housing 

developments designated for occupancy 

by elderly tenants as specified in 

sections 683(2)(B), (C), (D), (E), (F), or 

(G) of the Housing and Community 

Development Act of 1992 (Public Law 

102–550, approved October 28,1992) are 

eligible for emergency capital repair 

grants under this notice. Projects must 

have had final closing on or before 

January 1, 1999. 

To be eligible for an emergency 

capital repair grant under this notice, a 

project owner must be in compliance 

with: 

1. Its Loan Agreement, Capital 

Advance Agreement, Regulatory 

Agreement, Housing Assistance 

Payment contract, Project Rental 

Assistance Contract, Rent Supplement 

or LMSA contract, or any other HUD 

grant or contract document. 

2. All fair housing and civil rights 

laws, statutes, regulations, and 

executive orders as enumerated in 24 

CFR 5.105(a). 

IV. Grant Requirements 

A. Conditions for Assistance 

The following conditions apply to 

emergency capital grants awarded under 

this notice: 

1. The request for funding must 

clearly identify the emergency and must 

contain a detailed justification in 

support of the emergency designation. 

2. Funds awarded may only be 

expended for approved uses. 

3. Repairs must be initiated 

immediately upon receiving the grant 

award and must be sufficiently 

completed within six months of the 

initial start with final repairs completed 

no later than 12 months after receipt of 

funding. Unless there are safety 

concerns, tenants must be able to 

remain in their units while the repairs 

are being done. 

4. The project owner must 

demonstrate that: (i) The project 

accounts have been maintained in 

accordance with all HUD requirements; 

and (ii) there are insufficient funds in 

the operating budget, the reserve for 

replacement and/or residual receipts to 

fund emergency capital repairs. HUD 

encourages owners to use residual 

receipts when available. Owners are 

required to rebuild replacement reserves 

to help ensure that sufficient funds will 

be readily available for emergency 

capital repairs that may be required in 

the future. 

5. The project owner’s most recent 

management review rating is 

‘‘satisfactory’’ or above. 

6. The most recent Real Estate 

Assessment Center (REAC) physical 

inspection report for the project must 

have a score of 60 or above. 

Developments scoring less than 60 are 

ineligible. 

7. The project is well maintained 

except for the current emergency capital 

repair needs. 

8. The project does not have a recent 

history of mortgage defaults.

9. The project owner does not have 

any material adverse financial or 

managerial actions or omissions with 

regard to any project that is federally 

assisted or financed with a loan or 

capital advance from or mortgage 

insured by an agency of the federal 

government. 

10. Tenants must be notified of the 

request for the grant and must be 

informed of the overall plan to complete 

the capital repairs, if at all possible. 

11. The owner’s Affirmative Fair 

Housing Marketing Plan (AFHMP) must 

meet all applicable HUD requirements. 

If not, the owner must have an 

acceptable plan in place prior to 

completion of the repairs. 

Federal Register / Vol. 69, No. 241 / Thursday, December 16, 2004 / Notices 75419

12. The project owner is in 

compliance with all fair housing and 

equal opportunity statutes or has an 

approved plan for compliance prior to 

completion of the repairs. 

B. Funding 

The following requirements apply to 

emergency capital grant amounts 

awarded under this notice: 

1. The maximum amount an 

individual project owner may apply for 

is $500,000. 

2. HUD will fund all approved 

applications on an as submitted basis 

until funds have been fully expended. 

3. HUD retains the right to adjust the 

amount of the grant up to the maximum 

grant of $500,000 or down based upon 

review of the reasonableness of the costs 

for completing the repairs. 

4. Project owners should be aware as 

they prepare their request that the 

prevailing wage rate requirements of the 

Davis-Bacon Act may be applicable. 

C. Eligible Uses of Funds 

Grant funds are available only for 

emergency capital repairs that relate to 

immediate health/safety needs that 

impact upon the quality of life of the 

tenants if the repairs are not made. The 

project owner must submit a description 

of the proposed use of the funds and 

demonstrate how the repairs relate to 

eliminating the immediate emergency 

for the tenants. The award is a one-time 

opportunity for correction of the threat 

to the tenants. Funds may be used to 

repair or replace systems including, but 

not limited to: 

1. Major building and structural 

components that are in critical 

condition; and 

2. Repairs or replacements to 

mechanical equipment to the extent 

they are necessary for health and safety 

reasons. 

D. Ineligible Uses of Funds 

Emergency capital repair grants may 

not be used for the following costs: 

1. Deferred maintenance items. 

2. Lead-based paint abatement. 

3. Demolition and reconstruction 

activities. 

4. Security systems. 

E. Use Agreement 

If there are less than 10 years 

remaining on the existing mortgage, 

owners must enter into a Use Agreement 

(Attachment I) to extend the remaining 

affordability of the project for up to 10 

years. For example, if the maturity date 

of the mortgage is three years from the 

execution of the Grant Agreement, the 

owner must enter into a Use Agreement 

for seven years beyond the term of the 

mortgage; if the maturity date of the 

mortgage is 15 years, the owner will not 

need to execute a Use Agreement unless 

the mortgage is prepaid. All Use 

Agreements must be recorded. 

V. Request Process 

A. Owner Submission Requirements 

An emergency categorization is 

critical to qualifying for participation in 

this program. Priority will be given to 

areas subject to a current declaration of 

‘‘Federal Disaster Assistance.’’ Requests 

for grants must be submitted in 

accordance with the procedures 

described below: 

1. The request must be made in 

writing and submitted by the project 

owner to the local field office 

(Attachment II). The request must 

clearly identify all repairs of an 

emergency nature for which funding is 

requested, the basis for the emergency 

declaration and how it impacts upon the 

health and safety of the tenants as well 

as what would happen if the emergency 

repair was not done immediately. 

Requests signed by a consultant or 

management agent on behalf of the 

owner are not acceptable.

Note: Repair items identified on the REAC 

physical inspection report are not sufficient 

to be classified as emergency in nature.

2. Action items should be written in 

a manner that specifically describes the 

scope of work to be performed, provides 

an estimate of the cost of the work to be 

performed, and an explanation of the 

basis for the estimate. The estimate 

provided for the cost of each action item 

must be reasonable. 

3. The request must demonstrate that 

the repairs cannot be corrected at a cost 

that can be absorbed within the 

operating budget or use of the reserve 

for replacement and/or residual receipts 

funds. 

4. The request must provide a project 

plan for completing the repairs within 

six months but no longer than one year 

from the date of the grant award.

5. The project owner must notify the 

tenants of the plans to apply for this 

grant, if possible. If applicable, the 

request must provide evidence that the 

tenants were notified and given the 

opportunity to make comments. Any 

comments received from the tenants 

must be submitted to the local HUD 

field office along with the repair 

request. 

6. The request must provide a 

description of all unsuccessful attempts 

(if any) the owner has made to acquire 

funds from other sources, including 

letters of denial from funding sources, to 

complete the outstanding emergency 

capital repairs. 

7. The request must provide a 

description of any previous grants or 

loans received by the project for repairs. 

B. Field Office Processing 

1. The Hub Director/Program Center 

Director is responsible for ensuring that 

the requests are promptly and 

thoroughly reviewed and submitted to 

HUD headquarters. 

2. Incomplete applications will not be 

processed and will be returned to the 

owner. Owners may re-submit a revised 

application, but it will be processed as 

a new request in the order in which it 

is received the second time. 

3. Each field office has the 

responsibility for conducting a 

comprehensive review of the project’s 

files that may include an on-site review. 

The review should consist of 

completion of the questions in 

Attachment IV and may include any 

other concerns the field office may have 

about the project. 

C. Approval Process 

1. All approvable requests along with 

the Certifications from the Program 

Centers (Attachment III) should be sent 

to the Multifamily Hub Director. Hub 

Directors will fax the approvable request 

to the Office of Housing Assistance and 

Grant Administration in Headquarters, 

Attention: Willie Spearmon at (202) 

708–3104. In addition, an original copy 

of the request should be mailed to 

Willie Spearmon. 

2. Once Headquarters receives the 

approval of the request for emergency 

capital repairs from the Hub Director, 

the Office of Housing Assistance and 

Grant Administration will process the 

request and award the funds.

Note: Due to limitations of funding, 

approval of such recommendations are 

strictly based on an as submitted basis until 

the exhaustion of funds. HUD Headquarters 

reserves the right to deny or reduce any 

request for funds. Priority will be given to 

areas subject to a current declaration of 

‘‘Federal Disaster Assistance.’’

3. Once the grant funds have been 

reserved, Headquarters will notify the 

Multifamily Director in the field office 

who will notify the owner of the grant 

award. 

4. Headquarters will notify field staff 

by electronic mail at the time the 

reservation documents are sent to the 

Fort Worth Accounting Center to assign 

the funds. Field staff should check in 

LOCCS to confirm reservation of the 

funds. Once funds have been reserved, 

the Multifamily Hub/Program Center 

Director should execute the Grant 

Agreement. 

75420 Federal Register / Vol. 69, No. 241 / Thursday, December 16, 2004 / Notices 

VI. Environmental Review 

In accordance with 24 CFR 

50.19(b)(10) of HUD’s regulations, this 

notice provides assistance for temporary 

or permanent improvements that do not 

alter environmental conditions and are 

limited to protection, repair or 

restoration activities necessary only to 

control or arrest the effects from 

disasters or imminent threats to public 

safety including those resulting from 

physical deterioration. Therefore, 

emergency capital repair grants 

provided under this notice are 

categorically excluded from the 

requirements of the National 

Environmental Policy Act (42 U.S.C. 

4332 et seq.).

Dated: December 13, 2004. 

John C. Weicher, 

Assistant Secretary for Housing-Federal 

Housing Commissioner.

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