19070 Federal Register / Vol. 72, No. 72 / Monday, April 16, 2007 / Rules and Regulations 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 115 

[Docket No. FR–4748–F–02] 

RIN 2529–AA90 

Certification and Funding of State and 

Local Fair Housing Enforcement 

Agencies 

AGENCY: Office of the Assistant 

Secretary for Fair Housing and Equal 

Opportunity, HUD. 

ACTION: Final rule. 

SUMMARY: This final rule revises and 

updates HUD’s regulation implementing 

section 810(f) of the federal Fair 

Housing Act. This regulation establishes 

the criteria for certification of state and 

local fair housing laws that are 

substantially equivalent to the federal 

Fair Housing Act, as well as for 

decertification of state and local fair 

housing laws that are deemed no longer 

substantially equivalent. This final rule 

also revises the funding criteria for 

agencies participating in the Fair 

Housing Assistance Program (FHAP). 

DATES: Effective Date: May 16, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Bryan Greene, Deputy Assistant 

Secretary for Enforcement and 

Programs, Office of Fair Housing and 

Equal Opportunity, Department of 

Housing and Urban Development, 451 

Seventh Street, SW., Room 5204, 

Washington, DC 20410–2000; telephone 

(202) 402–7078 (this is not a toll-free 

number). Hearing- or speech-impaired 

persons may contact the FHAP Division 

by calling (800) 290–1617, or the tollfree Federal Information Relay Service 

at (800) 877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On May 18, 2005, HUD published a 

proposed rule (70 FR 28748) for public 

comment that would clarify numerous 

issues related to substantial equivalency 

certification and the FHAP. Under the 

FHAP, a state or local agency applies for 

substantial equivalency certification and 

the Department determines whether the 

agency enforces a law that provides 

substantive rights, procedures, 

remedies, and judicial review 

provisions that are substantially 

equivalent to the federal Fair Housing 

Act. The FHAP provides support for 

complaint processing, training, 

technical assistance, education and 

outreach, data and information systems, 

and other activities that will further fair 

housing within the state or local 

agency’s jurisdiction. 

The proposed rule provided a 

comprehensive revision of 24 CFR part 

115 to provide greater clarity and 

guidance to FHAP agencies. Among the 

proposed revisions were new 

definitions, revised and additional 

performance standards, and timeframes. 

The proposed rule also added 

procedures for renewal of certification 

and procedures for requests after 

withdrawal. HUD also proposed the 

addition of § 115.309, titled FHAP and 

the First Amendment, which provided 

that no funding made available under 

the FHAP may be used to investigate or 

prosecute any activity that may be 

protected by the First Amendment of 

the United States Constitution. Finally, 

HUD added § 115.310, which provided 

requirements for fair housing testing 

activities funded under the FHAP. A 

detailed description of the proposed 

rule can be found at 70 FR 28748– 

28751. 

In addition to inviting comments on 

the proposed rule generally, HUD 

sought comment from the public on 

three issues in particular. First, HUD 

requested that FHAP agencies of varying 

sizes provide insight into what would 

constitute reasonable complaint 

numbers. Second, HUD sought comment 

on the appropriateness of enumerating 

timeframes by which interim and 

certified agencies must comply in 

sending out letters notifying parties of a 

failure to meet the 100-day (completion 

of investigation) or the one-year (final 

administrative disposition) 

requirements. Third, HUD invited 

comments from the public on whether 

100 cases is still a reasonable number an 

agency must acceptably process in order 

to obtain 10 percent of the agency’s total 

FHAP payment amount. See section III 

of this preamble for a summary of the 

issues raised by the public commenters 

and HUD’s responses. 

II. This Final Rule 

This rule follows publication of the 

May 18, 2005, proposed rule and takes 

into consideration the public comments 

received on the proposed rule. HUD 

received five comments related to the 

May 18, 2005, proposed rule. After 

careful review of the public comments, 

HUD has made four noteworthy changes 

to the proposed rule. 

First, this final rule adds a timeframe 

for FHAP agencies to send 100-day 

letters. Performance Standard 1, at 

§ 115.206, requires that an agency 

unable to complete investigative 

activities with respect to a complaint 

within 100 days must send written 

notification to the parties within 110 

days of the filing of a complaint. 

Second, this rule revises § 115.210 of 

the proposed rule to clarify that HUD 

may suspend all types of funding (not 

just complaint processing funds) during 

suspension and withdrawal because of 

FHAP agency performance deficiencies. 

Third, HUD proposed to remove 

§ 115.305, the special enforcement effort 

(SEE) fund provisions, from the 

regulations but has retained the 

provision in this final rule. In addition 

to retaining the current regulatory 

provision, this final rule includes 

examples of meritorious mention, which 

is one of the criteria for obtaining SEE 

funds. 

Fourth, in this final rule, HUD has 

further clarified the requirement that a 

FHAP agency spend at least 20 percent 

of its total annual budget on fair housing 

activities. Section 115.307(a)(5) of this 

final rule clarifies that this requirement 

applies only to FHAP agencies that 

enforce antidiscrimination laws other 

than a fair housing law. 

III. Discussion of Public Comments on 

the May 18, 2005, Proposed Rule 

The public comment period on the 

May 18, 2005, proposed rule ended on 

July 18, 2005. HUD received five 

comments. Commenters included one 

private fair housing organization, two 

current FHAP agencies, one local 

community affairs department, and one 

local housing authority. The summary 

of comments that follows presents the 

major issues and questions raised by the 

public comments on the proposed rule. 

HUD’s response follows each comment. 

Comment: One commenter wrote that, 

although some provisions strengthen 

FHAP agencies, the majority create 

unnecessary infringements that exceed 

HUD’s authority and are better left to 

state agencies. 

HUD Response. The commenter did 

not include any specific examples of 

provisions that create unnecessary 

infringements that exceed HUD’s 

authority. Therefore, HUD cannot 

respond because of the lack of 

specificity. The authority to make the 

revisions contained in the proposed rule 

is set forth at 42 U.S.C. 3610(f) and 42 

U.S.C. 3608(a). 

Comment: The same commenter 

recommended that no agency remain 

certified if it processes fewer than 20 

complaints in any given year after its 

first year of operation. 

HUD Response. After careful 

consideration, HUD has determined that 

it is inappropriate to identify in a 

regulation a specific number of housing 

discrimination complaints that agencies 

must process. A one-size-fits-all 

approach is impracticable because, 

among other considerations, FHAP 


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agencies serve populations of varying 

sizes. An agency-by-agency analysis is a 

more reasonable approach. As provided 

in the proposed rule, this final rule 

identifies factors HUD will consider in 

determining what constitutes a 

reasonable number of housing 

discrimination complaints that a given 

agency should receive and process. 

Those factors include, but are not 

limited to, the jurisdiction’s population; 

the length of time the agency has 

participated in the FHAP; and the 

number of housing discrimination 

complaints that the agency has received 

and processed in the past. If an agency 

fails to receive and process a reasonable 

number of housing discrimination 

complaints during a year of FHAP 

participation, given education and 

outreach efforts conducted and receipts 

of complaints, the final rule gives the 

Office of Fair Housing and Equal 

Opportunity (FHEO) regional director 

the authority to put the agency on a 

Performance Improvement Plan (PIP). 

The PIP will set forth the number of 

housing discrimination complaints that 

the agency must receive and process 

during subsequent years of FHAP 

participation. 

Comment: Another commenter wrote 

that the determination of a reasonable 

number of complaints be a joint 

determination by HUD and the FHAP 

agency. 

HUD Response. As noted in response 

to a similar comment, the determination 

of what constitutes a reasonable number 

of housing discrimination cases will be 

made on an agency-by-agency basis. The 

final rule identifies factors that HUD 

will consider in making such a 

determination for a given agency. This 

commenter also recommended that the 

determination be based on the historical 

number of complaints that the FHAP 

agency has processed. This is one of the 

factors HUD has enumerated in this 

final rule. 

Comment: One commenter 

recommended that HUD establish a 10- 

day timeframe for sending out 100-day 

letters. 

HUD Response. HUD agrees and has 

amended Performance Standard 1 in 

§ 115.206 of the proposed regulation to 

add paragraph (e)(1)(vi), which sets 

forth a timeframe within which FHAP 

agencies must issue 100-day letters. 

HUD’s Title VIII Complaint Intake, 

Investigation, and Conciliation 

Handbook requires HUD to prepare case 

status reports for a complaint at the 85th 

day after the complaint is filed. The 

completion of a case status report 

triggers HUD’s automated complaint 

processing system to generate 100-day 

letters. Supervisors then review the case 

status report, followed by the issuance 

of the 100-day letter. Using HUD’s 

procedure as a guide, Performance 

Standard 1, in § 115.206(e)(1)(vi) 

establishes that 100-day letters be issued 

within 110 days of the filing of the 

complaint. 

Comment: A commenter wrote that 

granting authority to regional FHEO 

directors may be an improvement; 

however, the authority should be 

accompanied by consistent national 

guidance about performance assessment 

requirements and standards to avoid 

inconsistent outcomes. 

HUD Response. The proposed 

regulation and the final regulation are 

clear, stating that HUD may utilize the 

performance deficiency procedures at 

any time that the agency does not meet 

one or more of the ten performance 

standards enumerated in § 115.206. The 

Department believes that these 

enumerated standards compose the 

consistent national guidance sought by 

the commenter. The final regulation 

further states that the performance 

deficiency procedures may be applied to 

agencies with either interim 

certification or certification. At this 

time, HUD will not set forth further 

guidance regarding deficiency 

procedures. HUD will, however, 

monitor the implementation of the 

performance standards and consider 

developing additional guidance on this 

issue as necessary. 

Comment: Another commenter 

recommended that HUD provide an 

appeal process so that an agency that 

has been placed on a PIP can appeal the 

decision of the FHEO regional director 

if they have a basis to believe that they 

were wrongly placed on a performance 

improvement plan (PIP). 

HUD Response. After careful 

consideration, HUD has determined that 

it will not provide in the regulation an 

appeal process for an agency placed on 

a PIP. HUD believes that an agency’s 

interests are sufficiently protected 

within the performance deficiency 

process set forth in the final rule, which 

provides several opportunities for an 

under-performing agency to avoid 

involuntary withdrawal from the 

program. The fact that an agency has 

been placed on a PIP will not, in and of 

itself, result in an agency’s inability to 

participate in the FHAP. If an agency 

fails to improve after being placed on a 

PIP, HUD may move to suspend the 

agency. If suspension is proposed, an 

agency is given an opportunity to 

respond within 30 days of receipt of the 

suspension notification. Suspension 

also does not result in an agency’s 

inability to participate in the FHAP. If 

an agency fails to improve after a period 

of suspension, the Assistant Secretary 

for Fair Housing and Equal Opportunity 

may propose withdrawal. If withdrawal 

is proposed, the agency is given the 

opportunity to provide information and 

documentation that establishes that the 

administration of its law meets all of the 

substantial equivalency certification 

criteria set forth in 24 CFR part 115. 

Comment: A commenter suggested 

that HUD add mandated, on-site 

performance assessments at least every 

24 months and a requirement that FHEO 

seek public input before certifying an 

agency. The commenter also 

recommended that HUD be required to 

investigate complaints from the public 

about performance. 

HUD Response. The language of the 

final rule regarding on-site assessments, 

which in this respect is unchanged from 

the proposed rule, provides HUD with 

all of the authority necessary to 

accomplish its oversight 

responsibilities, while at the same time 

allowing HUD the flexibility to match 

available resources to identified 

priorities. 

With regard to the second issue 

identified by the commenter, the final 

rule indicates, as did the proposed rule, 

that HUD will seek public input before 

certifying an agency. Section 115.102(b) 

states: 

On an annual basis, the Assistant Secretary 

may publish in the Federal Register a notice 

that identifies all agencies that have received 

interim certification during the prior year. 

The notice will invite the public to comment 

on the state and local laws of the new interim 

agencies, as well as on the performance of the 

agencies in enforcing their laws. 

With regard to the third issue, while 

the final rule does not require HUD to 

investigate public complaints about the 

performance of an agency, § 115.206 

does require that ‘‘[A]ll [public] 

comments will be considered before a 

final decision on certification is made.’’

Moreover, complaints about a FHAP 

agency will be considered and 

examined as part of an agency’s 

performance assessment. 

Comment: Another commenter 

recommended that HUD not recognize 

prohibited bases in any manner because 

these are state, county, and city rules 

that are ‘‘completely foreign’’ to HUD. 

HUD Response. The proposed rule 

did not recognize any prohibited bases 

that have not already been recognized in 

the federal Fair Housing Act. Rather, 

§ 115.204 simply sets forth the longstanding HUD policy that the inclusion 

of additional prohibited bases in a state 

or local law does not preclude HUD 

from determining that a given law is 

substantially equivalent to the Fair 

Housing Act. While a state or local law 


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that has additional prohibited bases may 

be found substantially equivalent, it is 

important to note that HUD has not, and 

will not, pay FHAP agencies for cases 

that are not cognizable under the federal 

Fair Housing Act. 

Comment: A commenter 

recommended that HUD not change 

current HUD standards for 

administrative closures. This 

commenter also recommended that no 

more than 12 percent of cases be closed 

administratively. 

HUD Response. Because 

administrative closure standards for 

FHAP agencies do not exist under the 

current regulation, HUD is in the 

process of developing such standards 

and will provide further guidance. 

Section 115.206 of this final rule adds 

Performance Standard 2, which requires 

that administrative closures be utilized 

only in appropriate and limited 

circumstances. In response to the 

second part of the comment, HUD 

believes it is inappropriate to mandate 

an across-the-board cap on 

administrative closures, as FHAP 

agencies often have little control over 

circumstances that may warrant 

administrative closures. HUD’s objective 

in developing administrative closure 

guidance is not to prevent the use of 

administrative closures in cases in 

which they are warranted, but rather to 

prevent their use in cases where a 

finding on the merits would be more 

appropriate. 

Comment: The same commenter 

recommended that the final rule require 

that FHAP agencies follow the 

procedures and standards for 

investigation set forth in the Title VIII 

Handbook (HUD Handbook 8024–1). 

HUD Response. The Fair Housing Act, 

at § 810(f)(3)(A), states that the Secretary 

of HUD ‘‘may certify an agency * * * 

only if the Secretary determines that 

* * * the substantive rights protected 

by such agency * * *; the procedures 

followed by such agency; the remedies 

available to such agency; and the 

availability of judicial review of such 

agency’s action * * * are substantially 

equivalent to those created by and 

under this title’’ (emphasis added). The 

Fair Housing Act does not require an 

agency’s law and procedures to be 

identical to the Fair Housing Act. 

Although HUD makes the Title VIII 

Handbook available to FHAP agencies 

and recommends that it be utilized in 

the processing of dual-filed housing 

discrimination complaints, HUD has 

stopped short of requiring its usage. The 

Title VIII Handbook is based on the Fair 

Housing Act and its implementing 

regulations. Because substantially 

equivalent state and local laws may 

deviate from the Fair Housing Act to a 

certain extent, certain aspects of the 

Title VIII Handbook might prove 

impracticable for some FHAP agencies. 

Comment: A commenter 

recommended that the complaint be 

closed and the complainant advised to 

proceed through the courts if the 

complainant rejects an offer by the 

respondent to conciliation that 

represents full relief. 

HUD Response. HUD did not accept 

this suggestion. The goal of conciliation 

is to reach a resolution of a complaint 

that is mutually acceptable to all parties, 

including the complainant, the 

respondent, and the FHAP agency. A 

conciliator may educate parties about 

settlement and the realities of a case. 

However, a conciliator must never 

threaten, or appear to threaten, a party 

with adverse consequences for failing to 

conciliate a complaint. In addition, a 

FHAP agency must never close a 

complaint and advise a complainant to 

proceed to court if a complainant rejects 

a respondent’s offer during conciliation, 

even if the FHAP agency believes the 

offer represents full relief. Instead, if 

either party rejects an offer by the other 

party, the FHAP agency should proceed 

with its appropriate investigation and 

disposition of the complaint. 

Comment: A commenter stated that, if 

there is a disagreement on the 

determination issued by the FHAP 

agency, HUD should pay the FHAP 

agency for substantial work done and 

reactivate the complaint for HUD’s 

investigation. 

HUD Response. If HUD disagrees with 

the determination, the government 

technical representative (GTR) may 

deny payment to the agency for the case, 

or return the case to the agency for 

additional work. All cases in which 

HUD has denied payment will be 

considered as factors that affect the 

continued interim certification and 

certification. 

Whenever complainants or 

respondents disagree with the 

determination, they are bound by the 

FHAP agency’s procedures. HUD has no 

authority to reactivate a case or reverse 

a decision once the FHAP agency has 

rendered a determination. 

Comment: A commenter 

recommended that HUD move 

immediately to withdraw certification if 

a statutory change or judicial action 

‘‘limits the effectiveness of the law’’

rather than wait to determine if the law 

is going to be changed and let cases be 

processed by the FHAP agency during 

the meantime. 

HUD Response. In most cases, HUD 

will not immediately withdraw 

certification after learning that a change 

to the law impacts substantial 

equivalence. Rather than proceeding 

directly to withdrawal, HUD will 

proceed with the progressive scheme 

identified in § 115.211 of the proposed 

rule and this final rule. It is important 

to note, however, that at each stage of 

the progressive scheme, HUD may 

decline to refer some or all complaints 

to the agency, and elect not to provide 

payments for complaints to the agency, 

as provided in § 115.211. Moreover, it is 

important to note that a change limiting 

the effectiveness of an agency’s law may 

not necessarily impair its ability to 

process all types of housing 

discrimination complaints. 

Comment: The same commenter 

wrote that partnerships with private fair 

housing organizations, including 

qualified fair housing organizations, be 

added to the list of proper partnership 

funds usage. 

HUD Response. HUD believes that the 

language of the proposed rule 

sufficiently addressed this concern. 

Section 115.304(d) states, ‘‘[s]ome 

examples of proper P fund usage 

include, but are not limited to * * * 

contracting with qualified organizations 

to conduct fair housing testing in 

appropriate cases * * *.’’ The language 

in this final rule is unchanged from that 

of the proposed rule. 

Comment: A commenter suggested 

that HUD add a provision that states 

that agencies under a PIP, suspension or 

withdrawal status are not eligible for 

Partnership ‘‘P’’ funding. 

HUD Response. After considering this 

comment, HUD revised § 115.210. The 

section previously indicated that HUD 

may suspend only complaint processing 

funds during a period of suspension 

and/or withdrawal. Section 115.210 in 

this final rule is revised to state that 

HUD may suspend all types of funding 

under the FHAP during a period of 

suspension and withdrawal. 

Comment: A commenter 

recommended that HUD reinstate SEE 

(Special Enforcement Effort) funding. 

HUD Response. After considering this 

comment, HUD has decided to retain 

SEE funds in this final rule. It is 

important to recognize, however, that 

identifying funding in the final 

regulation does not guarantee that it will 

be available to FHAP agencies, since 

funding is subject to the annual 

congressional appropriations process. 

In reincorporating SEE funds at 

§ 115.305, HUD has added examples to 

clarify the current regulation. This final 

rule more fully defines what is meant by 

the meritorious mention criteria (which 

is one of the criteria for obtaining SEE 

funds identified in the regulation). 


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Comment: A commenter suggested 

that HUD remove the deduction 

provision or change it to specify that 

training funds will be deducted if the 

agency does not participate in HUDapproved training. 

HUD Response. HUD agrees with this 

commenter and has revised § 115.306(b) 

of the final rule to state, ‘‘* * * [i]f the 

agency does not participate in 

mandatory HUD-approved or HUDsponsored training, training funds will 

be deducted from the agency’s overall 

training amount.’’

Comment: Several commenters noted 

that funding for other agency 

components is often beyond a FHAP 

agency’s control. The commenters 

suggested that if an agency performs 

adequately, it should not matter what 

the percentage of its budget is for fair 

housing. 

HUD Response. It is important to 

HUD that a substantially equivalent 

state or local agency demonstrate a 

commitment to fair housing 

enforcement by devoting financial 

resources to its fair housing program 

and that those resources be comparable 

to amounts devoted to the enforcement 

of other antidiscrimination laws. 

Therefore, HUD will not eliminate the 

20 percent requirement. HUD has, 

however, revised § 115.306(a)(5) to 

further clarify that this requirement 

applies only when an agency enforces 

antidiscrimination laws other than a fair 

housing law. 

Comment: A commenter wrote that 

HUD should not, and does not, fund 

local agencies to enforce HUD’s fair 

housing responsibilities and suggested 

that the funds would be better used for 

the operating fund. 

HUD Response. Under section 810(f) 

of the Fair Housing Act, 42 U.S.C. 

3610(f) (‘‘the Act’’), the Secretary of 

HUD is required to refer housing 

discrimination complaints to state and 

local agencies that administer fair 

housing laws certified as substantially 

equivalent to the Act. The Secretary is 

further authorized by § 817 of the Act, 

42 U.S.C. 3616, to reimburse such 

agencies for services rendered in 

assisting HUD’s enforcement of the Act. 

Comment: A commenter wrote that 

First Amendment provisions should not 

be incorporated into this rule because 

some agencies will have different state 

constitutional provisions. 

HUD Response. The provision at 

§ 115.310 is unchanged in this final 

rule. The purpose of FHAP is to provide 

assistance and reimbursement to 

certified state and local fair housing 

enforcement agencies. The intent of this 

funding program is to build a 

coordinated intergovernmental 

enforcement effort to further fair 

housing, within constitutional 

limitations. HUD will not accept for 

filing any housing discrimination 

complaint in which the alleged 

discriminatory acts are protected by the 

First Amendment to the Constitution of 

the United States. This necessarily 

means that such complaints will not be 

dual-filed, and concomitantly, that 

FHAP agencies cannot and will not be 

reimbursed by HUD for any work 

related to the processing, investigation, 

or enforcement of such complaints. 

Findings and Certifications 

Paperwork Reduction Act 

The information collection 

requirements contained in this rule have 

been approved by the Office of 

Management and Budget (OMB) in 

accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501–

3520) and assigned OMB control 

number 2529–0005. This rule does not 

revise these information collection 

requirements. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information, unless the collection 

displays a valid control number. 

Regulatory Planning and Review 

The Office of Management and Budget 

(OMB) reviewed this rule under 

Executive Order 12866 (entitled 

‘‘Regulatory Planning and Review’’). 

OMB determined that this rule is a 

‘‘significant regulatory action’’ as 

defined in section 3(f) of the Order 

(although not economically significant, 

as provided in section 3(f)(1) of the 

Order). Any changes made to the rule 

subsequent to its submission to OMB 

are identified in the docket file, which 

is available for public inspection in the 

Regulations Division, Office of General 

Counsel, Department of Housing and 

Urban Development, 451 Seventh Street, 

SW, Room 10276, Washington, DC 

20410–0500. Due to security measures 

at the HUD Headquarters building, 

please schedule an appointment to 

review the docket file by calling the 

Regulations Division at (202) 708–3055 

(this is not a toll-free number). 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (2 U.S.C. 1531–

1538) (UMRA) establishes requirements 

for federal agencies to assess the effects 

of their regulatory actions on state, 

local, and tribal governments and the 

private sector. This final rule does not 

impose any federal mandates on any 

state, local, or tribal governments or the 

private sector within the meaning of the 

Unfunded Mandates Reform Act of 

1995. 

Executive Order 13132, Federalism 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits an agency from 

publishing any rule that has federalism 

implications if the rule either imposes 

substantial direct compliance costs on 

state and local governments and is not 

required by statute, or the rule preempts 

state law, unless the agency meets the 

consultation and funding requirements 

of section 6 of the Executive Order. This 

final rule does not have federalism 

implications and does not impose 

substantial direct compliance costs on 

state and local governments or preempt 

state law within the meaning of the 

Executive Order. 

Environmental Impact 

This final rule involves a policy 

document that sets out enforcement 

procedures and provides for fair 

housing enforcement assistance. 

Accordingly, under 24 CFR 50.19(c)(3), 

this final rule is categorically excluded 

from environmental review under the 

National Environmental Policy Act (42 

U.S.C. 4321). 

Impact on Small Entities 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) generally requires an 

agency to conduct a regulatory 

flexibility analysis of any rule subject to 

notice and comment rulemaking 

requirements, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. This final rule 

revises and makes clarifying changes 

related to substantial equivalency 

certification and the FHAP. Specifically, 

this rule is limited to providing clear 

timeframes, procedures, and concise 

explanations to assist FHAP agencies in 

complying with the regulations and 

successfully administering their 

agencies. Accordingly, the undersigned 

certifies that this rule will not have a 

significant economic impact on a 

substantial number of small entities. 

Catalog of Federal Domestic Assistance 

Number 

The Catalog of Federal Domestic 

Assistance Number is 14.401. 

List of Subjects in 24 CFR Part 115 

Administrative practice and 

procedure, Aged, Fair housing, Grant 

programs—housing and community 

development, Individuals with 

disabilities, Intergovernmental relations, 

Mortgages, Reporting and recordkeeping 

requirements. 


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■ For the reasons stated in the preamble, 

HUD revises 24 CFR part 115 to read as 

follows: 

PART 115—CERTIFICATION AND 

FUNDING OF STATE AND LOCAL FAIR 

HOUSING ENFORCEMENT AGENCIES 

Subpart A—General 

Sec. 

115.100 Definitions. 

115.101 Program administration. 

115.102 Public notices. 

Subpart B—Certification of Substantially 

Equivalent Agencies 

115.200 Purpose. 

115.201 The two phases of substantial 

equivalency certification. 

115.202 Request for interim certification. 

115.203 Interim certification procedures. 

115.204 Criteria for adequacy of law. 

115.205 Certification procedures. 

115.206 Performance assessments; 

Performance standards. 

115.207 Consequences of interim 

certification and certification. 

115.208 Procedures for renewal of 

certification. 

115.209 Technical assistance. 

115.210 Performance deficiency 

procedures; Suspension; Withdrawal. 

115.211 Changes limiting effectiveness of 

agency’s law; Corrective actions; 

Suspension; Withdrawal; Consequences 

of repeal; Changes not limiting 

effectiveness. 

115.212 Request after withdrawal. 

Subpart C—Fair Housing Assistance 

Program 

115.300 Purpose. 

115.301 Agency eligibility criteria; Funding 

availability. 

115.302 Capacity building funds. 

115.303 Eligible activities for capacity 

building funds. 

115.304 Agencies eligible for contributions 

funds. 

115.305 Special enforcement effort (SEE) 

funds. 

115.306 Training funds. 

115.307 Requirements for participation in 

the FHAP; Corrective and remedial 

action for failing to comply with 

requirements. 

115.308 Reporting and recordkeeping 

requirements. 

115.309 Subcontracting under the FHAP. 

115.310 FHAP and the First Amendment. 

115.311 Testing. 

Authority: 42 U.S.C. 3601–19; 42 U.S.C. 

3535(d). 

Subpart A—General 

§ 115.100 Definitions. 

(a) The terms ‘‘Fair Housing Act,’’

‘‘HUD,’’ and ‘‘the Department,’’ as used 

in this part, are defined in 24 CFR 5.100. 

(b) The terms ‘‘aggrieved person,’’

‘‘complainant,’’ ‘‘conciliation,’’

‘‘conciliation agreement,’’

‘‘discriminatory housing practice,’’

‘‘dwelling,’’ ‘‘handicap,’’ ‘‘person,’’

‘‘respondent,’’ ‘‘secretary,’’ and ‘‘state,’’

as used in this part, are defined in 

Section 802 of the Fair Housing Act (42 

U.S.C. 3602). 

(c) Other definitions. The following 

definitions also apply to this part: 

Act means the Fair Housing Act, as 

defined in 24 CFR 5.100. 

Assistant Secretary means the 

Assistant Secretary for Fair Housing and 

Equal Opportunity. 

Certified agency is an agency that has 

been granted certification by the 

Assistant Secretary in accordance with 

the requirements of this part. 

Cooperative agreement is the 

instrument HUD will use to provide 

funds. The Cooperative Agreement 

includes attachments and/or appendices 

establishing requirements relating to the 

operation and performance of the 

agency. 

Cooperative agreement officer (CAO) 

is the administrator of the funds 

awarded pursuant to this part and is a 

regional director of the Office of Fair 

Housing and Equal Opportunity. 

Dual-filed complaint means a housing 

discrimination complaint that has been 

filed with both HUD and the agency that 

has been granted interim certification or 

certification by the Assistant Secretary. 

FHAP means the Fair Housing 

Assistance Program. 

FHEO means HUD’s Office of Fair 

Housing and Equal Opportunity. 

FHEO regional director means a 

regional director of the Office of Fair 

Housing and Equal Opportunity. 

Fair housing law or Law refers to both 

state fair housing laws and local fair 

housing laws. 

Final administrative disposition 

means an agency’s completion of a case 

following a reasonable cause finding, 

including, but not limited to, an agencyapproved settlement or a final, 

administrative decision issued by 

commissioners, hearing officers or 

administrative law judges. Final 

administrative disposition does not 

include dispositions in judicial 

proceedings resulting from election or 

appeal. 

Government Technical Monitor (GTM) 

means the HUD staff person who has 

been designated to provide technical 

and financial oversight and evaluation 

of the FHAP grantee’s performance. 

Government Technical Representative 

(GTR) means the HUD staff person who 

is responsible for the technical 

administration of the FHAP grant, the 

evaluation of performance under the 

FHAP grant, the acceptance of technical 

reports or projects, the approval of 

payments, and other such specific 

responsibilities as may be stipulated in 

the FHAP grant. 

Impracticable, as used in this part, is 

when complaint processing is delayed 

by circumstances beyond the control of 

the interim or certified agency. Those 

situations include, but are not limited 

to, complaints involving complex issues 

requiring extensive investigations, 

complaints involving new and 

complicated areas of law that need to be 

analyzed, and where a witness is 

discovered late in the investigation and 

needs to be interviewed. 

Interim agency is an agency that has 

been granted interim certification by the 

Assistant Secretary. 

Ordinance, as used in this part, means 

a law enacted by the legislative body of 

a municipality. 

Statute, as used in this part, means a 

law enacted by the legislative body of a 

state. 

Testing refers to the use of an 

individual or individuals (‘‘testers’’) 

who, without a bona fide intent to rent 

or purchase a house, apartment, or other 

dwelling, pose as prospective renters or 

purchasers for the purpose of gathering 

information that may indicate whether a 

housing provider is complying with fair 

housing laws. 

§ 115.101 Program administration. 

(a) Authority and responsibility. The 

Secretary has delegated the authority 

and responsibility for administering this 

part to the Assistant Secretary. 

(b) Delegation of Authority. The 

Assistant Secretary retains the right to 

make final decisions concerning the 

granting and withdrawal of substantial 

equivalency interim certification and 

certification. The Assistant Secretary 

delegates the authority and 

responsibility for administering the 

remainder of this part to the FHEO 

regional director. This includes 

assessing the performance of interim 

and certified agencies as described in 

§ 115.206. This also includes the 

offering of a Performance Improvement 

Plan (PIP) as described in § 115.210 and 

the suspension of interim certification 

or certification due to performance 

deficiencies as described in § 115.210. 

§ 115.102 Public notices. 

(a) Periodically, the Assistant 

Secretary will publish the following 

public notices in the Federal Register: 

(1) A list of all interim and certified 

agencies; and 

(2) A list of agencies to which a 

withdrawal of interim certification or 

certification has been proposed. 

(b) On an annual basis, the Assistant 

Secretary may publish in the Federal 

Register a notice that identifies all 

agencies that have received interim 

certification during the prior year. The 


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notice will invite the public to comment 

on the state and local laws of the new 

interim agencies, as well as on the 

performance of the agencies in enforcing 

their laws. All comments will be 

considered before a final decision on 

certification is made. 

Subpart B—Certification of 

Substantially Equivalent Agencies 

§ 115.200 Purpose. 

This subpart implements section 

810(f) of the Fair Housing Act. The 

purpose of this subpart is to set forth: 

(a) The basis for agency interim 

certification and certification; 

(b) Procedures by which a 

determination is made to grant interim 

certification or certification; 

(c) How the Department will evaluate 

the performance of an interim and 

certified agency; 

(d) Procedures that the Department 

will utilize when an interim or certified 

agency performs deficiently; 

(e) Procedures that the Department 

will utilize when there are changes 

limiting the effectiveness of an interim 

or certified agency’s law; 

(f) Procedures for renewal of 

certification; and 

(g) Procedures when an agency 

requests interim certification or 

certification after a withdrawal. 

§ 115.201 The two phases of substantial 

equivalency certification. 

Substantial equivalency certification 

is granted if the Department determines 

that a state or local agency enforces a 

law that is substantially equivalent to 

the Fair Housing Act with regard to 

substantive rights, procedures, 

remedies, and the availability of judicial 

review. The Department has developed 

a two-phase process of substantial 

equivalency certification. 

(a) Adequacy of Law. In the first 

phase, the Assistant Secretary will 

determine whether, on its face, the fair 

housing law that the agency administers 

provides rights, procedures, remedies, 

and the availability of judicial review 

that are substantially equivalent to those 

provided in the federal Fair Housing 

Act. An affirmative conclusion may 

result in the Department offering the 

agency interim certification. An agency 

must obtain interim certification prior to 

obtaining certification. 

(b) Adequacy of Performance. In the 

second phase, the Assistant Secretary 

will determine whether, in operation, 

the fair housing law that the agency 

administers provides rights, procedures, 

remedies, and the availability of judicial 

review that are substantially equivalent 

to those provided in the federal Fair 

Housing Act. An affirmative conclusion 

will result in the Department offering 

the agency certification. 

§ 115.202 Request for interim certification. 

(a) A request for interim certification 

under this subpart shall be filed with 

the Assistant Secretary by the state or 

local official having principal 

responsibility for the administration of 

the state or local fair housing law. The 

request shall be supported by the text of 

the jurisdiction’s fair housing law, the 

law creating and empowering the 

agency, all laws referenced in the 

jurisdiction’s fair housing law, any 

regulations and directives issued under 

the law, and any formal opinions of the 

State Attorney General or the chief legal 

officer of the jurisdiction that pertain to 

the jurisdiction’s fair housing law. A 

request shall also include organizational 

information of the agency responsible 

for administering and enforcing the law. 

(b) The request and supporting 

materials shall be filed with the 

Assistant Secretary for Fair Housing and 

Equal Opportunity, Department of 

Housing and Urban Development, 451 

Seventh Street, SW., Washington, DC 

20410–2000. The Assistant Secretary 

shall forward a copy of the request and 

supporting materials to the appropriate 

FHEO regional director. A copy of the 

request and supporting materials will be 

kept available for public examination 

and copying at: 

(1) The office of the Assistant 

Secretary; and 

(2) The office of the state or local 

agency charged with administration and 

enforcement of the state or local fair 

housing law. 

(c) Upon receipt of a request, HUD 

will analyze the agency’s fair housing 

law to determine whether it meets the 

criteria identified in § 115.204. 

(d) HUD shall review a request for 

interim certification from a local agency 

located in a state with an interim 

certified or certified substantially 

equivalent state agency. However, in the 

request for interim certification, the 

local agency must certify that the 

substantially equivalent state law does 

not prohibit the local agency from 

administering and enforcing its own fair 

housing law within the locality. 

§ 115.203 Interim certification procedures. 

(a) Upon receipt of a request for 

interim certification filed under 

§ 115.202, the Assistant Secretary may 

request further information necessary 

for a determination to be made under 

this section. The Assistant Secretary 

may consider the relative priority given 

to fair housing administration, as 

compared to the agency’s other duties 

and responsibilities, as well as the 

compatibility or potential conflict of fair 

housing objectives with these other 

duties and responsibilities. 

(b) If the Assistant Secretary 

determines, after application of the 

criteria set forth in § 115.204, that the 

state or local law, on its face, provides 

substantive rights, procedures, 

remedies, and judicial review 

procedures for alleged discriminatory 

housing practices that are substantially 

equivalent to those provided in the Act, 

the Assistant Secretary may offer to 

enter into an Agreement for the Interim 

Referral of Complaints and Other 

Utilization of Services (interim 

agreement). The interim agreement will 

outline the procedures and authorities 

upon which the interim certification is 

based. 

(c) Such interim agreement, after it is 

signed by all appropriate signatories, 

will result in the agency receiving 

interim certification. Appropriate 

signatories include the Assistant 

Secretary, the FHEO regional director, 

and the state or local official having 

principal responsibility for the 

administration of the state or local fair 

housing law. 

(d) Interim agreements shall be for a 

term of no more than three years. 

(e) All regulations, rules, directives, 

and/or opinions of the State Attorney 

General or the jurisdiction’s chief legal 

officer that are necessary for the law to 

be substantially equivalent on its face 

must be enacted and effective in order 

for the Assistant Secretary to offer the 

agency an interim agreement. 

(f) Interim certification required prior 

to certification. An agency is required to 

obtain interim certification prior to 

obtaining certification. 

§ 115.204 Criteria for adequacy of law. 

(a) In order for a determination to be 

made that a state or local fair housing 

agency administers a law, which, on its 

face, provides rights and remedies for 

alleged discriminatory housing practices 

that are substantially equivalent to those 

provided in the Act, the law must: 

(1) Provide for an administrative 

enforcement body to receive and 

process complaints and provide that: 

(i) Complaints must be in writing; 

(ii) Upon the filing of a complaint, the 

agency shall serve notice upon the 

complainant acknowledging the filing 

and advising the complainant of the 

time limits and choice of forums 

provided under the law; 

(iii) Upon the filing of a complaint, 

the agency shall promptly serve notice 

on the respondent or person charged 

with the commission of a discriminatory 

housing practice advising of his or her 


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procedural rights and obligations under 

the statute or ordinance, together with a 

copy of the complaint; 

(iv) A respondent may file an answer 

to a complaint. 

(2) Delegate to the administrative 

enforcement body comprehensive 

authority, including subpoena power, to 

investigate the allegations of 

complaints, and power to conciliate 

complaints, and require that: 

(i) The agency commences 

proceedings with respect to the 

complaint before the end of the 30th day 

after receipt of the complaint; 

(ii) The agency investigates the 

allegations of the complaint and 

complete the investigation within the 

timeframe established by section 

810(a)(1)(B)(iv) of the Act or comply 

with the notification requirements of 

section 810(a)(1)(C) of the Act; 

(iii) The agency make final 

administrative disposition of a 

complaint within one year of the date of 

receipt of a complaint, unless it is 

impracticable to do so. If the agency is 

unable to do so, it shall notify the 

parties, in writing, of the reasons for not 

doing so; 

(iv) Any conciliation agreement 

arising out of conciliation efforts by the 

agency shall be an agreement between 

the respondent, the complainant, and 

the agency and shall require the 

approval of the agency; 

(v) Each conciliation agreement shall 

be made public, unless the complainant 

and respondent otherwise agree and the 

agency determines that disclosure is not 

required to further the purpose of the 

law. 

(3) Not place excessive burdens on the 

aggrieved person that might discourage 

the filing of complaints, such as: 

(i) A provision that a complaint must 

be filed within any period of time less 

than 180 days after an alleged 

discriminatory practice has occurred or 

terminated; 

(ii) Anti-testing provisions; 

(iii) Provisions that could subject an 

aggrieved person to costs, criminal 

penalties, or fees in connection with the 

filing of complaints. 

(4) Not contain exemptions that 

substantially reduce the coverage of 

housing accommodations as compared 

to section 803 of the Act. 

(5) Provide the same protections as 

those afforded by sections 804, 805, 806, 

and 818 of the Act, consistent with 

HUD’s implementing regulations found 

at 24 CFR part 100. 

(b) In addition to the factors described 

in paragraph (a) of this section, the 

provisions of the state or local law must 

afford administrative and judicial 

protection and enforcement of the rights 

embodied in the law. 

(1) The agency must have the 

authority to: 

(i) Grant or seek prompt judicial 

action for appropriate temporary or 

preliminary relief pending final 

disposition of a complaint, if such 

action is necessary to carry out the 

purposes of the law; 

(ii) Issue and seek enforceable 

subpoenas; 

(iii) Grant actual damages in an 

administrative proceeding or provide 

adjudication in court at agency expense 

to allow the award of actual damages to 

an aggrieved person; 

(iv) Grant injunctive or other 

equitable relief, or be specifically 

authorized to seek such relief in a court 

of competent jurisdiction; 

(v) Provide an administrative 

proceeding in which a civil penalty may 

be assessed or provide adjudication in 

court, at agency expense, allowing the 

assessment of punitive damages against 

the respondent. 

(2) If an agency’s law offers an 

administrative hearing, the agency must 

also provide parties an election option 

substantially equivalent to the election 

provisions of section 812 of the Act. 

(3) Agency actions must be subject to 

judicial review upon application by any 

party aggrieved by a final agency order. 

(4) Judicial review of a final agency 

order must be in a court with authority 

to: 

(i) Grant to the petitioner, or to any 

other party, such temporary relief, 

restraining order, or other order as the 

court determines is just and proper; 

(ii) Affirm, modify, or set aside, in 

whole or in part, the order, or remand 

the order for further proceeding; and 

(iii) Enforce the order to the extent 

that the order is affirmed or modified. 

(c) The requirement that the state or 

local law prohibit discrimination on the 

basis of familial status does not require 

that the state or local law limit the 

applicability of any reasonable local, 

state, or federal restrictions regarding 

the maximum number of occupants 

permitted to occupy a dwelling. 

(d) The state or local law may assure 

that no prohibition of discrimination 

because of familial status applies to 

housing for older persons, as described 

in 24 CFR part 100, subpart E. 

(e) A determination of the adequacy of 

a state or local fair housing law ‘‘on its 

face’’ is intended to focus on the 

meaning and intent of the text of the 

law, as distinguished from the 

effectiveness of its administration. 

Accordingly, this determination is not 

limited to an analysis of the literal text 

of the law. Regulations, directives, rules 

of procedure, judicial decisions, or 

interpretations of the fair housing law 

by competent authorities will be 

considered in making this 

determination. 

(f) A law will be found inadequate 

‘‘on its face’’ if it permits any of the 

agency’s decision-making authority to 

be contracted out or delegated to a nongovernmental authority. For the 

purposes of this paragraph, ‘‘decisionmaking authority’’ includes but is not 

limited to: 

(1) Acceptance of a complaint; 

(2) Approval of a conciliation 

agreement; 

(3) Dismissal of a complaint; 

(4) Any action specified in 

§ 115.204(a)(2)(iii) or (b)(1); and 

(5) Any decision-making regarding 

whether a particular matter will or will 

not be pursued. 

(g) The state or local law must provide 

for civil enforcement of the law by an 

aggrieved person by the commencement 

of an action in an appropriate court at 

least one year after the occurrence or 

termination of an alleged discriminatory 

housing practice. The court must be 

empowered to: 

(1) Award the plaintiff actual and 

punitive damages; 

(2) Grant as relief, as it deems 

appropriate, any temporary or 

permanent injunction, temporary 

restraining order or other order; and 

(3) Allow reasonable attorney’s fees 

and costs. 

(h) If a state or local law is different 

than the Act in a way that does not 

diminish coverage of the Act, including, 

but not limited to, the protection of 

additional prohibited bases, then the 

state or local law may still be found 

substantially equivalent. 

§ 115.205 Certification procedures. 

(a) Certification. (1) If the Assistant 

Secretary determines, after application 

of criteria set forth in §§ 115.204, 

115.206, and this section, that the state 

or local law, both ‘‘on its face’’ and ‘‘in 

operation,’’ provides substantive rights, 

procedures, remedies, and judicial 

review procedures for alleged 

discriminatory housing practices that 

are substantially equivalent to those 

provided in the Act, the Assistant 

Secretary may enter into a 

Memorandum of Understanding (MOU) 

with the agency. 

(2) The MOU is a written agreement 

providing for the referral of complaints 

to the agency and for communication 

procedures between the agency and 

HUD that are adequate to permit the 

Assistant Secretary to monitor the 

agency’s continuing substantial 

equivalency certification. 


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(3) The MOU, after it is signed by all 

appropriate signatories, may authorize 

an agency to be a certified agency for a 

period of not more than five years. 

Appropriate signatories include the 

Assistant Secretary, the FHEO regional 

director, and the authorized employee(s) 

of the agency. 

(b) In order to receive certification, 

during the 60 days prior to the 

expiration of the agency’s interim 

agreement, the agency must certify to 

the Assistant Secretary that the state or 

local fair housing law, ‘‘on its face,’’

continues to be substantially equivalent 

to the Act (i.e., there have been no 

amendments to the state or local fair 

housing law, adoption of rules or 

procedures concerning the fair housing 

law, or judicial or other authoritative 

interpretations of the fair housing law 

that limit the effectiveness of the 

agency’s fair housing law). 

§ 115.206 Performance assessments; 

Performance standards. 

(a) Frequency of on-site performance 

assessment during interim certification. 

The Assistant Secretary, through the 

appropriate FHEO regional office, may 

conduct an on-site performance 

assessment not later than six months 

after the execution of the interim 

agreement. An on-site performance 

assessment may also be conducted 

during the six months immediately 

prior to the expiration of the interim 

agreement. HUD has the discretion to 

conduct additional performance 

assessments during the period of 

interim certification, as it deems 

necessary. 

(b) Frequency of on-site performance 

assessment during certification. During 

certification, the Assistant Secretary 

through the FHEO regional office, may 

conduct on-site performance 

assessments every 24 months. HUD has 

the discretion to conduct additional 

performance assessments during the 

period of certification, as it deems 

necessary. 

(c) In conducting the performance 

assessment, the FHEO regional office 

shall determine whether the agency 

engages in timely, comprehensive, and 

thorough fair housing complaint 

investigation, conciliation, and 

enforcement activities. In the 

performance assessment report, the 

FHEO regional office may recommend 

to the Assistant Secretary whether the 

agency should continue to be interim 

certified or certified. In conducting the 

performance assessment, the FHEO 

regional office shall also determine 

whether the agency is in compliance 

with the requirements for participation 

in the FHAP enumerated in §§ 115.307, 

115.308, 115.309, 115.310, and 115.311 

of this part. In the performance 

assessment report, the FHEO regional 

office shall identify whether the agency 

meets the requirements of §§ 115.307, 

115.308, 115.309, 115.310, and 115.311 

of this part, and, therefore, should 

continue receiving funding under the 

FHAP. 

(d) At a minimum, the performance 

assessment will consider the following 

to determine the effectiveness of an 

agency’s fair housing complaint 

processing, consistent with such 

guidance as may be issued by HUD: 

(1) The agency’s case processing 

procedures; 

(2) The thoroughness of the agency’s 

case processing; 

(3) A review of cause and no cause 

determinations for quality of 

investigations and consistency with 

appropriate standards; 

(4) A review of conciliation 

agreements and other settlements; 

(5) A review of the agency’s 

administrative closures; and 

(6) A review of the agency’s 

enforcement procedures, including 

administrative hearings and judicial 

proceedings. 

(e) Performance standards. HUD shall 

utilize the following performance 

standards while conducting 

performance assessments. If an agency 

does not meet one or more performance 

standard(s), HUD shall utilize the 

performance deficiency procedures 

enumerated in § 115.210. 

(1) Performance Standard 1. 

Commence complaint proceedings, 

carry forward such proceedings, 

complete investigations, issue 

determinations, and make final 

administrative dispositions in a timely 

manner. To meet this standard, the 

performance assessment will consider 

the timeliness of the agency’s actions 

with respect to its complaint processing, 

including, but not limited to: 

(i) Whether the agency began its 

processing of fair housing complaints 

within 30 days of receipt; 

(ii) Whether the agency completes the 

investigative activities with respect to a 

complaint within 100 days from the 

date of receipt or, if it is impracticable 

to do so, notifies the parties in writing 

of the reason(s) for the delay; 

(iii) Whether the agency makes a 

determination of reasonable cause or no 

reasonable cause with respect to a 

complaint within 100 days from the 

date of receipt or, if it is impracticable 

to do so, notifies the parties in writing 

of the reason(s) for the delay; 

(iv) Whether the agency makes a final 

administrative disposition of a 

complaint within one year from the date 

of receipt or, if it is impracticable to do 

so, notifies the parties in writing of the 

reason(s) for the delay; and 

(v) Whether the agency completed the 

investigation of the complaint and 

prepared a complete, final investigative 

report. 

(vi) When an agency is unable to 

complete investigative activities with 

respect to a complaint within 100 days, 

the agency must send written 

notification to the parties, indicating the 

reason(s) for the delay, within 110 days 

of the filing of the complaint. 

(2) Performance Standard 2. 

Administrative closures are utilized 

only in limited and appropriate 

circumstances. Administrative closures 

should be distinguished from a closure 

on the merits and may not be used 

instead of making a recommendation or 

determination of reasonable or no 

reasonable cause. HUD will provide 

further guidance to interim and certified 

agencies on the appropriate 

circumstances for administrative 

closures. 

(3) Performance Standard 3. During 

the period beginning with the filing of 

a complaint and ending with filing of a 

charge or dismissal, the agency will, to 

the extent feasible, attempt to conciliate 

the complaint. After a charge has been 

issued, the agency will, to the extent 

feasible, continue to attempt settlement 

until a hearing or a judicial proceeding 

has begun. 

(4) Performance Standard 4. The 

agency conducts compliance reviews of 

settlements, conciliation agreements, 

and orders resolving discriminatory 

housing practices. The performance 

assessment shall include, but not be 

limited to: 

(i) An assessment of the agency’s 

procedures for conducting compliance 

reviews; and 

(ii) Terms and conditions of 

agreements and orders issued. 

(5) Performance Standard 5. The 

agency must consistently and 

affirmatively seek and obtain the type of 

relief designed to prevent recurrences of 

discriminatory practices. The 

performance assessment shall include, 

but not be limited to: 

(i) An assessment of the agency’s use 

of its authority to seek actual damages, 

as appropriate; 

(ii) An assessment of the agency’s use 

of its authority to seek and assess civil 

penalties or punitive damages, as 

appropriate; 

(iii) An assessment of the types of 

relief sought by the agency with 

consideration for the inclusion of 

affirmative provisions designed to 

protect the public interest; 


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(iv) A review of all types of relief 

obtained; 

(v) A review of the adequacy of the 

relief sought and obtained in light of the 

issues raised by the complaint; 

(vi) The number of complaints closed 

with relief and the number closed 

without relief; 

(vii) The number of complaints that 

proceed to administrative hearing and 

the result; and 

(viii) The number of complaints that 

proceed to judicial proceedings and the 

result. 

(6) Performance Standard 6. The 

agency must consistently and 

affirmatively seek to eliminate all 

prohibited practices under its fair 

housing law. An assessment under this 

standard will include, but not be limited 

to, an identification of the education 

and outreach efforts of the agency. 

(7) Performance Standard 7. The 

agency must demonstrate that it receives 

and processes a reasonable number of 

complaints cognizable under both the 

federal Fair Housing Act and the 

agency’s fair housing statute or 

ordinance. The reasonable number will 

be determined by HUD and based on all 

relevant circumstances including, but 

not limited to, the population of the 

jurisdiction that the agency serves, the 

length of time that the agency has 

participated in the FHAP, and the 

number of complaints that the agency 

has received and processed in the past. 

If an agency fails to receive and process 

a reasonable number of complaints 

during a year of FHAP participation, 

given education and outreach efforts 

conducted and receipts of complaints, 

then the FHEO regional director may 

offer the agency a Performance 

Improvement Plan (PIP), as described in 

§ 115.210(a)(2). The PIP will set forth 

the number of complaints the agency 

must process during subsequent years of 

FHAP participation. After issuing the 

PIP, the FHEO regional office will 

provide the agency with technical 

assistance on ways to increase 

awareness of fair housing rights and 

responsibilities in the jurisdiction. 

(8) Performance Standard 8. The 

agency must report to HUD on the final 

status of all dual-filed complaints where 

a determination of reasonable cause was 

made. The report must identify, at a 

minimum, how complaints were 

resolved (e.g., settlement, judicial 

proceedings, or administrative hearing), 

when they were resolved, the forum in 

which they were resolved, and types 

and amounts of relief obtained. 

(9) Performance Standard 9. The 

agency must conform its performance to 

the provisions of any written 

agreements executed by the agency and 

the Department related to substantial 

equivalency certification, including, but 

not limited to, the interim agreement or 

MOU. 

§ 115.207 Consequences of interim 

certification and certification. 

(a) Whenever a complaint received by 

the Assistant Secretary alleges 

violations of a fair housing law 

administered by an agency that has been 

interim certified or certified as 

substantially equivalent, the complaint 

will be referred to the agency, and no 

further action shall be taken by the 

Assistant Secretary with respect to such 

complaint except as provided for by the 

Act, this part, 24 CFR part 103, subpart 

C, and any written agreements executed 

by the Agency and the Assistant 

Secretary. HUD shall make referrals to 

interim certified and certified local 

agencies in accordance with this section 

even when the local agency is located in 

a state with an interim certified or 

certified state agency. 

(b) If HUD determines that a 

complaint has not been processed in a 

timely manner in accordance with the 

performance standards set forth in 

§ 115.206, HUD may reactivate the 

complaint, conduct its own 

investigation and conciliation efforts, 

and make a determination consistent 

with 24 CFR part 103. 

(c) Notwithstanding paragraph (a) of 

this section, whenever the Assistant 

Secretary has reason to believe that a 

complaint demonstrates a basis for the 

commencement of proceedings against 

any respondent under section 814(a) of 

the Act or for proceedings by any 

governmental licensing or supervisory 

authorities, the Assistant Secretary shall 

transmit the information upon which 

such belief is based to the Attorney 

General, federal financial regulatory 

agencies, other federal agencies, or other 

appropriate governmental licensing or 

supervisory authorities. 

§ 115.208 Procedures for renewal of 

certification. 

(a) If the Assistant Secretary 

affirmatively concludes that the 

agency’s law and performance have 

complied with the requirements of this 

part in each of the five years of 

certification, the Assistant Secretary 

may renew the certification of the 

agency. 

(b) In determining whether to renew 

the certification of an agency, the 

Assistant Secretary’s review may 

include, but is not limited to: 

(1) Performance assessments of the 

agency conducted by the Department 

during the five years of certification; 

(2) The agency’s own certification that 

the state or local fair housing law 

continues to be substantially equivalent 

both ‘‘on its face’’ and ‘‘in operation;’’

(i.e., there have been no amendments to 

the state or local fair housing law, 

adoption of rules or procedures 

concerning the fair housing law, or 

judicial or other authoritative 

interpretations of the fair housing law 

that limit the effectiveness of the 

agency’s fair housing law); and 

(3) Any and all public comments 

regarding the relevant state and local 

laws and the performance of the agency 

in enforcing the law. 

(c) If the Assistant Secretary decides 

to renew an agency’s certification, the 

Assistant Secretary will offer the agency 

either a new MOU or an Addendum to 

the Memorandum of Understanding 

(addendum). The new MOU or 

addendum will extend and update the 

MOU between HUD and the agency. 

(d) The new MOU or addendum, 

when signed by all appropriate 

signatories, will result in the agency’s 

certification being renewed for five 

years from the date on which the 

previous MOU was to expire. 

Appropriate signatories include the 

Assistant Secretary, the FHEO regional 

director, and the authorized employee(s) 

of the agency. 

(e) The provisions of this section may 

be applied to an agency that has an 

expired MOU or an expired addendum. 

§ 115.209 Technical assistance. 

(a) The Assistant Secretary, through 

the FHEO regional office, may provide 

technical assistance to the interim and 

certified agencies at any time. The 

agency may request such technical 

assistance or the FHEO regional office 

may determine the necessity for 

technical assistance and require the 

agency’s cooperation and participation. 

(b) The Assistant Secretary, through 

FHEO headquarters or regional staff, 

will require that the agency participate 

in training conferences and seminars 

that will enhance the agency’s ability to 

process complaints alleging 

discriminatory housing practices. 

§ 115.210 Performance deficiency 

procedures; Suspension; Withdrawal. 

(a) HUD may utilize the following 

performance deficiency procedures if it 

determines at any time that the agency 

does not meet one or more of the 

performance standards enumerated in 

§ 115.206. The performance deficiency 

procedures may be applied to agencies 

with either interim certification or 

certification. If an agency fails to meet 

performance standard 7, HUD may 

bypass the technical assistance 


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performance deficiency procedure and 

proceed to the PIP. 

(1) Technical assistance. After 

discovering the deficiency, the FHEO 

regional office should immediately 

inform the agency and provide the 

agency with technical assistance. 

(2) Performance improvement plan. If, 

following technical assistance, the 

agency does not bring its performance 

into compliance with § 115.206 within a 

time period identified by the FHEO 

regional director, the FHEO regional 

director may offer the agency a PIP. 

(i) The PIP will outline the agency’s 

performance deficiencies, identify the 

necessary corrective actions, and 

include a timetable for completion. 

(ii) If the agency receives a PIP, 

funding under the FHAP may be 

suspended for the duration of the PIP. 

(iii) Once the agency has 

implemented the corrective actions to 

eliminate the deficiencies, and such 

corrective actions are accepted by the 

FHEO regional director, funding may be 

restored. 

(iv) The FHEO regional office may 

provide the agency with technical 

assistance during the period of the PIP, 

if appropriate. 

(b) Suspension. If the agency does not 

agree to implement the PIP or does not 

implement the corrective actions 

identified in the PIP within the time 

allotted, then the FHEO regional 

director may suspend the agency’s 

interim certification or certification. 

(1) The FHEO regional director shall 

notify the agency in writing of the 

specific reasons for the suspension and 

provide the agency with an opportunity 

to respond within 30 days. 

(2) Suspension shall not exceed 180 

days. 

(3) During the period of suspension, 

HUD will not refer complaints to the 

agency. 

(4) If an agency is suspended, the 

FHEO regional office may elect not to 

provide funding under the FHAP to the 

agency during the period of suspension, 

unless and until the Assistant Secretary 

determines that the agency is fully in 

compliance with § 115.206. 

(5) HUD may provide the agency with 

technical assistance during the period of 

suspension, if appropriate. 

(6) No more than 60 days prior to the 

end of suspension, the FHEO regional 

office shall conduct a performance 

assessment of the agency. 

(c) Withdrawal. If, following the 

performance assessment conducted at 

the end of suspension, the Assistant 

Secretary determines that the agency 

has not corrected the deficiencies, the 

Assistant Secretary may propose to 

withdraw the interim certification or 

certification of the agency. 

(1) The Assistant Secretary shall 

proceed with withdrawal, unless the 

agency provides information or 

documentation that establishes that the 

agency’s administration of its law meets 

all of the substantial equivalency 

certification criteria set forth in 24 CFR 

part 115. 

(2) The Assistant Secretary shall 

inform the agency in writing of the 

reasons for the withdrawal. 

(3) During any period after which the 

Assistant Secretary proposes 

withdrawal, until such time as the 

agency establishes that administration 

of its law meets all of the substantial 

equivalency certification criteria set 

forth in 24 CFR part 115, the agency 

shall be ineligible for funding under the 

FHAP. 

§ 115.211 Changes limiting effectiveness 

of agency’s law; Corrective actions; 

Suspension; Withdrawal; Consequences of 

repeal; Changes not limiting effectiveness. 

(a) Changes limiting effectiveness of 

agency’s law. (1) If a state or local fair 

housing law that HUD has previously 

deemed substantially equivalent to the 

Act is amended; or rules or procedures 

concerning the fair housing law are 

adopted; or judicial or other 

authoritative interpretations of the fair 

housing law are issued, the interimcertified or certified agency must inform 

the Assistant Secretary of such 

amendment, adoption, or interpretation 

within 60 days of its discovery. 

(2) The requirements of this section 

shall apply equally to the amendment, 

adoption, or interpretation of any 

related law that bears on any aspect of 

the effectiveness of the agency’s fair 

housing law. 

(3) The Assistant Secretary may 

conduct a review to determine if the 

amendment, adoption, or interpretation 

limits the effectiveness of the interim 

agency’s fair housing law. 

(b) Corrective actions. (1) If the review 

indicates that the agency’s law no longer 

meets the criteria identified in 

§ 115.204, the Assistant Secretary will 

so notify the agency in writing. 

Following notification, HUD may take 

appropriate actions, including, but not 

limited to, any or all of the following: 

(i) Declining to refer some or all 

complaints to the agency unless and 

until the fair housing law meets the 

criteria identified in § 115.204; 

(ii) Electing not to provide payment 

for complaints processed by the agency 

unless and until the fair housing law 

meets the criteria identified in 

§ 115.204; 

(iii) Providing technical assistance 

and/or guidance to the agency to assist 

the agency in curing deficiencies in its 

fair housing law. 

(2) Suspension based on changes in 

the law. If the corrective actions 

identified in paragraph (b)(1)(i) through 

(iii) of this section fail to bring the state 

or local fair housing law back into 

compliance with the criteria identified 

in § 115.204 within the timeframe 

identified in HUD’s notification to the 

agency, the Assistant Secretary may 

suspend the agency’s interim 

certification or certification based on 

changes in the law or a related law. 

(i) The Assistant Secretary will notify 

the agency in writing of the specific 

reasons for the suspension and provide 

the agency with an opportunity to 

respond within 30 days. 

(ii) During the period of suspension, 

the Assistant Secretary has the 

discretion to not refer some or all 

complaints to the agency unless and 

until the agency’s law meets the criteria 

identified in § 115.204. 

(iii) During suspension, HUD may 

elect not to provide payment for 

complaints processed unless and until 

the agency’s law meets the criteria 

identified in § 115.204. 

(iv) During the period of suspension, 

if the fair housing law is brought back 

into compliance with the criteria 

identified in § 115.204, and the 

Assistant Secretary determines that the 

fair housing law remains substantially 

equivalent to the Act, the Assistant 

Secretary will rescind the suspension 

and reinstate the agency’s interim 

certification or certification. 

(3) Withdrawal based on changes in 

the law. If the Assistant Secretary 

determines that the agency has not 

brought its law back into compliance 

with the criteria identified in § 115.204 

during the period of suspension, the 

Assistant Secretary may propose to 

withdraw the agency’s interim 

certification or certification. 

(i) The Assistant Secretary will 

proceed with withdrawal unless the 

agency provides information or 

documentation that establishes that the 

agency’s current law meets the criteria 

of substantial equivalency certification 

identified in § 115.204. 

(ii) The Assistant Secretary will 

inform the agency in writing of the 

reasons for the withdrawal. 

(c) (1) If, following notification from 

HUD that its fair housing law no longer 

meets the criteria identified in 

§ 115.204, an interim-certified or 

certified agency unequivocally 

expresses to HUD that its fair housing 

law will not be brought back into 

compliance, the Assistant Secretary may 

forgo suspension and proceed directly 


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to withdrawal of the agency’s interim 

certification or certification. 

(2) During any period after which the 

Assistant Secretary proposes 

withdrawal, until such time as the 

agency establishes that administration 

of its law meets all of the substantial 

equivalency certification criteria set 

forth in 24 CFR part 115, the agency 

shall be ineligible for funding under the 

FHAP. 

(d) Consequences of repeal. If a state 

or local fair housing law that HUD has 

previously deemed substantially 

equivalent to the Act is repealed, in 

whole or in part, or a related law that 

bears on any aspect of the effectiveness 

of the agency’s fair housing law is 

repealed, in whole or in part, the 

Assistant Secretary may immediately 

withdraw the agency’s interim 

certification or certification. 

(e) Changes not limiting effectiveness. 

Nothing in this section is meant to limit 

the Assistant Secretary’s authority to 

determine that a change to a fair 

housing law does not jeopardize the 

substantial equivalency interim 

certification or certification of an 

agency. 

(1) Under such circumstances, the 

Assistant Secretary may proceed in 

maintaining the existing relationship 

with the agency, as set forth in the 

interim agreement or MOU. 

(2) Alternatively, the Assistant 

Secretary may decide not to refer certain 

types of complaints to the agency. The 

Assistant Secretary may elect not to 

provide payment for these complaints 

and may require the agency to refer such 

complaints to the Department for 

investigation, conciliation, and 

enforcement activities. 

(3) When the Assistant Secretary 

determines that a change to a fair 

housing law does not jeopardize an 

agency’s substantial equivalency 

certification, the Assistant Secretary 

need not proceed to suspension or 

withdrawal if the change is not 

reversed. 

§ 115.212 Request after withdrawal. 

(a) An agency that has had its interim 

certification or certification withdrawn, 

either voluntarily or by the Department, 

may request substantial equivalency 

interim certification or certification. 

(b) The request shall be filed in 

accordance with § 115.202. 

(c) The Assistant Secretary shall 

determine whether the state or local 

law, on its face, provides substantive 

rights, procedures, remedies, and 

judicial review procedures for alleged 

discriminatory housing practices that 

are substantially equivalent to those 

provided in the federal Fair Housing 

Act. To meet this standard, the state or 

local law must meet the criteria 

enumerated in § 115.204. 

(d) Additionally, if the agency had 

documented performance deficiencies 

that contributed to the past withdrawal, 

then the Department shall consider the 

agency’s performance and any steps the 

agency has taken to correct performance 

deficiencies and to prevent them from 

recurring in determining whether to 

grant interim certification or 

certification. The review of the agency’s 

performance shall include HUD 

conducting a performance assessment in 

accordance with § 115.206. 

Subpart C—Fair Housing Assistance 

Program 

§ 115.300 Purpose. 

The purpose of the Fair Housing 

Assistance Program (FHAP) is to 

provide assistance and reimbursement 

to state and local fair housing 

enforcement agencies. The intent of this 

funding program is to build a 

coordinated intergovernmental 

enforcement effort to further fair 

housing and to encourage the agencies 

to assume a greater share of the 

responsibility for the administration and 

enforcement of fair housing laws. 

The financial assistance is designed to 

provide support for: 

(a) The processing of dual-filed 

complaints; 

(b) Training under the Fair Housing 

Act and the agencies’ fair housing law; 

(c) The provision of technical 

assistance; 

(d) The creation and maintenance of 

data and information systems; and 

(e) The development and 

enhancement of fair housing education 

and outreach projects, special fair 

housing enforcement efforts, fair 

housing partnership initiatives, and 

other fair housing projects. 

§ 115.301 Agency eligibility criteria; 

Funding availability. 

An agency with certification or 

interim certification under subpart B of 

this part, and which has entered into a 

MOU or interim agreement, is eligible to 

participate in the FHAP. All FHAP 

funding is subject to congressional 

appropriation. 

§ 115.302 Capacity building funds. 

(a) Capacity building (CB) funds are 

funds that HUD may provide to an 

agency with interim certification. 

(b) CB funds will be provided in a 

fixed annual amount to be utilized for 

the eligible activities established 

pursuant to § 115.303. When the fixed 

annual amount will not adequately 

compensate an agency in its first year of 

participation in the FHAP due to the 

large number of fair housing complaints 

that the agency reasonably anticipates 

processing, HUD may provide the 

agency with additional funds. 

(c) HUD may provide CB funds during 

an agency’s first three years of 

participation in the FHAP. However, in 

the second and third year of the 

agency’s participation in the FHAP, 

HUD has the option to permit the 

agency to receive contribution funds 

under § 115.304, instead of CB funds. 

(d) In order to receive CB funding, 

agencies must submit a statement of 

work prior to the signing of the 

cooperative agreement. The statement of 

work must identify: 

(1) The objectives and activities to be 

carried out with the CB funds received; 

(2) A plan for training all of the 

agency’s employees involved in the 

administration of the agency’s fair 

housing law; 

(3) A statement of the agency’s 

intention to participate in HUDsponsored training in accordance with 

the training requirements set out in the 

cooperative agreement; 

(4) A description of the agency’s 

complaint processing data and 

information system, or, alternatively, 

whether the agency plans to use CB 

funds to purchase and install a data 

system; 

(5) A description of any other fair 

housing activities that the agency will 

undertake with its CB funds. All such 

activities must address matters affecting 

fair housing enforcement that are 

cognizable under the Fair Housing Act. 

Any activities that do not address the 

implementation of the agency’s fair 

housing law, and that are therefore not 

cognizable under the Fair Housing Act, 

will be disapproved. 

§ 115.303 Eligible activities for capacity 

building funds. 

The primary purposes of capacitybuilding funding are to provide for 

complaint activities and to support 

activities that produce increased 

awareness of fair housing rights and 

remedies. All such activities must 

support the agency’s administration and 

enforcement of its fair housing law and 

address matters affecting fair housing 

that are cognizable under the Fair 

Housing Act. 

§ 115.304 Agencies eligible for 

contributions funds. 

(a) An agency that has received CB 

funds for one to three consecutive years 

may be eligible for contributions 

funding. Contributions funding consists 

of five categories: 

(1) Complaint processing (CP) funds; 


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(2) Special enforcement effort (SEE) 

funds (see § 115.305); 

(3) Training funds (see § 115.306); 

(4) Administrative cost (AC) funds; 

and 

(5) Partnership (P) funds. 

(b) CP funds. (1) Agencies receiving 

CP funds will receive such support 

based solely on the number of 

complaints processed by the agency and 

accepted for payment by the FHEO 

regional director during a consecutive, 

specifically identified, 12-month period. 

The 12-month period will be identified 

in the cooperative agreement between 

HUD and the agency. The FHEO 

regional office shall determine whether 

or not cases are acceptably processed 

based on requirements enumerated in 

the cooperative agreement and its 

attachments/appendices, performance 

standards set forth in 24 CFR 115.206, 

and provisions of the interim agreement 

or MOU. 

(2) The amount of funding to agencies 

that are new to contributions funding 

will be based on the number of 

complaints acceptably processed by the 

agency during the specifically identified 

12-month period preceding the signing 

of the cooperative agreement. 

(c) AC funds. (1) Agencies that 

acceptably process 100 or more cases 

will receive no less than 10 percent of 

the agency’s total FHAP payment 

amount for the preceding year, in 

addition to CP funds, contingent on 

fiscal year appropriations. Agencies that 

acceptably process fewer than 100 cases 

will receive a flat rate, contingent on 

fiscal year appropriations. 

(2) Agencies will be required to 

provide HUD with a statement of how 

they intend to use the AC funds. HUD 

may require that some or all AC funding 

be directed to activities designed to 

create, modify, or improve local, 

regional, or national information 

systems concerning fair housing matters 

(including the purchase of state-of-theart computer systems, obtaining and 

maintaining Internet access, etc.). 

(d) P funds. The purpose of P funds 

is for an agency participating in the 

FHAP to utilize the services of 

individuals and/or public, private, forprofit, or not-for-profit organizations 

that have expertise needed to effectively 

carry out the provisions of the agency’s 

fair housing law. P funds are fixed 

amounts and shall be allocated based on 

the FHAP appropriation. Agencies must 

consult with the CAO and GTR in 

identifying appropriate usage of P funds 

for the geographical area that the agency 

services. Some examples of proper P 

fund usage include, but are not limited 

to: 

(1) Contracting with qualified 

organizations to conduct fair housing 

testing in appropriate cases; 

(2) Hiring experienced, temporary 

staff to assist in the investigation of 

complex or aged cases; 

(3) Partnering with grassroots, faithbased or other community-based 

organizations to conduct education and 

outreach to people of different 

backgrounds on how to live together 

peacefully in the same housing 

complex, neighborhood, or community; 

(4) Contracting with individuals 

outside the agency who have special 

expertise needed for the investigation of 

fair housing cases (e.g., architects for 

design and construction cases or 

qualified individuals from colleges and 

universities for the development of data 

and statistical analyses). 

§ 115.305 Special enforcement effort (SEE) 

funds. 

(a) SEE funds are funds that HUD may 

provide to an agency to enhance 

enforcement activities of the agency’s 

fair housing law. SEE funds will be a 

maximum of 20 percent of the agency’s 

total FHAP cooperative agreement for 

the previous contract year, based on 

approval of eligible activity or activities, 

and contingent upon the appropriation 

of funds. All agencies receiving 

contributions funds are eligible to 

receive SEE funds if they meet three of 

the six criteria set out in paragraphs 

(a)(1) through (a)(6) of this section: 

(1) The agency enforced a subpoena or 

made use of its prompt judicial action 

authority within the past year; 

(2) The agency has held at least one 

administrative hearing or has had at 

least one case on a court’s docket for 

civil proceedings during the past year; 

(3) At least ten percent of the agency’s 

fair housing caseload resulted in written 

conciliation agreements providing 

monetary relief for the complainant as 

well as remedial action, monitoring, 

reporting, and public interest relief 

provisions; 

(4) The agency has had in the most 

recent three years, or is currently 

engaged in, at least one major fair 

housing systemic investigation requiring 

an exceptional amount of funds 

expenditure; 

(5) The agency’s administration of its 

fair housing law received meritorious 

mention for its fair housing complaint 

processing or other fair housing 

activities that were innovative. The 

meritorious mention criterion may be 

met by an agency’s successful fair 

housing work being identified and/or 

published by a reputable source. 

Examples of meritorious mention 

include, but are not limited to: 

(i) An article in a minority newspaper 

or a newspaper of general circulation 

that identifies the agency’s role in the 

successful resolution of a housing 

discrimination complaint; 

(ii) A letter from a sponsoring 

organization of a fair housing 

conference or symposium that identifies 

the agency’s successful participation 

and presentation at the conference or 

symposium; 

(iii) A letter of praise, proclamation, 

or other formal documentation from the 

mayor, county executive, or governor 

recognizing the fair housing 

achievement of the agency. 

(6) The agency has completed the 

investigation of at least 10 fair housing 

complaints during the previous funding 

year. 

(b) Regardless of whether an agency 

meets the eligibility criteria set forth in 

paragraph (a) of this section, an agency 

is ineligible for SEE funds if: 

(1) Twenty percent or more of an 

agency’s fair housing complaints result 

in administrative closures; or 

(2) The agency is currently on a PIP, 

or its interim certification or 

certification has been suspended during 

the federal fiscal year in which SEE 

funds are sought. 

(c) SEE funding amounts are subject 

to the FHAP appropriation by Congress 

and will be described in writing in the 

cooperative agreements annually. HUD 

will periodically publish a list of 

activities eligible for SEE funding in the 

Federal Register. 

§ 115.306 Training funds. 

(a) All agencies, including agencies 

that receive CB funds, are eligible to 

receive training funds. Training funds 

are fixed amounts based on the number 

of agency employees to be trained. 

Training funds shall be allocated based 

on the FHAP appropriation. Training 

funds may be used only for HUDapproved or HUD-sponsored training. 

Agency-initiated training or other 

formalized training may be included in 

this category. However, such training 

must first be approved by the CAO and 

the GTR. Specifics on the amount of 

training funds that an agency will 

receive and, if applicable, amounts that 

may be deducted, will be set out in the 

cooperative agreement each year. 

(b) Each agency must send staff to 

mandatory FHAP training sponsored by 

HUD, including, but not necessarily 

limited to, the National Fair Housing 

Training Academy and the National Fair 

Housing Policy Conference. If the 

agency does not participate in 

mandatory HUD-approved and HUDsponsored training, training funds will 

be deducted from the agency’s overall 


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training amount. All staff of the agency 

responsible for the administration and 

enforcement of the fair housing law 

must participate in HUD-approved or 

HUD-sponsored training each year. 

§ 115.307 Requirements for participation 

in the FHAP; Corrective and remedial action 

for failing to comply with requirements. 

(a) Agencies that participate in the 

FHAP must meet the requirements 

enumerated in this section. The FHEO 

regional office shall review the agency’s 

compliance with the requirements of 

this section when it conducts on-site 

performance assessments in accordance 

with § 115.206. The requirements for 

participation in the FHAP are as 

follows: 

(1) The agency must conform to all 

reporting and record maintenance 

requirements set forth in § 115.308, as 

well as any additional reporting and 

record maintenance requirements 

identified by the Assistant Secretary. 

(2) The agency must agree to on-site 

technical assistance and guidance and 

implementation of corrective actions set 

out by the Department in response to 

deficiencies found during the technical 

assistance or performance assessment 

evaluations of the agency’s operations. 

(3) The agency must use the 

Department’s official complaint data 

information system and must input all 

relevant data and information into the 

system in a timely manner. 

(4) The agency must agree to 

implement and adhere to policies and 

procedures (as the agency’s laws allow) 

provided to the agency by the Assistant 

Secretary, including, but not limited to, 

guidance on investigative techniques, 

case file preparation and organization, 

and implementation of data elements for 

complaint tracking. 

(5) If an agency that participates in the 

FHAP enforces antidiscrimination laws 

other than a fair housing law (e.g., 

administration of a fair employment 

law), the agency must annually provide 

a certification to HUD stating that it 

spends at least 20 percent of its total 

annual budget on fair housing activities. 

The term ‘‘total annual budget,’’ as used 

in this subsection, means the entire 

budget assigned by the jurisdiction to 

the agency for enforcing and 

administering antidiscrimination laws, 

but does not include FHAP funds. 

(6) The agency may not co-mingle 

FHAP funds with other funds. FHAP 

funds must be segregated from the 

agency’s and the state or local 

government’s other funds and must be 

used for the purpose that HUD provided 

the funds. 

(7) An agency may not unilaterally 

reduce the level of financial resources 

currently committed to fair housing 

activities (budget and staff reductions or 

other actions outside the control of the 

agency will not, alone, result in a 

negative determination for the agency’s 

participation in the FHAP). 

(8) The agency must comply with the 

provisions, certifications, and 

assurances required in any and all 

written agreements executed by the 

agency and the Department related to 

participation in the FHAP, including, 

but not limited to, the cooperative 

agreement. 

(9) The agency must draw down its 

funds in a timely manner. 

(10) The agency must be audited and 

receive copies of the audit reports in 

accordance with applicable rules and 

regulations of the state and local 

government in which it is located. 

(11) The agency must participate in 

all required training, as described in 

§ 115.306(b). 

(12) If the agency subcontracts any 

activity for which the subcontractor will 

receive FHAP funds, the agency must 

conform to the subcontracting 

requirements of § 115.309. 

(13) If the agency receives a complaint 

that may implicate the First 

Amendment of the United States 

Constitution, then the agency must 

conform to the requirements of 

§ 115.310. 

(14) If the agency utilizes FHAP funds 

to conduct fair housing testing, then the 

agency must conform to the 

requirements of § 115.311. 

(b) Corrective and remedial action for 

failing to comply with requirements. 

The agency’s refusal to provide 

information, assist in implementation, 

or carry out the requirements of this 

section may result in the denial or 

interruption of its receipt of FHAP 

funds. Prior to denying or interrupting 

an agency’s receipt of FHAP funds, HUD 

will put the agency on notice of its 

intent to deny or interrupt. HUD will 

identify its rationale for the denial or 

interruption and provide the agency 

with an opportunity to respond within 

a reasonable period of time. If, within 

the time period requested, the agency 

does not provide information or 

documentation indicating that the 

requirement(s) enumerated in this 

section is/are met, HUD may proceed 

with the denial or interruption of FHAP 

funds. If, at any time following the 

denial or interruption, HUD learns that 

the agency meets the requirements 

enumerated in this section, HUD may 

opt to reinstate the agency’s receipt of 

FHAP funds. 

§ 115.308 Reporting and recordkeeping 

requirements. 

(a) The agency shall establish and 

maintain records demonstrating: 

(1) Its financial administration of 

FHAP funds; and 

(2) Its performance under the FHAP. 

(b) The agency will provide to the 

FHEO regional director reports 

maintained pursuant to paragraph (a) of 

this section. The agency will provide 

reports to the FHEO regional director in 

accordance with the frequency and 

content requirements identified in the 

cooperative agreement. In addition, the 

agency will provide reports on the final 

status of complaints following 

reasonable cause findings, in 

accordance with Performance Standard 

8 identified in § 115.206. 

(c) The agency will permit reasonable 

public access to its records consistent 

with the jurisdiction’s requirements for 

release of information. Documents 

relevant to the agency’s participation in 

the FHAP must be made available at the 

agency’s office during normal working 

hours (except that documents with 

respect to ongoing fair housing 

complaint investigations are exempt 

from public review consistent with 

federal and/or state law). 

(d) The Secretary, Inspector General 

of HUD, and the Comptroller General of 

the United States or any of their duly 

authorized representatives shall have 

access to all pertinent books, accounts, 

reports, files, and other payments for 

surveys, audits, examinations, excerpts, 

and transcripts as they relate to the 

agency’s participation in FHAP. 

(e) All files will be kept in such 

fashion as to permit audits under 

applicable Office of Management and 

Budget circulars, procurement 

regulations and guidelines, and the 

Single Audit requirements for state and 

local agencies. 

§ 115.309 Subcontracting under the FHAP. 

If an agency subcontracts to a public 

or private organization any activity for 

which the organization will receive 

FHAP funds, the agency must ensure 

and certify in writing that the 

organization is: 

(a) Using services, facilities, and 

electronic information technologies that 

are accessible in accordance with the 

Americans with Disability Act (ADA) 

(42 U.S.C. 12101), Section 504 of the 

1973 Rehabilitation Act (29 U.S.C. 701), 

and Section 508(a)(1) of the 

Rehabilitation Act amendments of 1998; 

(b) Complying with the standards of 

Section 3 of the Housing and Urban 

Development Act of 1968 (42 U.S.C. 

1441); 


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(c) Affirmatively furthering fair 

housing in the provision of housing and 

housing-related services; and 

(d) Not presently debarred, 

suspended, proposed for debarment, 

declared ineligible, or voluntarily 

excluded from covered transactions by 

any federal debarment or agency. 

§ 115.310 FHAP and the First Amendment. 

None of the funding made available 

under the FHAP may be used to 

investigate or prosecute any activity 

engaged in by one or more persons, 

including the filing or maintaining of a 

non-frivolous legal action, that may be 

protected by the First Amendment of 

the United States Constitution. HUD 

guidance is available that sets forth the 

procedures HUD will follow when it is 

asked to accept and dual-file a case that 

may implicate the First Amendment of 

the United States Constitution. 

§ 115.311 Testing. 

The following requirements apply to 

testing activities funded under the 

FHAP: 

(a) The testing must be done in 

accordance with a HUD-approved 

testing methodology; 

(b) Testers must not have prior felony 

convictions or convictions of any crimes 

involving fraud or perjury. 

(c) Testers must receive training or be 

experienced in testing procedures and 

techniques. 

(d) Testers and the organizations 

conducting tests, and the employees and 

agents of these organizations may not: 

(1) Have an economic interest in the 

outcome of the test, without prejudice to 

the right of any person or entity to 

recover damages for any cognizable 

injury; 

(2) Be a relative or acquaintance of 

any party in a case; 

(3) Have had any employment or 

other affiliation, within five years, with 

the person or organization to be tested; 

or 

(4) Be a competitor of the person or 

organization to be tested in the listing, 

rental, sale, or financing of real estate. 

Dated: April 5, 2007. 

Kim Kendrick, 

Assistant Secretary for Fair Housing and 

Equal Opportunity. 

[FR Doc. E7–7087 Filed 4–13–07; 8:45 am] 

BILLING CODE 4210–67–P 


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