[Federal Register Volume 62, Number 71 (Monday, April 14, 1997)]
[Notices]
[Pages 18242-18260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9547]



[[Page 18241]]

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Part VI





Department of Housing and Urban Development





_______________________________________________________________________



Notice of Funding Availability for the Revitalization of Severely 
Distressed Public Housing; Fiscal Year 1997

Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / 
Notices

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4175-N-01]


Notice of Funding Availability (NOFA) for the Revitalization of 
Severely Distressed Public Housing (HOPE VI); Fiscal Year 1997

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Notice of funding availability (NOFA) for Fiscal Year (FY) 
1997.

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SUMMARY: This notice announces the availability of approximately $447.5 
million in funding for the Revitalization of Severely Distressed Public 
Housing, hereafter referred to as the HOPE VI program, as provided in 
the Departments of Veterans Affairs and Housing and Urban Development, 
and Independent Agencies Appropriations Act, 1997. The 1997 
Appropriations Act continued funding of the HOPE VI program for the 
purpose of enabling the demolition of obsolete public housing 
developments or portions thereof, the revitalization (where 
appropriate) of sites (including remaining public housing units) on 
which such developments are located, replacement housing that will 
avoid or lessen concentrations of very low-income families, Section 8 
tenant-based assistance, and for providing replacement housing and 
assisting tenants to be displaced by the demolition. The HOPE VI 
program will fund demolition, the capital costs of reconstruction, 
rehabilitation and other physical improvements, the provision of 
replacement housing, management improvements, resident self-sufficiency 
programs, and tenant-based assistance.
    This NOFA contains information on eligible applicants, program 
requirements, evaluation factors, and application submission 
requirements, solely for the funding of revitalization and replacement 
programs with or without demolition. Information about the funding for 
Section 8 tenant-based assistance, and for demolition without 
revitalization, will be provided by separate notices.

DATES: Applications must be received at HUD Headquarters and the Field 
Office on or before 4 p.m. eastern time, except as expressly provided 
below, on July 18, 1997. The application deadline for each original 
application delivered to HUD Headquarters is firm as to date and hour, 
except as expressly provided herein. Public housing agencies (PHAs) 
should take this into account and submit applications as early as 
possible to avoid the risk brought about by unanticipated delays or 
delivery-related problems. In particular, PHAs intending to mail 
applications must provide sufficient time to permit delivery on or 
before the deadline date. HUD will disqualify and return to the 
applicant any application that it receives after the deadline date and 
time.
    Notwithstanding the foregoing, HUD will accept any application, the 
original of which was delivered to a U.S. Post Office or private mailer 
for expedited delivery, properly addressed to HUD Headquarters and 
fully paid for, no later than 12 noon local time on the day before it 
was due at HUD, for scheduled delivery prior to the deadline 
established above. If an application arrives at HUD Headquarters after 
the deadline date and time, and the applicant wishes to make a case 
that it delivered the application for expedited delivery on time, the 
applicant must document with an official receipt from the Post Office 
or private mailer that the application was received by 12 noon local 
time on the day before it was due at HUD.

ADDRESSES: An original of the completed application must be received at 
HUD Headquarters, 451 Seventh Street, SW, Room 4138, Washington, DC 
20410, Attention: Director, Office of Public Housing Investments. Two 
copies of the completed application must also be received at the 
appropriate HUD Field Office. Applications may be hand-delivered or 
mailed. HUD will not accept facsimile (fax), COD, or postage-due 
applications.

FOR FURTHER INFORMATION CONTACT: Mr. Milan Ozdinec, Director, Office of 
Urban Revitalization, Department of Housing and Urban Development, 451 
Seventh Street, SW, Room 4142, Washington, DC 20410; telephone (202) 
401-8812 (this is not a toll free number). Hearing-or speech-impaired 
individuals may access this number via TTY by calling the Federal 
Information Relay Service at 1-800-877-TDDY, which is a toll-free 
number. The NOFA is also available on the HUD Home Page at the World 
Wide Web at http://www.hud.gov. HUD will also post frequently asked 
questions and answers on the Home Page throughout the application 
preparation period.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Continuing Objectives of, and Changes to, the HOPE VI Program
II. Substantive Description
    A. Authority
    B. Eligible Applicants
    C. Definition of Obsolete Development
    D. Fund Availability
    E. Limitations on Grant Amount
    F. Other Grant Limitations
    G. Technical Assistance
    H. Failure to Proceed
    I. Total Development Costs
    J. Site and Neighborhood Standards
    K. Eligible Activities and Costs
III. Curable Technical Deficiencies
IV. Program Threshold Criteria
    A. Obsolescence
    B. Need for Funding
    C. Lessen Concentration
    D. Fair Housing
V. Application Evaluation Factors
    A. Urgency of Need for Revitalization
    B. Lessen Isolation of Low-Income Residents
    C. Encourage Resident Self-Sufficiency
    D. Property Management
    E. Local Impact
    F. Affirmatively Furthering Fair Housing
    G. Community and Partnerships
    H. Capability and Readiness
    I. Efficient Utilization of Federal Funding
    J. Feasibility and Sustainability
    K. Proposal Coherence and Integrity
VI. Application Submission Requirements
    A. Summary Statement of Plan and Objectives
    B. Existing Conditions
    C. Urgency of Need for Revitalization
    D. Description of Physical Revitalization Plan
    E. Applications for New Construction
    F. Self-Sufficiency Component
    G. Operation and Management Principles
    H. Local Impact
    I. Capability and Readiness
    J. Community and Partnerships
    K. Resources
    L. Program Financing and Sustainability
    M. Grant Limitations
    N. Need for Funding
    O. Section 8 Cost Comparison
    P. Affirmatively Furthering Fair Housing
    Q. Required Certifications
VII. Application Processing and Grant Administration
    A. Application Evaluation
    B. Reduction in Requested Grant Amount
    C. Corrections to Deficient Applications
    D. Notification of Funding Decisions
    E. Grant Agreement/ACC Amendment
VIII. Applicability of Program Requirements
IX. Applicability of Other Federal Requirements
X. Findings and Certifications

I. Continuing Objectives of, and Changes to, the HOPE VI Program

    In the Omnibus Consolidated Rescissions and Appropriations Act of 
1996 (Pub. L. 104-134; approved April 26, 1996) (OCRA), Congress 
continued efforts to deal with obsolete and severely distressed public 
housing which had been previously funded under the name ``Urban 
Revitalization Demonstration'' or ``URD,'' and popularly referred to as 
``HOPE VI.'' OCRA made significant changes to HOPE VI by, among other 
things, expanding eligibility to all PHAs and eliminating various 
restrictive features

[[Page 18243]]

of previous URD legislation. The Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agencies Appropriations 
Act, 1997 (Pub. L. 104-204; approved September 26, 1996) (the 1997 
Appropriations Act) eliminates certain mandated selection criteria 
contained in OCRA and prohibits HUD from utilizing rating preferences 
which grant competitive advantage in awards to settle litigation or pay 
judgments. The 1997 Appropriations Act also provides that fiscal year 
(FY) 1997 funds appropriated for this program shall not be used for any 
purpose that is not authorized in the U.S. Housing Act of 1937, and the 
HUD Appropriations Acts for fiscal years 1993, 1994, 1995, 1996, and 
1997.
    In the FY 1996 NOFA for the HOPE VI program (published on July 22, 
1996 (61 FR 38024)), HUD identified certain elements of public housing 
transformation as key to HOPE VI, and sought to select applications 
which would further that transformation, as follows:
    <bullet> Changing the physical shape of public housing.
    <bullet> Establishing positive incentives.
    <bullet> Enforcing tough expectations.
    <bullet> Lessening concentrations of poverty.
    <bullet> Forging partnerships.
    HUD believes that the FY 1996 funding process was successful in 
selecting applicants likely to achieve radical transformations, from 
some of the most obsolete and distressed projects in the entire 
inventory to models of community revitalization. However, as the 
program evolves it should also encompass appropriate revitalization 
strategies at obsolete and distressed developments where revitalization 
may be accomplished without extensive demolition, and more economical 
rehabilitation strategies may be available.
    HOPE VI was originally conceived as a demonstration program which 
would promote fundamental changes in the way PHAs developed and 
administered public housing, and in the way HUD related to those PHAs. 
It has succeeded remarkably in those respects. Now, however, there is a 
reduced need for HUD to ``jump start'' demolition and revitalization. 
With major efforts underway in all the largest and most troubled PHAs, 
some of which may be at their capacity for simultaneous development 
projects, HUD may appropriately turn to a broader group of 
developments. HOPE VI is the sole source of substantial and 
concentrated capital assistance to PHAs of all sizes and 
characteristics whose level of formula modernization funding cannot 
support revitalization or major reconfiguration of an obsolete 
development. Capable authorities which nevertheless have inadequate 
funds to prevent properties from becoming distressed should not be 
excluded from HOPE VI funding. This was certainly one purpose of 
Congress when, in FY 1996, the eligibility restrictions to the program 
were eliminated.
    Notwithstanding this widening focus, HOPE VI is not returning to 
the Major Reconstruction of Obsolete Projects (MROP) program. The 
essential requirement of HOPE VI remains that each revitalization 
effort promise a transformation of the physical site and the social 
dynamics of life for low-income residents at that site, or in any off-
site replacement housing.
    Throughout the HOPE VI selection and grant administration 
processes, HUD is placing even greater emphasis on plan designs, 
program management structures, performance measures, and the timely 
expenditure of grant funds, which will make public housing disciplined 
to perform with similar efficiency as the private sector. HUD will 
implement an aggressive approach to ensure quality and promptness in 
the HOPE VI program. HUD will contract with one or more private program 
and construction management entities to assure that HOPE VI development 
activities are carried out in an expeditious and cost-effective manner 
and that grantees are producing quality products. Each grantee will 
have to demonstrate that its HOPE VI team is capable of administering a 
major revitalization effort and that the team is ready to proceed 
immediately upon receipt of the grant. Should a PHA fail to make this 
demonstration to the satisfaction of HUD and its program oversight 
manager, HUD will direct corrective actions as a condition of retaining 
the grant. HUD's program oversight contractor will also represent HUD 
in such on-site inspections as HUD deems necessary to assure quality 
design and construction.
    Each grantee will also be held to strict schedules and performance 
measures. HUD will require grantees to execute construction contracts 
within a specified period. Failure to obligate construction funds 
within this timeframe will result in the withdrawal of grant funds. 
Once the revitalization has commenced, each grantee will also be held 
to interim performance goals and may be required to complete physical 
activities within four years of execution of the grant agreement. HUD 
will take into consideration those delays caused by factors beyond the 
control of the grantee when enforcing these schedules. The precise 
schedules and performance measures will be set forth in the HOPE VI 
grant agreement.
    HUD has also factored into the design of this FY 1997 NOFA 
considerations relating to section 202 of OCRA (42 U.S.C. 1437l note) 
known as the Mandatory Conversion Program. Congress there indicated 
that the cost and effectiveness of revitalization should be compared 
with those respective elements of tenant-based assistance. This is a 
relevant inquiry, particularly in rationing the scarce resource of 
revitalization dollars.
    Finally, Congress has eliminated the FY 1996 statutory selection 
criteria and has directed the elimination of other selection criteria 
utilized by HUD in FY 1996.
    For all these reasons, HUD has modified the FY 1996 NOFA. While the 
overall performance goals remain those set forth in FY 1996, this FY 
1997 NOFA has been revised to better select those applicants which can 
most promptly and effectively use HOPE VI dollars to make a significant 
positive change in the life of each resident and the life of the 
neighborhood.
    Demolition is not a required component of this FY 1997 HOPE VI 
competition. HUD recognizes that the elimination of this requirement 
and the broadening of the definition of obsolescence may encourage even 
more applicants to apply than in the FY 1996 round. Applicants are 
cautioned that the preparation of a serious HOPE VI application is 
time-consuming and expensive and may generate local expectations which 
cannot be met if funding is not awarded. Only a fraction of the FY 1996 
applicants were funded. Changes in this year's NOFA are intended to 
widen the definition of who may be assisted, but will not alter the 
fact that only applicants with strong showings of need, capability, 
vision, and impact will be selected. Potential applicants are 
encouraged to conduct a thorough and realistic up-front analysis of 
their chances before preparing an application.
    Among the more significant revisions are the following:
    <bullet> HUD has determined to use a definition of ``obsolete'' 
derived from the MROP authorizing statute, with modifications for 
program consistency with section 202 of OCRA and current practice.
    <bullet> This NOFA continues to use as a rating factor the relative 
urgency of pursuing revitalization at each site. HUD has carefully 
considered comments it has received to the effect that by expanding 
program eligibility,

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Congress intended that all obsolete sites should be given equal 
consideration and that local standards of distress should govern, not 
national ones. HUD has concluded, however, based on statutory language 
and context, that the aims of the HOPE VI program must continue to 
include the elimination of the nation's most severely distressed 
developments and immediate attention to those developments offering the 
worst quality of life for their residents and neighbors. Nonetheless, 
HUD has reformulated the relevant rating factor so as more clearly not 
to reward PHAs whose bad management is creating or exacerbating 
distress, nor penalize PHAs which may have managed to preserve 
relatively decent living conditions even as distress grows imminent. 
Moreover, an applicant whose needs are pressing, but not yet 
overwhelming, may still receive funding based on a particularly strong 
showing on other rating factors, while a PHA with an enormously 
distressed site, but little vision or capacity will not be selected.
    <bullet> Grants will be limited in amount to applicable Total 
Development Cost (TDC) limits, plus amounts for self-sufficiency and 
for excess demolition costs, as more fully described in Section II.E. 
below. While HUD recognizes that different PHAs face different 
situations, and that a successful revitalization may require 
expenditures in excess of cost limits, prior program experience has 
established the difficulties in distinguishing among necessary, 
optional, and excessive costs. The risk of inadvertently rewarding 
excess or penalizing thrift increases where rating factors encourage 
expansive visions of what will be accomplished. Given the flexibility 
of modernization funding under current law, HUD believes it is fairer 
to fund a predictable amount with HOPE VI dollars and allow PHAs to 
provide or arrange for such additional funding as they may prudently 
require. Demolition costs are allowed separately, however, because they 
depend on the size and type of existing structures, and will not vary 
with the ambition of the applicant.
    <bullet> An applicant's need for funding must be demonstrated as a 
threshold matter, with reference to its overall capital needs and 
resources.
    <bullet> A Section 8 cost comparison is included, and applicants 
will be rated on the degree to which their proposed expenditure of 
Federal funds exceeds that which would be incurred under a scenario of 
demolition with Section 8 replacement. This factor, derived from 
section 202 of OCRA and its implementing notice (published in the 
Federal Register on September 26, 1996 (61 FR 50632)), will favor 
applicants with cost-efficient strategies. The NOFA's methodology for 
measuring this factor is essentially similar to that contained in the 
section 202 notice, but is worded so as to apply more directly to, and 
permit more exact comparisons between, fact patterns expected under 
this NOFA.
    HUD has not included an explicit requirement, found in HUD's 
section 202 implementing notice, that applicants who ``fail'' the 
Section 8 cost comparison demonstrate special circumstances why 
revitalization is desirable. This FY 1997 HOPE VI NOFA as a whole 
contains various threshold and evaluation criteria which, if satisfied, 
constitute such special circumstances, and on which an applicant must 
score highly to be selected for funding. A special section tracking the 
language from the section 202 notice directly would be duplicative.
    <bullet> An applicant may target for revitalization a development 
for which demolition has already commenced or occurred even if tenant-
based assistance for relocation or replacement has already been awarded 
by HUD. HUD does not want to encourage authorities to preserve obsolete 
or distressed housing, in hopes of securing HOPE VI assistance in the 
future. A PHA which in good faith decided to demolish, in connection 
with the FY 1996 funding round or otherwise, should not be penalized by 
being excluded from this competition.
    <bullet> HUD has eliminated the categorization of PHAs by size, and 
has set a grant(s) limit of $35,000,000 per authority. The FY 1996 
results demonstrated that size categories were not necessary to obtain 
a fair distribution, which occurred naturally under the rating system 
used. Smaller authorities may have large obsolete developments, and 
other factors in this year's NOFA will disfavor a PHA which requests an 
inflated grant amount.
    <bullet> This NOFA takes into explicit consideration the extent to 
which a proposal will affirmatively further fair housing. While this 
objective flows directly from HOPE VI concepts of transformation and 
revitalization, HUD wishes both to emphasize the importance to all 
applicants of giving civil rights obligations explicit consideration, 
and to discipline its own attention to this factor. HUD has also 
emphasized the importance it attaches to carrying out the HOPE VI 
program in ways that directly benefit persons with disabilities. 
Developments constructed or rehabilitated with HOPE VI funds must meet 
the accessibility requirements contained in various civil rights 
statutes. In addition, HUD strongly encourages PHAs to develop housing 
that is ``visitable'' by persons with mobility impairments. In view of 
these priorities, HUD is asking applicants through various parts of 
this NOFA to address these issues in their applications.
    <bullet> For FY 1997, Congress did not separately fund Section 8 
tenant-based assistance for replacement housing, but included it within 
the $550 million appropriated for HOPE VI. HUD will set aside, and 
award through a separate process, funding for Section 8 tenant-based 
assistance for replacement housing with respect to units which are to 
be or have been demolished, but for which the PHAs are not seeking and 
have not been awarded ``hard'' replacement funding. PHAs are strongly 
encouraged to plan strategically and utilize Section 8 replacement to a 
considerable degree.
    HUD has set aside up to $30 million for demolition grants alone, a 
reduction from FY 1996, and will also award these funds by a separate 
process. Having utilized FY 1996 funding to address a number of 
expensive demolition situations for which PHA funding was unavailable, 
and having no indication as yet that section 202 of OCRA will generate 
immediate demolition decisions in the absence of hard replacement 
housing, HUD believes the lesser amount will suffice to address 
critical demolitions which would otherwise be impossible, while 
concentrating scarce funding on critical housing preservation and 
reconstruction efforts.
Promoting Comprehensive Approaches to Housing and Community Development
    HUD is interested in promoting comprehensive, coordinated 
approaches to housing and community development. Economic development, 
community development, public housing revitalization, homeownership, 
assisted housing for special needs populations, supportive services, 
and welfare-to-work initiatives can work better if linked at the local 
level. Toward this end, HUD in recent years has developed the 
Consolidated Planning process designed to help communities undertake 
such approaches.
    In this spirit, it may be helpful for applicants under this NOFA to 
be aware of other related HUD NOFAs that have recently been published 
or are expected to be published in the near future. By reviewing these 
NOFAs with respect to their program purposes and the

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eligibility of applicants and activities, applicants may be able to 
relate the activities proposed for funding under this NOFA to the 
recent and upcoming NOFAs and to the community's Consolidated Plan.
    The list of NOFAs related to housing revitalization that HUD 
expects to publish in the Federal Register within the next few weeks 
include the Comprehensive Improvement Assistance NOFA; the Lead-based 
Paint Hazard Reduction NOFA, the Public Housing Demolition NOFA, and 
the Notice of Funding for the Section 8 Rental Certificate and Voucher 
Programs. Additionally, HUD's NOFA for the Community Outreach 
Partnership Centers, published in the Federal Register on March 20, 
1997 (62 FR 13506), included HOPE VI projects in the list of HUD 
priority areas for which points will be awarded to an applicant whose 
research and outreach agenda is related to a HUD priority area.
    To foster comprehensive, coordinated approaches by communities, HUD 
intends for the remainder of FY 1997 to continue to alert applicants to 
upcoming and recent NOFAs as each NOFA is published. In addition, a 
complete schedule of NOFAs to be published during the fiscal year and 
those already published appears under the HUD Homepage on the Internet, 
which can be accessed at http://www.hud.gov/nofas.html. Additional 
steps on NOFA coordination may be considered for FY 1998.
    For help in obtaining a copy of your community's Consolidated Plan, 
please contact the community development office of your municipal 
government.

II. Substantive Description

A. Authority

    The funding made available under this NOFA is provided by the 
Departments of Veterans Affairs and Housing and Urban Development, and 
Independent Agencies Appropriations Act, 1997 (Pub. L. 104-204; 
approved September 26, 1996) (the 1997 Appropriations Act), under the 
heading ``Revitalization of Severely Distressed Public Housing.''

B. Eligible Applicants

    PHAs that own or operate public housing units are eligible to 
apply. Indian Housing Authorities are not eligible to apply.

C. Definition of Obsolete Development

    For purposes of this competition, an ``obsolete'' public housing 
development or portion thereof is defined as one:
    1. (a) Which has design or marketability problems resulting in 
vacancy of more than 10 percent of the units not due for funded, on-
schedule modernization; or (b) Which has an occupancy density or 
building height that is significantly in excess of that which prevails 
in the neighborhood in which the project is located, a bedroom 
configuration that could be altered to better serve the needs of 
families seeking occupancy in dwellings of the public housing agency, 
significant security problems in and around the project, or significant 
physical deterioration or inefficient energy and utility systems; and
    2. For which the cost of redesign, rehabilitation or reconstruction 
(including any costs for lead-based paint abatement activities) exceeds 
70 percent of the total development cost limits for new construction of 
similar units in the area.

D. Fund Availability

    This NOFA announces the availability of at least $447.5 million in 
funding for the Revitalization of Severely Distressed Public Housing, 
hereafter referred to as the HOPE VI program, as provided in the 1997 
Appropriations Act. The 1997 Appropriations Act provided $550 million 
in funding for the HOPE VI Program. HUD will reserve $2.5 million for 
technical assistance. Up to $70 million will be set aside and awarded 
pursuant to a separate funding process for Section 8 tenant-based 
assistance. Up to $30 million will be set aside and awarded pursuant to 
a separate funding process for HOPE VI demolition-only grants.
    Any FY 1997 funds which are reserved but not awarded under the 
Section 8 and demolition award processes, together with any FY 1996 
funds which are not obligated in accordance with their initial 
reservation, will be (1) added to the funds made available hereunder; 
(2) awarded pursuant to this NOFA to the most highly rated applicant(s) 
which did not initially receive funding; (3) utilized for amendment 
funding; or (4) carried over to a subsequent competitive funding round. 
A PHA may both apply for ``hard'' revitalization/replacement funding 
under this NOFA and replacement housing under the Section 8 award 
process, but may not be awarded duplicate funding (replacing the same 
units) under the two processes.

E. Limitations on Grant Amount

    A PHA may submit one or two separate applications in response to 
this NOFA so long as the total amount requested in one or both 
applications does not exceed $35 million. Each application submitted by 
a PHA is limited in amount to the sum of the following three 
components:
    The sum of (a) TDCs up to, but not to exceed 100 percent of, HUD's 
published TDC limits for the costs of demolition and new construction 
multiplied by the number of public housing Replacement Units (as 
defined in Section II.K.3.a of this NOFA); and (b) 90 percent of such 
TDC limits multiplied by the number of public housing units to be 
substantially rehabilitated; but in no event to exceed $25,000,000. 
HUD's most recent TDC limits were issued as PIH 96-15 (HA) on April 3, 
1996. Total Development Cost is defined as those costs for planning 
(including proposal preparation), administration, site acquisition, 
construction and equipment, interest and carrying charges, relocation, 
demolition, on-site streets and utilities, non-dwelling facilities, a 
contingency allowance, insurance premiums, off-site facilities, any 
initial operating deficit and other costs necessary to develop the 
project. The maximum total development cost excludes costs funded from 
donations.
    2. No more than $5,000 per unit, based on the higher of (a) the 
number of currently occupied units in the project to be revitalized; or 
(b) the number of Replacement Units (as defined in Section II.K.3.a of 
this NOFA) after revitalization, as an allowance for a self-sufficiency 
program.
    3. A percentage of the actual, necessary, and reasonable cost for 
the demolition of the targeted existing development or any portion 
thereof. The percentage shall be derived from a ratio, the denominator 
of which is the total number of units being demolished and the 
numerator of which is the difference between the total number 
demolished and the number of Replacement Units. For example, if a 100 
unit development is to be demolished and 75 Replacement Units are to be 
constructed, the applicant would be eligible for 25 percent of 
demolition costs under this component. Costs includable hereunder are 
resident relocation, demolition, environmental remediation and site 
restoration to an unimproved state.
    This Section (II.E.) is intended solely as a limit on grant amount, 
and does not vary HUD TDC rules applicable to public housing 
developments. A grantee may spend additional sums on resident self-
sufficiency using donations, HUD funds made available for that purpose, 
or other PHA funds. A grantee may spend more than TDC limits on costs 
of physical revitalization where permitted by HUD in accordance with 24 
CFR 941.306 (as issued in an interim rule published on July 22, 1996 
(61 FR 38014, 38019)), so long as it funds the

[[Page 18246]]

excess costs with non-HOPE VI funds. However, if an applicant seeks 
HOPE VI funds as permitted herein to supplement a prior uncompleted 
HOPE VI, Development, MROP or Comprehensive Improvement Assistance 
Program (CIAP) grant, the per unit grant limitations set forth herein 
will apply to the sum of all such targeted grant funds.
    For example, an applicant which had previously received $15 million 
from HUD specifically to address a 600 unit development (with 50 
percent occupancy), but had not yet done so, could now apply for a HOPE 
VI grant. If the applicant proposed to construct 300 Replacement Units 
at an average TDC of $80,000, the maximum HOPE VI grant would be 300 
times $85,000 or $25.5 million (TDC plus $5,000/unit), minus the $15 
million already in hand, which equals $10.5 million, plus the cost of 
demolishing the 300 unreplaced units.
    An applicant must document compliance with this provision in 
Exhibit M (Grant Limitations).

F. Other Grant Limitations

    1. As stated in Section II.E. above, a PHA may submit one or two 
separate applications in response to this NOFA so long as the total 
amount requested in both applications does not exceed $35 million. Each 
application may request funds for only one public housing development. 
Contiguous developments will be considered one development for all 
purposes in this NOFA. If a PHA submits two applications, each 
application will be reviewed separately. There is no minimum or maximum 
number of housing units for which funds may be requested in a single 
application.
    2. A PHA may not request replacement funding for units for which 
the PHA has already been awarded prior ``hard'' replacement funding 
from HUD. An applicant must document compliance with this provision in 
Exhibit M (Grant Limitations), and must disclose all prior ``hard'' 
replacement assistance received from HUD with respect to the targeted 
development.
    3. PHAs with previous HOPE VI grants may not seek FY 1997 HOPE VI 
funding to supplement the previous grants in treating the units covered 
by the original grants. Such PHAs may, however, seek FY 1997 HOPE VI 
funding to demolish, revitalize or replace units in the same 
development that were not targeted units under the previous HOPE VI 
grant. A PHA which received prior years' HOPE VI funding in an amount 
less than requested, but which has not yet had a revitalization plan 
approved at the reduced funding level, will not be deemed in this award 
process to have yet targeted any particular units, and thus may apply 
for supplemental funding.
    4. PHAs with previously-awarded Development, MROP or CIAP funding 
that they believe to be inadequate for the revitalization of a targeted 
development, with insurance proceeds attributable to the development, 
or with previously-awarded HOPE VI funds subject to the limitation in 
paragraph 3 above, may apply for supplemental funding under this NOFA. 
HUD will evaluate these applications under the rating factors 
established by this NOFA. PHAs must demonstrate that funding already 
available to them is insufficient to assure a sustainable 
revitalization, and/or that the portion of a development that would be 
unaddressed by other funding in itself would qualify for a HOPE VI 
grant. An applicant that submits an application for an existing HOPE VI 
site (pursuant to the limitations in Section II.F.3. of this NOFA, 
above) that make a case now that the existing HOPE VI site is no longer 
sustainable, pursuant to this section, are cautioned that the existing 
HOPE VI grant may be subject to withdrawal if FY 1997 HOPE VI funds are 
not awarded.
    While such PHAs may receive grants of up to $35 million as provided 
in Section II.E. of this NOFA, in addition to previously received 
funds, they may not do so if the total of grant funds would violate the 
per unit limitations set out in Section II.E.1.
    An applicant must document compliance with this provision in 
Exhibit M (Grant Limitations), and must disclose all prior grant 
assistance received from HUD (HOPE VI, Development, MROP, or CIAP, or 
insurance proceeds) with respect to the targeted development.
    5. PHAs may use HOPE VI funds in conjunction with any other funds 
available to the PHA, so long as the use of HOPE VI funds complies with 
the requirements set forth in this NOFA, and the Grant Agreement and 
ACC Amendment to be executed with HUD; the use of other funds complies 
with any applicable restrictions; and the proposed use of all funds 
complies with section 102(d) of the HUD Reform Act of 1989 (42 U.S.C. 
3531 note) and HUD's subsidy layering guidelines, including those found 
in 24 CFR part 4.

G. Technical Assistance

    In accordance with the 1997 Appropriations Act, up to $2.5 million 
may be used by HUD for technical assistance to be provided directly or 
indirectly by grants, contracts, or cooperative agreements, including 
training and cost of necessary travel for participants in such 
training, by or to officials and employees of HUD and PHAs and to 
residents. Technical assistance does not include assistance regarding 
how to draft any applications.

H. Failure to Proceed

    In the event that an applicant selected to receive HOPE VI funding 
does not proceed in a manner consistent with its application, HUD may 
withdraw any unobligated balances of funding and make this funding 
available subject to applicable law, in HUD's discretion, to the next 
highest ranked applicant that was not selected for funding in the most 
recently conducted HOPE VI selection process or combined with funding 
under an upcoming competitive selection process. Failure to proceed 
with respect to obligated funds will be governed by the terms of the 
Grant Agreement or ACC amendment, as applicable.

I. Total Development Costs

    1. If the average per unit costs attributable to TDC (see 
definition in Section II.E.1 of this NOFA) of the applicant's program 
is below 70 percent of HUD's published TDC limits, the development is 
not eligible for this program. For these calculations an applicant 
should include all costs included in Section II.E.1 of this NOFA, 
including demolition, remediation and relocation.
    An applicant must document compliance with this provision in 
Exhibit M (Grant Limitations).
    2. If the average per unit hard costs of rehabilitation falls 
between 70 and 90 percent of TDC, rehabilitation must be shown to be a 
viable, cost effective option by the application.
    3. The total development cost paid from HUD funds for units to be 
rehabilitated may not exceed 90 percent, and the total development cost 
for newly constructed units paid from HOPE VI funds may not exceed 100 
percent, of HUD's published TDC limits. Applications should include 
information on any anticipated costs above TDC limits to be funded from 
non-HOPE VI funds. Selection of an applicant which includes an 
anticipated request for approval for excess TDC costs to be paid for 
from non-HOPE VI funds does not constitute approval of such TDC excess 
(note Section II.E.3. above). Instead, the selected applicant will need 
to obtain written approval from HUD for TDC excesses in accordance with 
24 CFR 941.306 or make the necessary program changes to conform to TDC 
guidelines. HUD will

[[Page 18247]]

not select for funding any application which does not make a plausible 
case that it can meet the standards set forth in 24 CFR 941.306. HUD 
will more favorably consider those applicants that propose cost 
effective programs under the Feasibility and Sustainability evaluation 
factor (Section V.J. of this NOFA).

J. Site and Neighborhood Standards

    HOPE VI grantees must ensure that their revitalization proposals 
and replacement housing plans for the targeted development(s) will 
avoid or lessen concentrations of very low-income families by creating 
a mixed-income community or by expanding assisted housing opportunities 
in nonpoor and nonminority neighborhoods. Since HUD intends to fund 
only those applications under this program that demonstrate the 
capacity to alleviate distressed conditions at the targeted development 
and in the surrounding neighborhood, replacement housing under HOPE VI 
which is located on the site will not require independent approval 
under site and neighborhood standards. Units that are not located at 
the targeted development and in the immediate neighborhood will be 
subject to site and neighborhood standard rules stated in or made 
applicable by the Grant Agreement.

K. Eligible Activities and Costs

    HOPE VI proposals will typically include an array of activities and 
funding sources. The following limitations apply solely to activities 
to be funded with HOPE VI grant funds.
    Eligible expenditures are those eligible under sections 8 and 14 of 
the U.S. Housing Act of 1937 (42 U.S.C. 1437f, 1437l) (1937 Act). PHAs 
must use assistance under this HOPE VI program for demolition and/or 
the physical improvement and/or replacement of public housing and for 
associated management improvements.
1. Eligible Activities
    a. Total or partial demolition of buildings or disposition of 
property (subject to the requirements of section 18 of the 1937 Act (42 
U.S.C. 1437p)).
    b. Capital costs of major reconstruction, rehabilitation, and other 
physical improvements (including energy retrofits) and improvements to 
assure greater accessibility and visitability for persons with 
disabilities (subject to TDC limitations).
    c. Capital costs of replacement housing, including homeownership 
housing (subject to TDC limitations).
    d. Management improvements for the reconstructed development.
    e. Planning and technical assistance.
    f. Programs designed to help residents gain employment and attain 
self-sufficiency.
2. Eligible Costs
    a. Capital costs may include related administrative and relocation 
costs necessary for reconstruction, rehabilitation, demolition, or 
acquisition of land for replacement housing.
    b. Physical improvement costs may include those necessary to 
provide community facilities primarily intended to facilitate the 
delivery of self-sufficiency programs and economic development 
opportunities for residents of the targeted development.
    c. Administrative costs may include the annual premium of lead-
based paint insurance incident to approved revitalization work while 
work is in progress.
3. Interpretive and Cautionary Issues
    a. Replacement Units. HOPE VI funds awarded under this NOFA may 
directly support only housing units which are rehabilitated or which 
replace demolished or disposed units, and which are for use in 
accordance with the U.S. Housing Act of 1937 and appropriations acts 
incorporated by reference therein by the amendment to section 14 of the 
Act at section 201 of the FY 1996 Appropriations Act (42 U.S.C 1437l; 
Pub. L. 104-134, approved April 26, 1996; 110 Stat. 1321-277). Rental 
units will be deemed Replacement Units and qualify for operating 
subsidy only if they are to be placed under Annual Contributions 
Contract and operated in accordance therewith. Homeownership units will 
be deemed Replacement Units only as specified in the Urban 
Revitalization heading of the 1993 Appropriations Act (Pub. L. 102-389; 
approved October 6, 1992); that is, if they meet the statutory 
requirements of the Section 5(h) program (42 U.S.C. 1437c(h)); the HOPE 
II program (42 U.S.C. 12871-80; Pub. L. 101-625, secs. 421-31; 104 
Stat. 4079, 4162-72); or the HOPE III program (42 U.S.C. 12891-98; Pub. 
L. 101-625, secs. 441-48; 104 Stat. 4079, 4172-80); or are made 
available through housing opportunity programs of construction or 
substantial rehabilitation of homes meeting essentially the same 
eligibility requirements as the Nehemiah program. HOPE VI funds may not 
directly support mixed-finance units which are not themselves to be 
placed under ACC.
    b. While applicants are encouraged to propose HOPE VI plans with 
broad community revitalization features, HOPE VI funds not used for 
demolition may be expended only to construct, or for uses which 
directly and principally benefit, Replacement Units and other public 
housing. Where other units or nonhousing uses will also benefit from 
the expenditure, a reasonable proration to other fund sources is 
required. For instance, where housing authority property is to be 
transferred and improved for a nonreplacement use such as middle-income 
housing, the transfer should be at appraised value and the cost of 
improvement must be borne by other funds. Notwithstanding the 
foregoing, HUD may permit a temporary or permanent use of HOPE VI funds 
to benefit non-Replacement Units so long as the purposes are eligible 
under the FY 1997 Appropriations Act and HUD determines that such use 
serves a commensurate social benefit, materially enhances the social 
and physical environment of the Replacement Units, other public housing 
units and their residents, and is no more than necessary to accomplish 
such purposes. For instance, HUD could permit HOPE VI funds to be used 
to improve a site before transferring part of the site or individual 
lots (at improved value) for middle-income housing, and could 
additionally permit the costs of improvement to be written off or 
converted to a soft loan, where the middle-income units would provide 
economic diversity to the site and the cost writedown was reasonable 
and necessary to attract middle-income residents to the site.
    c. Where a plan contemplates the receipt of program-related income 
prior to grant closeout (e.g., from sale of homeownership Replacement 
Units, or the disposition of improved land), such income must be 
reflected in the HOPE VI budget and used for a program purpose.

III. Curable Technical Deficiencies

    The requirements of this NOFA must be satisfied in order for HUD to 
select an application for funding. If an applicant does not satisfy the 
technical requirements below, after the process for the correction of 
deficiencies described in Section VII.C. of this NOFA has been carried 
out, HUD cannot select the applicant for participation.
    A. The applicant must include evidence in Exhibit J.1.e of the 
application (Community and Partnerships) that at least one public 
meeting has been held to notify residents and community members of the 
proposed activities described in the application.
    B. The applicant must include all certifications and submissions 
required as Exhibit Q of the application.

[[Page 18248]]

    C. Applications that propose new construction of replacement 
housing must include Exhibit E of the application.

IV. Program Threshold Criteria

    Section IV of this NOFA identifies criteria which must be satisfied 
by each application in order for it to be selected. HUD will determine 
whether each criterion has been satisfied, based on the information 
submitted in accordance with specific requirements of Section VI of 
this NOFA. Applicants must submit the information described in Section 
VI of this NOFA; applicants must not respond directly to the criteria 
in Section IV. If HUD determines that an application fails to satisfy 
one or more threshold criteria, HUD may not select that application for 
funding.
    In addition to the specified threshold criteria, HUD expects every 
applicant selected to generally satisfy each application evaluation 
factor. It is a general threshold criterion for selection that an 
applicant must score at least some points (i.e., more than zero) on 
every evaluation factor identified in Section V of this NOFA. Further, 
an applicant must receive at least 15 of 25 possible points under the 
Feasibility and Sustainability (V.J.) evaluation factor.

A. Obsolescence

    A development targeted by an application must be ``obsolete'' as 
defined in Section II.C. of this NOFA, except that an applicant need 
not make a showing of obsolescence with respect to any portion of the 
development which has already been approved by HUD for demolition, 
whether or not such demolition has already begun or occurred.
    HUD will consider the entire application, and particularly Exhibit 
B (Existing Conditions) when evaluating this criterion.

B. Need for Funding

    An applicant which owns or operates 250 or more public housing 
dwelling units must establish that it cannot, using currently available 
and reasonably foreseeable funding from HUD, meet its long term capital 
needs for its entire public housing inventory and still accomplish the 
demolition, revitalization and/or replacement proposed in its 
application, in the absence of HOPE VI funding in the general amount 
requested. This criterion may be satisfied if a Comprehensive Grant 
Program (CGP) agency's total capital needs, as shown in its latest 
physical needs assessment, exceed by more than 10 percent the work it 
expects to be able to fund over the next 5 years. A CGP agency should 
use its most recent HUD approved 5-year action plan to make this 
determination.
    A PHA which owns or operates fewer than 250 public housing dwelling 
units, and thus does not receive CGP funds, is not held to this 
threshold requirement.
    HUD will consider the entire application, and particularly Exhibit 
N (Need for Funding) when evaluating this criterion.

C. Lessen Concentration

    Off-site Replacement Units must avoid or lessen concentrations of 
very low-income families. On-site units are not subject to this flat 
statutory requirement, but must nevertheless ensure, in accordance with 
the various evaluation factors, that after a reasonable investment and 
time, the site will not constitute an excessive concentration of very 
low-income families.
    HUD will consider the entire application, and particularly Exhibits 
D.6 and D.7, when evaluating this criterion.

D. Fair Housing

    HUD will use the following standards to assess compliance with 
civil rights laws for the threshold review. In making this assessment, 
HUD shall review appropriate records maintained by the Office of Fair 
Housing and Equal Opportunity, e.g., records of monitoring, audit, or 
compliance review findings, complaint determinations, or compliance 
agreements. If the review reveals the existence of any of the 
following, the application will be rejected.
    1. There is a pending civil rights suit against the applicant 
instituted by the Department of Justice.
    2. There is an outstanding finding of noncompliance with civil 
rights statutes (the Fair Housing Act (42 U.S.C. 3601-19); title VI of 
the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4); section 504 of 
the Rehabilitation Act of 1973 (29 U.S.C. 794); the Age Discrimination 
Act of 1975 (42 U.S.C. 6101-6107); and the Americans with Disabilities 
Act of 1990 (42 U.S.C. 1201 et seq.)), Executive Orders, or regulations 
as a result of formal administrative proceedings, unless the applicant 
is operating under a HUD-approved compliance agreement designed to 
correct the area of noncompliance, or is currently negotiating such an 
agreement with HUD.
    3. There is an unresolved Secretarial charge of discrimination 
against the applicant issued under section 810(g) of the Fair Housing 
Act (42 U.S.C. 3610), as implemented by 24 CFR 103.400.
    4. There has been an adjudication of a civil rights violation in a 
civil action brought against the applicant by a private individual, 
unless the applicant is operating in compliance with a court order 
designed to correct the area of noncompliance, or the applicant has 
discharged any responsibility arising from such litigation.
    5. There has been a deferral of the processing of applications from 
the applicant imposed by HUD under Title VI of the Civil Rights Act of 
1964, the Attorney General's Guidelines (28 CFR 50.3), or the HUD Title 
VI regulations (24 CFR 1.8) and procedures, or under section 504 of the 
Rehabilitation Act of 1973 or HUD's section 504 Regulations (24 CFR 
8.57).
    HUD will consider Exhibit P when evaluating this criterion.

V. Application Evaluation Factors

    Section V of this NOFA describes the evaluation factors that HUD 
will use to review applications. Each application will be evaluated 
based upon its merits determined pursuant to the factors set forth 
below. Applications will be selected for award in accordance with 
Section VII of this NOFA. HUD will consider the entire application, as 
a whole, when applying these factors. Applicants must submit the 
information described in Section VI (Application Submission 
Requirements) of this NOFA; applicants must not respond directly to the 
factors in Section V (Application Evaluation Factors) of this NOFA. 
Instances in which specific exhibits correspond to specific evaluation 
factors are noted in both Sections V and VI of this NOFA.

A. Urgency of Need for Revitalization [15 Points]

    HUD will consider the degree of distress at a site and the 
imminence of greater distress in the absence of immediate intervention. 
HUD will also consider the extent to which such distress is 
attributable to or exacerbated by the development's obsolescence, 
rather than factors more immediately within the control of applicant, 
and is potentially remediable by the applicant's revitalization plan. 
Maximum consideration will be given to sites at which the immediate 
obsolescence of physical design and condition make it virtually 
impossible to provide decent, safe, and sanitary housing at a 
reasonable cost to the applicant despite all reasonable current 
management and maintenance efforts. HUD will also give consideration, 
however, to the degree of imminence of

[[Page 18249]]

such obsolescence and consequent distress at developments which have 
not yet reached such condition.
    If a targeted development already has been vacated for demolition 
or disposition, or has been demolished or disposed of pursuant to HUD 
approval granted in 1995 or thereafter, HUD will apply this evaluation 
factor to the conditions which existed as of the date of HUD approval.
    HUD will consider the entire application, and particularly Exhibit 
C (Urgency of Need for Revitalization); Exhibit B (Existing 
Conditions); and Exhibit N (Need for Funding) when evaluating this 
criterion.

B. Lessen Isolation of Low-Income Residents [25 Points]

    A successful HOPE VI effort requires the replacement of isolated 
concentrations of very low-income, nonworking families with more 
integrated and diverse urban settings where nonworking families are in 
daily contact with working families and working society. HUD will 
consider the extent to which the applicant proposes to place or 
maintain public housing in well-functioning neighborhoods or promote 
mixed-income communities where public housing once stood alone, thereby 
ending the social and economic isolation of public housing residents, 
increasing their access to quality municipal services, and increasing 
their access to job information and mentoring opportunities. HUD will 
consider the extent to which the physical design would lessen the 
isolation and stigmatization of the development and its low-income 
residents. HUD will also consider features of the surrounding community 
which would enrich the lives of public housing residents within the 
development, such as educational institutions, transportation and 
employment opportunities. HUD will also consider the extent to which 
operational and management principles will promote economic and social 
diversity.
    If an applicant proposes demolition with replacement in part 
through tenant-based assistance, HUD will also consider the degree to 
which the PHA intends to provide counseling and other assistance, 
directly or through an intermediary, to help families receiving tenant-
based assistance to move to nonpoverty neighborhoods.
    HUD will consider the entire application, and particularly Exhibits 
B.3, B.4, and B.5 (Existing Conditions); Exhibits D.6 and D.7 
(Description of Physical Revitalization Plan), and Exhibit F (Self-
Sufficiency Component) when evaluating this factor.

C. Encourage Resident Self-Sufficiency [20 Points]

    With welfare reform, no revitalization effort can succeed if it 
does not make provisions for assisting low-income residents to achieve 
long-term self-sufficiency (i.e., independence from supportive 
governmental programs not provided to the general populace, primarily 
income support) where possible. An applicant should demonstrate that it 
has a feasible, coherent, realistic strategy for helping residents 
become wage-earners. Overall, HUD will consider the extent to which the 
objectives of the self-sufficiency plan are results-oriented, with 
measurable goals and outcomes; and the degree to which the program is 
sustainable and is likely to enable residents to become self-
supporting.
    HUD will consider such factors as the overall quality of the self-
sufficiency plan; the integration of the plan with the development 
process; the appropriateness of scale, type, and delivery of the plan 
to meet the identified needs of residents; the degree of resident 
training, employment, and contracting planned; the degree to which 
service providers have made commitments to provide services or funding; 
the experience of proposed service providers; the extent of effective 
use of technology; the involvement of educational institutions and 
business partners; and the extent to which residents are expected to 
invest in their own futures.
    HUD will also consider the extent to which proposed operating and 
management principles will complement the self-sufficiency program and 
reward the efforts of residents.
    HUD will consider the entire application, and particularly Exhibit 
F (Self-Sufficiency Component) and Exhibit G (Operation and Management 
Principles) when evaluating this factor.

D. Property Management [15 Points]

    HUD will consider the extent to which the housing authority has 
evaluated the obstacles that prevented good management and other 
management problems that led to the distress or obsolescence of the 
targeted development, and the new plan for management that will protect 
against similar problems of the past and promote efficient and 
economical management.
    HUD will consider the entire application, and particularly Exhibit 
G (Operation and Management Principles) when evaluating this factor.

E. Local Impact [25 Points]

    HUD will consider the degree and magnitude of positive change that 
the entire package of activities described in the application 
(including both eligible activities to be conducted by the applicant 
and complementary activities by other entities, such as CDBG 
investments or educational initiatives) will have on the affected 
public housing community, the surrounding neighborhood, and on the 
entire city or town. In this context, HUD will consider the community's 
need for such change as measured by objective indicia of social 
distress, criminal incidents, housing need, and similar factors. HUD 
will consider the extent to which a physical plan demonstrates 
attention to preserving and enriching the urban fabric. HUD will also 
consider the extent to which the infusion of HOPE VI dollars will 
leverage other resources, including municipal expenditures, charitable 
contributions, and private debt and equity. HUD will also consider the 
extent to which the proposal improves, where applicable, the safety and 
security of residents through the implementation of anti-crime measures 
and the installation of physical security or design enhancements. HUD 
will consider the relative impact a proposed revitalization will have 
on its surrounding community, not the magnitude of the program in 
relation to other applications.
    HUD will consider the entire application, and particularly Exhibit 
B (Existing Conditions), Exhibit D (Description of the Physical 
Revitalization Plan), and Exhibit H (Local Impact) when evaluating this 
factor.

F. Affirmatively Furthering Fair Housing [20 Points]

    HUD will consider the extent to which the applicant has 
demonstrated that it has affirmatively furthered fair housing, or will 
do so by its actions in connection with this application. HUD will 
consider the extent to which actions already taken by the applicant 
have removed or overcome, and, where applicable, the extent to which 
actions to be taken in connection with this application will remove or 
overcome the consequences of prior practices or usage which were 
discriminatory or which tended to limit participation by persons of a 
particular race, color or national origin. HUD will also consider the 
extent to which the applicant's previous actions, or actions taken in 
connection with this application, promote the provision of public 
housing opportunities for disabled persons. (See

[[Page 18250]]

Section VI.P. of this NOFA for examples of specific actions).
    In accordance with the provisions of the 1997 Appropriations Act, 
no appropriated funds shall be used directly or indirectly for the 
purpose of granting a competitive advantage in awards to settle 
litigation or pay judgments in court cases affecting applicants for 
this program. HUD will not, when reviewing applications under this 
NOFA, award extra points, for example, to any PHA involved in a consent 
decree mandating desegregation of the PHA's public housing.
    HUD will evaluate all applications, and particularly Exhibit B 
(Existing Conditions), Exhibit D (Description of Physical 
Revitalization), Exhibit G (Operation and Management Principles), and 
Exhibit P (Affirmatively Furthering Fair Housing) when evaluating this 
factor.

G. Community and Partnerships [20 Points]

    HUD will consider the entire application, and particularly Exhibit 
J (Community and Partnerships), when evaluating this factor.
1. Resident Support/Involvement (5 Points)
    HUD encourages full and meaningful involvement of residents and 
members of the communities to be affected by the proposed activities. 
HUD will consider the extent of resident consultation in shaping the 
application, the level of resident support for the proposed activities, 
the continued involvement and participation by the affected public 
housing residents, and the proposed involvement of residents in 
management of revitalized or replacement units.
 2. Community Support/Involvement (5 Points)
    HUD will consider the extent of involvement by local public, 
private, and nonprofit entities and community representatives in the 
preparation of the application, the level of enthusiasm for the plan in 
the larger community, and the extent to which the activities proposed 
in the application are coordinated with other revitalization plans 
within the community.
3. Partnerships (5 Points)
    This evaluation factor recognizes the importance of a PHA not just 
seeking endorsements and vendor relationships with others, but actively 
enlisting other stakeholders who are vested in the revitalization 
effort, including public and private nonprofit and for-profit entities 
with experience in the development and/or management of low-and 
moderate-income housing, those that are skilled in the delivery of 
services to residents of public housing, educational institutions, 
foundations, banks, and other organizations.
    HUD will consider the extent to which applications propose to 
develop partnerships to facilitate revitalization, the strength of 
commitments from potential partners to participate in the 
revitalization plan, and the experience, capability, and local 
importance of proposed partners.
    If a PHA is also a redevelopment agency or otherwise has citywide 
responsibilities, HUD will consider the city's redevelopment or other 
functional area to be a separate partner with which the housing 
authority function is partnering, where appropriate.
4. EZ/EC Involvement (5 Points)
    Points will be given to an application whose targeted development 
is principally located in a Federally-designated Empowerment Zone (EZ) 
or Enterprise Community (EC), and which demonstrates coordination with 
and support of the Strategic Plan for such EZ/EC.

H. Capability and Readiness [25 Points]

    HUD will consider the ability and capacity of a PHA and any 
identified partners to promptly begin and effectively carry out the 
revitalization and replacement activities it has proposed. HUD will 
likewise consider the extent to which an applicant with any outstanding 
grants from HUD of substantial capital funds under the HOPE VI, MROP, 
Development or CIAP programs is on schedule or, if behind schedule, has 
resolved all major issues and has been making good progress in the last 
6 months.
    HUD will separately evaluate the demonstrated capability and track 
record of the PHA and its team to plan, implement, adapt and manage the 
self-sufficiency program over a multi-year period.
    HUD will separately evaluate the demonstrated capability and track 
record of the PHA and its team to provide property management and 
marketing of the kind which will be required by the applicant's 
proposal.
    HUD will look at the capacity of the team presented by the 
applicant, including, as relevant, both PHA employees and partners and 
contractors who have been procured and who are demonstrably committed 
to the plan. A PHA which cannot currently demonstrate full capacity in 
this fashion will be evaluated on the likelihood that it can acquire 
such capacity. Where a PHA plans to utilize partners and/or 
contractors, it should demonstrate that it will provide an appropriate 
balance of oversight and autonomy.
    HUD will consider the entire application and particularly 
information provided in Exhibit I (Capability and Readiness) when 
evaluating this factor.

I. Efficient Utilization of Federal Funding [10 Points]

    HUD will consider the relative cost to the Federal Government of 
the proposed plan as opposed to demolishing the targeted development 
and replacing it with Section 8 tenant-based assistance, as determined 
in accordance with the Federal Register notice of September 26, 1996 
(61 FR 50632). A plan which is less costly will receive full points 
under this evaluation factor; more costly plans will receive fewer 
points. HUD will also evaluate the extent to which housing authorities 
have proposed budgets that demonstrate efficiency in spending. 
Applications with new construction and rehabilitation costs that are 
less than applicable TDC limits will be favorably considered.
    HUD will consider the entire application, and particularly Exhibit 
O (Section 8 Cost Comparisons) when evaluating this factor.

J. Feasibility and Sustainability [25 Points]

    HUD will consider the need and market for the revitalized and/or 
replacement units of the type and size proposed; whether the proposed 
program activities are likely to be accomplished within a reasonable 
time and expense; and whether the proposed activities are sustainable 
based on realistic budgets. Included in this analysis, HUD will 
evaluate the level and firmness of commitments for private and public 
funds upon which the proposal relies.
    HUD will consider the entire application, and particularly Exhibit 
B (Existing Conditions), Exhibit D (Description of Physical 
Revitalization), Exhibit K (Resources), and Exhibit L (Program 
Financing and Sustainability) when evaluating this factor.

K. Proposal Coherence and Integrity [15 Points]

    HUD will consider the entire application when determining the 
extent to which the proposed activities are likely to accomplish the 
program plan and objectives as outlined in Exhibit A (Summary Statement 
of Plan and Objectives). HUD will consider the extent to which 
information and strategies provided in each of Exhibits D-P are 
coherent and consistent with

[[Page 18251]]

each other, and whether the application proposes a comprehensive, 
realistic, and effective solution to the current problems at the 
development and in the neighborhood as described in Exhibit B (Existing 
Conditions).

VI. Application Submission Requirements

    This Section VI of the NOFA describes all of the items to be 
included in an application. All applications must include all 
information requested unless otherwise specifically noted.
    HUD reviewers will use the information provided in the application 
to evaluate each application in accordance with the evaluation factors 
described in Section V of this NOFA. Notwithstanding that certain 
application submission requirement sections of the application 
correspond to specific evaluation factors, reviewers will consider and 
evaluate the application as a whole during the evaluation process.
    Each application must consist of Exhibits A-Q that correspond 
directly to Sections VI.A.-VI.Q. listed below. For ease of review, each 
application must include a table of contents directing the reader to 
the page number upon which each exhibit begins. To help expedite review 
of the applications, please assemble in the order given in Section VI 
of this NOFA. Please mark each exhibit with an appropriately lettered 
tab and number each page of the application sequentially. If an exhibit 
is not applicable for any reason, provide an explanation of its 
inapplicability to the application under the tab for such exhibit.
    Each application must be limited to a total of 75 (8\1/2\ by 11 
inch) pages of narrative text utilizing double spacing and margins of 
preferably 1 inch, but no smaller than \1/2\ inch. HUD strongly 
recommends that applicants utilize a Courier 11 point font or 
equivalent. Page limits do not include such charts, maps and 
illustrations as are useful and necessary to illuminate the required 
narrative, nor do they include required or requested attachments such 
as letters of support or opposition, or certifications. Videos are not 
an allowable submission. Adherence to the page limit is mandatory; in 
reviewing an application, HUD will not consider any information on 
pages that exceed the limits. Applicants are encouraged to be concise 
and need not utilize the full page limit.

A. Summary Statement of Plan and Objectives

    All applicants must provide a narrative Exhibit A which summarizes 
the overall revitalization plan and sets forth what the applicant 
proposes to accomplish thereby. The narrative should include: (1) A 
statement describing the planned long-term impact the redevelopment 
will have on the current and future residents of the development and 
the neighborhood, and (2) A list of measurable goals and an estimate of 
when the goals are to be achieved. HUD will use information from 
Exhibit A both to orient readers and to evaluate specific factors for 
which goals are set in this section.

B. Existing Conditions

    All applicants must provide an Exhibit B that responds to all items 
in this section plus any others which the applicant deems relevant to 
the heading and intended use. HUD will use information from Exhibit B 
primarily to evaluate the Urgency of Need for Revitalization (V.A), 
Lessen Isolation of Low-Income Residents (V.B), Local Impact (V.E), 
Affirmatively Furthering Fair Housing (V.F.), and Feasibility and 
Sustainability (V.J) factors. HUD will use items 2 through 4, below, to 
determine whether the application meets the threshold criterion for 
obsolete housing (IV.A).
    The applicant must provide the following information in a narrative 
plus the map required under Paragraph 1.c. below:
1. Description of Current Development
    a. An identification of the targeted development and neighborhood. 
State the complete street address (including zip code) of the targeted 
development.
    b. The total number of current units, by bedroom distribution, 
separately identifying vacant and occupied units.
    c. A map of the current site.
2. Indicators of Physical Obsolescence
    a. The cost of redesign, rehabilitation, or reconstruction per unit 
as compared with TDC.
    b. Structural deficiencies (e.g., settlement of earth below the 
building caused by inadequate structural fills, faulty structural 
design, or settlement of floors).
    c. Substantial deterioration (e.g., severe termite damage or damage 
caused by extreme weather conditions) or other design or site problems 
(e.g., severe erosion or flooding).
    d. Design and site deficiencies (e.g., high density, building 
height, unit configuration or indefensible space).
    e. Major system deficiencies (e.g., peeling and chipping lead-based 
paint, lack of reliable and reasonably efficient heat and hot water, 
major structural deficiencies, electrical system not satisfying code 
requirements, poor site conditions, leaking roof, deteriorated laterals 
and sewers, or high number of plumbing leaks).
    f. Deficiencies with respect to accessibility for persons with 
disabilities as regards both individual units, entrance ways and common 
areas.
3. Neighborhood Characteristics
    a. Physical condition and characteristics of the neighborhood, 
including the percentage of the population in the neighborhood that 
lives in the targeted development and the percentage that lives in 
other assisted housing developments nearby.
    b. Land use and economic activity, including density and structure 
types as compared to the development proposed for funding.
    c. Demographic data such as income levels and minority 
concentration.
    d. Environmental conditions that may jeopardize the suitability of 
the site or a portion of the site and its housing structures for 
residential use. These conditions may be determined by either a HUD-
related environmental review, in accordance with 24 CFR part 50 which 
was previously conducted in connection with earlier assistance, or 
another assessment of conditions that, in the opinion of the applicant, 
may jeopardize suitability of the site.
    e. Deficiencies in the neighborhood that revitalization could 
ameliorate.
    f. Assets in the neighborhood which will assist revitalization.
4. Demographic Indicators
    For the following elements, applicants must provide the most 
current information that relates as specifically as possible to the 
targeted site. If site information is not available, applicants must 
indicate whether information provided pertains to the development, 
neighborhood, city, census tract, or other demographic area.
    a. Average income as a percentage of area median. Include the 
percentage of families with public assistance income, earned income, 
and social security income at the targeted development.
    b. Statistical information on the incidence of crime, including the 
following: frequency of criminal acts of various types per 1,000 
persons (including drug-related activities), number of lease 
terminations or evictions for criminal activity, average number of 
police calls to the development per month, and the average monthly 
incidence of vandalism to PHA property in dollars.
    c. Vacancy rate of units not in funded, on-schedule modernization; 
historical marketing and occupancy data.

[[Page 18252]]

5. Effect on the Neighborhood
    Applicants must describe how the physical, neighborhood, and 
demographic conditions of the obsolete development, or portions 
thereof, affect the residents of the surrounding neighborhood, the 
greater community, and city.

C. Urgency of Need for Revitalization

    The applicant should set forth in a narrative why it is urgent that 
it receive the funding sought and pursue the revitalization proposed. 
The applicant should refer to information contained in Exhibit B 
(Existing Conditions) and Exhibit N (Need for Funding), together with 
such other information as is relevant and helpful. If a targeted 
development already has been vacated for demolition or disposition, or 
has been demolished or disposed of pursuant to HUD approval granted in 
1995 or thereafter, describe the conditions which existed as of the 
date of HUD approval.

D. Description of Physical Revitalization Plan

    HUD will use information from Exhibit D primarily to evaluate the 
Lessen Isolation of Low-Income Residents (V.B.), Local Impact (V.E.) 
and Feasibility and Sustainability (V.J.) factors. HUD will use 
information in Exhibits D.6 and D.7 to evaluate the Lessen 
Concentration threshold criterion (IV.C.) and the Lessen Isolation of 
Low-Income Residents (V.B.) and Affirmatively Furthering Fair Housing 
(V.F.) factors. Applicants must describe the extent of the physical 
revitalization and/or replacement activities proposed, including the 
following, as appropriate:

    1. The extent of any proposed demolition/disposition and 
identification of the units to be demolished.
    2. The changes in the sizes and shapes of units and other 
changes in the use of interior space, including any reduction in the 
number of units due to reconfiguration or changes in bedroom mix.
    3. Any community space alterations, improvements, or additions.
    4. Any proposed on-site housing construction, including number, 
type, and bedroom distribution of units, and whether the new units 
will be for rental or homeownership. Indicate clearly the units 
proposed as public housing Replacement Units.
    5. For any reconfiguration, community space alterations or 
improvements, or on-site housing construction, describe how 
accessibility for persons with disabilities to individual units, 
community spaces and buildings will be assured.
    6. Any proposed off-site housing construction, including number, 
type, and bedroom distribution of units, and whether the new units 
will be for rental or homeownership. Indicate clearly the units 
proposed as public housing Replacement Units. Any applicant 
proposing to create off-site Replacement Units MUST use census data 
to describe how such housing will avoid or lessen concentrations of 
very low-income families.
    7. The number of any Section 8 certificates to be used for 
replacement or relocation housing, and whether those certificates 
are existing or are to be requested under the separate Section 8 
notice. Include a description of counselling or other assistance 
that will be provided to residents receiving tenant-based assistance 
as relocation or replacement housing to enable them to move to areas 
of lower poverty if they so choose.
    8. Any site acquisition necessary or proposed, the purpose of 
the acquisition, and how that acquisition is proposed to be 
financed.
    9. Any non-housing structures.
    10. Infrastructure and site improvements to be constructed.
    11. A description of any physical anti-crime measures and/or 
installation of physical enhancements (e.g., defensible space).
    12. A statement of the design objectives and considerations 
motivating the plan.
    13. Detail other revitalization activities or land use plans 
underway or planned in the neighborhood(s) that the revitalization 
plan would affect. Provide reference to and maps indicating the 
location of activities and resources identified in the city's or 
State's Consolidated Plan or Federally-designated Empowerment Zone 
or Enterprise Community Strategy (if applicable) in relationship to 
the development. Describe the current or projected impacts of these 
community-wide activities on residents of the development(s).
    14. If available, provide postrevitalization site and 
neighborhood maps and/or illustrative design illustrations.

E. Applications for New Construction

    In accordance with section 6(h) of the U.S. Housing Act of 1937 (42 
U.S.C. 1437d), the PHA may engage in new construction only if the PHA 
demonstrates to the satisfaction of the Secretary that the cost of new 
construction in the neighborhood where the PHA determines the housing 
is needed is less than the cost of acquisition or acquisition and 
rehabilitation in such neighborhood. Therefore, every application that 
includes new construction must be accompanied by a narrative Exhibit E 
that contains the information described in either paragraphs 1 or 2 of 
this section, below. If HUD cannot approve new construction under 
section 6(h) of the 1937 Act, HUD will reject the application.
    1. A PHA comparison of the costs of new construction (in the 
neighborhood where the PHA proposes to construct the housing) and the 
costs of acquisition of existing housing or acquisition and 
rehabilitation in the same neighborhood (including estimated costs of 
lead-based paint testing and abatement).
    2. A PHA certification, accompanied by supporting documentation, 
that there is insufficient existing housing in the neighborhood to 
develop housing through acquisition of existing housing or acquisition 
and rehabilitation.

F. Self-Sufficiency Component

    HUD will use information from Exhibit F primarily to evaluate the 
Encourage Resident Self-Sufficiency (V.C.), Capability and Readiness 
(V.H.), and Feasibility and Sustainability (V.J.) factors.
    A program of self-sufficiency may include, but is not limited to: 
child care, of a type that provides sufficient hours of operation and 
serves appropriate ages as needed to facilitate parental access to 
education and job opportunities; employment training and counseling, 
such as the Step-Up program, that may include job training, job 
preparation and counseling, job development and placement, and follow-
up assistance after job placement; computer skills training; education, 
including remedial education, literacy training, completion of 
secondary or postsecondary education, assistance in the attainment of 
certificates of high school equivalency, and the integration of modern 
computer technology into the education program; transportation as 
necessary to enable any participating family member to receive 
available services or to commute to his or her place of employment; 
partnerships with local businesses that will provide job placements for 
residents who complete adult education and job training programs; 
substance/alcohol abuse treatment and counseling; health care services; 
and developing a strategy to establish on-site credit union(s) to 
provide financial and economic development initiatives to residents. 
The credit union shall support the normal financial management needs of 
the community (i.e., check cashing, and any other services and 
resources, including case management) that are determined to be 
appropriate in assisting eligible residents.
    1. Describe the strategic vision, and the objective and measurable 
goals, of the self-sufficiency component, and describe how they will be 
measured and met through the self-sufficiency program.
    2. Describe how the self-sufficiency plan will be managed in order 
to achieve efficiency, economy and accountability. Identify 
capabilities and track records of responsible individuals or partners.

[[Page 18253]]

    3. Provide a brief description of each service that is expected to 
be made available for residents. For each service, to the extent that 
providers are identified, indicate the name of the service provider and 
the experience of that provider. If providers are not identified, 
describe the process the PHA will use to identify providers. Describe 
the location of the service provision, the timing of the service 
provision and how it relates to the development schedule, how long the 
service will be provided to residents, and whether the service will be 
available to residents that will remain on site, are moved off site, 
and/or are in relocation sites.
    4. Describe the analysis and any consultation with residents that 
the PHA employed to determine the needs upon which the self-sufficiency 
program was based and that will be used to reevaluate service needs in 
the future.
    5. Describe how residents will be selected to participate in 
services.
    6. In addition to the narrative, attach letters from service 
providers that commit to provide services to residents.
    7. Describe plans to provide on-the-job training, employment, and 
contracting opportunities to residents during implementation of the 
revitalization plan.

G. Operation and Management Principles

    HUD will use information from Exhibit G primarily to evaluate the 
Lessen Isolation of Low-Income Residents (V.B.), Encourage Resident 
Self-Sufficiency (V.C.), Property Management (V.D.) and Feasibility and 
Sustainability (V.J.) factors.
    For application purposes, the PHA should assume that Congress will 
make permanent the program modifications continued by the 1997 
Appropriations Act. However, PHAs will be required, if selected, to 
conform their proposals to current law.
    Applicants must describe those management and operational problems 
that led to the distress or obsolescence of the targeted development.
    Applicants must describe the manner and extent to which the 
proposed operation and management principles will:
    1. Achieve efficient and effective property management and 
maintenance through private management or other management 
improvements;
    2. Lead to a range of incomes in the subject development including 
substantial numbers of working families;
    3. Reward work and promote family stability through positive 
incentives such as income disregards and ceiling rents. PHAs may 
establish ceiling rents and may institute earned income disregards for 
FY 1997;
    4. Provide greater safety and security by instituting tough 
screening requirements and enforcing tough lease and eviction 
provisions, including the ``One Strike and You're Out'' policy in the 
Housing Opportunity Program Extension Act of 1996 (Pub. L. 104-120; 
approved March 28, 1996);
    5. Promote economic and demographic diversity through a system of 
local preferences (Congress has suspended all Federal preferences for 
FY 1997); and
    6. Encourage self-sufficiency by utilizing lease requirements that 
promote community service and/or transition from public housing.

H. Local Impact

    HUD will use information from Exhibit H primarily to evaluate the 
Local Impact (V.E.) factor.
    Applicants must describe the extent to which the revitalization 
plan as a whole will significantly address the indicators of 
obsolescence and distress described in Exhibit B (Existing Conditions) 
and contribute to positive change for residents of the development and 
the surrounding community. Applicants should address anticipated 
physical, social and economic changes for both public housing residents 
and existing neighbors.

I. Capability and Readiness

    HUD will use information from Exhibit I to evaluate all of the 
factors and particularly Capability and Readiness (V.H.). Applicants 
must provide a narrative that includes the following information:
    1. Describe progress made under any previously-awarded HOPE VI, 
development, and/or modernization funding which is still open or was 
closed out within the last two years, and explain any factors which 
have caused delay or unsatisfactory performance.
    2. Provide the PHA's overall and modernization scores under the 
Public Housing Management Assessment Program (PHMAP), 24 CFR part 901, 
as most recently assigned by HUD.
    3. Provide a brief summary of the PHA's most recent fiscal audit 
and any outstanding HUD monitoring findings.
    4. Provide an organizational chart that indicates the proposed PHA 
staffing of the revitalization program. Describe the qualifications of 
the PHA's key staff who will be responsible for the oversight of the 
program.
    5. Describe any prior experience of the PHA or its staff in 
financing, leveraging, and partnership activities.
    6. Describe how the PHA proposes to procure any necessary partners 
or service providers. If any have already been procured, describe them 
fully, including the nature of the organization, qualifications, the 
respective responsibilities and obligations of each party, the proposed 
financial relationship (i.e., the basis and source of compensation to 
nonapplicant parties), and the procurement process used to select the 
partner or provider. If the proposed development is to be implemented 
by a third party developer, include a written commitment by the 
developer stating eligibility for and experience in developing, 
constructing, and managing the proposed activities in this application. 
HUD warns PHAs against procuring partners other than in compliance with 
applicable laws and HUD procurement regulations, or after waivers 
thereof have been granted. Please refer to 24 CFR part 941, subpart F, 
published in the Federal Register on May 2, 1996 (61 FR 19708, 19714), 
for guidance on procurement of developer partners for mixed-finance 
development; all other partners are to be procured in accordance with 
24 CFR 85.36.
    7. Describe factors that will ensure that implementation of the 
program can begin quickly if the application is approved for an award.

J. Community and Partnerships

    All applicants must provide a narrative Exhibit J plus any 
pertinent letters as provided below. HUD will use information from 
Exhibit J primarily to evaluate the Community and Partnerships (V.G.) 
factor. HUD will use information in Exhibit J.1.e, below, to determine 
whether the resident consultation requirement of the Curable Technical 
Deficiencies (Section III.A.) portion of this NOFA has been met. 
Exhibit J should contain the following information:
1. Resident Support/Involvement
    a. Describe the level of participation and/or consultation with 
residents throughout the PHA in the preparation of the application.
    b. Explain how the PHA would continue the involvement and 
participation by the affected public housing residents after grant 
award.
    c. Describe any planned roles for residents in the management and 
operation of the revitalized and replacement units and the developments 
of which they are a part.
    All applicants must attach the following:

[[Page 18254]]

    d. Any letters from residents in support of or opposition to the 
proposed plan or any component element.
    e. Evidence that at least one public meeting has been held to 
notify residents and community members of the proposed activities 
described in this application. The meeting may be a regularly scheduled 
PHA board meeting. Evidence must include the notice announcing the 
meeting, how the notice was distributed, and a copy of the sign-in 
sheet. An application must contain such evidence that a public meeting 
took place in order to be selected for participation.
2. Community Support/Involvement
    All applicants must respond to this item.
    a. Describe the level of participation and/or consultation in the 
preparation of the applic<divide>tion by community organizations and 
institutions, agencies of local and State government, businesses, 
nonprofit corporations, social service providers, philanthropic 
organizations, educational institutions, and other entities. Discuss 
how the PHA would continue to involve these entities and groups if the 
application is selected.
    b. Provide any letters, resolutions, or other available 
documentation in support of, or objection to, the physical as well as 
the self-sufficiency component of the proposed demolition, and the 
revitalization and/or replacement of units.
    c. Describe how the PHA plans to coordinate with any other 
revitalization activities or land use plans underway or planned in the 
neighborhood(s) that the revitalization plan would affect.
    d. If the revitalization plan calls for changes in streets or other 
infrastructure, provide a letter of commitment from the unit of general 
local government to provide the resources necessary to carry out those 
activities.
3. Partnerships
    a. Describe plans to accomplish the revitalization through a 
proposed partnership with one or more entities.
    b. Identify and provide any commitments from potential partners to 
participate in the revitalization.
    c. Describe how the use of the partnership will enhance the PHA's 
ability to accomplish the revitalization.
4. EZ/EC Involvement
    If the targeted development is within a Federally-designated 
Empowerment Zone or Enterprise Community, provide evidence of this 
location and that the PHA has an established relationship with the EZ/
EC administrative body that was established before the publication of 
this NOFA, and that the proposed revitalization activity is consistent 
with and supportive of the Strategic Plan for the Federally-designated 
Empowerment Zone or Enterprise Community. In order to receive the 
maximum points, applicants must demonstrate that the HOPE VI proposal 
is a part of a pre-existing economic development or revitalization 
strategy and must provide a letter of endorsement from the EZ or EC 
governing body.

K. Resources

    Applicants must provide as Exhibit K a list of all of the 
individuals and organizations from which they have received evidence of 
financial or other support for the proposed activities. Next to each 
source, applicants must list the dollar figure associated with the 
resource to be provided, including the dollar value of any in-kind 
services or materials to be provided, if known. Next to the dollar 
figure, applicants must indicate the application page number of letters 
of support or commitments for contributions. The letters must describe 
the nature of the support and/or resource to be provided, the dollar 
value of the donation, if available, any conditions attached to the 
commitment, and the date that the resource will be made available. 
Applicants must include letters that provide resources for capital 
costs, self-sufficiency programs, and all other activities of the 
program. Applicants may attach letters as part of Exhibit K, and/or in 
Exhibit F.6 (self-sufficiency support), Exhibit J.2.b (community 
support), or Exhibit J.3.b (partner support).

L. Program Financing and Sustainability

    HUD will use information provided in Exhibit L primarily to 
evaluate the Feasibility and Sustainability (V.J) factor. (Note: the 
term ``construction'' refers to both rehabilitation and new 
construction). All applicants must provide an Exhibit L that contains 
the following:
    1. A narrative description of the proposed legal/financial 
structure of the entire development and, if appropriate, any phases. 
Describe how the PHA proposes to manage the proposed development and 
maintain programs on a long term basis, given the resources projected 
to be available for the development.
    2. A Market Analysis which demonstrates the marketability and long 
term feasibility of the proposed development and its compatibility with 
the surrounding community(ies). Ideally, and particularly where the 
feasibility may reasonably be doubted, as where middle-income 
homeownership is proposed in a currently low-income neighborhood, the 
analysis should be prepared by an arm's length third party with 
acknowledged expertise and experience in the field, and should include 
anticipated costs of units, compatibility of unit types, market 
conditions and demand, market values of community dwellings by type and 
bedroom size, and services immediately available (or proposed to be 
available) to residents and the community.
    3. A commencement and completion schedule, by phases if any.
    4. An estimated budget (Form HUD-52825-A, HOPE VI Budget, Parts I 
and II) showing uses of HOPE VI and other funding for the 
revitalization plan. Part I of the form will indicate the general uses 
of funds, and Part II breaks each individual use into specific 
activities.
    5. If this application is for a mixed financed development, a 
separate schedule must be attached showing ALL of the Sources and Uses 
of funds required for implementation.
    6. Specifically describe all financial sources, the provider, and 
the timing for availability of these sources. In the event that a 
source(s) is NOT available for expenditure at the commencement of 
construction, describe the method of providing for these funds on an 
interim basis. (Such may be the case with the availability of Low 
Income Housing Tax Credits, in which case a ``bridge'' loan may be 
appropriate.) If the proposed development is phased, provide this 
information for each phase.
    a. Provide letters of commitment signed by an authorized person 
providing these funds for all sources.
    b. Non-Hope VI funds provided by the PHA must be committed by the 
Executive Director as authorized by the PHA Board.
    7. Provide a preliminary construction budget from schematics or 
other preliminary plans for the proposed development (and each phase) 
which includes all hard and soft costs (itemized) required for 
completion. The qualifications of the person preparing the budget 
(preferably an architect or engineer) should appear over his or her 
signature validating the budget.
    8. Provide a detailed annual operating pro forma cash flow 
statement for a 5-year period for the proposed development and each 
phase thereof.

M. Grant Limitations

    Applicants must demonstrate compliance with various limitations 
through the following separate schedules. All representations should 
refer to and be substantiated by budget

[[Page 18255]]

documents provided in Exhibit L (Program Financing and Sustainability).
    1. Restate the funding requested under this NOFA and demonstrate 
that the grant amount is calculated in accordance with Section II.E. of 
this NOFA. The applicant must disclose all unexpended HUD capital 
grants and insurance proceeds targeted to the development.
    2. Identify all replacement housing assistance (development funds) 
and Section 8 funds previously awarded by HUD with respect to the 
targeted development, and identify the units addressed thereby.
    3. Demonstrate that the average per unit cost of the applicant's 
program is above 70 percent of HUD's published TDC limits. For these 
calculations, include all costs listed in 24 CFR 941.103, including 
those for demolition, remediation, and relocation.

N. Need for Funding

    HUD will use the information provided in Exhibit N primarily to 
evaluate the Urgency of Need for Revitalization evaluation factor 
(V.A.), and the Need for Funding threshold criterion (IV.B.). If the 
applicant PHA owns or operates more than 250 public housing units, 
demonstrate that its total capital needs, as shown in its latest 
physical needs assessment, exceed by more than 10 percent the work it 
expects to be able to fund over the next 5 years. A CGP agency should 
use its most recent HUD approved 5-year action plan to make this 
determination.

O. Section 8 Cost Comparison

    This exhibit details the required methodology for the cost 
comparison between public housing and Section 8 assistance and will be 
used to evaluate the Efficient Utilization of Federal Funding rating 
factor (V.I.). Applicants must provide, using the methodology described 
below, two figures: the overall monthly cost per unit for revitalizing 
and operating the targeted development, and the monthly cost per unit 
for demolishing the targeted development and providing affected 
residents with tenant-based assistance. The calculation for continuing 
the development as public housing will include both the costs for 
revitalizing and operating the public housing units. Please show, step-
by-step, the calculations made to arrive at the figures and include 
sufficient details to demonstrate that the methodology was correctly 
used.
    The estimated cost of the revitalization and operation as public 
housing shall be calculated as the sum of total operating, 
revitalization, and accrual costs, expressed on a monthly per public 
housing unit basis for the first month after stabilized occupancy is 
achieved. For purposes of this comparison, any Replacement Units 
including homeownership units will be deemed public housing.
    The development's operating cost (all overhead costs prorated to 
the development, including PHA oversight of a private owner or manager, 
where applicable) and including utilities and utility allowances, shall 
be expressed as total operating costs per month, divided by the number 
of occupied units after a reasonable vacancy allowance. Operating costs 
shall be the applicant's best realistic estimate for the first month 
after stabilized occupancy.
    The total cost of revitalization for the development (public 
housing units only) shall be the HUD funds (HOPE VI, CGP, CIAP, MROP or 
Development) required by the applicant's revitalization plan, but not 
including direct expenditures for self-sufficiency efforts. Total 
revitalization cost should include only that portion of demolition, 
remediation and relocation costs which is attributable to occupied 
units which will be replaced with hard units under the revitalization 
plan. (That is, if it will cost $5 million to demolish and relocate 
residents from a 600 unit development with 500 occupied units, of which 
only 400 units are to be replaced, then $4 million is attributed to the 
Replacement Units and $1 million should be excluded from total 
revitalization cost.) This total revitalization cost is converted into 
a monthly per public housing unit basis by dividing the total cost by 
the number of public housing units to be provided for after 
revitalization and dividing this figure by 180 (i.e., 15 years of 
months, where 15 results from an assumed life of 20 years for the 
capital investment amortized by a 3 percent annual rate of real 
interest to account for the cost of undertaking the capital 
improvements up front). For example, if the total HUD-funded 
revitalization cost of the development described above is $31 million 
and its occupancy by households after revitalization is to be 400 
public housing units, its monthly per unit revitalization cost will be 
$417 (i.e., $30 million divided by 400, for a per unit cost of $75,000, 
and then divided by 180 for a per unit monthly cost of $417).
    The monthly per occupied unit cost of accrual (i.e., replacement 
needs) will be estimated by using the HUD-funded revitalization cost, 
then multiplying that figure by .02 (representing a fifty year 
replacement cycle), and dividing this product by 12 to get a monthly 
cost. For example, if the HUD-funded revitalization cost is $75,000 per 
unit, then the estimated monthly cost of accrual per occupied unit is 
$125 (the result of multiplying $75,000 by .02 and then dividing by 
12).
    The overall current cost for continuing the development as public 
housing is the sum of its monthly operating cost per public housing 
unit, its monthly revitalization cost per public housing unit, and its 
estimated monthly accrual cost per public housing unit. For example, if 
the operating cost per unit month is $350 and the revitalization cost 
is $417 and the accrual cost is $125, the overall monthly cost per 
occupied unit is $892.
    The estimated cost of providing tenant-based assistance under 
Section 8 for an equivalent number of households shall be calculated as 
the amortized demolition cost of the existing site, plus the unit-
weighted averaging of the monthly Fair Market Rents for units of the 
applicable bedroom size plus the administrative fee applicable to newly 
funded certificates during the year used for calculating public housing 
operating costs (e.g., the administrative fee for units funded in FY 
1995 and FY 1996 is the monthly administrative fee amount in column C 
of the notice published in the Federal Register on January 24, 1995 (60 
FR 4764, 4765)). For example, if the replacement development will have 
200 two-bedroom public housing units and 200 three bedroom public 
housing units, and if the Fair Market Rent in the area is $600 for two-
bedroom units and is $800 for three-bedroom units, and if the 
administrative fee comes to $46 per unit, then the per unit monthly 
cost of tenant based assistance is $746 ($700 for the unit-weighted 
average of Fair Market Rents, or 200 times $600 plus 200 times $800, 
with the sum divided by 400, plus $46 for the administrative fee). To 
this must be added the demolition, remediation, and relocation costs of 
the entire existing site, converted to a monthly per occupied unit 
basis by dividing the total cost by the number of occupied units, then 
dividing again by 180. The total cost used should be the same as under 
the revitalization plan if 100 percent demolition is planned there; if 
partial demolition is planned, the PHA should use its best estimate of 
what 100 percent demolition would cost. In the example given above, the 
demolition of the 600-unit development would cost $10,000 per occupied 
unit, for an add-on of $56 per month in addition to the $746 Section 8 
cost.
    This Section 8 cost would then be compared to the cost of 
continuing the public housing development--in the example of this 
section, the public housing cost of $892 monthly per unit

[[Page 18256]]

would be greater than the Section 8 cost of $802 monthly per unit.

P. Affirmatively Furthering Fair Housing

    While HUD will use information from Exhibit P primarily to evaluate 
the Fair Housing threshold criterion (IV.D.), Exhibit P is also the 
vehicle for applicants to describe any or all of the following, which 
relate to Application Evaluation Factor V.F. The applicant must submit 
an Exhibit P that describes any or all of the following:
    1. The extent to which the applicant has affirmatively furthered 
fair housing and the actions it has already taken, or plans to take 
through this application to accomplish this objective. These actions 
may include but are not limited to, the following examples:
    a. Those actions which contribute toward the reduction of 
concentrations of low-income persons who are protected under the Fair 
Housing Act. Examples of such actions include:
    (1) Mobility counseling programs and clearinghouses which offer 
housing opportunities both within and outside of high-poverty areas;
    (2) Outreach programs targeted at groups within the eligible 
population that would not ordinarily consider applying for units 
located in heavily racially concentrated areas;
    (3) Outreach programs targeted at landlords with housing 
opportunities located outside of low-income concentrated areas;
    (4) The implementation of site selection policies which give 
priority to sites located outside of minority and low-income areas; and
    (5) The promotion of accessible homeownership opportunities and 
accessible rental housing in its jurisdiction.
    b. Those actions which increase the supply of accessible and 
visitable housing available to low-income persons with disabilities and 
insure accessibility for persons with disabilities to all aspects of 
the program. ``Accessible housing'' means that the unit is located on 
an accessible route (36'' clear passage) and, when designed, 
constructed, altered, or adapted, can be approached, entered, and used 
by an individual with physical disabilities. Visitability restricts 
itself to two areas of a unit: (1) At least one outside entrance is at 
grade (no step(s)), and (2) all interior and exterior doors provide a 
32'' clear passage.
    c. Actions which are communitywide or metropolitanwide in scope. 
Such actions may include mobility counseling programs, relocation 
advisory services, affirmative marketing and advertising programs, and 
other actions that may employ public and private resources to address 
fair housing problems.
    2. Actions taken, or, if applicable, to be taken through this 
application, to overcome the consequences of prior discriminatory 
practices or usage which have or may have tended to exclude persons of 
a particular race, color, or national origin, or to promote the 
provision of public housing opportunities for persons with 
disabilities. Such actions may include:
    a. Compliance with the provisions of Voluntary Compliance 
Agreements, contracts, and other legally binding documents, where 
applicable; or
    b. Actions taken without any kind of legally binding order which 
have changed previous discriminatory management, tenant selection and 
assignment or maintenance practices.
    Consistent with the provisions of the 1997 HUD Appropriations Act, 
no applicant shall describe actions connected with the implementation 
of the provisions of any consent decree settling litigation relating to 
the desegregation of public housing or related matters.
    3. Actions already taken, or, if applicable, to be taken through 
this application, to provide housing opportunities for persons with 
disabilities. Such actions may include implementation of a Needs 
Assessment and Transition Plan or other actions which increase, for 
persons with disabilities, accessibility to both the units and to other 
opportunities to participate in the PHA's programs and activities. Such 
actions may also include any actions taken to modify services, 
policies, and practices identified through the self-evaluation 
processes required by 28 CFR 35.105 or 24 CFR 8.51.

Q. Required Certifications

    Each applicant must submit an Exhibit Q that includes all of the 
following letters and forms, fully executed and dated. Submission of 
all of the following letters and forms is a requirement of this NOFA.
    1. As the first page of the application, submit an SF-424, 
Application for Federal Assistance. This form must include the Housing 
Authority Code, provide the name of the targeted development, list all 
activities proposed in the application (demolition, revitalization, 
replacement, Section 8) and the amount of funds requested for each. 
This form must be signed by the Executive Director of the PHA.
    2. A letter from the Chief Executive of the applicable jurisdiction 
in support of the application.
    3. Form HUD-52820-A, PHA Board Resolution for Submission of HOPE VI 
Application.
    4. A certification by the public official responsible for 
submitting the Consolidated Plan under 24 CFR part 91 that the proposed 
activities are consistent with the approved Consolidated Plan of the 
State or unit of general local government within which the development 
is located.
    5. Certification for a Drug-Free Workplace (Form HUD-50070) in 
accordance with 24 CFR 24.630.
    6. Form HUD 2880, Recipient Disclosure/Update Report. This report 
provides disclosures required by section 102 of the HUD Reform Act of 
1989 (Pub. L. 101-235; approved December 15, 1989). Implementing 
regulations in 24 CFR part 4 require PHAs that seek assistance from HUD 
for a specific activity to make the disclosures required under 24 CFR 
4.9.
    7. Anti-Lobbying Certification for Contracts, Grants, Loans and 
Cooperative Agreement (Form HUD-50071). In accordance with section 319 
of the Department of Interior and Related Agencies Appropriations Act 
for Fiscal Year 1990 (31 U.S.C. 1352) (the Byrd Amendment) and the 
implementing regulations in 24 CFR part 87, the PHA must certify that 
no Federally-appropriated funds have been paid or will be paid, by or 
on behalf of the PHA, for influencing or attempting to influence an 
officer or employee of any agency, or a member of Congress in 
connection with the awarding of any Federal contract, the making of any 
Federal grant or loan, the entering into of any cooperative agreement, 
and the extension, continuation, renewal, amendment, or modifications 
of any Federal contract, grant, loan, or cooperative agreement. (The 
rule also requires disclosure from the PHA if nonappropriated funds 
have been spent or committed for lobbying activities, if those 
activities would be prohibited if paid with appropriated funds.)

VII. Application Processing and Grant Administration

A. Application Evaluation

    Awards under this NOFA will be made through a selection process 
that will award grants to the most meritorious applications based upon 
points as provided below.
    HUD will preliminarily review, rate and rank each application, 
including those applications from prior HOPE VI planning grant 
recipients which are for the same development as their planning grant, 
on the basis of the evaluation factors set forth in Section V of this

[[Page 18257]]

NOFA. A final review panel will then review the scores of all 
applications whose preliminary score is above a base score established 
by HUD, using the same evaluation factors set forth in Section IV of 
this NOFA. HUD intends to set the base scores so that applications 
requesting a total of approximately $900 million are advanced to the 
final review stage. The HOPE VI program, following Congressional 
direction, has heretofore incorporated a progression from planning 
grants to implementation grants. HUD has not given any rating 
preference to prior planning grant sites; however, in order to preserve 
program continuity and obtain full consideration of sites in which HUD 
has made an investment of HOPE VI funds, HUD will review all such 
applications in the second review stage. Such applications will not 
receive special consideration during the panel review stage and will be 
reviewed in both stages of the selection process according to the 
evaluation factors set forth in Section V of this NOFA.
    The review panel will assess each of the applications advanced to 
final review and will assign the final scores.
    HUD will select for funding the most highly rated applications up 
to available funding. HUD, in its discretion, may choose to select a 
lower-rated approvable application over a higher-rated application in 
order to (1) Increase the level of national geographic diversity of 
applications selected under this NOFA, or (2) implement an exemplary, 
innovative or unique revitalization plan whose approach would otherwise 
be inadequately represented in the pool selected, and which HUD 
determines is a revitalization model which should be tested for the 
benefit of future efforts.
    HUD may establish a panel of experts with whom to consult for 
advice on elements of the applications that are within their expertise. 
Such experts will be advisors and will not conduct any part of the 
selection of grantees.

B. Reduction in Requested Grant Amount

    HUD may select an application for participation in the HOPE VI 
program but grant an award pursuant to such application in an amount 
lower than the amount requested by the applicant, or adjust line items 
in the proposed grant budget within the amount requested (or both), if 
it determines that partial funding is a viable option, and:
    1. The amount requested for one or more eligible activities is not 
supported in the application or is not reasonably related to the 
service or activity to be carried out;
    2. An activity proposed for funding does not qualify as an eligible 
activity and can be separated from the budget;
    3. The amount requested exceeds the total cost limitation 
established for a grant;
    4. Insufficient funds are available to fund the full amount; or
    5. Providing partial funding will permit HUD to fund one or more 
additional qualified PHAs.

C. Corrections to Deficient Applications

    HUD will evaluate each application against the evaluation factors 
in Section V of this NOFA. Upon completion of the evaluation, if HUD 
determines that a PHA failed to submit any of the items listed in 
Section III of this NOFA, or if the application contains a technical 
mistake, such as an incorrect signatory, or is missing any other 
information that does not affect evaluation of the application, HUD may 
notify the PHA in writing and by facsimile (fax) that the PHA has 14 
calendar days from the date of HUD's written notification to submit or 
correct any of the specified items. The PHA will have no opportunity to 
correct deficiencies other than those identified in HUD's written 
notification, or otherwise to supplement or revise its application. If 
any of the items identified in HUD's written notification is not 
corrected and submitted within the required time period, the 
application will be ineligible for further consideration.

D. Notification of Funding Decisions

    HUD will not notify applicants as to whether they have been 
selected to participate until the announcement of the selection of all 
recipients under this NOFA. HUD will provide written notification to 
applicants that have been selected to participate and to those that 
have not been selected. HUD's notification of award to a selected 
applicant will constitute a preliminary approval by HUD subject to the 
completion of a subsidy layering review pursuant to 24 CFR 941.10(b), 
HUD's completion of an environmental review of the proposed sites in 
accordance with 24 CFR part 50, and the execution by HUD and the 
recipient of a Grant Agreement and/or ACC Amendment. Selection for 
participation (preliminary approval) does not constitute approval of 
the proposed site(s). Each proposal will be subject to a HUD 
environmental review, in accordance with 24 CFR part 50, and the 
proposal may be modified or the proposed sites rejected as a result of 
that review. Each application must contain the certification included 
in the PHA Board Resolution for Submission of HOPE VI Application (form 
HUD 52820-A), submitted under Exhibit Q.3, that the applicant will 
assist HUD in complying with environmental review procedures. Under 
that certification, the applicant/recipient may not acquire, 
rehabilitate, convert, lease, repair, or construct a property, or 
commit HUD or local funds to these activities, until HUD approves the 
site.

E. Grant Agreement/ACC Amendment

    After HUD selects a PHA to receive an award pursuant to this NOFA, 
it will enter into a Grant Agreement and/or ACC Amendment, as 
determined appropriate by HUD, with the recipient setting forth the 
amount of the grant and applicable rules, terms, and conditions, 
including sanctions for violation of the agreement. Among other things, 
the agreement/amendment will provide that the recipient agrees to the 
following:
    1. To carry out the program in accordance with the provisions of 
this NOFA, applicable law, the approved application, and all other 
applicable requirements, including requirements for mixed finance 
development, and section 202 of OCRA if applicable;
    2. To comply with such other terms and conditions, including 
recordkeeping and reports, as HUD may establish for the purposes of 
administering, monitoring, and evaluating the program in an effective 
and efficient manner, including full cooperation with HUD's program 
oversight contractor;
    3. That HUD will require the grantee to demonstrate that the team 
assembled to implement the HOPE VI program has a strong management and 
development track record and has the capability to commence and carry 
out a quality HOPE VI program. If the grantee fails to make this 
demonstration to the satisfaction of HUD and its program oversight 
manager, HUD will direct corrective actions as a condition of retaining 
the grant; and
    4. That HUD will require each grantee to execute a construction 
contract within 18 months (or a period specified in the Grant 
Agreement). Failure to obligate funds will result in the enforcement of 
default remedies up to and including withdrawal of funding.
    5. That each grantee will have established interim performance 
goals and must complete the physical component of the HOPE VI 
revitalization within 4 years of execution of the grant agreement. The 
Secretary shall enforce this requirement through default remedies up to 
and including withdrawal of funding that the PHA has not obligated. HUD 
will

[[Page 18258]]

take into consideration those delays caused by factors beyond the 
control of the grantee when enforcing these schedules.
    The Grant Agreement will set forth the precise schedules of the 
HOPE VI program and will also provide program rules, describe 
requirements for implementation of the revitalization plan, and provide 
any special conditions on the grantee, as applicable.

VIII. Applicability of Program Requirements

    The development to be revitalized is a public housing development. 
Accordingly, certain activities under the revitalization plan are 
subject to statutory requirements applicable to public housing 
developments under the U.S. Housing Act of 1937 (the 1937 Act), other 
statutes, and the ACC. Within such restrictions, HUD seeks innovative 
solutions to the long-standing problems of obsolete developments. In 
order to satisfy any particular statutory requirement, a Grantee may 
take measures as described in implementing regulations or, upon request 
to HUD for a different approach, as otherwise approved in writing by 
HUD. In the event that a program regulation or requirement conflicts 
with a requirement established in this NOFA, the NOFA requirement 
prevails.
    The recipient must conduct the following activities, which may be 
undertaken with HOPE VI grant funds, in accordance with the cited 
program requirements or otherwise with HUD's written approval, 
consistent with the 1997 Appropriations Act and this NOFA:
    A. Demolition and disposition activity under the grant must be 
conducted in accordance with 24 CFR part 970;
    B. Public housing development activity (including on-site 
reconstruction as well as off-site replacement housing) must be 
conducted in accordance with 24 CFR part 941, including mixed finance 
development in accordance with subpart F (published in the Federal 
Register on May 2, 1996 (61 FR 19708, 19714)). HUD will distribute the 
Mixed-Finance ACC Amendment to the recipients.
    C. Replacement housing activity using Section 8 rental certificates 
must be conducted in accordance with 24 CFR part 882, 887, and 982, as 
applicable;
    D. Replacement housing activity with units acquired or otherwise 
provided for homeownership under section 5(h) of the 1937 Act must be 
conducted in accordance with 24 CFR part 906;
    E. Replacement housing activities provided through housing 
opportunity programs of construction or substantial rehabilitation of 
homes must be conducted in accordance with 24 CFR part 280 (the 
Nehemiah Program);
    F. Rehabilitation and physical improvement activities must be 
conducted in accordance with 24 CFR 968.112 (b), (d), (e), and (g)-(o), 
24 CFR 968.130, and 24 CFR 968.135 (b) and (d). These provisions were 
published in the Federal Register on March 5, 1996 (61 FR 8712, 8738), 
and are included in the May 1, 1996 codification of the Code of Federal 
Regulations.
    G. The administration and operation of units must be in accordance 
with all existing public housing rules and regulations.
    PHAs may request, for the revitalized development, a waiver of HUD 
regulations (that are not statutory requirements) governing rents, 
income eligibility, or other areas of public housing management to 
permit a PHA to undertake measures that enhance the long-term viability 
of a development revitalized under this program.

IX. Applicability of Other Federal Requirements

A. Flood Insurance

    In accordance with the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4001-4128), HUD will not approve applications for grants 
providing financial assistance for acquisition or construction 
(including rehabilitation) of properties located in an area identified 
by the Federal Emergency Management Agency (FEMA) as having special 
flood hazards, unless:
    1. The community in which the area is situated is participating in 
the National Flood Insurance program (see 44 CFR parts 59 through 79), 
or less than one year has passed since FEMA notification regarding such 
hazards; and
    2. Where the community is participating in the National Flood 
Insurance Program, flood insurance is obtained as a condition of 
approval of the application.

B. Coastal Barrier Resources Act

    In accordance with the Coastal Barrier Resources Act (16 U.S.C. 
3501), HUD will not approve grant applications for properties in the 
Coastal Barrier Resources System.

C. Fair Housing Requirements

    Recipients must comply with the requirements of the Fair Housing 
Act (42 U.S.C. 3601-19) and the regulations in 24 CFR part 100; 
Executive Order 11063 (Equal Opportunity in Housing) and the 
regulations in 24 CFR part 107; the fair housing poster regulations in 
24 CFR part 110; and Title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d) and the regulations in 24 CFR part 1.

D. Nondiscrimination on the Basis of Age or Handicap

    Recipients must comply with the prohibitions against discrimination 
on the basis of age pursuant to the Age Discrimination Act of 1975 (42 
U.S.C. 6101-07) and the regulations in 24 CFR part 146; the 
prohibitions against discrimination against, and reasonable 
modification, accommodation, and accessibility requirements for, 
persons with disabilities under section 504 of the Rehabilitation Act 
of 1973 (29 U.S.C. 794) and the regulations in 24 CFR part 8; the 
Americans with Disabilities Act (42 U.S.C. 12101 et seq.) and 
regulations issued pursuant thereto (28 CFR part 36); and the 
Architectural Barriers Act of 1968 (42 U.S.C. 4151) and the regulations 
in 24 CFR part 40.

E. Employment Opportunities

    The requirements of section 3 of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701u) (Employment Opportunities for Lower 
Income Persons in Connection with Assisted Projects) and the 
regulations in 24 CFR part 135 apply to this program.

F. Minority and Women's Business Enterprises

    The requirements of Executive Orders 11246, 11625, 12432, and 12138 
apply to this program. Consistent with HUD's responsibilities under 
these orders, recipients must make efforts to encourage the use of 
minority and women's business enterprises in connection with funded 
activities.

G. OMB Circulars

    The policies, guidelines, and requirements of OMB Circular Nos. A-
87 (Cost Principles Applicable to Grants, Contracts and Other 
Agreements with State and Local Governments) and 24 CFR part 85 
(Administrative Requirements for Grants and Cooperative Agreements to 
State, Local, and Federally-Recognized Indian Tribal Governments), as 
modified by 24 CFR 941, subpart F relating to the procurement of 
partners in mixed-finance developments, apply to the award, acceptance, 
and use of assistance under the program by PHAs, and to the remedies 
for noncompliance, except when inconsistent with the provisions of the 
1997 Appropriations Act, other Federal statutes, or this NOFA. 
Recipients are also subject to the audit requirements of OMB Circular 
A-128 implemented at 24 CFR part 44. Copies of OMB Circulars may be 
obtained from

[[Page 18259]]

E.O.P. Publications, room 2200, New Executive Office Building, 
Washington, DC 20503, telephone (202) 395-7332 (this is not a toll-free 
number). There is a limit of two free copies.

H. Drug-Free Workplace

    Applicants must certify that they will provide a drug-free 
workplace, in accordance with the Drug-free Workplace Act of 1988 and 
HUD's implementing regulations at 24 CFR part 24, subpart F.

I. Debarred or Suspended Contractors

    The provisions of 24 CFR part 24 apply to the employment, 
engagement of services, awarding of contracts, subgrants, or funding of 
any recipients, or contractors or subcontractors, during any period of 
debarment, suspension, or placement in ineligibility status.

J. Conflict of Interest

    1. In addition to the conflict of interest requirements in 24 CFR 
part 85, no person who is an employee, agent, consultant, officer, or 
elected or appointed official of the PHA and who exercises or has 
exercised any functions or responsibilities with respect to activities 
assisted under an HOPE VI grant, or who is in a position to participate 
in a decisionmaking process or gain inside information with regard to 
such activities, may obtain a financial interest or benefit from the 
activity, or have an interest in any contract, subcontract, or 
agreement with respect thereto, or the proceeds thereunder, either for 
himself or herself or for those with whom he or she has family or 
business ties, during his or her tenure or for one year thereafter.
    2. HUD may grant an exception to the exclusion in paragraph (1) of 
this section on a case-by-case basis when it determines that such an 
exception will serve to further the purposes of the revitalization 
demonstration and the effective and efficient administration of the 
revitalization program. HUD will consider an exception only after the 
applicant or recipient has provided a disclosure of the nature of the 
conflict, accompanied by an assurance that there has been public 
disclosure of the conflict and a description of how the public 
disclosure was made, and an opinion of the applicant's or recipient's 
attorney that the interest for which the exception is sought would not 
violate State or local laws. In determining whether to grant a 
requested exception, HUD will consider the cumulative effect of the 
following factors, as applicable:
    a. Whether the exception would provide a significant cost benefit 
or an essential degree of expertise to the revitalization program that 
would otherwise not be available;
    b. Whether an opportunity was provided for open competitive bidding 
or negotiation;
    c. Whether the person affected is a member of a group or class 
intended to be the beneficiaries of the activity, and the exception 
will permit such person to receive generally the same interest or 
benefits as are being made available or provided to the group or class;
    d. Whether the affected person has withdrawn from his or her 
functions or responsibilities, or the decisionmaking process, with 
respect to the specific activity in question;
    e. Whether the interest or benefit was present before the affected 
person was in a position as described in paragraph 1 of this section;
    f. Whether undue hardship will result either to the applicant, 
recipient, or the person affected when weighed against the public 
interest served by avoiding the prohibited conflict; and
    g. Any other relevant considerations.

K. Labor Standards

    Where HOPE VI funds provide assistance with respect to low-income 
housing (including Section 8 housing) that will be subject to a 
contract for assistance under the U.S. Housing Act of 1937, Davis-Bacon 
or HUD-determined wage rates apply to development or operation of the 
housing to the extent required under section 12 of the Act. Under 
section 12, the wage rate requirements do not apply to individuals who: 
perform services for which they volunteered; do not receive 
compensation for those services or are paid expenses, reasonable 
benefits, or a nominal fee for the services; and are not otherwise 
employed in the work involved (24 CFR part 70). In addition, if other 
Federal programs are used in connection with the revitalization 
program, labor standards requirements apply to the extent required by 
such other Federal programs, on portions of the development that are 
not subject to Davis-Bacon rates under the U.S. Housing Act.

L. Lead-Based Paint Testing and Abatement

    Any property assisted under the revitalization program established 
under this NOFA is covered by the Lead-Based Paint Poisoning Prevention 
Act (42 U.S.C. 4821 et seq.) and is therefore subject to 24 CFR part 
35; 24 CFR part 965, subpart H; and 24 CFR 968.110(k). Tenant-based 
assistance provided to PHAs under this program will be subject to 24 
CFR 982.401 and 24 CFR part 35.

M. Relocation

    1. The requirements of the Uniform Relocation Assistance and Real 
Property Acquisition Policies Act of 1970 and government-wide 
implementing regulations at 49 CFR part 24 apply to this program.
    2. Temporary Relocation. The recipient must provide each resident 
of an eligible property, who is required to relocate temporarily to 
permit work to be carried out, with suitable, decent, safe, and 
sanitary housing for the temporary period, and must reimburse the 
resident for all reasonable out-of-pocket expenses incurred in 
connection with the temporary relocation, including the costs of moving 
to and from the temporarily occupied housing and any increase in 
monthly costs of rent and utilities.

X. Findings and Certifications

A. Paperwork Reduction Act

    The information collection requirements of this NOFA (including 
Forms HUD-52825-A and HUD-52820- A required by Sections VI.L.1.a and 
VI.N.3 of this NOFA) have been submitted to the Office of Management 
and Budget (OMB) for review in accordance with the emergency processing 
procedures of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) 
and 5 CFR 1320.13. 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. The OMB control number, 
when assigned, will be announced by separate notice in the Federal 
Register.

B. Environmental Review

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
implementing section 102(2)(C) of the National Environmental Policy Act 
of 1969 (42 U.S.C. 4332). The Finding of No Significant Impact is 
available for public inspection and copying between 7:30 am and 5:30 pm 
weekdays at the Office of the Rules Docket Clerk, 451 Seventh Street, 
SW, Room 10276, Washington, DC 20410.

C. Impact on the Family

    The General Counsel, as the Designated Official for Executive Order 
12606, The Family, has determined that the policies announced in this 
NOFA will not have the potential for significant impact on family 
formation, maintenance, and general well-being within the meaning of 
the order. No significant change in existing HUD

[[Page 18260]]

policies and programs will result from the issuance of this NOFA, as 
those policies and programs relate to family concerns. To the extent 
that there is impact on the family, revitalization under this program 
can be expected to support families by enabling low-income families to 
live in decent, safe, and sanitary housing.

D. Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this NOFA 
will not have substantial, direct effects on States, on their political 
subdivisions, or on their relationship with the Federal Government, or 
on the distribution of power and responsibilities between them and 
other levels of government. While this NOFA offers financial assistance 
to units of general local government, none of its provisions will have 
an effect on the relationship between the Federal Government and the 
States, or the States' political subdivisions.

E. Accountability in the Provision of HUD Assistance

    Section 102 of the Department of Housing and Urban Development 
Reform Act of 1989 (HUD Reform Act) and the final rule codified at 24 
CFR part 4, subpart A, published on April 1, 1996 (61 FR 1448), contain 
a number of provisions that are designed to ensure greater 
accountability and integrity in the provision of certain types of 
assistance administered by HUD. On January 14, 1992, HUD published, at 
57 FR 1942, a notice that also provides information on the 
implementation of section 102. The documentation, public access, and 
disclosure requirements of section 102 are applicable to assistance 
awarded under this NOFA as follows:
    Documentation and public access requirements. HUD will ensure that 
documentation and other information regarding each application 
submitted pursuant to this NOFA are sufficient to indicate the basis 
upon which assistance was provided or denied. This material, including 
any letters of support, will be made available for public inspection 
for a five-year period beginning not less than 30 days after the award 
of the assistance. Material will be made available in accordance with 
the Freedom of Information Act (5 U.S.C. 552) and HUD's implementing 
regulations at 24 CFR part 15. In addition, HUD will include the 
recipients of assistance pursuant to this NOFA in its Federal Register 
notice of all recipients of HUD assistance awarded on a competitive 
basis.
    Disclosures. HUD will make available to the public for five years 
all applicant disclosure reports (HUD Form 2880) submitted in 
connection with this NOFA. Update reports (also Form 2880) will be made 
available along with the applicant disclosure reports, but in no case 
for a period less than three years. All reports--both applicant 
disclosures and updates--will be made available in accordance with the 
Freedom of Information Act (5 U.S.C. 552) and HUD's implementing 
regulations at 24 CFR part 15.

F. Section 103 of the HUD Reform Act

    HUD's regulation implementing section 103 of the Department of 
Housing and Urban Development Reform Act of 1989, codified as 24 CFR 
part 4, applies to the funding competition announced today. The 
requirements of the rule continue to apply until the announcement of 
the selection of successful applicants. HUD employees involved in the 
review of applications and in the making of funding decisions are 
limited by part 4 from providing advance information to any person 
(other than an authorized employee of HUD) concerning funding 
decisions, or from otherwise giving any applicant an unfair competitive 
advantage. Persons who apply for assistance in this competition should 
confine their inquiries to the subject areas permitted under 24 CFR 
part 4.
    Applicants or employees who have ethics related questions should 
contact the HUD Office of Ethics (202) 708-3815. (This is not a toll-
free number.) For HUD employees who have specific program questions, 
such as whether particular subject matter can be discussed with persons 
outside HUD, the employee should contact the appropriate Field Office 
Counsel, or Headquarters counsel for the program to which the question 
pertains.

G. Prohibition Against Lobbying Activities

    The use of funds awarded under this NOFA is subject to the 
disclosure requirements and prohibitions of section 319 of the 
Department of Interior and Related Agencies Appropriations Act for 
Fiscal Year 1990 (31 U.S.C. 1352) (the Byrd Amendment) and the 
implementing regulations in 24 CFR part 87. These authorities prohibit 
recipients of Federal contracts, grants, or loans from using 
appropriated funds for lobbying the executive or legislative branches 
of the Federal Government in connection with a specific contract, 
grant, or loan. The prohibition also covers the awarding of contracts, 
grants, cooperative agreements, or loans unless the recipient has made 
an acceptable certification regarding lobbying. Under 24 CFR part 87, 
applicants, recipients, and subrecipients of assistance exceeding 
$100,000 must certify that no Federal funds have been or will be spent 
on lobbying activities in connection with the assistance.

H. Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program number is 
14.864.

    Dated: March 27, 1997.
Kevin Emanuel Marchman,
Acting Assistant Secretary for Public and Indian Housing.
[FR Doc. 97-9547 Filed 4-11-97; 8:45 am]
BILLING CODE 4210-33-P