[Federal Register Volume 61, Number 20 (Tuesday, January 30, 1996)]
[Notices]
[Pages 3047-3048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1630]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of Assistant Secretary for Housing--Federal Housing Commissioner
[Docket No. FR-3995-N-01]


Notice of Impact of Rescissions Act on Section 202 Supportive 
Housing for the Elderly Program and Section 811 Supportive Housing for 
Persons With Disabilities Program

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Notice of Impact of Rescissions Act on the Section 202 
Supportive Housing for the Elderly Program and Section 811 Supportive 
Housing for Persons with Disabilities Program.

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SUMMARY: The Fiscal Year (FY) 1995 Rescissions Act rescinded, among 
other amounts appropriated for HUD in FY 1995, $1.115 billion from the 
assisted housing account. The Act authorized the Secretary to take 
several actions to realize the $1.115 billion savings, including 
waiving provisions of Section 202 of the Housing Act of 1959 and 
Section 811 of the National Affordable Housing Act, including the 
provisions governing the terms and conditions of project rental 
assistance. This notice advises the public of the impact of these 
rescissions on the Supportive Housing for the Elderly and the 
Supportive Housing for Persons with Disabilities Programs, including 
those projects selected in response to the FY 1995 Notices of Fund 
Availability for these programs.

EFFECTIVE DATE: January 30, 1996.

FOR FURTHER INFORMATION CONTACT: Aretha M. Williams, Office of Elderly 
and Assisted Housing, Department of Housing and Urban Development, 451 
Seventh Street S.W., Room 6120, Washington, DC 20410, telephone (202) 
708-2866; (TDD) (202) 708-4594. (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION: The Emergency Supplemental Appropriations 
for Additional Disaster Assistance, for Anti-Terrorism Initiatives, for 
Assistance in the Recovery from the Tragedy that Occurred at Oklahoma 
City, and Rescissions Act, 1995 (Pub. L. 104-19; approved July 27, 
1995) (the FY 1995 

[[Page 3048]]
Rescissions Act) provides in relevant part that:

    ``[I]n allocating this $1,115,000,000 rescission, the Secretary 
may reduce the appropriations needs of the Department by (1) waiving 
any provision of section 202 of the Housing Act of 1959 and section 
811 of the National Affordable Housing Act (including the provisions 
governing the terms and conditions of project rental assistance) 
that the Secretary determines is not necessary to achieve the 
objectives of these programs, or that otherwise impedes the ability 
to develop, operate or administer projects assisted under these 
programs, and may make provision for alternative conditions or terms 
where appropriate * * * .''

    The Department has identified the following provisions that 
affected the procedures for calculating the amount of project rental 
assistance contract (PRAC) funds reserved for Section 202 and 811 
projects funded in FY 1993, 1994, and 1995, as well as to reduce the 
term for reserving PRAC funds and to waive certain statutory and 
regulatory provisions for Section 202 and 811 projects funded in FY 
1995.

I. Projects Funded in Fiscal Years 1993 and 1994

    A Memorandum from Assistant Secretary for Housing--Federal Housing 
Commissioner Retsinas dated August 28, 1995 notified State and Area 
Offices that all Section 202 and Section 811 projects funded in FY 1993 
and 1994 that had not yet reached initial closing must include an 
Addendum to the Agreement to Enter into the Project Rental Assistance 
Contract (Forms HUD-90172-A-CA and HUD-90172-B-CA) at the time of 
initial closing. The Addendum, which had to be signed by both HUD and 
the Owner, alerted the Owner of HUD's right to reduce the PRAC reserved 
for the project at a later time.
    By instructions to the HUD offices, the PRAC funds reserved for 
projects funded in FY 1993 and 1994, which either had not gone to 
initial closing or had the Addendum described above as an attachment to 
their Agreement to Enter into the PRAC, were reduced by an amount 
equivalent to the anticipated tenant contributions. Based on a review 
of the average tenant contributions to rent and the average project 
operating expenses, tenants on the average contribute at least 25 
percent of the projects' operating expenses. Therefore, the PRAC funds 
were calculated at 75 percent of the estimated project's total 
operating expenses, thereby reducing the PRAC reserved funds by 25 
percent.

II. Projects Funded in Fiscal Year 1995

    A. For projects funded in FY 1995, PRAC funds were reserved at 75 
percent of the estimated project's total operating expenses to take 
into consideration estimated tenant contributions.
    B. In addition to the above, based on the authorization in the FY 
1995 Rescissions Act, the Secretary is hereby waiving the following 
statutory and regulatory provisions:

1. Reducing the Term of the PRAC From 20 to 5 Years

    Consequently, for all projects selected in FY 1995, project rental 
assistance funds were only reserved initially for five years. The 
Department anticipates that at the end of the five-year period, 
renewals will be approved depending upon the availability of funds.

2. Extending Income Eligibility for Admission to Lower Income 
Households

    Currently, eligible residents' income cannot exceed 50 percent of 
the median. A waiver of this provision extends the eligibility of 
elderly persons and persons with disabilities to persons with incomes 
up to 80 percent of median. These individuals, whether their incomes 
are up to 50 percent or 80 percent of median, must be admitted to 
occupancy on a first-come, first-served basis in accordance with fair 
housing requirements.

3. Waiving the Federal Preferences for Admission

    Waiving this provision permits project owners to admit to occupancy 
eligible residents without regard to Federal preferences. However, 
local preferences will still be allowed in accordance with HUD 
regulations. Project owners must still ensure that applicants for 
housing are selected for occupancy in a fair and equitable manner.

    Dated: January 19, 1996.
Stephanie A. Smith,
Acting General Deputy Assistant Secretary for Housing--Federal Housing 
Commissioner.
[FR Doc. 96-1630 Filed 1-29-96; 8:45 am]
BILLING CODE 4210-27-P