National Housing Law Project Housing Law Bulletin

Copies of the cited HUD documents may be secured from various sources, including (1) the Handsnet folder at Legal Services/Substantive Law/Housing Forum, (2) the Government Printing Office's spot on the World Wide Web,¹ (3) bound volumes of the Federal Register, (4) HUD Clips,² and (5) HUD.³ Citations are included with each document to help you secure copies.

HUD Regulations

Section 8 Rental Voucher and Certificate Programs and Establishment of Section 8 Management Assessment Program; Final Rule
63 Fed. Reg. 48,548-48,560 (Sept. 10, 1998)
Summary: This rule establishes the Section 8 Management Assessment Program (SEMAP) to objectively measure public housing agency (HA) performance in key Section 8 tenant-based assistance program areas. SEMAP enables HUD to ensure program integrity and accountability by identifying HA management capabilities and deficiencies and by improving risk assessment so as to effectively target monitoring and program assistance. HAs may use the SEMAP performance analysis to assess their own program operations.
Effective date: October 13, 1998, except sections as indicated in rule's preamble that are stayed until further notice.

Uniform Physical Condition Standards and Physical Inspection Requirements for Certain HUD Housing; Final Rule
63 Fed. Reg. 46,565-46,580 (Sept. 1, 1998)
Summary: This rule makes final a June 30, 1998, proposed rule to establish uniform physical condition standards for housing insured and/or assisted under certain HUD programs. To the extent possible, HUD believes that its Section 8 housing, public housing, HUD-insured multifamily housing, and other HUD-assisted housing (collectively, "HUD housing") should be subject to uniform physical standards which are intended to ensure that such housing is decent, safe, sanitary and in good repair. The rule amends HUD's regulations to require its housing to meet these standards. Additionally, it generally establishes new physical inspection procedures that will allow HUD to determine conformity with such standards. This rule does not change the requirement for annual physical inspections currently found in the covered HUD programs. Moreover, it does not affect the existing requirements in each covered HUD program regarding which entity is responsible for conducting the physical inspection. This rule takes into consideration public comment received on the June 30, 1998, proposed rule.
Effective date: October 1, 1998.

Uniform Financial Reporting Standards for HUD Housing Programs; Final Rule
63 Fed. Reg. 46,581-46,593 (Sept. 1, 1998)
Summary: This rule makes final a June 30, 1998, proposed rule to establish uniform annual financial reporting standards for HUD's public housing, Section 8 housing, and multifamily insured housing programs. The rule requires public housing agencies and project owners of HUD-assisted housing — which under longstanding regulatory and contractual requirements already submit financial information to HUD on an annual basis — to submit this information electronically to HUD, and that the submitted information be prepared in accordance with generally accepted accounting principles (GAAP). Electronic submission is important in reducing the administrative burden that manual submission presents to housing authorities, project owners, mortgagees and HUD. It is also important in bringing HUD and its program partners up to date with modern technology. Reporting in GAAP is important because GAAP accounting is more widely accepted and allows for financial consistency among various entities.

The objective of this rule is to standardize the annual financial information submission process and, through standardization, bring consistency and increased fairness to the evaluation of the financial condition of housing assisted under various HUD programs. This final rule takes into consideration public comments received on the June 30, 1998, proposed rule.
Effective date: October 1, 1998.

Multifamily Housing Mortgage and Housing Assistance Restructuring Program (Mark-to-Market) and Renewal of Expiring Section 8 Project-Based Assistance Contracts; Interim Rule
63 Fed. Reg. 48,925-48,955 (Sept. 11, 1998)
Summary: This interim rule implements recently enacted legislation that created a Mark- to-Market Program through which Section 8 rents for multifamily projects with HUD-insured or HUD-held mortgages will be reduced. The purpose of the program is to preserve low-income rental housing affordability while reducing the long-term costs of federal rental assistance, including project-based assistance, and minimizing the adverse effect on the FHA insurance funds. The Mark-to-Market Program will be implemented through Mortgage Restructuring and Rental Assistance Sufficiency Plans to be developed for individual projects by Participating Administrative Entities selected by HUD. The interim rule also implements legislation for renewal of Section 8 project-based assistance contracts for projects outside of the Mark-to-Market Program.
Effective date: October 13, 1998.

Loan Guarantees for Indian Housing; Direct Guarantee Processing; Interim Rule
63 Fed. Reg. 48,987-48,994 (Sept. 11, 1998)
Summary: This interim rule establishes for the Section 184 Indian Housing Loan Guarantee Program a new "direct guarantee" procedure modeled in part on the FHA single-family mortgage insurance "direct endorsement" procedure, under which HUD staff are not involved in the processing or approval of individual loans before closing.
Effective Date: October 13, 1998.

HUD Federal Register Notices

1998 HUD Disaster Recovery Initiative; Notices
63 Fed. Reg. 56,764-56,777 (Oct. 22, 1998)
Summary: The 1998 Supplemental Appropriations and Rescissions Act (Pub. L. No. 105-174, 112 Stat. 58 et seq., approved May 1, 1998) with respect to the 1998 HUD Disaster Recovery Initiative grant funds, requires the publication of a Notice governing the allocation and use of such funds. This Notice addresses that requirement.

1998 HUD Disaster Recovery Initiative: Waivers and Modifications of Requirements for Community Development Block Grant Funds Under the 1998 Supplemental Appropriations and Rescissions Act
63 Fed. Reg. 56,777-56,780 (Oct. 22, 1998)
Summary: The Notice immediately above governs the allocation and use of funds under the 1998 Disaster Recovery Initiative. In implementing this initiative, HUD is authorized by statute to waive statutory and regulatory requirements. This Notice lists the provisions being waived and provides justifications for these waivers.

Requirements for Notification, Evaluation and Reduction of Lead-Based Paint Hazards in Federally Owned Residential Property and Housing Receiving Assistance; Notice of Additional Information and Analysis on Determination of No Significant Economic Impact on Substantial Number of Small Entities
63 Fed. Reg. 54,422-54,426 (Oct. 9, 1998)
Summary: This Notice pertains to a proposed rule published by HUD in the Federal Register on June 7, 1996, that would implement sections 1012 and 1013 of the Residential Lead- Based Paint Hazard Reduction Act of 1992. This rule advised that HUD had determined that the proposed regulatory requirements would not have a significant economic impact on a substantial number of small entities. HUD continues to believe that this determination was correct and published this Notice to provide the public with additional details regarding the reasons for this determination.

Funding for Fiscal Year 1998: Capacity Building for Community Development and Affordable Housing; Notice
63 Fed. Reg. 48,983-48,986 (Sept. 11, 1998)
Summary: A recently enacted appropriation provided $15 million in Fiscal Year 1998 funding for activities authorized in Section 4 of the HUD Demonstration Act of 1993 as in effect immediately before June 23, 1997 (Pub. L. No. 103-120, 107 Stat. 1148, 42 U.S.C. § 9816 note). The funds are to be used for capacity building for community development and affordable housing — provided that at least $5 million of the funding be used in rural areas, including tribal areas.

Section 4 authorizes the Secretary to establish by Notice such requirements as may be necessary to carry out its provision. This Notice, which takes effect upon issuance, indicates that HUD will equally divide the $15 million appropriated for this capacity-building initiative between the Enterprise Foundation and the Local Initiatives Support Corporation (LISC). Each organization will match the HUD assistance provided with resources from private sources in an amount equal to three times its share, as required by Section 4. Each organization will use at least $2.5 million of its $7.5 million share for activities in rural areas, including tribal areas.

This Notice also provides details regarding administrative and other requirements that shall apply to this program.

Section 8 Housing Assistance Payments Program: Contract Rent Annual Adjustment Factors, Fiscal
Year 1999; Final Rule
63 Fed. Reg. 51,223-51,247 (Sept. 24, 1998)
Summary: The United States Housing Act of 1937 requires that assistance contracts signed by owners participating in HUD's Section 8 Housing Assistance Payments programs provide for annual adjustment in the monthly rentals for units covered by the contract. This Notice announces revised Annual Adjustment Factors (AAFs) for adjustment of contract rents on assistance contract anniversaries from October 1, 1998. The factors are based on a formula using data on residential rent and utilities cost changes from the most current Bureau of Labor Statistics Consumer Price Index (CPI) survey and from HUD Random Digit Dialing (RDD) rent change surveys.
Effective date: October 1, 1998.

HUD Notices

Section 8 Management Assessment Program Final Rule and Certification Form
Notice PIH 98-50 (Oct. 6, 1998)
Summary: This Notice announces publication of the Section 8 Management Assessment Program (SEMAP) final rule. The Notice transmits the rule and the SEMAP Certification, Form HUD-52648. Affected partiesare encouraged to read the entire rule and the preamble to the rule to become thoroughly familiar with its contents. SEMAP is a new management assessment system that HUD will use annually to measure the performance of all housing agencies (HAs) that administer the Section 8 tenant-based rental assistance programs.

Under SEMAP, HUD will assess housing authority performance on 14 key indicators that show whether eligible families are helped to be able to afford decent rental units at a reasonable subsidy cost as intended by federal housing legislation and by Congress' appropriation of federal tax dollars for these programs. The systematic and comprehensive approach of SEMAP will improve HUD's oversight of the Section 8 tenant-based rental assistance programs and will help HUD target monitoring and assistance to housing authority programs that most need improvement. Housing authorities may use the SEMAP indicators to assess the conformity of their program operations with the key Section 8 tenant-based program requirements and performance standards.

The SEMAP final rule and certification (Form HUD-52648) can be obtained on the HUD web site at http://www.hud.gov/handbook.html.
Effective date: October 13, 1998 (except sections that pertain to the assignment of ratings).

Transmittal of the New Demolition/Disposition Application — HUD Form 52860
Notice PIH 98-49 (Oct. 6, 1998)
Summary: HUD has recently developed an application form to assist public housing authorities that want to submit requests to HUD to demolish or dispose of public housing property (i.e., dwelling units, non-dwelling units, vacant land). The new application, HUD Form 52860, should significantly reduce the amount of time necessary for HAs to prepare an application and it will also expedite application review time at the Special Application Center (SAC) in Chicago.

Effective 90 days from the date of issue of this Notice, application for demolition or disposition shall be submitted on HUD Form 52860. In addition, plans are underway to make this new form available on the Internet. All demolition or disposition applications must be submitted to the Office of Public Housing, Special Application Center (SAC), 77 West Jackson Boulevard, Room 2401, Chicago, IL 60604.

Project-Based Section 8 Contracts Expiring in Fiscal Year 1999
Notice H 98-34 (Oct. 16, 1998)
Summary: The Multifamily Assisted Housing Reform and Affordability Act of 1997 (Title V of the HUD Fiscal Year 1998 Appropriations Act, Pub. L. No. 105-65, approved October 27, 1997), established new policies for the renewal of Section 8 project-based contracts. The Act also sets forth new rules for determining rent increases for renewed contacts and gives HUD authority to deny renewal when owners are in material violation of their obligations. For some projects, the Act also transfers processing and oversight functions from the Multifamily HUBs and Program Centers to the new Office of Multifamily Housing Assistance Restructuring (OMHAR).

These requirements are discussed in detail in HUD's Interim Rule for the Multifamily Assisted Housing Restructuring and Affordability Act of 1997 (MAHRA ("Mark-to-Market")) and Renewal of Expiring Section 8 Project-Based Assistance Contracts, published in the Federal Register on September 11, 1998, at 63 Fed. Reg. 48,925.

This Notice does the following:

It defines certain owners' notification responsibilities;

It advises owners of project-based Section 8 assistance projects of their options regarding the renewal of contracts, including the combination of multiple stages and/or multiple contracts;

It advises owners that if they choose Option 3 (opt-out) they must notify HUD 120 days prior to expiration of the contact, and if they choose Options 1 (renewal without restructuring) or 2 (restructuring), they must notify HUD 90 days prior to contract expiration;

It provides guidance and procedures to owners/management agents, contract administrators and HUD staff on renewing contracts;

It provides guidance on setting renewal rents and handling renewal rent increases; and

It provides the requirements and procedures for opting out of a Section 8 project-based contract.

Implementation of the Grants Management Center
Notice PIH 98-45 (Sept. 1, 1998)

Summary: Effective May 26, 1998, the Office of Public and Indian Housing implemented one of several organizational changes to implement the Secretary's "2020 initiative." The Office of Public Housing's Grants Management Center (GMC) has been established at 501 School Street, 8^th Floor, Washington, DC 20024. The GMC was created to support the Public and Indian Housing Program and field offices. The Center's main objective is to provide a centralized grants management and processing function that ensures the efficient use of grant funds to better achieve HUD's social and economic goals. The GMC will be fully operational as of October 1, 1998.

Section 8 Contracts Expiring Early in Fiscal Year 1999
Notice H 98-31 (Sept. 16, 1998)
Summary: Section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA), Title V of Pub. L. No. 105-65 (approved October 27, 1997), 42 U.S.C. § 1437f note (HUD's FY 1998 Appropriations Act) established new policies on renewal of Section 8 project-based contracts for FY 1999 expirations.

Renewal requirements are discussed in detail in HUD's Interim Rule for Multifamily Housing Mortgage and Housing Assistance Restructuring Program (Mark-to-Market) and Renewal of Expiring Section 8 Project-Based Assistance Contracts, published in the Federal Register on September 11, 1998.

The contract renewal requirement of the Interim Rule mandates that owners submit their contract renewal request at least 90 days prior to the expiration date. Because there is not sufficient time for certain project owners to satisfy these requirements, HUD is offering them the opportunity to have their contracts renewed under Section 405(a) of the January 26, 1996, Continuing Resolution (Pub. L. No. 104-99, approved January 26, 1996) (see Notices H 96-89 and H 96-97).

¹  At http://www.access.gpo.gov/su_docs.
² At http://www.hudclips.org/cgi/index.cgi.
³  To order Notices and Handbooks from HUD, call (800) 767-7468 or fax (202) 708-2313.