National Housing Law Project Housing Law Bulletin

The following are housing-related regulations and notices that HUD and other federal agencies have recently issued. For the most part, the summaries are taken directly from the agency’s summary of the regulation in the Federal Register. The Notice summaries are taken from the introductory paragraphs.

Copies of the cited 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

Civil Penalties for Fair Housing Act Violations;
Proposed Rule
24 C.F.R. Part 180
62 Fed. Reg. 66,487-66,490 (Dec. 18, 1997)

Summary: This proposed rule interprets the Fair Housing Act to allow Administrative Law Judges (ALJs) to assess a separate civil penalty for each of multiple acts involving housing discrimination. Under the Fair Housing Act, housing discrimination violations carry maximum civil penalties for first-, second-, and third-time offenders. This proposed rule would interpret the Fair Housing Act to clarify that, in a given case, an ALJ may assess more than one maximum civil penalty against a respondent in a given case, where the respondent has committed separate and distinct acts of discrimination.

The proposed rule is also part of President Clinton’s "Make ‘Em Pay" initiative, which is designed to fight housing-related acts of hate violence and intimidation with increased enforcement and monetary penalties. Such housing-related hate acts continue to pose a significant problem. Last year, according to FBI statistics, of 8,759 hate crimes, 2,416, or 27 percent, were housing-related. The rule describes how ALJs are to consider housing-related hate acts under the six factors they apply in determining the amount of a civil penalty to assess against a respondent found to have committed a discriminatory housing practice.

Comments due: Comments on the proposed rule were due on January 20, 1998.

HUD’s Regulation on Self-Testing Regarding
Residential Real Estate-Related Lending Transactions and Compliance With the Fair Housing Act; Final Rule
24 C.F.R. Parts 100 and 103
62 Fed. Reg. 66,423-66,433 (Dec. 18, 1997)

Summary: This rule implements Section 814A of the Fair Housing Act, which encourages voluntary compliance by lenders with the Fair Housing Act (FHAct) through lender-initiated self-tests of lenders’ residential real estate-related lending transactions and, where appropriate, corrective action designed to remedy any possible violations of the FHAct revealed by such tests. This rule also makes technical amendments to the fair housing complaint processing regulations.

Effective date: January 30, 1998.

HUD Federal Register Notices

Single-Family Property Disposition
Officer-Next-Door Sales Program
63 Fed. Reg. 1885-87 (Jan. 12, 1998)

Summary: Under its Single-Family Property Disposition program, HUD has implemented an initiative to sell HUD-owned single-family homes to law enforcement officers at a 50-percent discount. The initiative applies to properties located in Revitalization Areas and to other properties that meet certain exception criteria. These properties are being made available to law enforcement officers who agree to occupy them as their primary residence for at least three years. The Department has taken this action to ensure that homeownership opportunities are made available to law enforcement officers who are charged with the responsibility of ensuring the safety and well being of residents in the communities they serve and to help promote safe neighborhoods by furthering the community policing efforts being made by numerous cities.

HUD has also issued a new Notice on this program. Notice H 97-73 (HUD) (Dec. 31, 1997), Officer-Next-Door Sales Program Single-Family Property Disposition.

Notice of Fiscal Year 1998 Fair Market Rents (FMRs); Correction.
62 Fed. Reg. 64,521-64,522 (Dec. 8, 1997)

Summary: This Notice corrects final FY 1998 Fair Market Rents for two areas, the Duluth-Superior, Minnesota-Wisconsin MSA and the Des Moines, Iowa MSA, published in the Federal Register on September 26, 1997 (62 Fed. Reg. 50,724).

Effective date: October 1, 1997.

HUD Notices

Treatment of Income Received from Training Programs
Notice PIH 98-2 (HA) (Jan. 12, 1998)⁴

Summary: This Notice addresses questions regarding HUD’s existing policy on the treatment of amounts tenants received from training programs when determining annual income in assisted housing programs. It focuses on the two exclusions most directly related to welfare reform: 24 C.F.R. §§ 5.609(c)(8)(v) and 5.609(c)(13).

Responsibility for Completion of Form HUD-50058, Family Report
Notice PIH 97-60 (HA) (Dec. 4, 1997)

Summary: On July 25, 1997, the Office of Management and Budget (OMB) approved a new version of the Form HUD-50058. The new format reflects program changes driven by statutory changes including the housing authority’s minimum rent, discretionary income deductions and non-citizen rule information.

The form and instructions currently are available through the HUD Website at http://www.hud.gov. Hard copies of the form and instructions are being distributed to every HA in the country, as well as to all HUD State and Area Offices, and Area Offices of Native American Programs. If additional hard copies of the form and instructions are required, they may be ordered by contacting the MTCS Hotline at 1-800-FON-MTCS.

Restrictions on Leasing Additional Units — Budget Guidance
PIH 97-59 (HA) (Nov. 26, 1997)

Summary: This Notice replaces Notice PIH 96-68, Restrictions on Leasing Additional Units; Budget Guidance, which expired on August 31, 1997. Guidance is provided to public housing agencies and Indian housing authorities (HAs) and to HUD staff regarding the number of units that may be approved in an HA’s annual Certificate and Voucher program budget. Guidance is also provided regarding the utilization of Annual Budget Authority (ABA) and the Program Reserve Account to support budgeted units.

All other Notices still in effect with regard to the leasing of units continue to be applicable and must be adhered to, including the statutory prohibition on reissuing turnover certificates and vouchers for 90 days. The number of units an HA may lease is restricted to the number of units that may be fully supported by the Annual Budget Authority during the HA budget and subsequent years.

If the projected funding requirements for the budgeted units exceed the ABA, the budget must be reduced by the State or Area HUD office, working in conjunction with the HA, to a number of units that can be supported by the ABA.

This revised policy does not authorize the use of program reserves to support unit lease-up. The following exception is allowed:

Based upon previous policy (prior to Notice 96-68), HAs were allowed to over-lease using program reserves. However, effective August 23, 1996, HAs were to begin reducing their program size to bring costs in line with the ABA. During the transition period in which the HA is reducing program size, program reserves may be used to provide assistance to existing families in the program. However, in accord with this Notice, HAs are now directed to reduce program size to a level of the number of units fully supported from the ABA. The budget approval letter to the HA must direct the HA to stop reissuing turnover rental certificates or rental vouchers until the number of units under lease has declined to the number of units that can be assisted within the ABA available for the HA budget and subsequent years.

Issuance of Rental Certificates or Rental Vouchers. In the past, many HAs have found it necessary to issue two, three, or more rental certificates or rental vouchers to eligible families in order to achieve one successful lease-up. This is most common in rental markets with low vacancy rates and/or limited availability of affordable and adequate housing units. This practice does not need to change under these revised policies. Where market conditions adversely affect the ability of rental certificate and rental voucher holders to find suitable units, it is anticipated that HAs will continue the need to issue multiple rental certificates or rental vouchers to achieve one successful lease-up. Occasionally, rental certificate or rental voucher holders may be more successful than normal in their search for units, and the HA may find itself briefly in an overleased situation. If this happens, the HA must delay further the reissuance of turnover rental certificates or rental vouchers until current policy requirements are met and the number of units under lease are fully supported by the ABA.

Fiscal Year 1998 Renewal of Expiring Section 8
Moderate Rehabilitation (Mod Rehab) Housing
Assistance Payments (HAP) Contracts
Notice PIH 97-58 (HA) (Nov. 21, 1997)

Summary. This Notice provides instructions for implementing Sections 522(b) and 523(e) of the Department of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1998 (FY 1998 Appropriations Act) governing the renewal of HAP contracts under the Section 8 Mod Rehab program. This Notice also rescinds Notice PIH 97-46 to the extent that it conflicts with procedures outlined below.

Background: During FY 1997, Section 211(b) of the Department of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1997 (FY 1997 Appropriations Act) required, upon the request of an owner of a multifamily housing project covered by an expiring project-based HAP contract, that the Secretary renew the expiring HAP contract as project-based assistance for a period of not more than one year.

The FY 1998 Appropriations Act was enacted on October 27, 1997, as Pub. L. No. 105-65, 111 Stat. 1344. Section 522(b) of that Act extends Section 211(b) of the FY 1997 Appropriations Act to cover HAP contracts expiring during FY 1998.

The Notice explains HUD’s policies on various issues, including applicability, eligible projects. staged HAP contracts, renewal rent levels, general renewal procedures, owners ineligible for renewal of expiring Mod Rehab HAP contracts, statutory owner notification requirements, procedures applicable to units with HAP contracts expiring between October 1, 1997, and January 31, 1998, procedures applicable to units with HAP contracts expiring between February 1 and September 30, 1998, units that become vacant during the one-year HAP contract renewal term, vacancy payments, and other matters.

Occupancy in Section 202/8 Projects
Notice H 97-74 (HUD) (Dec. 31, 1997)

Summary: This Notice addresses the question of whether the adult children of an elderly family are eligible to occupy a Section 202/8 unit as a part of that family. This question typically arises when adult children, over the age of 18, return to the parental nest, first as guests, but remaining as family members. HUD believes that Congress intended the definition of "elderly family" is to be narrowly construed. Consequently, HUD’s Notice states its position that any adult children seeking to return to the parental home would be eligible only if they are essential for the care or well being of the elderly tenant(s).

The Notice does not relate to adult children who were a part of the family when occupancy began, nor does it relate to children who are legitimately providing care for the elderly tenant and who have no intentions of remaining permanently in the unit.

Rural Housing Service Regulations

Rural Rental Housing (RRH) Assistance; Final Rule
7 C.F.R. Part 1944
62 Fed. Reg. 67,215-67,224 (Dec. 23, 1997)

Summary: The Rural Housing Service (RHS) (formerly Rural Housing and Community Development Service (RHCDS), a successor Agency to the Farmers Home Administration (FmHA)) amends its regulations for the Rural Rental Housing (RRH) program. This action is taken to implement legislative reforms mandated by the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1997, Pub. L. No. 104-180, enacted August 6, 1996, and to implement Pub. L. No. 105-86, enacted November 18, 1997, which amends the maximum loan term for Section 515 loans from 50 years to 30 years. The intended effect of these reforms is to improve the effectiveness and efficiency of the Section 515 RRH program.

Rural Housing Service Notices

Notice of Funding Availability (NOFA) for
the Section 515 Rural Rental Housing Program
62 Fed. Reg. 67,234-67,236 (Dec. 23, 1997)

Summary: This NOFA announces the time frame to submit applications for Section 515 Rural Rental Housing loan funds and Section 521 Rental Assistance, for new construction. This document also describes the allocation of loan funds and new construction rental assistance (RA), the application process, submission requirements, and areas of special emphasis or consideration.

Dates: The closing deadline for receipt of applications in response to this NOFA is 5:00 p.m., local time, for each Rural Development State Office on March 23, 1998, except as noted.

Addresses: Applicants wishing to apply for assistance must contact the Rural Development State Office serving the place in which they desire to submit an application for rural rental housing to receive further information and copies of the application package. A listing of Rural Development State Offices, their addresses, telephone numbers, and the person to contact is included in the Notice.

Notice of Housing Preservation Grants
62 Fed. Reg. 67,329-67,330 (Dec. 24, 1997)

Summary: The Rural Housing Service (RHS) announces that it is soliciting competitive applications under its Housing Preservation Grant (HPG) program. The HPG program is a grant program that provides qualified public agencies, private nonprofit organizations and other eligible entities grant funds to assist very low- and low-income homeowners in rural areas in repairing and rehabilitating their homes, and to assist rental property owners and cooperative housing complexes to repair and rehabilitate their units if they agree to make such units available to low- and very low-income persons. This action is taken to comply with Agency regulations found in 7 C.F.R. Part 1944, Subpart N, which requires the Agency to announce the opening and closing dates for receipt of pre-applications for HPG funds from eligible applicants. The intended effect of this Notice is to provide eligible organizations notice of these dates.

Pre-application deadline: RHS announced that it began receiving pre-applications on December 24, 1997. The closing date for acceptance by RHS of pre-applications is March 24, 1998. This period will be the only time during the current fiscal year that RHS accepts pre-applications. Pre-applications must be received by or postmarked on or before the closing date.

Addresses: Submit pre-applications to Rural Development servicing offices for the HPG program. Applicants must contact their Rural Development State Office for this information. A listing of Rural Development State Offices, their addresses, and telephone numbers is included in the Notice

Other Agency Notices

DEPARTMENT OF JUSTICE

National Institute of Justice Solicitation for
Building Safer Public Housing Communities
Through Locally Initiated Research Partnerships
63 Fed. Reg. 2,416 (Jan. 15, 1998)

Summary: This is an announcement of the availability of the National Institute of Justice solicitation, "Building Safer Public Housing Communities Through Locally Initiated Research Partnerships, 1998." The National Institute of Justice (NIJ) is calling for proposals to implement Locally Initiated Research Projects (LIRP) in Public and Indian Housing Authorities. These projects will assist housing authorities in the evaluation of efforts to control and prevent drug and drug-related crime problems such as those efforts supported by the Public Housing Drug Elimination Program (PHDEP). Eight to 12 awards for a total expenditure of up to $975,000 will be granted to proposals that include the following areas of research:

Deadline: The due date for receipt of proposals is the close of business on March 31, 1998.

Addresses: National Institute of Justice, 810 Seventh Street, NW, Washington, DC 20531.

DEPARTMENT OF THE TREASURY

1998 Electronic Filing: Low-Income Housing
Credit Forms
63 Fed. Reg. 2,722 (Jan. 16, 1998)

Summary: The Internal Revenue Service is planning to conduct an automated pilot program during 1998 for filing Low-Income Housing Credit forms to be filed electronically (modem to modem). This pilot program will be available without geographic limitation, although all processing is centralized at the Internal Revenue Service Center in Philadelphia, Pennsylvania. Participants must have secured prior authorization from the Internal Revenue Service. Interested parties may obtain information by writing or calling the IRS. Generally, the procedures for electronic filing will require all the data currently supplied on the paper form, including attachments that usually accompany the form. Additionally, filers will be required to test before acceptance into the program. The LIHC pilot program is being offered to State Housing Agencies and software developers. Comments on the program are welcome.

Dates: Applications may be submitted year round.

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.
4. See Earned Income Disregards for Public Housing Tenants elsewhere in this issue for more discussion of this Notice.