National Housing Law Project Housing Law Bulletin

RECENT HUD REGULATIONS AND NOTICES

HUD Regulations

Replacement Housing Factor in Modernization Funding; Final rule. 24 C.F.R. Part 968; 63 Fed. Reg. 46,104-46,108 (Aug. 28, 1998)
Summary: This rule revises the regulations that govern the formula allocation of modernization funding under the Comprehensive Grant Program (CGP). It adds to adds to the formula a replacement housing factor that would
maintain, for five years, a portion of funding that otherwise would be lost by a CGP housing agency when the number of its public housing units is reduced as a result of demolition, disposition, or conversion. The preserved funding must be used for accelerated renovation and reoccupancy of vacant, viable units, or for construction or acquisition of replacement housing units, to the extent that the funds are authorized for such use.

The rule takes effect in federal Fiscal Year 1998, based on demolition, disposition and conversion of units between October 1, 1996, and September 30, 1997.

This rule is needed to encourage public housing agencies (PHAs) to demolish, dispose of, or convert units that are not providing decent, safe, and sanitary housing and to either develop replacement units or accelerate renovation of existing ones.
Effective date: September 28, 1998.

HUD Federal Register Notices

Fiscal Year 1999 Multifamily Housing Mortgage and Housing Assistance Restructuring Program, Request
for Qualifications; Notice, 63 Fed. Reg. 44,102 (Aug.
17, 1998)
This Notice is described in greater detail elsewhere in this issue. See HUD Solicits PAE Applications for Mark to Market Program.
Summary: HUD is implementing the Mark to Market Program authorized by the Multifamily Assisted Housing Reform and Affordability Act of 1997, Pub. L. No. 105-65, tit. V, 111 Stat. 1344, 1384, 105th Cong., 1st Sess. (Oct. 27, 1997) (MAHRA). The program is intended primarily to:

• Preserve low-income rental housing affordability and availability while reducing the long-term costs of project-based assistance;
• Reform the design and operation of federal rental housing assistance programs administered by the Secretary to promote greater multifamily housing project operating and cost efficiencies; and
• Encourage owners of eligible multifamily housing projects to restructure their FHA-insured mortgages and project-based assistance contracts in a manner consistent with the statute.

A PAE is a public agency, a nonprofit organization or any other entity (including a law firm or an accounting firm) that meets the requirements of MAHRA. For purposes of this Request for Qualifications (RFQ), a public agency means a state, county, municipality or other governmental or public body (or agency or instrumentality thereof) authorized to engage in or assist in the development or operation of low-income housing; namely, a public agency is either a state housing finance agency (HFA) or a local housing agency. HUD is publishing this Notice as a formal RFQ from entities that seek to become PAEs.

The statute establishes a priority and directs the Secretary to provide a reasonable period during which the Secretary will consider proposals only from state HFAs and local housing agencies. It further directs the Secretary to select such an agency without considering other applications if the Secretary determines the agency is qualified. By the end of the period the Secretary shall notify the state HFA or local housing agency regarding the status of the proposal. If the proposal is rejected, the Secretary will provide reasons for the rejection and the public agency will have an opportunity to respond. To comply with these provisions of the statute, the selection of qualified PAEs under this RFQ will be completed in two phases.

Secondary Market for Non-Conforming Mortgage Loans to Low-Wealth Borrowers; Advance Notice of Demonstration Program, 63 Fed. Reg. 41,702-41,703
(Aug. 4, 1998)
Summary: HUD's Fiscal Year 1998 appropriations act set aside $10 million for grants to certain nonprofit organizations to demonstrate methods of expanding homeownership opportunities for low-income borrowers by expanding the secondary market for non-conforming home mortgage loans to low-wealth borrowers. This advance notice solicits public input so that HUD can develop meaningful guidelines for selecting the organizations and operating the demonstration program.

Other Federal Register Notices

Privacy Act of 1974; Internal Revenue Service Computer Matching Program; Notice, 63 Fed. Reg. 42,908-42,910 (Aug. 11, 1998)
Summary: Pursuant to Section 552a(e)(12) of the Privacy Act of 1974, as amended, and the Office of Management and Budget (OMB) Guidelines on the Conduct of Matching Program, notice is hereby given of the conduct of Internal Revenue Service computer matching programs.

In accordance with pertinent provisions of Section 61102 of the Internal Revenue Code (IRC) of 1986, the computer matching programs provide federal, state and local agencies with tax information from IRS records to assist them in administering the programs and activities described hereafter. The purpose of these programs is to prevent or reduce fraud and abuse in certain federally assisted benefit programs and facilitate the settlement of government claims while protecting the privacy interest of the subjects of the match. The matches are conducted on an ongoing basis in accordance with the terms of the Computer Matching Agreement in effect with each participant as approved by the Data Integrity Boards of both agencies, and for the period of time specified in such agreement. Members of the public desiring specific information concerning an ongoing matching activity may request a copy of the agreement from the National Director, Office of Governmental Liaison and Disclosure, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, DC 20224.

The IRS is required, upon written request, to disclose current return information from returns with respect to unearned income from the Internal Revenue Service files to any federal, state or local agency administering

. . . (ix) any housing assistance program administered by the Department of Housing and Urban Development that involves initial and periodic review of an applicant's or participant's income, except that return information may be disclosed under this clause only on written request by the Secretary of Housing and Urban Development and only for use by officers and employees of HUD with respect to applicants for and participants in such programs.

Effective date: September 10, 1998.

HUD Notices

Ceiling Rents in Public Housing; Notice, PIH 98-41 (July 23, 1998)
Summary: This Notice reaffirms the current methods public housing agencies (PHAs) may use to establish ceiling rents in the public housing program. The FY 1998 Appropriations Act extended ceiling rent provisions contained in the Balanced Budget Downpayment Act I (Continuing Resolution) through September 30, 1998. The Continuing Resolution included a provision that allows PHAs to adopt ceiling rents that reflect the reasonable market value of the housing, but that are not less than the monthly costs (i) to operate the housing of the agency; and (ii) to make a deposit to a replacement reserve (in the sole discretion of the public housing agency). The Continuing Resolution further directed that the Secretary of HUD develop regulations, after notice and public comment, to carry out this provision. HUD published a Proposed Rule on Ceiling Rents for Public Housing in the Federal Register on November 25, 1997 (62 Fed. Reg. 62,928).

Until the aforementioned regulations have completed final rulemaking, the Continuing Resolution provided the following Transition Rule:

Prior to the issuance of final regulations … a public housing agency may implement ceiling rents, which shall be not less than the monthly costs to operate the housing of the agency and —

(i) determined in accordance with Section 3(a)(2)(A) of the United States Housing Act of 1937, as that section existed on the day before enactment of this Act;

(ii) equal to the 95th percentile of the rent paid for a unit of comparable size by tenants in the same public housing project or a group of comparable projects totaling 50 units or more; or

(iii) equal to the fair market rent for the area in which the unit is located.

Ceiling rents implemented under the Transition Rule of the Continuing Resolution do not require HUD approval. Any such ceiling rents cannot be used in reexaminations after September 30, 1998, unless the provisions are extended by law.

Until final ceiling rent regulations are issued, HUD encourages PHAs to consider the adoption of ceiling rents using any of the above methods to attract and retain working families or to market vacant units. The Notice includes questions and answers on the establishment of ceiling rents.

Processing of Grant Applications for Fiscal Year 1998 SuperNOFA; Public Housing Tenant Opportunities Program; Notice PIH 98-42 (July 31, 1998)
Purpose and applicability: This Notice provides instructions for processing Tenant Opportunities Program (TOP) grant applications submitted for funding under the Fiscal Year 1998 SuperNOFA for Economic Development and Empowerment Program. Eligible applicants in TOP-funded activities are residents of conventional public housing developments. Public housing site-based resident councils; Resident Management Corporations; and Intermediary Resident Organizations (IROs), which include National Resident Organizations (NROs), Statewide Resident Organizations (SROs), and Jurisdiction-Wide Resident Organizations (JROs) may apply for TOP Grants. Only IROs may apply for Mediation Grants. Indian Housing Resident Organizations are now ineligible to apply for TOP funding. For FY 1998, TOP funding is allocated to the following three grant categories:

• Economic Self-Sufficiency Grants (ESSGs) provide technical assistance and training to Site-Based Resident Associations (RAs) and IROs, to move welfare-dependent families to work. The overall goal of the TOP program is to focus resources on welfare-to-work for non-elderly family households and on independent living for households with elderly or disabled persons;
• Organizational Development Grants (ODGs) are available to Site-Based RAs and IROs. The grant's purpose is to help build the capacity of Site-Based RAs to conduct welfare-to-work activities; and
• Mediation Grants (MGs) are available to qualified IROs to partner with mediation organizations who provide training to the IRO and residents on mediation techniques and to provide mediation services.

Purpose and applicability: This Notice provides instructions for Office of Public Housing (OPH)/Area Office of Native American Programs (AONAP) responsibilities in processing Economic Development and Supportive Services (EDSS) program grant applications submitted for funding under the Fiscal Year 1998 SuperNOFA for Economic Development and Empowerment programs. This Notice is applicable to PHAs, Tribes and Tribally Designated Housing Entities (TDHE) to enable them to establish and implement programs that increase resident self-sufficiency and support continued independent living for elderly and disabled residents.

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.