(i) Resale. (2) Life estate. The participating jurisdiction may assist the person holding the life estate if the person is low-income and occupies the housing as his or her principal residence. The commenter stated that those organizations are not subject to the same public disclosure requirements as 501(c)(3) organizations and may participate in advocacy, including political advocacy. The agreement must set forth the requirements the subrecipient must follow to enable the participating jurisdiction to carry environmental review responsibilities before HOME funds are committed to a project. HUD Response: HUD has found that many resale provisions are not clearly described and do not meet statutory and regulatory requirements. For new construction building activity, several commenters argued that the development of written standards for methods and materials is unnecessary because state and local codes for new construction, as well as the International Residential Code (IRC) and International Building Code (IBC), provide sufficient specificity such that scopes of work can be developed using these codes. A CHDO that is a sponsor of HOME-assisted rental housing owns and develops the rental housing project that it agrees to convey to a private nonprofit organization at a predetermined time after completion of the development of the project. In response to the concerns raised about the effect of these provisions on organizations that are currently designated as CHDOs, HUD has made a substantial change in the definition of owner in revised 92.300(a)(2) that establishes a new role for CHDOs to become owners of rental housing that they do not develop. HUD is adopting the proposed rule language without change. A commenter recommended that HUD remove the existing prohibition on using HOME Start Printed Page 44639funds to refinance existing federal or federally-insured debt (e.g., a loan made with CDBG funds or a FHA-insured loan). In lieu of the limits provided by HUD, the participating jurisdiction may determine 95 percent of the median area purchase price for single family housing in the jurisdiction annually, as follows. HUD proposed amending the definition of program income in 92.2 to clarify that it does not include gross income from the use, rental, or sale of real property received by the project owner, developer, or sponsor, unless the funds are paid by the project owner, developer, or sponsor to the participating jurisdiction, subrecipient, or state recipient. The participating jurisdiction must review and approve written cost estimates for construction and determining that costs are reasonable. Several commenters stated that the proposed rule would require a full-scale market analysis for every project, even individual homebuyer units. The use of State recipients, subrecipients, or contractors does not relieve the participating jurisdiction of this responsibility. (b) Underwriting and subsidy layering. HUD also proposed a new 92.253(d)(3)(ii) that would provide that preferences may be given to disabled families who need services offered at a project, if certain conditions are met. The commenter stated that this alternative would eliminate the need to revise cost allocation to reflect fewer units and avoid problems related to potentially exceeding the maximum per unit subsidy limit. The IRS uses this model to determine utilities for its LIHTC program. This rule was determined to be a significant regulatory action, as defined in section 3(f) of the order (although not an economically significant regulatory action under the order). 5121-5206), the participating jurisdiction may request a reduction of its matching requirement. If the assisted and nonassisted units are not comparable, the actual costs may be determined based on a method of cost allocation. Participating jurisdictions that find this additional oversight burdensome should avoid entering into contractual agreements that may result in financial incentives to approve HOME assistance. (i) The State shall describe other forms of investment that are not described in 24 CFR 92.205(b). HUD Response: HUD's intent in revising the definition of commitment was to increase participating jurisdictions' accountability for the use of HOME funds. The commenters also stated that HUD should clearly define these terms for participating jurisdictions to ensure clarity and accuracy. Information about this document as published in the Federal Register. The participating jurisdiction must inspect the housing and document this compliance based upon an inspection that is conducted no earlier than 90 days before the commitment of HOME assistance. better and aid in comparing the online edition to the print edition. Brankica Lenic - University for Economics - LinkedIn The costs and benefits of the regulatory changes made by this rule are more fully discussed in the regulatory impact analysis (RIA) that accompanies this rule and can be found at http://www.hud.gov/offices/cpd/affordablehousing/programs/home/. Several comments were received regarding Uniform Physical Property Condition Standards (UPCS). A few commenters asked for clarification of what would constitute an acceptable assessment of neighborhood market conditions for projects of different sizes and types (e.g., homeownership, special needs). The participating jurisdiction must establish refinancing guidelines and state them in its consolidated plan described in 24 CFR part 91. The commenter stated that this, in turn, may prevent participating jurisdictions from investing in rural areas due to higher costs. HUD proposed changes to 92.205(e)(2) that would establish a 4-year time period from commitment of HOME funds and set-up of a project in IDIS to complete the project. Although the participating jurisdiction staff is not required to conduct the inspections, the participating jurisdiction cannot rely on or accept independent inspections performed by any party not under contract to the participating jurisdiction or its subrecipient, including inspections and certifications by the project owner or a contractor of the project owner. A commenter stated that requiring the State to request every HOME draw would add cost and reduce efficiency, adding an extra layer of administration. (The occupant of the housing has a divided ownership interest.) Housing includes manufactured housing and manufactured housing lots, permanent housing for disabled homeless persons, transitional housing, single-room occupancy housing, and group homes. (3) Costs of a project audit, including certification of costs performed by a certified public accountant, that the participating jurisdiction may require with respect to the development of the project. 92.253: Tenant protections and selection. The proposed rule would permit participating jurisdictions to request a 12-month extension of the completion deadline by submitting information about the status of the project, steps being taken to overcome any obstacles to completion, proof of adequate funding to complete the project, and a schedule with milestones for completion of the project for HUD's review and approval. Comments: A few commenters opposed the adoption of the Utility Schedule Model, stating that it is more complicated to determine a utility allowance for each project as opposed to relying on the local Public Housing Agency's (PHA) utility allowance. (3) Existing housing that is acquired for homeownership (e.g., downpayment assistance) must be decent, safe, sanitary, and in good repair. Disclaimer: The following policies are developed within the guidelines of the HOME regulations The written agreement must specify the forms and amounts of homeownership assistance that the participating jurisdiction authorizes the lender to provide to families and any conditions that apply to the provision of such homeownership assistance. The HOME Program provides funds for projects that primarily assist low- and moderate-income persons in securing: Down payment and closing cost assistance to first time homebuyers. and CPD Notice 03-05[8] HUD has also revised 92.214(b)(1) to further clarify the circumstances under which the participating jurisdictions, subrecipients, and state recipients may charge certain fees. HUD is adopting the proposed rule language without change. (7) The participating jurisdiction determines the form of assistance (e.g., grant or loan) that it will provide to the community housing development organization receives or, for rental housing projects under paragraph (a)(4) of this section, to the entity that owns the project. HUD Response: The use of HOME funds is statutorily limited to permanent and transitional affordable housing for low-income households. To clarify, the participating jurisdiction must determine whether the units in a project will be fixed or floating at the time of commitment of the HOME funds because that decision affects the amount of HOME funding the project can receive. HOME - Investment Partnership Program - Community Development A few commenters suggested that HUD should provide additional time beyond acquisition to reach the 15-year remaining useful life standard, as many large rehabilitation projects take place over several years. Comments: A few commenters supported the clarification that tenants cannot be evicted or lose their lease because they cannot or will not purchase the HOME rental unit they occupy. Participating jurisdictions will be required to document the basis on which they calculated their fee and retain this documentation for monitoring by HUD. Single room occupancy (SRO) housing means housing (consisting of single- room dwelling units) that is the primary residence of its occupant or occupants. Based upon many of the comments received in response to the 4-year deadline for project completion proposed in 92.205(e), participating jurisdictions appeared to not fully understand the point at which a commitment of HOME funds may take place. Other commenters suggested that HUD not require repayment in cases where the failure to complete the project was beyond the control of the participating jurisdiction or where the participating jurisdiction is unable to recover the HOME funds expended on the project from the developer. Because the provisions of the proposed rule were made applicable to FY 2012 HOME funds in HUD's FY 2012 appropriation law, HUD sees no benefit to participating jurisdictions or CHDOs in delaying the implementation of these provisions. The participating jurisdiction must establish standards to determine that the housing is decent, safe, sanitary, and in good repair. (c) Ownership interest. This site displays a prototype of a Web 2.0 version of the daily (xi) Written agreement. HUD agrees that the maximum per unit subsidy limit applicable to a project receiving additional HOME funds should be the limit in effect at the time that the funds are added. However, other commenters cited concerns about the added burden, cost, and complexity of the new requirements. Subrecipients can conduct the inspections, if specified in the written agreement with the participating jurisdiction, or it can hire an independent third party contractor to conduct the inspections. (B) If there are observed deficiencies for any of the inspectable items in the property standards established by the participating jurisdiction, in accordance with the inspection requirements of 92.251, a follow-up on-site inspection to verify that deficiencies are corrected must occur within 12 months. (iv) The officers and employees of the for-profit entity may not be officers or Start Printed Page 44665employees of the community housing development organization. Escambia County announces new workforce housing program, plans to build With respect to the development of new public housing, paragraph (a) also makes clear that HOME funds cannot be used for public housing units, whether funded under section 9 or another source. Several commenters requested that HUD clarify whether inspection procedures of HUD's Real Estate Assessment Center (REAC) would be required. Reconstruction is rehabilitation for purposes of this part. Available for Eligible Activities. One commenter was concerned that a one-size-fits-all approach to affirmative marketing would have limited effectiveness. Restore Funding for HUD's Home Investment Partnerships (HOME) Program A few commenters suggested that the requirement be changed to 120 days, as Federal Housing Administration (FHA) appraisals are valid within 120 days of the loan closing date. regulatory information on FederalRegister.gov with the objective of 1736, approved July 21, 2010) (Dodd-Frank Act). These commenters stated that by the time the participating jurisdiction obtains the inspection report, which is after the lender has approved the borrower's loan package, the proposed 30-day period may already have elapsed and another inspection may be required. As more projects are constructed or rehabilitated to higher energy-efficiency standards, thus enhancing affordability of the units, the use of a standard utility allowance that may not represent actual utility costs is difficult to justify. A commenter requested guidance to assist in implementing these standards. A few commenters recommended that HUD not impose a specific capital needs assessment format or process, and instead allow participating jurisdictions to use their own process. However, if these organizations are to qualify as CHDOs, they must not be controlled and staffed by the PHA. Consequently, those comments are addressed under Property Standards at 92.251. 12. (2) If a participating jurisdiction does not complete a project within 4 years of the date of commitment of funds, the project is considered to be terminated and the participating jurisdiction must repay all funds invested in the project to the participating jurisdiction's HOME Investment Trust Fund in accordance with 92.503(b). Some commenters suggested that the requirement to re-inspect HOME-assisted properties within 12 months if there are any observed deficiencies could result in a costly and disproportionate response, (e.g., a minor deficiency should not necessitate a second onsite inspection, which would be particularly costly in rural or remote areas). (xiii) Records documenting objections to the religious character of an organization that provides services under the HOME program, and the reasonable efforts undertaken to identify and refer the program participant to an alternative provider to which the prospective program participant has no objection, as provided in 92.257(d). HUD proposed revising paragraph (5) of the definition to clarify that a governmental entity may create a CHDO, but is not permitted to control the CHDO by providing its employees to the CHDO as staff or officers. The final rule does not change the proposed rule, and therefore states that each of the major systems must have a minimum useful life of 5 years, or the system(s) must be rehabilitated. Consequently, HUD declines to adopt any of the alternative language offered by commenters and is adopting the proposed rule language without change. The new provision that participating jurisdictions develop and follow policies and procedures established at 92.504(a) will become effective 12 months after the publication date of this final rule in the Federal Register. If additional HOME funds are used to directly assist the tenants to become homeowners, the minimum period of affordability is the affordability period under 92.254(a)(4), based on the amount of direct homeownership assistance provided. Experienced in conducting studies, guidelines and manuals elaboration, delivery of capacity . If the community housing development organization is not also receiving funds for a housing project to be developed, sponsored, or owned by the community housing development organization, the agreement must provide that the community housing development organization is expected to receive funds for a project within 24 months of the date of receiving the funds for operating expenses, and must specify the terms and conditions upon which this expectation is based and the consequences of failure to receive funding for a project.
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