[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR511.71]

[Page 23-24]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 511_RENTAL REHABILITATON GRANT PROGRAM--Table of Contents
 
                     Subpart H_Grant Administration
 
Sec. 511.71  Administrative costs.

    (a) Maximum amount. Any grantee may use not to exceed 10 percent of 
the grant amount initially obligated to the grantee for Federal Fiscal 
Year 1988 and later fiscal years for administrative costs eligible under 
paragraphs (b) and (c) of this section. Eligible grantees may draw down 
funds to pay for eligible administrative costs through HUD's C/MI 
System.
    (b) Eligibility. Eligible administrative costs are reasonable and 
necessary costs, as described in OMB Circular A-87, incurred by the 
grantee itself, or by a unit of general local government pursuant to a 
written cost-sharing agreement with a State grantee (see Sec. 
511.51(b)), in carrying out the Rental Rehabilitation Program in 
accordance with this part. Administrative costs do not include costs of 
rehabilitation which are incurred by and charged to project owners as 
eligible project costs under Sec. 511.10(f)(2).
    (c) Written cost-sharing agreement. A State grantee shall determine 
the amount of its rental rehabilitation grant that it will permit to be 
used for administrative expenses, not to exceed the maximum permitted by 
this section. The State grantee shall share the amount of its rental 
rehabilitation grant designated for administrative expenses with units 
of general local government that incur eligible administrative costs in 
carrying out the Rental Rehabilitation Program, whether the unit of 
general local government receives a distribution of funds from the State 
or selects and manages projects independently as a State recipient or 
whether it performs less comprehensive functions by agreement with the 
State. Before any eligible administrative expenses are incurred by a 
unit of general local government under a State's grant, the cost-sharing 
arrangement shall be specified in a written agreement between the State 
grantee and each unit of general local government that receives payment 
from the State for administrative expenses under this part. This 
agreement shall describe (whether very generally or more specifically) 
the functions that the unit of general local government shall perform 
and the terms and conditions under which the unit of general local 
government participates in the program, including the procedures by 
which the unit of general local government's compensation for its 
administrative expenses incurred in performing the authorized functions 
is to be calculated and paid. HUD will not review the relative sharing 
of administrative expenses between the State and affected units of 
general local government, but pursuant to Sec. Sec. 511.74 and 511.80, 
it will review and audit the State's program on the eligibility of 
administrative expenses paid with program funds.
    (d) Allocation of benefit. Rental rehabilitation grant amounts used 
for program administration will be deemed to meet program requirements 
imposed on a percentage of the annual grant basis, such as lower income 
benefit and use of rental rehabilitation grants for housing for families 
with children, in the same proportion as the grant amounts for a grant 
year which are used for eligible project costs meet the grant 
requirements. For example, if 70 percent of the grant amounts used for

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project costs for Fiscal Year 1989 benefit low-income families, then 70 
percent of the Fiscal Year 1989 grant amounts spent for administrative 
costs will be deemed to benefit low-income persons.