[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: 24CFR572.110]

[Page 175-177]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 572_HOPE FOR HOMEOWNERSHIP OF SINGLE FAMILY HOMES PROGRAM (HOPE 3)--Table of Contents
 
   Subpart B_Homeownership Program Requirements_Implementation Grants
 
Sec. 572.110  Identifying and selecting eligible families for homeownership.

    (a) Selection procedures. (1) Recipients must establish written 
equitable procedures for identifying and selecting eligible families to 
participate in the homeownership program, consistent with the 
affordability standards in Sec. 572.120. Except for Indian tribes and 
IHAs as described in Sec. 572.405(a)(2), the

[[Page 176]]

recipient must have a procedure to carry out its affirmative fair 
marketing responsibilities, described in Sec. 572.405(e), that apply 
whenever homeownership opportunities are made available to other than 
current residents of the property. These procedures must include 
specific steps to inform potential applicants and solicit applications 
from eligible families in the housing market area who are least likely 
to apply for the program without special outreach.
    (2) The written selection procedures must provide for selection only 
of families that are creditworthy and have the financial capacity to 
handle the anticipated costs of homeownership. Any family determined not 
to have paid the appropriate amount of tenant contribution under a HUD 
housing assistance program must be required to resolve any deficiency 
before being selected for homeownership.
    (b) Preferences. (1) In making selections for the program, each 
recipient must give first preference to qualified residents who legally 
occupied units on the date the recipient's application for the 
implementation grant was submitted to HUD and to persons residing in the 
units at the time the properties are selected. If the unit occupied by a 
former resident on the date the implementation grant application was 
submitted to HUD is occupied by a different resident at the time of 
property selection, a vacant unit under this program must be offered to 
the former resident at the earliest possible time.
    (2) In the case of vacant properties for which the preferences in 
paragraph (b)(1) of this section do not apply, recipients must give a 
first preference to otherwise qualified eligible families who reside in 
public or Indian housing under the 1937 Act. Recipients must use 
whatever measures are considered appropriate to inform residents of 
public and Indian housing developments within the housing market area of 
the preference, such as informing resident councils, PHAs, and IHAs, or 
other appropriate measures.
    (3) Recipients must give a second preference to otherwise qualified 
eligible families who have completed participation in one of the 
following economic self-sufficiency programs: Project Self-Sufficiency, 
Operation Bootstrap, Family Self-Sufficiency, JOBS, and any other 
Federal, State, territorial, or local program approved by HUD as 
equivalent.
    (c) Responsibilities of selected families. (1) Each eligible family 
selected for homeownership must certify at the time it acquires an 
ownership interest in the unit (or enters into a lease-purchase 
agreement for the unit) that it intends to occupy the unit as its 
principal residence during the six-year period from the date it acquires 
ownership interest in the unit, unless the recipient determines that the 
family is required to move outside the market area due to a change in 
employment or an emergency situation or the family sells its ownership 
interest. The family may permit others to rent space (such as a basement 
area or a spare bedroom) in the unit occupied by the family as its 
principal residence. (See Sec. 572.115(c) concerning the rental of 
units in a multi-unit property purchased by a homebuyer under this 
part.)
    (2) Any homebuyer that violates the agreement made under paragraph 
(c)(1) of this section shall be subject to penalties as provided in the 
transfer documents, as prescribed by HUD.
    (3) Each eligible family selected for the program must participate 
in counseling and training of homebuyers and homeowners regarding the 
general rights and responsibilities of homeownership.
    (d) Social security numbers; wage and claims information. As a 
condition of eligibility for homeownership under this part, at the time 
a family applies for howeownership, the recipient (or other appropriate 
entity) must:
    (1) Require the family to meet the requirements for the disclosure 
and verification of social security numbers, as provided by part 5, 
subpart B, of this title; and
    (2) Require the family to sign and submit consent forms for the 
obtaining of wage and claim information from State Wage Information 
Collection Agencies, as provided by part 5, subpart B, of this title.
    (e) Notification of rejected applicant families. Recipients or 
another appropriate entity must promptly notify in

[[Page 177]]

writing any rejected applicant family of the grounds for any rejection.

[58 FR 36526, July 7, 1993, as amended at 61 FR 11118, Mar. 18, 1996; 61 
FR 48797, Sept. 16, 1996]