[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR970.9]

[Page 545]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 970_PUBLIC HOUSING PROGRAM_DEMOLITION OR DISPOSITION OF PUBLIC 
HOUSING PROJECTS--Table of Contents
 
Sec. 970.9  Disposition of property; use of proceeds.

    (a) Where HUD approves the disposition of real property of a 
project, in whole or in part, the PHA shall dispose of it promptly by 
public solicitation of bids for not less than fair market value, unless 
HUD authorizes negotiated sale for reasons found to be in the best 
interests of the PHA or the Federal Government, or sale for less than 
fair market value (where permitted by State law), based on commensurate 
public benefits to the community, the PHA or the Federal Government 
justifying such an exception. Reasonable costs of disposition, and of 
relocation of displaced tenants allowable under Sec. 970.5, may be paid 
by the PHA out of the gross proceeds, as approved by HUD.
    (b) Net proceeds, including any interest earned on the proceeds, 
(after payment of HUD-approved costs of disposition and relocation under 
paragraph (a) of this section) shall be used, subject to HUD approval, 
as follows:
    (1) For the retirement of outstanding obligations, if any, issued to 
finance original development or modernization of the project; and
    (2) Thereafter, to the extent that any net proceeds remain, for the 
provision of housing assistance for low-income families, through such 
measures as modernization of low-income housing or the acquisition, 
development or rehabilitation of other properties to operate as low-
income housing.
    (c) In the case of scattered-site housing of a public housing 
agency, the net proceeds of a disposition shall be used for the 
retirement of outstanding obligations issued to finance original 
development or modernization of the project, in an amount that bears the 
same ratio to the total of such costs and obligations as the number of 
units disposed of bears to the total number of units of the project at 
the time of disposition. For example, in cases where debt has not been 
forgiven, if a development project of ten units that cost $100,000 has 
one unit disposed of for $10,000, then there would be no net proceeds 
after paying off the proportional cost ($100,000 divided by 10=$10,000/
unit) of the project. If, however, the unit was disposed of and net 
proceeds were $12,000, there would be $2,000 available that the PHA 
would use for the provision of housing assistance for lower income 
families. Where debt has been forgiven, all the net proceeds may be used 
by the PHA for the provision of low income housing assistance.

[50 FR 50894, Dec. 13, 1985, as amended at 53 FR 30988, Aug. 17, 1988; 
60 FR 3719, Jan. 18, 1995]