[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR882.805]



[Page 92-95]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL 

 

PART 882_SECTION 8 MODERATE REHABILITATION PROGRAMS--Table of Contents

 

   Subpart H_Section 8 Moderate Rehabilitation Single Room Occupancy 

                    Program for Homeless Individuals

 

Sec.  882.805  HA application process, ACC execution, and 

pre-rehabilitation activities.



    (a) Review. When funds are made available for assistance, HUD will 

publish a notice of funding availability (NOFA) in the Federal Register 

in accordance with the requirements of 24 CFR part 4. HUD will review 

and screen applications in accordance with the guidelines, rating 

criteria, and procedures published in the NOFA.

    (b) ACC Execution. (1) Before execution of the annual contributions 

contract (ACC), the HA must submit to the appropriate HUD field office 

the following:

    (i) Estimates of Required Annual Contributions, Forms HUD-52672 and 

HUD-52673;

    (ii) Administrative Plan, which should include:

    (A) Procedures for tenant outreach;

    (B) A policy governing temporary relocation; and

    (C) A mechanism to monitor the provision of supportive services.

    (iii) Proposed Schedule of Allowances for Tenant-Furnished Utilities 

and Other Services, Form HUD-52667, with a justification of the amounts 

proposed;

    (iv) If applicable, proposed variations to the acceptability 

criteria of the Housing Quality Standards (see Sec.  882.803(b)); and

    (v) The fire and building code applicable to each structure.

    (2) After HUD has approved the HA's application, the review and 

comment requirements of 24 CFR part 791 have been complied with, and the 

HA has submitted (and HUD has approved) the items required by paragraph 

(b)(1) of this section, HUD and the HA must execute the ACC in the form 

prescribed by HUD. The initial term of the ACC must be 11 years. This 

term allows one year to rehabilitate the units and place them under a 

10-year HAP contract. The ACC must give HUD the option to



[[Page 93]]



renew the ACC for an additional 10 years.

    (3) Section 882.403(a) (Maximum Total ACC Commitments) applies to 

this program.

    (4) Section 882.403(b) (Project account) applies to this program.

    (c)(1) If an owner is proposing to accomplish at least $3000 per 

unit of rehabilitation by including work to make the unit(s) accessible 

to a person with disabilities occupying the unit(s) or expected to 

occupy the unit(s), the PHA may approve such units not to exceed 5 

percent of the units under its Program, provided that accessible units 

are necessary to meet the requirements of 24 CFR part 8, which 

implements section 504 of the Rehabilitation Act of 1973. The 

rehabilitation must make the unit(s), and access and egress to the 

unit(s), barrier-free with respect to the disability of the individual 

in residence or expected to be in residence.

    (2) The PHA must take the applications and determine the eligibility 

of all tenants residing in the approved units who wish to apply for the 

Program. After eligibility of all the tenants has been determined, the 

Owner must be informed of any adjustment in the number of units to be 

assisted. In order to make the most efficient use of housing assistance 

funds, an Agreement may not be entered into covering any unit occupied 

by a family which is not eligible to receive housing assistance 

payments. Therefore, the number of units approved by the PHA for a 

particular proposal must be adjusted to exclude any unit(s) determined 

by the PHA to be occupied by a family not eligible to receive housing 

assistance payments. Eligible Families must also be briefed at this 

stage as to their rights and responsibilities under the Program.

    (3) Should the Owner agree with the assessment of the PHA as to the 

work that must be accomplished, the preliminary feasibility of the 

proposal, and the number of units to be assisted, the Owner, with the 

assistance of the PHA where necessary, must prepare detailed work write-

ups including specifications and plans (where necessary) so that a cost 

estimate may be prepared. The work write-up will describe how the 

deficiencies eligible for amortization through the Contract Rents are to 

be corrected including minimum acceptable levels of workmanship and 

materials. From this work write-up, the Owner, with the assistance of 

the PHA, must prepare a cost estimate for the accomplishment of all 

specified items.

    (4) The owner is responsible for selecting a competent contractor to 

undertake the rehabilitation. The PHA must propose opportunities for 

minority contractors to participate in the program.

    (5) The PHA must discuss with the Owner the various financing 

options available. The terms of the financing must be approved by the 

PHA in accordance with standards prescribed by HUD.

    (6) Before execution of the Agreement, the HA must:

    (i)(A) Inspect the structure to determine the specific work items 

that need to be accomplished to bring the units to be assisted up to the 

Housing Quality Standards (see Sec.  882.803(b)) or other standards 

approved by HUD;

    (B) Conduct a feasibility analysis, and determine whether cost-

effective energy conserving improvements can be added;

    (C) Ensure that the owner prepares the work write-ups and cost 

estimates required by paragraph (c)(3) of this section;

    (D) Determine initial base rents and contract rents;

    (ii) Assure that the owner has selected a contractor in accordance 

with paragraph (c)(4) of this section;

    (iii) After the financing and a contractor are obtained, determine 

whether the costs can be covered by initial contract rents, computed in 

accordance with paragraph (d) of this section; and, if a structure 

contains more than 50 units to be assisted, submit the base rent and 

contract rent calculations to the appropriate HUD field office for 

review and approval in sufficient time for execution of the Agreement in 

a timely manner;

    (iv) Obtain firm commitments to provide necessary supportive 

services;

    (v) Obtain firm commitments for other resources to be provided;

    (vi) Determine that the $3,000 minimum amount of work requirement 

and



[[Page 94]]



other requirements in paragraph (c)(1) of this section are met;

    (vii) Determine eligibility of current tenants, and select the units 

to be assisted, in accordance with paragraph (c)(2) of this section;

    (viii) Comply with the financing requirements in paragraph (c)(5) of 

this section;

    (ix) Assure compliance with all other applicable requirements of 

this subpart; and

    (x) If the HA determines that any structure proposed in its 

application is infeasible, or the HA proposes to select a different 

structure for any other reason, the HA must submit information for the 

proposed alternative structure to HUD for review and approval. HUD will 

rate the proposed structure in accordance with procedures in the 

applicable notice of funding availability. The HA may not proceed with 

processing for the proposed structure or execute an Agreement until HUD 

notifies the HA that HUD has approved the proposed alternative structure 

and that all requirements have been met.

    (d) Initial contract rents. Section 882.408 (Initial contract 

rents), including the establishment of fair market rents for SRO units 

at 75 percent of the O-bedroom Moderate Rehabilitation Fair Market Rent, 

applies to this program, except as follows:

    (1)(i) In determining the monthly cost of a rehabilitation loan, in 

accordance with Sec.  882.408(c)(2), a loan term of a least 10 years 

(instead of 15 years) may be used. The exception in Sec.  

882.408(c)(2)(iii) for using the actual loan term if the total amount of 

the rehabilitation is less than $15,000 continues to apply. In addition, 

the cost of the rehabilitation that may be included for the purpose of 

calculating the amount of the initial contract rent for any unit must 

not exceed the lower of:

    (A) The projected cost of rehabilitation; or

    (B) The per unit cost limitation that is established by Federal 

Register notice, plus the cost of the fire and safety improvements 

required by 24 CFR 982.605(b)(4). HUD may, however, increase the 

limitation in paragraph (d)(1)(i)(B) of this section by an amount HUD 

determines is reasonable and necessary to accommodate special local 

conditions, including high construction costs or stringent fire or 

building codes. HUD will publish future cost limitation changes in the 

Federal Register in the Notice of Funding Availability issued each year.

    (ii) If the Federal Housing Administration (FHA) believes that high 

construction costs warrant an increase in the per unit cost limitation 

in paragraph (d)(1)(i)(B) of this section, the HA must demonstrate to 

HUD's satisfaction that a higher average per unit amount is necessary to 

conduct this program, and that every appropriate step has been taken to 

contain the amount of the rehabilitation within the published per unit 

cost limitation established at that time, plus the cost of the required 

fire and safety improvements. These higher amounts will be determined as 

follows:

    (A) HUD may approve a higher per unit amount up to, but not to 

exceed, an amount computed by multiplying the HUD-approved High Cost 

Percentage for Base Cities (used for computing FHA high cost area 

adjustments) for the area, by the current published cost limitation plus 

the cost of the required fire and safety improvements.

    (B) HUD may, on a structure-by-structure basis, increase the level 

approved in paragraph (d)(1)(i) of this section to up to an amount 

computed by multiplying 2.4 by the current published cost limitation 

plus the cost of the required fire and safety improvements.

    (2) In approving changes to initial contract rents during 

rehabilitation in accordance with Sec.  882.408(d), the revised initial 

contract rents may not reflect an average per unit rehabilitation cost 

that exceeds the limitation specified in paragraph (d)(1) of this 

section.

    (3) If the structure contains four or fewer SRO units, the Fair 

Market Rent for that size structure (the Fair Market Rent for a 1-, 2-, 

3-, or 4-bedroom unit, as applicable) must be used to determine the Fair 

Market Rent limitation instead of using the separate Fair Market Rent 

for each SRO unit. To determine the Fair Market Rent limitation for each 

SRO unit, the Fair Market Rent for the structure must be apportioned 

equally to each SRO unit.



[[Page 95]]



    (4) Contract rents must not include the costs of providing 

supportive services, transportation, furniture, or other nonhousing 

costs, as determined by HUD. SRO program assistance may be used for 

efficiency units selected for rehabilitation under this program, but the 

gross rent (contract rent plus any Utility Allowance) for these units 

will be no higher than for SRO units (i.e., 75 percent of the 0-bedroom 

Moderate Rehabilitation Fair Market Rent).



(Approved by the Office of Management and Budget under control number 

2506-0131)



[61 FR 48057, Sept. 11, 1996, as amended at 63 FR 23855, Apr. 30, 1998]