[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: 24CFR904.107]



[Page 308-312]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 904_LOW RENT HOUSING HOMEOWNERSHIP OPPORTUNITIES--Table of Contents

 

                Subpart B_Turnkey III Program Description

 

Sec.  904.107  Responsibilities of homebuyer.



    (a) Repair, maintenance and use of home. The homebuyer shall be 

responsible for the routine maintenance of the home to the satisfaction 

of the HBA and the LHA. This routine maintenance includes the work 

(labor and materials) of keeping the dwelling structure, grounds and 

equipment in good repair, condition and appearance so that they may be 

utilized continually at their designed capacities and at the 

satisfactory level of efficiency for their intended purposes, and in 

conformity with the requirements of local housing code and applicable 

regulations and guidelines of HUD. It includes repairs (labor and 

materials) to the dwelling structure, plumbing fixtures, dwelling 

equipment (such as range and refrigerator), shades and screens, water 

heater, heating equipment and other component parts of the dwelling. It 

also includes all interior painting and the maintenance of grounds (lot) 

on which the dwelling is located. It does not include maintenance and 

replacements provided for by the NRMR described in Sec.  904.111.

    (b) Repair of damage. In addition to the obligation for routine 

maintenance, the homebuyer shall be responsible for repair of any damage 

caused



[[Page 309]]



by him, members of his family, or visitors.

    (c) Care of home. A homebuyer shall keep the home in a sanitary 

condition; cooperate with the LHA and the HBA in keeping and maintaining 

the common areas and property, including fixtures and equipment, in good 

condition and appearance; and follow all rules of the LHA and of the HBA 

concerning the use and care of the dwellings and the common areas and 

property.

    (d) Inspections. A homebuyer shall agree to permit officials, 

employees, or agents of the LHA and of the HBA to inspect the home at 

reasonable hours and intervals in accordance with rules established by 

the LHA and the HBA.

    (e) Use of home. A homebuyer shall not (1) sublet the home without 

the prior written approval of the LHA and HUD, (2) use or occupy the 

home for any unlawful purpose nor for any purpose deemed hazardous by 

insurance companies on account of fire or other risks, or (3) provide 

accommodations (unless approved by the HBA and the LHA) to boarders or 

lodgers. The homebuyer shall agree to use the home only as a place to 

live for the family (as identified in the initial application or by 

subsequent amendment with the approval of the LHA), for children 

thereafter born to or adopted by members of such family, and for aged or 

widowed parents of the homebuyer or spouse who may join the household.

    (f) Obligations with respect to other persons and property. Neither 

the homebuyer nor any member of his family shall interfere with rights 

of other occupants of the development, or damage the common property or 

the property of others, or create physical hazards.

    (g) Structural changes. A homebuyer shall not make any structural 

changes in or additions to the home unless the LHA has first determined 

in writing that such change would not (1) impair the value of the unit, 

the surrounding units, or the development as a whole, or (2) affect the 

use of the home for residential purposes, or (3) violate HUD 

requirements as to construction and design.

    (h) Statements of condition and repair. When each homebuyer moves 

in, the LHA shall inspect the home and shall give the homebuyer a 

written statement, to be signed by the LHA and the homebuyer, of the 

condition of the home and the equipment in it. Should the homebuyer 

vacate the home, the LHA shall inspect it and give the homebuyer a 

written statement of the repairs and other work, if any, required to put 

the home in good condition for the next occupant (see Sec.  

904.110(j)(1)). The homebuyer, his representative, and a representative 

of the HBA may join in any such inspections by the LHA.

    (i) Maintenance of common property. The homebuyer may participate in 

nonroutine maintenance of his home and in maintenance of common property 

as discussed in Sec.  904.110(d) and Sec.  904.111(c).

    (j) Homebuyer's required monthly payment. (1) The term ``required 

monthly payment'' as used herein means the monthly payment the homebuyer 

is required to pay the LHA on or before the first day of each month. The 

homebuyer's required monthly payment, which is based upon family income, 

shall be an amount equal to the Tenant Rent as determined in accordance 

with part 913 of this chapter. If the Utility Allowance, as defined in 

part 913 of this chapter, exceeds the Homebuyer's Total Tenant Payment, 

as determined in accordance with part 913, the LHA will pay a utility 

reimbursement equal to that excess to the Homebuyer, or as provided in 

Sec.  913.108 of this chapter.

    (2) For purposes of determining eligibility of an applicant (see 24 

CFR parts 5 and 913, as well as this part) and the amount of Homebuyer 

payments under paragraph (j)(1) of this section, the LHA shall examine 

the family's income and composition and follow the procedures required 

by 24 CFR part 5 for determining citizenship or eligible immigration 

status before initial occupancy. Thereafter, for the purposes stated in 

this paragraph and to determine whether a Homebuyer is required to 

purchase the home under Sec.  904.104(h)(1), the LHA shall reexamine the 

Homebuyer's income and composition regularly, at least once every 12 

months, and shall undertake such further determination and verification 

of citizenship or eligible immigration status as



[[Page 310]]



required by 24 CFR part 5. The Homebuyer shall comply with the LHA's 

policy regarding required interim reporting of changes in the family's 

income and composition. If the LHA receives information from the family 

or other source concerning a change in the family income or other 

circumstances between regularly scheduled reexaminations, the LHA, upon 

consultation with the family and verification of the information (in 

accordance with 24 CFR parts 5 and 913 of this chapter) shall promptly 

make any adjustments determined to be appropriate in the Homebuyer 

payment amount or take appropriate action concerning the addition of a 

family member who is not a citizen with eligible immigration status. Any 

change in the family's income or other circumstances that results in an 

adjustment in the Total Tenant Payment and Tenant Rent must be verified.

    (3) The LHA shall not refuse to accept monthly payments because of 

any other charges (other than overdue monthly payments) owed by the 

homebuyer to the LHA; however, by accepting monthly payments under such 

circumstances the LHA shall not be deemed to have waived any of its 

rights and remedies with respect to such other charges.

    (k) Application of monthly payment. The LHA shall apply the 

homebuyer's monthly payment as follows:

    (1) To the credit of the homebuyer's EHPA (see Sec.  904.110);

    (2) To the credit of the homebuyer's NRMR (see Sec.  904.111); and

    (3) For payment of monthly operating expense including contribution 

to operating reserve (see Sec.  904.109).

    (l) Assignment and survivorship. Until such time as the homebuyer 

obtains title to the home, it shall be used only to house a family of 

low income. Therefore:

    (1) A homebuyer shall not assign any right or interest in the home 

or under the Homebuyers Ownership Opportunity Agreement without the 

prior written approval of the LHA and HUD;

    (2) In the event of death, mental incapacity or abandonment of the 

family by the homebuyer, the person designated as the successor in the 

Homebuyers Ownership Opportunity Agreement shall succeed to the rights 

and responsibilities under the Agreement if that person is an occupant 

of the home at the time of the event and is determined by the LHA to 

meet all of the standards of potential for homeownership as set forth in 

Sec.  904.104(e)(2). Such person shall be designated by the homebuyer at 

the time the Homebuyers Ownership Opportunity Agreement is executed. 

This designation may be changed by the homebuyer at any time. If there 

is no such designation or the designee is no longer an occupant of the 

home or does not meet the standards of potential for homeownership, the 

LHA may consider as the homebuyer any family member who was an occupant 

at the time of the event and who meets the standards of potential for 

homeownership.

    (3) If there is no qualified successor in accordance with paragraph 

(l) (2) of this section, the LHA shall terminate the Agreement and 

another family shall be selected except under the following 

circumstances: where a minor child or children of the homebuyer family 

are in occupancy, then in order to protect their continued occupancy and 

opportunity for acquisition of ownership of the home, the LHA may 

approve as occupants of the unit, an appropriate adult(s) who has been 

appointed legal guardian of the children with a duty to perform the 

obligations of the Homebuyers Ownership Opportunity Agreement in their 

interest and behalf.

    (m) Termination by LHA. (1) In the event the homebuyer breaches the 

Homebuyers Ownership Opportunity Agreement by failure to make the 

required monthly payment within ten days after its due date, by 

misrepresenting or withholding of information in applying for admission 

or in connection with any subsequent reexamination of income and family 

composition (including the failure to submit any required evidence of 

citizenship or eligible immigration status, as provided by 24 CFR part 

5; the failure to meet the disclosure and verification requirements for 

Social Security Numbers, as provided by 24 CFR part 5; or the failure to 

sign and submit consent forms for the obtaining of wage and claim 

information from State Wage Information Collection Agencies, as provided



[[Page 311]]



by 24 CFR part 5), or by failure to comply with any of the other 

homebuyer obligations under the Agreement, the LHA may terminate the 

Agreement. No termination under this paragraph may occur less than 30 

days after the LHA gives the homebuyer notice of its intention to do so, 

in accordance with paragraph (m)(3) of this section. For termination of 

assistance for failure to establish citizenship or eligible immigration 

status under 24 CFR part 5, the requirements of 24 CFR parts 5 and 966 

shall apply.

    (2) Notice of termination by the LHA shall be in writing. Such 

notice shall state

    (i) The reason for termination,

    (ii) That the homebuyer may respond to the LHA, in writing or in 

person, within a specified reasonable period of time regarding the 

reason for termination,

    (iii) That in such response he may be represented or accompanied by 

a person of his choice, including a representative of the HBA,

    (iv) That the LHA will consult the HBA concerning this termination, 

and

    (v) That unless the LHA rescinds or modifies the notice, the 

termination shall be effective at the end of the 30-day notice period.

    (n) Termination by the homebuyer. The homebuyer may terminate the 

Homebuyers Ownership Opportunity Agreement by giving the LHA 30 days 

notice in writing of this intention to terminate and vacate the home. In 

the event that the homebuyer vacates the home without notice to the LHA, 

the Agreement shall be terminated automatically and the LHA may dispose 

of, in any manner deemed suitable by it, any items of personal property 

left by the homebuyer in the home.

    (o) Transfer to rental unit. (1) Inasmuch as the homebuyer was found 

eligible for admission to the Project on the basis of having the 

necessary elements of potential for homeownership, continuation of 

eligibility requires continuation of this potential, subject only to 

temporary unforeseen changes in circumstances. Accordingly, in the event 

it should develop that the homebuyer no longer meets one or more of 

these elements of homeownership potential, the LHA shall investigate the 

circumstances and provide such counseling and assistance as may be 

feasible in order to help the family overcome the deficiency as promptly 

as possible. After a reasonable time, not to exceed 30 days from the 

date of evaluation of the results of the investigation, the LHA shall 

make a re-evaluation as to whether the family has regained the potential 

for homeownership or is likely to do so within a further reasonable 

time, not to exceed 30 days from the date of the reevaluation. Further 

extension of time may be granted in exceptional cases, but in any event, 

a final determination shall be made no later than 90 days from the date 

of evaluation of the results of the initial investigation. The LHA shall 

invite the HBA to participate in all investigations and evaluations.

    (2) If the final determination of the LHA, after considering the 

views of the HBA, is that the homebuyer should be transferred to a 

suitable dwelling unit in an LHA rental project, the LHA shall give the 

homebuyer written notice of the LHA determination of the loss of 

homeownership potential and of the offer of transfer to a rental unit. 

The notice shall state that the transfer shall occur as soon as a 

suitable rental unit is available for occupancy, but no earlier than 30 

days from the date of the notice, provided that an eligible successor 

for the homebuyer unit has been selected by the LHA. The notice shall 

also state that if the homebuyer should refuse to move under such 

circumstances, the family may be required to vacate the homebuyer unit, 

without further notice. The notice shall include a statement (i) that 

the homebuyer may respond to the LHA in writing or in person, within a 

specified reasonable time, regarding the reason for the determination 

and offer of transfer, (ii) that in such response he may be represented 

or accompanied by a person of his choice including a representative of 

the HBA, and (iii) that the LHA has consulted the HBA concerning this 

determination and offer of transfer.

    (3) When a Homebuyers Ownership Opportunity Agreement is terminated 

pursuant to this paragraph (o), the amount in the homebuyer's EHPA



[[Page 312]]



shall be paid in accordance with the provisions of Sec.  904.110(j).



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

2577-0083)



[39 FR 10966, Mar. 22, 1974. Redesignated at 40 FR 15580, Apr. 7, 1975, 

and at 49 FR 6714, Feb. 23, 1984, and amended at 49 FR 21490, May 21, 

1984; 49 FR 26719, June 29, 1984; 54 FR 39710, Sept. 27, 1989; 56 FR 

7544, Feb. 22, 1991; 60 FR 14848, Mar. 20, 1995; 60 FR 13626, Mar. 27, 

1996]