[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: 24CFR906.19]



[Page 358]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

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

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 906_PUBLIC HOUSING HOMEOWNERSHIP PROGRAMS--Table of Contents

 

                    Subpart C_Purchaser Requirements

 

Sec.  906.19  Requirements applicable to a purchase and resale entity 

(PRE).



    (a) In general. In the case of a purchase of units for resale to 

low-income families by a PRE, the PHA must have an approved 

homeownership program that describes the use of a PRE to sell the units 

to low-income families within 5 years from the date of the PRE's 

acquisition of the units.

    (b) PRE requirements. The PHA must demonstrate in its homeownership 

program that the PRE has the necessary legal capacity and administrative 

capability to carry out its responsibilities under the program. The 

PHA's homeownership program also must contain a written agreement (not 

required to be submitted as part of the homeownership plan) that 

specifies the respective rights and obligations of the PHA and the PRE, 

and which includes:

    (1) Assurances that the PRE will comply with all provisions of the 

HUD-approved homeownership program;

    (2) Assurances that the PRE will be subject to a title restriction 

providing that the property must be resold or otherwise transferred only 

by conveyance of individual dwellings to eligible families, in 

accordance with the HUD-approved homeownership program, or by 

reconveyance to the PHA, and that the property will not be encumbered by 

the PRE without the written consent of the PHA;

    (3) Protection against fraud or misuse of funds or other property on 

the part of the PRE, its employees, and agents;

    (4) Assurances that the resale proceeds will be used only for the 

purposes specified by the HUD-approved homeownership program;

    (5) Limitation of the PRE's administrative and overhead costs, and 

of any compensation or profit that may be realized by the PRE, to 

amounts that are reasonable in relation to its responsibilities and 

risks;

    (6) Accountability to the PHA and residents for the recordkeeping, 

reporting, and audit requirements of Sec.  906.33;

    (7) Assurances that the PRE will administer its responsibilities 

under the plan on a nondiscriminatory basis, in accordance with the Fair 

Housing Act, its implementing regulations, and other applicable civil 

rights statutes and authorities, including the authorities cited in 

Sec.  5.105(a) of this title; and

    (8) Adequate legal remedies for the PHA and residents, in the event 

of the PRE's failure to perform in accordance with the agreement.

    (c) Sale to low-income families. The requirement for a PRE to sell 

units under a homeownership program only to low-income families must be 

recorded as a deed restriction at the time of purchase by the PRE.

    (d) Resale within five years. A PRE must agree that, with respect to 

any units it acquires under a homeownership program under this part, it 

will transfer ownership to the PHA if the PRE fails to resell the unit 

to a low-income family within 5 years of the PRE's acquisition of the 

unit.