[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: 24CFR941.610]



[Page 387-390]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

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

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 941_PUBLIC HOUSING DEVELOPMENT--Table of Contents

 

Subpart F_Public/Private Partnerships for the Mixed Finance Development 

                         of Public Housing Units

 

Sec.  941.610  Evidentiary materials and other documents.



    (a) Submission of documents. As a condition of the release of grant 

funds under Sec.  941.612, the PHA shall submit to HUD, within the 

timeframe prescribed by HUD, evidentiary materials and other 

documentation, as more fully set forth in the special mixed-finance 

amendment to the ACC (and/or grant agreement). Such materials and 

documentation shall include, but shall not be limited to:

    (1) A copy of executed development-related contracts entered into by 

the PHA or owner entity with respect to the development, and the PHA-

executed ACC amendment or special mixed-finance amendment to the ACC 

(and/or grant agreement);

    (2) Agreements that are necessary to implement the proposal and to 

ensure that all requirements of this subpart are satisfied. Such 

agreements must be submitted to HUD for review and approval and shall 

include, but shall not be limited to:

    (i) A deed restriction, covenant running with the land, ground 

lease, or other arrangement of public record, that will assure to HUD's 

satisfaction that the public housing units will be available for use by 

eligible low-income



[[Page 388]]



families in accordance with all applicable public housing requirements 

for the maximum period required by law;

    (ii) A regulatory or operating agreement between the PHA and the 

owner entity that provides binding assurances that the operation of the 

public housing units will be in accordance with all applicable public 

housing requirements;

    (iii) An agreement between the PHA and the owner entity with respect 

to the provision of operating subsidy by the PHA in accordance with this 

subpart;

    (iv) A partnership agreement, development agreement, or other 

agreement entered into between the PHA and its partner, or any other 

participating party, that establishes the relationships between the 

parties with respect to the implementation of the proposal, including 

all rights and liabilities (financial and otherwise) of the parties, a 

development schedule, and the respective commitments of the parties with 

respect to the development of the public housing units. For developments 

involving public and non-public housing units only, the PHA shall also 

provide for an allocation with the owner entity of expenses and risks 

(e.g., fire, exhaustion of, or failure to receive, syndication funds, 

etc.) associated with the development and operation of the development. 

The allocation of expenses and risks shall be based upon a ratio that 

reflects the proposed bedroom mix of the public housing units as 

compared to the bedroom mix and unit count of the non-public housing 

units in the development, or as otherwise approved by HUD;

    (v) Any agreement relating to the management of the public housing 

units by an entity other than the PHA;

    (vi) For developments consisting of public housing and non-public 

housing units, and in lieu of the standard cooperation agreement 

required under Sec.  941.201(c), the PHA shall submit a cooperation 

agreement with the applicable locality concerning PILOT payments, local 

tax exemption and local government services on behalf of the proposed 

public housing units. Such payments, exemption and services must be 

based upon a ratio reflecting the proposed bedroom mix of the public 

housing units as compared to the bedroom mix of the non-public housing 

units in the development, or as otherwise approved by HUD. For 

developments consisting only of public housing units, the PHA shall 

submit the standard cooperation agreement required under Sec.  

941.201(c);

    (3) All private or public financing documents evidencing the 

availability of the participating party(ies)'s financing, the amount and 

source of financing committed to the proposal by the participating 

party(ies), and the irrevocability of those funds. HUD may require in 

lieu of, or in addition to the submission of these documents, an opinion 

of the PHA's and the owner entity's counsel (or other party designated 

by HUD) attesting that counsel has examined the availability of the 

participating party(ies)'s financing, and the amount and source of 

financing committed to the proposal by the participating party(ies), and 

has determined that such financing has been irrevocably committed by the 

participating party(ies) for use in carrying out the proposal, and that 

such commitment is in the amount required under the terms of the 

proposal;

    (4) The organizational documents of the owner entity, which shall be 

reviewed by HUD (together with all financing documents) to ensure that 

they do not provide equity investors, creditors, and any other parties, 

with rights that would be inconsistent with, or that could interfere 

with, HUD's interest in the proposed development;

    (5) Evidence that all necessary actions have been taken by the PHA 

and other participating parties to confer such legally enforceable 

rights as will enable HUD to protect its investment in the property and 

to ensure the availability of the public housing units for low-income 

persons for the maximum permissible period;

    (6) Evidence of control of the site by the PHA, partner, or owner 

entity following proposal submission, for such period of time as may be 

required by HUD;

    (7) Evidence that construction or rehabilitation is permitted by 

current zoning ordinances or regulations, or



[[Page 389]]



evidence to indicate that needed rezoning is likely and will not delay 

construction of the development;

    (8) In addition, the PHA shall submit the following certifications 

warranting that:

    (i) For PHAs receiving operating assistance, that:

    (A) There shall be no disposition of the public housing units 

without the prior written approval of HUD during and for ten years after 

the end of the period in which the public housing units receiving 

operating subsidy from the PHA; and

    (B) During a 40-year period (which may be extended for 10 years 

after the end of the period in which the public housing units receive 

operating subsidy from the PHA, or as may be otherwise required by law), 

the public housing units shall be maintained and operated in accordance 

with all applicable public housing requirements (including the ACC), as 

those requirements may be amended from time to time;

    (ii) The PHA will develop at least the same number of public housing 

units as were approved by HUD as part of the PHA's proposal. Where the 

PHA proposes to pay for more than its pro rata share of the cost of 

common area improvements, the PHA must also certify that:

    (A) It will develop the same number of public housing units as were 

approved by HUD as part of the PHA's proposal, and will do so within the 

TDC limits; and

    (B) The common area improvements will benefit all residents of the 

development. If the PHA's proposal provides that public housing units 

within a development will not be specifically designated as public 

housing units, but shall instead constitute a fixed percentage of the 

housing units and number of bedrooms developed under the proposal, the 

PHA must provide additional binding assurances that the percentage of 

public housing units and number of bedrooms, as approved by HUD, will be 

maintained as public housing by the owner entity, and that all of the 

requirements of this subpart will be satisfied with respect to those 

units;

    (iii) It will ensure that the requirements of this subpart are 

binding upon the owner entity and any partner of the PHA and, to the 

extent determined necessary by HUD, upon any other participating party. 

In addition, in the event of any noncompliance with the requirements of 

this subpart by any participating party, the PHA agrees to take all 

necessary enforcement action to ensure such compliance or, 

alternatively, to pursue any legal or equitable remedies that HUD deems 

appropriate;

    (iv) It will include in all agreements or contracts with the 

partner, owner entity, or any other participating parties receiving 

development funds under this subpart, an acknowledgement that a transfer 

of the development funds by the PHA to the partner, the owner entity, or 

other participating party, shall not be deemed to be an assignment of 

development grant funds and that, accordingly, the partner, the owner 

entity or other participating party shall not succeed to any rights to 

benefits of the PHA under the ACC, or ACC amendment, nor shall it attain 

any privileges, authorities, interests, or rights in or under the ACC or 

ACC amendment;

    (v) It will include, or cause to be included, in all its agreements 

or contracts with the partner, the owner entity, or other participating 

parties, and in all contracts with any other party involving the use of 

development grant funds under this subpart, a provision stating that 

nothing in the ACC or ACC amendments providing such funds, nor any 

agreement or contract between the party(ies) shall be deemed to create a 

relationship of third-party beneficiary, principal and agent, limited or 

general partnership, joint venture, or any association or relationship 

involving HUD;

    (vi) It will ensure that the development of the public housing units 

will be in compliance with labor standards applicable to the development 

of public housing including, but not limited to, wage rates under the 

Davis-Bacon Act (40 U.S.C. 276a et seq.). If the proposed development 

will include public housing units that are not specifically designated 

units, the PHA shall ensure that such labor requirements are met with 

respect to the development of all units that may, at any time, be used 

as the public housing units;



[[Page 390]]



    (vii) It will take all steps necessary to ensure that, in the event 

of a foreclosure or other adverse action brought against the owner 

entity with respect to the housing units (including, but not limited to, 

the public housing units), the operation of the public housing units 

developed under this subpart shall not be adversely affected.

    (9) Such additional documentation as may be required by HUD.

    (b) Subsidy layering analysis. After the PHA submits the 

documentation required under paragraph (a) of this section, HUD (or its 

designee) shall carry out a subsidy layering analysis pursuant to 

section 102(d) of the Department of Housing and Urban Development Reform 

Act of 1989 (42 U.S.C. 3545) (see 24 CFR part 4) to determine whether 

the amount of assistance being provided for the development is more than 

necessary to make the assisted activity feasible after taking into 

account the other governmental assistance.



    Effective Date Note: At 61 FR 19716, May 2, 1996, Sec.  941.610 was 

added. This section contains information collection and recordkeeping 

requirements and will not become effective until approval has been given 

by the Office of Management and Budget.