[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: 24CFR970.9]



[Page 538-539]

 

                 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



[[Page 539]]



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]