[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR941.102]

[Page 368-369]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
 
PART 941_PUBLIC HOUSING DEVELOPMENT--Table of Contents
 
                            Subpart A_General
 
Sec.  941.102  Development methods and funding.

    (a) Methods. A PHA may use any generally accepted method of 
development including, but not limited to, conventional, turnkey, 
acquisition with or without rehabilitation, mixed-finance, and force 
account.
    (1) Conventional. Under this method, the PHA is responsible for 
selecting a site or property and designing the project. The PHA 
advertises for competitive bids to build or rehabilitate the development 
on the PHA-owned site. The PHA awards a construction contract in 
accordance with 24 CFR part 85. The contractor receives progress 
payments from the PHA during construction or rehabilitation and a final 
payment upon completion of the project in accordance with the 
construction contract. The conventional method may be used for either 
new construction or rehabilitation.
    (2) Turnkey. The turnkey method involves the advertisement and 
selection of a turnkey developer by the PHA, based on the best housing 
package for a site or property owned or to be purchased by the 
developer. Following HUD approval of the PHA's full proposal, the 
developer prepares the design and construction documents. The PHA and 
the developer execute the contract of sale to implement the PHA's full 
proposal. The developer is responsible for providing a completed housing 
project, which includes obtaining construction financing. Upon 
completion of project construction or rehabilitation in accordance with 
the contract of sale, the PHA purchases the development from the 
developer. This method may be used for either new construction or 
rehabilitation.
    (3) Acquisition. The acquisition method involves a purchase of 
existing property that requires little or no repair work. Any needed 
repair work is completed after acquisition, either by the PHA 
contracting to have the work done or by having the staff of the PHA 
perform the work.
    (4) Mixed-finance. This method involves financing from both public 
and private sources and may involve ownership of the public housing 
units by an entity other than the PHA. This method of development may be 
carried out by a PHA only in accordance with the requirements set forth 
in subpart F.
    (5) Force account. The force account method involves use of PHA 
staff to carry out new construction or rehabilitation. A PHA may only 
develop a full proposal based on the force account method if HUD has 
determined that the PHA has the capability to develop successfully the 
public housing units using this method.
    (b) Funding. A PHA may develop public housing with:
    (1) Development funds reserved by HUD for that purpose;
    (2) Modernization funds under section 14 of the Act (42 U.S.C. 
1437l), to the extent authorized by law and under procedures approved by 
HUD; and/or
    (3) Funds available to it from any other source, consistent with 
Sec.  941.306(e), or as may be otherwise approved by HUD.

[[Page 369]]

    (c) Limit on number of units--(1) General. A PHA may not develop 
public housing pursuant to this part beyond the lesser of the number of 
units that the PHA had under ACC on August 21, 1996, or the number of 
units for which it was receiving operating subsidy on that date, unless 
authorized by HUD. HUD may condition such authorization on the PHA's 
agreement that such incremental units, once developed, will be 
ineligible for capital and/or operating subsidies from HUD.
    (2) Replacement housing units. With respect to units constructed to 
replace public housing units that were demolished or disposed of, a PHA 
may use (in whole or in part) funding from non-HUD sources or from HUD 
funding not provided under the Act. However, development of such units 
must be approved by HUD in advance for them to be eligible for inclusion 
under the ACC.

[61 FR 38016, July 22, 1996, as amended at 67 FR 76101, Dec. 10, 2002]