Notice2021-22046
Waivers and Alternative Requirements for Implementation of the HOME American Rescue Plan (HOME-ARP) Program
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 12, 2021
Issuing agencies
Housing and Urban Development Department
Abstract
This notice publishes the waivers and alternative requirements that apply to a grantee's use of HOME Investment Partnerships Program funds made available under Section 3205 of the American Rescue Plan Act (ARP) of 2021 ("HOME-ARP"). On September 13, 2021, HUD issued a notice imposing the requirements applicable to the use of HOME-ARP funds (the "HOME-ARP Notice"). At the same time, HUD published an Appendix to the HOME-ARP Notice describing all waivers and alternative requirements applicable to HOME-ARP funds. Consistent with HUD's responsibility under the HUD Reform Act, HUD is providing additional notice to the public and all interested parties of the HOME-ARP waivers and alternative requirements by republishing the Appendix in this notice.
Full Text
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<title>Federal Register, Volume 86 Issue 194 (Tuesday, October 12, 2021)</title>
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[Federal Register Volume 86, Number 194 (Tuesday, October 12, 2021)]
[Notices]
[Pages 56764-56787]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-22046]
[[Page 56763]]
Vol. 86
Tuesday,
No. 194
October 12, 2021
Part II
Department of Housing and Urban Development
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Waivers and Alternative Requirements for Implementation of the HOME
American Rescue Plan (HOME-ARP) Program; Notice
Federal Register / Vol. 86 , No. 194 / Tuesday, October 12, 2021 /
Notices
[[Page 56764]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6296-N-01]
Waivers and Alternative Requirements for Implementation of the
HOME American Rescue Plan (HOME-ARP) Program
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
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SUMMARY: This notice publishes the waivers and alternative requirements
that apply to a grantee's use of HOME Investment Partnerships Program
funds made available under Section 3205 of the American Rescue Plan Act
(ARP) of 2021 (``HOME-ARP''). On September 13, 2021, HUD issued a
notice imposing the requirements applicable to the use of HOME-ARP
funds (the ``HOME-ARP Notice''). At the same time, HUD published an
Appendix to the HOME-ARP Notice describing all waivers and alternative
requirements applicable to HOME-ARP funds. Consistent with HUD's
responsibility under the HUD Reform Act, HUD is providing additional
notice to the public and all interested parties of the HOME-ARP waivers
and alternative requirements by republishing the Appendix in this
notice.
FOR FURTHER INFORMATION CONTACT: Virginia Sardone, Director, Office of
Affordable Housing Programs, U.S. Department of Housing and Urban
Development at <a href="/cdn-cgi/l/email-protection#a5f3ccd7c2cccbccc48bf6c4d7c1cacbc0e5cdd0c18bc2cad3"><span class="__cf_email__" data-cfemail="4a1c23382d2324232b64192b382e25242f0a223f2e642d253c">[email protected]</span></a>, or at telephone number 202-
402-4606 (this is not a toll-free number). Persons with hearing or
speech challenges may access this number through TTY by calling the
Federal Relay Service at 800-877-8339 (this is a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
On March 11, 2021, President Biden signed the American Rescue Plan
Act (ARP) of 2021 (Pub. L. 117-2) into law, which provides over $1.9
trillion in relief to address the continued impact of the COVID-19
pandemic on the economy, public health, State and local governments,
individuals, and businesses. To address the need for homelessness
assistance and supportive services, Congress appropriated $5 billion in
ARP funds to the HOME Investment Partnerships Program (HOME) to be
administered by HUD to primarily benefit qualifying individuals or
families through the following activities: (1) Development and support
of affordable housing; (2) tenant-based rental assistance (TBRA); (3)
provision of supportive services; and (4) acquisition and development
of non-congregate shelter units. The program for the use of the $5
billion in ARP funds is the HOME-American Rescue Plan or ``HOME-ARP.''
Under HOME-ARP, qualifying individuals or families are those that
are (1) homeless; (2) at risk of homelessness; (3) fleeing, or
attempting to flee domestic violence, dating violence, sexual assault,
stalking, or human trafficking; (4) part of other populations where
providing supportive services or assistance would prevent a family's
homelessness or would serve those with the greatest risk of housing
instability; or (5) veterans and families that include a veteran family
member that meet the criteria in one of (1)-(4) above.
On April 8, 2021, in accordance with ARP, HUD allocated HOME-ARP
funds to 651 grantees. The list of grantees and allocation amounts can
be found at: <a href="https://www.hud.gov/sites/dfiles/CPD/documents/HOME-ARP.pdf">https://www.hud.gov/sites/dfiles/CPD/documents/HOME-ARP.pdf</a>. On September 13, 2021, HUD issued Community Planning and
Development Notice CPD-21-10, Requirements for the Use of Funds in the
HOME-American Rescue Plan Program (<a href="https://www.hud.gov/sites/dfiles/OCHCO/documents/2021-10cpdn.pdf">https://www.hud.gov/sites/dfiles/OCHCO/documents/2021-10cpdn.pdf</a>) (the ``HOME-ARP Notice''), which set
forth the requirements for the use of HOME-ARP funds, including
criteria for qualifying populations, permissible targeting and
preferences, requirements for the funds allocation plan and eligible
activities. At the same time, HUD published an Appendix to the HOME-ARP
Notice (<a href="https://www.hud.gov/sites/dfiles/OCHCO/documents/cpdWaiverHOMEARP.pdf">https://www.hud.gov/sites/dfiles/OCHCO/documents/cpdWaiverHOMEARP.pdf</a>) that describes all waivers and alternative
requirements applicable to the use of HOME-ARP funds.
II. Applicable Rules, Waiver, and Alternative Requirements
Section 3205 of ARP authorizes the Secretary of HUD to waive or
specify alternative requirements for any provision of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12701 et seq.)
(``NAHA'') or regulation for the administration of funds appropriated
to HOME-ARP, other than requirements related to fair housing,
nondiscrimination, labor standards, and the environment, upon a finding
that the waiver or alternative requirement is necessary to expedite or
facilitate the use of HOME-ARP funds. Title II of NAHA is the
authorizing statute for HOME and applicable HOME regulations are at 24
CFR part 92. Consolidated plan requirements for the use of HOME funds
are in Title I of NAHA with applicable regulations in 24 CFR part 91.
Pursuant to the Secretary's HOME-ARP statutory authority and
regulatory waiver authority in 24 CFR 5.110, the Secretary is waiving
the provisions of NAHA and HOME regulations and imposing the
alternative requirements as set forth in the Appendix in this notice.
The Secretary has determined that each waiver and alternative
requirement described in this notice is necessary to expedite or
facilitate the use of HOME-ARP funds. A participating jurisdiction may
request additional waivers and alternative requirements from HUD to
address specific needs related to its use of HOME-ARP funds.
Principal Deputy Assistant Secretary for Community Planning and
Development, James Arthur Jemison II, having reviewed and approved this
document, is delegating the authority to electronically sign this
document to submitter, Aaron Santa Anna, who is the Federal Register
Liaison for HUD, for purposes of publication in the Federal Register.
Aaron Santa Anna,
Federal Liaison for the Department of Housing and Urban Development.
Appendix: Waivers and Alternative Requirements
Overall Requirements
A. Compliance with HOME-ARP Notice. The requirements in 24 CFR
part 92, as revised by this notice, apply to HOME-ARP. All
references to compliance with requirements of or in ``this part'' in
24 CFR part 92 shall mean compliance with the requirements in ``24
CFR part 92, as revised by the HOME-ARP Notice, including the
Appendix to the HOME-ARP Notice published on HUD's website, unless
specifically stated otherwise herein.''
B. Substitution of ``HOME-ARP'' for ``HOME.'' All references to
``HOME'' throughout 24 CFR part 92 shall mean ``HOME-ARP'' for the
use of HOME-ARP funds unless otherwise stated in the HOME-ARP
Notice.
C. Use of ``the Act'' and ``title II of NAHA.'' The definition
of ``Act'' is not revised, however ``title II of NAHA'' and ``Act''
are used interchangeably throughout the Appendix in this notice and
24 CFR part 92 and mean the HOME Investment Partnerships Act at
title II of the Cranston-Gonzalez National Affordable Housing Act,
as amended, 42 U.S.C. 12701 et seq.
D. Substitution of ``nonprofit organization'' for ``community
housing development organization.'' All references to ``community
housing development organization'' or ``CHDO'' in 24 CFR part 92,
except the definition of CHDO in 24 CFR 92.2, are
[[Page 56765]]
waived and revised to ``nonprofit organization.''
E. Matching Contribution Requirements. The requirements of 24
CFR 92.218 through 24 CFR 92.222 and any other requirements for
matching contributions in 24 CFR part 92 shall not apply to HOME-ARP
funds, as section 3205(c)(1) of ARP states that the underlying
statutory requirement at section 220 of NAHA (42 U.S.C. 12750) does
not apply to HOME-ARP funds.
F. Set-aside for Community Housing Development Organizations
(CHDOs). The requirements of Sec. Sec. 92.300, 92.301, 92.302,
92.303, 92.452, 92.504(c)(3)(x), and 92.504(c)(7) and any other
requirements for amounts set-aside for CHDOs shall not apply to
HOME-ARP funds as section 3205(c)(1) of ARP states that the
underlying statutory requirements at section 231 of NAHA (42 U.S.C.
12771) do not apply to HOME-ARP funds. In addition, the statutory
requirements in sections 232, 233, and 234 of NAHA (42 U.S.C. 12772,
12773, and 12774(a)) for the use of set-aside funds for CHDOs are
waived.
G. Expiration of right to draw funds. The requirements of 24 CFR
92.500(d) and any other requirements for the 24-month deadline for
the commitment of funds shall not apply to HOME-ARP funds as section
3205(c)(1) of ARP states that the underlying statutory requirement
at section 218(g) of NAHA (42 U.S.C. 12748) does not apply to HOME-
ARP funds.
H. Homebuyer activities/Existing homeowner requirements. All
statutory requirements for homebuyer or existing homeowner
activities in NAHA are waived for the use of HOME-ARP funds because
homebuyer/existing homeowner assistance is not an eligible activity
under HOME-ARP. Specifically, HUD waives the requirements in
sections 212(a)(1), 215(b), 254 of NAHA (42 U.S.C. 12742(a)(1),
12745, 12804) for homeownership, homebuyer, and owner-occupied
activities, including the development of affordable housing for
homeownership and homeowner rehabilitation. Requirements in
Sec. Sec. 92.205, 92.206, 92.207, 92.217, 24 92.251(c)(3), 92.254,
92.255, 92.258, and 92.504(c)(3)(ii)(B) applicable to homeownership
activities shall not apply and are waived.
I. Other Support for State and Local Housing Strategies and
Specified Model Program. The statutory requirements in section 213
(42 U.S.C. 12743), sections 241 to 245 of NAHA (42 U.S.C. 12781-
12785), and sections 251 to 260 (42 U.S.C. 12801-12810) do not apply
to HOME-ARP and are waived.
Waivers and Alternative Requirements
A. Subpart A--General
The definitions in 24 CFR 92.2 apply to the use of HOME-ARP
funds except that HUD waives 24 CFR 92.2 and imposes the following
revised definitions as alternative requirements:
Commitment means (1) The participating jurisdiction has executed
a legally binding written agreement (that includes the date of the
signature of each person signing the agreement) that meets the
minimum requirements for a written agreement in Sec. 92.504(c), as
revised by the Appendix in this notice, and the HOME-ARP Notice. An
agreement between the participating jurisdiction and a subrecipient
that is controlled by the participating jurisdiction (e.g., an
agency whose officials or employees are official or employees of the
participating jurisdiction) does not constitute a commitment. An
agreement between the representative unit and a member unit of
general local government of a consortium does not constitute a
commitment. Funds for administrative and planning costs of the HOME-
ARP program are committed based on the amount in the program
disbursement and information system for administration and planning.
The written agreement must be:
(i) With a State recipient or a subrecipient to use a specific
amount of HOME-ARP funds to produce affordable housing, acquire and
develop non-congregate shelter, provide tenant-based rental
assistance, or provide supportive services;
(ii) With a nonprofit organization carrying out HOME-ARP
activities to provide funds for operating expenses, in accordance
with the HOME-ARP Notice;
(iii) To develop the capacity of nonprofit organizations in the
jurisdiction carrying out HOME-ARP activities, in accordance with
the HOME-ARP Notice; or
(iv) To commit to a specific local project, as defined in
paragraph (2) of this definition and the HOME-ARP Notice.
(2) Commit to a specific local project means:
(i) Rental Housing.
(A) If the project consists of rehabilitation or new
construction (with or without acquisition) the participating
jurisdiction (or State recipient or sub recipient) and project owner
have executed a written legally binding agreement under which HOME-
ARP assistance will be provided to the owner for an identifiable
project for which all necessary financing has been secured, a budget
and schedule have been established, and underwriting has been
completed and under which construction is scheduled to start within
twelve months of the agreement date. If the project is owned by the
participating jurisdiction or State recipient, the project has been
set up in the disbursement and information system established by
HUD, and construction can reasonably be expected to start within
twelve months of the project set-up date.
(B) If the project consists of acquisition of standard housing
and the participating jurisdiction (or State recipient or
subrecipient) is acquiring the property with HOME-ARP funds, the
participating jurisdiction (or State recipient or subrecipient) and
the property owner have executed a legally binding contract for sale
of an identifiable property and the property title will be
transferred to the participating jurisdiction (or State recipient or
subrecipient) within six months of the date of the contract.
(C) If the project consists of acquisition of standard housing
and the participating jurisdiction (or State recipient or
subrecipient) is providing HOME-ARP funds to a purchaser to acquire
rental housing, the participating jurisdiction (or State recipient
or subrecipient) and the purchaser have executed a written agreement
under which HOME-ARP assistance will be provided for the purchase of
rental housing and the property title will be transferred to the
purchaser within six months of the agreement date.
(ii) Non-Congregate Shelter.
(A) If the project consists of rehabilitation or new
construction (with or without acquisition) the participating
jurisdiction (or State recipient or sub recipient) and project owner
have executed a written legally binding agreement under which HOME-
ARP assistance will be provided to the owner for an identifiable
project for which development is reasonably expected to begin within
12 months of the date of commitment.
(B) If the project consists of acquisition (without
rehabilitation or new construction) of a property and the
participating jurisdiction (or State recipient or subrecipient) is
either acquiring the property with HOME-ARP funds or providing HOME-
ARP funds to a purchaser to acquire the property for use as a non-
congregate shelter that is reasonably expected to operate within six
months of the date the commitment, the participating jurisdiction
(or State recipient or subrecipient) and the property owner or
purchaser have executed a legally binding contract for sale of an
identifiable property and the property title will be transferred
from the property owner to the participating jurisdiction (or State
recipient or subrecipient) or purchaser.
(iii) Tenant-based rental assistance. If the project consists of
tenant-based rental assistance, the participating jurisdiction (or
State recipient, or subrecipient) has entered into a rental
assistance contract with the owner, the tenant, or the sponsor of
the qualifying household in accordance with the provisions of the
HOME-ARP Notice.
(iv) Supportive Services. If the project consists of providing
supportive services, the participating jurisdiction (or State
recipient, or subrecipient) has entered into a legally binding
written agreement or contract with the contractor or subrecipient
providing services to qualifying households in accordance with the
HOME-ARP Notice.
HOME-ARP funds mean funds made available under Section 3205 of
the American Rescue Plan Act of 2021 (Pub. L. 117-2) through
allocations.
Housing includes manufactured housing and manufactured housing
lots, permanent housing for disabled homeless persons, transitional
housing, single-room occupancy housing, and group homes. Housing
does not include emergency shelters, congregate or non-congregate
shelters (including shelters for disaster victims), or facilities
such as nursing homes, convalescent homes, hospitals, residential
treatment facilities, correctional facilities, halfway houses,
housing for students, or dormitories (including farmworker
dormitories).
Program income. Program income means gross income received by
the participating jurisdiction, State recipient, or a subrecipient
directly generated from the use of HOME-ARP funds. When program
income is generated by housing or shelter that is only partially
assisted with HOME-ARP funds, the income shall be prorated to
reflect the
[[Page 56766]]
percentage of HOME-ARP funds used. Program income includes, but is
not limited to, the following:
(1) Proceeds from the disposition by sale or long-term lease of
real property acquired, rehabilitated, or constructed with HOME-ARP
funds;
(2) Gross income from the use or rental of real property, owned
by the participating jurisdiction, State recipient, or a
subrecipient, that was acquired, rehabilitated, or constructed, with
HOME-ARP funds, less costs incidental to generation of the income
(Program income does not include gross income from the use, rental
or sale of real property received by the project owner, developer,
or sponsor, unless the funds are paid by the project owner,
developer, or sponsor to the participating jurisdiction,
subrecipient or State recipient);
(3) Payments of principal and interest on loans made using HOME-
ARP funds;
(4) Proceeds from the sale of loans made with HOME-ARP funds;
(5) Proceeds from the sale of obligations secured by loans made
with HOME-ARP funds;
(6) Interest earned on program income pending its disposition;
(7) Any other interest or return on the investment of HOME-ARP
funds permitted under Sec. 92.205(b) or the HOME-ARP Notice; and,
(8) Any operating cost assistance or replacement reserve funds
returned to the participating jurisdiction after the required
compliance or use period, in accordance with the HOME-ARP Notice.
Project means a site or sites together with any building
(including a manufactured housing unit) or buildings located on the
site(s) that are under common ownership, management, and financing
and are to be assisted with HOME-ARP funds as a single undertaking
under 24 CFR part 92 and the HOME-ARP Notice. The project includes
all the activities associated with the site and building. For HOME-
ARP tenant-based rental assistance or supportive services, project
means assistance to a qualifying individual or family.
Project completion means that all necessary title transfer
requirements and construction work, if applicable, have been
performed; the project complies with the requirements of the HOME-
ARP Notice and applicable requirements of this part, as revised by
the Appendix in this notice (including the property standards); the
final drawdown of HOME funds has been disbursed for the project; and
the project completion information has been entered into the
disbursement and information system established by HUD, except that
with respect to rental housing project completion, for the purposes
of Sec. 92.502(d), project completion occurs upon completion of
construction and before occupancy. For HOME-ARP tenant-based rental
assistance or supportive services, project completion means the
final drawdown has been disbursed for the project.
Subrecipient means a public agency or nonprofit organization
selected by the participating jurisdiction to receive HOME-ARP funds
to administer all or some of the participating jurisdiction's HOME-
ARP programs. A public agency or nonprofit organization that
receives HOME-ARP funds solely as a developer or owner of a housing
project or non-congregate shelter is not a subrecipient. The
participating jurisdiction's selection of a subrecipient is not
subject to the procurement procedures and requirements.
All other definitions in Sec. 92.2 applicable to HOME-ARP
remain unchanged.
B. Subpart B--Allocation Formula
1. Formula Allocation. ARP required the Secretary to allocate
HOME-ARP funds pursuant to section 217 of NAHA (42 U.S.C. 12747) to
grantees that received allocations in fiscal year (FY) 2021 pursuant
to that same formula, within 30 days of enactment of ARP. Therefore,
section 216(1) (42 U.S.C. 12746(1)) which requires the allocation of
funds provided under title II of NAHA in 20 days from the date of
enactment of the appropriation and sections 216(10) (42 U.S.C.
12746(10)) and 217(a)(4) (42 U.S.C. 12747(a)(4)) which provide for a
threshold reduction do not apply. The requirements in 24 CFR 92.50
and 92.60 apply only to the extent that they do not conflict with
this ARP statutory requirement. All regulatory requirements related
to the participation threshold amount do not apply to HOME-ARP.
Insular Areas
2. Program description. The requirements in 24 CFR 92.61 are
waived to the extent they apply to HOME-ARP funds and HUD imposes
the alternative requirement that insular areas must comply with the
requirements for participating jurisdictions for the HOME-ARP
allocation plan in the HOME-ARP Notice, unless stated otherwise in
the HOME-ARP Notice.
3. Review of program description and certifications. The
requirements for the HOME-ARP allocation plan for participating
jurisdictions in the HOME-ARP Notice apply to insular areas,
therefore 24 CFR 92.62 is waived to the extent that it conflicts
with the following alternative requirements:
(a) Review of HOME-ARP allocation plan. The responsible HUD
Field Office will review an insular area's HOME-ARP allocation plan
and will approve the plan unless the insular area has submitted a
substantially incomplete HOME-ARP allocation plan; has submitted a
HOME-ARP allocation plan that is inconsistent with the purposes of
ARP; has failed to submit information sufficient to allow HUD to
make the necessary determinations that the HOME-ARP allocation plan
complies with the requirements in the HOME-ARP Notice; or if the
level of proposed projects or eligible activities is not within the
management capability demonstrated by past performance in housing
and community development programs.
An insular area's allocation plan is inconsistent with ARP if it
allocates HOME-ARP funds for uses other than a HOME-ARP eligible
activity, as described in the HOME-ARP Notice. An insular area's
HOME-ARP allocation plan is substantially incomplete if the insular
area does not complete the required public participation or
consultation or fails to describe those efforts in the plan; if the
insular area fails to include the required elements outlined in the
HOME-ARP Notice, including the amount of HOME-ARP funds for each
eligible HOME-ARP activity type; the insular area fails to identify
and describe the responsibilities of the subrecipient or contractor
administering all of its HOME-ARP award, if applicable; or HUD
rejects the insular area's certifications as inaccurate.
If the insular area has not submitted information in its HOME-
ARP allocation plan that is satisfactory to HUD to demonstrate
compliance with HOME-ARP allocation plan requirements; or if the
level of proposed projects or eligible activities is not within the
management capability demonstrated by past performance in housing
and community development programs, the insular area may be required
to furnish such further information or assurances as HUD may
consider necessary to find the HOME-ARP allocation plan and
certifications satisfactory. The HUD Field Office shall work with
the insular area to achieve a complete and satisfactory plan.
(b) Review period. Within thirty days of receipt of the HOME-ARP
allocation plan, the HUD Field Office will notify the insular area
if determinations cannot be made based on the information submitted
that the HOME-ARP allocation plan complies with HOME-ARP allocation
plan requirements, or if the proposed projects or activities are
beyond currently demonstrated capability as demonstrated by past
performance in housing and community development programs. The
insular area will have a reasonable period of time, agreed upon
mutually, to submit the necessary supporting information or to
revise the proposed projects or activities in its HOME-ARP
allocation plan.
(c) HOME Investment Partnership Agreement. Upon issuance of the
HOME-ARP Notice, HUD will obligate all HOME-ARP grants to insular
areas through the signing of the HOME-ARP Grant Agreements by both
parties. After obligation, HUD will permit the insular area to use 5
percent of its award for eligible administrative and planning costs
in accordance with the HOME-ARP Notice. After submission and
acceptance of the insular area's HOME-ARP allocation plan, the
remainder of the HOME-ARP funds will be made available to the
insular area for expenditure.
4. Amendments to program description. HUD waives 24 CFR 92.63
and imposes the following alternative requirement for insular areas:
Insular areas must make a substantial amendment to its HOME-ARP
allocation plan for a change in the method of distributing funds; to
carry out an activity not previously described in the plan; to
change the purpose, scope, location, or beneficiaries of an
activity, including new preferences not previously described in the
plan; a change in the guidelines that apply to HOME-ARP funds for
other forms of investment (24 CFR 92.61(b)(6)), minority and women
business outreach program (24 CFR 92.61(b)(7)), or refinancing (24
CFR 92.61(b)(8)); or a change
[[Page 56767]]
in the tenure type of the project or activities; or a funding
increase to a project or activity of $100,000 or 50 percent
(whichever is greater). Participating jurisdictions must make the
proposed substantial amendment public and provide for a 15-day
public comment period prior to submission. Upon completion,
participating jurisdictions must submit substantial amendments to
HUD in accordance with the process for submitting the HOME-ARP
allocation plan as described in Section V.D.
The HUD Field Office will notify the insular area if its HOME-
ARP allocation plan, as amended, does not permit a determination
that the HOME-ARP allocation plan complies with the requirements in
the HOME-ARP Notice, or if the level of proposed projects or
eligible activities is not within the management capability
demonstrated by past performance in housing and community
development programs, within 30 days of receipt. The insular area
will have a reasonable period of time, agreed upon mutually, to
submit the necessary supporting information to revise the proposed
projects or activities in its HOME-ARP allocation plan.
5. Applicability of HOME-ARP requirements to insular areas. The
requirements in 24 CFR 92.64 are revised to impose the alternative
requirement that insular areas are subject to the same HOME-ARP
requirements in the HOME-ARP Notice as participating jurisdictions,
and applicable regulatory requirements for insular areas that are
not revised by the HOME-ARP Notice. The following exceptions in 24
CFR 92.64, as revised, still apply to insular areas:
(1) Subpart K (Program Administration): References to HOME
Investment Trust Fund in 24 CFR 92.500(b), as revised by the HOME-
ARP Notice shall be ``HOME account'' for insular areas. The
requirements in 24 CFR 92.502(c) Local Account do not apply to
insular areas, and instead insular areas must comply with Treasury
Circular No. 1075 (31 CFR part 205) and 2 CFR 200.305.
(2) Section 92.504 (Participating jurisdiction responsibilities;
written agreements; on-site inspections) applies, except that the
written agreement must require compliance with the requirements in
the HOME-ARP Notice, including the Appendix.
(3) Subpart L (Performance Reviews and Sanctions). Section
92.552 does not apply. Instead, 24 CFR 92.65 applies.
Exceptions in Sec. 92.64(a)(1), (4), and (5) do not apply to
HOME-ARP for insular areas and are waived. The requirements in 24
CFR 92.64(b), (c), and (d) for insular areas are not revised.
6. Reallocation. Section 217 of NAHA (42 U.S.C. 12747) and the
regulation at 24 CFR 92.66 for the reallocation of funds for insular
areas are waived so that any HOME-ARP funds which are reduced or
recaptured from an insular area's allocation will be reallocated by
HUD in accordance with 24 CFR part 92, subpart J, as revised by the
Appendix in this notice.
C. Subpart C--Consortia; Designation and Revocation of Designation as a
Participating Jurisdiction
1. Continuous designation as a participating jurisdiction. 24
CFR 92.106 is waived and revised to the alternative requirement that
once a State or unit of general local government is designated a
participating jurisdiction for HOME-ARP, it must remain a HOME-ARP
participating jurisdiction for its HOME-ARP period of performance
and the requirements of 24 CFR 92.102 through 92.105 do not apply,
unless HUD revokes the designation in accordance with 24 CFR 92.107,
as revised by the Appendix in this notice. Once allocated HOME-ARP
funds, a HOME-ARP participating jurisdiction does not have to be a
participating jurisdiction under the HOME program to remain a
participating jurisdiction under the HOME-ARP program.
2. Revocation of designation as a participating jurisdiction.
The requirements in 24 CFR 92.107(a) apply to HOME-ARP. The
requirements in Sec. 92.107(b) and (c) are waived. Reallocation
requirements in Sec. 92.107(c) are replaced with the alternative
requirements for 24 CFR part 92, subpart J, as revised by the
Appendix in this notice.
D. Subpart D--Submission Requirements
1. Submission requirements. HUD waives requirements associated
with a comprehensive housing affordability strategy in sections 105
(42 U.S.C. 12705), 106 (42 U.S.C. 12706), 107 (42 U.S.C. 12707), and
216 (42 U.S.C. 12746) of NAHA and 24 CFR 92.150 and imposes the
following alternative requirement:
After the date of the HOME-ARP Notice, the participating
jurisdiction may execute the HOME-ARP grant agreement with HUD to
obligate the participating jurisdiction's HOME-ARP allocation. After
obligation and prior to acceptance of a participating jurisdiction's
HOME-ARP allocation plan by HUD, the participation jurisdiction may
incur eligible administrative and planning costs in accordance with
24 CFR 92.207, as revised by the Appendix in this notice and may
expend up to 5 percent of its HOME-ARP funds for eligible
administrative and planning costs.
The participating jurisdiction must submit a HOME-ARP allocation
plan and related documents in accordance with the HOME-ARP Notice,
including the requirements for the content of the HOME-ARP
allocation plan, the process of developing and submitting the plan,
certifications, consultation, public participation, HUD review,
identification of subrecipient or contractor administering all of a
participating jurisdiction's HOME-ARP award and its
responsibilities, if applicable, and amendments. After a
participating jurisdiction's HOME-ARP allocation plan has been
accepted by HUD, in accordance with the HOME-ARP Notice, a
participating jurisdiction may use its HOME-ARP funds on all
eligible costs, including eligible project costs.
If the participating jurisdiction does not submit a HOME-ARP
allocation plan or if the participating jurisdiction's plan is not
accepted within a reasonable period of time, as determined by HUD,
all HOME-ARP costs incurred by the participating jurisdiction (or
its subrecipient or contractor) will be ineligible costs and any
HOME-ARP funds expended by the participating jurisdiction must be
repaid to the HOME Investment Trust Fund Treasury account, in
accordance with guidance from HUD.
E. Subpart E--Program Requirements
1. Distribution of assistance. The requirements in section 222
of NAHA (42 U.S.C. 12752) and 24 CFR 92.201 are waived to the extent
necessary to impose the following alternative requirements:
a. Local. Each participating jurisdiction must, insofar as is
feasible, distribute HOME-ARP funds geographically within its
boundaries and among different categories of need of qualifying
populations, according to the priorities identified in its approved
HOME-ARP allocation plan. The participating jurisdiction may only
invest its HOME-ARP funds in eligible projects within its
boundaries, or in jointly funded projects within the boundaries of
contiguous local jurisdictions which serve qualifying populations in
both jurisdictions. For a HOME-ARP rental or non-congregate shelter
project to be jointly funded, both jurisdictions must make a
financial contribution to the project.
b. State. Each State participating jurisdiction is responsible
for distributing HOME-ARP funds throughout the State according to
the State's assessment of the geographical distribution of the needs
of the qualifying populations within the State, as identified in the
State's approved HOME-ARP allocation plan. The State must distribute
HOME-ARP funds to rural areas in amounts that take into account the
non-metropolitan share of the State's total qualifying populations
and objective measures of rural need, such as poverty and
homelessness data, as set forth in the State's approved HOME-ARP
allocation plan. To the extent the need is within the boundaries of
a participating unit of general local government, the State and the
unit of general local government shall coordinate activities to
address that need. A State that uses State recipients to perform
program functions shall require that the State recipients use HOME-
ARP funds in accordance with the HOME-ARP Notice and other
applicable laws. A State may fund projects on Indian reservations
located within the State provided that the State includes Indian
reservations in its consolidated plan and HOME-ARP allocation plan.
Eligible and Prohibited Activities
2. New Eligible Activities. In addition to the activities
contained in 24 CFR 92.205 and the NAHA, section 3205(a)(1) of ARP
has defined the following new eligible activities:
(1) Supportive services to qualifying households that are not
already receiving supportive services, including supportive services
activities listed in section 401(29) of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11360(29)); housing counseling; and
homeless prevention services; and
(2) The acquisition and development of non-congregate shelter
units.
For purposes of implementing the new eligible activities under
ARP, HUD has determined that the new eligible activities are not
subject to the requirements in section
[[Page 56768]]
212 of NAHA (42 U.S.C. 12742) and imposes the requirements for the
new eligible activities in the HOME-ARP Notice. As such, the waivers
and alternative requirements in this Notice shall not apply to the
above-activities unless specified in the HOME-ARP Notice.
3. Eligible activities. HUD is providing a waiver of the
requirements of section 212(a)(1) and (3) of NAHA (42 U.S.C.
12742(a)(1) and (3)), section 215(b) of NAHA (42 U.S.C. 12745(b)),
24 CFR 92.205(a)(1)-(4), (b)-(e), and 24 CFR 92.209 as follows:
(1) Ineligible activities. Homeownership and owner-occupied
activities, including assistance to homebuyers, development of
affordable housing for homeownership, and homeowner rehabilitation,
shall not be eligible activities in which HOME-ARP funds may be
invested.
(2) Costs associated with eligible activities. HUD is waiving
and imposing an alternative requirement to 24 CFR 92.205(a)(1)
because the regulation specifies that eligible costs are those set
forth in 24 CFR 92.206 through 24 CFR 92.209. The alternative
requirement is that eligible costs shall be those costs set forth in
24 CFR 92.206 through 24 CFR 92.209, as modified by the waivers and
alternative requirements in this notice.
(3) Applicability of forms of assistance, minimum amount of
assistance, multi-unit projects, and related limited waivers. As
homeownership activities are not eligible activities for HOME-ARP
funds, 24 CFR 92.205(b)-(d) are waived to the extent that they
applied to assisting homebuyers, homeowners, or the development of
housing for homeownership purposes.
(4) Waiver and alternative requirement of regulations for
terminated projects. As participating jurisdictions are required to
have a HOME-ARP Investment Trust Fund Treasury account instead of
the local HOME Investment Trust Fund, HUD is providing a limited
waiver and alternative requirement of the requirements of 24 CFR
92.205(e) to the extent that 24 CFR 92.252(e) specifies that funds
must be paid into the participating jurisdiction's HOME Investment
Trust Fund. HOME-ARP funds repaid pursuant to 24 CFR 92.252(e) and
the HOME-ARP Notice shall be repaid to the participating
jurisdiction's HOME-ARP Investment Trust Fund Treasury account.
4. Eligible project costs. HUD waives 24 CFR 92.206 to the
extent that it conflicts with the eligible costs for eligible
activities identified in the HOME-ARP Notice. In addition, HUD
waives 24 CFR 92.206(d)(5) and imposes the following alternative
requirement:
For new construction or rehabilitation of HOME-ARP rental
housing for qualifying populations, the cost of funding operating
cost assistance during the project's compliance period or a
capitalized operating cost assistance reserve in accordance with
requirements in section VI.B of the HOME-ARP Notice is an eligible
cost.
For new construction or rehabilitation of HOME-ARP rental
housing units for low-income households, the cost of funding an
initial operating deficit reserve, which is a reserve to meet any
shortfall in project income during the period of project rent-up for
HOME-ARP units for low-income households (not to exceed 12 months),
is an eligible cost. An initial operating deficit reserve may only
be used to pay the share of operating expenses, scheduled payments
to a replacement reserve, and debt service of the HOME-ARP rental
housing units for low-income households. The initial operating
deficit reserve must be included in the project's underwriting and
the participating jurisdiction must review and approve the initial
operating deficit reserve amount in accordance with the
participating jurisdiction's standardized underwriting guidelines.
The initial operating deficit reserve must be based on a
participating jurisdiction's analysis of projected operating
deficits attributable to the HOME-ARP units for low-income
households during the period of project rent-up (not to exceed 12
months) and remaining after expected rental revenue and operating
expenses are calculated according to the projected lease-up
schedule. Any HOME-ARP funds placed in an initial operating deficit
reserve that remain unexpended after the period of project rent-up
may be retained for reserves for replacement for HOME-ARP units if
permitted by the participating jurisdiction.
HUD also waives Sec. 92.206(d)(6) to impose the following
alternative requirement: Staff and overhead costs of the
participating jurisdiction are those costs directly related to
carrying out the project or activity, such as work specifications
preparation, loan processing inspections, and other services related
to assisting tenants and occupants. Although these project delivery
costs may be charged as project costs, these costs cannot be charged
to or paid by qualifying households or low-income families.
5. Eligible administrative and planning costs. Section
3205(a)(2) of ARP provides that notwithstanding sections 212(c) and
(d)(1) of NAHA (42 U.S.C. 12742(c) and (d)(1)), a participating
jurisdiction or insular area may use up to fifteen percent of its
HOME-ARP allocation for payment of administrative and planning costs
of the HOME-ARP program. Therefore, HUD waives sections 212(c) and
(d)(1) of NAHA (42 U.S.C. 12742(c) and (d)(1)) and the requirements
in 24 CFR 92.207 to the extent it conflicts with the following
alternative requirement:
A participating jurisdiction may incur and expend up to fifteen
percent of its HOME-ARP allocation for eligible administrative and
planning costs. From the obligation date of the participating
jurisdiction's HOME-ARP award, as identified in the HOME-ARP Grant
Agreement, until the date of HUD's acceptance of the participating
jurisdiction's HOME-ARP allocation plan, a participating
jurisdiction may incur and expend up to five percent of its HOME-ARP
allocation for eligible administrative and planning costs, in
accordance with the requirements in the HOME-ARP Notice.
HOME-ARP funds for may not be used to pay costs attributable to
the regular HOME Program, including administrative and planning
costs.
A participating jurisdiction may provide all or a portion of its
HOME-ARP administrative and planning funds to subrecipients and
contractors that are administering activities on behalf of the
participating jurisdiction (e.g., CoC entity, other non-Federal
entity), in accordance with the requirements in the HOME-ARP Notice.
However, from the obligation date of the HOME-ARP funds in the HOME-
ARP Grant Agreement and prior to HUD's acceptance of the
participating jurisdiction's HOME-ARP allocation plan, a
subrecipient or contractor to the participating jurisdiction may
only incur and expend HOME-ARP funds for eligible administrative and
planning costs if the subrecipient or contractor is responsible for
the participating jurisdiction's entire HOME-ARP award and has
executed a HOME-ARP written agreement that complies with 24 CFR
92.504, as revised by the Appendix in this notice. A participating
jurisdiction must identify subrecipient or contractor that is
responsible for the use of the participating jurisdiction's entire
HOME-ARP award and describe the subrecipient or contractor's
responsibilities in its HOME-ARP allocation plan, in accordance with
the HOME-ARP Notice.
All costs must comply with the Cost Principles contained in
subpart E of the Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards at 2 CFR part
200, as amended.
If the participating jurisdiction does not submit a HOME-ARP
allocation plan or if the participating jurisdiction's plan is not
accepted within a reasonable period of time, as determined by HUD,
all HOME-ARP costs incurred by the participating jurisdiction will
be ineligible costs and any HOME-ARP funds expended by the
participating jurisdiction must be repaid to the participating
jurisdiction's HOME Investment Trust Fund Treasury account, in
accordance with 24 CFR 92.503, as revised by the Appendix in this
notice. Moreover, if the participating jurisdiction's HOME-ARP
allocation plan does not identify or include a description of the
responsibilities of the subrecipient or contractor that is
responsible for the participating jurisdiction's entire HOME-ARP
award, if applicable, the administrative and planning costs incurred
or expended by the subrecipient or contractor will also be
ineligible and any HOME-ARP funds expended by the participating
jurisdiction or the contractor or subrecipient must be repaid to the
participating jurisdiction's HOME Investment Trust Fund Treasury
account.
Reasonable administrative and planning costs for the HOME-ARP
program include:
a. General management, oversight, and coordination. Reasonable
costs of overall HOME-ARP program management, coordination,
monitoring, and evaluation. Such HOME-ARP costs include, but are not
limited to, necessary expenditures for the following:
1. Salaries, wages, and related costs of the participating
jurisdiction's staff. If a participating jurisdiction charges costs
to this category, the participating jurisdiction may either include
the entire salary and related costs allocable to the HOME-ARP
program of each person whose primary responsibilities with regard to
the HOME-ARP program involves program administration
[[Page 56769]]
assignments, or the prorated share of the salary, wages, and related
costs of each person whose job includes any HOME-ARP program
administrative assignments. A participating jurisdiction may only
use one of these two methods. HOME-ARP program administration
includes:
i. Developing systems and schedules for complying with HOME-ARP
program requirements, including systems to prevent a duplication of
benefits among beneficiaries of HOME-ARP activities;
ii. Developing interagency agreements and agreements with
entities receiving HOME-ARP funds;
iii. Monitoring HOME-ARP activities for progress and compliance
with HOME-ARP program requirements;
iv. Preparing HOME-ARP reports and other documents related to
the HOME-ARP program for submission to HUD;
v. Coordinating the resolution of audit and monitoring findings
on any HOME-ARP activities;
vi. Evaluating HOME-ARP program results against stated
objectives in the HOME-ARP allocation plan, and
vii. Managing or supervising persons whose primary
responsibilities with regard to the HOME-ARP program include such
assignments as those described above.
2. Travel costs incurred for official business in carrying out
the HOME-ARP program.
3. HOME-ARP administrative services performed under third party
contracts or agreements, including such services as general legal
services, accounting services, and audit services.
4. Other costs for goods and services required for administering
the HOME-ARP program, such as: Rental or purchase of equipment,
insurance, information systems necessary to track and implement
beneficiaries of HOME-ARP activities in accordance with the
requirements of the HOME-ARP Notice, including the Appendix in this
notice, utilities, office supplies, and rental and maintenance (but
not purchase) of office space.
5. Costs of administering HOME-ARP TBRA and HOME-ARP supportive
services programs.
b. Staff and overhead. Staff and overhead costs of the
participating jurisdiction related to administering a HOME-ARP
project or activity, such as work specifications preparation, loan
processing, inspections, lead-based paint evaluations (visual
assessments, inspections, and risk assessments) and other services
related to assisting potential owners, tenants; and staff and
overhead costs directly related to providing advisory and other
relocation services to persons displaced by the project, including
timely written notices to occupants, referrals to comparable and
suitable replacement property, property inspections, counseling, and
other assistance necessary to minimize hardship. These costs may be
charged as administrative costs, at the discretion of the
participating jurisdiction; however, these costs (except housing
counseling) cannot be charged to or paid by qualifying or low-income
individuals and families.
c. Public information. The provision of information and other
resources to residents and citizen organizations participating in
the planning, implementation, or assessment of projects being
assisted with HOME-ARP funds.
d. Fair Housing. Activities to affirmatively further fair
housing (AFFH) in accordance with 24 CFR 5.151 and the participating
jurisdiction's certification in accordance with 24 CFR 5.152. (HUD's
Interim Final Rule entitled, ``Restoring Affirmatively Furthering
Fair Housing Definitions and Certifications,'' (86 FR 30779, issued
on Jun. 10, 2021) as amended, established the AFFH definition at 24
CFR 5.151 and the certification requirements in 24 CFR 5.152 and
became effective on July 31, 2021). Available at <a href="https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-affirmatively-furthering-fair-housing-definitions-and-certifications">https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-affirmatively-furthering-fair-housing-definitions-and-certifications</a>.
e. Indirect costs. Indirect costs may be charged to the HOME-ARP
program under a cost allocation plan prepared in accordance with 2
CFR part 200, subpart E, as amended.
f. Preparation of HOME-ARP allocation plan. Preparation of the
HOME-ARP allocation plan as required in the HOME-ARP Notice.
Preparation includes the costs of public hearing, consultations, and
publications.
g. Other Federal requirements. Costs of complying with the
applicable Federal requirements in 24 CFR part 92, subpart H. HOME-
ARP project-specific environmental review costs may be charged as
administrative or project costs in accordance with 24 CFR
92.206(d)(8) and is at the discretion of the participating
jurisdiction.
6. Eligible community housing development organization (CHDO)
operating expense and capacity building costs. Section 3205(a)(3) of
ARP provides that notwithstanding sections 212(a) and (g) of the Act
(42 U.S.C. 12742(a) and (g)), a participating jurisdiction or
insular area may use up to an additional five percent of its
allocation for the payment of operating expenses of community
housing development organizations and nonprofit organizations
carrying out activities under the HOME-ARP Notice, but only if such
funds are used to develop the capacity of the community housing
development organization or nonprofit organization in the
jurisdiction or insular area to carry out activities authorized
under the HOME-ARP Notice; and the community housing development
organization or nonprofit organization complies with the limitation
on assistance in section 234(b) of NAHA (42 U.S.C. 12774(b)).
Therefore, HUD waives sections 212(a) and (g) of the Act (42 U.S.C.
12742(a) and (g)) and 24 CFR 92.208 to the extent they conflict with
ARP and the requirements in the HOME-ARP Notice for Nonprofit
Operating and Capacity Building Assistance and imposes the following
alternative requirements:
A participating jurisdiction may use up to 5 percent of its
HOME-ARP allocation to pay operating expenses of community housing
development organizations and other nonprofit organizations that
will carry out activities with HOME-ARP funds. A participating
jurisdiction may also use up to an additional 5 percent of its
allocation to pay eligible costs related to developing the capacity
of eligible nonprofit organizations to successfully carry out HOME-
ARP eligible activities. Participating jurisdictions may award
operating expense assistance or capacity building assistance to a
nonprofit organization if it reasonably expects to provide HOME-ARP
funds to the organization for the eligible HOME-ARP activities of
development and support of rental housing, tenant-based rental
assistance, acquisition and development of non-congregate shelter,
or supportive services within 24 months of the award.
(1) Operating Expense Assistance: Operating expenses are defined
as reasonable and necessary costs of operating the nonprofit
organization. These costs include employee salaries, wages and other
employee compensation and benefits; employee education, training,
and travel; rent; utilities; communication costs; taxes; insurance;
equipment, materials, and supplies. HOME-ARP funds used for
operating expenses must be used for the general operating costs of
the nonprofit organization. These operating costs must not have a
particular final cost objective, such as a project or activity, or
must not be directly assignable to a HOME-ARP activity or project.
(2) Capacity Building Assistance: Capacity building expenses are
defined as reasonable and necessary general operating costs that
will result in expansion or improvement of an organization's ability
to successfully carry out eligible HOME-ARP activities. Eligible
costs include salaries for new hires including wages and other
employee compensation and benefits; costs related to employee
training or other staff development that enhances an employee's
skill set and expertise; equipment (e.g., computer software or
programs that improve organizational processes), upgrades to
materials, and supplies; and contracts for technical assistance or
for consultants with expertise related to the HOME-ARP qualifying
populations.
(3) Ineligible Costs:
(a) No costs related to operating a non-congregate shelter
(e.g., allocable overhead and staffing costs, insurance, utilities,
etc.) are eligible costs under the HOME-ARP program.
(b) The actual costs of implementing a specific activity or
project, including staff costs of the community housing development
organization or nonprofit organization to deliver supportive
services or administer HOME-ARP tenant-based rental assistance, are
considered HOME-ARP project delivery costs or project soft costs and
are not eligible operating expense and capacity building costs.
(4) Limitations on Assistance: In any fiscal year, operating
assistance provided to a nonprofit organization may not exceed the
greater of 50 percent of the general operating expenses of the
organization, as described in the HOME-ARP Notice, for that fiscal
year or $50,000. Likewise, in any fiscal year, capacity building
assistance provided to a nonprofit organization may not exceed the
greater of 50 percent of the general operating expenses of the
organization, as described in
[[Page 56770]]
the HOME-ARP Notice for that fiscal year or $50,000. If an
organization receives both operating assistance and capacity
building assistance in any fiscal year, the aggregate total amount
of assistance it may receive is the greater of 50 percent of the
organization's total operating expenses for that fiscal year or
$75,000.
7. Troubled HOME-assisted rental housing projects. HUD waives 24
CFR 92.210.
8. Pre-award costs. The requirements in 24 CFR 92.212 are waived
and HUD imposes the alternative requirement that HOME-ARP funds
cannot be used for pre-award costs.
9. HOME Funds and Public Housing. HUD is waiving 24 CFR
92.213(d) to the extent that it requires that HOME funds must be
used in accordance with 24 CFR part 92 and the rent requirements in
24 CFR 92.252. Instead, as an alternative requirement, HOME funds
must be used in accordance with 24 CFR part 92, as revised by the
Appendix in this notice and the HOME-ARP Notice, including the rent
requirements contained in each.
10. HOME prohibited activities and fees. HUD is waiving
provisions in 24 CFR 92.214 and providing alternative requirements
related to prohibited activities and fees, as follows:
(1) Operating Cost Assistance. 24 CFR 92.214(a)(6) is waived,
and 24 CFR 92.214(a)(1) is waived to the extent that it conflicts
with the following alternative requirements:
a. A participating jurisdiction may pay ongoing operating
assistance or capitalize an operating cost assistance reserve for
HOME-ARP-assisted units restricted for occupancy by qualifying
populations in a project where the participating jurisdiction
determines in its underwriting that the reserve is necessary to
maintain the HOME-ARP units' long-term operational feasibility.
However, HOME-ARP funds cannot be used for both a capitalized
operating cost assistance reserve and ongoing payments for operating
cost assistance during the minimum compliance period. The allowable
amount of the reserve shall not exceed the amount determined by the
participating jurisdiction to be necessary to provide operating cost
assistance for HOME-ARP units restricted for occupancy by qualifying
populations for the 15-year HOME-ARP minimum compliance period.
b. The operating cost assistance reserve for HOME-ARP units for
qualifying households must be held by the project owner in a
separate interest-bearing account and sized, based on an analysis of
projected deficits remaining after the expected payments toward rent
by qualifying households are applied to the units' share of
operating costs. Funds in a capitalized operating cost assistance
reserve can only be drawn to address operating deficits associated
with HOME-ARP units restricted for occupancy by the qualifying
populations. The participating jurisdiction must, no less than
annually, review the operating cost assistance reserve account to
determine that the account is appropriately sized based on the
projected operating deficits of units restricted for occupancy by
qualifying households. A participating jurisdiction must use the
definition of operating costs in the HOME-ARP Notice in its
calculation of operating deficits to determine the amount of HOME-
ARP funds needed for an operating cost assistance reserve or when
providing operating cost assistance. The participating jurisdiction
may require the project owner to enter into a deposit account
control agreement for the operating cost assistance reserve where
the participating jurisdiction must approve disbursements from the
account.
c. The participating jurisdiction must require the project owner
to request written approval from the participating jurisdiction
prior to disbursing funds from the project operating cost assistance
reserve. The participating jurisdiction must review each requested
distribution from the operating cost assistance reserve, including
supporting documentation, to determine that the distribution is
reasonable and necessary to cover the operating deficit associated
with units occupied by qualifying households.
d. A participating jurisdiction may provide operating cost
assistance to a HOME-ARP rental project to cover an operating
deficit associated with HOME-ARP units restricted for occupancy by
qualifying households except for when an operating cost assistance
reserve is already established for the project. Operating cost
assistance reserve and operating cost assistance cannot be provided
beyond the HOME-ARP budget period, as described in Section VIII.C.3
of the HOME-ARP Notice. Unexpended operating cost assistance reserve
amounts remaining at the end of the minimum compliance period of the
HOME-ARP units must be returned in accordance with Section VI.B.23
of the HOME-ARP Notice. During the HOME-ARP minimum compliance
period and prior to the end of the HOME-ARP budget period, a
participating jurisdiction may invest additional HOME-ARP funds to
provide operating cost assistance but is prohibited from investing
additional HOME-ARP funds for capital costs except within the 12
months after project completion.
(2) Eligible Costs for Operating Cost Assistance. 24 CFR 92.206
and 24 CFR 92.214(a)(9) are waived to the extent that they conflict
with the following alternative requirement:
a. For purposes of the operating cost assistance, operating
costs include costs for administrative expenses, property management
fees, insurance, utilities, property taxes, and maintenance of a
unit that is designated as a HOME-ARP-assisted unit and required to
be occupied by a qualifying household. Operating costs must be
reasonable and appropriate for the area, size, population(s) served,
and type of project.
b. Project administrative expenses include payroll costs, which
are gross salaries and wages paid to employees assigned to the
property, including payroll taxes, employee compensation, and
employee benefits; employee education, training, and travel;
advertising; and general administrative costs which are costs for
goods and services required for administration of the housing,
including rental or purchase of equipment, supplies, legal charges,
bank charges, utilities, telephone/internet services, insurance, and
other administrative costs that are reasonable and customary for the
general administration of a rental unit occupied by qualifying
populations. HOME-ARP permits the pro-rated staffing costs of a
Resident Services Coordinator to be included in the operating costs
allocated to a HOME-ARP unit for low-income or qualifying households
if such costs are not already paid by another source. Typically, the
role of a Resident Services Coordinator is to arrange community
activities for residents and link residents to outside service
agencies as needed.
c. Property management fee includes the total fee paid to a
management agent by the owner for the day-to-day management of a
HOME-ARP rental unit restricted for occupancy by qualifying
populations. A management agent must cover its costs of supervising
and overseeing operations of a HOME-ARP unit out of the fee they
receive.
d. A reserve for replacement must be based on the useful life of
each major system and expected replacement cost in a HOME-ARP
project. Scheduled payments to a reserve for replacement of major
systems included in the operating costs allocated to a HOME-ARP unit
restricted for a qualifying household may be made from the operating
cost assistance reserve. A reserve for replacement allocated to the
HOME-ARP units may also be capitalized in the initial year of the
minimum compliance period of the HOME-ARP units. HOME-ARP funds
cannot be used to both capitalize a reserve for replacement and
provide payments to the reserve for replacement from a capitalized
operating reserve during the minimum compliance period.
Supportive services costs are not eligible operating costs of
HOME-ARP units, however, qualifying households occupying HOME-ARP
rental units may receive supportive services through the HOME-ARP
supportive services eligible activity.
(3) Prohibited fees. 24 CFR 92.214(b) is waived only to the
extent that it conflicts with the alternative requirement that a
participating jurisdiction may allow such occupancy fees or charges
that are customary and reasonable if such fees or charges comply
with 24 CFR 578.77(b).
11. Alternative requirements for Tenant-based rental assistance.
The requirements of section 212(a)(3) (42 U.S.C. 12742(a)(3)), 24
CFR 92.209, 24 CFR 92.252(d), and 24 CFR 92.504(c)(5) are waived.
The following alternative requirements apply:
(1) General Requirements. HOME-ARP funds may be used to provide
tenant-based rental assistance to qualifying households (``HOME-ARP
TBRA''). HOME-ARP TBRA is a form of rental assistance that is
attached to the household and not a particular rental unit.
Therefore, the HOME-ARP TBRA assisted household may choose to move
to another unit with continued HOME-ARP TBRA as long as it continues
to meet the program eligibility requirements. If a HOME-ARP TBRA
assisted household chooses to move, the rental assistance contract
terminates and a new rental assistance contract for the new unit
will be executed according to HOME-ARP TBRA requirements. The HOME-
ARP TBRA assisted household must notify the
[[Page 56771]]
participating jurisdiction before moving in order to receive
continued HOME-ARP TBRA.
a. Tenant Selection. Only individuals and families in the
qualifying populations are eligible to receive HOME-ARP TBRA
assistance. Consistent with the alternative requirements listed
below and Section IV.C of the HOME-ARP Notice, a participating
jurisdiction may use a Continuum of Care's (CoC's) coordinated entry
(CE) process, a CE process and other referral agencies, or a
waitlist to select qualifying households for HOME-ARP TBRA.
Participating jurisdictions may establish a system of preferences
that includes a preference for one or more of the qualifying
populations, such as homeless. Preferences for one or more of the
qualifying populations must be disclosed in the HOME-ARP allocation
plan, as required by the HOME-ARP Notice, including the Appendix in
this notice. The participating jurisdiction must select qualifying
households for HOME-ARP TBRA in accordance with written tenant
selection policies and criteria that are based on local housing
needs established in the HOME-ARP allocation plan. The participating
jurisdiction must follow written tenant selection policies and
criteria that:
i. Limit eligibility to households that meet one of the HOME-ARP
qualifying populations definitions in accordance with HOME-ARP
requirements. Preferences for households in one or more of the HOME-
ARP qualifying populations, if any, must comply with the preferences
and/or method of prioritization in the participating jurisdiction's
HOME-ARP allocation plan and the participating jurisdiction's
policies and procedures, if any, and must not violate
nondiscrimination requirements in 24 CFR 92.350.
ii. If the participating jurisdiction selects TBRA applicants
off a waiting list, it must provide for the selection of households
from a written waiting list in the chronological order of their
application, insofar as is practicable.
iii. Give prompt written notification to any rejected applicant
of the grounds for any rejection, and
iv. Comply with the VAWA requirements as described in 24 CFR
92.359.
v. Finally, the participating jurisdiction may offer, in
conjunction with HOME-ARP TBRA assistance, a simultaneous award of
services in accordance with Section VI.D of the HOME-ARP Notice, as
well as provide particular types of other nonmandatory services that
may be most appropriate for persons with a special need or a
particular disability.
(2) Tenant Protections. Participating jurisdictions must verify
that there is an executed lease between the qualifying household
that receives HOME-ARP TBRA and the owner of the rental unit or a
between a qualifying household that receives HOME-ARP TBRA and a
HOME-ARP sponsor with a sublease between the qualifying households
and the HOME-ARP sponsor, in accordance with 24 CFR 92.253(a). A
HOME-ARP sponsor is a nonprofit organization that provides housing
or supportive services to qualifying households and facilitate the
leasing of a HOME-ARP rental unit to a qualifying household or the
use and maintenance of HOME-ARP tenant-based rental assistance by a
qualifying household. Participating jurisdictions may permit a HOME-
ARP sponsor, as defined in Section VI.B.18 of the Notice, to execute
a lease or master lease with a project owner. The HOME-ARP sponsor
must then sublease a unit to a qualifying household. The lease
between the qualifying household and the rental unit owner or the
sublease between the HOME-ARP sponsor` and the qualifying household
cannot contain any of the prohibited lease terms specified in 24 CFR
92.253(b).
(3) Eligible Costs. Eligible costs under HOME-ARP TBRA include
rental assistance, security deposit payments, and utility deposit
assistance to qualifying households. HOME-ARP funds may be used to
pay for up to 100 percent of these eligible costs. A participating
jurisdiction may use HOME-ARP TBRA funds to provide loans or grants
to qualifying households for security deposits for rental units
regardless of whether the participating jurisdiction provides any
other HOME-ARP TBRA assistance. The amount of funds that may be
provided for a security deposit may not exceed the equivalent of two
months' rent for the unit. Utility deposit assistance is an eligible
cost only if rental assistance or a security deposit payment is
provided with HOME-ARP TBRA. Costs of inspecting the housing are
also eligible as costs of HOME-ARP TBRA. Administration of HOME-ARP
TBRA is eligible only under general management oversight and
coordination at 24 CFR 92.207(a), except that the costs of
inspecting the housing and determining the income eligibility of the
family are eligible project costs under HOME tenant-based rental
assistance.
(4) Ineligible Costs. HOME-ARP TBRA may not be used to pay for
the homebuyer program as defined at 24 CFR 92.209(c)(2)(iv).
(5) Portability of Assistance. A participating jurisdiction may
require the HOME-ARP TBRA assisted household to use HOME-ARP TBRA
within the participating jurisdiction's boundaries or may permit the
household to use the assistance outside its boundaries consistent
with the requirements in 24 CFR 92.209(d).
(6) Term of Rental Assistance Contract. The participating
jurisdiction must determine the maximum term of the rental
assistance contract. The rental assistance contract continues until
the end of the rental assistance contract term, as determined by the
participating jurisdiction, or until the lease or sublease is
terminated, whichever occurs first. The term of the rental
assistance contract may be renewed, subject to the availability of
HOME-ARP funds. The term of the rental assistance contract must
begin on the first day of the term of the lease or sublease.
(7) Maximum Subsidy. The participating jurisdiction must
establish policies for the allowable maximum subsidy, which may
differ from the maximum subsidy requirements at 24 CFR 92.209(h).
Participating jurisdictions may provide up to 100 percent subsidy
for rent, security deposit payments, and utility bills. The
participating jurisdiction must also establish policies for
determining any household contribution to rent based on a
determination of the qualifying household's income.
(8) Rent Standard. Consistent with 24 CFR 92.209(h)(3),
participating jurisdictions must also establish a rent standard for
HOME-ARP TBRA by unit size that is based upon local market
conditions or the Section 8 Housing Choice Voucher program under 24
CFR part 982. The participating jurisdiction must determine whether
the rent for a HOME-ARP TBRA household complies with the rent
standard established by the participating jurisdiction for the HOME-
ARP program and must disapprove a lease if the rent does not meet
the participating jurisdiction's rent standard for HOME-ARP TBRA.
(9) Housing Quality Standards. Housing occupied by a household
receiving HOME-ARP TBRA must comply with all housing quality
standards required in 24 CFR 982.401 (or successor inspection
standards issued by HUD) unless the tenant is residing in a HOME or
HOME-ARP unit, in which case the participating jurisdiction may
defer to initial and ongoing inspection standards.
(10) Program Operation. The participating jurisdiction may
operate HOME-ARP TBRA itself or may contract with a PHA or other
entity with the capacity to operate a rental assistance program. In
either case, the participating jurisdiction or entity operating the
program must approve the lease. HOME-ARP TBRA may be provided
through an assistance contract with (1) an owner that leases a unit
to a qualifying household; (2) the qualifying household; or (3) an
owner and the qualifying household in a tri-party contract. In the
case of HOME-ARP TBRA provided in coordination with a HOME-ARP
sponsor, as described below, the participating jurisdiction may
require that payments are made directly to the HOME-ARP sponsor that
will make rental payments to the owner on behalf of the qualifying
household or require payments directly to the owner of the unit.
(11) HOME-ARP TBRA with a HOME-ARP Sponsor. HOME ARP-TBRA may be
provided in coordination with a HOME-ARP TBRA sponsor. A HOME-ARP
TBRA sponsor is a nonprofit organization that provides housing or
services to HOME-ARP TBRA qualifying households and facilitates the
leasing of a HOME-ARP rental unit to a qualifying household or the
use and maintenance of HOME-ARP TBRA on behalf of a qualifying
household. A HOME-ARP sponsor may make rental subsidy payments and a
security deposit payment on behalf of a qualifying household. Under
HOME-ARP TBRA, a qualifying household may reside in housing leased
by a HOME-ARP sponsor if there is a sublease that complies with
HOME-ARP lease requirements between the HOME-ARP sponsor and the
qualifying household.
(12) Rental Assistance Contract. There must be a rental
assistance contract between the participating jurisdiction and at
least one of the following:
i. HOME-ARP sponsor;
ii. Qualifying household; or
iii. Owner of the housing.
Rental subsidy payments are made on behalf of the HOME ARP-TBRA
household
[[Page 56772]]
pursuant to a rental assistance contract. The rental assistance
contract continues until the lease is terminated. Regardless of the
role of the sponsor, the household has the right to continued HOME
ARP TBRA assistance if it chooses to move from the unit.
The HOME-ARP sponsor may only receive the TBRA subsidy directly
from the participating jurisdiction on behalf of the qualifying
household if the rental assistance contract is between the HOME-ARP
sponsor and the participating jurisdiction or the HOME-ARP sponsor
and the participating jurisdiction have entered into a written
agreement as outlined below. The HOME-ARP sponsor must make rental
subsidy payments to the owner on behalf of the qualifying household
per the terms and conditions of the HOME-ARP TBRA contract or
written agreement with the participating jurisdiction. When the
HOME-ARP TBRA qualifying household moves to a new rental unit, the
HOME-ARP sponsor is not required to continue its sponsor
relationship with the HOME-ARP TBRA-assisted household for the new
rental unit but may do so with the consent of the HOME-ARP TBRA
household.
The participating jurisdiction must establish policies and
procedures regarding termination of HOME-ARP TBRA assistance for
qualifying households who are absent from the rental unit where a
HOME-ARP sponsor is leasing the rental unit and subleasing to the
qualifying household or providing HOME-ARP TBRA rental subsidy
payments on behalf of the household.
(13) Lease and Sublease. Participating jurisdictions must verify
that each household that receives HOME-ARP TBRA assistance has an
executed lease that complies with the tenant protection requirements
of the HOME-ARP Notice. The lease agreement may be between the
project owner and the HOME-ARP TBRA household, or participating
jurisdictions may permit a HOME-ARP sponsor to execute a lease for
an individual unit or a master lease with an owner for more than one
unit restricted for occupancy by HOME-ARP TBRA households. If the
lease agreement is between the HOME-ARP sponsor and owner, the HOME-
ARP sponsor must execute a sublease agreement with a HOME-ARP TBRA
household. The sublease between the HOME-ARP sponsor and the HOME-
ARP TBRA household must meet the tenant protection requirements of
the HOME-ARP Notice.
(14) Written Agreement with HOME-ARP Sponsor. The participating
jurisdiction must enter into a written agreement with the HOME-ARP
sponsor if the HOME-ARP TBRA rental assistance contract is not with
the HOME-ARP sponsor and the HOME-ARP sponsor will receive the HOME-
ARP TBRA subsidy directly from the participating jurisdiction on
behalf of the qualifying household. The written agreement must
specify the requirements for the HOME-ARP sponsor receiving the
HOME-ARP TBRA subsidy on behalf of the qualifying household and the
HOME-ARP sponsor's obligation to provide the HOME-ARP TBRA payment
to the owner for the unit's required rent.
Income Targeting
12. Alternative requirement to HOME rental income targeting
requirements. HUD is waiving section 215(a)(1)(B) and (C) of NAHA
(42 U.S.C. 12745(a)(1)(B) and (C)) and 24 CFR 92.216. For HOME-ARP
rental units, the following alternative requirements shall apply:
(1) 30 Percent Requirement. Not more than 30 percent of the
total number of rental units assisted with HOME-ARP funds by the
participating jurisdiction may be restricted to households that are
low-income as defined in 24 CFR 92.2. These units may only be
located in projects containing HOME-ARP units restricted for
occupancy by qualifying households. The remainder of the total HOME-
ARP rental units assisted with HOME-ARP funds by the participating
jurisdiction must be restricted for occupancy by qualifying
households in accordance with the HOME-ARP Notice.
(2) Low-Income Households. The HOME-ARP rental units occupied by
low-income households must be occupied by low-income households and
bear a rent no greater than the lesser of:
a. The Fair Market Rent for existing housing for comparable
units in the area, as established by HUD, or
b. A rent equal to 30 percent of the income of a family at 65
percent of median income for the area, as determined by HUD, with
adjustments for the number of bedrooms in the unit.
13. HOME tenant-based rental assistance income targeting
requirements. HUD is waiving section 212(a)(3)(A)(ii) of NAHA (42
U.S.C. 12742(a)(3)(A)(ii)) and 24 CFR 92.216 requirements for income
targeting of HOME tenant-based rental assistance and imposing an
alternative requirement that all persons assisted with HOME-ARP TBRA
must be qualifying households upon admission.
F. Subpart F--Project Requirements
1. Maximum per-unit subsidy amount and the waiver and
alternative requirement for underwriting and subsidy layering. The
requirements of 24 CFR 92.250(a) shall not apply to HOME-ARP funds
because section 3205 (c)(1) of ARP states that the underlying
statutory requirements for cost limits in section 212(e) of NAHA (42
U.S.C. 12742(e)) do not apply to HOME-ARP funds. Additionally, the
underwriting and subsidy layering requirements in 24 CFR 92.250(b)
shall not apply to HOME-ARP rental project activities and are
waived. Lastly, the requirements of section 212 of NAHA (42 U.S.C.
12742) and 24 CFR 92.214(a) are waived to the extent that they
conflict with the alternative requirements below. HUD is specifying
the following alternative requirements:
(1) Underwriting and Subsidy Layering Guidelines. Participating
jurisdictions must develop standardized underwriting guidelines for
HOME-ARP rental projects. These guidelines must provide for
underwriting that accommodates and is appropriate for different
types of projects. All participating jurisdictions are required to
develop and implement standardized underwriting guidelines for HOME-
ARP that require the following:
a. An examination of the sources and uses of funds for the
project and a determination that costs are reasonable. In examining
a project's proposed sources and uses, a participating jurisdiction
must determine the amount of HOME-ARP development subsidy required
to fill the gap between other committed funding sources and the cost
to develop the project.
b. An assessment of the current market demand for the proposed
project. For HOME-ARP units for qualifying households, a market
assessment is not required. Rather, the participating jurisdiction
can demonstrate that there is unmet need among qualifying
populations for the type of housing proposed through CoC data,
public housing and affordable housing waiting lists, point-in-time
surveys, housing inventory count, or other relevant data on the need
for permanent housing for the qualifying populations. For projects
containing units restricted for occupancy by low-income households
or market-rate households, the participating jurisdiction must
conduct a market assessment in accordance with 24 CFR 92.250(b)(2).
A third-party market assessment completed by the developer or
another funder meets this requirement, but the participating
jurisdiction must review the assessment and acknowledge in writing
that it accepts the assessment's findings and conclusions. The
market assessment and the participating jurisdiction's written
acknowledgement must be retained for recordkeeping purposes.
c. Review of and determination that the developer's experience
and financial capacity are satisfactory based on the size and
complexity of the project. When assessing the developer, the
participating jurisdiction must review, at minimum, prior experience
with similar projects and the current capacity to develop the
proposed project. When determining whether the developer has the
financial capacity to undertake the project, the participating
jurisdiction should examine financial statements and audits to
determine the developer's net worth, portfolio risk, pre-development
funding, and liquidity.
d. Firm written financial commitments for the project.
e. A careful review of the project's operating budget, including
the assumptions, projections of a project's net operating income,
and reasonably expected increases in revenue and expenses during the
minimum compliance period, to determine if any HOME-ARP-funded
operating cost assistance is necessary and if applicable, an
operating cost assistance reserve is sized appropriately. Operating
income of the project must be sufficient to cover operating expenses
through the minimum compliance period. For HOME-ARP units for
qualifying households, the proforma or projections should include
any anticipated ongoing operating cost assistance or draws from an
operating cost assistance reserve, if applicable, that will offset
operating deficits associated with those units to demonstrate
sufficient operating support. If project-based vouchers or project-
based rental assistance will be awarded, this analysis must include
that rental assistance revenue because operating cost assistance
cannot be used for
[[Page 56773]]
units for qualifying households with project-based vouchers or
project-based rental assistance. A participating jurisdiction's
underwriting standards may permit projects to generate reasonable
net operating income throughout the minimum compliance period.
However, HOME-ARP operating cost assistance may only be used to
offset operating deficits, in accordance with the requirements of
the HOME-ARP Notice. Net operating income resulting from HOME-ARP
operating cost assistance is not permitted and must be prohibited in
the written agreement between the participating jurisdiction and the
owner.
f. An assessment of the project's overall viability through the
minimum compliance period based on the households (i.e., qualifying
households, low-income households, market-rate households) it will
serve.
(2) Developer Fee. A developer fee is a permitted development
cost under the HOME-ARP program, but the participating jurisdiction
must review the fee and determine that it is reasonable. A
participating jurisdiction may set limits on the developer fee and
other fees (e.g., asset management fee, property management fee) to
be paid by HOME-ARP funds that differ from other funding sources
(e.g., Low-Income Housing Tax Credit underwriting standards).
(3) Underwriting and Subsidy Layering Review Standards. Before
the HOME-ARP funds can be committed to a HOME-ARP rental project,
participating jurisdictions must evaluate the project to determine
the amount of HOME-ARP capital subsidy and operating cost assistance
necessary to provide quality affordable housing that meets the
requirements of the HOME-ARP Notice and is financially viable for
the minimum 15-year HOME-ARP compliance period. The participating
jurisdiction must evaluate the project in accordance with
underwriting and subsidy layering guidelines it has developed for
HOME-ARP projects.
(4) Underwriting and Subsidy Layering Commitment Requirements.
The participating jurisdiction's project underwriting must include
an in-depth review of underlying project assumptions, development
sources and uses, and projected operating income and expenses, and
the project's long-term financial viability to determine the
project's need for HOME-ARP assistance while preventing over-
subsidization of the project. Participating jurisdictions must take
a holistic approach to underwriting that examines the overall
feasibility of the entire project to determine that the property
will be financially sustainable for the duration of the 15-year
HOME-ARP compliance period.
For projects that will receive operating cost assistance through
a capitalized operating cost assistance reserve or on-going
operating cost assistance for a specific period, the on-going
operating cost assistance or operating cost assistance reserve must
be included in the underwriting. Unless placed into an operating
cost assistance reserve, operating cost assistance committed to a
project for a specific period cannot be provided beyond the budget
period, as described in Section VIII.C.4 of the HOME-ARP Notice.
HOME-ARP units that have commitments for project-based rental
assistance must be underwritten with the projected rental assistance
and not with operating cost assistance. An operating cost assistance
reserve must be sized based on an analysis of projected operating
deficits remaining after the expected payments toward rent by
qualifying households are applied to the HOME-ARP unit's share of
actual operating costs. However, the participating jurisdiction,
through its underwriting, must also determine that the HOME-ARP
capital and operating subsidies do not result in over-subsidization
of the project.
2. Property Standards. The property standards in 24 CFR 92.251
shall apply to all HOME-ARP rental activities except that:
The requirements in 24 CFR 92.251(c)(3) shall not apply and are
waived because homeownership is not an eligible activity for HOME-
ARP funds.
HOME-ARP rental units must comply with the ongoing property
condition standards of 24 CFR 92.251(f) throughout the compliance
period as demonstrated by an on-site inspection within 12 months of
project completion and an on-site inspection at least once every
three years thereafter as required by 24 CFR 92.504(d)(1)(ii).
3. Lease-up of HOME-ARP rental units. The requirement in 24 CFR
92.252 that states that HUD will require the participating
jurisdiction to repay HOME funds invested in any housing unit that
has not been rented to eligible tenants 18 months after the date of
project completion is waived. Instead, as an alternative
requirement, if the HOME-ARP units are not occupied by eligible
qualifying households or low-income households, in accordance with
the unit restrictions, within six months following project
completion, the participating jurisdiction, as applicable, must
submit to HUD information on its efforts to coordinate with a CoC,
homeless service providers, social service and other public agencies
to fill units for qualifying households or must submit marketing
information and, if appropriate, a marketing plan to fill units for
low-income households. The participating jurisdiction must repay any
HOME-ARP funds invested in units that are not rented to eligible
qualifying or low-income households within 12 months of project
completion.
4. Rent limitations, initial rent schedule, and utility
allowances for HOME-ARP rental housing. The requirements in 24 CFR
92.252(a)-(d) are waived and the following alternative requirements
shall apply:
(1) Rent limitations for units restricted for occupancy by
Qualifying Households. In no case can the HOME-ARP rents exceed 30
percent of the adjusted income of a household whose annual income is
equal to or less than 50 percent of the median income for the area,
as determined by HUD, with adjustments for number of bedrooms in the
unit. HUD will publish the HOME-ARP rent limits on an annual basis.
Notwithstanding the foregoing, a unit that receives a Federal or
state project-based rental subsidy and is occupied by a very low-
income household that pays as a contribution to rent no more than 30
percent of the household's adjusted income, may charge the rent
allowable under the Federal or state project-based rental subsidy
program (i.e., the tenant rental contribution plus the rental
subsidy allowable under that program). If a household receives
tenant-based rental assistance, the rent is the rent permissible
under the applicable rental assistance program (i.e., the tenant
rental contribution plus the rental subsidy allowable under that
rental assistance program).
The rent limits for HOME-ARP qualifying populations include the
rent plus the utility allowance established pursuant to Section
VI.B.13.d of the HOME-ARP Notice.
(2) Rent limitations--low-income households. HOME-ARP rental
units occupied by low-income households must comply with the rent
limitations in 24 CFR 92.252(a) (i.e., the lesser of the Fair Market
Rent for existing housing for comparable units in the area, as
established by HUD, or a rent equal to 30 percent of the income of a
family at 65 percent of median income for the area, as determined by
HUD, with adjustments for number of bedrooms in the unit).
Notwithstanding the foregoing, when a household receives assistance
from a Federal tenant-based rental assistance (e.g., housing choice
vouchers), the rent is the rent permissible under the applicable
rental assistance program (i.e., the tenant rental contribution plus
the rent subsidy allowable under the rental assistance program). The
rent limits for low-income households apply to the rent plus the
utility allowance established pursuant to Section VI.B.13.d of the
HOME-ARP Notice.
(3) Rent limitations--Single Room Occupancy (SRO) Units. A HOME-
ARP rental project may consist of SRO units. For the purposes of
HOME-ARP rental activities, a SRO unit is defined as a unit that is
the primary residence of the occupant(s) and must at least contain
sanitary facilities but may also contain food preparation
facilities. A project's designation as a SRO cannot be inconsistent
with the building's zoning and building code classification. If the
SRO units have both sanitary and food preparation facilities, the
maximum HOME-ARP rent is based on the zero-bedroom fair market rent.
If the SRO unit has only sanitary facilities, the maximum HOME-ARP
rent is based on 75 percent of the zero-bedroom fair market rent.
The rent limits for SRO units must also include the utility
allowance established pursuant to Section VI.B.13.d of the HOME-ARP
Notice.
(4) Initial Rent Schedule and Utility Allowance. The
participating jurisdiction must establish maximum allowances for
utilities and services and update the allowances annually. The
participating jurisdiction may adopt the utility allowance schedule
of the PHA. The participating jurisdiction must review and approve
the HOME-ARP rents proposed by the owner, subject to the HOME-ARP
rent limitations. For HOME-ARP units where the tenant is paying
utilities and services (e.g., trash collection), the participating
jurisdiction must determine that the rent for the unit does not
exceed the maximum rent minus the monthly allowance for utilities
and services.
[[Page 56774]]
5. Affordability requirements and limited waiver and alternative
requirement to period of affordability requirements. The requirement
that affordability restrictions must remain in place for the amount
of time in the table specifying the minimum period of affordability
in 24 CFR 92.252(e) is waived. HUD is specifying that as an
alternative requirement, HOME-ARP-assisted rental units must comply
with the requirements of the HOME-ARP Notice in serving the
qualifying households and, to the extent applicable, low-income
households, for a minimum period of 15 years, irrespective of the
amount of HOME-ARP funds invested in the project or the development
activity being undertaken. Additionally, HUD is specifying the
following alternative requirements to the use restriction
requirements in 24 CFR 92.252(e)(1):
(1) Units restricted for occupancy by qualifying populations
must be occupied by households that meet the definition of a
qualifying population at the time of initial occupancy. The
household's contribution toward rent during this period must be
affordable in accordance with the HOME-ARP Notice. The rents for
these units must comply with the rent limitations established in the
HOME-ARP Notice, including the rent provisions specified in 24 CFR
92.252(i)(2) for households whose income increases above 80 percent
of area median income and whose contribution to rent complies with
the requirements in Section VI.B.15 of the HOME-ARP Notice.
(2) Units available for low-income households must be
continuously occupied by households who are income eligible. The
rents for these units must comply with the rent limitations
established in the HOME-ARP Notice, including the rent provisions
specified in 24 CFR 92.252(i)(2) for households whose income
increases above 80 percent of area median income.
(3) If a project-based rental assistance Housing Assistance
Payments (HAP) contract is awarded to a HOME-ARP rental project, a
participating jurisdiction must impose a minimum compliance period
that is the greater of 15 years or the term of the HAP contract.
Participating jurisdictions are also encouraged to extend
restrictions for occupancy of the HOME-ARP units in accordance with
the requirements in this section to match eligible HAP contract
renewals.
6. Adjustment of HOME rent limits for an existing project. The
requirements of 24 CFR 92.252(g) are waived.
7. Tenant income restrictions and tenant rental contribution
requirements for HOME-ARP rental projects and limited waiver and
alternative requirements. The requirements at 24 CFR 92.203 and 24
CFR 92.252(h) and (i) shall apply except that they are waived to the
extent that they differ from the following alternative requirements:
(1) Household income at Initial Occupancy--Qualifying
Households. The participating jurisdiction must require all HOME-ARP
rental units be restricted for occupancy by eligible households
throughout the minimum compliance period. Qualifying households are
eligible for admission to HOME-ARP rental units solely by meeting
the definition of one of the qualifying populations (i.e., HOME-ARP
does not impose income restrictions on units restricted for
qualifying populations). If there is no income requirement in the
qualifying population's definition, a participating jurisdiction is
not required to perform an initial determination of household income
except as necessary to determine an affordable rental contribution
by the qualifying household or to establish eligibility for another
funding source in the unit that imposes income restrictions (e.g.,
LIHTC).
(2) Household income in Subsequent Years--Qualifying Households.
Each year during the compliance period, starting 1 year after
initial occupancy, the participating jurisdiction must use the
definition of annual income as defined in 24 CFR 5.609 to examine
the income of qualifying households to determine the household's
contribution to rent. For low-income households, the participating
jurisdiction must use the definition of annual income as defined in
24 CFR 5.609 to examine the household's income at initial occupancy
and each subsequent year during the compliance period to determine
the household's ongoing income eligibility and applicable rental
contribution.
a. Qualifying populations. For purposes of establishing the
qualifying household's rental contribution after initial occupancy,
a participating jurisdiction must examine a HOME-ARP qualifying
household's income using 24 CFR 92.203(a)(1)(i) or (iii), starting 1
year after initial occupancy. Each year during the minimum
compliance period, the owner must examine the household's annual
income in accordance with any one of the options in 24 CFR
92.203(a)(1) specified by the participating jurisdiction. A project
owner who re-examines household income through a statement and
certification in accordance with 24 CFR 92.203(a)(1)(ii), must
examine the income of each household, in accordance with 24 CFR
92.203(a)(1)(i), every sixth year of the compliance period.
Otherwise, an owner who accepts the household's statement and
certification in accordance with 24 CFR 92.203(a)(1)(ii) is not
required to examine the household's income unless there is evidence
that the household's written statement failed to completely and
accurately state information about the household's size or income.
b. Over-income--Temporary noncompliance. HOME-ARP-assisted units
restricted for low-income households continue to qualify as HOME-ARP
rental housing despite a temporary noncompliance caused by increases
in the incomes of existing households if actions satisfactory to HUD
are taken so that all vacancies are filled in accordance with HOME-
ARP requirements until the noncompliance is corrected.
c. Changes in income--Qualifying households. A household that
met the definition of one of the HOME-ARP qualifying populations at
initial occupancy and whose annual income at the time of income re-
certification is above 50 percent of median income for the area but
at or below 80 percent of the median income for the area must pay
the rent specified in 24 CFR 92.252(a).
d. Changes in income--Low-income Households or Qualifying
households. A household that is not low-income at the time of income
re-certification (i.e., whose income is above 80 percent of the
median income for the area) must pay rent that complies with the
over income regulatory requirements at 24 CFR 92.252(i)(2).
e. Household income--Low-income Households. In accordance with
24 CFR 92.252(h), the income of each low-income household must be
determined initially in accordance with 24 CFR 92.203(a)(1)(i), and
each year following the initial determination during the minimum
compliance period in accordance with any one of the options in 24
CFR 92.203(a)(1) specified by the participating jurisdiction. An
owner who re-examines household income through a statement and
certification in accordance with 24 CFR 92.203(a)(1)(ii), must
examine the income of each household, in accordance with 24 CFR
92.203(a)(1)(i), every sixth year of the minimum compliance period.
Otherwise, an owner who accepts the household's statement and
certification in accordance with 24 CFR 92.203(a)(1)(ii) is not
required to examine the household's income unless there is evidence
that the household's written statement failed to completely and
accurately state information about the household's size or income.
f. Alternative Requirement for Households Assisted by Other
Programs. Notwithstanding the alternative requirements specified
above or the provisions of 24 CFR 92.203, if a family is applying
for or living in a HOME-ARP-assisted rental unit, and the unit is
assisted by a Federal or State project based rental subsidy then a
participating jurisdiction must accept the public housing agency,
section 8 project owner, or Continuum of Care recipient or
subrecipient's determination of the family's annual income and
adjusted income under that program's and does not need to obtain
source documentation in accordance with 24 CFR 92.203(a)(1) or
calculate the annual income of the family. If a family is applying
for or living in a HOME-ARP-assisted rental unit, and the family is
assisted by a Federal tenant-based rental assistance program (e.g.,
housing choice vouchers, etc.) then a participating jurisdiction may
choose to accept the rental assistance provider's determination of
the family's annual and adjusted income under that program's rules
without need for review under 24 CFR 92.203(a)(1).
8. Tenant selection in HOME-ARP rental housing projects. Except
for affirmative marketing requirements in 24 CFR 92.351 and VAWA
requirements, the requirements in 24 CFR 92.252(k) and 24 CFR
92.253(d) are waived to the extent that they differ from the
following alternative requirements:
(1) Use of Coordinated Entry System or Project-Specific
Waitlists. In accordance with Section IV.C of the HOME-ARP Notice,
participating jurisdictions must determine whether an owner may use
a CoC's CE, a CoC's CE and other referral sources, or a project-
specific waitlist to select qualifying households for HOME-ARP units
restricted
[[Page 56775]]
for occupancy by qualifying populations in accordance with the HOME-
ARP Notice. The participating jurisdiction may also use a waiting
list to receive referrals from a CoC CE and other referral agencies
for a project or activity, where a CoC CE or other referral agency
refers an applicant that is placed on the waiting list for that
project or activity in chronological order. Participating
jurisdictions will make this determination on a project-by-project
basis. Regardless of which method is selected, in all cases, the
participating jurisdiction must use a project-specific waitlist when
selecting households to occupy units restricted for occupancy by
low-income households. Any preferences among qualifying households
must be disclosed in the HOME-ARP allocation plan through the
participating jurisdiction's public participation process in
accordance with Section V.C of the HOME-ARP Notice. The written
agreement between the participating jurisdiction and the project
owner must specify the method the owner must use for selecting
qualifying households for admission to HOME-ARP units.
The owner of a HOME-ARP rental project must adopt and follow
written tenant selection policies and criteria for HOME-ARP units
that:
a. Limit eligibility to households that meet one of the HOME-ARP
qualifying populations definitions or low-income households in
accordance with HOME-ARP requirements. Preference for households
must comply with the participating jurisdiction's preferences and
the participating jurisdiction's policies and procedures for
applying the preferences, if any, and must not violate
nondiscrimination requirements in 24 CFR 92.350.
b. Do not exclude an applicant with a voucher under the Section
8 Housing Choice Voucher Program (24 CFR 982), or an applicant
participating in a HOME, HOME-ARP or other Federal, state, or local
tenant-based rental assistance program because of the status of the
prospective tenant as a holder of such a certificate, voucher, or
comparable tenant-based assistance document.
c. Limit eligibility or gives a preference to a particular
qualifying population or segment of the qualifying population if
permitted in its written agreement with the participating
jurisdiction (and only if the limitation or preference is described
in the participating jurisdiction's HOME-ARP allocation plan). A
preference for households in one or more of the HOME-ARP qualifying
populations must comply with the participating jurisdiction's
determined preference(s) and the participating jurisdiction's
policies and procedures for applying the preference(s), if any;
d. Any limitation or preference must not violate
nondiscrimination requirements in 24 CFR 92.350. If the
participating jurisdiction requires the use of a project-specific
waitlist to select qualifying households and/or low-income
households for occupancy of HOME-ARP units, provide for the
selection of households from a written waiting list in the
chronological order of their application, insofar as is practicable.
e. Give prompt written notification to any rejected applicant of
the grounds for any rejection, and
f. Complies with the VAWA requirements as described in 24 CFR
92.359.
(2) Use of preferences for Qualifying Households. Any
preferences for qualifying households must be disclosed in the HOME-
ARP allocation plan through the participating jurisdiction's public
participation process. The written agreement between the
participating jurisdiction and the project owner must specify the
method the owner must use for prioritizing applicants for admission
to HOME-ARP units.
9. Tenant protections in HOME-ARP rental units. The requirements
of Section 225 of NAHA (42 U.S.C. 12755) and 24 CFR 92.253(a)-(c)
shall apply to HOME-ARP rental projects except to the extent that
they differ from the following alternative requirements:
(1) Use of Master Leases. Section 225 of NAHA (42 U.S.C. 12755)
and 24 CFR 92.253(a) are waived to the extent that they are
interpreted as barring an owner from leasing a unit to a nonprofit
organization that would sublease that unit to a qualifying household
or to the extent that it is interpreted as barring an owner of a
HOME-ARP unit from executing a master lease with a nonprofit
organization for HOME-ARP units restricted for occupancy by
qualifying households. As an alternative requirement, an owner may
execute a lease or master lease with a nonprofit organization, known
as a HOME-ARP sponsor. A HOME-ARP sponsor is a nonprofit
organization that provides housing or supportive services to
qualifying households and facilitates the leasing of a HOME-ARP
rental unit to a qualifying household or the use and maintenance of
HOME-ARP TBRA by a qualifying household. Participating jurisdictions
may permit a HOME-ARP sponsor to lease a HOME-ARP unit from an owner
or execute a master lease with the owner of a HOME-ARP project for
HOME-ARP units restricted for occupancy by qualifying households.
The HOME-ARP sponsor may then sublease the HOME-ARP rental unit to
the qualifying household. The sublease between the HOME-ARP sponsor
and the qualifying household must comply with the rent limitations
and tenant protection requirements of the HOME-ARP Notice, including
the Appendix in this notice.
(2) Termination of tenancy. HUD is applying the requirements of
24 CFR 92.253(c) to termination of tenancy and, as an alternative
requirement, also applying the protections of 24 CFR 92.253(c) to
termination of Master Leases that effectuate the tenancy of
qualifying households. HUD is also specifying the following
alternative requirement for termination of tenancy for qualifying
households in projects that capitalized operating cost assistance
reserves or where there is a current contract for the participating
jurisdiction to provide operating cost assistance to the project. In
those cases, an owner may not terminate the tenancy or refuse to
renew the lease of a qualifying household because of the household's
inability to pay rent during the compliance period. A qualifying
household's inability to pay rent shall mean that the qualifying
household cannot pay more than 30 percent of the qualifying
household's income toward rent, based on an income determination
made by the participating jurisdiction in the last 30 days.
To terminate or refuse to renew tenancy for any household
occupying a HOME-ARP unit, the owner must serve written notice upon
the tenant (and the HOME-ARP sponsor if the lease is between an
owner and sponsor), specifying the grounds for the action at least
30 days before termination of tenancy. In the case of a sublease, to
terminate or refuse to renew tenancy of a qualifying household, the
HOME-ARP sponsor, in accordance with the policy established by the
participating jurisdiction, must notify the participating
jurisdiction in advance of serving written notice to the qualifying
household and must serve written notice upon the qualifying
household at least 30 days before termination of tenancy, specifying
the grounds for the action.
(3) Prohibited Lease Terms. The requirements in 24 CFR 92.253(b)
that prohibit owners from placing certain terms in their lease
agreements shall continue to apply. HUD is also specifying an
alternative requirement that the prohibited lease terms in 24 CFR
92.253(b) may not be placed into a sublease between a HOME-ARP
sponsor and a qualifying household.
G. Subpart G--Community Housing Development Organizations
The requirements in sections 232, 233, 234(a) of NAHA (42 U.S.C.
12772, 12773, 12774(a)) and 24 CFR 92.300, 92.301, 92.302, and
92.303 are waived and do not apply to HOME-ARP.
H. Subpart H--Other Federal Requirements
1. Nondiscrimination, affirmative marketing, and minority
outreach program requirements. The requirements of 24 CFR 92.350 and
24 CFR 92.351 shall apply to all HOME-ARP activities, including Non-
Congregate Shelter and Supportive Services activities. Section 3205,
section 3205 (d)(4) of the ARP states that the Secretary may not
waive or specify alternative requirements for any provision or
regulation related to fair housing or nondiscrimination.
2. Environmental review requirements and labor standards. The
requirements of 24 CFR 92.352 and 24 CFR 92.354 shall apply to all
eligible HOME-ARP activities, including Non-Congregate Shelter and
Supportive Services activities. Section 3205 (d)(4) of ARP states
that the Secretary may not waive or specify alternative requirements
to labor standards and environment.
3. Applicability of lead-based paint requirements. The Lead-
Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the
Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C.
4851-4856), and implementing regulations at 24 CFR part 35, subparts
A, B, J, K, M, and R apply to HOME-ARP-assisted activities.
For the HOME-ARP Non-Congregate Shelter activity, a project must
comply with 24 CFR part 35, subpart K when the HOME-ARP activity is
acquisition only. HOME-ARP NCS projects that involve rehabilitation
of
[[Page 56776]]
pre-1978 facilities, whether the rehabilitation is funded with HOME-
ARP or other funds, must comply with the requirements of 24 CFR part
35, subpart J.
4. Conflicts of interest requirements. The requirements of 24
CFR 92.356 shall apply to all participating jurisdictions, State
recipients, and subrecipients engaging in any HOME-ARP activities.
For purposes of implementing HOME-ARP provisions for Non-Congregate
Shelters, owners and developers of HOME-ARP Non-Congregate Shelters
shall be subject to 24 CFR 92.356(f). The following alternative
requirements shall apply to all participating jurisdictions, State
recipients, and subrecipients engaging in any HOME-ARP activities.
(1) Written Standards of Conduct. Consistent with current
regulations, participating jurisdictions, State recipients, and
subrecipients must maintain written standards of conduct covering
the conflicts of interest and organizational conflicts of interest
requirements under the HOME-ARP Notice and 2 CFR 200.318. In
addition to current regulatory requirements, HUD is requiring that
all participating jurisdictions, State recipients and subrecipients
maintain written standards of conduct that also provide for internal
controls and procedures to ensure a fair and open selection process
for awarding HOME-ARP funds pursuant to the HOME-ARP Notice. These
standards must include provisions on if and how CoC board members
may participate in and/or influence discussions or resulting
decisions concerning the competition or selection of an award or
other financial benefits made pursuant to the HOME-ARP Notice,
including internal controls on when funds may be awarded to the
organization that the member represents.
(2) Organizational Conflicts of Interest. The provision of any
type or amount of HOME-ARP TBRA or supportive services may not be
conditioned on an individual's or family's acceptance or occupancy
of a shelter or housing unit owned by the participating
jurisdiction; State recipients; the subrecipient; or a parent,
affiliate, or subsidiary of the subrecipient. No subrecipient may,
with respect to individuals or families occupying housing owned by
the subrecipient, or any parent, affiliate, or subsidiary of the
subrecipient, administer financial assistance that includes rental
payments, utility deposits, security deposits, and/or first and last
month's rent pursuant to the HOME-ARP Notice. All contractors of the
participating jurisdiction, State recipients, or subrecipient must
comply with the same requirements that apply to subrecipients under
this section.
(3) Requesting Exceptions to Organizational Conflicts of
Interest. Any request for an exception to the organizational
conflicts of interest provisions in the HOME-ARP Notice shall be in
writing and shall be considered by HUD only after the participating
jurisdiction or State recipient has provided the following:
a. A written disclosure of the nature of the conflict,
accompanied by an assurance that there has been public disclosure of
the conflict and a description of how the public disclosure was
made; and
b. An opinion of the participating jurisdiction's or State
recipient's attorney that the interest for which the exception is
sought would not violate State or local law.
(4) Granting Exceptions to Organizational Conflicts of Interest.
HUD shall determine whether to grant an exception to the
organizational conflicts of interest on a case-by-case basis when it
determines that the exception will serve to further the purposes of
HOME-ARP. HUD shall consider the following factors, as applicable,
in determining whether to grant such an exception:
a. Whether the exception would provide a significant cost
benefit or an essential degree of expertise to the program or
project which would otherwise not be available;
b. Whether undue hardship will result to the participating
jurisdiction, State recipient, subrecipient or the person affected
when weighed against the public interest served by avoiding the
prohibited conflict;
c. Whether conditioning approval on changes to the participating
jurisdiction, State recipient, or subrecipient's policies or
procedures can adequately address the organizational conflict of
interest; and
d. Any other factors relevant to HUD's determination, including
the timing of the requested exception.
5. Applicability of displacement, relocation, and acquisition
requirements and waiver of one-for-one replacement requirements. The
requirements of 24 CFR 92.353, which also implement the Uniform
Relocation Assistance and Real Property Acquisition Act of 1970, as
amended, (42 U.S.C. 4201 et seq.) (URA), the URA's implementing
requirements at 49 CFR part 24, and section 104(d) of the Housing
and Community Development Act of 1974, as amended (42 U.S.C. 5304)
and its implementing regulations at 24 CFR part 42, shall apply to
all projects receiving HOME-ARP funds except for the following
waiver and alternative requirement. For purposes of the one-for-one
replacement housing requirements of section 104(d)(2)(A)(i) and (ii)
and (d)(3) (42 U.S.C. 5304(d)(2)(A)(i) and (ii) and 42 U.S.C.
5304(d)(3)) and 24 CFR 42.375, lower-income dwelling units shall not
include single-room occupancy (SRO) units or residential hotel or
motel units in jurisdictions where those units are considered
dwelling units under state or local law.
6. Regulations on consultant activities. The requirements of 24
CFR 92.358 are not waived.
7. Violence Against Women Act Requirements. The requirements of
24 CFR 92.359 are not waived.
I. Subpart I--Technical Assistance
Applicability of requirements on provision of Technical
Assistance in support of HOME-ARP activities. The requirements of 24
CFR 92.400 are waived and shall not apply to the extent that they
restrict the Department's ability to provide Technical Assistance
funds allocated to the Department under section 3205(d)(2) of ARP
without competition, and to the extent that their application of
Subpart C of NAHA (42 U.S.C. 12781 et seq.) would restrict capacity
building to affordable housing activities rather than the broader
set of eligible HOME-ARP activities.
J. Subpart J--Reallocations
Reallocation of HOME-ARP Funds. The requirements of section 216
of NAHA (42 U.S.C. 12746), section 217 of NAHA (42 U.S.C. 12747), 24
CFR 92.66, 24 CFR 92.107, 24 CFR 92.450, 24 CFR 92.451(a), 24 CFR
92.452, 24 CFR 92.453 and 24 CFR 92.454 shall not apply to HOME-ARP
funds and are waived to the extent they differ from the following
alternative requirements for reallocations:
(1) Participating Jurisdictions. For any participating
jurisdiction that refuses to accept its allocation of HOME-ARP
funds, does not have its HOME-ARP allocation plan accepted by HUD,
or has its designation revoked during the period of availability of
HOME-ARP funds, HUD shall reallocate the participating
jurisdiction's unspent HOME-ARP funds to the State jurisdiction in
accordance with 24 CFR 92.451(b) and (c).
(2) State Jurisdictions. For any State jurisdiction that refuses
to accept its allocation of HOME-ARP funds, does not have its HOME-
ARP allocation plan accepted by HUD, or has its designation revoked
during the period of availability of HOME-ARP funds, HUD shall
reallocate the State jurisdiction's unspent HOME-ARP funds in
accordance with 24 CFR 92.451(b) and (c).
Insular areas. For any insular area that refuses to accept its
allocation of HOME-ARP funds, does not have its HOME-ARP allocation
plan accepted by HUD, or has its designation revoked during the
period of availability of HOME-ARP funds, HUD shall reallocate the
insular area's unspent HOME-ARP funds proportionally to the
remaining insular areas participating in the HOME-ARP program.
(3) Annual Reallocation. Reallocations of funds pursuant to the
above waivers and alternative requirements shall be performed
annually, if practicable.
K. Subpart K--Program Administration
1. The HOME Investment Trust Fund. The requirements in 24 CFR
92.500 apply to HOME-ARP, except Sec. 92.500(b) is waived and the
following alternative requirement is imposed:
Treasury Account. The United States Treasury account of the HOME
Investment Trust Fund includes funds allocated to the participating
jurisdiction under HOME-ARP and funds reallocated to the
participating jurisdiction under subpart J of 24 CFR part 92.
The requirements in section 218(c)(2) of NAHA (42 U.S.C.
12748(c)(2)), 24 CFR 92.500(c)(2), (d)(1)(i)-(iii), and (d)(2) are
waived and do not apply to HOME-ARP.
2. HOME Investment Partnership Agreement. The requirements in 24
CFR 92.501 are waived and the following alternative requirements are
imposed:
Allocated and reallocated HOME-ARP funds will be made available
pursuant to a HOME-ARP Grant Agreement. The agreement requires that
HOME-ARP funds invested in HOME-ARP activities are repayable if the
activity does not comply with the requirements in the HOME-ARP
Notice and any subsequent amendments.
[[Page 56777]]
After the date of the HOME-ARP Notice, the participating
jurisdiction and HUD may enter into a HOME-ARP Grant Agreement for
the use of its HOME-ARP allocation pursuant to the HOME-ARP Notice.
After the obligation date identified in the HOME-ARP Grant
Agreement, a participating jurisdiction may use up to 5 percent of
its HOME-ARP award for eligible administrative and planning costs in
24 CFR 92.207. The participating jurisdiction may not incur any
costs or expend any funds for costs other than administrative and
planning costs before the HOME-ARP allocation plan is accepted by
HUD as described in the HOME-ARP Notice.
If the participating jurisdiction does not submit a HOME-ARP
allocation plan, if the participating jurisdiction's plan is not
accepted within a reasonable period of time, as determined by HUD,
or if the subrecipient or contractor administering a participating
jurisdiction's entire HOME-ARP award is not included in the HOME-ARP
allocation plan, in accordance with the HOME-ARP Notice, all HOME-
ARP costs incurred by the participating jurisdiction (or its
subrecipient or contractor) are ineligible costs and any HOME-ARP
funds expended by the participating jurisdiction must be repaid to
the participating jurisdiction's HOME Investment Trust Fund Treasury
account, in accordance with guidance from HUD.
3. Program disbursement and information system. The requirements
in 24 CFR 92.502(b) are waived to the extent they conflict with the
alternative requirement that HOME-ARP investments for acquisition,
new construction, or rehabilitation of housing or non-congregate
shelter, the provision of tenant-based rental assistance, and the
provision of supportive services must be set up as projects in the
Integrated Disbursement and Information System. The requirements in
24 CFR 92.502(c)(3) are waived and do not apply to HOME-ARP.
4. Program income and repayments. A participating jurisdiction
must comply with the requirements for program income and repayments
in the HOME-ARP Notice. The requirements in 24 CFR 92.503 apply to
the use of HOME-ARP funds, except that the requirements in Sec.
92.503(a)(2), (b)(3), (c)(3), (c)(4), and (d) are waived and the
following alternative requirements apply:
(1) Program income. If a jurisdiction is not a participating
jurisdiction in HOME or HOME-ARP when the HOME-ARP program income is
received, the funds must be remitted to HUD and reallocated, in
accordance with 24 CFR 92.454 and the HOME-ARP Notice.
(2) Repayments. A participating jurisdiction must repay HOME-ARP
funds to the HOME Investment Trust Fund Treasury account. If the
jurisdiction is not a participating jurisdiction for HOME or HOME-
ARP at the time the repayment is made, the funds must be remitted to
HUD and reallocated, in accordance with 24 CFR 92.454 and the HOME-
ARP Notice.
5. Participating jurisdiction responsibilities; written
agreements; on-site inspection. HUD waives 24 CFR 92.504, except for
those provisions that reference the requirements of 24 CFR 92.350,
24 CFR 92.351, and 24 CFR 92.359, and imposes the following
alternative requirements for Sec. 92.504:
(a) Responsibilities. The participating jurisdiction is
responsible for managing the day-to-day operations of its HOME-ARP-
ARP program, ensuring that HOME-ARP funds are used in accordance
with all program requirements and written agreements, and taking
appropriate action when performance problems arise. The use of State
recipients, subrecipients, or contractors does not relieve the
participating jurisdiction of this responsibility. The performance
and compliance of each contractor, State recipient, and subrecipient
must be reviewed at least annually. The participating jurisdiction
must have and follow written policies, procedures, and systems,
including a system for assessing risk of activities and projects and
a system for monitoring entities consistent with HOME-ARP Notice, to
ensure that the requirements of this part are met.
(b) Executing a written agreement. Before disbursing any HOME-
ARP funds to any entity, the participating jurisdiction must enter
into a written agreement with that entity. Before disbursing any
HOME-ARP funds to any entity, a State recipient, subrecipient, or
contractor which is administering all or a part of the HOME-ARP
program on behalf of the participating jurisdiction, must also enter
into a written agreement with that entity. The written agreement
must ensure compliance with the requirements of the HOME-ARP Notice.
(c) Provisions in written agreements. The contents of the
agreement may vary depending upon the role the entity is asked to
assume or the type of project undertaken. The written agreement must
contain the applicable minimum provisions for a written agreement in
the HOME-ARP Notice based on the project or activity (e.g., HOME-ARP
rental housing, non-congregate shelter, tenant-based rental
assistance, or supportive services) and the basic requirements and
minimum provisions by role described in this section.
(1) State recipient. The provisions in the written agreement
between the State and a State recipient will depend on the program
functions that the State specifies the State recipient will carry
out in accordance with 24 CFR 92.201(b). The written agreement must
require the State recipient to comply with State's requirements,
including underwriting, refinancing guidelines, and applicable
requirements described in the HOME-ARP Notice.
(i) Use of the HOME-ARP funds. The agreement with a State
recipient must describe the amount and use of the HOME-ARP funds to
administer one or more HOME-ARP programs, including the type and
number of projects to be funded, tasks to be performed, a schedule
for completing the tasks, duration of the agreement, and a budget
for each program. These items must be in sufficient detail to
provide a sound basis for the participating jurisdiction or State to
effectively monitor performance under the agreement.
(ii) Affordability. The agreement must require projects assisted
with HOME-ARP funds to meet the requirements of the HOME-ARP Notice,
as applicable, and must require repayment of the funds if the
project does not meet the requirements for the specified time
period.
(iii) Program income. The agreement must state if program income
is to be remitted to the State or to be retained by the State
recipient for additional eligible activities.
(iv) Uniform administrative requirements. The agreement must
require the State recipient or subrecipient to comply with
applicable uniform administrative requirements described in 24 CFR
92.505, as revised by the Appendix to the HOME-ARP-ARP Notice.
(v) Project requirement. The agreement must require compliance
with requirements in the HOME-ARP Notice, in accordance with the
type of project assisted. The agreement must state whether the State
is permitting a preference for a qualifying population or segment of
a qualifying population. The written agreement must contain
provisions requiring the method of tenant selection to be used in
accordance with the requirements of the HOME-ARP Notice.
(vi) Other program requirements. The agreement must require the
State recipient to carry out each activity in compliance with the
HOME-ARP Notice and all Federal laws and regulations described in
subpart H of 24 CFR part 92, except that the State recipient does
not assume the State's responsibilities for release of funds under
24 CFR 92.352 and the intergovernmental review process in 24 CFR
92.357 does not apply to the State recipient. If HOME-ARP funds are
provided, the agreement must set forth all obligations the State
imposes on the State recipient in order to meet the VAWA
requirements under 24 CFR 92.359, including notice obligations and
any obligations with respect to the emergency transfer plan
(including whether the State recipient must develop its own plan or
follow the State's plan).
(vii) Affirmative marketing. The agreement must specify the
State recipient's affirmative marketing responsibilities in
accordance with 24 CFR 92.351.
(viii) Requests for disbursement of funds. The agreement must
specify that the State recipient may not request disbursement of
HOME-ARP funds under this agreement until the funds are needed for
payment of eligible costs. The amount of each request must be
limited to the amount needed. Program income must be disbursed
before the State recipient requests funds from the State.
(ix) Records and reports. The agreement must specify the
particular records that must be maintained and the information or
reports that must be submitted in order to assist the State in
meeting its recordkeeping and reporting requirements.
(x) Enforcement of the agreement. The agreement must provide for
a means of enforcement of affordable housing or non-congregate
shelter requirements by the State or the intended beneficiaries, if
the State recipient will be the owner at project completion of the
affordable housing or non-congregate shelter. The means of
enforcement may include liens on real property, deed restrictions,
or covenants running with the land. The applicable requirements as
[[Page 56778]]
described in the HOME-ARP Notice must be enforced by deed
restriction. In addition, the agreement must specify remedies for
breach of the HOME-ARP requirements. The agreement must specify
that, in accordance with 2 CFR 200.338, suspension or termination
may occur if the State recipient materially fails to comply with any
term of the agreement. The State may permit the agreement to be
terminated in whole or in part in accordance with 2 CFR 200.339.
(xi) Written agreement. Before the State recipient provides
funds to for-profit owners or developers, nonprofit owners or
developers or sponsors, subrecipients, HOME-ARP owners, sponsors, or
tenants (or landlords) receiving tenant-based rental assistance, or
contractors who are providing services to the State recipient, the
State recipient must have a written agreement with such entities
that meets the requirements of this section and the HOME-ARP Notice.
(xii) Duration of the agreement. The duration of the agreement
will depend on which functions the State recipient performs (e.g.,
whether the State recipient or the State has responsibility for
monitoring rental projects for the period of affordability) and
which activities are funded under the agreement. The duration of the
agreement must comply with the requirements of the HOME-ARP Notice.
(xiii) Fees. The agreement must prohibit the State recipient and
its subrecipients, community housing development organizations, and
nonprofit organizations from charging servicing, origination,
processing, inspection, or other fees for the costs of administering
a HOME-ARP program, except as permitted by 24 CFR 92.214, as revised
by the Appendix to the HOME-ARP Notice.
(2) Subrecipient. A subrecipient is a public agency or nonprofit
organization selected by the participating jurisdiction to
administer all or some of the participating jurisdiction's HOME-ARP
programs to produce affordable housing, non-congregate shelter, or
provide tenant-based rental assistance or supportive services. The
agreement must set forth and require the subrecipient to follow the
participating jurisdiction's requirements, including requirements
for underwriting, refinancing guidelines, and requirements described
in the HOME-ARP Notice.
The agreement between the participating jurisdiction and the
subrecipient must include:
(i) Use of the HOME-ARP funds. The agreement with a subrecipient
must describe the amount and use of the HOME-ARP-ARP funds to
administer one or more HOME-ARP-ARP programs, including the type and
number of projects to be funded, tasks to be performed, a schedule
for completing the tasks, duration of the agreement, and a budget
for each program. These items must be in sufficient detail to
provide a sound basis for the participating jurisdiction or State to
effectively monitor performance under the agreement.
(ii) Program income. The agreement must state if program income
is to be remitted to the participating jurisdiction or to be
retained by the subrecipient for additional eligible activities.
(iii) Uniform administrative requirements. The agreement must
require the State recipient or subrecipient to comply with
applicable uniform administrative requirements described in 24 CFR
92.505 as revised by the Appendix to the HOME-ARP Notice.
(iv) Other program requirements. The agreement must require the
subrecipient to carry out each activity in compliance with HOME-ARP
Notice and all Federal laws and regulations described in subpart H
of 24 CFR part 92, except that the subrecipient does not assume the
participating jurisdiction's responsibilities for environmental
review under 24 CFR 92.352 and the intergovernmental review process
in 24 CFR 92.357 does not apply. The agreement must set forth the
requirements the subrecipient must follow to enable the
participating jurisdiction to carry environmental review
responsibilities before HOME-ARP funds are committed to a project.
If HOME-ARP funds are being provided, the agreement must set forth
all obligations the participating jurisdiction imposes on the
subrecipient in order to meet the VAWA requirements under 24 CFR
92.359, including notice obligations and obligations under the
emergency transfer plan.
(v) Affirmative marketing. The agreement must specify the
subrecipient's affirmative marketing responsibilities in accordance
with 24 CFR 92.351.
(vi) Requests for disbursement of funds. The agreement must
specify that the subrecipient may not request disbursement of funds
under the agreement until the funds are needed for payment of
eligible costs. The amount of each request must be limited to the
amount needed. Program income must be disbursed before the
subrecipient requests funds from the participating jurisdiction.
(vii) Reversion of assets. The agreement must specify that upon
expiration of the agreement, the subrecipient must transfer to the
participating jurisdiction any HOME-ARP funds on hand at the time of
expiration and any accounts receivable attributable to the use of
HOME-ARP funds.
(viii) Records and reports. The agreement must specify the
particular records that must be maintained and the information or
reports that must be submitted in order to assist the participating
jurisdiction in meeting its recordkeeping and reporting
requirements.
(ix) Enforcement of the agreement. The agreement must specify
remedies for breach of the provisions of the agreement. The
agreement must specify that, in accordance with 2 CFR 200.338,
suspension or termination may occur if the subrecipient materially
fails to comply with any term of the agreement. The participating
jurisdiction may permit the agreement to be terminated in whole or
in part in accordance with 2 CFR 200.339.
(x) Written agreement. Before the subrecipient provides HOME-ARP
funds to for-profit owners or developers, nonprofit owners or
developers or sponsors, subrecipients, HOME-ARP owners, sponsors,
tenants (or landlords) receiving tenant-based rental assistance, or
contractors, the subrecipient must have a written agreement that
meets the requirements of this section and the HOME-ARP Notice. The
agreement must state if repayment of HOME-ARP funds or recaptured
HOME-ARP funds must be remitted to the participating jurisdiction or
retained by the subrecipient for additional eligible activities.
(xi) Fees. The agreement must prohibit the subrecipient and any
community housing development organizations from charging servicing,
origination, or other fees for the costs of administering the HOME-
ARP program, except as permitted by 24 CFR 92.214, as revised by the
Appendix to the HOME-ARP Notice.
(3) For-profit or nonprofit housing owner, sponsor, or developer
(other than single-family owner-occupant). The participating
jurisdiction may preliminarily award HOME-ARP funds for a proposed
project, contingent on conditions such as obtaining other financing
for the project. This preliminary award is not a commitment to a
project. The written agreement committing the HOME-ARP funds to the
project must meet the requirements of ``commit to a specific local
project'' in the definition of ``commitment'' in 24 CFR 92.2, as
revised by the Appendix to the HOME-ARP Notice and contain the
following:
(i) Use of the HOME-ARP funds. The agreement between the
participating jurisdiction and a for-profit or nonprofit housing
owner, sponsor, or developer must describe the address of the
project or the legal description of the property if a street address
has not been assigned to the property, the use of the HOME-ARP funds
and other funds for the project, including the tasks to be performed
for the project, a schedule for completing the tasks and the
project, and a complete budget. These items must be in sufficient
detail to provide a sound basis for the participating jurisdiction
to effectively monitor performance under the agreement to achieve
project completion and compliance with the HOME-ARP requirements;
(ii) Affordability. The agreement must require projects assisted
with HOME-ARP funds to meet the requirements of the HOME-ARP Notice,
as applicable, and must require repayment of the funds if the
project does not meet the requirements for the specified time
period;
(iii) Project requirements. The agreement must require
compliance with requirements in the HOME-ARP Notice, in accordance
with the type of project assisted. The agreement must state whether
the State is permitting a preference for a qualifying population or
segment of a qualifying population. The written agreement must
contain provisions requiring the method of tenant selection to be
used in accordance with the requirements of the HOME-ARP Notice;
(iv) Property standards. The agreement must require the housing
or shelter to meet the property standards established in the HOME-
ARP Notice upon project completion. The agreement must also require
owners of rental housing or shelter assisted with HOME-ARP funds to
maintain the project in compliance with the HOME-ARP Notice for the
duration of the affordability period;
(v) Other program requirements. The agreement must require the
owner or
[[Page 56779]]
developer to carry out each project in compliance with the following
requirements of the HOME-ARP Notice:
(A) The agreement must specify the owner or developer's
affirmative marketing responsibilities as enumerated by the
participating jurisdiction in accordance with 24 CFR 92.351.
(B) The federal requirements and nondiscrimination established
in 24 CFR 92.350.
(C) Any displacement, relocation, and acquisition requirements
imposed by the participating jurisdiction consistent with 24 CFR
92.353 and the HOME-ARP Notice.
(D) The labor requirements in 24 CFR 92.354.
(E) The conflicts of interest provisions prescribed in the HOME-
ARP Notice.
(F) If HOME-ARP funds are being provided, the agreement must set
forth all obligations the participating jurisdiction imposes on the
owner in order to meet the VAWA requirements under 24 CFR 92.359,
including the owner's notice obligations and owner obligations under
the emergency transfer plan.
(vi) Records and reports. The agreement must specify the
particular records that must be maintained and the information or
reports that must be submitted in order to assist the participating
jurisdiction in meeting its recordkeeping and reporting
requirements;
(vii) Enforcement of the agreement. The agreement must provide
for a means of enforcement of the HOME-ARP rental housing or non-
congregate shelter requirements by the participating jurisdiction
and the intended beneficiaries. This means of enforcement may
include liens on real property, deed restrictions, or covenants
running with the land. The applicable requirements in the HOME-ARP
Notice must be imposed by deed restrictions, covenants running with
the land, use restrictions, or other mechanisms approved by HUD
under which the participating jurisdiction has the right to require
specific performance. In addition, the agreement must specify
remedies for breach of the provisions of the agreement;
(viii) Requests for disbursement of funds. The agreement must
specify that the developer may not request disbursement of funds
under the agreement until the funds are needed for payment of
eligible costs. The amount of each request must be limited to the
amount needed;
(ix) Omitted;
(x) Duration of the agreement. The agreement must specify the
duration of the agreement in accordance with the HOME-ARP Notice. If
the project assisted under this agreement is rental housing, the
agreement must be in effect through the compliance period required
by the participating jurisdiction, but in no case less than the
minimum compliance period in the HOME-ARP Notice;
(xi) Fees. The agreement must prohibit project owners from
charging fees that are not customarily charged in rental housing
such as laundry room access fees, and other fees. However, rental
project owners may charge reasonable application fees to prospective
tenants may charge parking fees to tenants only if such fees are
customary for rental housing projects in the neighborhood; and may
charge fees for services such as bus transportation or meals, as
long as such services are voluntary.
(4) Contractor. The participating jurisdiction selects a
contractor through applicable procurement procedures and
requirements. The contractor provides goods or services in
accordance with a written agreement (the contract). For contractors
who are administering all or some of the participating
jurisdiction's HOME-ARP programs or specific services for one or
more programs, the contract must include at a minimum the following
provisions:
(i) Use of the HOME-ARP funds. The agreement must describe the
use of the HOME-ARP funds, including the tasks to be performed, a
schedule for completing the tasks, a budget, and the length of the
agreement.
(ii) Program requirements. The agreement must provide that the
contractor is subject to the requirements in 24 CFR part 92 and the
HOME-ARP Notice that are applicable to the participating
jurisdiction, except 24 CFR 92.505 and 92.506 do not apply, and the
contractor cannot assume the participating jurisdiction
responsibilities for environmental review, decision making, and
action under 24 CFR 92.352. Where the contractor is administering
only a portion of the program, the agreement must list the
requirements applicable to the activities the contractor is
administering. If applicable to the work under the contract, the
agreement must set forth all obligations the participating
jurisdiction imposes on the contractor in order to meet the VAWA
requirements under 24 CFR 92.359, including any notice obligations
and any obligations under the emergency transfer plan.
(iii) Duration of agreement. The agreement must specify the
duration of the contract in accordance with the HOME-ARP Notice.
Generally, the duration of a contract should not exceed two years.
(5) HOME-ARP owner tenant receiving tenant-based rental or
security deposit assistance. When a participating jurisdiction
provides assistance to a HOME-ARP owner, sponsor, or tenant, the
written agreement, including the rental assistance contract or
security deposit contract, must comply with the HOME-ARP Notice.
(6) Community housing development organization or nonprofit
organization receiving assistance for operating expenses. The
agreement must describe the use of HOME-ARP funds for operating
expenses; e.g., salaries, wages, and other employee compensation and
benefits; employee education, training, and travel; rent; utilities;
communication costs; taxes; insurance; equipment; and materials and
supplies. If the community housing development organization or
nonprofit organization is not also receiving funds for a HOME-ARP
project, the agreement must provide that the community housing
development organization or nonprofit organization is expected to
receive funds for a project within 24 months of the date of
receiving the funds for operating expenses, and must specify the
terms and conditions upon which this expectation is based and the
consequences of failure to receive funding for a project.
(7) waived and omitted.
(8) Technical assistance provider to develop the capacity of
community housing development organizations or nonprofit
organizations in the jurisdiction. The agreement must identify the
specific nonprofit organization(s) to receive capacity building
assistance. The agreement must describe the amount and use (scope of
work) of the HOME-ARP funds, including a budget, a period of
performance, and a schedule for completion.
(9) Supportive Services Providers. If participating
jurisdictions are using a supportive services provider,
participating jurisdictions must document in their written agreement
with supportive service providers whether they are authorizing
McKinney-Vento supportive services, homelessness prevention
services, Housing Counseling services or some combination of the
three. Only the supportive services that are authorized in the
written agreement may be provided to program participants and only
program participants that are eligible for those supportive services
may be served. As such, supportive services providers must
demonstrate through their documentation that the individuals served
were eligible to receive the supportive services that were
authorized under the written agreement in order for those costs to
be eligible.
While all qualifying households are eligible to receive
supportive services under this activity, the participating
jurisdiction must establish requirements for documenting eligible
costs for an individual or family in a qualifying population (as
defined in Section IV.A of the HOME-ARP Notice) as McKinney-Vento
supportive services, homelessness prevention services, or Housing
Counseling.
If a person is homeless, then the person is eligible to be
provided the supportive services as McKinney-Vento supportive
services for the costs allowable in Section VI.D.4.c below. If a
person is housed and the supportive services are intended to help
the program participant regain stability in the program
participant's current permanent housing or move into other permanent
housing to achieve stability in that housing then the person is
eligible for homelessness prevention services for the costs
allowable in Section VI.D.4.c.i below. Housing Counseling services
may be provided regardless of whether a person is homeless or
currently housed.
(d) On-site inspections and financial oversight.
(1) Inspections. The participating jurisdiction must inspect
each rental housing project at project completion and during the
compliance period to determine that the project meets the property
standards of 24 CFR 92.251. The participating jurisdiction must
inspect each non-congregate shelter at project completion and as
needed, during the restricted use period, to determine that the
project meets the property standards, in accordance with the HOME-
ARP Notice.
(i) Completion inspections. Before completing the project in the
disbursement and information system established by HUD,
[[Page 56780]]
the participating jurisdiction must perform an on-site inspection of
HOME-ARP rental housing or non-congregate shelter to determine that
all contracted work has been completed and that the project complies
with the property standards, as described in the HOME-ARP Notice.
(ii) Ongoing periodic inspections of HOME-ARP-assisted rental
housing. During the period of affordability, the participating
jurisdiction must perform on-site inspections of HOME-ARP assisted
rental housing to determine compliance with the property standards
of 24 CFR 92.251 and to verify the information submitted by the
owners in accordance with the requirements of 24 CFR 92.252, as
revised by the Appendix to the HOME-ARP Notice. The inspections must
be in accordance with the inspection procedures that the
participating jurisdiction establishes to meet the inspection
requirements of 24 CFR 92.251.
(A) The on-site inspections must occur within 12 months after
project completion and at least once every 3 years thereafter during
the compliance period.
(B) If there are observed deficiencies for any of the
inspectable items in the property standards established by the
participating jurisdiction, in accordance with the inspection
requirements of 24 CFR 92.251, a follow-up on-site inspection to
verify that deficiencies are corrected must occur within 12 months.
The participating jurisdiction may establish a list of non-hazardous
deficiencies for which correction can be verified by third party
documentation (e.g., paid invoice for work order) rather than re-
inspection. Health and safety deficiencies must be corrected
immediately, in accordance with 24 CFR 92.251. The participating
jurisdiction must adopt a more frequent inspection schedule for
properties that have been found to have health and safety
deficiencies.
(C) The property owner must annually certify to the
participating jurisdiction that each building and all HOME-ARP-
assisted units in the project are suitable for occupancy, taking
into account State and local health, safety, and other applicable
codes, ordinances, and requirements, and the ongoing property
standards established by the participating jurisdiction to meet the
requirements of 24 CFR 92.251.
(D) Inspections must be based on a statistically valid sample of
units appropriate for the size of the HOME-ARP-assisted project, as
set forth by HUD through notice. For projects with one-to-four HOME-
ARP-assisted units, participating jurisdiction must inspect 100
percent of the HOME-ARP-assisted units and the inspectable items
(site, building exterior, building systems, and common areas) for
each building housing HOME-ARP-assisted units.
(iii) Annual inspections. Tenant based rental assistance (TBRA).
All housing occupied by tenants receiving HOME-ARP tenant-based
rental assistance must meet the standards in 24 CFR 982.401 or the
successor requirements as established by HUD. The participating
jurisdiction must perform annual on-site inspections of rental
housing occupied by tenants receiving HOME-ARP-assisted TBRA to
determine compliance with these standards.
(2) Financial oversight. During the period of affordability, the
participating jurisdiction must examine at least annually the
financial condition of HOME-ARP-assisted rental projects with 10
units or more to determine the continued financial viability of the
housing and must take actions to correct problems, to the extent
feasible.
6. Applicability of uniform administrative requirements. The
requirements of 24 CFR 92.505 apply to the use of HOME-ARP funds,
except HUD waives 24 CFR 92.505 to the extent that it conflicts with
the following:
The requirements of 2 CFR part 200, as amended, apply to
participating jurisdictions, State recipients, and subrecipients
receiving HOME-ARP funds, except for the following provisions: 24
CFR 200.306, 200.307, 200.308 (not applicable to participating
jurisdictions), 200.311 (except as provided in 24 CFR 92.257),
200.312, 200.329, 200.333, and 200.334. The provisions of 2 CFR
200.305 apply as modified by 24 CFR 92.502(c) and the HOME-ARP
Notice. If there is a conflict between definitions in 2 CFR part 200
and 24 CFR part 92, as revised by the HOME-ARP Notice, the
definitions in 24 CFR part 92, as revised by the HOME-ARP Notice,
govern. Moreover, if there is a conflict between the provisions of 2
CFR part 200 and the provisions of the HOME-ARP Notice, the
provisions of the HOME-ARP Notice govern.
Where regulations in 24 CFR part 92 refer to specific
regulations of 2 CFR part 200 that were or are renumbered or revised
by amendments to 2 CFR part 200, the requirements that apply to the
use of HOME-ARP funds are the applicable requirements in 2 CFR part
200, as amended, notwithstanding the renumbered regulatory
reference.
7. Confidentiality. 24 CFR 92.504 and 24 CFR 92.508(a)(3) are
waived only to the extent that they conflict with the following
alternative requirements:
Confidentiality Requirements. The participating jurisdiction,
subrecipients, owners, contractors, must develop, implement, and
maintain written procedures to require that:
a. All records containing personally identifying information of
any individual or family who applies for and/or receives HOME-ARP
assistance will be kept secure and confidential;
b. The address or location of any NCS or HOME-ARP rental housing
exclusively for individuals fleeing or attempting to flee domestic
violence, dating violence, sexual assault, stalking, or human
trafficking will not be made public, except as necessary where
making the address or location public does not identify occupancy of
the NCS or HOME-ARP rental housing, when necessary to record use
restrictions or restrictive covenants in accordance with Section
VI.B or VI.E, or with written authorization of the person or entity
responsible for the operation of the NCS or HOME-ARP rental housing;
and
c. The address or location of any program participant that is a
fleeing or attempting to flee domestic violence, dating violence,
sexual assault, stalking, or human trafficking will not be made
public, except as provided under a privacy policy of the
participating jurisdiction consistent with state and local laws and
any other grant conditions from other federal grant programs
regarding privacy and obligations of confidentiality.
Documenting status of a qualifying population that is fleeing or
attempting to flee domestic violence, dating violence, stalking,
sexual assault, or human trafficking:
i. If an individual or family qualifies because the individual
or family is fleeing or attempting to flee domestic violence, dating
violence, sexual assault, stalking, or human trafficking then
acceptable evidence includes an oral or written statement by the
qualifying individual or head of household seeking assistance that
they are fleeing that situation. An oral statement may be documented
by either: A written certification by the individual or head of
household; or a written certification by a victim service provider,
intake worker, social worker, legal assistance provider, health-care
provider, law enforcement agency, legal assistance provider,
pastoral counselor, or an intake worker in any other organization
from whom the individual or family sought assistance.
The written documentation need only include the minimum amount
of information indicating that the individual or family is fleeing
or attempting to flee domestic violence, dating violence, sexual
assault, stalking, or human trafficking and need not include any
additional details about the conditions that prompted the individual
or family to seek assistance.
All entities assisted by HOME-ARP funds must develop, implement,
and maintain written procedures to require that:
a. All records containing personally identifying information of
any individual or family who applies for and/or receives HOME-ARP
assistance will be kept secure and confidential;
b. The address or location of any NCS or HOME-ARP rental housing
exclusively for individuals fleeing or attempting to flee domestic
violence, dating violence, sexual assault, stalking, or human
trafficking will not be made public, except as necessary where
making the address or location public does not identify occupancy of
the NCS or HOME-ARP rental housing, when necessary to record use
restrictions or restrictive covenants in accordance with Section
VI.B or VI.E, or with written authorization of the person or entity
responsible for the operation of the NCS or HOME-ARP rental housing;
and
c. The address or location of any program participant that is a
fleeing or attempting to flee domestic violence, dating violence,
sexual assault, stalking, or human trafficking will not be made
public, except as provided under a privacy policy of the
participating jurisdiction consistent with state and local laws and
any other grant conditions from other federal grant programs
regarding privacy and obligations of confidentiality.
Documenting status of a qualifying population that is fleeing or
attempting to flee domestic violence, dating violence, stalking,
sexual assault, or human trafficking:
a. If an individual or family qualifies because the individual
or family is fleeing or attempting to flee domestic violence, dating
violence, sexual assault, stalking, or human
[[Page 56781]]
trafficking then acceptable evidence includes an oral or written
statement by the qualifying individual or head of household seeking
assistance that they are fleeing that situation. An oral statement
may be documented by either:
i. A written certification by the individual or head of
household; or
ii. a written certification by a victim service provider, intake
worker, social worker, legal assistance provider, health-care
provider, law enforcement agency, legal assistance provider,
pastoral counselor, or an intake worker in any other organization
from whom the individual or family sought assistance.
The written documentation need only include the minimum amount
of information indicating that the individual or family is fleeing
or attempting to flee domestic violence, dating violence, sexual
assault, stalking, or human trafficking and need not include any
additional details about the conditions that prompted the individual
or family to seek assistance.
8. Recordkeeping. Each participating jurisdiction must establish
and maintain sufficient records to enable HUD to determine whether
the participating jurisdiction has met the requirements of the HOME-
ARP Notice. The recordkeeping requirements in 24 CFR 92.508 apply to
HOME-ARP, except Sec. 92.508(a)(2) for program records, (a)(3) for
project records, (a)(4) for financial records, and Sec. 92.508(c)
for period of record retention are waived and HUD imposes the
following alternative requirements for program, project, financial,
and period of record retention:
(1) Program Records:
a. Records evidencing that all HOME-ARP funds used by a
participating jurisdiction for TBRA, supportive services, and
acquisition and development of non-congregate shelter units benefit
individuals and families in qualifying populations.
b. Records evidencing that not less than 90 percent of
affordable rental housing units acquired, rehabilitated, and/or
constructed with HOME funds by a participating jurisdiction are
occupied by households in the qualifying populations.
c. Records documenting compliance with the 15 percent limitation
on administrative and planning costs.
d. Records documenting compliance with the 5 percent limitation
on CHDO and non-profit operating and capacity building costs.
e. The underwriting and subsidy layering guidelines adopted in
accordance with Section VI.B.10 of the HOME-ARP Notice that support
the participating jurisdiction's HOME-ARP allocation plan
certification.
f. If existing debt is refinanced for multifamily rehabilitation
projects, the HOME-ARP refinancing guidelines established in the
HOME-ARP Allocation Plan.
g. If HOME-ARP funds are used for TBRA, records supporting the
participating jurisdiction's written selection policies and
criteria; supporting documentation for preferences for specific
categories of individuals with disabilities; and records supporting
the rent standard and minimum tenant contribution established in
accordance with Section VI.C.7 and 8 of the HOME-ARP Notice.
h. Confidentiality.
i. The participating jurisdiction's written policies and
procedures for maintaining confidentiality of qualifying households
as individuals or families fleeing, or attempting to flee domestic
violence, dating violence, sexual assault, stalking, or human
trafficking in accordance with Section VIII.H
ii. The participating jurisdiction's written policies and
procedures for maintaining confidentiality in compliance with the
VAWA protections contained in 24 CFR part 5, subpart L.
(2) Project Records: Participating jurisdictions are required to
retain the following records for HOME-ARP-assisted projects, as
specified by activity type.
a. A full description of each project assisted with HOME-ARP
funds, including the location (address of project), form of HOME-ARP
assistance, and the units, families, or qualifying households
assisted with HOME-ARP funds, subject to the confidentiality
requirements in the HOME-ARP Notice.
b. The source and application of funds for each project,
including supporting documentation in accordance with 2 CFR 200.302;
and records to document the eligibility and permissibility of the
project costs, including the documentation of the actual HOME-ARP-
eligible development costs of each HOME-ARP-assisted unit as defined
in the HOME-ARP Notice.
c. Records (i.e., written agreements) demonstrating compliance
with the written agreement requirements in Section VIII.B. of the
HOME-ARP Notice.
d. Records (e.g., inspection reports) demonstrating that each
HOME-ARP rental project meets the property standards in Section
VI.B.11 of the HOME-ARP Notice at project completion and through the
applicable minimum compliance period. In addition, during a HOME-ARP
rental project's minimum compliance period, records demonstrating
compliance with the property standards and financial oversight
pursuant to 24 CFR 92.504(d) and the operating cost assistance
reserve management and oversight required by Section VI.B.22 of the
HOME-ARP Notice.
e. Records (e.g., inspection reports) demonstrating that each
unit occupied by a qualifying household receiving HOME-ARP TBRA,
meets the housing quality standards of Section VI.C.9 of the HOME-
ARP Notice at initial occupancy and throughout the household's term
of assistance.
f. Records (e.g., inspection reports) demonstrating that each
NCS project meets the property and habitability standards of
SectionVI.E.7., of the HOME-ARP Notice at project completion and
throughout the applicable restricted use period.
g. Records demonstrating that each qualifying household is
eligible for HOME-ARP assistance based on the requirements of the
ARP and Section IV of the HOME-ARP Notice.
h. Records demonstrating that each household qualifying as
homeless, records that meet the requirements in 24 CFR
576.500(b)(1), (2), (3), or (4), as applicable (except that youth
aged 24 and under must not be required to provide third-party
documentation to show they are homeless to receive any shelter,
housing, or services for which ESG or CoC Program funds may be used
to supplement the HOME-ARP assistance);
i. Records demonstrating that each household qualifying as ``at
risk of homelessness,'' records that meet the requirements in 24 CFR
576.500(c)(1) or (2), as applicable, and include the following
documentation of annual income:
(i) Income evaluation form containing the minimum requirements
specified by HUD and completed by the recipient or subrecipient; and
(ii) Source documents for the assets held by the household and
income received over the most recent period for which representative
data is available before the date of the evaluation (e.g., wage
statement, unemployment compensation statement, public benefits
statement, bank statement);
(iii) To the extent that source documents are unobtainable, a
written statement by the relevant third party (e.g., employer,
government benefits administrator) or the written certification by
the recipient's or subrecipient's intake staff of the oral
verification by the relevant third party of the income the household
received over the most recent period for which representative data
is available; or
(iv) To the extent that source documents and third-party
verification are unobtainable, the written certification by the
household of the amount of income the household received for the
most recent period representative of the income that the household
is reasonably expected to receive over the 3-month period following
the evaluation.
j. Records demonstrating compliance with the household income
requirements in accordance with Section VI.B.12 of the HOME-ARP
Notice for each HOME-ARP rental project.
k. Records demonstrating that each HOME-ARP rental and NCS
project meets the minimum compliance period or restricted use period
described in Sections VI.B.17 and VI.E.9 respectively, of the HOME-
ARP Notice.
l. Records demonstrating that for each HOME-ARP rental housing
unit or for each household receiving HOME-ARP TBRA, compliance with
the tenant protection requirements of Sections VI.B.18 and VI.C. 2,
respectively, of the HOME-ARP Notice. For HOME-ARP TBRA or rental
projects under a master lease, the participating jurisdiction must
retain records demonstrating that a master lease for housing leased
by a HOME-ARP sponsor and each sublease between a qualifying
household and HOME-ARP sponsor complies with the tenant and
participant protections of 24 CFR 92.253 and the HOME-ARP Notice.
Records must be kept for each household.
m. Records demonstrating compliance with the return of the HOME-
ARP rental capitalized operating cost assistance reserve and/or the
NCS replacement reserve at the end of the compliance or restricted
use period in accordance with Sections VI.B.23
[[Page 56782]]
and VI.E.10 respectively, of the HOME-ARP Notice.
n. Records demonstrating that each HOME-ARP rental and each NCS
project meets the underwriting and subsidy layering or due diligence
requirements of Section VI.B.10 or VI.E.6 of the HOME-ARP Notice.
o. Records demonstrating that each HOME-ARP rental housing
project meets the rent limitations of Sections VI.B.13 and VI.B.15
of the HOME-ARP Notice for the 15-year minimum compliance period.
Records must be kept for each household assisted.
p. Records demonstrating that each multifamily HOME-ARP rental
housing project involving rehabilitation with refinancing complies
with the refinancing guidelines established in accordance with 24
CFR 92.206(b).
q. Records demonstrating that a site and neighborhood standards
review was conducted for each HOME-ARP rental housing project
involving new construction under Section VI.B. of the HOME-ARP
Notice to determine that the site meets the requirements of 24 CFR
983.57(e)(2) and (e)(3), in accordance with 24 CFR 92.202.
r. Records demonstrating that any conversion of HOME-ARP NCS
complies with the requirements established by Section VI.E. of the
HOME-ARP Notice, including that conversion of NCS only occurred
after the end of the applicable minimum use period defined in
Section VI.E.11.
s. For all HOME-ARP NCS projects the following documents must be
maintained, as applicable:
(i) Purchase contract, closing documents, settlement statement
and title work for acquisitions.
(ii) Appraisal or other estimation of value to justify
acquisition expenditure.
(iii) Architectural and engineering contracts and completed
designs, plans, and specifications for rehabilitation and new
construction activities.
(iv) Invoices, pay requests, and proof of payment for all
project expenditures.
(v) Proof of insurance.
(vi) Project and program audits.
t. For all HOME-ARP Supportive Services projects pursuant to
McKinney-Vento or Homelessness Prevention Supportive Services:
(i) Records demonstrating which types of Supportive Services the
participating jurisdiction is offering program participants.
(ii) Records, where applicable, demonstrating compliance with
the termination of assistance requirement as described in section
VI.D.5. of the HOME-ARP Notice.
(iii) Records of all solicitations of and agreements with
subrecipients and contractors, records of all payment requests by
and dates of payments made to subrecipients, and documentation of
all monitoring and sanctions of subrecipients, as applicable
including any findings and corrective actions required.
(iv) Records of all procurement contracts and documentation of
compliance with the procurement requirements in 2 CFR part 200,
subpart D, and Section VIII.D of the HOME-ARP Notice.
(v) Records evidencing the use of the written procedures
required under Section VI.D.2 and records evidencing compliance with
Section IV.C.2.
(vi) Records of all leases, subleases, and financial assistance
agreements for the provision of rental payments, documentation of
payments made by the participating jurisdiction to owners, HOME-ARP
sponsor, or qualifying households for the provision of financial
assistance for rental payments, and supporting documentation for
these payments, including dates of occupancy by qualifying
individuals and families.
(vii) Records that document the monthly allowance for utilities
(excluding telephone) used to determine compliance with the rent
restriction.
(viii) Records of the types of services provided under the
participating jurisdiction's program and the amounts spent on these
services.
(ix) Records demonstrating subrecipient compliance with the
recordkeeping requirements in Section VIII.F. of the HOME-ARP
Notice.
u. For all HOME-ARP Housing Counseling Services projects as
defined in 24 CFR part 5, each participating housing counseling
agency must maintain a recordkeeping and reporting system in
accordance with 24 CFR 214.315 and 24 CFR 214.317. The system must
permit HUD to easily access all information needed for a performance
review.
v. For all HOME-ARP-assisted nonprofit operating expense and
capacity building assistance activities:
(i) Records concerning the use of funds for nonprofit operating
expense and capacity building assistance must be maintained to
enable HUD to determine whether the participating jurisdiction has
met the requirements of Section VI.F. of the HOME-ARP Notice.
(ii) Written agreements between the participating jurisdiction
and the nonprofit organization providing nonprofit operating expense
assistance or capacity building assistance must be retained for five
years after the agreement terminates.
(3) Financial records:
a. Records, in accordance with 2 CFR 200.302, identifying the
source and application of HOME-ARP funds. Identification must
include, as applicable, the Assistance Listing program title and
number (formerly Catalogue of Federal Domestic Assistance), Federal
award identification number and year, name of the Federal agency,
and name of the pass-through entity, if any.
b. Records concerning the HOME Investment Trust Fund Treasury
account and local account required to be established and maintained
by the HOME-ARP Notice, including deposits, disbursements, balances,
supporting documentation and any other information required by IDIS.
c. Records identifying the source and application of program
income and repayments.
d. Records demonstrating adequate budget control and other
records required by 2 CFR 200.302, including evidence of periodic
account reconciliations.
(4) Program administration records:
a. Records demonstrating compliance with the written agreements
required by Section VIII.B. of the HOME-ARP Notice.
b. Records demonstrating compliance with the applicable uniform
administrative requirements required by Section VIII.D. of the HOME-
ARP Notice.
c. Records documenting required inspections, monitoring reviews
and audits, and the resolution of any findings or concerns.
(5) Records concerning other Federal requirements:
a. Equal opportunity and fair housing records.
(i) Data on the extent to which each racial and ethnic group,
and single-headed households by gender of household head) have
applied for, participated in, or benefited from, any program or
activity funded in whole or in part with HOME-ARP funds.
(ii) Documentation that the participating jurisdiction submitted
a certification that it will affirmatively further fair housing
consistent with 24 CFR 5.152 (HUD's Interim Final Rule entitled
``Restoring Affirmatively Furthering Fair Housing Definitions and
Certifications,'' (86 FR 30779, June 10, 2021), as amended
established the AFFH definition, codified at 24 CFR 5.151 and the
AFFH certification, codified at 24 CFR 5.152, available at: <a href="https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-affirmatively-furthering-fair-housing-definitions-and-certifications">https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-affirmatively-furthering-fair-housing-definitions-and-certifications</a>)
(iii) Records demonstrating compliance with the
nondiscrimination and equal opportunity requirements of 24 CFR 92,
Subpart H.
b. Affirmative marketing and MBE/WBE records.
(i) Records demonstrating compliance with the affirmative
marketing procedures and requirements of 24 CFR 92.351.
(ii) Documentation and data on the steps taken to implement the
jurisdiction's outreach programs to minority-owned (MBE) and female-
owned (WBE) businesses including data indicating the racial/ethnic
or gender character of each business entity receiving a contract or
subcontract of $25,000 or more paid, or to be paid, with HOME-ARP
funds; the amount of the contract or subcontract, and documentation
of participating jurisdiction's affirmative steps to assure that
minority business and women's business enterprises have an equal
opportunity to obtain or compete for contracts and subcontracts as
sources of supplies, equipment, construction, and services.
c. Records demonstrating compliance with the environmental
review requirements of 24 CFR 92.352, 24 CFR part 58, and the HOME-
ARP Notice including flood insurance requirements.
d. Records demonstrating compliance with the requirements of 24
CFR 92.353 and the provisions of Section VII.F. of the HOME-ARP
Notice regarding displacement, relocation, and real property
acquisition, including but not limited to:
(i) project occupancy lists identifying the name and address of
all persons occupying the real property on the date described in 24
CFR 92.353(c)(2)(i)(A), moving into the
[[Page 56783]]
property on or after the date described in 24 CFR
92.353(c)(2)(i)(A), and occupying the property upon completion of
the project;
(ii) Lists of all individuals or families occupying hotels and
motels and other nonresidential properties acquired, rehabilitated,
and/or demolished and newly constructed to become HOME-ARP NCS or
HOME-ARP rental housing that qualify for assistance under the HOME-
ARP Notice as members of a qualifying population, as well as records
indicating whether such persons were assisted by the HOME-ARP
program by the participating jurisdiction following the closure of
the nonresidential properties because of HOME-ARP activities;
(iii) Lists of all individuals or families occupying HOME-ARP
NCS that were converted during the required use period that qualify
for assistance under the HOME-ARP Notice, as well as records
indicating whether moving costs or advisory services were provided
as part of HOME-ARP administrative costs or under the HOME-ARP
supportive services activity in Section VI.D of the HOME-ARP Notice,
and records indicating whether such persons were assisted by the
HOME-ARP program by the participating jurisdiction following the
conversion of the HOME-ARP NCS units.
(iv) Documentation that the participating jurisdiction has and
followed a RARAP in accordance with 24 CFR 92.353 and 24 CFR 42.325.
e. Records demonstrating compliance with the labor requirements
of 24 CFR 92.354, including contract provisions and payroll records.
f. Records demonstrating compliance with the lead-based paint
requirements of 24 CFR part 35, subparts A, B, J, K, M and R, as
applicable.
g. Records supporting compliance with conflict of interest
requirements in 24 CFR 92.356, as revised by Section VII.H. of the
HOME-ARP Notice, as well as documentation of any exceptions granted
by HUD or a state participating jurisdiction, as applicable, to the
conflict of interest provisions in 24 CFR 92.356, as revised by
Section VII.H. of the HOME-ARP Notice.
h. Records demonstrating compliance with debarment and
suspension requirements in 2 CFR part 2424.
i. Records concerning intergovernmental review, as required by
24 CFR 92.357.
j. Records of emergency transfers requested under 24 CFR
5.2005(e) and 24 CFR 92.359 pertaining to victims of domestic
violence, dating violence, sexual assault, or stalking, including
data on the outcomes of those requests.
k. Documentation of actions undertaken to meet the requirements
of 24 CFR part 75 which implements section 3 of the Housing
Development Act of 1968, as amended (12 U.S.C. 1701u).
(6) State Recipients and Subrecipients: A participating
jurisdiction that distributes HOME-ARP funds to State recipients or
subrecipients must require the State recipients or subrecipients to
keep the records required by paragraphs 1. program records, 2.
project records, 3. financial records, 4. program administration
records, and 5. records concerning other federal requirements of
this Section of the Notice, and such other records as the
participating jurisdiction determines to be necessary to enable the
participating jurisdiction to carry out its responsibilities under
the HOME-ARP Notice. The participating jurisdiction need not
duplicate the records kept by the State recipients or subrecipients.
The participating jurisdiction must keep records concerning its
annual review of the performance and compliance of each State
recipient and subrecipient as required under 24 CFR 92.504(a).
(7) Period of record retention: All records pertaining to HOME-
ARP funds must be retained for five years, except as provided below.
a. For rental housing projects, records may be retained for five
years after the project completion date; except that records of
individual tenant income verifications, project rents and project
inspections must be retained for the most recent five-year period,
until five years after the affordability period terminates.
b. For HOME-ARP TBRA projects, records must be retained for five
years after the period of rental assistance terminates.
c. Written agreements must be retained for five years after the
agreement terminates.
d. Records covering displacements and acquisition must be
retained for five years after the date by which all persons
displaced from the property and all persons whose property is
acquired for the project have received the final payment to which
they are entitled in accordance with 24 CFR 92.353.
e. If any litigation, claim, negotiation, audit, monitoring,
inspection, or other action has been started before the expiration
of the required record retention period records must be retained
until completion of the action and resolution of all issues which
arise from it, or until the end of the required period, whichever is
later.
(8) Access to records: The participating jurisdiction must
provide citizens, public agencies, and other interested parties with
reasonable access to records, consistent with applicable state and
local laws and any other applicable grant conditions from other
federal grant programs regarding privacy and obligations of
confidentiality.
The participating jurisdiction, subrecipient, contractor, or
owner may create a program participant identifier code or number
that can be used on a file and maintained internally, in such a way
that the number itself does not inadvertently identify the program
participant, (i.e. no use of initials, date of birth, or other
pieces of information that might suggest who the program participant
is.) The ``key'' or ``cypher'' for the program participant
identifier code would itself be confidential and would not leave the
provider. In the circumstance of HUD programs, the Unique Personal
Identification Number which is generated within the comparable
database could be used with auditors to identify records of services
to distinct individuals, subject to the below requirement.
HUD and the Comptroller General of the United States, any of
their representatives, have the right of access to any pertinent
books, documents, papers or other records of the participating
jurisdiction, state recipients, and subrecipients, in order to make
audits, examinations, excerpts, and transcripts. If a provider of
services or operator of an NCS is subject to state or local laws or
other federal grant programs that require that HUD not be given
access to records detailing PII of victims, then auditors or
evaluators may be given access to representative files without any
sharing of individual identifying information.
(9) Performance reports. Requirements in 24 CFR 92.509 are
waived and HUD imposes the requirements in the Reporting and
Performance Reports section in the HOME-ARP Notice as an alternative
requirement.
The participating jurisdiction must submit reports in a format
and at such time as prescribed by HUD. In addition, HUD and Office
of the Inspector General (OIG) staff must be given access, upon
reasonable notice, to all information related to the selection,
award, and use of HOME-ARP funds.
Each participating jurisdiction must enter the required HOME-ARP
data elements timely in IDIS.
1. For HOME-ARP rental activities, the participating
jurisdiction must enter complete project completion information when
it completes the activity in IDIS, except the assisted units can be
marked vacant until they are occupied by eligible households.
2. For HOME-ARP NCS activities, the participating jurisdiction
must enter complete project completion information when it completes
the activity in IDIS. In addition, the participating jurisdiction
must report the disposition of any HOME-ARP-assisted NCS activity
that is converted to another eligible use at the time of conversion.
3. For HOME-ARP TBRA activities, the participating jurisdiction
reports beneficiary information in IDIS at the time assistance is
provided.
4. For HOME-ARP Supportive Services activities, the
participating jurisdiction must report in IDIS quarterly, by the
30th day after the end of each calendar quarter, on the number of
homeless and not homeless households assisted with supportive
services and, housing counseling, and/or homelessness prevention
including the race and ethnicity, household size, and household type
of the households assisted.
HUD will issue guidance about reporting on HOME-ARP activities
in the participating jurisdiction's consolidated annual performance
and evaluation report (CAPER) required under 24 CFR 91.520, at a
later date.
L. Subpart L--Performance Reviews and Sanctions
1. Performance reviews. HUD waives 24 CFR 92.550 and imposes the
following alternative requirements:
HUD will review the performance of each participating
jurisdiction in carrying out its responsibilities for the use of
HOME-ARP funds and its compliance with the requirements of the HOME-
ARP Notice. Such reviews may take the form of remote or on-site
monitoring, review of IDIS data or reports, assessment of documents
requested from the participating jurisdiction, subrecipient, or
other entity carrying out
[[Page 56784]]
HOME-ARP activities, and inquiries resulting from external audit
reports, media reports, citizen complaints, or other sources of
relevant information.
HUD may also review a participating jurisdiction's timely use of
HOME-ARP funds for eligible activities, including the progress of
expenditures for individual projects or activities, the requirement
to place a project in service in accordance with requirements in the
HOME-ARP Notice, and compliance of HOME-ARP rental housing and NCS
with the 4-year deadline for completing projects.
If HUD preliminarily determines that a participating
jurisdiction has not met a requirement of the HOME-ARP Notice or an
applicable requirement of the HOME regulations at 24 CFR part 92,
HUD will communicate its determination in writing and provide the
participating jurisdiction with the opportunity to demonstrate,
based on substantial facts, documentation, and data, that it has
done so. HUD may extend any time period it provided to the
participating jurisdiction to demonstrate its compliance if upon
request of the participating jurisdiction, HUD determines that it is
infeasible for the participating jurisdiction to provide a full
response within the prescribed period.
If the participating jurisdiction fails to demonstrate to HUD's
satisfaction that it has met the requirement, HUD will take
corrective or remedial action in accordance with this section or 24
CFR 92.552.
2. Corrective and remedial actions. HUD waives 24 CFR 92.551 and
imposes the following alternative requirements:
Corrective or remedial actions for a performance deficiency
(e.g., failure to meet a provision of the HOME-ARP Notice or an
applicable provision of 24 CFR part 92) will be designed to prevent
a continuation of the deficiency; mitigate, to the extent possible,
its adverse effects or consequences; and prevent its recurrence. HUD
may impose corrective or remedial actions including but not limited
to the following:
1. HUD may instruct the participating jurisdiction to submit and
comply with proposals for action to correct, mitigate and prevent a
performance deficiency, including:
a. Preparing and following a schedule of actions for carrying
out the affected activities, consisting of schedules, timetables,
and milestones necessary to implement the affected activities;
b. Establishing and following a management plan that assigns
responsibilities for carrying out the remedial actions;
c. Canceling or revising activities likely to be affected by the
performance deficiency, before expending HOME-ARP funds for the
activities;
d. Reprogramming HOME-ARP funds that have not yet been expended
from affected activities to other eligible activities;
e. Reimbursing its HOME-ARP grant in any amount not used in
accordance with the requirements of the HOME-ARP Notice;
f. Suspending disbursement of HOME-ARP funds for affected
activities; and
g. Establishing procedures to ensure compliance with HOME-ARP
requirements.
2. HUD may also:
a. Change the method of payment from an advance to a
reimbursement basis and may require supporting documentation to be
submitted for HUD review for each payment request before payment is
made;
b. Determine the participating jurisdiction to be high risk and
impose special conditions or restrictions on the use of HOME-ARP
funds in accordance with 2 CFR 200.208; and
c. Take other remedies that may be legally available, including
remedies under 2 CFR 200.339 and 200.340.
3. The requirements in 24 CFR 92.551(c)(2) are also revised to
the updated regulatory references to 2 CFR part 200, as amended,
that have been renumbered.
M. Consolidated Submissions for Community Planning and Development
Programs (24 CFR PART 91)
1. Consultation requirements for HOME-ARP allocation plan. 24
CFR 91.100 and 24 CFR 91.110 are waived and the following
alternative requirements shall apply to HOME-ARP allocation plan
submissions.
(1) Before developing its HOME-ARP allocation plan, a
participating jurisdiction must consult with agencies and service
providers whose clientele include the HOME-ARP qualifying
populations to identify unmet needs and gaps in housing or service
delivery systems. In addition, a participating jurisdiction should
use consultation to determine the HOME-ARP eligible activities
currently taking place within its jurisdiction and potential
collaborations for administering HOME-ARP. This consultation will
provide a basis for the participating jurisdiction's strategy for
distributing HOME-ARP funds for eligible activities to best meet the
needs of qualifying populations.
(2) At a minimum, a participating jurisdiction must consult with
the CoC(s) serving the jurisdiction's geographic area, homeless and
domestic violence service providers, public housing agencies (PHAs),
public agencies that address the needs of the qualifying
populations, and public or private organizations that address fair
housing, civil rights, and the needs of persons with disabilities.
State participating jurisdictions are not required to consult with
every PHA or CoC within the state's boundaries; however, local
participating jurisdictions must consult with all PHAs and CoCs
within the jurisdiction's boundaries. In its plan, a participating
jurisdiction must describe its consultation process, list the
organizations consulted, and summarize the feedback received from
these entities.
2. Public participation requirements for HOME-ARP allocation
plan. Section 105 of NAHA (42 U.S.C. 12705), section 107 of NAHA (42
U.S.C. 12707), 24 CFR 91.105, 24 CFR 91.115, and 24 CFR 91.401 are
waived and the following alternative requirements shall apply to
HOME-ARP allocation plan submissions by participating jurisdictions.
(1) Participating jurisdictions must provide for and encourage
citizen participation in the development of the HOME-ARP allocation
plan. Before submitting the HOME-ARP allocation plan to HUD,
participating jurisdictions must provide residents with reasonable
notice and an opportunity to comment on the proposed HOME-ARP
allocation plan of no less than 15 calendar days. The participating
jurisdiction must follow its adopted requirements for ``reasonable
notice and an opportunity to comment'' for plan amendments in its
current citizen participation plan except for where it conflicts
with the requirements of the HOME-ARP Notice, including the Appendix
in this notice. In addition, participating jurisdictions must hold
at least one public hearing during the development of the HOME-ARP
allocation plan prior to submitting the plan to HUD.
(2) For the purposes of HOME-ARP, participating jurisdictions
are required to make the following information available to the
public:
a. The amount of HOME-ARP funds the participating jurisdiction
will receive, and
b. The range of activities the participating jurisdiction may
undertake.
(3) A participating jurisdiction must consider any comments or
views of residents received in writing, or orally at a public
hearing, when preparing the HOME-ARP allocation plan. In its plan, a
participating jurisdiction must describe its public participation
process, including any efforts made to broaden public participation
and summarize the comments or views received. In its plan, the
participating jurisdiction must also include a summary of comments
received through the public participation process and any comments
or views not accepted and the reasons why.
(4) Throughout the HOME-ARP allocation plan public participation
process, the participating jurisdiction must follow its applicable
requirements and procedures for effective communication,
accessibility, and reasonable accommodation for persons with
disabilities and providing meaningful access to participation by
limited English proficient (LEP) residents that are in its current
citizen participation plan.
3. Alternative requirement to the Contents of the Consolidated
Plan for Local Governments, States, Consortia, and Insular Areas.
The requirements of section 105(a), (b), (d)-(g) of NAHA (42 U.S.C.
12705(a), (b), (d)-(g)), section 107 of NAHA (42 U.S.C. 12707), 24
CFR part 91, subparts C and D are waived for HOME-ARP allocation
plan submissions except to the extent that such provisions allow for
the submission of the HOME-ARP allocation plan as part of a
participating jurisdiction's annual action plan submission for
Fiscal Year 2021. 24 CFR 91.505 is also waived. 24 CFR 91.500 shall
apply except as modified by alternative requirements stated below.
The following alternative requirements shall apply to the contents,
submission, and review of the HOME-ARP allocation plan.
(1) General Requirement. The HOME-ARP allocation plan must
describe the distribution of HOME-ARP funds and the process for
soliciting applications and/or selecting eligible projects. The plan
must also identify any preferences being established for eligible
activities or projects. However, participating jurisdictions are not
required to identify specific projects that will be funded in the
HOME-ARP allocation plan.
(2) Needs Assessment and Gaps Analysis. A participating
jurisdiction must evaluate the
[[Page 56785]]
size and demographic composition of qualifying populations within
its boundaries and assess the unmet needs of those populations. In
addition, a participating jurisdiction must identify any gaps within
its current shelter and housing inventory as well as the service
delivery system. A participating jurisdiction should use current
data including point in time count, housing inventory count, or
other data available through CoCs, and consultations with service
providers to quantify the individuals and families in the qualifying
populations and their need for additional housing, shelter, or
services. A participating jurisdiction should identify and consider
the current resources available to assist qualifying populations,
including congregate and non-congregate shelter units, supportive
services, TBRA, and affordable and permanent supportive rental
housing. A participating jurisdiction must consider the housing and
service needs of qualifying populations, including but not limited
to:
1. Sheltered and unsheltered homeless populations;
2. Those currently housed populations at risk of homelessness;
3. Other families requiring services or housing assistance to
prevent homelessness; and
4. Those at greatest risk of housing instability or in unstable
housing situations.
A participating jurisdiction should include data in its HOME-ARP
allocation plan that describes the qualifying populations. In
addition, participating jurisdictions must include a narrative
description that:
a. Identifies the characteristics of housing associated with
instability and an increased risk of homelessness if the
participating jurisdiction will include such conditions under HUD's
definition of ``other populations'' as established in Section
IV.A.2.g. of the HOME-ARP Notice;
b. Identifies the participating jurisdiction's priority needs
for qualifying populations; and
c. Explains how the participating jurisdiction determined the
level of need and gaps in its shelter and housing inventory and
service delivery systems.
(3) HOME-ARP Activities. The HOME-ARP allocation plan must
describe how a participating jurisdiction will distribute HOME-ARP
funds in accordance with its priority needs. The plan must describe
the participating jurisdiction's method for soliciting applications
for funding and/or selecting developers, service providers and/or
subrecipients and whether the participating jurisdiction will
administer eligible activities directly. If the participating
jurisdiction will provide any portion of its HOME-ARP administrative
funds to a subrecipient or contractor prior to HUD's acceptance of
the participating jurisdiction's HOME-ARP allocation plan because
the subrecipient or contractor is responsible for the administration
of the participating jurisdiction's entire HOME-ARP grant, the plan
must identify the subrecipient or contractor and describe its role
and responsibilities in administering all of the participating
jurisdiction's HOME-ARP program.
Participating jurisdictions must indicate in the HOME-ARP
allocation plan the amount of HOME-ARP funding that is planned for
each eligible HOME-ARP activity type, including administrative and
planning activities. In addition, a participating jurisdiction must
demonstrate that any planned funding for non-profit operating
assistance, as described in Section VI.F of the HOME-ARP Notice,
non-profit capacity building, and administrative costs is within
statutory limits. A participating jurisdiction must also include a
narrative description about how the characteristics of its shelter
and housing inventory and service delivery system and the needs
identified in the participating jurisdiction's gap analysis provided
a rationale for its plan to fund eligible activities.
(4) HOME-ARP Production Housing Goals. The HOME-ARP allocation
plan must estimate the number of affordable rental housing units for
qualifying populations that a participating jurisdiction will
produce or support with its HOME-ARP allocation. The plan must also
include a narrative about the specific affordable rental housing
production goal that the participating jurisdiction hopes to achieve
and describe how it will address the participating jurisdiction's
priority needs.
(5) Preferences. The HOME-ARP allocation plan must identify
whether the participating jurisdiction intends to give preference to
one or more qualifying populations or a subpopulation within one or
more qualifying populations for any eligible activity or project.
For example, participating jurisdictions may include a preference
for:
a. Homeless individuals and families as defined in the ESG and
CoC Programs;
b. Individuals with special needs or persons with disabilities
among qualifying individuals and families; or
c. A specific category of qualifying individuals and families
(e.g., chronically homeless as defined in 24 CFR 91.5).
Participating jurisdictions are not required to describe
specific projects to which the preferences will apply in the HOME-
ARP allocation plan. However, a participating jurisdiction must
explain how the use of a preference or method of prioritization will
address the unmet need or gap in benefits and services received by
individuals and families in the qualifying population or category of
qualifying population, consistent with participating jurisdiction's
needs assessment and gap analysis. The participating jurisdiction
must also describe how it will still address the unmet needs or gaps
in benefits and services of the other qualifying populations that
are not included in a preference through the use of HOME-ARP funds.
Preferences cannot violate any applicable fair housing, civil
rights, and nondiscrimination requirements, including but not
limited to those requirements listed in 24 CFR 5.105(a). The
participating jurisdiction must comply with all applicable
nondiscrimination and equal opportunity laws and requirements listed
in 24 CFR 5.105(a) and any other applicable fair housing and civil
rights laws and requirements when establishing preferences or
methods of prioritization.
(6) HOME-ARP Refinancing Guidelines. If a participating
jurisdiction intends to use HOME-ARP funds to refinance existing
debt secured by multifamily rental housing that is being
rehabilitated with HOME-ARP funds, it must state its refinancing
guidelines in accordance with 24 CFR 92.206(b)(2). The guidelines
must describe the conditions under with the participating
jurisdiction will refinance existing debt for a HOME-ARP rental
project. At a minimum, the gui
[…truncated; see source link]Indexed from Federal Register on October 12, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.