# Notice of Funding Availability for Revitalization of Severely Distressed Public Housing; HOPE VI Revitalization and Demolition Grants, Fiscal Year 2003

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## Record

- **Collection:** Federal Register
- **Document type:** Notice
- **Published:** October 21, 2003
- **Citation:** 68 FR 60178

## Text

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4861-N-01]
Notice of Funding Availability for Revitalization of Severely Distressed Public Housing; HOPE VI Revitalization and Demolition Grants, Fiscal Year 2003

AGENCY:

Office of Public and Indian Housing, HUD.

ACTION:

Notice of funding availability (NOFA).

SUMMARY:

This NOFA announces the availability of $574 million for the HOPE VI Program. Of this amount, approximately $447.8 million in FY 2003 funds are available for the HOPE VI Revitalization Program and $40 million for the HOPE VI Demolition Program. The remaining funds will be made available for other purposes including Neighborhood Networks, technical assistance and Housing Choice Voucher Assistance.

General Section

The General Section of the HOPE VI NOFA contains information that applies to both the HOPE VI Revitalization and Demolition Programs. Detailed information on the specific guidance for each of these programs is included in separate sections of this NOFA. Unless otherwise noted, citations refer to the General Section.

I. Program Overview

(A) Purpose of the Program. In accordance with section 24(a) of the United States Housing Act of 1937 (1937 Act), the purpose of HOPE VI Revitalization grants is to assist public housing agencies (PHAs) to:

(1) Improve the living environment for public housing residents of severely distressed public housing projects through the demolition, rehabilitation, reconfiguration, or replacement of obsolete public housing projects (or portions thereof);

(2) Revitalize sites (including remaining public housing dwelling units) on which such public housing projects are located and contribute to the improvement of the surrounding neighborhood;

(3) Provide housing that will avoid or decrease the concentration of very low-income families; and

(4) Build sustainable communities.

(B) Available Funds. Approximately $447.8 million for HOPE VI Revitalization grants and $40 million for HOPE VI Demolition grants, in accordance with Section II below.

(C) Eligible Applicants. Public Housing Authorities that have severely distressed housing in their inventory and are otherwise in conformance with the threshold requirements provided in Section III of this NOFA. PHAs that only administer Housing Choice Voucher (Section 8, HCV) Programs and Tribal PHAs and Tribally-Designated Housing Entities are not eligible to apply.

(D) Application Deadline. Revitalization grant applications are due on January 19, 2004, as described in Section III(B) of this NOFA. Demolition grant applications are due on February 18, 2004, as described in Section III(B) of this NOFA.

(E) Authority. (1) The funding authority for HOPE VI Revitalization and Demolition grants under this HOPE VI NOFA is provided by the Consolidated Appropriations Resolution, 2003 (Pub. L. 108-7, approved on February 20, 2003) under the heading “Revitalization of Severely Distressed Public Housing (HOPE VI).”

(2) The program authority for the HOPE VI Program is section 24 of the U.S. Housing Act of 1937 (42 U.S.C. 1437v), as amended by section 215 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act of 2003 (Pub. L. 108-7, approved February 22, 2003).

II. Allocation of HOPE VI Funds

Type of assistance

Allocation
of funds
(approximate)

Funds available
for award in this
HOPE VI NOFA
(approximate)

Revitalization Grants
$447,750,000
$447,750,000

Demolition Grants
40,000,000
40,000,000

Neighborhood Networks
5,000,000

Technical Assistance
6,250,000

Housing Choice Voucher Assistance
75,000,000

Total
574,000,000
487,750,000

(A) Revitalization Grants. Approximately $447.8 million of the FY 2003 HOPE VI appropriation has been allocated to fund HOPE VI Revitalization grants and will be awarded in accordance with this HOPE VI NOFA.

(B) Demolition Grants. Approximately $40 million of the FY 2003 HOPE VI appropriation has been allocated to fund HOPE VI Demolition grants and will be awarded in accordance with this HOPE VI NOFA.

(C) Neighborhood Networks. The FY 2003 appropriation for HOPE VI allocated $5 million for a Neighborhood Networks initiative for activities authorized in section 24(d)(1)(G) of the Act, which provides for the establishment and operation of computer centers in public housing for the purpose of enhancing the self-sufficiency, employability, and economic self-reliance of public housing residents by providing them with onsite computer access and training resources. The availability of these funds will be announced in a separate NOFA and, in accordance with the appropriation, they will be awarded to PHAs on a competitive basis. PHAs that receive HOPE VI Revitalization grant funds under this NOFA are required to establish Neighborhood Networks and may use funds awarded under this NOFA for this purpose.

(D) Technical Assistance. The FY 2003 appropriation for HOPE VI allocated $6.25 million to provide technical assistance and contract expertise in the HOPE VI program, to be provided directly or indirectly by grants, contracts, or cooperative agreements, including training and cost of necessary travel for participants in such training, by or to officials and employees of HUD and of PHAs, and to residents. The Office of Public Housing Investments will administer technical assistance funds.

(E) Housing Choice Voucher Assistance. The cost of Housing Choice Voucher (HCV) assistance that will be provided to FY 2003 HOPE VI Revitalization and Demolition grantees will come from the FY 2003 HOPE VI appropriation. Approximately $75 million will be allocated for such assistance. If this amount is more than the amount necessary, the remaining

funds will be used for eligible activities under Section 24 of the Act and made available for obligation before September 30, 2004.

(1) If you anticipate that you will need HCV assistance in order to carry out necessary relocation in conjunction with proposed revitalization during FY 2004, your application must include the number of vouchers you will need, both in total and in FY 2004, and a HCV application.

(2) If you will need HCV assistance in fiscal years beyond FY 2004 for revitalization or demolition that is being carried out in phases, or if you have unused Housing Choice Vouchers that are available to be used for HOPE VI-related relocation in FY 2003 but will need more for subsequent years, you must request additional vouchers only as needed during the appropriate fiscal years.

(3) HCV assistance cannot be awarded or used to relocate residents from units that are to be demolished until HUD has approved those units for demolition.

(4) If you have previously received HCV assistance to relocate residents from the targeted severely distressed units, you may still apply for a HOPE VI Revitalization grant to physically replace those same units, or a HOPE VI Demolition Grant to demolish the units without replacement.

(5) You may request HCV assistance for the relocation of families who intend to move back to the site upon completion of the demolition and revitalization of the severely distressed project. Such families are not required to move back to the site if they prefer to keep the HCV assistance after revitalization activities are completed.

(6) You may request HCV assistance for all units covered under a HOPE VI Revitalization or Demolition application to relocate residents from units that will not be replaced with hard units.

(7) Housing Choice Vouchers are available as replacement units for all units that will be demolished, sold, or otherwise disposed of at the severely distressed project(s), minus the number of HOPE VI-eligible replacement units otherwise to be provided under section 24(d)(1)(J) in connection with said project.

(8) In accordance with Section III(D)(8) of the Revitalization Section of this NOFA, to the extent that you need Housing Choice Vouchers for relocation purposes in connection with HOPE VI grant funds under this NOFA, in an amount that exceeds the number of units to be demolished, sold, or otherwise disposed of at the severely distressed project, you should apply for Housing Choice Vouchers in accordance with the separate funding notices to be issued by HUD.

(9) You must have a 97 percent lease-up rate or budget authority utilization rate for your current voucher program in order not to have your requested number of relocation/replacement vouchers reduced by HUD.

(F) HUD will not use any funds from this HOPE VI NOFA to fund any non-selected HOPE VI Revitalization or Demolition applications submitted in previous years. Only applications submitted under this FY 2003 HOPE VI NOFA will be considered for funding.

III. Application Submission Information

(A) Applications

(1) The HOPE VI Revitalization application and the HOPE VI Demolition application are appended to this NOFA. Each provides explicit, specific instructions as to the format and contents of your HOPE VI application. Your application must conform to the requirements of this NOFA and follow the format described in the application. The applications are designed to guide you through the application process and ensure that your application addresses all of the requirements of this NOFA. Please note that if there is a discrepancy between information provided in the application and the information provided in the NOFA, the information in the NOFA prevails.

(2) The HOPE VI Revitalization application and the HOPE VI Demolition application will be available from the HOPE VI Web site at
www.hud.gov/hopevi
and the HUD home page at
www.hud.gov/grants.
They will not be made available in hardcopy form.

(3) Signatures. Unless otherwise indicated, the Executive Director of the applicant PHA, or his or her designate, must sign each form or certification, whether part of an Attachment or a Standard Certification. Signatures need not be original in the copy version(s) of the applications.

(B) Application Submission Timeframes

(1) Revitalization Applications. Revitalization grant applications are due at HUD Headquarters on January 19, 2004.

(2) Demolition Applications. Demolition grant applications will only be accepted from January 5, 2004, through February 18, 2004. Applications received before January 5, 2004, will be returned to the applicant and will not be considered unless resubmitted on or after January 5, 2004, through February 18, 2004. Applications submitted outside of this timeframe will not be reviewed by HUD and will not be eligible for funding.

(3) These application deadlines are firm. Your application(s) must arrive at HUD by 5:15 p.m. on the due date. If you mail or give your application to an overnight carrier on the due date and it does not arrive by 5:15 p.m. on the due date, your application will not be considered. Submit your application early to avoid missing the deadline and being disqualified by unanticipated delays or other related problems.

(C) Application Delivery

(1) Revitalization Applications. Send the original and one copy of your completed application to Mr. Milan Ozdinec, Deputy Assistant Secretary for Public Housing Investments, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 4130, Washington, DC 20410-5000. Please make sure that you note the room number. The correct room number is very important to ensure that your application is not misdirected.

(2) Demolition Applications. Send the original of your completed application to Mr. Milan Ozdinec, Deputy Assistant Secretary for Public Housing Investments, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 4130, Washington, DC 20410-5000. Please make sure that you note the room number.

(3) Applications Sent by Overnight Delivery. It is strongly recommended that you send your application by an overnight carrier, at least two days before the application due date. You may use only DHL, Falcon Carrier, FedEx, United Parcel Service (UPS), or the U.S. Postal Service (USPS), as they are the only carriers accepted into the HUD building without an escort. Delivery by these services must be made during HUD's Headquarters business hours, between 8:45 a.m. and 5:15 p.m., eastern time, Monday to Friday. If these companies do not serve your area, you must submit your application via USPS.

(4) Hand Carried Applications. Due to new security measures, HUD will no longer accept hand-carried applications.

(5) You must send one copy of your application (Revitalization and/or Demolition) to your HUD Field Office. The application sent to Headquarters will be the one that must meet the deadline. If the HUD Field Office receives an application on time, but the application is not received on time at Headquarters, it will not be considered.

(6) HUD will not accept for review and evaluation any applications sent by facsimile (fax). Also, do not submit resumes or videos.

(D) Technical Assistance

(1) Before the application due date, HUD staff will be available to provide you with general guidance and technical assistance. HUD staff, however, is not permitted to assist in preparing your application. If you have a question or need a clarification, you may call, fax, or write Mr. Milan Ozdinec, Deputy Assistant Secretary for Public Housing Investments, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 4130, Washington, DC 20410-5000; telephone (202) 401-8812; fax (202) 401-2370 (these are not toll free numbers). Persons with hearing- or speech-impairments may access this telephone number via text telephone (TTY) by calling the toll-free Federal Information Relay Service at (800) 877-8339.

(2) Frequently asked questions, clarifications, any technical corrections to the NOFA, and all materials related to this NOFA will be posted to the HUD home page at
www.hud.gov/offices/adm/grants/otherhud.cfm,
and on the HOPE VI Web site at
www.hud.gov/hopevi.
Any technical corrections will also be published in the
Federal Register
and posted to the above Web sites. Applicants are responsible for monitoring these sites during the application preparation period.

IV. Severe Distress of Targeted Public Housing

(A)
Threshold. Severe Distress.
(1) The public housing project or building in a project targeted by a HOPE VI Revitalization or Demolition application must be severely distressed. In accordance with section 24(j)(2) of the 1937 Act, the term “severely distressed public housing” means a public housing project (or building in a project):

(a) That:

(i) Requires major redesign, reconstruction or redevelopment, or partial or total demolition, to correct serious deficiencies in the original design (including inappropriately high population density), deferred maintenance, physical deterioration or obsolescence of major systems, and other deficiencies in the physical plant of the project;

(ii) Is a significant contributing factor to the physical decline of, and disinvestment by public and private entities in, the surrounding neighborhood;

(iii) (A) Is occupied predominantly by families who are very low-income families with children, are unemployed, and dependent on various forms of public assistance; or (B) has high rates of vandalism and criminal activity (including drug-related criminal activity) in comparison to other housing in the area;

(iv) Cannot be revitalized through assistance under other programs, such as the Capital and Operating Funds Programs for public housing under the Act, or the programs under sections 9 and 14 of the 1937 Act (as in effect before the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998 (Pub. L. 105-276, approved October 21, 1998, referred to as the Public Housing Reform Act)), because of cost constraints and inadequacy of available amounts; and

(v) In the case of individual buildings, is in the Secretary's determination sufficiently separable from the remainder of the project of which the building is part to make use of the building feasible for purposes of section 24 of the 1937 Act; or

(b) That was a project described in Section IV(A)(1)(a) that has been legally vacated or demolished, but for which HUD has not yet provided replacement housing assistance (other than tenant-based assistance).

V. Fair Housing and Equal Opportunity

(A)
Threshold
.
Compliance with Fair Housing and Civil Rights Laws.
(1) All applicants and their subrecipients must comply with all Fair Housing and Civil Rights laws, statutes, regulations, and Executive Orders as enumerated in 24 CFR 5.105(a), as applicable.

(2) As of the HOPE VI application due date, if you:

(a) Have been charged with a systemic violation of the Fair Housing Act alleging ongoing discrimination;

(b) Are a defendant in a Fair Housing Act lawsuit filed by the Department of Justice alleging an on-going pattern or practice of discrimination; or

(c) Have received a letter of non-compliance findings, identifying on-going or systemic noncompliance, under Title VI of the Civil Rights Act, section 504 of the Rehabilitation Act, or section 109 of the Housing and Community Development Act; and if the charge, lawsuit, or letter of findings has not been resolved to HUD's satisfaction before the application deadline stated in the NOFA, you may not apply for assistance under this NOFA. HUD will not rate and rank your application.

(3) HUD's decision regarding whether a charge, lawsuit, or a letter of findings has been satisfactorily resolved will be based upon whether appropriate actions have been taken to address allegations of on-going discrimination in the policies or practices involved in the charge, lawsuit, or letter of findings. Examples of actions that may be taken prior to the application deadline to resolve the charge, lawsuit, or letter of findings, include but are not limited to:

(a) A voluntary compliance agreement signed by all parties in response to the letter of findings;

(b) A HUD-approved conciliation agreement signed by all parties;

(c) A consent order or consent decree; or

(d) A judicial ruling or a HUD Administrative Law Judge's decision that exonerates the respondent of any allegations of discrimination.

(B)
Threshold.

Desegregation Orders.
You must be in full compliance with any desegregation or other court order and Voluntary Compliance Agreements related to Fair Housing (
e.g.
, Title VI of the Civil Rights Act of 1964, the Fair Housing Act, and section 504 of the Rehabilitation Act of 1973) that affects your public housing program and that is in effect on the date of application submission.

(C)
Additional Nondiscrimination Requirements.
You and your subrecipients must comply with:

(1) Title IX of the Education Amendments Act of 1972.

(2) The Americans with Disabilities Act of 1990 (42 U.S.C. 12101
et seq.
)

(D)
Ensuring the Participation of Disadvantaged Firms.
The Department is committed to ensuring that small businesses, small disadvantaged businesses, minority firms, women's business enterprises, and labor surplus area firms (firms that pursue business development in areas designated as having high unemployment; see
http://www.uses.doleta.gov/lsa.asp
for more information) participate fully in HUD's direct contracting and in contracting opportunities generated by HUD grant funds. Too often, these businesses still experience difficulty accessing information and successfully bidding on Federal contracts. HUD regulations at 24 CFR 85.36(e) require recipients of assistance (grantees and subgrantees) to take all necessary affirmative steps in contracting for purchase of goods or services to assure that these disadvantaged firms are used when possible. Affirmative steps include:

(1) Placing disadvantaged firms on solicitation lists;

(2) Assuring that disadvantaged firms are solicited whenever they are potential sources;

(3) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by disadvantaged firms;

(4) Establishing delivery schedules, where the requirement permits, which encourage participation by disadvantaged firms;

(5) Using the services and assistance of the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and

(6) Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in Sections (1) through (5) above.

(E) HOPE VI grantees must comply with section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) (Economic Opportunities for Low- and Very Low-Income Persons in Connection with Assisted Projects) and its implementing regulations at 24 CFR part 135. Information about section 3 can be found at HUD's section 3 Web site at
www.hud.gov/fhe/sec3over.html.

VI. Grant Implementation Requirements

(A) Conflict of Interest

(1)
Prohibition
. In addition to the conflict of interest requirements in 24 CFR part 85, no person who is an employee, agent, consultant, officer, or elected or appointed official of a Grantee and who exercises or has exercised any functions or responsibilities with respect to activities assisted under a HOPE VI Grant, or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a financial interest or benefit from the activity, or have an interest in any contract, subcontract, or agreement with respect thereto, or the proceeds thereunder, either for himself or herself or for those with whom he or she has family or business ties, during his or her tenure or for one year thereafter.

(2)
HUD-Approved Exception.

(a)
Standard.
HUD may grant an exception to the prohibition in Section (1) above on a case-by-case basis when it determines that such an exception will serve to further the purposes of HOPE VI and its effective and efficient administration.

(b)
Procedure.
HUD will consider granting an exception only after the Grantee has provided a disclosure of the nature of the conflict, accompanied by:

(i) An assurance that there has been public disclosure of the conflict;

(ii) A description of how the public disclosure was made; and

(iii) An opinion of the Grantee's attorney that the interest for which the exception is sought does not violate state or local laws.

(c)
Consideration of Relevant Factors.
In determining whether to grant a requested exception under Section (b) above, HUD will consider the cumulative effect of the following factors, where applicable:

(i) Whether the exception would provide a significant cost benefit or an essential degree of expertise to the Revitalization Plan and/or Demolition Activities that would otherwise not be available;

(ii) Whether an opportunity was provided for open competitive bidding or negotiation;

(iii) Whether the person affected is a member of a group or class intended to be the beneficiaries of the Revitalization Plan and/or Demolition Plan and the exception will permit such person to receive generally the same interests or benefits as are being made available or provided to the group or class;

(iv) Whether the affected person has withdrawn from his or her functions or responsibilities, or the decision making process, with respect to the specific activity in question;

(v) Whether the interest or benefit was present before the affected person was in a position as described in Section (iii) above;

(vi) Whether undue hardship will result either to the Grantee or the person affected when weighed against the public interest served by avoiding the prohibited conflict; and

(vii) Any other relevant considerations.

(B)
Written Code of Conduct.
Entities subject to 24 CFR parts 84 and 85 are required to develop and maintain a written code of conduct (see sections 84.42 and 85.36(b)(3)). Your Code of Conduct must: prohibit real and apparent conflicts of interest that may arise among officers, employees, or agents; prohibit the solicitation and acceptance of gifts or gratuities by your officers, employees, and agents for their personal benefit in excess of minimal value; and outline administrative and disciplinary actions available to remedy violations of such standards. If awarded assistance under this NOFA, you will be required, prior to entering into an agreement with HUD, to submit a copy of your Code of Conduct and describe the methods you will use to ensure that all officers, employees, and agents of your organization are aware of your Code of Conduct. Failure to meet the requirement for a Code of Conduct will prohibit you from receiving an award of funds from HUD.

(C)
OMB Circulars and Administrative Requirements.
You must comply with the following administrative requirements related to the expenditure of Federal funds. OMB Circulars can be found at
www.whitehouse.gov/omb/circulars/index.html.
Copies of the OMB Circulars may be obtained from EOP Publications, Room 2200, New Executive Office Building, Washington, DC 20503, telephone (202) 395-7332 (this is not a toll free number). The Code of Federal Regulations can be found at
www.access.gpo.gov/nara/cfr/index.html.

(1) Administrative requirements applicable to PHAs are:

(a) 24 CFR part 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local, and Federally Recognized Indian Tribal Governments), as modified by 24 CFR 941 or successor part, subpart F, relating to the procurement of partners in mixed finance developments.

(b) OMB Circular A-87 (Cost Principles for State, Local, and Indian Tribal Governments);

(c) 24 CFR 85.26 (audit requirements).

(2) Administrative requirements applicable to non-profit organizations are:

(a) 24 CFR part 84 (Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations);

(b) OMB Circular A-122 (Cost Principles for Non-Profit Organizations);

(c) 24 CFR 84.26 (audit requirements).

(3) Administrative requirements applicable to for profit organizations are:

(a) 24 CFR part 84 (Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations);

(b) 48 CFR part 31 (contract cost principles and procedures);

(c) 24 CFR 84.26 (audit requirements).

(D)
Labor Standards.
The following standards must be implemented as appropriate in regards to HOPE VI grants.

(1) Labor Standards.

(a) Davis-Bacon wage rates apply to development of any public housing rental units or homeownership units developed with HOPE VI grant funds and to demolition followed by construction on the site. Davis-Bacon rates are “prevailing” minimum wage rates set by the Secretary of Labor that all laborers and mechanics employed in the development, including rehabilitation other than nonroutine maintenance of a public housing project must be paid, as set forth in a wage determination that must be obtained by the PHA prior to bidding on each construction contract. The wage determination and provisions requiring payment of these wage rates must be included in the construction contract.

(b) HUD-determined wage rates apply to:

(i) Operation (including nonroutine maintenance) of revitalized housing, and

(ii) Demolition followed only by filling in the site and establishing a lawn.

(2) Exclusions. Under section 12(b) of the 1937 Act, wage rate requirements do not apply to individuals who:

(a) Perform services for which they volunteered;

(b) Do not receive compensation for those services or are paid expenses, reasonable benefits, or a nominal fee for the services; and

(c) Are not otherwise employed in the work involved (24 CFR part 70).

(3) If other Federal programs are used in connection with your HOPE VI activities, labor standards requirements apply to the extent required by the other Federal programs on portions of the project that are not subject to Davis-Bacon rates under the 1937 Act.

(E)
Lead-Based Paint.
You must comply with lead-based paint evaluation and reduction requirements as provided for under the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821,
et seq.
). You must also comply with regulations at 24 CFR part 35, 24 CFR 965.701, and 24 CFR 968.110(k), as they may be amended or revised from time to time. Unless otherwise provided, you will be responsible for lead-based paint evaluation and reduction activities. The National Lead Information Hotline is 1-800-424-5323.

(F)
Internet Access.
You must have access to the Internet and provide HUD with e-mail addresses of key staff and contact people.

VII. Environmental Review

(A)
Environmental Review.
HUD notification that you have been selected to receive a HOPE VI grant constitutes only preliminary approval. Grant funds may not be released until the responsible entity completes an environmental review and you submit and obtain HUD approval of a request for release of funds and the responsible entity's environmental certification in accordance with 24 CFR part 58 and Section VII of this NOFA (or HUD has completed an environmental review under 24 CFR part 50 where HUD has determined to do the environmental review). Revitalization grantees are subject to additional requirements found at Section XVII of the Revitalization Section of this NOFA.

(B) If you are selected for funding and an environmental review has not been conducted on the targeted site, the responsible entity, as defined in 24 CFR 58.2(a)(7), must assume the environmental review responsibilities for projects being funded by HOPE VI. If you object to the responsible entity conducting the environmental review, on the basis of performance, timing, or compatibility of objectives, HUD will review the facts and determine who will perform the environmental review. At any time, HUD may reject the use of a responsible entity to conduct the environmental review in a particular case on the basis of performance, timing, or compatibility of objectives, or in accordance with 24 CFR 58.77(d)(1). If a responsible entity objects to performing an environmental review, or if HUD determines that the responsible entity should not perform the environmental review, HUD may designate another responsible entity to conduct the review or may itself conduct the environmental review in accordance with the provisions of 24 CFR part 50. You must provide any documentation to the responsible entity (or HUD, where applicable) that is needed to perform the environmental review.

(C) If you are selected for funding, you must have a Phase I environmental site assessment completed in accordance with the American Society for Testing and Material (ASTM) Standards E 1527-900, as amended, for each affected site. A Phase I assessment is required whether the environmental review is completed under 24 CFR part 50 or 24 CFR part 58. The results of the Phase I assessment must be included in the documents that must be provided to the responsible entity (or HUD) for the environmental review. If the Phase I assessment recognizes environmental concerns or if the results are inconclusive, a Phase II environmental site assessment will be required.

(D) You may not undertake any actions with respect to the project that are choice-limiting or could have environmentally adverse effects, including demolishing, acquiring, rehabilitating, converting, leasing, repairing, or constructing property proposed to be assisted under this NOFA, and you may not commit or expend HUD or local funds for these activities, until HUD has approved a Request for Release of Funds following a responsible entity's environmental review under 24 CFR part 58, or until HUD has completed an environmental review and given approval for the action under 24 CFR part 50. In addition, you must carry out any mitigating/remedial measures required by the Responsible Entity (or HUD). If a remediation plan, where required, is not approved by HUD and a fully-funded contract with a qualified contractor licensed to perform the required type of remediation is not executed, HUD reserves the right to determine that the grant is in default.

(E) The costs of environmental reviews and hazard remediation are eligible costs under the HOPE VI Program.

(F) HUD's Environmental Web site is located at
http://hudstage.hud.gov/offices/cpd/energyenviron/environment/index.cfm

VIII. Additional Governmental Requirements

(A) The Catalog of Federal Domestic Assistance (CFDA) Number for HOPE VI is 14.866. The CFDA is a government-wide compendium of Federal programs, projects, services, and activities that provide assistance or benefits to the public.

(B) Environmental Impact. A Finding of No Significant Impact with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). The Finding of No Significant Impact is available for public inspection during regular business hours in the Office of the General Counsel, Regulations Division, Room 10276, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-0500.

(C) Federalism. Executive Order 13132 prohibits, to the extent practicable and permitted by law, an agency from promulgating policies that have federalism implications and either impose substantial direct compliance costs on State and local governments and are not required by statute, or preempt State law, unless the relevant requirements of section 6 of the Executive Order are met. This NOFA does not have federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive Order.

(D) Intergovernmental Review of Federal Programs. Executive Order 12372 was issued to foster intergovernmental partnership and strengthen federalism by relying on State and local processes for the coordination and review of Federal financial assistance and direct Federal development. The Order allows each State to designate an entity to perform a State review function. The official listing of State Points of Contact (SPOC) for this review process can be found at:
www.whitehouse.gov/omb/grants/spoc.html.
States that are not listed on the Web site have chosen not to participate in the intergovernmental review process, and therefore do not have a SPOC. If you are located within

one of those States, you may send applications directly to HUD. If your State has a SPOC, you should contact them to see if they are interested in reviewing your application prior to submission to HUD. Please make sure that you allow ample time for this review process when developing and submitting your application.

(E) Prohibition Against Lobbying Activities. You are subject to the provisions of section 319 of the Department of Interior and Related Agencies Appropriation Act for Fiscal Year 1991, 31 U.S.C. 1352 (the Byrd Amendment), which prohibits recipients of Federal contracts, grants, or loans from using appropriated funds for lobbying the executive or legislative branches of the Federal Government in connection with a specific contract, grant, or loan. You are required to certify, using the certification found at Appendix A to 24 CFR part 87, that you will not, and have not, used appropriated funds for any prohibited lobbying activities. In addition, you must disclose, using Standard Form LLL, “Disclosure of Lobbying Activities” (SF LLL) any funds, other than federally appropriated funds, that will be or have been used to influence Federal employees, members of Congress, and congressional staff regarding specific grants or contracts. SF LLL is included in the HOPE VI Revitalization application and the Web sites listed in Section (III)(D)(2) of this NOFA. The Lobbying Disclosure Act of 1995 (Pub. L. 104-65), approved December 19, 1995, repealed section 112 of the HUD Reform Act, and requires all persons and entities who lobby covered executive or legislative branch officials to register with the Secretary of the Senate and the Clerk of the House of Representatives and file reports concerning their lobbying activities.

(F) Documentation and Public Access Requirements. Section 102 of the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3545) (HUD Reform Act) and the regulations codified in 24 CFR part 4, subpart A, contain a number of provisions that are designed to ensure greater accountability and integrity in the provision of certain types of assistance administered by HUD. On January 14, 1992, HUD published a notice that also provides information on the implementation of section 102 (57 FR 1942). The documentation, public access, and disclosure requirements of section 102 apply to assistance awarded under this NOFA as follows:

(1) Documentation and public access requirements. HUD will ensure that documentation and other information regarding each application submitted pursuant to this NOFA are sufficient to indicate the basis upon which assistance was provided or denied. This material, including any letters of support, will be made available for public inspection for a 5-year period beginning not less than 30 days after the award of the assistance. Material will be made available in accordance with the Freedom of Information Act (5 U.S.C. 552) and HUD's implementing regulations in 24 CFR part 15.

(2) Disclosures. HUD will make available for public inspection all HOPE VI grant applications for five years beginning not less than 30 days following the grant award. Applications will be made available in accordance with the Freedom of Information Act (5 U.S.C. 552) and HUD's implementing regulations at 24 CFR part 5.

(3) Publication of Recipients of HUD Funding. HUD's regulations at 24 CFR 4.7 provide that HUD will publish a notice in the
Federal Register
to notify the public of all decisions made by the Department to provide:

(i) Assistance subject to section 102(a) of the HUD Reform Act, and/or

(ii) Assistance that is provided through grants or cooperative agreements on a discretionary (non-formula, non-demand) basis, but that is not provided on the basis of a competition.

(G) Section 103 of the HUD Reform Act. HUD's regulations implementing section 103 of the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3537a), codified in 24 CFR part 4, subpart B, apply to this funding competition. The regulations continue to apply until the announcement of the selection of successful applicants. HUD employees involved in the review of applications and in the making of funding decisions are limited by the regulations from providing advance information to any person (other than an authorized employee of HUD) concerning funding decisions, or from otherwise giving any applicant an unfair competitive advantage. Persons who apply for assistance in this competition should confine their inquiries to the subject areas permitted under 24 CFR part 4. Applicants or HUD employees who have ethics related questions should contact the HUD Ethics Law Division at (202) 708-3815. (This is not a toll-free number.) HUD employees who have specific program questions should contact the appropriate field office counsel, or Headquarters counsel for the program to which the question pertains.

(H) Paperwork Reduction Act Statement. The information collection requirements contained in this NOFA have been approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), and assigned OMB control number 2577-0208. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a valid control number.

(I) Delinquent Federal Debt. Consistent with the purpose and intent of 31 U.S.C. 3720B and 28 U.S.C. 3201(e), no award of Federal funds shall be made to an applicant who has an outstanding Federal debt until: (a) The delinquent account is paid in full; (b) a negotiated repayment schedule is established and at least one payment is received; or (c) other arrangements satisfactory to the Department of Housing and Urban Development are made prior to the deadline submission date.

(J) Pre-Award Accounting System Survey. HUD may arrange for a pre-award accounting system survey of the applicant's financial management system in cases where the recommended applicant has no prior Federal support, the applicant is considered a high risk based upon past performance or financial management findings. HUD will not make an award to any applicant who does not have a financial management system that meets Federal standards.

(K) False Statements. A false statement in an application is grounds for denial or termination of an award and possible punishment as provided in 18 U.S.C. 1001.

(L) Name Check Review Process. Applicants are subject to a name check review process. Name checks are intended to reveal matters that significantly reflect on the applicant's management and financial integrity, or if key individuals have been convicted or are presently facing criminal charges. If the name check reveals significant adverse findings that reflect on the business integrity or responsibility of the recipient and/or key individuals, HUD reserves the right to: (a) Deny funding or consider suspension/termination of an award immediately for cause; (b) require the removal of any key individual from association with management of and/or implementation of the award; and (c) make appropriate provisions or revisions with respect to the method of payment and/or financial reporting requirements.

(M) Executive Order 13202, Preservation of Open Competition and

Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally Funded Construction Projects. Compliance with HUD regulations at 24 CFR 5.108 implementing Executive Order 13202 is a condition of receipt of assistance under this NOFA. Subgrantees are considered recipients of financial assistance for purposes of § 5.108.

(N) Procurement of Recovered Materials. State agencies and agencies of a political subdivision of a state, including PHAs, that are using assistance under this NOFA for procurement, and any person contracting with such agency with respect to work performed under an assisted contract, must comply with the requirements of section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. In accordance with section 6002, these agencies and persons must procure items designated in guidelines of the Environmental Protection Agency at 40 CFR part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the quantity acquired in the preceding fiscal year exceeded $10,000; must procure solid waste management services in a manner that maximizes energy and resource recovery; and must have established an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines.

(O) 31 U.S.C. 1552. In accordance with this statute, all FY 2003 HOPE VI funds must be expended by September 30, 2009. Any funds that are not expended by that date will be cancelled and recaptured by the Treasury, and thereafter will not be available for obligation or expenditure for any purpose.

Dated: October 14, 2003.
Michael Liu,
Assistant Secretary for Public and Indian Housing.

HOPE VI Revitalization Grants Section

The Revitalization Grants Section of the HOPE VI NOFA contains information that applies to the HOPE VI Revitalization Program. Unless otherwise noted, citations refer to the HOPE VI Revitalization Grants Section.

I. Eligible Revitalization Activities

HOPE VI Revitalization grants may be used for activities to carry out revitalization programs for severely distressed public housing in accordance with section 24(d) of the U.S. Housing Act of 1937 Act (1937 Act). Revitalization activities approved by HUD must be conducted in accordance with the requirements of this NOFA.

(A) Relocation, including reasonable moving expenses, for residents displaced as a result of the revitalization of the project. See section IX of this NOFA for relocation requirements.

(B) Demolition of dwelling units and nondwelling facilities, in whole or in part.

(1) Demolition is not a required element of a HOPE VI Revitalization Plan.

(2) You may not carry out, nor permit others to carry out, the demolition of the Project or any portion of the Project until HUD approves, in writing, one of the following:

(a) Information in your HOPE VI Revitalization Application, along with Supplemental Submissions requested by HUD after the award of the grant and a Request for Release of Funds submitted in accordance with 24 CFR part 58. Section 24(g) of the 1937 Act provides that severely distressed public housing demolished pursuant to a Revitalization Plan is not required to be approved by a demolition application under section 18 of the 1937 Act or regulations at 24 CFR part 970. If you do not receive a HOPE VI Revitalization grant, the information in your application will not be used to process a request for demolition;

(b) A demolition application under section 18 of the 1937 Act. While a section 18 approval is not required by HOPE VI demolition, you will not have to wait for demolition approval through your Supplemental Submissions, as described in section (a) above; or

(c) A Section 202 Mandatory Conversion Plan, in compliance with regulations at 24 CFR part 971 and other applicable HUD requirements, if the project is subject to Mandatory Conversion (Section 202 of the Omnibus Consolidated Rescissions and Appropriations Act of 1996 Pub. L. 104-134, approved on April 26, 1996). A Mandatory Conversion Plan concerns the removal of a public housing project from a PHA's inventory.

(C) Disposition of a severely distressed public housing site, by sale or lease, in whole or in part, in accordance with section 18 of the 1937 Act and implementing regulations at 24 CFR part 970. A lease of one year or more that is not incident to the normal operation of a Project is considered to be a disposition that is subject to section 18 of the 1937 Act.

(D) Rehabilitation and physical improvement of public housing and/or community facilities primarily intended to facilitate the delivery of community and supportive services for residents of the Project and residents of off-site replacement housing, in accordance with 24 CFR 968.112(b), (d), (e), and (g)-(o) and 24 CFR 968.130 and 968.135(b) and (d) or successor regulations, as applicable.

(E) Development.

(1) For any standard (non-mixed finance) public housing development activity, (whether on-site reconstruction or off-site development), you must obtain HUD approval of a standard development proposal submitted under 24 CFR part 941 (or successor part).

(2) For mixed-finance housing development, you must obtain HUD approval of a Mixed Finance Proposal, submitted under 24 CFR part 941, subpart F (or successor part and subpart).

(3) For new construction of community facilities primarily intended to facilitate the delivery of community and supportive services for residents of the Project and residents of off-site replacement housing, you must comply with 24 CFR part 941 (or successor part). Information required for this activity must be included in either a Standard or Mixed Finance Development Proposal, as applicable.

(F) Homeownership Activities.

(1) For homeownership replacement units developed under a Revitalization Plan, you must obtain HUD approval of a homeownership proposal. The homeownership proposal must be consistent with the 80 percent of Area Median Income (AMI) limitations and any other applicable provisions under the 1937 Act. (HUD publishes AMI tables for each family size in each locality annually. The income limit tables can be found at
www.huduser.org/datasets/il/fmr01/index.html
). See Section XI(D) of this NOFA (mixed-income communities) for more information about homeownership housing. Your homeownership proposal must conform to either:

(a) Section 24(d)(1)(J) of the 1937 Act; or

(b) Section 32 of the 1937 Act (see 24 CFR 906). Additional information on this option may be found at:
www.hud.gov/offices/pih/centers/sac/homeownership.

(2) Assistance may include:

(a) Downpayment or closing cost assistance;

(b) Provision of second mortgages; and/or

(c) Construction or permanent financing for new construction, acquisition, or rehabilitation costs

related to homeownership replacement units.

(G) Acquisition.

(1) Rental Units. For acquisition of rental units in existing or new apartment buildings, single family subdivisions, etc., with or without rehabilitation, for use as public housing replacement units, you must submit a Development Proposal in accordance with CFR part 941.304 (conventional development) or 24 CFR 941.606 (mixed finance development).

(2) Land for Off-Site Replacement Units. For acquisition of land for public housing or homeownership development, you must comply with 24 CFR part 941 or successor part.

(3) Land for Economic Development-Related Activities.

(a) You may use HOPE VI grant funds to acquire land for economic development-related activities if those activities specifically promote the economic self-sufficiency of residents.

(b) With HUD approval, you may also use HOPE VI grant funds for limited infrastructure and site improvements associated with developing retail, commercial, or office facilities, such as rough grading and bringing utilities to (but not on) the site.

(c) You may not use HOPE VI grant funds to pay hard construction costs or to buy equipment for retail, commercial, or non-public housing office facilities.

(4) Acquisition Proposal. Before you may undertake acquisition activities with HOPE VI or other public housing funds, you must submit an acquisition proposal to HUD that meets the requirements of 24 CFR 941.303.

(H) Necessary management improvements, including transitional security activities.

(I) Reasonable costs for administration, planning, technical assistance, and fees and costs, as established by HUD guidance and policies regarding cost controls. These costs are limited to the costs of implementing the Revitalization Plan, as specifically approved by HUD, such as fees for architectural and engineering work, program management (if any), and reasonable legal fees. See Section III(C)(3) for soft development costs guidelines.

(J) Community and Supportive Services (CSS). The CSS Component of the HOPE VI Program encompasses all activities that are designed to promote upward mobility, self-sufficiency, and improved quality of life for the residents of the public housing project involved. The CSS Component is described in Section VIII of this NOFA.

(K) Leveraging other resources, including additional housing resources, supportive services, job creation, and other economic development uses on or near the project that will benefit future residents of the site.

II. Summary of Threshold Requirements

(A) The following are summary descriptions of threshold requirements that must be met in order for a HOPE VI Revitalization application to be considered for funding. These threshold requirements are described in more detail at the citations identified below. If the application fails to meet any one of these thresholds, HUD will not rate or rank the application, in accordance with Section XIV(B)(5) of this NOFA.

(B) Unless specifically stated that an item is curable, the threshold items in this Section II(B) are not subject to Section XIV(B)(3) of this NOFA regarding the correction of deficiencies.

(1) The applicant must qualify as an eligible applicant, as defined in Section IV(A)(1) of this NOFA.

(2) HUD must receive the application by the deadline date and time, in accordance with Section III(B) of the General Section of this NOFA.

(3) Standard certifications must be submitted in accordance with Section XIII(A)(4) of this NOFA. Deficiencies for this item are curable, in accordance with Section XIV(B)(3) of this NOFA.

(4) The application must include a certification by a third party professional that the proposed costs meet the requirements of Section III(C) of this NOFA. Deficiencies for this item are curable, in accordance with Section XIV(B)(3) of this NOFA.

(5) In accordance with Section III(D)(1) of this NOFA, each applicant may submit only one HOPE VI Revitalization application.

(6) If an application proposes to revitalize more than one severely distressed public housing project, those projects must meet the requirements of Section III(D)(3) of this NOFA.

(7) If an application proposes to revitalize a severely distressed scattered site project, the project must meet the requirements of Section III(D)(4) of this NOFA.

(8) An application may not request HOPE VI Revitalization grant funds to revitalize units that were funded by an existing HOPE VI Revitalization grant, in accordance with Section III(D)(6) of this NOFA.

(9) If an application proposes to use HOPE VI Revitalization funds to develop market rate units or affordable units which do not qualify as replacement units in accordance with Section III(D)(7) of this NOFA, the entire application will be disqualified.

(10) If applicable, the application must meet the requirements of separability, as described in Section III(D)(11) of this NOFA.

(11) If an applicant has been designated as troubled, it must meet the requirements of Section IV(A)(1) of this NOFA.

(12) An applicant must have obligated at least 90 percent of its FY 1999-2001 Capital Funds in accordance with Section IV(A)(2) of this NOFA.

(13) An applicant which has one or more existing HOPE VI Revitalization grants will be disqualified if it has an open Inspector General (IG) or General Accounting Office (GAO) audit finding related to the HOPE VI or Capital Fund Programs as of the application due date, in accordance with Section IV(A)(3) of this NOFA.

(14) An applicant must provide a signed certification that it has either initiated competitive procurement procedures to select a developer by the application deadline date or that it will act as its own developer, in accordance with Section IV(A)(4) of this NOFA. Deficiencies for this item are curable, in accordance with Section XIV(B)(3) of this NOFA.

(15) An application must include a program schedule that, at a minimum, reflects the timeliness of construction requirements of Section XVI(C) of this NOFA, in accordance with Section IV(C).

(16) An application must include a signed certification that the applicant or its procured property manager will implement the operation and management principles and policies in accordance with Section IV(A)(5) of this NOFA. Deficiencies for this item are curable, in accordance with Section XIV(B)(3) of this NOFA.

(17) An application must include a certification signed by an engineer or architect that the targeted public housing project meets the definition of severe physical distress in accordance with Section V(A) of this NOFA. Deficiencies for this item are curable, in accordance with Section XIV(B)(3) of this NOFA.

(18) An application must include commitments of resources in an amount that meets the match requirements of Section VI(A) of this NOFA.

(19) An application must include a certification by the applicant that a resident training session and public meetings were held in accordance with Section VII(A) of this NOFA. Deficiencies for this item are curable, in accordance with Section XIV(B)(3) of this NOFA.

(20) An application must include a certification that the applicant has

completed a HOPE VI Revitalization Relocation Plan and that the Relocation Plan is in compliance with the Uniform Relocation Act, as described in Section IX(D) of this NOFA. Deficiencies for this item are curable, in accordance with Section XIV(B)(3) of this NOFA.

(21) An applicant must be in compliance with Fair Housing and Civil Rights Laws, in accordance with Section V(A) of the General Section of this NOFA.

(22) An applicant must be in compliance with any desegregation or other court order related to Fair Housing, in accordance with Section V(B) of the General Section of this NOFA.

(23) If an application includes a proposal to develop off-site replacement housing, the application must include evidence of site control of the proposed off-site locations, in accordance with Section XI(B)(4) of this NOFA.

(24) If an application includes a proposal to develop market rate housing, it must include a preliminary market assessment letter, in accordance with Section XI(C) of this NOFA. Deficiencies for this item are curable, in accordance with Section XIV(B)(3) of this NOFA.

(25) If you are proposing to use off-site parcels of land for housing development or other uses that are currently zoned for a purpose different than the one proposed in your revitalization plan, your application must include a certification from the appropriate local official documenting that all required zoning approvals have been secured for such parcels, and/or the actual zoning approval document for the parcel(s), in accordance with Section XI(E) of this NOFA.

(26) An application must include a demonstration of the appropriateness of the proposal, in accordance with Section XII(A) of this NOFA.

(27) An application must include a certification that, if awarded funds under this NOFA, the Grantee will submit a copy of their Code of Conduct which will also describe the methods they will use to ensure that all officers, employees, and agents of their organization are aware of the Code of Conduct, in accordance with Section VI(B) of the General Section of this NOFA. This certification may be provided in the form of a letter.

(28) Consistent with the purpose and intent of 31 U.S.C. 3720B and 28 U.S.C. 3201(e), no award of Federal funds shall be made to an applicant who has an outstanding Federal debt in accordance with Section VIII(I) of the General Section of this NOFA. HUD will determine compliance with this threshold.

(29) An applicant must have a financial management system that meets Federal standards, in accordance with Section VIII(J) of the General Section of this NOFA. HUD will determine compliance with this threshold.

(30) Applicants are subject to a name check review process, in accordance with Section VIII(L) of the General Section of this NOFA. HUD will determine compliance with this threshold.

III. Revitalization Grant Limitations

(A) Grant Amount Limitations

(1) The total amount you may request in your Revitalization application is limited to $20 million or the sum of the amounts in Section III(A)(2), whichever is lower.

(2) Total Development Cost (TDC). The “TDC Limit” refers to the maximum amount of HUD funding that HUD will approve for development of specific public housing units in a given location. The TDC limit applies only to the costs of development of public housing that are paid directly with HUD public housing funds; a PHA may exceed the TDC limit using non-public housing funds such as CDBG, HOME, low-income housing tax credit equity, etc. The HUD TDC Cost Tables are issued for each calendar year for the building type and bedroom distribution for the public housing replacement units. Use the TDC limits in effect at the time this HOPE VI NOFA is published when making your TDC calculations (24 CFR 941, final rule published in the
Federal Register
on December 10, 2002. The TDC final rule may be found in the
Federal Register
, Vol. 67, No. 237, 76096 and on the HOPE VI Web site).

(a) The total cost of development, including relocation costs, is limited to the sum of:

(i) HUD's TDC limits up to 100 percent of HUD's published TDC limits for the costs of demolition and new construction, multiplied by the number of HOPE VI public housing replacement units; and/or

(ii) 90 percent of the TDC limits, multiplied by the number of public housing units after substantial rehabilitation and reconfiguration.

(b) The TDC limit for a project is made up of the following components:

(i) Housing Cost Cap (HCC): HUD's published limit on the use of public housing funds for the cost of constructing the public housing units, which includes unit hard costs, builder's overhead and profit, utilities from the street, finish landscaping, and a hard cost contingency. Estimates should take into consideration the Davis-Bacon wage rate requirements as described in Section VI(D) of the General Section of this NOFA.

(ii) Community Renewal (CR): The balance of funds remaining within the project's TDC limit after the housing construction costs described in (i) above are subtracted from the TDC limit. This is the amount of public housing funds available to pay for PHA administration, planning, infrastructure and other site improvements, community and economic development facilities, acquisition, relocation, demolition, and remediation of units to be replaced on site, and all other development costs.

(3) CSS. You may request an amount up to 15 percent of the total HOPE VI grant to pay the costs of CSS activities, as described in Section VIII(B) of this NOFA. These costs are in addition to (
i.e.
, excluded from) the TDC calculation in Section (2) above.

(4) Demolition and Site Remediation Costs of Unreplaced On-site Units. You may request an amount necessary for demolition and site remediation costs of units that will not be replaced on-site. This cost is in addition to (
i.e.
, excluded from) the TDC calculation in Section (2) above.

(5) Extraordinary Site Costs.

(a) You may request a reasonable amount to pay extraordinary site costs, which are construction costs related to unusual pre-existing site conditions that are incurred, or anticipated to be incurred. If such costs are significantly greater than those typically required for similar construction, are verified by an independent, certified engineer or architect, and are approved by HUD, they may be excluded from the TDC calculation Section (2) above. Extraordinary site costs may be incurred in the remediation and demolition of existing property, as well as in the development of new and rehabilitated units. Examples of such costs include, but are not limited to: abatement of extraordinary environmental site hazards; removal or replacement of extensive underground utility systems; extensive rock and/or soil removal and replacement; removal of hazardous underground tanks; work to address unusual site conditions such as slopes, terraces, water catchments, lakes,
etc.;
and work to address flood plain and other environmental remediation issues. Costs to abate asbestos and lead-based paint from structures are normal demolition costs. Extraordinary measures to remove lead-based paint that has leached into the soil would constitute an extraordinary site cost.

(b) Extraordinary site costs must be justified and verified by a licensed engineer or architect who is not an employee of the housing authority or the city. The engineer or architect must provide his or her license number and State of registration. An Extraordinary Site Costs Certification is included in the HOPE VI application. If this certification is not included in the application after the cure period described in Section XIV(B)(3) of this NOFA, extraordinary site costs will not be allowed.

(B) Other Application Limitations

You may not use HOPE VI Revitalization Grant funds to pay for any revitalization activities carried out on or before the date of the letter announcing the award of the HOPE VI Grant.

(C) Hard and Soft Development Costs Guidelines

(1) Your projected hard development costs must be realistic, developed through the use of technically competent methodologies, including cost estimating services, and comparable to industry standards for the kind of construction to be performed in the proposed geographic area.

(2) Your cost estimates must represent an economically viable preliminary plan for designing, planning, and carrying out your proposed activities in accordance with local costs of labor, materials, and services.

(3) Your projected soft costs must be reasonable and comparable to industry standards. Upon award, soft costs will be subject to HUD's “Safe Harbor” cost control standards. These safe harbors provide specific limitations on such costs as developer's fees (between 9 and 12 percent), PHA administration/consultant cost (no more than 3 to 6 percent of the total project budget), contractor's fee (6 percent), overhead (2 percent), and general conditions (6 percent). HUD's Cost Control and Safe Harbor Standards can be found on the Grant Administration page of the HOPE VI Web site at
http://www.hud.gov/utilities/intercept.cfm?/offices/pih/programs/ph/hope6/grants/admin/safe_harbor.pdf.

(4)
Threshold:
Your cost estimates must be certified to meet the standards of Sections (1) through (3) above by an independent cost estimator, architect, engineer, contractor, or other qualified third party professional.

(5) If you are eligible for funding, HUD will delete any unallowable items from your budget and may reduce your grant accordingly, except as provided in Section III(D)(7) of this NOFA. (D) Site and Unit Requirements.

(1)
Threshold:
One application. Each applicant may submit only one HOPE VI Revitalization application as described in this NOFA. If more than one application is submitted by a single applicant, all applications will be disqualified.

(2)
Threshold:
One Project. Except as provided in Sections III(D)(3) and (4) below, each application must target one severely distressed public housing project (
i.e.
, with one project number).

(3)
Threshold:
Contiguous Projects. Each application may request funds for more than one project if those projects are immediately adjacent to one another or within a quarter-mile of each other. If you include more than one project in your application, you must provide a map that clearly indicates that the projects are within a quarter-mile of each other. If HUD determines that they are not, your application will be ineligible for funding.

(4)
Threshold:
Scattered Site Projects. Your application may request funds to revitalize a scattered site public housing project. The sites targeted in an application proposing to revitalize scattered sites (regardless of whether the scattered sites are under multiple project numbers) must fall within an area with a one-mile radius. You may identify a larger site if you can show that all of the targeted scattered site units are located within the hard edges (
e.g.
, major highways, railroad tracks, lakeshore,
etc.
) of a neighborhood. If you propose to revitalize a project that extends beyond a one-mile radius or is otherwise beyond the hard edges of a neighborhood, your application will be ineligible for funding.

(5) Number of Units. You may request funds for as few or as many units as you wish in your application. HUD will review requests to revitalize projects with small numbers of units on an equal basis with those with large numbers of units.

(6)
Threshold:
Previously-funded Sites. You may submit a Revitalization application that targets a project that is being revitalized or replaced under an existing HOPE VI Revitalization grant. However, you may not apply for new HOPE VI Revitalization funds for units in that project that were funded by the existing HOPE VI Revitalization grant or other HUD funds, even if those funds are inadequate to pay the costs to revitalize or replace all of the targeted units. For example, if a project has 700 units and you were awarded a HOPE VI Revitalization grant or other HUD public housing funds to address 300 of those units, you may submit an FY 2003 HOPE VI Revitalization application to revitalize the remaining 400 units. You may
not
apply for funds to supplement work on the original 300 units. If you request funds to revitalize units or buildings that have been funded by an existing HOPE VI Grant or other HUD funds, your application will be ineligible for funding.

(7)
Threshold:
HOPE VI funds may not be used to develop market rate units or affordable housing units which do not qualify as public housing or homeownership replacement units.

(8) Replacement Units. Under this HOPE VI NOFA, a HOPE VI Replacement unit shall be deemed to be any combination of public housing rental units, eligible homeownership units under section 24(d)(1)(J) of the 1937 Act, and Housing Choice Voucher assistance that does not exceed the number of units demolished and/or disposed of at the targeted severely distressed public housing project.

(9) Access to Services. For both on-site and any off-site units, your overall Revitalization Plan must result in increased access to municipal services, jobs, mentoring opportunities, transportation, and educational facilities;
i.e.
, the physical plan and self-sufficiency strategy must be well integrated and strong linkages must be established with the appropriate Federal, State, and local agencies, non-profits, and the private sector to achieve such access.

(10) Universal Design. HUD encourages you to incorporate the principles of universal design in the construction or rehabilitation of housing, retail establishments, and community facilities, or when communicating with community residents at public meetings or events. Universal design is the design of products and environments to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design. The intent of universal design is to simplify life for everyone by making products, communications, and the built environment more usable by as many people as possible at little or no extra cost. Universal design benefits people of all ages and abilities. Examples include designing wider doorways, installing levers instead of doorknobs, and putting bathtub/shower grab bars in all units. Computers and telephones can also be set up in ways that enable as many residents as possible to use them. The Department has a publication that contains a number of ideas about how the principles of Universal Design can benefit persons with disabilities. To order a copy of

Strategies for Providing

Accessibility and Visitability for HOPE VI and Mixed Finance Homeownership,

go to the publications and resource page of the HOPE VI Web site at
http://www.huduser.org/publications/pubasst/strategies.html.

(11)
Threshold.
Separability. In accordance with section 24(j)(2)(A)(v) of the 1937 Act, if you propose to target only a portion of a project for revitalization, you must:

(a) Demonstrate to HUD's satisfaction that the severely distressed public housing is sufficiently separable from the remainder of the project of which the building is part to make use of the building feasible for revitalization, and

(b) Demonstrate that the site plan and building designs of the revitalized portion will provide defensible space for the occupants of the revitalized building(s) and that the properties that remain will not have a negative influence on the revitalized buildings(s), either physically or socially. Separations may include a road, berm, catch basin, or other recognized neighborhood distinction.

IV. Capacity

(A) Thresholds

(1)
Threshold:
Troubled Status. If HUD has designated your housing authority as troubled pursuant to section 6(j)(2) of the 1937 Act, HUD's Troubled Agency Recovery Centers will use documents and information available to it to determine whether you qualify as an eligible applicant. In accordance with section 24(j) of the 1937 Act, the term “applicant” means:

(a) Any PHA that is not designated as “troubled” pursuant to section 6(j)(2) of the 1937 Act;

(b) Any PHA for which a private housing management agent has been selected, or a receiver has been appointed, pursuant to section 6(j)(3) of the 1937 Act; and

(c) Any PHA that is designated as “troubled” pursuant to section 6(j)(2) of the 1937 Act and that:

(i) Is designated as troubled principally for reasons that will not affect its capacity to carry out a revitalization program;

(ii) Is making substantial progress toward eliminating the deficiencies of the agency that resulted in its troubled status; or

(iii) Is otherwise determined by HUD to be capable of carrying out a revitalization program.

(2)
Threshold:
Obligation of Capital Funds. In order to be considered for funding, you must have obligated Capital Fund amounts (including the Comprehensive Improvement Assistance Program (CIAP) or Comprehensive Grant Program (CGP) in a timely manner. HUD will not consider any application from a PHA that failed to obligate 90 percent or more of its FY 1999, 2000, and 2001 Capital Funds by the applicable obligation deadlines, as required by section (9)(j) of the U.S. Housing Act of 1937, unless the Deputy Secretary has approved an extension. HUD will use LOCCS to determine compliance with the applicable obligation deadlines. Replacement Housing Factor funds are not excluded from the calculation of Capital Fund obligation rates, pursuant to 24 CFR 905.10(i), as they are part of the Capital Fund Program formula allocation. Some PHAs have executed Moving To Work (MTW) Agreements that exempt the PHA from the statutory Capital Fund obligation and expenditure deadlines. Accordingly, those PHAs will not be subject to this provision.

(3)
Threshold:
Performance of Existing HOPE VI Grantees. If an applicant has one or more existing HOPE VI Revitalization grants, the Department will disqualify such an applicant if the applicant has an open Inspector General (IG) or General Accounting Office (GAO) audit finding related to the HOPE VI or Capital Fund Programs as of the date the application is due to HUD.

(4)
Threshold:
Selection of Developer. In a departure from previous years, in order to be selected for funding, you must provide a signed certification that:

(a) You have initiated RFQ competitive procurement procedures in accordance with 24 CFR 85.36 and 23 CFR 941.602(d) (as applicable), but have not entered into a contract with a developer for your first phase of construction by the application due date. A developer is an entity contracted to develop (and possibly operate) a mixed finance development that includes public housing units, pursuant to 24 CFR part 941 subpart F, and contingent on a satisfactory environmental review under 24 CFR part 58 or part 50, under the terms of a HUD-approved proposal. A developer most often has an ownership interest in the entity that is established to own and operate the replacement units (
e.g.
as the General Partner of a Limited Partnership). It is not necessary to have executed a Master Development Agreement with the selected developer in order to meet the threshold. If you change developers after you are selected for funding, HUD reserves the right to rescind the grant; or

(b) You will act as your own developer for the proposed project. If you change your plan and procure an outside developer after you are selected for funding, HUD reserves the right to rescind the grant.

(5)
Threshold:
Operation and Management Principles and Policies.

(a) Authority. Any HOPE VI-funded activities at public housing projects are subject to statutory requirements applicable to public housing projects under the 1937 Act, other statutes, and the Annual Contributions Contract (ACC). Within such restrictions, HUD seeks innovative solutions to the long-standing problems of severely distressed public housing projects. You may request, for the revitalized project, a waiver of HUD regulations, subject to statutory limitations and a finding of good cause under 24 CFR 5.110 if the waiver will permit you to undertake measures that enhance the long-term viability of a project revitalized under this program. HUD will assess each request to determine whether good cause is established to grant the waiver.

(b) Requirements. HOPE VI Revitalization Grantees will be required to develop Management Agreements that describe their operation and management principles and policies for their public housing units. In your application, you must provide a certification that you will ensure that you and/or your procured property manager have complied (to the extent required) with the provisions of 24 CFR 966.3 in planning for the implementation of the operation and management principles and policies described below.

(i) Rewarding work and promoting family stability by promoting positive incentives such as income disregards and ceiling rents;

(ii) Instituting a system of local preferences adopted in response to local housing needs and priorities,
e.g.
, preferences for victims of domestic violence, residency preferences, disaster victims;

(iii) Encouraging self-sufficiency by including lease requirements that promote involvement in the resident association, performance of community service, participation in self-sufficiency activities, and transitioning from public housing;

(iv) Implementing site-based waiting lists for the redeveloped public housing and/or following project-based management principles;

(v) Instituting strict applicant screening requirements such as credit checks, references, home visits, and criminal records checks;

(vi) Strictly enforcing lease and eviction provisions;

(vii) Improving the safety and security of residents through the implementation

of defensible space principles and the installation of physical security systems such as surveillance equipment, control engineering systems,
etc;
(viii) Enhancing on-going efforts to eliminate drugs and crime from neighborhoods through collaborative efforts with Federal, State, and local crime prevention programs and entities such as:

(A) Local law enforcement agencies;

(B) Your local United States Attorney;

(C) The Weed and Seed Program, if the targeted project is located in a designated Weed and Seed area. Operation Weed and Seed is a multi-agency strategy that “weeds out” violent crime, gang activity, drug use, and drug trafficking in targeted neighborhoods and then “seeds” the target area by restoring these neighborhoods through social and economic revitalization. Law enforcement activities constitute the “weed” portion of the program. Revitalization, which includes prevention, intervention, and treatment services as well as neighborhood restoration, constitutes the “seed” element. HUD has provided the Department of Justice with $10 million to fund Weed and Seed Strategies that fight crime and drugs in public, Indian, and federally assisted housing. For more information, see the Community and Safety and Conservation Web site at
www.hud.gov/offices/pih/divisions/cscd/.

(B) Rating Factor: Capacity—20 Points Total

The term “your Team” includes your HOPE VI Coordinator (an individual designated by the PHA who may be a staff member or contractor), PHA staff who will be involved in HOPE VI grant administration, and developer partners, program managers, property managers, subcontractors, consultants, attorneys, financial consultants, and other entities or individuals identified and/or proposed to carry out program activities.

(1)
Development Capacity.

(a) Capacity of Developer—6 Points.

(i) You will receive 6 Points if:

(A) Your Developer or other Team members have extensive, recent (within the last five years), and successful experience in planning, implementing, and managing physical development, financing, leveraging, and partnership activities that are comparable in character, scale, and complexity to your proposed revitalization activities;

(B) You propose development using low-income tax credits, and you, your Developer, or other Team members have relevant tax credit experience; and

(C) If homeownership, rent-to-own, cooperative ownership, or other major development components are proposed, you, your Developer, or other Team members have relevant, successful experience in development, sales, and/or conversion activities.

(ii) You will receive 4 Points if your Developer or other Team members have some but not extensive experience in the factors described above.

(iii) You will receive 0 Points if your Developer or other Team members do not have the experience described and the application does not demonstrate that it has the capacity to carry out your Revitalization Plan. You will also receive 0 Points if there is inadequate information in your application to rate this factor.

(b) Development Capacity of Applicant—6 Points.

(i) You will receive 6 Points if:

(A) You have identified potential gaps in your current staffing in relation to development activities, and you have plans to fill such gaps, internally or externally, in a timely manner in order to successfully implement your Revitalization Plan;

(B) You have demonstrated that physical development activities will proceed as promptly as possible following grant award, and you will be able to begin significant construction within 23 months of the award of the grant.

(C)
Threshold:
Your application must contain a program schedule that provides a feasible plan to meet the schedule requirements of Section XVI(C) of this NOFA, with no impediments such as litigation that would prevent timely startup. The program schedule must indicate the date on which the development proposal for each phase of the revitalization plan will be submitted to HUD.

(D) Your management experience and previous experience with development activities demonstrates that you have experience in overseeing large scale development, whether it be in-house or implemented by a private entity. In your application, you will describe the dollar amount and timeframe for completion of the project(s); and

(E) As of the HOPE VI Revitalization application due date, you do not have any outstanding Comprehensive Grant, Comprehensive Improvement Assistance Program, or Capital Fund Program IG audit findings. If you have such a finding, you cannot receive 6 Points.

(ii) You will receive 4 Points if you have had experience in managing large scale development in accordance with the factors above, but your experience has not been extensive and/or your project(s) were not completed within the timeframe originally established for the project.

(iii) You will receive 1 Point if your application indicates that you have had little experience in managing large-scale development projects. Or, you will receive 1 Point if you have experience described in (i) or (ii) above, but have an outstanding audit finding related to the Comprehensive Grant program, Comprehensive Improvement Assistance Program, or Capital Fund Program.

(iv) You will receive 0 Points if you do not demonstrate any experience in managing development activities, or if there is inadequate information in your application to rate this factor.

(2)
Capacity of Existing HOPE VI Revitalization Grantees.
This section applies only to applicants that have received HOPE VI Revitalization grants for fiscal years 1993-2000. If an applicant has more than one HOPE VI Revitalization grant, each will be rated separately, not averaged, and the highest deduction will be made. Applicants with HOPE VI Revitalization grants only from FY 2001 or FY 2002, or no existing HOPE VI Revitalization grants are not subject to this section. As indicated in the following tables, up to 5 Points will be deducted if a Grantee has failed to achieve adequate progress in relation to cumulative unit production goals. Production achievement numbers will be taken from the quarterly reporting system for the quarter most recently completed at the time the NOFA is published in the
Federal Register
.

Percent of unit production
completed

Points
deducted

Grants Awarded in FY 1993-1996

95-100
0

90-94
1

85-89
2

80-84
3

75-79
4

Less than 75
5

Grants Awarded in FY 1997

90-100
0

80-89
1

75-79
2

70-74
3

65-69
4

Less than 65
5

Grants Awarded in FY 1998

80-100
0

70-79
1

60-69
2

50-59
3

40-49
4

Less than 40
5

Grants Awarded in FY 1999

60-100
0

50-59
1

40-49
2

30-39
3

20-29
4

Less than 20
5

Grants Awarded in FY 2000

25-100
0

20-24
1

15-19
2

10-14
3

5-9
4

Less than 5
5

(3) CSS Program Capacity—3 Points.

You can receive points for proper demonstration in your application of CSS Program capacity. See Section VIII(B) of this NOFA for detailed information on CSS activities.

(a) You will receive 2 Points if you demonstrate one of the following. If you fail to demonstrate one of the following, you will receive 0 points:

(i) If you propose to carry out your CSS Plan in-house and you have recent, successful experience in planning, implementing, and managing the types of CSS activities proposed in your application, or

(ii) If you propose that a member(s) of your Team will carry out your CSS Plan, that this procured Team member(s) has the qualifications and experience to plan, implement, manage, and coordinate the types of activities proposed, and/or that you have a plan for promptly hiring staff or procuring a Team member to do so.

(b) If you have an existing HOPE VI grant, you will receive 1 Point if you demonstrated that your proposed CSS Team will be adequate to implement a new program without weakening your existing Team. In doing so, you must describe how you plan to accommodate or expand capacity to support new or changing services. If you do not have an existing HOPE VI Revitalization grant, demonstrate how your current proposed CSS Team will be adequate to implement a new program without weakening your existing staffing structure. In doing so, you must describe how you plan to accommodate or expand capacity to support new or changing services.

(4) Property Management Capacity—4 Points.

(a) Property management activities may be the responsibility of the PHA or another member of the Team, which may include a separate entity that you have procured or will procure to carry out property management activities. In your application you will describe the number of units and the condition of the units currently managed by you or your property manager, your annual budget for those activities, and any awards or recognition that you or your property manager have received.

(b) Past Property Management Experience—3 Points.

(i) You will receive 3 Points if: You or your property manager currently has extensive knowledge and recent (within the last five years), successful experience in property management of the housing types included in your revitalization plan. This may include market rate rental housing, public housing, and/or other affordable housing, including rental units developed with low-income housing tax credit assistance. If your Revitalization Plan includes cooperatively-owned housing, rent-to-own units, or other types of managed housing, you must demonstrate recent, successful experience in the management of such housing by the relevant member(s) of your Team.

(ii) You will receive 1 Point if your application demonstrates that you or your property manager has some but not extensive experience of the kind required for your Revitalization Plan.

(iii) You will receive 0 Points if your application does not demonstrate that you or your property manager has the capacity to manage your proposed plan, or if there is inadequate information in your application to rate this factor.

(c) Property Management Plan—1 Point.

(i) You will receive 1 Point if your application provides a detailed description of the goals and plans of you or your property manager to administer the following elements:

—Property maintenance;

—Rent collection;

—MTCS reporting;

—Site-based management experience;

—Tenant grievances;

—Evictions;

—Occupancy rate;

—Unit turnaround;

—Preventive maintenance;

—Work order completion;

—Project-based budgeting;

—Management of Homeownership and rent-to-own programs; and

—Energy Audits.

(ii) You will receive 0 Points if there is insufficient information in your application to rate this factor.

(5) PHA Plan—1 Point.

(a) You will receive 1 Point if you demonstrate that you have incorporated the revitalization plan described in your application into your most recent PHA Plan (whether approved by HUD or pending approval). In order to qualify as “incorporated,” your PHA Plan must indicate the intent to pursue a HOPE VI Revitalization grant and the public housing development for which it is targeted.

(b) You will receive 0 Points if you have not incorporated the revitalization plan described in your application into your PHA Plan, or if there is insufficient information in your application to rate this factor.

V. Need

(A) Threshold: Severe Distress

(1) The targeted public housing project or building in a project must be severely distressed. In accordance with Section 24(j)(2) of the 1937 Act, the term “severely distressed public housing” means a public housing project (or building in a project):

(a) That:

(i) Requires major redesign, reconstruction or redevelopment, or partial or total demolition, to correct serious deficiencies in the original design (including inappropriately high population density), deferred maintenance, physical deterioration or obsolescence of major systems, and other deficiencies in the physical plan of the project;

(ii) Is a significant contributing factor to the physical decline of, and disinvestment by public and private entities in, the surrounding neighborhood;

(iii) (A) Is occupied predominantly by families who are very low-income families with children, are unemployed, and dependent on various forms of public assistance; or (B) has high rates of vandalism and criminal activity (including drug-related criminal activity) in comparison to other housing in the area;

(iv) Cannot be revitalized through assistance under other programs, such as the Capital and Operating Funds Programs for public housing under the Act, or the programs under sections 9 and 14 of the 1937 Act (as in effect before the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998 (Pub. L. 105-276, approved October 21, 1998, referred to as the Public Housing Reform Act), because of cost constraints and inadequacy of available amounts; and

(v) In the case of individual buildings, is sufficiently separable from the remainder of the project of which the building is part to make use of the building feasible for revitalization; or

(b) That was a project described in section V(A)(1)(a) that has been legally

vacated or demolished, but for which HUD has not yet provided replacement housing assistance (other than tenant-based assistance).

(2) For the purposes of this threshold, Replacement Housing Factor funds will not be considered as “replacement housing assistance.”

(3) A severely distressed project that has been legally vacated or demolished (but for which HUD has not yet provided replacement housing assistance, other than tenant-based assistance) must have met the definition of physical distress as of the day the demolition application approval letter was dated by HUD.

(4) To meet the severe distress requirement, you must certify that the public housing project or building in a project targeted in your HOPE VI application meets the definition of severe distress provided in Section V(A)(1). You will make this certification by signing the HOPE VI Revitalization Grant Applicant Certifications. The certification form is included in the HOPE VI Application and is included as part of Appendix A to this HOPE VI NOFA.

(5) In order to certify to the severe physical distress described in Section V(A)(1)(a) of this NOFA, your application must include a certification that is signed by an engineer or architect licensed by a State licensing board. The license does not need to have been issued in the same State as the severely distressed project. The engineer or architect must include his or her license number and State of registration on the certification. The engineer or architect may not be an employee of the housing authority or the city.

(B) Rating Factor: Need—24 Points Total

(1) Need for Revitalization: Severe Physical Distress of the Public Housing Development—10 Points

HUD will evaluate the extent of the severe physical distress of the targeted public housing development. If the targeted units have already been demolished, HUD will evaluate your description of the extent of the severe physical distress of the site as of the day the demolition application was approved by HUD. You will receive Points for the following separate subfactors, as indicated.

(a) You will receive 2 Points if you demonstrate that there are major deficiencies in the project's infrastructure, roofs, electrical, plumbing, heating and cooling, mechanical systems, settlement, and/or other deficiencies in Housing Quality Standards.

(b) You will receive 2 Points if you demonstrate that there are poor soil conditions, inadequate drainage, deteriorated laterals and sewers, and/or inappropriate topography.

(c) You will receive 3 Points if you demonstrate that the project has at least 3 of the following major design deficiencies, including:

(i) Inappropriately high population density, room, and/or unit size and configurations;

(ii) Isolation;

(iii) Indefensible space;

(iv) Significant utility expenses caused by energy conservation deficiencies that may be documented by an energy audit; and/or

(v) Inaccessibility for persons with disabilities with regard to individual units, entrance ways, and/or common areas.

(d) You will receive 3 Points if you demonstrate that there are (or were, if the site is already demolished) levels of unmitigated lead-based paint, PCBs, mold, and/or asbestos that make the site or a portion of the site and its housing structures unsuitable for residential use.

(2) Need for Revitalization: Impact of the Severely Distressed Site on the Surrounding Neighborhood—3 Points

HUD will evaluate the extent to which the severely distressed public housing project is a significant contributing factor to the physical decline of, and disinvestment by, public and private entities in the surrounding neighborhood. In making this determination, HUD will evaluate your description of your narrative, crime statistics, photographs or renderings, socio-economic data, trends in property values, evidence of property deterioration and abandonment, evidence of underutilization of surrounding properties, and indications of neighborhood disinvestment.

(a) You will receive 3 Points if your narrative adequately demonstrates that the project has a significant impact on the surrounding neighborhood, as documented by each item listed above.

(b) You will receive 2 Points if your narrative demonstrates that the project has a moderate impact on the neighborhood, and/or only some of the items listed above are adequately documented.

(c) You will receive 0 Points if your narrative does not demonstrate that the project has an impact on the surrounding neighborhood, or there is inadequate information in your application to rate this factor.

(3) Need for Funding: Obligation of Capital Funds—8 Points

HUD will evaluate the extent to which you could undertake the proposed revitalization activities without a HOPE VI grant. Large amounts of available Capital Funds indicate that the revitalization could be carried out without a HOPE VI grant. HUD will use data from LOCCS available at the time of the grant application deadline date to determine the amount of unobligated FY 1999-2002 Capital Grant (including CIAP and CGP) funds currently available that could be used to carry out the proposed revitalization activities. Applicants must ensure that their obligation and expenditure information was updated in LOCCS prior to the application deadline. Replacement Housing Factor funds are not excluded from the calculation of Capital Fund obligation rates, pursuant to 24 CFR 905.10(i), as they are part of the Capital Fund Program formula allocation. Information provided in the application will not be considered, except in the case of some moving to work applicants, which are not required to enter obligations into LOCCS in accordance with their MTW agreements. Those PHAS must provide a certification of their obligation rate in their applications in order to receive any points for this rating factor.

(a) You will receive 8 Points if your unobligated Capital Funds balance is up to 20 percent of the amount of HOPE VI funds requested.

(b) You will receive 6 Points if your unobligated balance is 21-45 percent of the amount of HOPE VI funds requested.

(c) You will receive 4 Points if your unobligated balance is 46-70 percent of the amount of HOPE VI funds requested.

(d) You will receive 2 Points if your unobligated balance is 71 to 90 percent of the amount of HOPE VI funds requested.

(e) You will receive 0 Points if your unobligated balance is more than 90 percent of the amount of HOPE VI funds requested.

(4) Need for Affordable Accessible Housing in the Community—3 Points

The applicant must demonstrate the need for affordable housing in the community. For purposes of this competition, the need for affordable housing in the community will be measured by Housing Choice Voucher program utilization rates and public housing occupancy rates, excluding the public housing site targeted for revitalization. This information must be demonstrated and documented in your application, as described below and

must be the most recent information available at the time of the application deadline. In figuring the Housing Choice Voucher utilization rate, provide the percentage of units under lease out of the total authorized. In figuring the public housing occupancy rate, provide the percentage of units occupied out of the total in your public housing inventory, not including the targeted public housing site. If you are a non-MTW site, you must use information consistent with the Section Eight Management Assessment Program (SEMAP) and/or the Public Housing Assessment System (PHAS) submissions. If you are an MTW site, and do not report into SEMAP and/or PHAS, you must demonstrate your utilization and/or occupancy rate using similar methods and information sources in order to earn points under this rating factor.

(a) You will receive 3 Points if :

(i) The utilization rate of your Housing Choice Voucher program is 97 percent or higher; and/or

(ii) The occupancy rate of your public housing inventory is 97 percent or higher.

(b) You will receive 2 Points if:

(i) The utilization rate of your Housing Choice Voucher program is between 95 and 96 percent; and/or

(ii) The occupancy rate of your public housing inventory is between 95 and 96 percent.

(c) You will receive 1 Point if:

(i) The utilization rate of your Housing Choice Voucher program is between 93 and 94 percent; and/or

(ii) The occupancy rate of your public housing inventory is between 93 and 94 percent.

(d) You will receive 0 Points if:

(i) The utilization rate of your Housing Choice Voucher program is less than 93 percent and/or

(ii) The occupancy rate of your public housing inventory is less than 93 percent.

VI. Match and Leveraging

(A) Match Requirements

(1) Overall Match. In accordance with section 24(c) of the 1937 Act, if you are selected for funding, you must supplement your HOPE VI Revitalization grant with funds from other sources greater than or equal to 5 percent of the HOPE VI funds provided.

(2) Additional Community and Supportive Services (CSS) Match. In addition to supplemental amounts provided as Overall Match in accordance with Section (1) above, if you are selected for funding and propose to use more than 5 percent of your HOPE VI grant for CSS activities (you may use up to 15 percent of your grant for such activities), you must provide supplemental funds from sources other than HOPE VI, for the amount over 5 percent of the grant that you will use for CSS activities.

(3) In accordance with section 24(c) of the Act, for purposes of calculating the amount of matching funds required by Sections (1) and (2), you may include amounts from other Federal sources, any state or local government sources, any private contributions, the value of donated material or building, the value of any lease on a building, the value of the time and services contributed by volunteers, and the value of any other in-kind services or administrative costs provided.

(4) Matching funds must be directly applicable to the revitalization of the site and the transformation of the lives of residents.

(5) Grantees must provide matching funds which, combined with HOPE VI funds, will enable them to carry out revitalization activities, including CSS activities. Applicants must show firm commitments in the amounts required for match in their applications in order to be funded. Grantees will be required to show evidence that matching resources were actually received and used for their intended purposes through quarterly reports as the project proceeds. Sources of matching funds may be substituted after grant award, as long as the dollar requirement is met.

(6) Grantees must pursue and enforce any commitment (including commitments for services) obtained from any public or private entity for any contribution or commitment to the project or surrounding area that was used for leverage in their HOPE VI applications.

(7)
Threshold:
You must provide evidence that you have met your match requirements in the application. This means that the amount of Overall Match accepted by HUD must be at least 5 percent of the total grant. You must also meet the CSS Match Requirement (
i.e.
, you must provide supplemental funds from sources other than HOPE VI, for the amount over 5 percent of the grant that you will use for CSS activities). For example, a request for 15 percent of the grant for CSS would require that the amount of funds over that first 5 percent be matched dollar for dollar (
i.e.
, a 10 percent match of other CSS resources).

(B) Leverage

Although related to match, leverage is strictly a rating factor. Leverage consists of firm commitments of funds and other resources. HUD will rate your application based on the amount of funds and other resources that will be leveraged by the HOPE VI grant as a percentage of the amount of HOPE VI funds requested.

(C) Documentation for Development and CSS Resources

In your application, you will enter basic information about each resource on the appropriate resource summary form: Name of the organization providing the resource, the dollar value of the resource, and its proposed use.

(1) For each resource you list, you
must
provide a commitment document, such as a letter, memorandum of understanding, agreement to participate, city council resolution, or other evidence of the resource to be committed, which may be subject to the receipt of a HOPE VI Revitalization grant. An official of the organization legally authorized to make commitments on behalf of the organization must sign the commitment document.

(2) Each commitment document must include the dollar value and time duration of the commitment (
e.g.
, $10,000 will be provided each year for 4 years for a total commitment of $40,000). The dollar value must be consistent with the amount entered on the resource summary form. On the form you will also enter the page number of your application where the commitment document is located.

(3) Endorsements or general letters of support from organizations or vendors alone will not count as resources and should not be included in the application or on a Resources Summary Form.

(4) Each resource may be used for only one category: Development, CSS, Anticipatory, or Collateral, as described below. Any resource listed in more than one category will be disqualified from all categories.

(5) For CSS purposes, include only funds that will be newly generated for HOPE VI activities. HUD will not count any funds that have been provided routinely, such as TANF payments or funds that support ongoing CSS-type activities. However, if an existing service provider significantly increases the level of services provided at the site, the increased amount of funds may be counted.

(6) Even though an in-kind CSS contribution may count as a resource, it may not be appropriate to include on the sources and uses attachment. Each source on the sources and uses attachment must be matched by a specific and appropriate use. For example, donations of staff time may

not be used to offset costs for infrastructure.

(D) Types of Development Resources

HUD seeks to fund mixed-finance developments that use HOPE VI funds to leverage the maximum amount of other physical development funds, particularly from private sources, that will result in revitalized public housing, other types of assisted and market rate housing, and private retail and economic development. Types of resources that may be counted include:

(1) Private mortgage-secured loans and other debt. Note the term maturity expected and sources of repayment of all loans.

(a) Where there is both a construction loan and a permanent take-out loan, you must provide documentation of both, but only the value of the permanent loan will be counted as leverage.

(b) For privately financed homeownership construction loans, acceptable documentation of construction loans will be considered as leverage. Documentation of permanent financing is not required.

(c) If you have obtained a construction loan but not a permanent loan, the value of the acceptably documented construction loan will be counted as leverage.

(2) Insured loans.

(3) Donations and contributions.

(4) Housing trust funds.

(5) Net sales proceeds from a homeownership project. Downpayments from homebuyers may not be counted.

(6) Funds committed to build private sector housing in direct connection with the HOPE VI Revitalization Plan.

(7) Tax Increment Funding (TIF).

(8) Tax Exempt Bonds. Describe the use and term.

(9) Other Federal Funds. Other Federal sources may also include funds provided by HUD, except-public housing funds, such as HOPE VI Revitalization funds, HOPE VI Demolition funds, Capital Fund Program funds, and proposals to use operating subsidy for debt service. Though these HUD public housing funds may not be counted for points under this NOFA, they can be used as part of your revitalization plan.

(10) Sale of Land. The value of land may be included as a development resource only if this value is a sales proceed. Absent a sales transaction, the value of land may not be counted.

(11) Donations of Land. Donations of land may be counted as a development resource, only if the donating entity owns the land to be donated. Donating entities may include a city, county, church, community organization,
etc
. The application must include documentation of this ownership, signed by the appropriate authorizing official.

(12) Low-Income Housing Tax Credits (LIHTC). Low-Income Tax Credits are authorized by section 42 of the IRS Code which allows investors to receive a credit against Federal tax owed in return for providing funds to developers to help build or renovate housing that will be rented only to lower-income households for a minimum period of years. There are two types of credits, both of which are available over a 10-year period: A 9 percent credit on construction/rehab costs, and a 4 percent credit on acquisition costs and all development costs financed partially with below-market Federal loans (
e.g.
, tax exempt bonds). Tax credits are generally reserved annually through State Housing Finance Agencies, a directory of which can be found at
http://www.ncsha.org/ncsha/public/statehfadirectory/index.htm.
Only tax credits that have been reserved for the project will be counted as development leveraging.

(a) If you propose to include LIHTC equity as a development resource for your first phase of development, your application must include a LIHTC reservation letter from your state or local Housing Finance Agency. This letter must constitute a firm commitment and can only be conditioned on the receipt of the HOPE VI grant.

(b) If you propose to include LIHTC equity as a development resource for phases of development other than your first phase, your application must include a reservation letter from your state or local Housing Finance Agency in order to have the tax credit amounts for future phases counted as development leveraging.

(c) Only LIHTC commitments that have been secured as of the application deadline will be considered for the scoring under section VI(H)(1).

(E) Sources of Development Resources

You must actively enlist other stakeholders who are vested in and can provide significant financial assistance to your revitalization effort. Sources of resources that can be used for leveraging may include:

(1) Public, private, and non-profit entities, including LIHTC purchasers;

(2) State and local Housing Finance Agencies;

(3) Local governments;

(4) The city's housing and/or redevelopment agency or other comparable agency. HUD will consider this to be a separate entity with which you are partnering if your PHA is also a redevelopment agency or otherwise has citywide responsibilities.

(a) You are strongly urged to seek a pledge of Community Development Block Grant (CDBG) funds for improvements to public infrastructure such as streets, water mains, etc. related to the revitalization effort. CDBG funds are awarded by HUD by formula to units of general local government and to states, which may then award a grant or loan to a PHA, a partnership, a non-profit organization, or other entity for revitalization activities, including loans to a project's for-profit partnership. More information about the CDBG Program can be found at
www.hud.gov/offices/cpd/index.cfm.

(b) The city, county, or State may provide HOME funds to be used in conjunction with HOPE VI funds. The Home Investment Partnership Program provides housing funds that are distributed from HUD to units of general local governments and states. Funds may be used for new construction, rehabilitation, acquisition of standard housing, assistance to homebuyers, and tenant-based rental assistance. Current legislation allows HOME funds to be used in conjunction with HOPE VI funds, but they may not be used in conjunction with Public Housing Capital Funds under section 9(d) of the 1937 Act. Information about the HOME Program can be found at:
www.hud.gov/offices/cpd/affordablehousing/programs/home/index.cfm.

(5) Foundations.

(6) Government Sponsored Enterprises such as the Federal Home Loan Bank, Fannie Mae, and Freddie Mac.

(7) HUD and other Federal agencies.

(8) Financial institutions, banks, or insurers.

(9) Other private funders.

(F) Types of CSS Resources

HUD seeks to fund mixed-finance developments that use HOPE VI funds to leverage the maximum amount of other resources to support CSS activities in order to ensure the successful transformation of the lives of residents and the sustainability of the revitalized public housing development. Leveraging scarce HOPE VI CSS funds with other funds and services is critical to the sustainability of CSS activities so that they will continue after the HOPE VI funds have been expended.

Commitments of funding or in-kind services related to the provision of CSS activities may be counted as CSS resources and towards the calculation of CSS leverage. Types of resources that

may be counted include but are not limited to:

(a) Materials;

(b) A building;

(c) A lease on a building;

(d) Other infrastructure;

(e) Time and services contributed by volunteers;

(f) Staff salaries and benefits; and

(g) Supplies.

(h) See Section VIII(B) for other types of CSS resources.

Note that wages projected to be paid to residents through jobs, or projected benefits (
e.g.
, health/insurance/retirement benefits) related to those projected jobs, provided by CSS Partners will not be counted as leverage.

(G) Sources of CSS Resources

In order to achieve quantifiable self-sufficiency results, you must form partnerships with organizations that are skilled in the delivery of services to residents of public housing and that can provide commitments of resources to support those services. You must actively enlist as partners other stakeholders who are vested in and can provide commitments of funds and in-kind services for the CSS portion of your revitalization effort. See Section VIII(C) for a list of the kinds of organizations, agencies, and other providers that may be used as sources of CSS resources.

(H) Rating Factor: Leveraging—16 Points Total

(1)
Development Leveraging—7 Points.
For each commitment document, HUD will evaluate the strength of commitment and add the amounts that are acceptably documented. HUD will then calculate the ratio of the amount of HUD funds requested to the amount of funds that HUD deems acceptably documented. HUD will round figures to two decimal points, using standard rounding rules.

(a) You will receive 7 Points if the ratio of the amount of HOPE VI funds requested for physical development activities (not including CSS or administration) to the dollar value of documented, committed development resources from other sources is 1:3 or higher.

(b) You will receive 6 Points if the ratio is between 1:2.50 and 1:2.99.

(c) You will receive 5 Points if the ratio is between 1:2.0 and 1:2.49.

(d) You will receive 4 Points if the ratio is between 1:1.50 and 1:1.99.

(e) You will receive 3 Points if the ratio is between 1:1.0 and 1:1.49.

(f) You will receive 2 Points if the ratio is between 1:0.50 and 1:0.99.

(g) You will receive 1 Point if the ratio is between 1:0.25 to 1:0.49.

(h) You will receive 0 Points if the ratio is less than 1:0.25, or there is inadequate information in your application to rate this factor.

(2)
CSS Leveraging—Amount of CSS Leveraged Resources—5 Points.
(a) You will receive 5 Points if the ratio of the amount of HOPE VI funds requested for CSS activities to the dollar value of documented, committed CSS resources leveraged from other sources is 1:4 or higher. If no HOPE VI funds are requested for CSS activities because all CSS funds will come from outside sources, all adequately-documented funds from such outside sources will be counted and you will receive 5 Points.

(b) You will receive 4 Points if the ratio is between 1:3.5 and 1:3.99.

(c) You will receive 3 Points if the ratio is between 1:3 and 1:3.49.

(d) You will receive 2 Points if the ratio is between 1:2.5 and 1:2.99.

(e) You will receive 1 Point if the ratio is between 1:2 and 1:2.49.

(f) You will receive 0 Points if the ratio is less than 1:2, or there is inadequate information in your application to rate this factor.

(3) Anticipatory Resources Leveraging—2 Points. Anticipatory Resources relate to activities that have taken place in the past and that were conducted in direct relation to a HOPE VI Revitalization grant. In many cases, PHAs, cities, or other entities may have carried out revitalization activities (including demolition) in previous years in anticipation of your receipt of a HOPE VI Revitalization grant. These expenditures, if documented, may be counted as leveraged anticipatory resources. They cannot duplicate any other type of resource and cannot be counted towards match.

(a) You will receive 2 Points if the ratio of the amount of HOPE VI funds requested for physical development activities (not including CSS or administration) to the amount of your documented anticipatory resources is 1:0.1 or higher.

(b) You will receive 0 Points if the ratio of the amount of HOPE VI funds requested for physical development activities (not including CSS or administration) to the amount of your documented anticipatory resources is less than 1:0.1.

(4)
Collateral Investment Leveraging—2 Points.
Collateral Investment includes physical redevelopment activities that are currently underway, or that have yet to begin but are projected to be completed before October 2008. It must be demonstrated that these activities will directly enhance the new HOPE VI community, but will occur whether or not a Revitalization grant is awarded and the public housing project is revitalized. This includes economic or other kinds of development activities that would have occurred with or without the anticipation of HOPE VI funds. These resources cannot duplicate any other type of resource and cannot be counted as match. The resources are subject to the same restrictions regarding documentation. Collateral investment resources are counted as leverage only and cannot be counted towards match. Examples of collateral investments include schools, libraries, subway or light rail stations, improved roads, day care facilities, and local medical facilities.

(a) You will receive 2 Points if the ratio of the amount of HOPE VI funds requested for physical development activities (not including CSS or administration) to the amount of your documented collateral resources is 1:1.0 or higher.

(b) You will receive 0 Points if the ratio of the amount of HOPE VI funds requested for physical development activities (not including CSS or administration) to the amount of your documented collateral resources is less than 1:1.0.

VII. Resident and Community Involvement

(A) Requirements and Thresholds

(1) General. You are required to involve residents and the broader community in the planning, proposed implementation, and management of your Revitalization Plan. HUD will evaluate the nature, extent, and quality of the resident and community outreach and involvement you have achieved by the time your application is submitted, as well as your plans for continued and/or additional outreach and involvement.

(2) Resident Training Session. You must conduct at least one training session for residents of the severely distressed project on the HOPE VI development process. HUD does not prescribe the content of this meeting.

(3) Public Meetings.

(a) You must conduct at least three public meetings with residents and the broader community, in order to involve them in a meaningful way in the process of developing the Revitalization Plan and preparing the application.

(b) During the course of the three meetings, you must address the following issues listed below (
i.e.
, all issues need not be addressed at each meeting):

(i) The HOPE VI planning and implementation process;

(ii) The proposed physical plan, including site and unit design, and

whether the unit design is in compliance with Fair Housing Act and UFAS standards;

(iii) The extent of proposed demolition;

(iv) Planned community and supportive service activities;

(v) Other proposed revitalization activities;

(vi) Relocation issues, including relocation planning, mobility counseling, and maintaining the HOPE VI community planning process during the demolition and reconstruction phases where temporary relocation is involved;

(vii) Reoccupancy plans and policies, including site-based waiting lists; and

(viii) Section 3 and employment opportunities to be created as a result of redevelopment activities.

(4) All training sessions and meetings must be held in facilities that are accessible to persons with disabilities, provide services such as day care, transportation, and sign language interpreters as appropriate, and as practical and applicable, be conducted in English and the language(s) most appropriate for the community.

(5) The training session and each of the public meetings must be held after the publication date of this NOFA in the
Federal Register
; any training sessions or public meetings held before the NOFA publication date will not be counted for the purposes of this competition.

Threshold:
In your application you must provide a signed certification that the above resident training session and public meetings were held and that the topics listed above were covered. The cert

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A03-26476. Public record. Not legal advice.