Preference for Elderly Families in Certain Section 8 Housing; and Reservation of Units for Disabled Families

Federal RegisterMay 3, 1994

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SUMMARY: This interim rule amends the Department's section 8

regulations for newly constructed and substantially rehabilitated

housing projects to provide for the system of occupancy preferences in

certain section 8 assisted housing authorized by subtitle D of title VI

of the Housing and Community Development Act of 1992. Subtitle D allow

owners of section 8 projects originally designed primarily for

occupancy by elderly families to provide preferences to elderly

families in selecting tenants for available units in those projects.

Owners that elect to provide preferences to elderly families as

authorized by subtitle D also must reserve no less than a statutorily

determined number of units for disabled families who are not elderly or

near-elderly families.

The Supplementary Information section of this document provides

further information on the specific amendments to be made to the

section 8 regulations in parts 880, 881, 883, 884 and 886, and explains

the Department's reasons for issuing this rule as an interim rule.

DATES: Effective date: June 2, 1994 through May 3, 1995.

Comments due date: July 5, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding

this interim rule to the Rules Docket Clerk, room 10276, Office of

General Counsel, Department of Housing and Urban Development, 451

Seventh Street, SW., Washington, DC 20410-0500. Comments should refer

to the above docket number and title. A copy of each comment submitted

will be available for public inspection and copying between 7:30 a.m.

and 5:30 p.m. weekdays at the above address. Facsimile (FAX) comments

are not acceptable.

FOR FURTHER INFORMATION CONTACT: Margaret Milner, Acting Director of

the Office of Elderly and Assisted Housing, Office of Housing,

Department of Housing and Urban Development, room 6130, or Albert

Sullivan, Director of the Office of Multifamily Management, room 6160,

451 Seventh Street, SW., Washington, DC 20410. Telephone number (202)

708-4542 (voice) for Ms. Milner: (202) 708-3730 for Mr. Sullivan; or

(202) 708-4594 (TDD). (These telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Background

Subtitle D (sections 651-661; codified at 42 U.S.C. 13611-13620) of

title VI of the Housing and Community Development Act of 1992 (Pub. L.

102-550, approved October 28, 1992) (hereafter, ``1992 HCD Act'') is

entitled ``Authority to Provide Preferences for Elderly Residents and

Units for Disabled Residents1 in Certain Section 8 Assisted

Housing,'' and allows an owner of a covered section 8 housing project

to elect to provide preferences to elderly families in selecting

tenants for available units in the project, subject to certain

statutory requirements. An owner who elects to provide preferences to

elderly families must also reserve a percentage of units, not to be

less than the percentage determined according to a formula set out in

the statute, for disabled families who are not elderly or near-

elderly.2

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\1\Definitions for ``elderly families'' and ``disabled

families'' are codified in section 3(b) of the U.S. Housing Act of

1937 (1937 Act). Section 3(b) was amended by section 621 of the 1992

HCD Act. Where the definition for ``elderly families'' has, since

1974, encompassed disabled families, the amended section 3(b) now

defines ``elderly families'' as families whose heads (or their

spouses) or sole members are persons at least 62 years old. Thus,

under the revised definition, a disabled person does not qualify as

an elderly family solely because of the person's disability.

Section 3(b) defines ``disabled families'' to mean families

whose heads (or their spouses) or sole members are persons with

disabilities. ``Person with disabilities'' is defined to mean a

person who: (1) has a disability as defined in section 223 of the

Social Security Act; (2) is determined pursuant to regulations

issued by the Secretary of HUD, to have a physical, mental or

emotional impairment which is expected to be of long-continued and

indefinite duration, substantially impedes his or her ability to

live independently, and is of such a nature that such ability could

be improved by more suitable housing conditions; or (3) has a

developmental disability as defined in section 102 of the

Developmental Disabilities Assistance and Bill of Rights Act.

The Department's regulations for the terms defined in section

3(b) of the 1937 Act for the assisted housing programs are published

at 24 CFR part 812. While the 1992 HCD Act amendments to section

3(b) of the 1937 Act require changes to 24 CFR part 812, this rule

does not amend 24 CFR part 812. The Department will modify 24 CFR

part 812 by separate rulemaking. Also, unless the context indicates

otherwise, reference to the terms elderly families, disabled

families, and near-elderly families in this preamble is reference to

these terms as defined in section 3(b) of the 1937 Act, as amended

by section 621 of the 1992 HCD Act.

\2\Under section 3(b) of the 1937 Act, as revised by section 621

of the 1992 HCD Act, the term ``near-elderly families'' is defined

as families whose heads (or their spouses) or sole members are

persons who are 50-61 years old.

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This interim rule adopts in regulation the system of preferences

for occupancy provided by subtitle D, and sets forth the standards for

determining whether a project is eligible to elect the preferences for

occupancy provided by subtitle D, and explains the effect of such

preferences on administration of project waiting lists.

II. Eligibility To Provide Preferences for Elderly Residents

Section 651 of the 1992 HCD Act provides in relevant part,

``[n]otwithstanding any other provision of law, an owner of a covered

section 8 housing project designed primarily for occupancy by elderly

families, may in selecting tenants for units in the project that become

available for occupancy, give preference to elderly families who have

applied for occupancy in the housing * * *.'' (Emphasis added.)

With regard to the phrase ``designed primarily for occupancy by

elderly families,'' the Department believes that in using the term

``primarily,'' the Congress intended to limit the applicability of

subtitle D to either the section 8 units in those covered projects in

which a majority of the section 8 units were designed for elderly

families (i.e., seniors3), or to the section 8 units in covered

projects where a distinct portion of the project (e.g., a tower or a

wing of a project, but not just a floor) exists in which the majority

of section 8 units were restricted to seniors only. Thus, section 651

may apply to the section 8 units in an entire project originally

designed primarily for occupancy by elderly families (``covered section

8 housing project''), or section 651 may apply to the section 8 units

in a portion of such project, but only where the section 8 units in

this project or portion of the project were designed primarily for

seniors. The preamble frequently uses the term ``covered section 8

units'' to recognize that there are partially assisted projects whose

section 8 units will be covered by this interim rule .

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\3\As used in this preamble, the term ``seniors'' refers to

families whose heads of household, their spouses or sole members are

62 years or older.

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It is important to note that the statutory system of preferences

provided by subtitle D is only available to projects which qualify as

``covered section 8 housing projects designed primarily for occupancy

by elderly families.'' The Department points out that many projects

which have section 8 assistance are not ``covered section 8 housing

projects designed primarily for occupancy by elderly families'' (as

defined in Section I.A. of the preamble, which follows), and may not

elect the subtitle D statutory system of preferences.

A. Covered Section 8 Housing Project: Section 659

Subtitle D and these regulations define ``covered section 8

housing'' to mean housing that:

(1) was constructed or substantially rehabilitated pursuant to

assistance provided under section 8(b)(2) of the United States Housing

Act of 1937 (1937 Act), as in effect before October 1, 1983;

(2) is assisted under a contract for assistance under such section;

and

(3) was originally designed primarily for occupancy by elderly

families.

1. Projects That are Newly Constructed or Substantially

Rehabilitated Pursuant to Assistance Provided Under Section 8(b)(2) of

the 1937 Act, as in Effect Before October 1, 1983.

The Department administers six section 8 programs that involve

newly constructed or substantially rehabilitated housing. However, the

system of preferences under subtitle D does not apply to all these

programs.

The programs to which subtitle D applies are:

(1) The section 8 New Construction Program, 24 CFR part 880;

(2) The Section 8 Substantial Rehabilitation Program, 24 CFR part

881;

(3) The State Housing Agencies program (insofar as it involves new

construction and substantial rehabilitation), 24 CFR part 883;

(4) The New Construction Set-Aside for Section 515 Rural Rental

Housing Projects Program, 24 CFR part 884; and

(5) The Section 8 Housing Assistance Program for the Disposition of

HUD-Owned Projects (insofar as it involves substantial rehabilitation),

24 CFR part 886.4

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\4\The ``Additional Assistance Program for Projects with HUD-

Insured and HUD-Held Mortgages'' (see 24 CFR part 886, subpart A)

involves only existing housing. However, the ``Section 8 Housing

Assistance Program for the Disposition of HUD-owned Projects'' (see

24 CFR part 886, subpart C) involves substantially rehabilitated

housing, in addition to existing housing. Accordingly, this rule

would amend subpart C of 24 CFR part 886, but only for projects

involving substantially rehabilitated housing.

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Other programs which may involve section 8 new construction or

substantial rehabilitation assistance, but which are not covered by the

preferences in subtitle D are identified in section 658 of the 1992 HCD

Act. Under section 658 of the 1992 HCD Act, an owner of a project (or

portion of a project) that was originally designed for occupancy by

elderly families, and assisted under the Section 221(d)(3) Below Market

Interest Rate (BMIR) program, the Section 236 Mortgage Insurance and

Interest Reduction Payment for Rental Projects program, or Section 202

Loans for Housing for the Elderly or Handicapped Program, may continue

to restrict occupancy in such projects (or portion of such projects) to

elderly families in accordance with the rules, standards and agreements

in effect when the housing project was developed. Accordingly, under

this interim rule, the subtitle D statutory system of preferences does

not apply to newly constructed or substantially rehabilitated section 8

projects with HUD insurance or assistance under any of these three

programs.5 The Department emphasizes that it is critical that a

project owner understand the type of assistance a project receives to

determine eligibility under subtitle D and these regulations.

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\5\Although in this regard, the Department is aware of no

Section 221(d)(3) BMIR projects or Section 236 projects with Section

8 new construction or substantial rehabilitation assistance. As

such, by its terms, ``covered section 8 housing'' does not seem to

encompass the Section 236 Mortgage Insurance and Interest Reduction

Payment for Rental Projects program or the Section 221(d)(3) BMIR

program.

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Project owners should note that the following types of projects or

assistance would NOT be covered by this interim rule:

--Section 202 housing projects,

--Section 221(d)(3) BMIR housing projects,

--Section 221(d)(4) retirement service centers (because such projects

have FHA mortgage insurance but no section 8 assistance),

--Section 236 housing projects,

--Housing projects with contracts for section 8 loan management set

aside (unless the projects also have contracts for section 8 assistance

involving new construction or substantial rehabilitation, in which case

the units could be covered),

--Housing projects with project-based section 8 rental certificates,

and

--Section 8 tenant-based assistance programs (rental vouchers and

certificates).

2. Assisted Under a Contract for Assistance Under Section 8(b)(2)

Some newly constructed or substantially rehabilitated projects have

unassisted units and assisted units. These projects are often referred

to as ``partially assisted projects.'' Because the statutory definition

of ``covered section 8 housing'' only applies to housing that is under

a contract for assistance, the subtitle D system of preferences would

not apply to unassisted units in a partially assisted project.

Additionally, nothing in this regulation establishes a cap on the

number of unassisted units for disabled families in a partially

assisted project.

While this regulation does not apply to the unassisted units in a

partially assisted project, this regulation also does not relieve any

owner of any project, including the owner of a partially assisted

project from complying with the Fair Housing Amendments Act of 1988,

section 504 of the Rehabilitation Act of 1973, the implementing

regulations for these statutes, or any other applicable statutory or

regulatory requirement, including the requirements of the National

Housing Act, with respect to the assisted or unassisted units. However,

notwithstanding the foregoing, owners may provide the preferences in

accordance with this interim rule, with respect to the assisted units.

3. Originally Designed Primarily for Occupancy by Elderly Families

The final statutory requirement for qualification as a ``covered

section 8 housing project'' is that the project must have been

originally designed for occupancy by elderly families. The statute does

not define the term ``originally'' or define the phrase ``originally

designed for occupancy by elderly families.'' However, the House Report

offers some insight on this subject. The House Report suggests that to

qualify as housing originally designed for occupancy by elderly

families, the owner of the project must have expressed an intent to

create housing for elderly tenants when the developer negotiated with

the Department for Federal financial assistance. (H.R. Rept. No. 760,

102d Cong. 2d Sess. at 141 (1992).)

Because the various types of housing projects covered by this

interim rule were developed under several different programs, and over

a period of time which spans almost two decades, there is no uniform

documentation at the Department which evidences the population group to

be served by a project. In many instances, the application in response

to a notice of funding availability (NOFA) shows that a project was

designed as an elderly housing project. However, an indication of the

population group to be served by the housing project does not always

appear in any one document.

In addition, because one of the previous definitions of ``elderly

families'' in section 3(b) of the 1937 Act included disabled families,

it is not always clear from documents that indicate a project was

developed for ``elderly families'' whether the project for elderly

families was intended to mean housing for the broader eligible category

of families (i.e., elderly families and disabled families) or for

families who qualified by virtue of age alone. Further confusion may be

added by the fact that for most of the period when this housing was

being developed, the Department policy required all housing for the

elderly (defined by age) to incorporate certain accessible features and

to design a certain percentage of the units to be accessible for

persons with physical disabilities. Typically, these units were made

available to eligible families with physical disabilities, regardless

of age.

Thus, in establishing whether a project was originally designed

primarily for occupancy by elderly families within the meaning of

subtitle D, two distinctions must be drawn: (1) The project was

designed primarily for elderly families (as opposed to non-elderly

families); and (2) the project was designed for elderly families (i.e.,

seniors), and not designed for elderly families under the broader

meaning of this term, which formerly included elderly families and

disabled families.

Recognizing all these factors, the interim rule provides for

supporting documentation to be drawn from a variety of sources. These

sources are identified as being either ``primary'' sources, or

``secondary'' sources. The interim rule provides that if at least one

of the primary sources clearly establishes that a project was

originally designed for elderly families (seniors), the owner of this

project may elect the system of preferences provided by subtitle D.

However, if another primary source establishes a design contrary to the

primary source upon which the owner would base support that the project

is a covered section 8 housing project, the owner cannot make the

election of preferences provided by subtitle D without finding support

in secondary sources. Secondary sources may then, as discussed in this

interim rule, be used to establish the use for which the project was

originally designed.

If there are no primary sources clearly establishing the original

design of the project, then original design may still be established

through secondary sources. At least two secondary sources must support

that the project was designed as elderly (seniors) housing in the

absence of primary documentation in order to establish such intention

for elderly housing. Additionally, in the case of conflict between

primary sources, and the owner chooses to rely on secondary sources,

then at least two secondary sources must support that the project was

designed as elderly (seniors) housing.

Primary sources. Primary sources that would evidence that a project

was originally designed for occupancy by elderly families (seniors)

include any of the following: the application in response to the notice

of funding availability (NOFA); the terms of the NOFA under which the

application was solicited; the regulatory agreement, the loan

commitment, the bid invitation, the owner's management plan, or any

other underwriting or financial document collected at or before loan

closing. If any one of these project documents clearly evidence that

the project was originally designed primarily for elderly families

(seniors), the owner would be eligible to elect to apply the system of

preferences provided under these regulations so long as the primary

documents do not conflict.

Secondary sources. As discussed above, if primary sources do not

evidence that the population intended to be served by the project were

elderly families (seniors), an owner may elect the system of

preferences provided by subtitle D if the owner is able to produce

evidence from two secondary sources that clearly evidence that the

project was originally designed primarily for elderly families

(seniors). Secondary sources include: (1) Lease records from the

earliest two years of occupancy for which records are available showing

that occupancy has been restricted primarily to households where the

head, spouse, or sole member is 62 years of age or older; (2) evidence

that services for elderly persons have been provided, such as services

funded by the Older Americans Act, transportation to senior citizen

centers, or programs coordinated with the Area Agency on Aging; (3)

project unit mix with a higher percentage of efficiency and one-bedroom

units [a secondary source particularly relevant to distinguishing

elderly projects under the previous section 3(b) definition (in which

disabled families were included in the definition of ``elderly

families'') from non-elderly projects and which in combination with

other factors (such as the number of accessible units) may be useful in

distinguishing projects for seniors from those serving the broader

definition of ``elderly families'' which includes disabled families];

or (4) any other relevant type of historical data unless clearly

contradicted by other comparable evidence.

As discussed above, the lack of uniform documentation, and the

possible lack of distinction between: (1) Elderly projects which are

seniors housing, and (2) elderly projects which planned to serve

disabled families equally with seniors, make the determination of

whether a project is a ``covered section 8 housing project'' a

difficult one.

The Department is specifically interested in public comment on this

issue, particularly with respect to the existence (or lack thereof) of

documentation that would show the original population group intended to

be served by the project, other types of evidence that might be

considered, and how to distinguish between: (1) Projects for elderly

families, which included, and intended to include, disabled families,

from (2) projects for elderly families which served disabled families

only incidentally.

B. Projects That Do Not Elect Subtitle D System of Preferences: Section

657

The Department emphasizes that the system of preferences provided

by subtitle D and these regulations is not mandatory, and is available

at the election of the multifamily housing owner. In accordance with

section 657 of the 1992 HCD Act, an owner of a covered section 8

housing project that does not elect to implement the system of

preferences provided by subtitle D would continue to provide housing

for elderly families without incurring any obligation (beyond that

mandated by the specific authorizing statutes and any other applicable

statutory requirements) to provide housing for elderly families and/or

non-elderly and disabled families.

For covered section 8 projects for which the owner does not elect

the subtitle D system of preferences, the new definition of ``elderly

families'' established by section 621 of the 1992 HCD Act would not

apply. Rather the former definition in section 3(b) of the 1937 Act,

which includes the non-elderly disabled families in the meaning of

``elderly families,'' would be applicable, and elderly families under

this broader definition (i.e., elderly families and disabled families)

would be eligible for units in these projects for which the election of

preferences was not taken to the same extent that such families were

eligible before enactment of the 1992 HCD Act.

The non-election of the subtitle D system of preferences does not

override any occupancy requirements affecting covered section 8 housing

designed primarily for occupancy by elderly families based on the

authority of regulatory agreements or statutory provisions governing

the FHA mortgage insurance programs. By way of example, the enabling

statute for the Section 231 Program (``Housing Mortgage Insurance for

the Elderly'') mandates that not less than 50 percent of the units in a

Section 231 project must be designed for the use of elderly persons,

meaning any person, married or single, who is 62 years of age or over.

Accordingly, not all members of the entire population group encompassed

by the pre-1992 HCD Act definition of ``elderly families'' (i.e.,

elderly families and non-elderly disabled families), are eligible for

elderly units in Section 231 projects.

Application of the pre-1992 HCD Act definition could make it

impossible to meet the statutory percentage requirement of the Section

231 Program or a higher percentage that may have been specified in the

regulatory agreement or in other authority. Therefore, owners of

Section 231 projects (where the projects are also covered section 8

housing designed primarily for occupancy by elderly families) who do

not make an election to be covered by the subtitle D system of

preferences will continue to follow the standards of Section 231 of the

National Housing Act and the terms of their regulatory agreement or

other controlling documentation in determining the eligibility of

elderly families for occupancy in their projects. This position is

consistent with section 657 of subtitle D which provides that where the

owner does not elect the preference scheme, ``elderly families'' as

defined by the pre-1992 HCD Act definition, shall be eligible for

occupancy ``to the same extent that such families were eligible before

the date of enactment [of the 1992 HCD Act.] (emphasis added.)''

III. Implementation of Preferences for Elderly Families

An owner who elects to provide preferences for elderly families in

accordance with section 651, and who can compile and, on request,

produce the required documentation to support a determination that the

project was designed primarily for occupancy by elderly families

(seniors), may, in selecting tenants for units in the project that

become available for occupancy after the effective date of this

regulation, give preference to elderly families who have applied for

occupancy in the housing.

An owner of a covered section 8 project is not required to solicit

or obtain the approval of HUD before exercising the election of

preference for elderly families provided by subtitle D. The owner, if

challenged on the issue of the ``coverage'' of the project, must be

able to support the project's coverage, and the owner's eligibility to

make the election of preference through the production of the

supporting evidence discussed earlier in this preamble. (The owner may

be challenged by, among others, existing tenants, applicants for

tenancy or HUD on this issue.) Additionally, the Department reserves

the right at any time to review and make determinations regarding the

accuracy of the determination of the project as an eligible project.

The Department can make such determinations as a result of its ongoing

monitoring of activities, or the conduct of complaint investigations

and compliance reviews required under the Fair Housing Act (42 U.S.C.

3601-19), section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)

and other applicable statutes.

When establishing the preference for elderly families, an owner

also must reserve units for occupancy by disabled families who are not

elderly or near-elderly, as explained below. In no case, may an owner

evict, without good cause, a family that is lawfully residing in a unit

in a covered section 8 housing project to achieve the occupancy level

that has been determined under the system of preferences or the

reservation of units set forth in this interim rule. (Good cause would

not exist where the eviction stemmed from the system of preferences or

the reservation of units, or because of any action taken by the

Secretary or owner pursuant to subtitle D.)

A. Reservation of Units for Disabled Families Who Are Neither Elderly

Nor Near-Elderly: Section 652

If an owner elects to provide preferences for elderly families for

admission to a project or a portion of a project that is determined to

be ``covered section 8 housing project'' in accordance with section

651, then section 652 requires the owner also to reserve covered

section 8 units in the project for occupancy by disabled families who

are not elderly or near-elderly. The number of units to be reserved for

disabled families who are not elderly or near-elderly is based on a

calculation prescribed in section 652(b).

Under section 652(b), an owner who elects to provide preferences

for elderly families must determine the percentage of covered section 8

units occupied by disabled families who are not elderly or near-elderly

on October 28, 1992, which is the date of enactment of the 1992 HCD Act

(the October 28, 1992 percentage). The next step is for the owner to

compare the October 28, 1992 percentage to the percentage of covered

section 8 units occupied by disabled families who are not elderly or

near-elderly on January 1, 1992 (the January 1, 1992 percentage), in

order to determine the highest occupancy percentage of disabled

families who are not elderly or near-elderly in 1992. The owner must

reserve the highest occupancy percentage (either the October 28, 1992

percentage or the January 1, 1992 percentage), up to a maximum of 10

percent of the covered section 8 units, for disabled families who are

not elderly or near-elderly.

Under the statute and these regulations, an owner may, but is never

obligated to, admit disabled families who are not elderly or near-

elderly to more than 10 percent of the covered section 8 units. The

actual percentage required is the highest percentage in occupancy on

the two ``snapshot'' dates in 1992 (again October 28, 1992 or January

1, 1992), unless that number exceeds 10 percent, in which case the

requirement is set at 10 percent. Thus, under the statutory formula and

this interim rule, if a project did not have any disabled families who

are not elderly or near-elderly residing in the covered section 8 units

on both January 1, 1992 and October 28, 1992, the owner would not be

required to reserve any covered section 8 units for such families. The

Department believes that few, if any, projects will fall into this

category.

While the percentage of covered section 8 units required to be

reserved may vary between 10 percent and zero, the Department

reiterates that the required percentage is not a ceiling, and owners

are encouraged to reserve (or permit admission to) a higher percentage

of covered section 8 units for disabled families who are not elderly or

near-elderly where the need exists. Owners who choose to reserve (or

permit admission to) a greater percentage of covered section 8 units

than the percentage which is statutorily required for disabled families

who are not elderly or near-elderly would not incur any obligation to

continue maintaining the higher percentage (than statutorily required

by subtitle D) as vacancies arise.

In calculating actual utilization of units reserved for disabled

families who are not elderly or near-elderly, units occupied by elderly

families where a member of the family is disabled do not count as part

of the required percentage. Another factor to be considered is that the

percentage of units which are reserved under subtitle D for disabled

families who are not elderly or near-elderly is not linked to specific

units.

Since most elderly projects, even when designed for occupancy by

seniors, have a portion of the units designed to be accessible and

usable by persons with physical disabilities, there may be a tendency

to assume that these ``accessible'' units will be designated to fulfill

the required percentage of units reserved for disabled families who are

not elderly or near-elderly. This is not the case. Disabled families

who are not elderly or near-elderly and therefore qualify for the units

reserved under subtitle D may have any one of a variety of

disabilities, many of which will not require an accessible unit. Thus,

in determining whether a project has met its obligation under subtitle

D, the relevant factor is the number of disabled families who are not

elderly or near-elderly in occupancy, not the units in which they

reside. The accessible units may be occupied by elderly families, or by

a mixture of elderly families and disabled families who are not elderly

or near-elderly. Similarly, a project may have reached its required

percentage of occupancy by disabled families who are not elderly or

near-elderly, and have vacant accessible units. In such case, an owner

is under no obligation to offer these units to disabled families before

offering such units to elderly families. However, the owner must offer

such vacant accessible units to current tenants who need any of the

accessible features of the unit before offering it to the first elderly

or non-elderly family on the waiting list. In selecting from the

waiting list, the owner can give elderly disabled families who need the

accessible unit a preference over elderly non-disabled families.

The Department emphasizes that when a vacancy occurs and it is a

disabled family's turn to be placed in a project pursuant to the

preference system, the fact that the vacant unit may not be accessible,

does not entitle the housing provider to skip over the disabled family.

Where the available unit is not accessible and the disabled family

needs an accessible unit, the housing provider is to accommodate the

family, either by (1) making that unit accessible, or (2) by

transferring a tenant who is living in an accessible unit but does not

need an accessible unit to the inaccessible unit and offering the

disabled family an accessible unit.

B. Secondary System of Preferences: Section 653.

Under the statutory system of preferences, if there are an

insufficient number of elderly families to fill vacant covered section

8 units, an owner may give a secondary preference to disabled families

who are near-elderly. Similarly, if there are an insufficient number of

disabled families who are not elderly or near-elderly to fill vacant

covered section 8 units reserved for such disabled families, an owner

may give a secondary preference to disabled families who are near-

elderly to fill those units. However, in the event that there are an

insufficient number of elderly families, disabled families who are not

elderly or near-elderly, or near-elderly disabled families to fill

vacancies that occur, the owner must make vacant covered section 8

units generally available to eligible families who apply for housing,

without regard to the statutory system of preferences or reservation of

units.

The statute looks to the Department to establish a standard for

determining whether there are an insufficient number of families to

fill vacant units subject to the preferences or reservations

established in this interim rule. These standards are already in place

in the existing section 8 regulations. The interim rule provides that

before an owner can determine that there are an insufficient number of

families to fill vacant covered section 8 units, an owner must conduct

marketing to attract applicants qualifying for the preferences

(including outreach to such applicants) in accordance with

Secs. 880.601(a), 881.601(a), 883.702(a), 884.226, or 886.321(a), as

applicable. Additionally, the owner must make a good faith effort to

lease to applicants qualifying for the preferences (which must include

taking all feasible actions to fill vacancies by renting to such

families), and not reject any such applicant family except for reasons

acceptable to the Department or the contract administrator (in

accordance with HUD guidelines).

C. Waiting Lists

Owners of covered section 8 housing projects designed primarily for

occupancy by elderly families, which are required to have a percentage

of covered section 8 units reserved for disabled families who are not

elderly or near-elderly pursuant to section 652, or which have other

units available to disabled families pursuant to statutory and

regulatory requirements (e.g., near-elderly disabled families admitted

under the secondary preferences of section 653) would not be able to

use this interim rule to remove applicants from a waiting list.

Moreover, an owner would have to continue to select applicants for

covered section 8 vacant units in accordance with current HUD

procedures with the exception noted below.

Procedures presently in effect provide that the applicant's place

on the waiting list and the application of preferences determine the

order of selection for admission. Section 655 provides that the

existing Federal preferences apply within each group (i.e. elderly

families, disabled families who are not elderly or near-elderly, and

disabled families who are near-elderly) to the extent that they

currently apply under each applicable multifamily housing

program.6 Local preferences also are permitted under existing

rules.

---------------------------------------------------------------------------

\6\For example, an elderly family with a Federal preference

would be selected for a vacant unit before an elderly family without

a Federal preference.

---------------------------------------------------------------------------

However, under this interim rule, if the applicants at the top of

the waiting list are disabled families who are not elderly or near-

elderly, and such disabled families currently occupy the full

percentage of covered section 8 units required to be reserved for them

under subtitle D, the owner may, but is not required to, skip over the

disabled applicants on the waiting list, and select elderly families

for vacant covered section 8 units. The owner would only be required to

select disabled families who are not elderly or near-elderly, and who

are at the top of the waiting list for vacant covered section 8 units

when: (1) The number of disabled families who are not elderly or near-

elderly in covered section 8 units drops below the minimum required

percentage, (2) the owner has adopted a secondary preference under

section 653(a) of the 1992 HCD Act, and there are not sufficient

numbers of elderly families or near-elderly disabled families to fill

the elderly units (in accordance with section 654 of the 1992 HCD Act),

or (3) the owner has not adopted a secondary preference under section

653(a), and there are not sufficient numbers of elderly families to

fill the elderly units.

It is important to note that some projects which do not have to

reserve any units for non-elderly disabled families under subtitle D

may have disabled families who are not elderly or near-elderly on their

waiting lists. If a project originally designed primarily for occupancy

by elderly families would not have to reserve any units for disabled

families who are not elderly or near-elderly under subtitle D, the

owner would not have to admit such disabled families on the waiting

list to covered section 8 units, nor would any additional non-elderly

families have to be added to the waiting list for covered section 8

units. The owner would, of course, have to admit disabled families who

are also elderly, and provide such families with the same preference

for admission as non-disabled elderly families.

Also, an owner who has adopted a secondary preference under section

653(a) would admit, and give a preference to, near-elderly disabled

families, if there are insufficient numbers of elderly families to fill

the elderly units. An owner who has adopted a secondary preference

under section 653(a) would also admit families without regard to age

(including disabled families that are not elderly or near-elderly) if

there are not sufficient numbers of elderly families or near-elderly

disabled families to fill the elderly units (pursuant to section 654).

An owner who has not adopted a secondary preference under section

653(a) would admit applicants without regard to age (including disabled

families that are not elderly or near-elderly) if there are not

sufficient numbers of elderly families to fill the elderly units.

Even where there are sufficient numbers of elderly families to fill

the elderly units, an owner may elect to admit disabled families who

are not elderly or near-elderly to covered section 8 units, and the

Department encourages this voluntary policy, particularly where the

need exists and the units are available. Owners who choose to admit

such disabled families in excess of the statutorily-mandated minimum

may do so without incurring any continuing obligation as such disabled

families voluntarily move out, and without losing their project's

identification as a project designed primarily for occupancy by elderly

families.

In any case, when an owner's decision to provide preferences to

elderly families under subtitle D would have an adverse effect on non-

elderly families on the waiting list, the owner would be required to

notify those families of the new policy and how this policy may affect

them. The notification requirement would be triggered if the current

percentage of disabled families who are neither elderly nor near-

elderly exceeds the minimum required percentage, and non-elderly

families on the waiting list (including those with disabilities) may be

passed over for covered section 8 units for the elderly, or if the

project is one of the few which will have no units set aside for such

disabled families under subtitle D.

Justification for Interim Rulemaking

It is the Department's general policy to publish a rule for notice

and comment before issuing a rule for effect in accordance with the

Department's own rule on rulemaking, codified at 24 CFR part 10.

However, part 10 provides for exceptions from that general rule where

the agency finds good cause to omit advance notice and public

participation. The good cause requirement is satisfied when prior

public procedure is determined to be ``impracticable, unnecessary, or

contrary to the public interest.'' (See 24 CFR 10.1)

The Department finds that good cause exists to publish this interim

rule for effect without notice and prior public comment because the

Department has determined that, with the exception of possible

clarifying changes at the final rule stage, public comment will not

alter the standards set forth in this interim rule for making the

election of preferences provided by subtitle D, and is therefore

unnecessary. The interim rule adopts the standards for the election of

preferences for elderly families and reservation of units for disabled

families as set forth in the statute.

Subtitle D establishes which section 8 housing projects are

eligible for the election of preferences provided by subtitle D.

Subtitle D establishes that the ``elderly families'' eligible to reside

in covered section 8 housing projects for which the owner has made the

election of preferences provided by subtitle D are those families who

meet the definition of ``elderly families'' as set forth in section

3(b) of the 1937 Act, as amended by section 621 of the 1992 HCD Act.

Subtitle D establishes the formula by which an owner will determine the

number of units in the covered section 8 housing project that must be

reserved for occupancy by disabled families who are not elderly or

near-elderly. Subtitle D establishes the secondary system of

preferences available to owners if there are insufficient numbers of

elderly families to occupy all the units reserved for elderly families.

Subtitle D also establishes the procedures to be followed if units

remain vacant after the owner has elected to provide the secondary

system of preferences, and the procedures to be followed concerning the

order of selection within groups to whom a preference has been given.

The interim rule adopts all these statutory provisions without

substantive change.

The interim rule departs from the statute in providing the types of

documents that an owner must be able to produce in the event the owner

is challenged on the issue of whether the owner's project is eligible

for the election of preferences provided by subtitle D. The statute

does not provide how the owner may support that the owner's section 8

housing project was originally designed primarily for occupancy by

elderly families (i.e., seniors). The interim rule provides a list of

documents which the owner may rely upon as support for determining

project eligibility to make the election of preferences provided by

subtitle D.

The Department carefully considered which documents may evidence

project eligibility for the subtitle D system of preferences. As

discussed earlier in the preamble, because of the various types of

housing projects covered by subtitle D and this interim rule, and

because these housing projects were developed under several different

programs and over a period of time which spans almost two decades,

there is no uniform documentation at the Department which identifies

the population group to be served by the project. Additionally, and

again as discussed earlier in the preamble, the difficulty in

identifying the population group to be served is added by the fact that

the previous definition of ``elderly families'' in the 1937 Act

included disabled families, and the Department's policy required all

housing for the elderly (defined by age) to incorporate certain

accessible features and to design a certain percentage of units to be

accessible for persons with physical disabilities. The Department

specifically requests comments from the public on the list of

supporting documents provided in the interim rule, and this provision

may change following public comment.

The Department recognizes that there may be questions concerning

the Department's use of interim rulemaking for subtitle D of title VI,

but not for subtitle B of the title VI. Subtitle B provides public

housing agencies (PHAs) with the option, subject to certain

requirements, to designate public housing projects, or portions of

these projects, for occupancy by elderly families, by disabled

families, or elderly families and disabled families. Under subtitle B,

to elect this option, a PHA must submit an allocation plan to the

Department for review and approval before designating a project for

occupancy by one of the three categories of families listed in the

statute. Additionally, for projects to be designated for occupancy by

disabled families, the statute requires the PHA also must submit, and

receive approval of, a supportive service plan. The Department added

requirements, by regulation, to the allocation plan and supportive

service plan to supplement those set forth in the statute. For this

reason, it was necessary to provide the public with advance notice and

public comment before making those regulatory requirements effective.

Additionally, to the extent that this subtitle D rule, which

concerns section 8 housing, and the subtitle B rule, which concerns

public housing, address similar issues, the public comments on the

subtitle B rule are applicable to this interim rule. Both statutes

(subtitle D and subtitle B), which permit housing to be reserved for

occupancy by elderly families, may have the affect of reducing housing

assistance for non-elderly disabled persons. Subtitle D attempts to

minimize the reduction of housing assistance for non-elderly disabled

families by limiting the preference for elderly families to covered

section 8 housing that was originally designed primarily for occupancy

by elderly families. Subtitle D also requires owners of these covered

projects to reserve units in the covered project for disabled families

who are neither elderly nor near-elderly, and the number of units to be

reserved is determined in accordance with the formula established by

the statute.

Subtitle B attempts to minimize the reduction of housing assistance

for non-elderly disabled families by requiring housing authorities that

designate projects for elderly families to submit a plan for securing

sufficient additional resources that the agency owns, controls, or has

received preliminary notification that it will obtain, or for which the

agency plans to apply that will be sufficient to provide assistance to

not less than the number of non-elderly disabled families that would

have been housed but for the designation of the project for elderly

families. Further, both statutes prohibit the eviction of any tenant

lawfully residing in a section 8 covered project or a public housing

project because the project is to be reserved for elderly families or

to be designated for elderly families.

Persons with disabilities commenting on the subtitle B rule were

concerned about the possible reduction of public housing assistance for

non-elderly disabled families as a result of projects designated for

elderly families, and several requested that the Department not permit

designated housing. The Department anticipates that persons with

disabilities will have the same concerns about the subtitle D rule, and

perhaps make similar comments. However, in both cases, the statute

permits the reservation or designation for projects for occupancy by

elderly families, and the Department cannot preclude this an as option

for project owners or housing authorities.

Persons with disabilities commenting on the subtitle B rule

requested that the Department carefully monitor the statutory

protections provided for non-elderly disabled families. The Department

anticipates that persons with disabilities commenting on the subtitle D

rule will make similar comments. The Department will monitor both the

subtitle D reservation, and the subtitle B designation, to ensure, to

the extent possible, that there is minimum adverse impact on non-

elderly disabled families.

Persons with disabilities commenting on the subtitle B rule stated

that their concern about loss of access to projects designated for

elderly families should be construed to mean a concern about reduction

of housing assistance generally, and not concern about loss of access

to ``elderly'' projects. These commenters stated that an integrated

housing setting is not a project that houses only elderly families and

disabled families. The commenters asked the Department to make

available section 8 assistance to non-elderly disabled families so that

they could live in housing with ``mainstream'' populations. The

Department anticipates that similar comments will be made by persons

with disabilities on the subtitle D rule. The Department will make

every effort to increase section 8 housing assistance for non-elderly

disabled persons.

Given the statutory framework of the system of preferences for

elderly families authorized by the subtitle D rule, the Department

reiterates that, except for the types of documentation a project owner

should be able to produce to support a determination of eligibility to

make the election of preferences, there is very little that will change

at the final rule stage as a result of public comments. Given the

similarity of certain issues addressed by subtitle D and subtitle B,

the Department also reiterates that those comments received on the

subtitle B rule and that are applicable to this rule were taken into

consideration in developing this interim rule.

Although this interim rule is being published for effect within 30

days from the date of publication, the Department requests comments

from the public on this interim rule, and the public comments will be

considered by the Department in development of the final rule.

Additionally, in accordance with the Department's policy on interim

rules, the amendments made by this interim rule to parts 880, 881, 883,

884, and 886 will expire on the twelve-month anniversary date of

publication of this interim rule unless extended by notice published in

the Federal Register or adopted by a final rule published on or before

the twelve-month anniversary date of publication of this interim rule.

Other Matters

Executive Order 12866

This interim rule was reviewed by the Office of Management and

Budget (OMB) under Executive Order 12866 on Regulatory Planning and

Review. Any changes made in this interim rule as a result of that

review are clearly identified in the docket file, which is available

for public inspection in the Office of the Department's Rule's Docket

Clerk, room 10276, 451 Seventh St. SW., Washington, DC.

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,

which implement section 102(2)(C) of the National Environmental Policy

Act of 1969. The finding is available for public inspection during

regular business hours in the Office of General Counsel, the Rules

Docket Clerk room 10276, 451 Seventh Street, SW., Washington, DC 20410.

Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive order 12612, Federalism, has determined that the policies

contained in this interim rule will not have substantial direct effects

on states or their political subdivisions, or the relationship between

the Federal government and the states, or on the distribution of power

and responsibilities among the various levels of government.

Specifically, the interim rule is directed to owners of multifamily

housing projects, and will not impinge upon the relationship between

the Federal Government and State and local governments. As a result,

the interim rule is not subject to review under the order.

Executive Order 12606, the Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this interim rule does not

have potential for significant impact on family formation, maintenance,

and general well-being within the meaning of the order. This interim

rule implements the system of preferences authorized by subtitle D of

title VI of the 1992 HCD Act, which provides that owners of certain

section 8 covered projects that were originally designed primarily for

occupancy by elderly families (i.e., families whose heads, spouses or

sole members are 62 years or older) may elect to give preference in

occupancy to vacant units in the project to elderly families. Although

subtitle D provides for preferences for elderly families in projects

meeting the conditions established by subtitle D, subtitle D also

requires that owners of such projects must reserve no less than a

minimum number of units in these projects for disabled families who are

not elderly or near-elderly. The minimum number is determined in

accordance with the formula established by statute.

Since the subtitle D preference system provides a primary

preference for elderly families, and a secondary preference for

disabled families who are near-elderly, there is the possibility that

this statutory system of preferences would limit the availability of

certain section 8 housing for: (1) Disabled families who are not

elderly or near-elderly (if an owner gives preference to elderly

families for units), and (2) such families with children, and thus

adversely impact the maintenance and well-being of these families.

(Although owners can apply the same preferences and reservation of

units to families with children as to families without children, owners

cannot restrict admission to any units solely because of familial

status as long as the family qualifies for the unit on the basis of the

relevant age or disability criterion for admission.) The Department

believes that the number of projects that would be eligible for the

preferences provided by subtitle D is limited, and thus, the impact on

family maintenance and well being would not be significant within the

meaning of the order.

Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)) has reviewed and approved this interim rule, and in so

doing certifies that this interim rule would not have a significant

economic impact on a substantial number of small entities. This interim

rule reflects a system of occupancy preferences authorized by statute

which applies to section 8 newly constructed or substantially

rehabilitated housing without regard to the size of entities involved.

Regulatory Agenda

This interim rule was listed as sequence no. 1580 in the

Department's Semiannual Agenda of Regulations published on April 25,

1994 (59 FR 20424, 20446) in accordance with Executive Order 12866 and

the Regulatory Flexibility Act.

Catalog of Federal Domestic Assistance Programs. The Catalog of

Federal Domestic Assistance program number is 14.156.

List of Subjects

24 CFR Part 880

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 881

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 883

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 884

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements, Rural areas.

24 CFR Part 886

Grant programs--housing and community development, Lead poisoning,

Rent subsidies, Reporting and recordkeeping requirements.

Accordingly, 24 CFR parts 880, 881, 883, 884, and 886 are amended

as follows:

PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW

CONSTRUCTION

1. The authority citation for 24 CFR part 880 is revised to read as

follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-

13619.

2. A new Sec. 880.612a is added to read as follows:

Sec. 880.612a Preference for occupancy by elderly families.

(a) Election of preference for occupancy by elderly families--(1)

Election by owners of eligible projects. (i) An owner of a project

assisted under this part (including a partially assisted project) that

was originally designed primarily for occupancy by elderly families (an

``eligible project'') may elect to give preference to elderly families

in selecting tenants for assisted, vacant units in the project, subject

to the requirements of this section.

(ii) For purposes of this section, a project eligible for the

preference provided by this section, and for which the owner makes an

election to give preference in occupancy to elderly families is

referred to as an ``elderly project.'' ``Elderly families'' refers to

families whose heads of household, their spouses or sole members are 62

years or older.

(2) HUD approval of election not required. (i) An owner is not

required to solicit or obtain the approval of HUD before exercising the

election of preference for occupancy provided in paragraph (a)(1) of

this section. The owner, however, if challenged on the issue of

eligibility of the project for the election provided in paragraph

(a)(1) of this section must be able to support the project's

eligibility through the production of supporting evidence as provided

in paragraph (b) of this section.

(ii) The Department reserves the right at any time to review and

make determinations regarding the accuracy of the identification of the

project as an elderly project. The Department can make such

determinations as a result of ongoing monitoring activities, or the

conduct of complaint investigations and compliance reviews required

under the Fair Housing Act (42 U.S.C. 3601 through 19), section 504 of

the Rehabilitation Act of 1973 (29 U.S.C. 794) and other applicable

statutes.

(b) Determining projects eligible for preference for occupancy by

elderly families--(1) Evidence supporting project eligibility. Evidence

that a project assisted under this part (or portion of a project) was

originally designed primarily for occupancy by elderly families, and is

therefore eligible for the election of occupancy preference provided by

this section, shall consist of at least one item from the sources

(``primary'' sources) listed in paragraph (b)(1)(i) of this section, or

at least two items from the sources (``secondary'' sources) listed in

paragraph (b)(1)(ii) of this section:

(i) Primary sources. Identification of the project (or portion of a

project) as serving elderly (seniors) families in at least one primary

source such as: the application in response to the notice of funding

availability; the terms of the notice of funding availability under

which the application was solicited; the regulatory agreement; the loan

commitment; the bid invitation; the owner's management plan, or any

other underwriting or financial document collected at or before loan

closing; or

(ii) Secondary sources. Two or more sources of evidence such as:

lease records from the earliest two years of occupancy for which

records are available showing that occupancy has been restricted

primarily to households where the head, spouse or sole member is 62

years of age or older; evidence that services for elderly persons have

been provided, such as services funded by the Older Americans Act,

transportation to senior citizen centers, or programs coordinated with

the Area Agency on Aging; project unit mix with a higher percentage of

efficiency and one-bedroom units [a secondary source particularly

relevant to distinguishing elderly projects under the previous section

3(b) definition (in which disabled families were included in the

definition of ``elderly families'') from non-elderly projects and which

in combination with other factors (such as the number of accessible

units) may be useful in distinguishing projects for seniors from those

serving the broader definition of ``elderly families'' which includes

disabled families]; or any other relevant type of historical data,

unless clearly contradicted by other comparable evidence.

(2) Sources in conflict. If a primary source establishes a design

contrary to that established by the primary source upon which the owner

would base support that the project is an eligible project (as defined

in this section), the owner cannot make the election of preferences for

elderly families as provided by this section based upon primary sources

alone. In any case where the primary sources do not provide clear

evidence of original design of the project for occupancy primarily by

elderly families, including those cases where primary documents

conflict, secondary sources may be used to establish the use for which

the project was originally designed.

disabled families. The owner of an elderly project is required to

reserve, at a minimum, the number of units specified in paragraph

(c)(1) of this section for occupancy by disabled families who are not

elderly or near-elderly families (hereafter, collectively referred to

``non-elderly disabled families'').

(1) Minimum number of units to be reserved for non-elderly disabled

families. The number of units in an elderly project required to be

reserved for occupancy by non-elderly disabled families, shall be, at a

minimum, the lesser of:

(i) The number of units equivalent to the higher of;

(A) The percentage of units assisted under this part in the elderly

project that were occupied by non-elderly disabled families on October

28, 1992; and

(B) The percentage of units assisted under this part in the elderly

project that were occupied by non-elderly disabled families upon

January 1, 1992; or

(ii) 10 percent of the number of units assisted under this part in

the eligible project.

(2) Option to reserve greater number of units for non-elderly

disabled families. The owner, at the owner's option, and at any time,

may reserve a greater number of units for non-elderly disabled families

than that provided for in paragraph (c)(1) of this section. The option

to provide a greater number of units to non-elderly disabled families

will not obligate the owner to always provide that greater number to

non-elderly disabled families. The number of units required to be

provided to non-elderly disabled families at any time in an elderly

project is that number determined under paragraph (c)(1) of this

section.

(d) Secondary preferences. An owner of an elderly project also may

elect to establish secondary preferences in accordance with the

provisions of paragraph (d) of this section.

(1) Preference for near-elderly disabled families in units reserved

for elderly families. If the owner of an elderly project determines, in

accordance with paragraph (f) of this section, that there are an

insufficient number of elderly families who have applied for occupancy

to fill all the vacant units in the elderly project reserved for

elderly families (that is, all units except those reserved for the non-

elderly disabled families as provided in paragraph (c) of this

section), the owner may give preference for occupancy of such units to

disabled families who are near-elderly families.

(2) Preference for near-elderly disabled families in units reserved

for non-elderly disabled families. If the owner of an elderly project

determines, in accordance with paragraph (f) of this section, that

there are an insufficient number of non-elderly disabled families to

fill all the vacant units in the elderly project reserved for non-

elderly disabled families as provided in paragraph (c) of this section,

the owner may give preference for occupancy of these units to disabled

families who are near-elderly families.

(e) Availability of units to families without regard to preference.

If the owner of an elderly project who has elected to adopt the

secondary preferences in paragraph (d) of this section determines, in

accordance with paragraph (f) of this section, that there are an

insufficient number of families for whom preference, including

secondary preference, in occupancy has been given, to fill all the

vacant units in the elderly project, the owner shall make the vacant

units generally available to otherwise eligible families who apply for

housing, without regard to the preferences and reservation of units

provided in this section.

(f) Determination of insufficient number of applicants qualifying

for preference. To make a determination that there are an insufficient

number of applicants who qualify for the preferences, including

secondary preferences, provided by this section, the owner must:

(1) Conduct marketing in accordance with Sec. 880.601(a) to attract

applicants qualifying for the preferences and reservation of units set

forth in this section; and

(2) Make a good faith effort to lease to applicants who qualify for

the preferences provided in this section, including taking all feasible

actions to fill vacancies by renting to such families.

(g) Federal preferences. An owner that gives preferences to elderly

families and reserves units for non-elderly disabled families in

accordance with this section also shall select applicants among each

respective group in accordance with the Federal preferences contained

in Sec. 880.613.

(h) Prohibition of evictions. An owner may not evict a tenant

without good cause, or require that a tenant vacate a unit, in whole or

in part because of any reservation or preference provided in this

section, or because of any action taken by the Secretary pursuant to

subtitle D (sections 651 through 661) of title VI of the Housing and

Community Development Act of 1992 (42 U.S.C. 13611 through 13620).

(i) Expiration date of section. This section will expire on May 3,

1995.

PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR

SUBSTANTIAL REHABILITATION

3. The authority citation for 24 CFR part 881 is revised to read as

follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and

13611-13619.

4. A new Sec. 881.612a is added to read as follows:

Sec. 881.612a Preference for occupancy by elderly families.