NOFA for Vacancy Reduction Program

SUMMARY: This NOFA announces the availability of funding for activities

under the Vacancy Reduction Program. Under this program, certain public

housing agencies (PHAs) are required to develop and submit a plan

regarding vacancies in units owned or operated by the PHA. Assessment

teams have conducted on-site assessments of the vacancy situation at

known eligible PHAs, and when notified will conduct an assessment at

any PHA that meets the eligibility requirements but has not been

assessed. In addition, when requested, HUD will provide assistance to

any eligible PHA in developing its vacancy reduction plan. Although

funds available under this NOFA will be used to implement the plans,

these funds are intended to supplement other initiatives of the PHA

that will reduce the rate of vacancies in a PHA's inventory. The NOFA

contains information on the following:

(a) The purpose of the NOFA, available amounts, and eligibility;

and

(b) Application processing, including how to apply, the required

content of the application, and how selections will be made.

DATES: An application must be submitted before 4 p.m. (Eastern Standard

Time) on July 28, 1994.

Any PHA that considers itself eligible for funding under this NOFA,

but that has not yet been scheduled for an assessment under 24 CFR

968.410, must request an assessment before June 28, 1994.

The above-stated deadlines are firm as to date and hour.

Applications may be hand-delivered or mailed, but applications sent by

facsimile will not be accepted.

ADDRESSES: The original completed application must be submitted to:

Attention: Office of Assisted Housing, Department of Housing and Urban

Development, 451 Seventh St., SW., room 4204, Washington, DC 20410; one

copy must be sent to the appropriate HUD Field Office; and a one copy

must be sent to each member of the assessment team.

FOR FURTHER INFORMATION CONTACT: MaryAnn Russ, Director, Office of

Assisted Housing, Department of Housing and Urban Development, 451

Seventh Street, SW., room 4204, Washington, DC 20410, telephone (202)

708-1800 or (202) 708-1380 (TDD). (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

The information collection requirements contained in this NOFA have

been approved by the Office of Management and Budget (OMB), under

section 3504(h) of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-

3520), and assigned OMB control number 2577-0181.

I. Purpose and Substantive Description

A. Authority

The funding made available under this Notice of Funding

Availability (NOFA) is authorized as a set-aside by section 115(a) of

the Housing and Community Development Act of 1992 (Pub. L. 102-550,

approved October 28, 1992) (1992 Act). Section 115(a) requires a

percentage of the amounts available under section 14 of the United

States Housing Act of 1937 in fiscal years 1993 and 1994 to be set

aside for the Vacancy Reduction Program. Final implementing regulations

for the Vacancy Reduction Program are published elsewhere in today's

Federal Register.

In the Departments of Veterans Affairs and Housing and Urban

Development, and Independent Agencies Appropriations Act, 1993 (Pub. L.

102-389, approved October 6, 1992; 106 Stat. 1582) (1993 Appropriations

Act), Congress appropriated $3.1 billion for activities under section

14, and in the Departments of Veterans Affairs and Housing and Urban

Development, and Independent Agencies Appropriations Act, 1994 (Pub. L.

103-124, approved October 28, 1993 (1994 Appropriations Act), Congress

appropriated $3.23 billion for these activities. A total of

$202,560,000 in set-asides is available for this program to fund

Vacancy Reduction Program activities.

B. Allocation Amounts

A portion of the funds available for this program will be used for

travel and administrative expenses of the assessment teams, as

authorized by Section 115 of the 1992 Act. Of the remaining amount, no

PHA applying for funding under this NOFA may receive more than 15

percent of the total available funds.

Subject to this 15 percent limitation, eligible public housing

agencies (PHAs) that are Comprehensive Improvement Assistance Program

(CIAP) agencies will be provided funding in the full amounts approved

for Vacancy Reduction Program activities. For PHAs that are

Comprehensive Grant Program (CGP) agencies, if insufficient funds

remain to fund all eligible and approved activities under this NOFA,

the amount to be reserved for each CGP agency will be its pro rata

share of the total remaining funds available, in accordance with

Section I.J(3) of this NOFA.

All units that are funded in whole or in part by the Vacancy

Reduction Program must be brought into compliance with the Housing

Quality Standards (HQS), as set forth in 24 CFR 882.109, and must be

readily marketable when the work is completed.

C. Background

In order to gain greater insight into the vacancy problems of the

PHAs required to participate in the Vacancy Reduction Program, the

Department sent a survey form on April 2, 1993, to all PHAs that, based

on HUD data bases, were troubled or mod-troubled on January 1, 1993, or

had a vacancy rate that exceeded 15.9% on that date. Of the 400

identified PHAs, 345 responded to the survey. These PHAs reported a

total of 56,324 vacancies, about half of the total vacancies

nationally. The responses showed that additional funding was necessary

to cure only half of the vacancies in the inventories of the responding

PHAs.

Of those vacant units whose occupancy was not dependent upon

additional funding, the reasons for and percentages of the total

vacancies were as follows:

Ready, awaiting leasing--5.7%;

No demand (defined as few or no persons on the waiting

list)--3.5%;

Undesirable (defined as requiring 4 or more offers to

obtain a tenant, but not requiring funding)--2.0%;

Funded under a modernization program--29.7%;

In litigation--6.5%; and

Other reason not requiring funding--3.2%.

Of those units in which vacancies could be eliminated with

additional funding, the reasons for and percentages of the vacancies

were as follows:

Awaiting demolition--5.4%;

Needing modernization--30.0%;

Needing repair--12.8%; and

Other reason requiring funding--1.1%.

Of the vacant units that would benefit from additional funding, the

estimated costs of rehabilitation (exclusive of any costs for lead-

based paint testing and abatement) and percentage of total vacancies

were as follows:

Up to $5,000--4.8%;

$5,000-10,000--14.8%;

$10,000-25,000--7.1%; and

Over $25,000--13.8%.

Thus, almost 20% of all vacancies in these high-vacancy PHAs could

be remedied for a cost of $10,000 or less per unit, plus the cost of

any lead-based paint activity, essential management improvements,

Section 504 (of the Rehabilitation Act of 1973) rehabilitation, or

other essential costs.

The Department seeks maximum efficiency in the use of Vacancy

Reduction Program funds. To this end, the Department met with public

housing interest groups and resident representatives on January 28 and

July 9, 1993, to discuss the needs of public housing that might be met

by this program. As a result, the Department has decided to focus this

NOFA on units that can be rehabilitated for occupancy at a modest cost,

and on units with more expensive rehabilitation costs where the PHA has

the ability and agrees to provide the remainder of the funding

necessary to prepare the property for occupancy. In this way, the

Department hopes to house the optimal number of additional families

using the available program funds.

The survey has enabled the Department to proceed with vacancy

assessments (see 24 CFR 968.410 in the final rule published elsewhere

in today's Federal Register and the preamble of the proposed rule,

published at 58 FR 29728) for those PHAs that responded to the survey

and indicated an inventory of unfunded vacant units. Other PHAs that

did not receive a survey form or did not respond to the survey, but

that believe they are eligible under this NOFA and wish to apply for

funding, must notify the Department so that an assessment can be

scheduled as indicated under DATES, at the beginning of this NOFA.

The Vacancy Reduction Program is not designed to focus solely on

the rehabilitation of vacant units; the program also is intended to

identify and correct site and management deficiencies as necessary to

achieve and sustain occupancy of vacant units. Management problems in

some of the high-vacancy PHAs also may be responsible for vacancies.

These problems may include high turnover, poor maintenance and

security, delays in making units ready for occupancy after they are

vacated, delays in placing tenants in units as soon as they are ready,

or inability to deal with marketability problems that could be

addressed successfully. Therefore, management improvements that are

necessary for a PHA to achieve and maintain a high level of occupancy

and to manage turnover successfully also will be funded under this

NOFA. The vacancy assessments will assist the PHAs and HUD in

identifying what actions need to be taken in this regard.

Some PHAs may have difficulty preparing an application, including a

vacancy reduction plan. The Department will, on request by the PHA,

assist the PHA in preparation of the plan. Such assistance may be

requested by telephoning Strategic Resources, Inc. (703) 749-3040.

Moreover, if an application submitted in response to this NOFA is

technically approvable under the NOFA, but is deemed by HUD to need

improvement or supplementation in specific areas of the PHA's plan to

increase the potential for success, HUD will require changes in the

plan before execution of the amendment of the Annual Contributions

Contract (ACC).

D. Definitions

The following definitions apply to this NOFA, in addition to the

definitions that apply generally to the program under Sec. 968.405 of

the final rule published elsewhere in today's Federal Register:

Assistant Secretary means the Assistant Secretary for Public and

Indian Housing.

Eligible unit means a dwelling unit that satisfies the conditions

under either paragraph (1) or paragraph (2) of this definition, as

applicable. The unit must be either:

(1) A vacant unit that meets the characteristics of both of the

following paragraphs (1) (a) and (b):

(a) The cost of rehabilitation necessary to make the unit available

for occupancy and marketable (including development-wide physical

improvements and other necessary costs, but not including costs of

lead-based paint activity, costs for accessibility for those with

disabilities, and management improvement funding) is either:

(i) $8,000 or less, when averaged with other vacant units in the

development for which the PHA is applying for this category of funding

(i.e., average of not more than $8,000 per unit); or

(ii) More than $8,000, when averaged with other vacant units in the

development for which the PHA is applying for this category of funding

(i.e., average of more than $8,000 per unit), and the PHA has available

funding that it agrees to use to pay the costs in excess of $8,000 per

unit. ``Available funding'' includes funds legally available to the PHA

by September 30, 1994; and

(b) The unit will be marketable when it has been made ready for

occupancy. Units that cannot be made marketable, for any reason, are

not eligible to be funded under this NOFA, and funds should not be

requested for them in the application. Such units, however, must be

included in the vacancy reduction plan; or

(2) An occupied unit, if either:

(a) The unit meets the criteria of paragraphs (1)(a)(i) or (ii) and

paragraph (1)(b) of this definition, and either:

(i) In order to address the overall vacancy situation at a PHA, it

is necessary to move a resident family to another unit. The unit

vacated by that family may then be considered an eligible unit. For

example, if a PHA has vacant one-bedroom units for which there is no

demand, but also has overhoused families that could be transferred to

the one-bedroom units (thus freeing up larger units for which there is

a demand), the PHA could request funding under this NOFA for both

units; or

(ii) The unit is expected to be vacated under the Moving to

Opportunities Program; or

(b) The PHA has fewer vacancies on the date of its application than

it had on September 1, 1993, and the PHA had expended funds on

rehabilitation of the unit in reasonable anticipation of reimbursement

from Vacancy Reduction Program funds. The PHA may be reimbursed for the

cost of the rehabilitation only if funds remain available after HUD has

funded all other eligible costs at all PHAs applying for funds.

Lead-based paint activity includes lead-based paint risk

assessments, risk management (interim containment), testing, and

abatement, consistent with the Lead-Based Paint Poisoning Prevention

Act (42 U.S.C. 4821-4826) and HUD implementing regulations at 24 CFR

parts 35, 965, and 968.

Marketable means that there is a waiting list for units of the

applicable size and that either the past experience of the PHA would

indicate that the unit should lease reasonably quickly after completion

of the work funded under this program, or other available data

indicates that physical and management improvements, including more

extensive outreach, would likely result in a demand for the units.

Repair includes routine maintenance when essential to the

reoccupancy of the eligible vacant units.

Vacancy Reduction Plan means a plan developed by the PHA that

includes the following:

(1) The statements required by Sec. 968.407(b) of the final rule

(also see Appendix to this NOFA) published elsewhere in today's Federal

Register;

(2) For all vacant units, reported by development, information on

the:

(i) Number and percentage of units vacant at the time of

application under this NOFA;

(ii) Number and percentage of units expected to be occupied by each

semiannual date after the submission of the PHA's vacancy reduction

plan, as provided under paragraph (3) of this definition, including

date of full occupancy;

(iii) Source of funding and expected percentage of funds to be

obligated and expended by each semiannual date, as provided under

paragraph (3) of this definition; and

(iv) Expected date of any demolition or disposition, and the number

of units involved in this activity.

(3) A schedule, by chart or time line, indicating milestones for

vacancy reduction activities (all vacant units must be included

regardless of whether they require funding and whether they have

already been funded). The schedule shall indicate all actions that will

have been taken as of the end of each semiannual period, either

September 30 or March 31.

(i) Actual calendar dates shall be used for units that do not

require vacancy reduction program funding, but will be funded from

sources within the control of the PHA (e.g., CGP and the operating

budget) or have already been funded by another governmental program

(e.g., CIAP, the Severely Distressed Public Housing Program).

(ii) For units for which specific calendar dates cannot be given

because approval from HUD is a prerequisite to the action, the schedule

shall specify semiannual dates from the expected HUD approval (e.g.,

first semiannual reporting date after approval, second semiannual

reporting date after approval, etc.). Such units include those for

which the PHA is requesting or intends to request funding under the

Vacancy Reduction Program or another HUD program (e.g., CIAP or the

Severely Distressed Public Housing Program), or for which approval of

demolition/disposition is required but has not yet been granted.

E. PHA Eligibility

(1) Indian Housing Authorities are not eligible for the Vacancy

Reduction Program.

(2) To be eligible under this NOFA, a PHA must:

(a) Have had a vacancy rate that exceeded 15.9% on March 30, 1993,

the date used in the HUD survey of vacancies;

(b) Have had a receiver appointed for the PHA pursuant to section

6(j)(3) of the United States Housing Act of 1937; or

(c) Have been a designated troubled or mod-troubled PHA any time

within the twelve-month period that ended September 1, 1993. Such a PHA

must also meet either of the conditions described in paragraphs (i) and

(ii) below:

(i) The PHA has demonstrated substantial progress on the following

vacancy related Public Housing Management Assessment Program (PHMAP)

indicators: 1 (Vacancy Number and Percentage), 2 (Modernization), 5

(Unit Turnaround), 6 (Outstanding Work Orders), or 7 (Annual Inspection

and Condition of Units and Systems), as demonstrated by a PHMAP score

of ``C'' or better. If the PHA does not have a score of ``C'' or better

on these indicators, substantial progress may be demonstrated as

follows:

(A) Evidence that the PHA, based on more recent data would qualify

for a score of ``C'' or better on the indicators; or

(B) A statement of alternative arrangements that have been made to

assure effective administration of the function covered by the

indicator, i.e., rehabilitation and modernization activities (in regard

to the units for which funding is requested) and the PHA-wide

administration of unit turnaround, work orders, and preventive

maintenance; or

(ii) The PHA has provided a reasonable assurance that substantial

progress will be made to remedy any management deficiencies identified

by the assessment team, or any vacancy-related management deficiencies

related to PHMAP indicators 1, 2, 5, 6, and 7, through activities that

have already begun or will be initiated in the next six months,

including activities to be funded under this NOFA. The assurance may

cross-reference management improvement activity described in its

vacancy reduction plan.

F. Eligibility of Activities and Costs

(1) Eligible Activities. The following activities are eligible for

funding to the extent that they are essential to the goal of improving

and maintaining a lower vacancy rate at the PHA. The extent to which

activities requested for funding are essential to the achievement of

this goal will be determined by HUD on the basis of the application and

the vacancy assessment.

(a) Management improvements that have the following

characteristics:

(i) The management improvements generally may not exceed 25% of the

hard costs to be funded (exclusive of costs for lead-based paint

abatement and handicapped accessibility), except that higher amounts

for management improvements may be approved when such expenditures are

deemed by HUD to be critical to the reduction of vacancies in the PHA.

Management improvements include, but are not limited to: activities

permitted under paragraph 2-3 of CIAP Handbook 7485.1 (Rev. 4); equal

opportunity and civil rights training; and the development of

appropriate procedures when there are management problems regarding the

PHA's administration of equal opportunity requirements; and

(ii) The management improvement costs shall be funded one time

only, to cover a period not to exceed three years or, with regard to

PHAs with serious management difficulties, such period as is proposed

by the PHA and approved by HUD. Where an approved Vacancy Reduction

Program includes management improvements that involve ongoing costs,

such as security, HUD will not be obligated to provide any continued

funding or additional operating subsidy after the funded period. The

PHA shall be responsible for finding other funding sources or reducing

its ongoing management costs.

(b) Rehabilitation or repair of vacant eligible units to bring the

unit at least into compliance with the Housing Quality Standards (HQS),

as set forth in 24 CFR 882.109. Correction of HQS deficiencies outside

the unit is not required, unless the correction of the HQS deficiencies

is essential to the marketability of the vacant units in the

development. Any physical component that is replaced must meet the

standards for such components set forth in the Public Housing

Modernization Standards Handbook, 7485.2 Rev.1.

(c) Costs necessary to provide accessibility in eligible units to

persons with disabilities, in accordance with the requirements of

Section 504 of the Rehabilitation Act of 1973 and the Americans with

Disabilities Act of 1990.

(d) Lead-based paint activity, as defined in Section I.D of this

NOFA, in eligible units. For lead-based paint (LBP) activities, the PHA

is required to comply with 24 CFR part 965, subpart H, and 24 CFR part

35.

(e) Development-wide improvements that are essential to the

marketability of the eligible units, such as improvements made to

enhance security or ``curb appeal.''

(f) Reconfiguration of the interior of buildings or units when

there is documentation of significant problems in marketability for the

currently available unit size. Documentation for reconfiguration must

meet the requirements of HUD Handbook 7465.1 REV. In addition, where

reconfiguration is requested, applicants must document that the lack of

demand for these units is not compounded by the failure of the PHA to

transfer inappropriately housed families. Approval of an application

under this NOFA that includes reconfiguration activity will constitute

HUD approval of the reconfiguration and no further HUD approval is

necessary.

(g) When vacancies are attributable to families being overhoused,

activities relating to reassigning those families and repairing of the

occupied units made vacant by the reassignment may be included in the

PHA request, if the reassignment is essential to correcting the vacancy

problem. However, such units will be considered only if the

reassignment and repair is likely to result in a decrease of the

vacancy rate in the PHA.

(h) Other related activities and improvements eligible under the

modernization program (see 24 CFR part 968), such as administrative

expenses, fees and costs, nondwelling structures and equipment, and

relocation, but only to the extent that such costs are necessary to

support activity otherwise eligible and are essential to the

achievement and maintenance of a lower vacancy rate.

(i) Demolition of vacant units, when a demolition application has

been approved by HUD and the demolition has not been previously funded.

(j) If the PHA has fewer vacancies on the date of its application

than it had on September 1, 1993, the PHA will be reimbursed for the

costs of rehabilitating the formerly vacant units only if funds remain

available after the Department has funded all other eligible costs at

all PHAs applying for funds.

(2) Eligible Costs. The total amount of funding for which a PHA is

eligible is the sum of the following:

(a) For each development, the necessary costs of rehabilitation of

eligible units; development-wide physical improvements, including

common areas; demolition; or reconfiguration. These costs are not to

exceed $8,000 times the number of eligible units in the development at

the time of application.

(b) Necessary costs of management improvements, not to exceed 25%

of the total hard costs to be funded for all developments (exclusive of

costs for lead-based paint abatement and handicapped accessibility),

except that the Assistant Secretary may approve higher amounts for

management improvements when such expenditures are deemed critical to

reduction of vacancies in the PHA;

(c) Other related costs as discussed in paragraph (1)(h) (under

``Eligible Activities'') of this Section I.F;

(d) Necessary costs for lead-based paint containment or abatement

in eligible units; and

(e) Necessary costs for handicapped accessibility for eligible

units.

(3) Ineligible Activities. Activities are not eligible if the

activities are under contract; have been selected for funding from

other sources, such as Urban Revitalization Demonstration (URD) grants,

CIAP, or State or local funding; or if the PHA has sufficient funds in

its operating budget or pursuant to its formula grant under the CGP to

fund the activities.

Sufficiency of funds will be determined as follows:

(a) For hard costs, a CGP agency will be deemed to have

insufficient funds for the activities if the Assessment of Physical

Needs in the Comprehensive Plan shows a need for funds greater than the

funds expected to be available to the PHA under the CGP in the next

five years.

(b) For management improvements, a CGP agency will be deemed to

have insufficient funds if:

(i) For CGP agencies, the Management Needs Assessment in the

Comprehensive Plan shows a need for funds greater than 10% of the funds

expected to be available to the PHA under its CGP in the next five

years; and

(ii) The PHA plans to use at least 10% of its CGP funds for

management improvements in each of the next five years.

(c) In addition, for CGP and Comprehensive Improvement Assistance

Program (CIAP) agencies, operating funds will be deemed to be

insufficient only if the PHA has an operating reserve of less than 75%

of the maximum allowable reserve.

G. Resident Involvement

The PHA shall develop a process that assures that residents are

fully briefed, have an opportunity to comment on the proposed content

of the PHA's application in response to this NOFA, and to be involved

in all phases of the process. Particular attention shall be given to

opportunities for resident employment. The PHA shall give full

consideration to the comments and concerns of residents. The process

shall include:

(1) Informing residents of the applicable housing developments

about the preparation of the application, including a discussion of the

report of the assessment team and actions that will be taken to address

any deficiencies;

(2) Once a draft application has been prepared, the PHA shall make

a copy available for reading in the management office; provide copies

of the draft to any resident organization representing the residents of

any development involved; and provide adequate opportunity for comment

by the residents of the developments and their representative

organizations prior to making the application final;

(3) Providing to HUD and any resident organization representing the

development a summary of the resident comments and the PHA's response

to them; and notifying residents of the developments that the summary

and responses are available for reading in the management office; and

(4) After HUD approval of a grant, notifying residents of the

development and any representative organizations of the approval of the

grant; providing any resident organization with a copy of the HUD-

approved implementation schedule; notifying the residents that the

schedule is available in the management office for reading; and

developing a system to facilitate regular resident monitoring of the

program.

H. Resident Training, Employment, and Contracting

The Vacancy Reduction Program provides an ideal opportunity to

enhance resident training, employment, and contracting. In furtherance

of HUD goals and priorities, PHAs should, to the greatest extent

possible, provide such opportunities for residents under this program,

including development of programs under section 3 of the Housing and

Urban Development Act of 1968 (12 U.S.C. 1701u) (Section 3). Section 3

requires best efforts on the part of the PHA to give low- and very low-

income persons training and employment opportunities generated by

Vacancy Reduction Program assistance, and to award contracts for work

to be performed in connection with Vacancy Reduction Program assistance

to business concerns that provide economic opportunities for low- and

very low-income persons. A PHA shall include in its vacancy reduction

plan the projected number of residents the PHA expects to be trained or

hired, and the number of business firms that provide economic

opportunity to low- and very low-income persons to be contracted with

for vacancy reduction activities, whether directly by the PHA or

through business concerns with which the PHA has contracts for vacancy

reduction activities.

I. Required Results

(1) Except as provided below, funds provided under this NOFA must

be expended and units reoccupied within 24 months from the date of

funding, and management improvements must be implemented fully within 3

years from the date of funding. However, the Assistant Secretary for

Public and Indian Housing may approve alternative schedules proposed by

PHAs with significant management improvement needs. Funds awarded under

this program that are not obligated on a timely basis may be

recaptured.

(2) During the funding period, move-ins to developments funded

under this program must at least equal the number of move-outs plus the

number of units funded under this program (excluding units that are

vacated for modernization and later reoccupied after modernization). At

the end of the funding period, the PHA's current vacancy rate must be

reduced to the extent of the number of units funded under this program.

J. Selection and Funding Process

(1) Sufficiency of Application. In order to be considered for

funding, an application must be complete and consistent with the terms

of this NOFA, and the vacancy reduction plan must generally be

consistent with the recommendations of the assessment team. The

Department recognizes that some variance will exist since some of the

assessments already conducted concentrated on units that could be

repaired for $10,000 or less. In determining the amount of funds to be

reserved for each approvable application, HUD will review the request

for consistency with the recommendations of the assessment team and

will consider any other information HUD may have available. When an

approvable vacancy reduction plan submitted in response to this NOFA

needs improvement or supplementation, HUD will require any necessary

changes or additions to the plan, and will assist the PHA in revising

its plan, before execution of the amendment of the ACC.

(2) Management Deficiencies. If a PHA does not adequately address

management weaknesses that contribute to its vacancy problem and have

been reported by the assessment team, its application will be deemed

ineligible for funding.

(3) Funding Decisions. When a PHA is requesting funding for

eligible units in which rehabilitation costs will exceed an average of

$8,000 (see paragraph (1)(a)(ii) in the definition of ``eligible unit''

in Section I.D of this NOFA), HUD will determine whether the PHA's plan

to fund the cost above an average of $8,000 per unit is reasonable.

However, no PHA may receive greater than 15 percent of the total amount

of funding available.

(a) CIAP Agencies. HUD will fully fund all eligible units and

associated costs (as defined in Section I.F of this NOFA) for which

CIAP agencies apply.

(b) CGP Agencies. From the remaining funds HUD will fund eligible

applications from CGP agencies to the extent funding is available. Of

the total funds remaining available for CGP agencies, 75 percent will

be made available for units eligible under paragraph (1)(a)(i) in the

definition of ``eligible unit'' in Section I.D, ``Definitions,'' of

this NOFA. The other 25 percent will be made available for units

eligible under paragraph (1)(a)(ii) of that definition of ``eligible

unit''.

(i) If the amount of funds available is sufficient to fund fully

(including the costs of management improvements, lead-based paint

control, and accessibility for the disabled) all CGP agencies in either

category of funding, HUD will fund those requests fully.

(ii) If the total funding requested by CGP agencies in any category

exceeds the total amount of funds available in that category, the

amount to be reserved for each CGP agency will be determined as

follows, except that an agency will not be funded at a level exceeding

its budget request:

(A) If the amount of available funding is sufficient, each CGP

agency will be funded for its eligible costs (exclusive of management

improvements and the costs of lead-based paint control and

accessibility for the disabled). If funds remain available after

funding the requested costs under this paragraph, each CGP agency will

receive a pro rated share of the remaining funds, according to the

ratio of eligible related costs (i.e., management improvements and the

costs of lead-based paint control and accessibility for the disabled)

requested by the agency to the total of eligible related costs

requested by all CGP agencies.

(B) If the amount of available funding is not sufficient to fund

all eligible costs costs under paragraph (3)(b)(ii)(A) of this Section

I.J, the funding allocated to each CGP agency will be its pro rata

share of funds, determined by using the same ratio as the number of

eligible units in the CGP agency in that category for which funding is

requested to the total number of eligible units in that category for

which funding is requested by all applicant CGP agencies.

(iii) If funds remain available in either category and there are

unmet needs in the other category, the excess funds will be reallocated

to the category in which additional funding is needed.

(iv) If applications from CGP agencies are not fully funded, those

agencies will be required to revise their vacancy reduction plans and

budgets to indicate which items will be funded with the amounts

reserved for the CGP agency under this program and state alternative

plans for unfunded vacancies. To the extent that funds are prorated for

its units averaging more than $8,000 in costs, each CGP agency

receiving program funds under paragraph (1)(a)(ii) of that definition

of ``eligible unit'' in Section I.D, ``Definitions,'' will be required

to commit a portion of the funds the agency had agreed to commit from

independent resources if those units had been funded in the full amount

requested. This portion will be determined by applying (to the total

commitment made in the application) the ratio of funding received for

those units to funding requested for those units.

(c) Remaining funds. If funds remain available after funding all

eligible activities under paragraphs (a) and (b) of Section I.J(3),

``Funding Decisions,'' of this NOFA, a PHA may be reimbursed for costs,

or a portion of costs, associated with rehabilitating certain occupied

units. The PHA must have fewer vacancies on the date of its application

than it had on September 1, 1993, and must have expended funds on those

units in reasonable anticipation of reimbursement from Vacancy

Reduction Program funds.

K. Implementation of Plan and Other Programs

(a) An applicant's vacancy reduction plan must be approved before

an application is funded under this NOFA even though, in most cases,

the plan will cover the physical treatment of many units that are not

eligible under this NOFA. The PHA is expected to implement the plan

using available funds, including the operating budget and CGP funds,

and by requesting funds under discretionary programs, including CIAP

and the Severely Distressed Public Housing Program. HUD will monitor

implementation of the vacancy reduction plan.

(b) Eligible units that a PHA originally planned to fund with CGP

funds may also be funded under this NOFA, as long as they are not

currently under contract. The PHA may then reprogram its CGP funds to

other work set forth in the Five-Year Action Plan.

II. Application Process

A. Submission of Application

An application must be submitted before 4 p.m. (Eastern Standard

Time), July 28, 1994.

An original completed application must be submitted, as follows:

(1) One to: Attention: Director, Office of Assisted Housing, Department

of Housing and Urban Development, 451 Seventh St., SW., room 4204,

Washington, DC 20410,; (2) one copy to the appropriate HUD Field

Office; and (3) one copy to each member of the assessment team. The

above-stated deadline is firm as to date and hour. Applications may be

hand-delivered or mailed, but applications sent by facsimile will not

be accepted.

B. Scheduling of Assessments

Any PHA that considers itself eligible and wishes to apply for

funding under this NOFA, but that is not yet scheduled for a vacancy

assessment under Sec. 968.410, must notify the Department by June 28,

1994, so that an assessment can be performed.

C. Availability of Funding

CIAP agencies that apply early may receive funding prior to the

application deadline. Funding will be provided as soon as the

application is approved.

III. Checklist of Application Submission Requirements

The following documents comprise the application:

A. Vacancy Reduction Plan

As defined in Section I.D of this NOFA.

B. Request for Funding

Under this NOFA, including:

(1) Form HUD-52825, CIAP Budget/Progress Report, Part I--Summary,

including work to be performed with funds other than VRP funds for

units eligible under paragraph (1)(a)(ii) of the definition of

``eligible unit'' in Section I.E of this NOFA, indicating the source of

funds. Do not include non-VRP funds in the totals.

(2) Form HUD-52825, CIAP Budget/Progress Report, Part II--

Supporting Pages, include work to be performed with funds other than

VRP funds for units eligible under paragraph (1)(a)(ii) of the

definition of ``eligible unit'' in Section I.D of this NOFA, indicating

the source of funds. Do not include non-VRP funds in the totals. Note

that Form HUD-52825, CIAP Budget/Progress Report, Part III--

Implementation Schedule is not required;

(3) For both categories of funding (i.e., units averaging costs of

$8,000 or less by development, and units averaging costs of more than

$8,000 by development), a statement of the number of eligible units in

each development and the average per-unit cost in the development,

including the costs for rehabilitation of the units and for any

development-wide improvements, but excluding costs for lead-based

paint, Section 504 compliance, and management improvements.

(4) Troubled and mod-troubled PHAs must demonstrate eligibility for

the program by submission of documentation required under Section

I.E(2)(b) of this NOFA.

(5) An administrative plan for carrying out the work.

(6) When funding is requested under Section I.J(3)(c), ``Remaining

Funds,'' of this NOFA, statements of the number of vacancies on

September 1, 1993, and the total number of vacancies in the PHA at the

time of the application under this NOFA.

C. Other Submissions

(1) OMB Standard Form SF-424, Application for Federal Assistance,

including SF-424B, Assurances--Non-Construction Programs. On the SF-

424, PHAs need to complete only items 2, 5, 12, 13, 14, 15, 17, and 18.

(2) A resolution of the governing board of the PHA, including the

following:

(a) A certification that the units for which funding is requested

in this application will be readily marketable when they are made ready

for occupancy;

(b) Certification of eligibility of the PHA and the proposed

activities under sections I.F(1) and (2) of this NOFA;

(c) A certification that the PHA has insufficient funds (as defined

in Section I.F(3) of this NOFA) in its operating budget or pursuant to

its formula grant under the Comprehensive Grant Program to fund the

activities for which funding is sought under this NOFA, and that the

activities have not been selected for funding from other sources, such

as Urban Revitalization Demonstration (URD) grants, CIAP, or State or

local funding.

(3) Form HUD-50070, Certification for Drug-Free Workplace.

(4) Form HUD-50071, Certification for Contracts, Grants, Loans and

Cooperative Agreements, required of PHAs established under State law

that are applying for grants exceeding $100,000.

(5) SF-LLL, Disclosure of Lobbying Activities, required of HAs

established under State law only when any funds, other than federally

appropriated funds, will be or have been used to influence Federal

workers or Members of Congress or their staffs regarding specific

grants or contracts.

(6) Form HUD-2880, Applicant/Recipient Disclosure/Update Report.

(7) For any unit reconfiguration for which funds are requested

under Section I.F(1)(e) of this NOFA, data supporting the eligibility

of the conversions.

(8) Certification of the PHA's intent to comply with the Fair

Housing Act, Title VI of the Civil Rights Act of 1964, Executive Order

11063, the Age Discrimination Act of 1975, Section 504 of the

Rehabilitation Act of 1973, the Americans with Disabilities Act of

1990, and any implementing regulations.

(9) Certification that the PHA will make best efforts to give low-

and very low-income persons training and employment opportunities

generated by assistance awarded under this NOFA, and to award contracts

for work to be performed in connection with assistance provided under

this NOFA to business concerns that provide economic opportunities for

low- and very low-income persons, as required by section 3 of the

Housing and Urban Development Act of 1968 (12 U.S.C. 1701u).

IV. Corrections to Deficient Applications

Immediately after the submission of an application, HUD will screen

the application to determine whether all items were submitted. If the

PHA fails to submit any of the items listed in Section III.C of this

NOFA, or the application contains a technical mistake such as an

incorrect signatory, HUD will immediately notify the PHA that it has 14

calendar days from the date of HUD's written notification to submit or

correct the specified items. If any items are missing and the PHA does

not submit them within the 14-day cure period, the application will be

ineligible for further processing.

V. Subsequent Revisions of Vacancy Reduction Plan

The intent of the Department is to assist each high vacancy PHA to

develop a plan that will assure success in reducing the PHA's vacancy

rate and improving management capacity to assure continued progress in

reaching high occupancy levels. If a plan submitted in response to this

NOFA is approved under the NOFA, but needs improvement or

supplementation, HUD will so advise the PHA. The Department will

specify areas in which improvement or supplementation is needed and

require that revisions be made prior to execution of the amendment of

the ACC. HUD staff will be available to assist the PHA in revising its

plan.

VI. Other Matters

A. Environmental Review

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 of no significant impact is available for

public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the

Office of the Rules Docket Clerk, Office of the General Counsel, room

10276, Department of Housing and Urban Development, 451 Seventh Street,

SW., Washington, DC 20410-0500.

B. Federalism Executive Order

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

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

contained in this notice 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. As a result,

the notice is not subject to review under the Order. The NOFA merely

sets forth funding availability for eligible PHAs that require the

assistance to undertake vacancy reduction activities.

C. Family Executive Order

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this notice has potential

for a significant impact on family formation, maintenance, and general

well-being. The purpose of the notice is to provide funding to improve

housing opportunities by reducing the number of vacant units in the

inventories of PHAs, which could benefit some families significantly.

However, because the impact on families would be indirect and would be

beneficial, no further review is considered necessary.

D. Section 102 of the HUD Reform Act: Documentation and Public Access

Requirements; Applicant/Recipient Disclosures

Disclosures. HUD will make available to the public for five years

all applicant disclosure reports (HUD Form 2880) submitted in

connection with this NOFA. Update reports (also Form 2880) will be made

available along with the applicant disclosure reports, but in no case

for a period of less than three years. All reports--both applicant

disclosures and updates--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 15. (See 24 CFR part 12, subpart C, and the

notice published in the Federal Register on January 16, 1992 (57 FR

1942), for further information on these disclosure requirements.)

Public notice. HUD will include recipients that receive assistance

pursuant to this NOFA in its quarterly Federal Register notice of

recipients of all HUD assistance awarded on a competitive basis. (See

24 CFR 12.16(b), and the notice published in the Federal Register on

January 16, 1992 (57 FR 1942), for further information on these

requirements.)

E. Section 103 of the HUD Reform Act

HUD's regulation implementing section 103 of the Department of

Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3537a) was

published on May 13, 1991 (56 FR 22088) and became effective on June

12, 1991. That regulation, codified as 24 CFR part 4, applies to the

funding competition announced today. The requirements of the rule

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 restrained by part 4 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 who have questions should contact the HUD Office of

Ethics (202) 708-3815 (voice/TDD) (this is not a toll-free number). The

Office of Ethics can provide information of a general nature to HUD

employees, as well. However, a HUD employee who has specific program

questions, such as whether particular subject matter can be discussed

with persons outside the Department, should contact his or her Field

Office Counsel or Headquarters counsel for the program to which the

question pertains.

F. Section 112 of the Reform Act

Section 13 of the Department of Housing and Urban Development Act

(42 U.S.C. 3537b), added by section 112 of the Reform Act, contains two

provisions dealing with efforts to influence HUD's decisions with

respect to financial assistance. The first imposes disclosure

requirements on those who are typically involved in these efforts--

those who pay others to influence the award of assistance or the taking

of a management action by the Department and those who are paid to

provide the influence. The second restricts the payment of fees to

those who are paid to influence the award of HUD assistance, if the

fees are tied to the number of housing units received or are based on

the amount of assistance received, or if they are contingent upon the

receipt of assistance.

Section 13 was implemented by 24 CFR part 86. If readers are

involved in any efforts to influence the Department in these ways, they

are urged to read part 86, particularly the examples contained in

Appendix A of that part.

Any questions about part 86 should be directed to the Office of

Ethics, room 2158, Department of Housing and Urban Development, 451

Seventh Street, SW., Washington, DC 20410-3000. Telephone: (202) 708-

3815 (voice/TDD). (This is not a toll-free number.) Forms necessary for

compliance with the rule may be obtained from the local HUD office.

G. Prohibition Against Lobbying Activities

The use of funds awarded under this NOFA is subject to the

disclosure requirements and prohibitions of section 319 of the

Department of Interior and Related Agencies Appropriations Act for

Fiscal Year 1990 (31 U.S.C. 1352) (the ``Byrd Amendment'') and the

implementing regulations at 24 CFR part 87. These authorities prohibit

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. The prohibition also covers the awarding of contracts,

grants, cooperative agreements, or loans unless the recipient has made

an acceptable certification regarding lobbying. Under 24 CFR part 87,

applicants, recipients, and subrecipients of assistance exceeding

$100,000 must certify that no federal funds have been or will be spent

on lobbying activities in connection with the assistance.

Authority: 42 U.S.C. 14371 and 3535(d).

Dated: June 6, 1994.

Joseph Shuldiner,

Assistant Secretary for Public and Indian Housing.

Appendix--Requirements for ``Vacancy Reduction Plan'' in 24 CFR

968.407

Section 968.407--Vacancy Reduction Plan

(a) Submission of plan. Each PHA to which this subpart applies, in

accordance with Sec. 968.403, shall submit a vacancy reduction plan.

The plan shall contain the elements identified in paragraph (b) of this

section, and shall be organized so that each of the elements can be

identified, reviewed, and funded separately.

(b) Contents of plan. The format of a plan submitted for funding

under this program will be defined in NOFAs to be published

periodically in the Federal Register. Each vacancy reduction plan

submitted by a PHA under paragraph (a) of this section shall include

statements:

(1) Identifying all vacant dwelling units administered by the PHA,

including unmarketable units, and explaining the reasons for the

vacancies. Units may be grouped together when explaining the reasons

for the vacancies;

(2) A description of the turnover rate of units for the past two

years, including the number of units vacated and reoccupied per

development per year and the average number of days required to return

a unit to occupancy. If the turnover rate is increasing, the plan

should identify each cause of the increase.

(3) Describing the actions to be taken by the PHA during the

following five years to eliminate the vacancies. The PHA shall:

(i) State project-specific actions that it is taking or intends to

take that will eliminate vacancies, such as modernization, demolition,

unit redesign or conversion, density reduction, disposition,

modification of occupancy policies, site and security improvements, and

other physical or management improvements; and

(ii) For each project identified, set out a schedule for completing

the actions identified in paragraph (b)(3)(i) of this section and

removing the dwelling units from the PHA's inventory of vacant units.

If the timing of any action is dependent upon a HUD approval or

decisionmaking process, the schedule for the PHA action may be

presented in terms of a specified time period following completion of

the HUD process. For each action, the schedule shall include the number

of vacancies that will be eliminated by the end of each 12-month period

after the PHA begins to receive assistance under this subpart.

(iii) For units vacated during the last two years, when the PHA has

been unable to return these units to occupancy within 30 days from the

date the units become vacant, the plan shall describe actions planned

to achieve at least a 30-day turnover rate.

(4) Identifying any impediments that will prevent elimination of

the vacancies within the five-year period;

(5) Identifying any vacant units funded for modernization, major

reconstruction, demolition, or disposition activities;

(6) Identifying any vacant dwelling units that are eligible for

modernization, major reconstruction, demolition, or disposition, but

have not been funded or approved for these activities and are not

likely to be funded or approved for at least three years. The statement

shall include an estimate of the amount of assistance necessary to

complete the modernization, major reconstruction, demolition, or

disposition of these units;

(7) Identifying any vacant units not identified under paragraphs

(b)(5) and (b)(6) of this section. The statement shall include a

description of any appropriate activities relating to elimination of

the vacancies in these units and an estimate of the amount of

assistance necessary to carry out the activities identified under this

paragraph;

(8) Setting forth an agenda for implementation of management

improvements during the first fiscal year beginning after submission of

the plan. If the timing of any improvement is dependent upon a HUD

approval or decisionmaking process, the schedule for the improvement

may be presented in terms of a specified time period following

completion of the HUD process. The agenda should include any management

improvements recommended by the assessment team pursuant to

Sec. 968.410 and an estimate of the amount of assistance necessary to

implement the management improvements; and

(9) Of any other information that the Secretary shall deem

appropriate, as provided in the applicable NOFA. Such information may

include budget documents, in the case of any PHA that is applying for

funds under a NOFA.

(c) Housing standards. To the extent that a plan involves

modernization, reconstruction, or rehabilitation activities that have

not been funded or approved previously and are not planned to be

undertaken using Comprehensive Grant Program funds, the plan must

reflect cost estimates that, at a minimum, are based on:

(1) For individual work items funded under the program, compliance

with modernization standards, as set forth in HUD Handbook 7485.2, as

revised; and

(2) For each vacant unit on which funds are expended, compliance of

the unit with the Housing Quality Standards, as set forth in 24 CFR

882.109 and as amended by the regulations concerning lead-based paint

in public housing in 24 CFR part 35.

[FR Doc. 94-14282 Filed 6-10-94; 8:45 am]

BILLING CODE 4210-33-P