Transitional Housing Loan Program

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AG82

Transitional Housing Loan Program

AGENCY: Veterans Health Administration.

ACTION: Final rule.

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SUMMARY: This document establishes application provisions and selection

criteria for loans to non-profit organizations for use in initial

startup costs for transitional housing for veterans who are in (or have

recently been in) a program for the treatment of substance abuse. This

new program is intended to increase the amount of transitional housing

available for such veterans who need a period of supportive housing to

encourage sobriety maintenance and reestablishment of social and

community relationships.

EFFECTIVE DATE: September 29, 1994.

FOR FURTHER INFORMATION CONTACT:

Christine Woods, Administrative Officer, Office of Deputy Associate

Director for Psychiatric Rehabilitation Services, at (804) 722-9961

x3628. (This is not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

In a document published in the Federal Register on August 1, 1994,

(59 F.R. 38947) the VA proposed to establish Transitional Housing Loan

Program regulations. Comments were solicited for a period of 30 days.

No comments were received. The rationale presented in the proposed rule

still provides the basis for this final rule. Therefore, based on the

rationale set forth in the proposed rule, the VA hereby adopts the

provisions of the proposed rule as a final rule without change.

E.O. 12866

This action is exempt from OMB review under E.O. 12866.

Regulatory Flexibility Act

The Secretary hereby certifies that the provisions of this final

rule would not have a significant economic impact on a substantial

number of small entities as they are defined in the Regulatory

Flexibility Act (RFA), 5 U.S.C. 601-612. The reason for this

certification is that in all likelihood, only similar entities that are

small entities would seek loans under this program. Therefore, pursuant

to 5 U.S.C. 605(b), this rule is exempt from the initial and final

regulatory flexibility analysis requirements of sections 603 and 604.

Administrative Procedure Act

Pursuant to 5 U.S.C. 553, the VA has found good cause for making

this final rule effective upon publication in light of the critical

need to provide transitional housing to veterans.

List of Subjects

Administrative practice and procedure, Alcohol abuse, Alcoholism,

Claims, Daycare, Dental health, Drug abuse, Foreign relations,

Government contracts, Grant programs--health, Grant programs--veteran,

Healthcare, Health facilities, Health professionals, Health records,

Loans, Medical and dental schools, Medical devices, Medical research,

Medical health programs, Nursing homes, Philippines, Reporting and

recordkeeping requirements, Scholarships and fellowships, Travel and

transportation expenses, Veterans, Veterans Affairs Department.

Approved: September 23, 1994.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR part 17 is amended

as set out below:

PART 17--MEDICAL

1. The authority citation for Part 17 is revised to read as

follows:

Authority: 38 U.S.C. 501, 38 U.S.C. 7721, unless otherwise

noted.

2. Part 17 is amended by adding Secs. 17.800 through 17.805 and an

undesignated center heading preceding section 17.800 to read as

follows:

Transitional Housing Loan Program

Sec. 17.800 Purpose.

The purpose of the Transitional Housing Loan Program regulations is

to establish application provisions and selection criteria for loans to

non-profit organizations for use in initial startup costs for

transitional housing for veterans who are in (or have recently been in)

a program for the treatment of substance abuse. This program is

intended to increase the amount of transitional housing available for

such veterans who need a period of supportive housing to encourage

sobriety maintenance and reestablishment of social and community

relationships.

Sec. 17.801 Definitions.

(a) Applicant: A non-profit organization making application for a

loan under this program.

(b) Non-profit organization: A secular or religious organization,

no part of the net earnings of which may inure to the benefit of any

member, founder, contributor, or individual. The organization must

include a voluntary board and must either maintain or designate an

entity to maintain an accounting system which is operated in accordance

with generally accepted accounting principles. If not named in, or

approved under Title 38 U.S.C. (United States Code), Section 5902, a

non-profit organization must provide VA with documentation which

demonstrates approval as a non-profit organization under Internal

Revenue Code, Section 501.c(3).

(c) Recipient: A non-profit organization which has received a loan

from VA under this program.

(d) Veteran: A person who served in the active military, naval, or

air service, and who was discharged or released therefrom under

conditions other than dishonorable.

(Authority: Sec. 8 of Pub. L. 102-54, 105 Stat 271, 38 U.S.C. 501)

Sec. 17.802 Application provisions.

(a) To obtain a loan under these Transitional Housing Loan Program

regulations, an application must be submitted by the applicant in the

form prescribed by VA in the application package. The completed

application package must be submitted to the Deputy Associate Director

for Psychiatric Rehabilitation Services, (302/111C), VA Medical Center,

100 Emancipation Drive, Hampton, VA 23667. An application package may

be obtained by writing to the proceeding address or telephoning (804)

722-9961 x3628. (This is not a toll-free number)

(b) The application package includes exhibits to be prepared and

submitted, including:

(1) Information concerning the applicant's income, assets,

liabilities and credit history,

(2) Information for VA to verify the applicant's financial

information,

(3) Identification of the official(s) authorized to make financial

transactions on behalf of the applicant,

(4) Information concerning:

(i) The history, purpose and composition of the applicant,

(ii) The applicant's involvement with recovering substance abusers,

including:

(A) Type of services provided,

(B) Number of persons served,

(C) Dates during which each type of service was provided,

(D) Names of at least two references of government or community

groups whom the organization has worked with in assisting substance

abusers,

(iii) The applicant's plan for the provision of transitional

housing to veterans including:

(A) Means of identifying and screening potential residents,

(B) Number of occupants intended to live in the residence for which

the loan assistance is requested,

(C) Residence operating policies addressing structure for

democratic self-government, expulsion policies for nonpayment, alcohol

or illegal drug use or disruptive behavior,

(D) Type of technical assistance available to residents in the

event of house management problems,

(E) Anticipated cost of maintaining the residence, including rent

and utilities,

(F) Anticipated charge, per veteran, for residing in the residence,

(G) Anticipated means of collecting rent and utilities payments

from residents,

(H) A description of the housing unit for which the loan is sought

to support, including location, type of neighborhood, brief floor plan

description, etc., and why this residence was selected for this

endeavor.

(iv) The applicant's plans for use of the loan proceeds.

(Authority: Sec. 8 of Pub. L. 102-54, 105 Stat. 271, 38 U.S.C. 501)

Sec. 17.803 Order of consideration.

Loan applications will be considered on a first-come-first-serve

basis, subject to availability of funds for loans and awards will be

made on a first-come-first-serve basis to applicants who meet the

criteria for receiving a loan. If no funds are available for loans,

applications will be retained in the order of receipt for consideration

as funds become available.

(Authority: Sec. 8 of Pub. L. 102-54, 105 Stat. 271, 38 U.S.C. 501)

Sec. 17.804 Loan approval criteria.

Upon consideration of the application package, loan approval will

be based on the following:

(a) Favorable financial history and status,

(1) A minimum of a two-year credit history,

(2) No open liens, judgments, and no unpaid collection accounts,

(3) No more than two instances where payments were ever delinquent

beyond 60 days,

(4) Net ratio: (monthly expenses divided by monthly cash flow) that

does not exceed 40%,

(5) Gross ratio: (total indebtedness divided by gross annual cash

flow) that does not exceed 35%,

(6) At least two favorable credit references,

(b) Demonstrated ability to successfully address the needs of

substance abusers as determined by a minimum of one year of successful

experience in providing services, such as, provision of housing,

vocational training, structured job seeking assistance, organized

relapse prevention services, or similar activity. Such experience would

involve at least twenty-five substance abusers, and would be experience

which could be verified by VA inquiries of government or community

groups with whom the applicant has worked in providing these services.

(c) An acceptable plan for operating a residence designed to meet

the conditions of a loan under this program, which will include:

(1) Measures to ensure that residents are eligible for residency,

i.e., are veterans, are in (or have recently been in) a program for the

treatment of substance abuse, are financially able to pay their share

of costs of maintaining the residence, and agree to abide by house

rules and rent/utilities payment provisions,

(2) Adequate rent/utilities collections to cover cost of

maintaining the residence,

(3) Policies that ensure democratic self-run government, including

expulsion policies, and

(4) Available technical assistance to residents in the event of

house management problems.

(d) Selection of a suitable housing unit for use as a transitional

residence in a neighborhood with no known illegal drug activity, and

with adequate living space for number of veterans planned for residence

(at least one large bedroom for every three veterans, at least one

bathroom for every four veterans, adequate common space for entire

household)

(e) Agreements, signed by an official authorized to bind the

recipient, which include:

(1) The loan payment schedule in accordance with the requirements

of Pub. L. 102-54, with the interest rate being the same as the rate

the VA is charged to borrow these funds from the U.S. Department of

Treasury and with a penalty of 4% of the amount due for each failure to

pay an installment by the date specified in the loan agreement

involved, and

(2) The applicant's intent to use proceeds of loan only to cover

initial startup costs associated with the residence, such as security

deposit, furnishings, household supplies, and any other initial startup

costs.

(Authority: Sec. 8 of Pub. L. 102-54, 105 Stat. 271, 38 U.S.C. 501)

Sec. 17.805 Additional terms of loans.

In the operation of each residence established with the assistance

of the loan, the recipient must agree to the following:

(a) The use of alcohol or any illegal drugs in the residence will

be prohibited;

(b) Any resident who violates the prohibition of alcohol or any

illegal drugs will be expelled from the residence;

(c) The cost of maintaining the residence, including fees for rent

and utilities, will be paid by residents;

(d) The residents will, through a majority vote of the residents,

otherwise establish policies governing the conditions of the residence,

including the manner in which applications for residence are approved;

(e) The residence will be operated solely as a residence for not

less than six veterans.

(Authority: Sec. 8 of Pub. L. 102-54, 105 Stat. 271, 38 U.S.C. 501)

[FR Doc. 94-24066 Filed 9-28-94; 8:45 am]

BILLING CODE 8320-01-M