Office of the Assistant Secretary for Community Planning and Development; Section 8 Moderate Rehabilitation Single Room Occupancy Program for Homeless Individuals; Final Rule

SUMMARY: This rule represents the final rulemaking for three interim

rules implementing the Section 8 Moderate Rehabilitation Single Room

Occupancy Program for Homeless Individuals. The interim rules clarified

program definitions and requirements, conformed the regulations with

statutory and other changes, and simplified the application selection

and tenant outreach processes by conforming them with the processes

used in other HUD-administered competitive McKinney Act programs. This

final rule adopts the interim rules as final and includes a discussion

of the public comments received on the interim rules. This final rule

also further streamlines the regulations by eliminating provisions that

are redundant of statutes or are otherwise unnecessary, in accordance

with the President's regulatory reform initiatives.

EFFECTIVE DATE: October 11, 1996.

FOR FURTHER INFORMATION CONTACT: Maggie H. Taylor, Director, Office of

Special Needs Assistance Programs, Department of Housing and Urban

Development, 451 Seventh Street, SW., Washington, DC 20410; (202) 708-

4300 (this number is not toll-free). Hearing- or speech-impaired

persons may access this number via TTY by calling the Federal

Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

The purpose of the Section 8 Moderate Rehabilitation Single Room

Occupancy (SRO) Program for Homeless Individuals is to provide rental

assistance to homeless individuals in rehabilitated SRO housing. Under

this program HUD awards assistance through a national competition that

focuses on filling gaps identified in locally-developed continuum of

care systems for assisting persons who are homeless. The program is

authorized by title IV of the Stewart B. McKinney Homeless Assistance

Act (42 U.S.C. 11301 et seq.) (the McKinney Act). HUD published its

first final rule for the program in the Federal Register on November 7,

1989 (54 FR 46832).

Since that time, HUD has amended these regulations through three

interim rules. Regulations that HUD publishes in interim rules become

effective like final rules--30 days after publication in the Federal

Register. Unlike final rules, however, interim rules invite the public

to comment on their provisions.

The purpose of today's final rule is to adopt as final the

provisions of the SRO regulations that were the product of the three

interim rules. The preamble of this final rule summarizes the public

comments HUD received on each of the three interim rules and provides

HUD's responses to the comments as appropriate. This final rule also

improves the SRO regulations by clarifying and further streamlining the

provisions, as described below.

II. March 15, 1993 Interim Rule

HUD published an interim rule amending the SRO regulations on March

15, 1993 (58 FR 13828). The March 15, 1993 interim rule adopted a

standardized funding award process for competitively awarded assistance

under the McKinney Act. This process consisted of two stages under

which HUD would, after conditionally selecting applicants, require

those applicants to submit additional technical information, such as

project rent calculations (see Sec. 882.805 (c) and (d) of the interim

rule).

The March 15, 1993 interim rule also conformed the SRO program with

other McKinney Act programs by removing the provisions requiring that

units be leased to homeless individuals referred from a housing

authority (HA) waiting list. Instead, the interim rule provided

flexibility to HAs and owners by allowing them to engage in outreach

efforts to bring homeless individuals into the program, and it provided

that vacant units be rented directly to homeless individuals located

through these outreach efforts (see Sec. 882.808).

Additionally, the March 15, 1993 interim rule amended the SRO

regulations to reflect a statutory amendment permitting an HA to

contract with itself to receive SRO assistance for a project that it

owns. The rule provided that HA-owners are subject to the same

requirements that apply to other owners in the program, and that HUD

must approve the base and contract rent calculations for these projects

prior to execution of the agreement to enter into a housing assistance

payments (HAP) contract and prior to the execution of the HAP contract

(see Sec. 882.803(e)).

The March 15, 1993 interim rule also amended Secs. 882.802 and

882.805(f)(6) to reflect section 127 of the Department of Housing and

Urban Development Reform Act of 1989 (Pub. L. 101-235; approved

December 15, 1989), which raised the minimum amount of rehabilitation

necessary to qualify a unit for assistance under the program to $3,000

per unit, and which limited the size of projects to no more than 100

assisted units.

Lastly, the interim rule clarified the definition of ``Single Room

Occupancy (SRO) housing'' in Sec. 882.802, the requirements for using

SRO assistance in conjunction with the rehabilitation of efficiency

units in the program, and HUD's right to require recipients of

assistance to maintain any records and make any reports that HUD

requires (see Sec. 882.808(p)).

Summary of Public Comments

The deadline for submitting public comments on the March 15, 1993

interim rule was May 14, 1993. By that date, HUD received comments from

three organizations. After considering these comments, which are

described below, HUD decided not to make any changes based on these

comments in this final rule.

Two-Stage Application Process

All three commenters supported the new two-stage application

process (see Sec. 882.805(c) and (d) of the interim rule). As HUD

stated in the preamble to the interim rule, under the new process,

applicants submitting proposals that were not conditionally selected

for funding would not have to incur the costs of addressing technical

issues, such as securing financial commitments from other sources, only

to have HUD reject their applications.

HUD Response: The two-stage application process has been in effect

for three years, and HUD believes the process has been successful in

reducing the burden on applicants and in providing conditionally

selected applicants with the opportunity to receive ongoing HUD

assistance in meeting the technical submission requirements.

Conformance with Other McKinney Act Programs

The commenters supported the provisions of the March 15, 1993

interim rule that conformed the SRO program with the other McKinney Act

[[Page 48053]]

programs. The commenters especially supported the interim rule's

requirement that HAs or owners engage in outreach efforts to bring

homeless individuals into the program, rather than using HA waiting

lists (see Sec. 882.808). One commenter noted that the new outreach

process would be a more efficient process for locating homeless

individuals.

HUD Response: As indicated in the preamble to the interim rule,

private nonprofit organizations, HAs, and project owners had expressed

to HUD that the HA waiting list was an impractical method of locating

homeless individuals for participation in the program, given the

transient nature of many of these individuals. HUD is pleased that

commenters supported the increased flexibility that the rule provided

to them.

Records and Reports

The commenters supported the interim rule's requirement in

Sec. 882.808(p) that each recipient of assistance under this program

maintain any records and make any reports that HUD may require.

HUD Response: HUD has used this authority to implement annual

progress reporting requirements in the SRO program similar to those

used in other HUD-administered McKinney Act programs. The goal of these

reports is to provide recipients the opportunity to demonstrate the

progress they are making in areas such as increasing the skills and

income of program participants.

Private Nonprofit Organizations as Direct Applicants

The preamble to the March 15, 1993 interim rule noted that section

1405 of the Housing and Community Development Act of 1992 (42 U.S.C.

11399) amended the SRO program, providing in part that private

nonprofit organizations could apply directly for SRO assistance.

Although the interim rule did not change the regulations to reflect

this amendment, one commenter questioned whether HUD would scrutinize

these nonprofit organizations as thoroughly as it scrutinizes housing

authorities. This commenter also expressed concern that HUD was leading

these organizations to believe they could apply for public housing

administration or Section 8 program administration funds.

HUD Response: HUD has used the ability of the applicant to develop

and operate a project as a rating criterion for applications. Under

this criterion, HUD subjects HAs and private nonprofit applicants to

the same scrutiny. Additionally, the statutory provision allowing

private nonprofit organizations to apply for assistance, and HUD's

subsequent implementation of this provision (see the discussion of the

February 14, 1996 interim rule, below), clearly only apply to the SRO

program.

Definition of ``Single Room Occupancy (SRO) Housing''

All of the commenters supported the March 15, 1993 interim rule's

revision of the definition of ``Single room occupancy (SRO) housing''

in Sec. 882.802 to include units with or without food preparation or

sanitary facilities. One commenter suggested that HUD expand the

program to include units that could accommodate more than one person,

since families are now a large proportion of the homeless population.

HUD Response: According to section 441 of the McKinney Act, HUD may

only provide assistance for SRO units occupied by single homeless

individuals. The legislative history of section 441 of the McKinney

Act, which HUD recounts in the first final rule for the SRO program

published in the Federal Register on November 7, 1989 (54 FR 46828),

clearly indicates that Congress intended that assistance under this

program only be used for single homeless individuals, and not

multiperson families.

While there is no statutory authority to provide assistance to

homeless families under the SRO program, these families can receive

assistance under other McKinney Act programs, including the Supportive

Housing program (24 CFR part 583) and the Shelter Plus Care program (24

CFR part 582).

Efficiency Units

The March 15, 1993 interim rule amended Sec. 882.805(g)(4) to

clarify that SRO program assistance may be used for efficiency units,

but the gross rent for these units will be no higher than for SRO

units. One commenter recommended that HUD amend the paragraph even

further to provide that contract rents should include service-related

hard costs, such as those related to the creation of office and meeting

space. The commenter also suggested HUD include in this paragraph a

list of reasonable service-related hard costs that could be included in

contract rents.

HUD Response: HUD has described in detail the provisions on

eligible and ineligible costs in the technical assistance book on the

SRO program that HUD issues each year. HUD believes that repeating

these detailed provisions in the regulations would unnecessarily

complicate the regulations, and that such repetition would be

inconsistent with the President's regulatory reform initiatives

(described below in this preamble, under the heading ``Regulatory

Reform'').

On a substantive level, the technical assistance book indicates

that rehabilitation of space that will be used to provide supportive

services to program participants is an eligible program cost. The costs

of providing the supportive services, however, is not an eligible cost.

III. May 10, 1994 Interim Rule

HUD published an interim rule on May 10, 1994 (59 FR 24252) that

amended the SRO program application and funding award provisions by

removing some of the descriptive information and providing that this

information will appear in the annual notices of funding availability

(NOFAs). The interim rule also amended the regulations to clarify when

Comprehensive Housing Affordability Strategy (CHAS) certifications must

be made. The deadline for public comments on the May 10, 1994 interim

rule was July 11, 1994. HUD has not received any comments on the rule.

Today's rule will adopt as final these amendments to the SRO program

regulations, as well as similar amendments to the Shelter Plus Care

program in Sec. 582.200 that also were included in the May 10, 1994

interim rule. (The May 10, 1994 interim rule also amended the

Supportive Housing program in Sec. 583.200; this portion of the interim

was adopted as final in a rule published on July 19, 1994 (59 FR

36886)). However, while this rule adopts these amendments as final, it

also streamlines the regulations as part of the President's regulatory

reform initiatives. This streamlining is described below, in the

``Regulatory Reform'' section of this preamble.

IV. February 14, 1996 Interim Rule

HUD published a third interim rule amending the SRO regulations on

February 14, 1996 (61 FR 5850). The February 14, 1996 interim rule

eliminated most of the remaining provisions on the required use of HA

waiting lists, in conformance with the March 15, 1993 interim rule,

described above. The February 14, 1996 interim rule also clarified the

role of HAs in helping to identify homeless individuals during the

outreach process (Sec. 882.808(a)(1)).

The February 14, 1996 interim rule also conformed the regulations

with section 1405 of the Housing and Community Development Act of 1992,

[[Page 48054]]

which amended the Stewart B. McKinney Homeless Assistance Act. This

statutory amendment included a requirement for the participation of

homeless individuals in considering and making policies and decisions

regarding rehabilitation of structures receiving assistance under the

SRO program, and for the involvement of homeless individuals in the

rehabilitation and operation of these structures. The interim rule

included this requirement in Sec. 882.808(q).

The statutory amendment also provided that private nonprofit

organizations can apply directly for SRO assistance. Prior to this

amendment, HAs were the only eligible applicants under the program. To

implement this change, the interim rule added definitions of

``Applicant'' and ``Private nonprofit organization'' in Sec. 882.802.

The February 14, 1996 interim rule also conformed the program

regulations with the environmental review procedures in 24 CFR part 58.

The Multifamily Housing Property Disposition Reform Act of 1994 (Pub.

L. 103-233; approved April 11, 1994) made these procedures applicable

to the SRO program, and HUD published implementing regulations in the

Federal Register on March 13, 1995 (60 FR 13518). Under part 58, HAs

(including HAs that administer programs for nonprofit applicants) must

obtain an agreement with the responsible entity designated under part

58 for the performance of environmental reviews.

Additionally, the interim rule revised the provision on project

eligibility in Sec. 882.803(a)(2) to provide that housing is ineligible

for assistance under this program if it is receiving Federal funding

for rental assistance or operating costs under other HUD programs.

Under this revised standard, there is no restriction on the use of

other Federal funding for acquisition and rehabilitation costs. HUD has

successfully used this clearer, less restrictive standard in its

Shelter Plus Care program.

The February 14, 1996 interim rule also eliminated an obsolete date

reference in the provision for determining the maximum amount of

rehabilitation allowable in the program (Sec. 882.805(g)(1)(ii)(A) of

the interim rule) so that more recent data can be used.

Finally, the interim rule corrected an error in a final rule on

relocation and displacement requirements published in the Federal

Register on June 6, 1994 (59 FR 29326). The June 6, 1994 rule, which

conformed HUD's regulations with the requirements of the Uniform

Relocation Assistance and Real Property Acquisition Policies Act of

1970, and its implementing regulations in 49 CFR part 24, added

Sec. 882.810 and intended to remove much of Sec. 882.803(d). However,

the most recent codification of part 882 (April 1, 1995) included all

of Sec. 882.803(d). Therefore, in order to correct the error, the

February 14, 1996 interim rule removed much of Sec. 882.803(d).

Summary of Public Comments

The deadline for submitting public comments on the February 14,

1996 interim rule was April 15, 1996. By that date, HUD received

comments from two organizations. After considering these comments,

which are described below, HUD has decided not to make any changes to

the interim rule.

Start-Up Costs

A commenter that administers this program for units owned by a

nonprofit organization remarked that start-up costs can be an obstacle,

primarily because filling all the units is difficult when the

individuals to be served by the program are transient. The commenter

stated that until a project reaches 100 percent occupancy, the owners

have to rely on the maximum allowable rents for the occupied units,

plus 80 percent of the contract rent for vacant units. The commenter

maintained that this is insufficient to cover start-up costs, and that

HUD should provide another way for nonprofit organizations to survive

early cash flow problems.

HUD Response: Under Sec. 882.808(f), if a unit that has been

rehabilitated in accordance with HUD requirements is not leased within

15 days of the effective date of the HAP contract, owners may receive

housing assistance payments in the amount of 80 percent of the contract

rent for the unit for a vacancy period not exceeding 60 days from the

effective date of the HAP contract. Maintaining this 60-day provision

is reasonable. The SRO program is designed to serve homeless

individuals, many of whom are living on the streets and in shelters.

These individuals need the permanent housing the SRO program provides

as quickly as possible. The current regulations provide assistance to

owners who need a reasonable period of time to lease the SRO units,

while simultaneously creating an incentive to lease the units at the

earliest possible date.

Elimination of Waiting Lists

Another commenter remarked on the February 14, 1996 interim rule's

removal of most of the remaining provisions for waiting lists,

requiring instead that HAs or owners engage in outreach efforts. This

commenter requested additional guidance for situations in which the

outreach efforts fail to produce eligible individuals. This commenter

also worries that discarding waiting lists could have a disparate

impact on the young, the aged, or the disabled.

HUD Response: The SRO regulations (Sec. 882.808(a)(2)) require that

if the outreach procedures the HA or owner intends to use are unlikely

to reach persons of any particular age, physical or mental handicap,

race, color, religion, sex, or national origin, the HA or owner must

establish additional procedures that will ensure such persons are made

aware of the availability of the program. Additionally,

Sec. 882.808(a)(1) requires owners to notify HAs when they conduct the

outreach effort, so that the HA may provide referrals of homeless

individuals (including referrals from any waiting list maintained by

the HA). These provisions ensure that all individuals, including those

individuals listed by the commenter, are treated equally in the

program. Lastly, additional guidance on the tenant outreach process is

contained in the SRO technical assistance book.

This final rule also removes one last reference to the procedures

for establishing waiting lists, which was included in the contents of

the Administrative Plan (Sec. 882.805(b)(1)(ii)).

Participation of Homeless Individuals

Although the February 14, 1996 interim rule required that private

nonprofit applicants include at least one homeless individual or

formerly homeless individual in their decisions regarding the

rehabilitation of the SRO housing, one commenter remarked that the rule

still reflects an underrepresentation of homeless individuals in the

decisionmaking process, especially since HAs are exempt from even this

minimal requirement. The commenter expressed concern about HAs or other

entities that focus on the interests of suburbia or business, rather

than those of homeless individuals.

This commenter applauded the involvement of homeless individuals in

the rehabilitation efforts and in providing services to the occupants,

and requested HUD to encourage any such employment initiative by HAs,

especially within the SRO facility.

HUD Response: Section 1405 of the Housing and Community Development

Act of 1992 provides that each approved applicant that is not an HA

must provide for the participation of not less than one homeless

individual or

[[Page 48055]]

formerly homeless individual on its board of directors or other

equivalent policymaking entity to the extent that such entity considers

and makes policies and decisions regarding the rehabilitation of any

SRO housing. Thus, the statute specifically exempts HAs from this

requirement.

HUD shares the commenter's view that homeless individuals should be

involved in the SRO decisionmaking process. Thus, the 1996 Continuum of

Care application (which covers assistance under the SRO, Shelter Plus

Care, and Supportive Housing programs) requires that applicants

describe how they will involve homeless participants in project

decisionmaking and operations. Additionally, the application requires

that an applicant describe the involvement of homeless and formerly

homeless individuals in the development of a jurisdiction's continuum

of care strategy (see Fiscal Year 1996 Continuum of Care NOFA,

published on March 15, 1996 (61 FR 10866)).

Private Nonprofit Organizations as Eligible Applicants

One commenter applauded the eligibility of private nonprofit

organizations as applicants under the SRO program. The commenter

explained that nonprofit organizations may be better equipped in some

areas to serve the homeless population, because they are community-

based and may have stronger neighborhood support.

HUD Response: HUD agrees that providing for private nonprofit

applicants in the SRO program enhances the critical role these

organizations play in developing a continuum of care strategy for

assisting homeless individuals and in implementing that strategy.

V. Regulatory Reform

In response to Executive Order 12866 and President Clinton's

memorandum of March 4, 1995 to all Federal departments and agencies on

the subject of regulatory reinvention, HUD has reviewed all its

regulations to determine whether certain regulations can be eliminated,

streamlined, or consolidated with other regulations. While the interim

rules described above were successful in eliminating many obsolete

provisions, and in updating and significantly streamlining certain

requirements, HUD determined that the SRO regulations can be further

streamlined.

This final rule, in addition to adopting the previous interim rules

as final, further streamlines and clarifies the SRO regulations as

follows:

(a) It streamlines the definition of ``Homeless individual'' in

Sec. 882.802. This definition simply repeated the language contained in

section 103 of the McKinney Act. This rule also revises the definition

of ``Statement of family responsibility'', by changing the term

``family'' to ``individual.'' Since HUD can only serve eligible

individuals under this program, using the term ``individual'' will help

eliminate confusion.

(b) It removes the definition of ``Supportive services,'' which

largely consisted of a listing of items that may be considered

supportive services. HUD can more appropriately provide such guidance

in the SRO technical assistance book.

(c) It eliminates Sec. 882.803(b)(5). This provision is repetitive

of the definition of ``Single room occupancy (SRO) housing'' in

Sec. 882.802--a unit for occupancy by one person, which need not but

may contain food preparation or sanitary facilities, or both.

(d) It revises and updates Sec. 882.804 regarding other Federal

requirements. Part of this section repeats information already provided

in 24 CFR part 5. This rule will provide a cross-reference to part 5,

and it will also refer to the Americans with Disabilities Act,

compliance with which is required under the SRO program.

(e) It removes information from Sec. 882.805 regarding the

application requirements and criteria for rating applications, which

HUD will more appropriately provide in the annual NOFA.

(f) It removes the obsolete reference in Sec. 882.805(b) to the

requirement of submitting an Equal Opportunity Housing Plan. In July

1995, HUD merged the contents of this plan into the Administrative

Plan, which is also listed in Sec. 882.805(b). Therefore, while HAs

must still submit the contents of an Equal Opportunity Housing Plan as

part of the Administrative Plan, it is inaccurate for the regulations

to list it as a separate requirement.

(g) It consolidates the lengthy description of displacement and

relocation requirements in Sec. 882.810. These requirements are nearly

identical to those in Sec. 882.406. Since it is unnecessary to

duplicate these requirements within the same part of the Code of

Federal Regulations, this rule amends Sec. 882.406 so that it also

applies to the SRO program. This rule then removes the provisions of

Sec. 882.810 and replaces them with a reference to Sec. 882.406. In

this streamlining of Secs. 882.406 and 882.810, HUD is not making any

substantive changes to the requirements, but is merely eliminating

unnecessary provisions.

As part of HUD's regulatory reform efforts, HUD consolidated some

of the requirements in Sec. 882.102 (which contains definitions for the

Section 8 Certificate and Moderate Rehabilitation programs) and the

provisions in 24 CFR part 812 (which contained the definition of

``Family'' and the restrictions on assistance to noncitizens) into 24

CFR part 5. Part 5 now contains most of HUD's general program

requirements. HUD also consolidated the requirements in 24 CFR part 12

regarding accountability in the provision of HUD assistance into 24 CFR

part 4. This final rule updates the references to all these

requirements in the SRO regulations.

VI. Other Matters

Environmental Impact

This rule does not in itself have an environmental impact. This

rule merely adopts effective interim regulations as final and amends

existing regulations by streamlining provisions; it does not alter the

environmental effect of the regulations being amended. At the time of

development of regulations in part 882, subpart H, and for each of the

three interim rules discussed above, Findings of No Significant Impact

with respect to the environment were made in accordance with HUD

regulations in 24 CFR part 50 and section 102(2)(C) of the National

Environmental Policy Act of 1969 (42 U.S.C. 4332). The findings remain

applicable to this rule, and are 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 General Counsel, Room 10276, Department of

Housing and Urban Development, 451 Seventh Street, SW., Washington, DC.

Executive Order 12606, The Family

The General Counsel, as the designated official under Executive

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

potential for significant impact on family formation, maintenance, and

general well-being. This rule merely adopts effective interim

regulations as final and eliminates unnecessary provisions, and does

not change the substance of the program's regulations. Therefore, this

rule is not subject to review under the order.

Executive Order 12612, Federalism

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

of Executive Order 12612, Federalism, has

[[Page 48056]]

determined that the policies in this 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. This rule is limited to adopting effective interim

regulations as final and eliminating unnecessary provisions. Therefore,

the rule is not subject to review under the order.

Regulatory Flexibility Act

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

U.S.C. 605(b)), has reviewed this rule before publication and by

approving it certifies that it does not have a significant economic

impact on a substantial number of small entities. Specifically, the

rule is limited to adopting effective interim regulations as final and

eliminating unnecessary provisions.

List of Subjects

24 CFR Part 582

Homeless, Rent subsidies, Reporting and recordkeeping requirements,

Supportive housing programs--housing and community development,

Supportive services.

24 CFR Part 882

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

poisoning, Manufactured homes, Rent subsidies, Reporting and

recordkeeping requirements.

Accordingly, for the reasons stated in the preamble, the interim

rule amending 24 CFR part 882, which was published at 58 FR 13828 on

March 15, 1993; the interim rule amending 24 CFR parts 582 and 882,

which was published at 59 FR 24252 on May 10, 1994; and the interim

rule amending 24 CFR part 882, which was published at 61 FR 5850 on

February 14, 1996; are adopted as final rules, with the following

changes:

PART 882--SECTION 8 CERTIFICATE AND MODERATE REHABILITATION

PROGRAMS

1. The authority citation for 24 CFR part 882 continues to read as

follows:

Authority: 42 U.S.C. 1437f and 3535(d).

2. Section 882.406 is revised to read as follows:

Sec. 882.406 Displacement, relocation, and acquisition.

(a) Minimizing displacement. (1) Consistent with the other goals

and objectives of this part, owners must assure that they have taken

all reasonable steps to minimize the displacement of persons

(households, businesses, nonprofit organizations, and farms) as a

result of a project assisted under this part. To the extent feasible,

residential tenants must be provided a reasonable opportunity to lease

and occupy a suitable, decent, safe, sanitary, and affordable dwelling

unit in the project upon its completion.

(2) Whenever a building/complex is rehabilitated, and some but not

all of the rehabilitated units will be assisted upon completion of the

rehabilitation, the relocation requirements described in this section

apply to the occupants of each rehabilitated unit, whether or not

Section 8 assistance will be provided for the unit.

(b) Temporary relocation. The following policies cover residential

tenants who will not be required to move permanently but who must

relocate temporarily for the project. Such tenants must be provided:

(1) Reimbursement for all reasonable out-of-pocket expenses

incurred in connection with the temporary relocation;

(2) Appropriate advisory services, including reasonable advance

written notice of:

(i) The date and approximate duration of the temporary relocation;

(ii) The location of the suitable, decent, safe, and sanitary

dwelling to be made available for the temporary period;

(iii) The terms and conditions under which the tenant may lease and

occupy a suitable, decent, safe, and sanitary dwelling in the project

upon completion; and

(iv) The assistance required under paragraph (b)(1) of this

section.

(c) Relocation assistance for displaced persons. A ``displaced

person'' (defined in paragraph (g) of this section) must be provided

relocation assistance at the levels described in, and in accordance

with the requirements of, the Uniform Relocation Assistance and Real

Property Acquisition Policies Act of 1970, as amended (URA) (42 U.S.C.

4601-4655) and implementing regulations in 49 CFR part 24. A displaced

person must be advised of his or her rights under the Fair Housing Act

(42 U.S.C. 3601-19) and, if the comparable replacement dwelling used to

establish the amount of the replacement housing payment to be provided

to a minority is located in an area of minority concentration, such

person also must be given, if possible, referrals to comparable and

suitable, decent, safe, and sanitary replacement dwellings not located

in such areas.

(d) Real property acquisition requirements. The acquisition of real

property for a project is subject to the URA and the requirements

described in 49 CFR part 24, subpart B.

(e) Appeals. A person who disagrees with the HA's determination

concerning whether the person qualifies as a displaced person, or the

amount of relocation assistance for which the person is eligible, may

file a written appeal of that determination with the HA. A person who

is dissatisfied with the HA's determination on his or her appeal may

submit a written request for review of that determination to the HUD

field office.

(f) Responsibility of HA. (1) The HA must certify (i.e., provide

assurance of compliance as required by 49 CFR part 24) that it will

comply with the URA, the regulations in 49 CFR part 24, and the

requirements of this section, and must ensure such compliance

notwithstanding any third party's contractual obligation to the HA to

comply with these provisions.

(2) The cost of required relocation assistance is an eligible

project cost in the same manner and to the same extent as other project

costs. Such costs may be paid for with local public funds or funds

available from other sources. The cost of HA advisory services for

temporary relocation of tenants to be assisted under the program also

may be paid from preliminary administrative funds.

(3) The HA must maintain records in sufficient detail to

demonstrate compliance with the provisions of this section. The HA must

maintain data on the racial, ethnic, gender, and disability status of

displaced persons.

(g) Definition of displaced person. (1) For purposes of this

section, the term displaced person means a person (household, business,

nonprofit organization, or farm) that moves from real property, or

moves personal property from real property, permanently, as a direct

result of acquisition, rehabilitation, or demolition for a project

assisted under this part. The term displaced person includes, but may

not be limited to:

(i) A person who moves permanently from the real property after

receiving notice requiring such move, if the move occurs on or after

the date the owner submits to the HA the owner proposal that is later

approved;

(ii) A person, including a person who moves from the property

before the date the owner submits the proposal to the HA, if the HA or

HUD determines that the displacement resulted directly from

acquisition, rehabilitation, or demolition for the assisted project; or

(iii) A tenant-occupant of a dwelling unit who moves from the

building/

[[Page 48057]]

complex permanently after the execution of the Agreement between the

owner and the HA (or, for projects assisted under subpart H of this

part, after the ``initiation of negotiations'' (see paragraph (h) of

this section)), if the move occurs before the tenant is provided a

written notice offering him or her the opportunity to lease and occupy

a suitable, decent, safe, and sanitary dwelling in the same building/

complex, under reasonable terms and conditions, upon its completion.

Such reasonable terms and conditions must include a monthly rent and

estimated average monthly utility costs that do not exceed the greater

of:

(A) The tenant's monthly rent before the execution of the agreement

and estimated average monthly utility costs; or

(B) Thirty percent of gross household income.

(C) For projects assisted under subpart H of this part, the amount

cannot exceed the greater of the tenant's monthly rent before the

``initiation of negotiations'' and estimated average monthly utility

costs; or (if the tenant is low-income) the total tenant payment, as

determined under 24 CFR 813.107, or (if the tenant is not low-income)

30 percent of gross household income; or

(iv) A tenant-occupant of a dwelling, who is required to relocate

temporarily, but does not return to the building/complex, if either:

(A) The tenant is not offered payment for all reasonable out-of-

pocket expenses incurred in connection with the temporary relocation;

or

(B) Other conditions of the temporary relocation are not

reasonable; or

(v) A tenant-occupant of a dwelling who moves from the building/

complex permanently after he or she has been required to move to

another dwelling unit in the building/complex, if either:

(A) The tenant is not offered reimbursement for all reasonable out-

of-pocket expenses incurred in connection with the move; or

(B) Other conditions of the move are not reasonable.

(2) Notwithstanding the provisions of paragraph (g)(1) of this

section, a person does not qualify as a displaced person (and is not

eligible for relocation assistance under the URA or this section), if:

(i) The person has been evicted for serious or repeated violation

of the terms and conditions of the lease or occupancy agreement,

violation of applicable Federal, State, or local law, or other good

cause, and the HA determines that the eviction was not undertaken for

the purpose of evading the obligation to provide relocation assistance;

(ii) The person moved into the property after the submission of the

preliminary proposal (or application, if there is no preliminary

proposal), and before signing a lease and commencing occupancy,

received written notice of the project and its possible impact on the

person (e.g., the person may be displaced, temporarily relocated, or

suffer a rent increase) and the fact that the person would not qualify

as a displaced person (or for any assistance provided under this

section) as a result of the project;

(iii) The person is ineligible under 49 CFR 24.2(g)(2); or

(iv) HUD determines that the person was not displaced as a direct

result of acquisition, rehabilitation, or demolition for the project.

(3) The HA may request, at any time, HUD's determination of whether

a displacement is or would be covered by this section.

(h) Definition of initiation of negotiations. For purposes of

determining the formula for computing the replacement housing

assistance to be provided to a residential tenant displaced as a direct

result of private-owner rehabilitation or demolition of the real

property, the term initiation of negotiations means the execution of

the Agreement between the owner and the HA.

(Approved by Office of Management and Budget under OMB control

number 2506-0121).

3. Subpart H is revised to read as follows:

Subpart H--Section 8 Moderate Rehabilitation Single Room Occupancy

Program for Homeless Individuals

Sec.

882.801 Purpose.

882.802 Definitions.

882.803 Project eligibility and other requirements.

882.804 Other Federal requirements.

882.805 HA application process, ACC execution, and pre-

rehabilitation activities.

882.806 Agreement to enter into housing assistance payments.

882.807 Housing assistance payments contract.

882.808 Management.

882.809 Waivers.

882.810 Displacement, relocation, and acquisition.

Subpart H--Section 8 Moderate Rehabilitation Single Room Occupancy

Program for Homeless Individuals

Sec. 882.801 Purpose.

The purpose of the Section 8 Moderate Rehabilitation Program for

Single Room Occupancy (SRO) Dwellings for Homeless Individuals is to

provide rental assistance for homeless individuals in rehabilitated SRO

housing. The Section 8 assistance is in the form of rental assistance

payments. These payments equal the rent for the unit, including

utilities, minus the portion of the rent payable by the tenant under

the U.S. Housing Act of 1937 (42 U.S.C. 1437 et seq.).

Sec. 882.802 Definitions.

In addition to the definitions set forth in 24 CFR part 5 and

Sec. 882.102 (except for the definition of ``Single Room Occupancy

(SRO) Housing'' therein) the following will apply:

Agreement to enter into housing assistance payments contract

(Agreement). A written agreement between the owner and the HA that,

upon satisfactory completion of the rehabilitation in accordance with

requirements specified in the Agreement, the HA will enter into a

housing assistance payments contract with the owner.

Applicant. A public housing agency or Indian housing authority

(collectively referred to as HAs), or a private nonprofit organization

that applies for assistance under this program. HUD will require

private nonprofit applicants to subcontract with public housing

agencies to administer their rental assistance.

Eligible individual (individual). An individual who, taking into

account the supportive services available to the individual, is capable

of independent living and is authorized for admission to assisted

housing under subparts D and E of 24 CFR part 5, and 24 CFR part 813.

Homeless individual. An individual as described in section 103 of

the McKinney Act (42 U.S.C. 11302).

McKinney Act. The Stewart B. McKinney Homeless Assistance Act (42

U.S.C. 11301 et seq.).

Moderate rehabilitation. Rehabilitation involving a minimum

expenditure of $3,000 for a unit, including its prorated share of work

to be accomplished on common areas or systems, to upgrade to decent,

safe, and sanitary condition to comply with the Housing Quality

Standards or other standards approved by HUD, from a condition below

those standards (improvements being of a modest nature and other than

routine maintenance).

Private nonprofit organization. An organization, no part of the net

earnings of which inures to the benefit of any member, founder,

contributor, or individual. The organization must:

(1) Have a voluntary board;

[[Page 48058]]

(2) Have a functioning accounting system that is operated in

accordance with generally accepted accounting principles, or designate

an entity that will maintain a functioning accounting system for the

organization in accordance with generally accepted accounting

principles; and

(3) Practice nondiscrimination in the provision of assistance.

Single room occupancy (SRO) housing. A unit for occupancy by one

person, which need not but may contain food preparation, sanitary

facilities, or both.

Statement of individual responsibility. An agreement, in the form

prescribed by HUD, between the HA and an individual to be assisted

under the program, stating the obligations and responsibilities of the

two parties.

Sec. 882.803 Project eligibility and other requirements.

(a) Eligible and ineligible properties. (1) Except as otherwise

provided in paragraph (a) of this section, housing suitable for

moderate rehabilitation is eligible for inclusion under this program.

Existing structures of various types may be appropriate for this

program, including single family houses and multifamily structures.

(2) Housing is not eligible for assistance under this program if it

is receiving Federal funding for rental assistance or operating costs

under other HUD programs.

(3) Nursing homes and related facilities such as intermediate care

or board and care homes; units within the grounds of penal,

reformatory, medical, mental, and similar public or private

institutions; and facilities providing continual psychiatric, medical,

or nursing services are not eligible for assistance under this program.

(4) No Section 8 assistance may be provided with respect to any

unit occupied by an owner.

(5) Housing located in the Coastal Barrier Resources System

designated under the Coastal Barriers Resources Act is not eligible.

(6) Single-sex facilities are allowable under this program,

provided that the HA determines that because of the physical

limitations or configuration of the facility, considerations of

personal privacy require that the facility (or parts of the facility)

be available only to members of a single sex.

(b) Housing quality standards. Section 882.404 (including its

incorporation by reference of Sec. 882.109) applies to this program,

except as follows:

(1) The housing quality standards in Secs. 882.109(i) and

882.404(c) concerning lead-based paint do not apply to this program,

since these SRO units will not house children.

(2) In addition to the performance requirements contained in

Sec. 882.109(p) concerning SRO units, a sprinkler system that protects

all major spaces, hard wired smoke detectors, and such other fire and

safety improvements as State or local law may require must be installed

in each building. The term ``major spaces'' means hallways, large

common areas, and other areas specified in local fire, building, or

safety codes.

(3) Section 882.109(q), concerning shared housing, does not apply

to this program.

(4) Section 882.404(b), concerning site and neighborhood standards,

does not apply to this program, except that Sec. 882.404(b) (1) and (2)

applies. In addition, the site must be accessible to social,

recreational, educational, commercial, and health facilities, and other

appropriate municipal facilities and services.

(c) Financing. Section 882.405 applies to this program.

(d) Relocation. Section 882.406 applies to a project assisted under

this program.

(e) HA-owned housing. (1) A unit that is owned by the HA that

administers the assistance under the ACC (including a unit owned by an

entity substantially controlled by the HA) may only be assisted if:

(i) The unit is not ineligible under Sec. 882.803(a); and

(ii) HUD approves the base and contract rent calculations prior to

execution of the Agreement and prior to execution of the HAP contract.

(2) The HA as owner is subject to the same program requirements

that apply to other owners in the program.

Sec. 882.804 Other Federal requirements.

(a) Participation in this program requires compliance with the

Federal requirements set forth in 24 CFR 5.105, and with the Americans

with Disabilities Act (42 U.S.C. 12101 et seq.).

(b) For agreements covering nine or more assisted units, the

following requirements for labor standards apply:

(1) Not less than the wages prevailing in the locality, as

determined by the Secretary of Labor under the Davis-Bacon Act (40

U.S.C. 276a through 276a-5), must be paid to all laborers and mechanics

employed in the development of the project, other than volunteers under

the conditions set out in 24 CFR part 70;

(2) The employment of laborers and mechanics is subject to the

provisions of the Contract Work Hours and Safety Standards Act (40

U.S.C. 327-333); and

(3) HAs, owners, contractors, and subcontractors must comply with

all related rules, regulations, and requirements.

(c) The environmental review requirements of 24 CFR part 58,

implementing the National Environmental Policy Act and related

environmental laws and authorities, apply to this program.

Sec. 882.805 HA application process, ACC execution, and pre-

rehabilitation activities.

(a) Review. When funds are made available for assistance, HUD will

publish a notice of funding availability (NOFA) in the Federal Register

in accordance with the requirements of 24 CFR part 4. HUD will review

and screen applications in accordance with the guidelines, rating

criteria, and procedures published in the NOFA.

(b) ACC Execution. (1) Before execution of the annual contributions

contract (ACC), the HA must submit to the appropriate HUD field office

the following:

(i) Estimates of Required Annual Contributions, Forms HUD-52672 and

HUD-52673;

(ii) Administrative Plan, which should include:

(A) Procedures for tenant outreach;

(B) A policy governing temporary relocation; and

(C) A mechanism to monitor the provision of supportive services.

(iii) Proposed Schedule of Allowances for Tenant-Furnished

Utilities and Other Services, Form HUD-52667, with a justification of

the amounts proposed;

(iv) If applicable, proposed variations to the acceptability

criteria of the Housing Quality Standards (see Sec. 882.803(b)); and

(v) The fire and building code applicable to each structure.

(2) After HUD has approved the HA's application, the review and

comment requirements of 24 CFR part 791 have been complied with, and

the HA has submitted (and HUD has approved) the items required by

paragraph (b)(1) of this section, HUD and the HA must execute the ACC

in the form prescribed by HUD. The initial term of the ACC must be 11

years. This term allows one year to rehabilitate the units and place

them under a 10-year HAP contract. The ACC must give HUD the option to

renew the ACC for an additional 10 years.

(3) Section 882.403(a) (Maximum Total ACC Commitments) applies to

this program.

(4) Section 882.403(b) (Project account) applies to this program.

(c) Project development. Before execution of the Agreement, the HA

must:

[[Page 48059]]

(1)(i) Inspect the structure to determine the specific work items

that need to be accomplished to bring the units to be assisted up to

the Housing Quality Standards (see Sec. 882.803(b)) or other standards

approved by HUD;

(ii) Conduct a feasibility analysis, and determine whether cost-

effective energy conserving improvements can be added;

(iii) Ensure that the owner prepares the work write-ups and cost

estimates required by Sec. 882.504(f); and

(iv) Determine initial base rents and contract rents;

(2) Assure that the owner has selected a contractor in accordance

with Sec. 882.504(g);

(3) After the financing and a contractor are obtained, determine

whether the costs can be covered by initial contract rents, computed in

accordance with paragraph (d) of this section; and, if a structure

contains more than 50 units to be assisted, submit the base rent and

contract rent calculations to the appropriate HUD field office for

review and approval in sufficient time for execution of the Agreement

in a timely manner;

(4) Obtain firm commitments to provide necessary supportive

services;

(5) Obtain firm commitments for other resources to be provided;

(6) Determine that the $3,000 minimum amount of work requirement

and other requirements in Sec. 882.504(c)(2) and (3) are met;

(7) Determine eligibility of current tenants, and select the units

to be assisted, in accordance with Sec. 882.504(e);

(8) Comply with the financing requirements in Sec. 882.504(i);

(9) Assure compliance with all other applicable requirements of

this subpart; and

(10) In the event that the HA determines that any structure

proposed in its application is infeasible, or the HA proposes to select

a different structure for any other reason, the HA must submit

information for the proposed alternative structure to HUD for review

and approval. HUD will rate the proposed structure in accordance with

procedures in the applicable notice of funding availability. The HA may

not proceed with processing for the proposed structure or execute an

Agreement until HUD notifies the HA that HUD has approved the proposed

alternative structure and that all requirements have been met.

(d) Initial contract rents. Section 882.408 (Initial contract

rents), including the establishment of fair market rents for SRO units

at 75 percent of the O-bedroom Moderate Rehabilitation Fair Market

Rent, applies to this program, except as follows:

(1)(i) In determining the monthly cost of a rehabilitation loan, in

accordance with Sec. 882.408(c)(2), a loan term of a least 10 years

(instead of 15 years) may be used. The exception in

Sec. 882.408(c)(2)(iii) for using the actual loan term if the total

amount of the rehabilitation is less than $15,000 continues to apply.

In addition, the cost of the rehabilitation that may be included for

the purpose of calculating the amount of the initial contract rent for

any unit must not exceed the lower of:

(A) The projected cost of rehabilitation; or

(B) The per unit cost limitation that is established by Federal

Register notice, plus the cost of the fire and safety improvements

required by Sec. 882.803(b)(2). HUD may, however, increase the

limitation in paragraph (d)(1)(i)(B) of this section by an amount HUD

determines is reasonable and necessary to accommodate special local

conditions, including high construction costs or stringent fire or

building codes. HUD will publish future cost limitation changes in the

Federal Register in the Notice of Funding Availability issued each

year.

(ii) If the Federal Housing Administration (FHA) believes that high

construction costs warrant an increase in the per unit cost limitation

in paragraph (d)(1)(i)(B) of this section, the HA must demonstrate to

HUD's satisfaction that a higher average per unit amount is necessary

to conduct this program, and that every appropriate step has been taken

to contain the amount of the rehabilitation within the published per

unit cost limitation established at that time, plus the cost of the

required fire and safety improvements. These higher amounts will be

determined as follows:

(A) HUD may approve a higher per unit amount up to, but not to

exceed, an amount computed by multiplying the HUD-approved High Cost

Percentage for Base Cities (used for computing FHA high cost area

adjustments) for the area, by the current published cost limitation

plus the cost of the required fire and safety improvements.

(B) HUD may, on a structure-by-structure basis, increase the level

approved in paragraph (d)(1)(i) of this section to up to an amount

computed by multiplying 2.4 by the current published cost limitation

plus the cost of the required fire and safety improvements.

(2) In approving changes to initial contract rents during

rehabilitation in accordance with Sec. 882.408(d), the revised initial

contract rents may not reflect an average per unit rehabilitation cost

that exceeds the limitation specified in paragraph (d)(1) of this

section.

(3) If the structure contains four or fewer SRO units, the Fair

Market Rent for that size structure (the Fair Market Rent for a 1-, 2-,

3-, or 4-bedroom unit, as applicable) must be used to determine the

Fair Market Rent limitation instead of using the separate Fair Market

Rent for each SRO unit. To determine the Fair Market Rent limitation

for each SRO unit, the Fair Market Rent for the structure must be

apportioned equally to each SRO unit.

(4) Contract rents must not include the costs of providing

supportive services, transportation, furniture, or other nonhousing

costs, as determined by HUD. SRO program assistance may be used for

efficiency units selected for rehabilitation under this program, but

the gross rent (contract rent plus any Utility Allowance) for these

units will be no higher than for SRO units (i.e., 75 percent of the 0-

bedroom Moderate Rehabilitation Fair Market Rent).

(Approved by the Office of Management and Budget under control

number 2506-0131)

Sec. 882.806 Agreement to enter into housing assistance payments.

(a) Rehabilitation period. (1) Agreement. Before the owner begins

any rehabilitation, the HA must enter into an Agreement with the owner

in the form prescribed by HUD.

(2) Timely performance of work. Section 882.506(a) applies to this

program. In addition, the Agreement must provide that the work must be

completed and the contract executed within 12 months of execution of

the ACC. HUD may reduce the number of units or the amount of the annual

contribution commitment if, in HUD's determination, the HA fails to

demonstrate a good faith effort to adhere to this schedule or if other

reasons justify reducing the number of units.

(3) Inspections. Section 882.506(b) applies to this program.

(4) Changes. Section 882.506(c)(1) applies to this program.

Contract rents may not be increased except in accordance with

Secs. 882.408(d) and 882.805(d)(2).

(b) Completion of rehabilitation. (1) Notification of completion.

Section 882.507(a) applies to this program.

(2) Evidence of completion. Section 882.507(b) applies to this

program, except that Sec. 882.507(b)(2)(iv), concerning lead-based

paint requirements, does not apply.

(3) Actual cost and rehabilitation loan certifications. Section

882.507(c) applies

[[Page 48060]]

to this program, except that contract rents must be established in

accordance with Sec. 882.805(d).

(4) Review and inspections. Section 882.507(d) applies to this

program.

(5) Acceptance. Section 882.507(e) applies to this program.

(Approved by the Office of Management and Budget under control

number 2502-0367)

Sec. 882.807 Housing assistance payments contract.

(a) Time of execution of contract. Section 882.508(a) applies to

this program.

(b) Term of contract. The contract for any unit rehabilitated in

accordance with this program must be for a term of 10 years. The

contract must give the HA the option to renew the contract for an

additional 10 years.

(c) Changes in contract rents from agreement. The contract rents

may be higher or lower than those specified in the Agreement, in

accordance with Sec. 882.805(d).

(d) Unleased units. Section 882.508(c) applies to this program.

(e) Contract rents at end of rehabilitation loan term. For a

contract in which the initial contract rent was based upon a loan term

shorter than 10 years, the contract must provide for reduction of the

contract rent effective with the rent for the month following the end

of the term of the rehabilitation loan. The amount of the reduction

will be the monthly cost of amortization of the rehabilitation loan.

This reduction should result in a new contract rent equal to the base

rent plus all subsequent adjustments.

(Approved by the Office of Management and Budget under control

number 2502-0367)

Sec. 882.808 Management.

(a) Outreach to homeless individuals and appropriate organizations.

(1) The HA or the owner must undertake outreach efforts to homeless

individuals so that they may be brought into the program. The outreach

effort should include notification to emergency shelter providers and

other organizations that could provide referrals of homeless

individuals. If the owner conducts the outreach effort, the owner must

notify the HA so that it may provide referrals of homeless individuals.

(2) Additional outreach concerns. If the procedures that the HA or

owner intends to use to publicize the availability of this program are

unlikely to reach persons of any particular race, color, religion, sex,

age, national origin, or mental or physical disability who may qualify

for admission to the program, the HA or owner must establish additional

procedures that will ensure that such persons are made aware of the

availability of the program. The HA or owner must also adopt and

implement procedures to ensure that interested persons can obtain

information concerning the existence and location of services and

facilities that are accessible to persons with disabilities.

(3) First priority for homeless individuals. Homeless individuals

must have the first priority for occupancy of housing rehabilitated

under this program.

(b) Individual participation. (1) Initial determination of

individual eligibility. Section 882.514(a) applies to this program.

(2) Owner selection of individuals. The owner must rent all vacant

units under contract to homeless individuals located through HA or

owner outreach efforts and determined by the HA to be eligible. The

owner is responsible for tenant selection and may refuse any

individual, provided the owner does not unlawfully discriminate. If the

owner rejects an individual, and the individual believes that the

owner's rejection was the result of unlawful discrimination, the

individual may request the assistance of the HA in resolving the issue

and may also file a complaint with HUD's Office of Fair Housing and

Equal Opportunity in accordance with 24 CFR 103.25. If the individual

requests the assistance of the HA, and if the HA cannot resolve the

complaint promptly, the HA should advise the individual that he or she

may file a complaint with HUD, and provide the individual with the

address of the nearest HUD Office of Fair Housing and Equal

Opportunity.

(3) Briefing of individuals. Section 882.514(d) applies to this

program, except that Sec. 882.514(d)(1)(vi) does not apply.

(4) Continued participation of individual when contract is

terminated. Section 882.514(e) applies to this program, except that the

HA may issue a Housing Voucher instead of a Certificate.

(5) Individuals determined by the HA to be ineligible. Section

882.514(f) applies to this program. In addition, individuals are not

precluded from exercising other rights if they believe they have been

discriminated against on the basis of age.

(c) Lease. (1) Contents of lease. Section 882.504(j) applies to

this program. In addition, the lease must limit occupancy to one

eligible individual.

(2) Term of lease. Section 882.403(d) applies to this program.

(d) Security and utility deposits. Section 882.112 applies to this

program.

(e) Rent adjustments. Section 882.410 applies to this program.

(f) Payments for vacancies. Section 882.411 applies to this

program.

(g) Subcontracting of owner services. Section 882.412 applies to

this program.

(h) Responsibility of the individual. Section 882.413 applies to

this program.

(i) Reexamination of individual income. (1) Regular reexaminations.

The HA must reexamine the income of all individuals at least once every

12 months. After consultation with the individual and upon verification

of the information, the HA must make appropriate adjustments in the

Total Tenant Payment in accordance with 24 CFR part 813, and verify

that only one individual is occupying the unit. The HA must adjust

Tenant Rent and the Housing Assistance Payment to reflect any change in

Total Tenant Payment. At each regular reexamination, the HA must follow

the requirements of 24 CFR part 5, subpart E concerning verification of

immigration status of any new family member.

(2) Interim reexaminations. The individual must supply such

certification, release, information, or documentation as the HA or HUD

determines to be necessary, including submissions required for interim

reexaminations of individual income and determinations as to whether

only one person is occupying the unit. In addition, the second and

third sentences of Sec. 882.515(b) apply. At any interim reexamination

when there is a new family member, the HA must follow the requirements

of 24 CFR part 5, subpart E concerning obtaining and processing

evidence of citizenship or eligible immigration status of the new

family member.

(3) Continuation of Housing Assistance Payments. Section 882.515(c)

applies to this program.

(j) Overcrowded units. If the HA determines that anyone other than,

or in addition to, the eligible individual is occupying an SRO unit

assisted under this program, the HA must take all necessary action, as

soon as reasonably feasible, to ensure that the unit is occupied by

only one eligible individual.

(k) Adjustment of utility allowance. Section 882.510 applies to

this program.

(l) Termination of tenancy. Section 882.511 applies to this

program. For provisions requiring termination of assistance when the HA

determines that a family member is not a U.S. citizen or does not have

eligible immigration status, see 24 CFR part 5, subpart E for

provisions concerning certain assistance

[[Page 48061]]

for mixed families (families whose members include those with eligible

immigration status, and those without eligible immigration status) in

lieu of termination of assistance, or for provisions concerning

deferral of termination of assistance.

(m) Reduction of number of units covered by contract. Section

882.512 applies to this program.

(n) Maintenance, operation, and inspections. Section 882.516

applies to this program.

(o) HUD review of contract compliance. Section 882.217 applies to

this program.

(p) Records and reports. Each recipient of assistance under this

subpart must keep any records and make any reports that HUD may require

within the timeframe required.

(q) Participation of homeless individuals. (1) Each approved

applicant receiving assistance under this program, except HAs, must

provide for the participation of not less than one homeless individual

or formerly homeless individual on the board of directors or other

equivalent policymaking entity of such applicant, to the extent that

the entity considers and makes policies and decisions regarding the

rehabilitation of any housing with assistance under this subpart. This

requirement is waived if the applicant is unable to meet this

requirement and presents a plan that HUD approves to consult with

homeless or formerly homeless individuals in considering and making

such policies and decisions.

(2) To the maximum extent practicable, each approved applicant must

involve homeless individuals and families, through employment,

volunteer services, or otherwise, in rehabilitating and operating

facilities assisted under this subpart, and in providing services for

occupants of such facilities.

(Approved by the Office of Management and Budget under control

number 2506-0131)

Sec. 882.809 Waivers.

Section 5.405(b) of this title does not apply to this program.

Sec. 882.810 Displacement, relocation, and acquisition.

Section 882.406 applies to this program.

Dated: September 3, 1996.

Andrew M. Cuomo,

Assistant Secretary for Community Planning and Development.

[FR Doc. 96-23166 Filed 9-10-96; 8:45 am]

BILLING CODE 4210-29-P