Office of the Assistant Secretary for Community Planning and Development; Homeownership of Single Family Homes Program (HOPE 3); Streamlining Final Rule

SUMMARY: This rule completes the rulemaking process for an interim rule

on HUD's regulations for the HOPE for Homeownership of Single Family

Homes Program (HOPE 3) Program and further amends the regulations to

comply with the President's regulatory reform initiatives. The rule

streamlines HOPE 3 program regulations by eliminating provisions that

are redundant of statutes or are otherwise unnecessary, and will make

the regulations clearer and more concise. Additional HOPE 3

streamlining proposals that require notice-and-comment rulemaking will

be included in a separate proposed rule that HUD expects to publish

soon in the Federal Register.

EFFECTIVE DATE: October 16, 1996.

FOR FURTHER INFORMATION CONTACT: Gordon McKay, Director, Office of

Affordable Housing Programs, Room 7168, Department of Housing and Urban

Development, 451 7th Street, SW, Washington, DC 20410, telephone number

(202) 708-2685 (this is not a toll-free number). For hearing- and

speech-impaired persons, this number may be accessed via TTY (text

telephone) by calling the Federal Information Relay Service at 1-800-

877-8339.

SUPPLEMENTARY INFORMATION: On March 4, 1995, President Clinton issued a

memorandum to all Federal departments and agencies regarding regulatory

reinvention. In response to this memorandum, the Department of Housing

and Urban Development conducted a page-by-page review of its

regulations to determine which can be eliminated, consolidated, or

otherwise improved. HUD determined that the regulations for the HOPE

for Homeownership of Single Family Homes Program (42 U.S.C. 12891-

12898a) (HOPE 3) Program could be improved and streamlined.

On July 12, 1995 (60 FR 36016), HUD published an interim rule that

streamlined program implementation, clarified inconsistencies in

previous regulatory provisions, and facilitated grantees' performance

of HOPE 3 programs. HUD received only one comment in response to the

interim rule, from a Housing Authority. The commenter agreed with the

changes made by the final rule, stating that the changes seem to remove

operational burdens and streamline program implementation.

Today's rule makes additional streamlining changes and makes final

changes that were implemented in the interim rule, including:

correcting an inconsistency involving grantee performance in

transferring HOPE 3 properties; lengthening the time grantees are

allowed to use sale and resale proceeds; eliminating a prohibition

against commingling grant or match funds with sale or resale proceeds;

clarifying that the cost of required rehabilitation must be counted,

whenever incurred, when determining whether a homebuyer can afford a

HOPE 3 unit; modifying the definition of income in order to establish a

consistent approach to determining a family's eligibility for the

program and its required monthly payment; updating the references to

the consolidated planning process under part 91 of this title; adding a

paragraph authorizing program closeout procedures; and reducing the

match requirement from 33 to 25 percent for grants awarded after April

11, 1994.

The additional amendments in this rule to Secs. 572.115(a)(2) and

572.210(f) will give HUD Field Offices greater authority to extend

deadlines for transferring homeownership interests and spending

implementation grant funds. This will allow the Field Offices to

provide greater flexibility to grantees when appropriate.

This final rule also removes several provisions in the regulations

that repeat statutory language from title IV, subtitle C, of the

National Affordable Housing Act, 42 U.S.C. 12891-12898) (NAHA), for

example, see Sec. 572.140, Third party rights, which is a grant of

jurisdiction in lawsuits.

It is unnecessary to maintain in the Code of Federal Regulations

(CFR) language that merely repeats statutory requirements, because

those requirements are otherwise fully accessible and binding.

Furthermore, if regulations contain statutory language, HUD must amend

the regulations whenever Congress amends the statute. Therefore, this

final rule removes repetitious statutory language.

In this rule HUD has also consolidated redundant provisions within

part 572. For example, provisions in Sec. 572.210(e) on matching

requirements will now only appear in Sec. 572.220, a separate section

on matching requirements.

In the separate proposed rule, HUD will streamline the competitive

funding provisions in part 572. In the exercise of its discretion with

respect to funding awards, and in view of extremely limited funds that

might become available through repayments, HUD also is clarifying in

this preamble that a previously approved grant amount will not be

amended to increase the grant amount.

Some provisions in the regulations do not have to be maintained in

the Code of Federal Regulations, because of the status of the HOPE 3

program. At this time, HUD does not have significant unobligated HOPE 3

funds, and does not anticipate requesting a new appropriation for HOPE

3 funds. Therefore, HUD is removing provisions on the selection process

and criteria applicable to planning grants. However, because authority

for the program has not been repealed, receipt of resale proceeds will

continue into the future, and the statute specifies a requirement for

certain regulations applicable to planning grants, HUD will maintain

current provisions on planning grants by means of savings clauses in

this final rule (see Secs. 572.200, 572.205, and 572.315). (Similar

provisions on the selection process and criteria relating to

implementation grants, which are not subject to a statutory requirement

for regulations, are proposed for removal in the separate proposed

rule)

HUD does not expect to make any planning grants under the program

in the future, and any current planning grants are already beyond the

original deadline for completion of activities. However, in the event

that planning grants are made in the future, HUD will recodify the

applicable provisions in full. Existing awards remain subject to grant

agreements and the regulatory provisions applicable to those

agreements.

Lastly, HUD is simplifying some language and removing some

provisions in the regulations that do not contain regulatory

requirements. For example, several sections in the regulations contain

nonbinding guidance or explanations (see Secs. 572.130(d) (3) and (4)

and 572.220(b)(2)(ii)). While this information is very helpful to

recipients, HUD will more appropriately provide this information

through other sources, rather than maintaining it in the CFR. For

immediate convenience, an

[[Page 48797]]

uncodified appendix to this rule includes such information that is

being removed from the CFR.

Justification for Final Rulemaking

HUD generally publishes a rule for public comment before issuing a

rule for effect, in accordance with its own regulations on rulemaking

in 24 CFR part 10. However, part 10 provides for exceptions to the

general rule if the agency finds good cause to omit advance notice and

public participation. The good cause requirement is satisfied when

prior public procedure is ``impracticable, unnecessary, or contrary to

the public interest'' (24 CFR 10.1). A number of the provisions in this

final rule were published for comment in an interim rule (60 FR 36016,

July 12, 1995); the one comment received agreed with the changes in

those provisions. HUD finds that good cause exists to publish other

changes included in this rule for effect without first soliciting

public comment. These additional changes merely remove unnecessary

regulatory provisions. Therefore, prior public comment on the

additional changes is unnecessary.

Other Matters

Paperwork Reduction Act Statement

The information collection requirements contained in Secs. 572.225,

572.300, and 572.425 of the HOPE 3 regulations have been submitted to

the Office of Management and Budget for an extension of the control

number, in accordance with the Paperwork Reduction Act of 1995 (44

U.S.C. 3501-3520), and assigned OMB control number 2506-0128. A notice

requesting public comment on this extension will be published in the

Federal Register. When assigned, the OMB control number will be

published by a separate notice in the Federal Register. An agency may

not conduct or sponsor, and a person is not required to respond to, a

collection of information unless the collection displays a valid

control number.

Regulatory Flexibility Act

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

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

doing certifies that this rule will not have a significant economic

impact on a substantial number of small entities. This rule merely

makes final program changes that are already in effect and streamlines

regulations by removing unnecessary provisions. The rule will have no

adverse or disproportionate economic impact on small businesses.

Environmental Impact

This rulemaking does not have an environmental impact. This

rulemaking simply makes final an existing regulation and consolidates

and streamlines provisions; it does not alter the environmental effect

of the regulations being amended. A Finding of No Significant Impact

with respect to the environment was made in accordance with HUD

regulations in 24 CFR part 50 that implement section 102(2)(C) of the

National Environmental Policy Act of 1969 (42 U.S.C. 4332) at the time

of the interim rule. That finding remains applicable to this rule, and

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 General

Counsel, Room 10276, Department of Housing and Urban Development, 451

Seventh Street, SW, Washington, DC.

Executive Order 12612, Federalism

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

of Executive Order 12612, Federalism, has determined that 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. No programmatic or policy changes

will result from this rule that would affect the relationship between

the Federal Government and State and local governments.

Executive Order 12606, The Family

The General Counsel, as the Designated Official under Executive

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

the potential for significant impact on family formation, maintenance,

or general well-being, and thus is not subject to review under the

Order. No significant change in existing HUD policies or programs will

result from promulgation of this rule.

The Catalog of Federal Domestic Assistance number for this

program is 14.240.

List of Subjects in 24 CFR Part 572

Condominiums, Cooperatives, Fair housing, Government property,

Grant programs--housing and community development, Low and moderate

income housing, Nonprofit organizations, Reporting and recordkeeping

requirements.

Accordingly, for the reasons set out in the preamble, the

amendments included in the interim rule at 60 FR 36016 (July 12, 1995)

are adopted as final and part 572 of title 24 of the Code of Federal

Regulations is further amended as follows:

PART 572--HOPE FOR HOMEOWNERSHIP OF SINGLE FAMILY HOMES PROGRAM

(HOPE 3)

1. The authority citation for part 572 continues to read as

follows:

Authority: 42 U.S.C. 3535(d) and 12891.

Sec. 572.1 [Amended]

2. Section 572.1 is amended by removing paragraph (b) and by

removing the paragraph designation and heading ``Purpose'' of paragraph

(a).

3. Section 572.5 is amended by revising the definitions of

``Displaced homemaker'', ``First-time homebuyer'', and ``Single

parent'', to read as follows:

Sec. 572.5 Definitions.

* * * * *

Displaced homemaker means as the term is defined in 42 U.S.C.

12704. The individual must not have worked full-time, full-year in the

labor force for at least 2 years.

* * * * *

First-time homebuyer means as the term is defined in 42 U.S.C.

12704.

* * * * *

Single parent means as the term is defined in 42 U.S.C. 12896.

4. Section 572.110 is amended by revising the first sentence of

paragraph (b)(1), to read as follows:

Sec. 572.110 Identifying and selecting eligible families for

homeownership.

* * * * *

(b) * * * (1) In making selections for the program, each recipient

must give first preference to qualified residents who legally occupied

units on the date the recipient's application for the implementation

grant was submitted to HUD and to persons residing in the units at the

time the properties are selected. * * *

* * * * *

5. Section 572.115 is amended by revising paragraph (a)(2) to read

as follows:

Sec. 572.115 Transfer of homeownership interests.

(a) * * *

(2) The HUD Field Office may approve a request for an extension of

the deadline in paragraph (a)(1) of this section on a per-program or

per-unit basis if the Field Office determines that all program

activities will be completed in accordance with the timing requirements

of Sec. 572.210(f) (including

[[Page 48798]]

any extension granted under Sec. 572.210(f)).

* * * * *

Sec. 572.130 [Amended]

6. Section 572.130 is amended by removing the examples at the end

of paragraphs (d)(3) and (4).

7. Section 572.140 is revised to read as follows:

Sec. 572.140 Third party rights.

The rights of third parties are governed by 42 U.S.C. 12895(d) and

apply to the requirements of this part.

8. Section 572.200 is revised to read as follows:

Sec. 572.200 Planning grants.

Any planning grants made by HUD under the HOPE 3 program will

continue to be governed by the provisions in this section in effect

immediately before October 16, 1996. When or before HUD announces the

availability of funds for planning grants under this part, these

provisions will be recodified.

9. Section 572.205 is revised to read as follows:

Sec. 572.205 Planning grants--eligible activities.

Any planning grants made by HUD under the HOPE 3 program will

continue to be governed by the provisions in this section in effect

immediately before October 16, 1996. When or before HUD announces the

availability of funds for planning grants under this part, these

provisions will be recodified.

10. Section 572.210 is amended by revising paragraphs (a) and (f)

and by removing and reserving paragraph (e) to read as follows:

Sec. 572.210 Implementation grants.

(a) General authority. HUD will make implementation grants to HOPE

3 applicants for the purpose of carrying out homeownership programs

approved under this part. Applications will be selected in accordance

with selection criteria to be published in a NOFA.

* * * * *

(e) [Reserved]

(f) Deadline for completion. A recipient must spend all

implementation grant amounts within 4 years from the effective date of

the grant agreement. The appropriate HUD Field Office may approve a

request to extend the deadline when it determines that an extension is

warranted.

* * * * *

11. Section 572.220 is amended by:

a. Revising paragraph (a)(1);

b. Adding a new paragraph (a)(3);

c. Revising paragraph (b)(1)(ii)(C);

d. Revising the second sentence in paragraph (b)(2)(i); and

e. Removing the example at the end of paragraph (b)(2)(ii), to read

as follows:

Sec. 572.220 Implementation grants--matching requirements.

(a) * * *

(1) Except as provided in paragraph (a)(3) of this section, each

recipient must assure that matching contributions equal to not less

than 33 percent (or 25 percent for grants awarded after April 11, 1994)

of the amount of the implementation grant shall be provided from non-

Federal sources to carry out the homeownership program. Amounts

contributed to the match must be used for eligible activities or in

accordance with the requirements of this section.

(2) * * *

(3) When the recipient is an IHA, and the IHA (acting in that

capacity) has not received, and will not receive, amounts under title I

of the Housing and Community Development Act of 1974 for the fiscal

year in which HUD obligates HOPE grant funds, the match requirements

under this section will not apply.

(b) * * *

(1) * * *

(ii) * * *

(C) Income from a Federal grant earned after the end of the award

period, if no Federal programmatic requirements govern the disposition

of the program income.

(2) * * *

(i) * * * This limitation is in addition to the 15 percent

limitation on administrative costs (see Sec. 572.215(o)).

* * * * *

12. Section 572.315 is revised to read as follows:

Sec. 572.315 Rating criteria for planning grants.

Any planning grants made by HUD under the HOPE 3 program will

continue to be governed by the provisions in this section in effect

immediately before October 16, 1996. When or before HUD announces the

availability of funds for planning grants under this part, these

provisions will be recodified.

13. Section 572.420 is amended by revising paragraphs (b) and (h)

and by removing and reserving paragraphs (c) and (d), to read as

follows:

Sec. 572.420 Miscellaneous requirements.

* * * * *

(b) Requirements in 24 CFR part 5. The Disclosure requirements;

provisions on Debarred, suspended or ineligible contractors; and Drug-

Free Workplace requirements, as identified in Sec. 5.105 (b), (c), and

(d) of this title, apply to this program.

(c) [Reserved]

(d) [Reserved]

* * * * *

(h) Lead-based paint. Residential property assisted under this

program constitutes HUD-associated housing for purposes of the

requirements of part 35 of this title. Unless otherwise provided,

recipients are responsible for testing and abatement activities.

Dated: September 3, 1996.

Andrew Cuomo,

Assistant Secretary for Community Planning and Development.

Note: The following Appendix will not be codified in the Code of

Federal Regulation.

Appendix

The material contained in this appendix to the HOPE 3 final rule

published on September 16, 1996 is provided for the convenience of

users of the HOPE 3 regulations. The appendix contains material

removed from codification in 24 CFR part 572 (title 24 of the Code

of Federal Regulations, part 572).

Examples

Calculation under Sec. 572.130(d)(3): The following example

illustrates a calculation under paragraph (3) of Sec. 572.130(d),

which addresses the amount payable under a promissory note with

respect to a sale by an initial homeowner after the first 6 years

and through the 20th year after acquisition.

Example: If the family sells at the end of the 13th year of

homeownership (at the halfway point between the end of the 6th year

and the end of the 20th year of ownership), 84/168 (or one-half) of

the note would be forgiven, and only half of the principal amount of

the note would be payable from sales proceeds. The family could

retain all remaining proceeds, including proceeds due to normal

market value increases in the value of the property. If the initial

homeowner retains ownership for 20 or more years, the entire amount

of the note would be forgiven.

Calculation under Sec. 572.130(d)(4): The following example

illustrates a calculation under paragraph (4) of Sec. 572.130(d),

which addresses the amount payable on a promissory note that is

required to be executed by a subsequent purchaser who purchases the

property for less than the fair market value during the 20-year

period, as measured by the term of the initial promissory note.

Example: If the subsequent homeowner acquires the property from

an initial homeowner at the end of year 4, there are 192 months (16

years x 12 months/year) remaining in the 20-year period. The term

of the promissory note is 16 years. If the subsequent homeowner

sells at the end of year 10, having owned the property for 72 months

(6 years x 12 months/year), 72/192 (37.5 percent) of the note

would be forgiven,

[[Page 48799]]

and 62.5 percent of the principal amount of the note would be

payable from sales proceeds. The family could retain all remaining

proceeds, including proceeds due to normal market value increases in

the value of the property. If the subsequent homeowner retains

ownership until the end of the initial 20-year period (for 16 years,

in the example), the entire amount of the note would be forgiven.

Examples of non-Federal resources that may apply toward matching

requirements as cash contributions, under Sec. 570.220(b)(1)(ii)(C)

(income from a Federal grant earned after the end of the award

period, if no programmatic requirements govern the disposition of

the program income): Repayments from closed out grants under the

Urban Development Action Grant Program (24 CFR part 570, subpart G),

the Housing Development Grant Program (24 CFR part 850), and the

Rental Rehabilitation Program (RRP) when all RRP grant years of

participation by an RRP recipient have been closed out by HUD.

Calculation under Sec. 572.220(b)(2)(ii): The following example

illustrates a calculation under Sec. 572.220(b)(2)(ii), which

addresses the valuation of administrative services contributed

toward the matching requirement applicable to implementation grants.

Example: If the grant amount is $600,000, the recipient must

assure the provision of at least $198,000 (33 percent of grant) or

$150,000 (25 percent of the grant, if awarded after April 11, 1994))

from non-Federal sources, as applicable. Contributions for

administrative costs that may be counted toward the match may not

exceed $42,000 (7 percent of the grant amount of $600,000). Although

a recipient can spend more than this on administrative costs, it may

not be counted towards the match. In addition, the recipient must

provide contributions covering the remaining $156,000 ($198,000-

$42,000) or the remaining $108,000 ($150,000-$42,000 for grants

awarded after April 11, 1994) required for the match from non-

Federal sources.

Planning Grants--Provisions in Effect Immediately Before September 16,

1996:

The following provisions relating to planning grants under the

HOPE 3 program were moved from the CFR by the final rule published

on September 16, 1996. In the event that planning grants are made in

the future, HUD will recodify the applicable provisions in full.

Existing projects remain subject to grant agreements and the

regulatory provisions contained therein:

Former Sec. 572.200--Planning Grants

(a) General authority. HUD will make HOPE 3 planning grants to

applicants for the purpose of developing HOPE 3 homeownership

programs under this part. Applications will be selected in a

national competition in accordance with the selection and NOFA

process described in subpart D of this part. The maximum amount of a

planning grant will be specified in the NOFA.

(b) Overall limitations. (1) If two or more fundable

applications for planning grants propose substantially the same

general locations, the highest ranking application will be selected.

However, HUD may reduce the scope of an application if the size of

the jurisdiction is sufficiently large to justify approval of more

than one grantee. HUD may also approve a planning grant in an area

where an implementation grant already exists or is being approved in

the current funding round as long as the program that could result

from the planning grant will not lead to substantial competition

among grant recipients for eligible properties. However, if a

determination is made that the approval of both a planning grant and

implementation grant will lead to substantial competition for

eligible properties, only the implementation grant will be approved.

(2) A single applicant may apply for more than one planning in

response to any NOFA, but HUD will not approve more than one

planning grant for any one applicant.

(3) An applicant who has previously received a HOPE 3 planning

grant or implementation grant is not eligible for an additional HOPE

3 planning grant.

(4) No amendments to increase previously approved grant amounts

are allowed.

(c) Scope of program. (1) Applications that identify a public

body as the entity to execute the grant agreement may only propose a

program to be carried out within the jurisdiction of that entity.

Applications that identify a private nonprofit organization as the

entity to execute the grant agreement may propose a program to be

carried out within two or more jurisdictions. No application may

propose a program to be carried out in more than one State, except

for Indian tribes or IHAs whose jurisdiction covers more than one

State.

(2) An applicant must demonstrate that at least 10 units in

eligible properties will be available for use in the area proposed

for the program through evidence of current availability or evidence

of availability during the 12-month period prior to submission of

the application.

(d) Deadline for completion of activities.

(1) Activities under a planning grant, including the

requirements outlined in paragraph (d)(2) of this section, must be

carried out within 12 months of the effective date of the planning

grant agreement. HUD Field Offices may extend the period up to 60

days. HUD may deobligate amounts not drawn down by the approved

completion date. HUD Headquarters may approve a request for an

additional extension for costs related to the preparation of an

implementation grant application where it determines an extension is

necessary.

(2) Each recipient must submit either:

(i) An implementation grant application by the deadline date

stated in a HOPE 3 NOFA issued within 12 months of the effective

date of the planning grant agreement; or

(ii) A report on activities undertaken under the planning grant

agreement, including the recipient's determination whether it is

feasible for it to undertake a homeownership program and an

assessment of the factors used to make the determination.

Former Sec. 572.205 Planning Grants--Eligible Activities

Planning grants may be used for the reasonable costs of eligible

activities necessary to develop homeownership programs under this

part. No additional activities may be approved. Applicants are not

required to request funding for each type of eligible activity. Only

costs incurred on or after the effective date of the grant agreement

qualify for funding under this part. Activities eligible under a

planning grant are:

(a) Assessing stock of eligible properties. Assessing the

availability on an ongoing basis of eligible properties of the

appropriate condition, type, and price in specific neighborhoods or

areas to implement a homeownership program. For example, planning

grants may be used to fund the costs of obtaining and analyzing

lists of potentially eligible properties from appropriate Federal,

State, and local agencies and inspecting representative properties,

including inspection for the purpose of evaluating potential lead-

based paint hazards. Technical studies to evaluate environmental

problems and to determine whether mitigation is feasible are

eligible.

(b) Training and technical assistance for grant recipients.

Training of and technical assistance to grant recipients related to

development of a specific homeownership program. This may include,

for example, courses in real estate financing and examining

alternative approaches for carrying out a homeownership program.

Training and technical assistance may only be provided by qualified

entities other than the recipient and may not be provided to any

individual or group other than the grant recipient and any

cooperating entity named in the approved application.

(c) Feasibility studies. Studies of the feasibility of a

specific homeownership program, including whether the program can be

designed to meet the affordability standards under Sec. 572.120 and

achieve financial feasibility.

(d) Preliminary architectural and engineering work. Preliminary

architectural and engineering work, including developing estimates

of the amount of work necessary to support rehabilitation of a

typical unit that may be acquired by an eligible family under the

program and other cost estimates to be included in a HOPE 3

implementation grant application.

(e) Identification of counseling and training curricula and

sources. Identification of course curricula and sources that can

provide homebuyer and homeowner counseling and training, including

such subjects as personal financial management, home maintenance,

home repair, construction skills (to the extent appropriate,

especially where eligible families will do some of the

rehabilitation (``sweat equity''), and general rights and

responsibilities of a homeowner. Development of new curricula is not

an eligible cost.

(f) Economic development planning. Planning for economic

development activities that are eligible implementation grant

activities under Sec. 572.215. The aggregate amount of planning and

implementation grants that may be used for economic development

activities related to any one HOPE 3 program may not exceed

$250,000.

(g) Security plans. Development of security plans. This activity

may cover, where

[[Page 48800]]

necessary, such costs as assessing the need for negotiating

agreements with local law enforcement agencies and for planning

security systems.

(h) Application for an implementation grant. Preparation of an

application for an implementation grant to carry out a homeownership

program under this part.

(i) Administrative costs. Administrative costs necessary to

carry out the eligible activities specified in the approved

application.

Former Sec. 572.315--Rating Criteria for Planning Grants

HUD will review each application for a planning grant that

qualifies for additional consideration under the screening

procedures described in Sec. 572.300(c), in accordance with the

following rating criteria:

(a) Capability. The ability of the applicant to develop a HOPE 3

homeownership program in a reasonable time and in a successful

manner. In assigning points for this criterion, HUD will consider

evidence in the application that demonstrates:

(1) The capability of the applicant to develop a HOPE 3

homeownership program, demonstrated through previous experience of

the applicant or key staff in managing acquisition, rehabilitation,

construction, real estate financing, counseling and training, or

other relevant activities, or by an explanation of how such

capability will be obtained.

(2) The ability of the applicant to handle financial resources,

demonstrated through such evidence as previous experience of the

applicant or key staff and existing financial control procedures, or

an explanation of how such capability will be obtained.

(b) Public/private support. In assigning points for this

criterion, HUD shall consider:

(1) The extent of interest of the unit of general local

government (or Indian tribe, where applicable), or State or

territorial government, and other public agencies, in support of a

homeownership program, demonstrated through evidence of intent to

provide assistance, such as supportive services (including

counseling and training), rehabilitation loans or grants, interest

rate subsidies, water and sewer improvements, street and sidewalk

improvements, and tax abatements.

(2) The extent of interest of the private sector and nonprofit

organizations (including places of worship, banks, neighborhood or

community organizations, the business community, or other community

groups) in support of a home ownership program, demonstrated through

evidence of intent to provide assistance such as the donation of

labor or materials, interest rate reductions or other financing

subsidies, and volunteer assistance in some aspect of the program

(activities of the applicant will not be considered under this

subcriterion).

(c) Need for homeownership program. In assigning points for this

criterion, HUD will consider the relative percentage of the total

number of rental households consisting of persons with incomes at or

below the poverty level, as determined by the Bureau of Census, in

the applicable jurisdiction or jurisdictions.

(d) Planning approach. HUD will consider the extent to which the

proposal represents a sound approach to planning, demonstrates an

understanding of the nature and scope of activities required to

successfully implement a homeownership program, and is likely to

result in a successful homeownership program.

[FR Doc. 96-23574 Filed 9-13-96; 8:45 am]

BILLING CODE 4210-29-P