Emergency Capital Repair Grants for Multifamily Housing Projects Designated for Occupancy by the Elderly, 29538-29564 [06-4745]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 71, Number 98 (Monday, May 22, 2006)]
[Notices]
[Pages 29538-29564]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-4745]



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Part III





Department of Housing and Urban Development





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Emergency Capital Repair Grants for Multifamily Housing Projects 
Designated for Occupancy by the Elderly; Notice

Federal Register / Vol. 71, No. 98 / Monday, May 22, 2006 / Notices

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5004-N-01]


Emergency Capital Repair Grants for Multifamily Housing Projects 
Designated for Occupancy by the Elderly

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: This notice announces the availability of approximately $30 
million in grant funds to make emergency capital repairs to eligible 
multifamily projects owned by private nonprofit entities that are 
designated for occupancy by elderly tenants. The capital repair needs 
must relate to items that present an immediate threat to the health, 
safety, and quality of life of the tenants. The intent of these grants 
is to provide one-time assistance for emergency items that could not be 
absorbed within the project's operating budget and other project 
resources, and where the tenants' continued occupancy in the immediate 
near future would be jeopardized by a delay in initiating the proposed 
cure.
    The notice provides instructions for owners of multifamily projects 
to request funding and instructions for the HUD field offices to 
process requests.

DATES: HUD will accept applications on a first-come, first-serve basis 
upon publication of this notice and will award emergency capital repair 
grants until available amounts are expended. Applicants should submit 
emergency capital repair applications as soon as they have prepared an 
application that complies with the procedures and requirements 
contained in this notice.

ADDRESSES: Applications must be submitted to the local HUD Field Office 
for the project covered by the application. Please see Appendix II for 
a list of the local HUD Field Offices.

FOR FURTHER INFORMATION CONTACT: G. DeWayne Kimbrough, Director, Grant 
and Housing Assistance Field Support Division, Office of Multifamily 
Housing, Room 6146, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410; telephone (202) 708-3000 
(this is not a toll-free number). Persons with hearing or speech 
impairments may access this number via TTY by calling the toll-free 
Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 202b of Title II of the Housing Act of 1959 (12 U.S.C. 
1701q-2) was amended to provide grants for ``substantial capital 
repairs to eligible multifamily projects with elderly tenants that are 
needed to rehabilitate, modernize, or retrofit aging structures, common 
areas or individual dwelling units.'' The Consolidated Appropriations 
Act, 2005 (Pub. L. 108-447, approved December 8, 2004), provided $25 
million ($15 million of which was announced in the FY 2005 Assisted 
Living Conversion Program's Notice of Funding Availability (NOFA) as 
being set aside for the Emergency Capital Repair Program). In addition, 
the Transportation, Treasury, Housing and Urban Development, the 
Judiciary, the District of Columbia, and Independent Agencies 
Appropriations Act, 2006 (Pub. L. 109-115, approved November 30, 2005) 
provides $24.8 million for grants under section 202b of the Housing Act 
of 1959 (12 U.S.C. 1701q-2) for conversion of eligible projects to 
assisted living ``and for emergency capital repairs as determined by 
the Secretary'' of HUD.
    This notice announces the availability of approximately $30 million 
in funding, including $15 million in FY 2006 appropriation funding and 
$15 million in carry-over grant funds to make emergency capital repairs 
to eligible multifamily projects that are owned by private nonprofit 
entities. The capital repair needs must relate to items that present an 
immediate threat to the health, safety, and quality of life of the 
tenants. The intent of these grants is to provide one-time assistance 
for emergency items that could not be absorbed within the project's 
operating budget and other project resources, and where the tenants' 
continued occupancy in the immediate near future would be jeopardized 
by a delay in initiating the proposed cure.

II. Definition of ``Emergency Capital Repairs''

    For purposes of this notice, ``emergency capital repairs'' is 
defined as repairs at a project to correct a situation that presents an 
immediate threat to the life, health and safety of project tenants. 
Assistance is limited to those projects with emergency problems that 
are of such a magnitude that:
    A. The problem poses an immediate threat to the quality of life of 
the tenants; and
    B. The continuation of the existing problem could potentially 
result in an evacuation of the tenants or long-term tenant displacement 
unless the repairs are made.

III. Eligibility Requirements

    Eligibility for emergency capital repair grants under this notice 
is restricted to: private nonprofit owners of eligible multifamily-
assisted housing developments designated for occupancy by elderly 
tenants, as specified in sections 683(2)(B), (C), (D), (E), (F), or (G) 
of the Housing and Community Development Act of 1992 (Pub. L. 102-550, 
approved October 28, 1992). Those projects, as identified below, must 
have had final closing on or before January 1, 1999. The eligible 
projects are:
    A. Section 202 direct loan projects with or without Section 8 
rental assistance;
    B. Section 202 capital advance projects receiving rental assistance 
under their Project Rental Assistance Contract (PRAC);
    C. Section 515 rural housing projects receiving Section 8 rental 
assistance;
    D. Projects subsidized with Section 221(d)(3) below-market interest 
mortgage;
    E. Projects assisted under Section 236 of the National Housing Act; 
and
    F. Other projects receiving Section 8 project-based rental 
assistance.
    To be eligible for an emergency capital repair grant under this 
notice, a project owner must be in compliance with:
    1. Its Loan Agreement, Capital Advance Agreement, Regulatory 
Agreement Housing Assistance Payment contract, Project Rental 
Assistance contract, Rent Supplement or Loan Management Set Aside 
(LMSA) contract, or any other HUD grant or contract document, and
    2. All applicants must comply with all applicable fair housing and 
civil rights requirements in 24 CFR 5.105(a), as applicable.
    If you, the applicant:
    (a) Have been charged with an ongoing systemic violation of the 
Fair Housing Act; or
    (b) Are a defendant in a Fair Housing Act lawsuit filed by the 
Department of Justice alleging an ongoing pattern or practice of 
discrimination; or
    (c) Have received a letter of findings identifying ongoing systemic 
noncompliance under Title VI of the Civil Rights Act of 1964, section 
504 of the Rehabilitation Act of 1973, or section 109 of the Housing 
and Community Development Act of 1974, and the charge, lawsuit, or 
letter of findings referenced in subparagraph (a), (b), or (c) above 
has not been resolved to HUD's satisfaction before the application 
deadline, then you are

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ineligible and HUD will not rate and rank your application. HUD will 
determine if actions to resolve the charge, lawsuit, or letter of 
finding taken prior to the application deadline are sufficient to 
resolve the matter.
    Examples of actions that would normally be considered sufficient to 
resolve the matter include, but are not limited to:
    (i) A voluntary compliance agreement signed by all parties in 
response to a letter of finding;
    (ii) A HUD-approved conciliation agreement signed by all parties;
    (iii) A consent order or consent decree; or
    (iv) An issuance of a judicial ruling or a HUD Administrative Law 
Judge's decision.

IV. Grant Requirements

A. Conditions for Assistance

    The following conditions apply to emergency capital grants awarded 
under this notice:
    1. The request for funding must clearly identify the existing 
emergency and must contain a detailed justification in support of the 
emergency designation.
    2. Funds awarded may be expended only for approved uses.
    3. Repairs must be initiated immediately upon receiving the grant 
award and must be substantially completed within 6 months of the 
initial start, with final repairs completed no later than 12 months 
after receipt of funding. Unless there are safety concerns, tenants 
must be able to remain in their units while the repairs are being made.
    4. The project owner must demonstrate that: (i) The project 
accounts have been maintained in accordance with all HUD requirements; 
and (ii) there are insufficient funds in the operating budget and other 
project resources. Owners must use all residual receipts available and 
all reserve for replacement funds in excess of $1,000 per unit to 
address the emergency.
    5. The project owner's most recent management review rating is 
``satisfactory'' or above.
    6. The most recent Real Estate Assessment Center (REAC) physical 
inspection report for the project must have a score of 60 or above. 
Developments scoring less than 60 are ineligible.
    7. The project is well maintained except for the current emergency 
capital repair needs.
    8. The project does not have a recent history of mortgage defaults.
    9. The project owner does not have any material-adverse financial 
or managerial actions or omissions with regard to any project that is 
federally assisted or financed with a loan or capital advance from, or 
mortgage insured by, an agency of the Federal government.
    10. Tenants must be notified of the request for the grant and must 
be informed of the overall plan to complete the capital repairs.
    11. The owner's Affirmative Fair Housing Marketing Plan (AFHMP) 
must meet all applicable HUD requirements. A copy of the approved AFHMP 
should be attached with the request for funding. If the owner does not 
have an approved AFHMP, one must be submitted for HUD approval along 
with the request for funds. A request for funds without either an 
existing approved AFHMP or a proposed AFHMP will be considered 
incomplete and will be processed using the procedures set out in 
Section V B.3 of this notice.
    12. The project owner must not have an outstanding Letter of 
Noncompliance and must not be out of compliance with a voluntary 
compliance agreement, consent decree, court order, or other Settlement 
Agreement. If the project owner has an outstanding Letter of 
Noncompliance or is not in compliance with a voluntary compliance 
agreement, consent decree, court order, or other Settlement Agreement, 
the project owner must submit, along with the request for funds, a plan 
that identifies the compliance problem(s) and the method(s) to be used 
to correct it (them). A request for funds without a written correction 
plan under the conditions of this paragraph will be considered 
incomplete and will be processed using the procedures set out in 
Section V B.3 of this notice.

B. Funding

    The following requirements apply to emergency capital grant amounts 
awarded under this notice:
    1. The maximum amount an individual project owner may apply for is 
$500,000. (The grant, along with funds from other sources, must remove 
the emergency condition's.)
    2. All grant requests that are submitted by the Hub Directors will 
be funded based on the date and time of receipt in the Field Offices. 
See V B. (2) and (3) below.
    3. HUD retains the right to adjust the amount of the grant up (to a 
maximum grant of $500,000) or down, based on review of the 
reasonableness of the costs for completing the repairs.
    4. Davis-Bacon prevailing wage rate requirements do not apply to 
emergency capital repair grants. Davis-Bacon requirements may apply to 
emergency repairs if the repairs will also be assisted by another 
federal program that requires Davis-Bacon wage rates.

C. Eligible Uses of Funds

    Grant funds are available only for emergency capital repairs that 
relate to immediate health/safety needs that impact upon the quality of 
life of the tenants if the repairs are not made. The project owner must 
submit a description of the proposed use of the funds and demonstrate 
how the repairs relate to eliminating the immediate emergency for the 
tenants. The repair item must have existed prior to submission of the 
application in order to obtain grant funds. The award is a one-time 
opportunity for correction of the threat to the tenants. Funds may be 
used to repair or replace systems including, but not limited to:
    1. Existing major building and structural components that are in 
critical condition; and
    2. Repairs or replacements to existing mechanical equipment to the 
extent that they are necessary for health and safety reasons. The 
purchase of high efficiency heating and cooling systems (Energy Star) 
for the approved replacement equipment is encouraged to promote energy 
conservation.

D. Ineligible Uses of Funds

    Emergency capital repair grants may not be used for the following 
costs:
    1. Deferred maintenance items.
    2. Lead-based paint abatement.
    3. Demolition and reconstruction activities, e.g., conversion of 
bedroom units.
    4. Security systems.
    5. Improvements, i.e., installation of sprinkler systems, air 
conditioning, additional lighting in parking lots, etc.
    6. Clearing of mold or mildew unless it is related to a repair of 
an existing emergency item that poses an immediate threat to the 
residents.

E. Rental Use Agreement

    If there are less than 10 years remaining on the existing mortgage, 
owners must enter into a Rental Use Agreement (Appendix I of this 
notice), to extend the remaining affordability of the project for up to 
10 years. For example, if the maturity date of the mortgage is 3 years 
from the execution of the Grant Agreement, the owner must enter into a 
Rental Use Agreement for 7 years beyond the term of the mortgage. If 
the maturity date of the mortgage is 15 years, the owner will not need 
to execute a Rental Use Agreement unless the mortgage is prepaid. All 
Rental Use Agreements must be recorded.

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V. Request Process

A. Owner Submission Requirements

    An emergency categorization is critical to qualifying for 
participation in this program. Requests for grants must be submitted in 
accordance with the procedures described below:
    1. The request must be made in writing and submitted by the project 
owner to the local field office. The request must clearly identify the 
basis for the emergency declaration and how it impacts the health and 
safety of the tenants, as well as what would happen if the emergency 
repair were not made immediately. The request also must identify the 
repairs proposed to correct the emergency for which funding is 
requested. Requests signed by a consultant or management agent on 
behalf of the owner are not acceptable.


    Note: Repair items identified on the REAC physical inspection 
report are not sufficient to be classified as emergency in nature.


    2. The repair and/or replacement items are to be written in a 
manner that specifically describes the scope of work to be performed, 
provides an estimate of the cost of the work to be performed, and 
provides an explanation of the basis for the estimate. The estimate 
provided for the cost of each action item must be reasonable and 
current (within 6 months of the application submission).
    3. The request must demonstrate that the repairs cannot be 
corrected at a cost that can be absorbed within the operating budget or 
by use of the reserve for replacement funds in excess of $1,000 per 
unit and/or residual receipts funds.
    4. The request must provide a project plan for substantially 
completing the repairs within 6 months, but no longer than 12 months 
from the date of the grant award.
    5. The project owner must notify the tenants of the plans to apply 
for this grant. The request must provide evidence that the tenants were 
notified and given the opportunity to make comments. Any comments 
received from the tenants must be submitted to the local HUD field 
office along with the repair request.
    6. The request must provide a description of any unsuccessful 
attempts the owner has made to acquire funds from other sources, 
including letters of denial from funding sources, to complete the 
outstanding emergency capital repairs.
    7. The request must provide a description of any previous grants or 
loans received by the project for repairs during the past 3 years from 
the effective date of this notice.

B. Field Office Processing

    1. The Hub Director/Program Center Director is responsible for 
ensuring that the requests are promptly and thoroughly reviewed and 
submitted to HUD Headquarters.
    2. Upon receipt of an owner's application, the Field Office will 
notify Headquarters of the date and time of receipt by facsimile, which 
should be addressed, ``Attention: G. DeWayne Kimbrough, Director, Grant 
and Housing Assistance Field Support Division.'' His facsimile number 
is (202) 401-9087. Headquarters will acknowledge the date and time of 
receipt by return facsimile. Also, Headquarters will advise the Field 
Office that the application will be placed in the Headquarters funding 
queue as of the date and time of reported receipt and that the Field 
Office has 15 working days to review and mail the approved application 
to Headquarters in accordance with the approval process outlined in C. 
below.
    3. Incomplete applications will not be processed and will be 
returned to the owner. Owners may revise and re-submit an application. 
However, the resubmitted application will be processed as a new request 
in the order in which it is received the second time. The Field Office 
must also notify Headquarters by facsimile of the date an incomplete 
application is returned to the owner so that the application can be 
taken out of the Headquarters funding queue.
    4. Each field office has the responsibility for conducting a 
comprehensive review of the project's files, which may include an on-
site review if such action is determined to be necessary to resolve 
concerns raised by the comprehensive review. The review should consist 
of completion of the questions in Appendix IV of this notice and may 
include any other concerns the field office may have about the project. 
The Office of Fair Housing and Equal Opportunity (FHEO) must be 
involved in determining fair housing and civil rights compliance.

C. Approval Process

    1. All approvable requests along with the Recommendations from the 
Program Centers (Appendix III of this notice) along with narratives 
describing the emergency capital repairs at the property are to be sent 
to the Multifamily Hub Director. Hub Directors will review, sign the 
certification, and mail the approvable request to the Office of Housing 
Assistance and Grant Administration in Headquarters, Attention: Willie 
Spearmon, 451 Seventh Street, SW., Washington, DC 20410.
    2. When Headquarters receives the request from the Hub Director, 
the Office of Housing Assistance and Grant Administration will process 
the request and award the funds, if approved, in accordance with the 
funding queue established by the date and time of receipt in the Field 
Office.


    Note: HUD Headquarters reserves the right to deny or reduce any 
request for funds.


    3. Headquarters will notify the Hub Director/Program Center 
Director by memorandum at the time the assignment of the funds has been 
approved. The Hub staff will prepare form HUD-718 and send it to the 
Fort Worth Accounting Center (FWAC) to reserve the funds in the name of 
the project. After the funds have been reserved, the Field Office can 
notify the grantee of the award and inform the grantee that execution 
of the Grant Agreement (Appendix V) and Rental Use Agreement (if 
appropriate) is necessary to receive the funds.
    Catalog of Federal Domestic Assistance (CFDA) Number: 14.315.

VI. Paperwork Reduction Act

    The information collection requirements contained in this rule have 
been submitted to the Office of Management and Budget (OMB) for review 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and 
assigned OMB control number 2502-0542. This Notice also contains 
information collection requirements that have not yet received OMB 
approval. These information collection requirements have been submitted 
to OMB for review, and approval is pending. HUD will announce the 
control numbers once OMB approval is received. In accordance with the 
Paperwork Reduction Act of 1995, 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.

VII. Environmental Review

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made for this notice in accordance with HUD 
regulations at 24 CFR part 50 that implement section 102(2)(C) of the 
National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The 
FONSI is available for public inspection between 8 a.m. and 5 p.m. 
Eastern Time, Monday through Friday, except federal holidays, in the 
Office of the General Counsel, Regulations Division, Room

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10276, Department of Housing and Urban Development, 451 Seventh Street, 
SW., Washington, DC 20410-0500. Due to security measures at the HUD 
Headquarters building, please schedule an appointment to review the 
FONSI by calling the Regulations Division at (202) 708-3055 (this is 
not a toll-free number).

    Dated: May 16, 2006.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.
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[FR Doc. 06-4745 Filed 5-17-06; 4:35 pm]
BILLING CODE 4210-67-C