Streamlining Management and Occupancy Reviews for Section 8 Housing Assistance Programs and Amending Vacancy Payments for Section 8 and Section 162 Housing Assistance Programs, 1860-1868 [2015-00357]
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Federal Register / Vol. 80, No. 9 / Wednesday, January 14, 2015 / Proposed Rules
improvements will meet HHS, as well as
all other Federal, state and local
requirements for fire safety equipment,
if applicable.
Dated: December 16, 2014.
Biniam Gebre,
Acting Assistant Secretary for Housing—
Federal Housing Commissioner.
[FR Doc. 2015–00373 Filed 1–13–15; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Parts 880, 881, 883, 884, 886,
and 891
[Docket No. FR–5654–P–01]
RIN 2502–AJ22
Streamlining Management and
Occupancy Reviews for Section 8
Housing Assistance Programs and
Amending Vacancy Payments for
Section 8 and Section 162 Housing
Assistance Programs
Office of the Assistant
Secretary for Housing—Federal Housing
Commissioner.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
amend existing project-based Section 8
regulations related to Management and
Occupancy Reviews (MORs) and
Vacancy Payments for the following
programs: the Section 8 Housing
Assistance Payments (HAP) Programs
for New Construction, Substantial
Rehabilitation, State Housing Agencies,
New Construction financed under
Section 515 of the Housing Act of 1949,
the Loan Management Set-Aside
Program, the HAP Program for the
Disposition of HUD-Owned Projects,
and the Section 202/8 Program. This
rule would also amend the existing
Section 162 regulations related to
Vacancy Payments for the Section 202
Projects. Under this rule, MORs would
be conducted in accordance with a
schedule published in the Federal
Register and subject to public comment.
The first such schedule is being
published for comment concurrently
with this proposed rule, and can be
found elsewhere in today’s Federal
Register. HUD is proposing this change
in order to reduce the frequency of
MORs, thereby minimizing
interruptions in property operations
created by onsite reviews, preserving
staff time, and reducing costs. In
addition, this proposed rule would
reduce the vacancy payments made to
the owner by HUD for a vacant assisted
unit.
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SUMMARY:
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DATES:
Comment Due Date. March 16,
2015.
Interested persons are
invited to submit comments regarding
this rule to the Regulations Division,
Office of General Counsel, 451 7th
Street SW., Room 10276, Department of
Housing and Urban Development,
Washington, DC 20410–0500.
Communications must refer to the above
docket number and title. There are two
methods for submitting public
comments. All submissions must refer
to the above docket number and title.
1. Submission of Comments by Mail.
Comments may be submitted by mail to
the Regulations Division, Office of
General Counsel, Department of
Housing and Urban Development, 451
7th Street SW., Room 10276,
Washington, DC 20410–0500.
2. Electronic Submission of
Comments. Interested persons may
submit comments electronically through
the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly
encourages commenters to submit
comments electronically. Electronic
submission of comments allows the
commenter maximum time to prepare
and submit comments, ensures timely
receipt by HUD, and enables HUD to
make them immediately available to the
public. Comments submitted
electronically through the
www.regulations.gov Web site can be
viewed by other commenters and
interested members of the public.
Commenters should follow the
instructions provided on that site to
submit comments electronically.
ADDRESSES:
Note: To receive consideration as public
comments, comments must be submitted
through one of the two methods specified
above. Again, all submissions must refer to
the docket number and title of the rule.
No Facsimile Comments. Facsimile
(FAX) comments are not acceptable.
Public Inspection of Public
Comments. All properly submitted
comments and communications
submitted to HUD will be available for
public inspection and copying between
8 a.m. and 5 p.m. Eastern Time
weekdays at the above address. Due to
security measures at the HUD
Headquarters building, an advance
appointment to review the public
comments must be scheduled by calling
the Regulations Division at 202–708–
3055 (this is not a toll-free number).
Individuals with speech or hearing
impairments may access this number
through TTY by calling the Federal
Relay Service at 800–877–8339. Copies
of all comments submitted are available
for inspection and downloading at
www.regulations.gov.
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For
information about management and
occupancy reviews contact Lauryn
Alleva, Program Administration Office,
Office of Housing, Department of
Housing and Urban Development, 451
7th Street SW., Washington, DC 20410–
7000; telephone number 202–708–3730
(this is not a toll-free number). For
information about vacancy claims,
contact Yvette Viviani, Housing
Assistance Policy Division, Office of
Housing Assistance and Grant
Administration, Office of Housing,
Department of Housing and Urban
Development, 451 7th Street SW.,
Washington, DC 20410–7000; telephone
number 202–708–3000 (this is not a tollfree number). Hearing- and speechimpaired persons may access these
numbers through TTY by calling the
Federal Relay Service at 800–877–8339
(this is a toll-free number).
SUPPLEMENTARY INFORMATION:
FOR FURTHER INFORMATION CONTACT:
I. Background
Section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f)
authorizes one of HUD’s primary
programs for providing rental housing
assistance (Section 8). The purpose of
Section 8 is to provide low-income
families with decent, safe, and sanitary
rental housing. The Section 8 program
includes a project-based program and a
tenant-based housing choice program.
Under the project-based program, HUD
may enter into an annual contributions
contract (ACC) with a public housing
agency (PHA) through which HUD
commits to provide the agency with
funds to make housing assistance
payments to a project owner. The PHA
or state agency, acting as a contract
administrator, then enters into a
Housing Assistance Payments (HAP)
contract with the owner. Under the HAP
contract, the contract administrator
agrees to subsidize certain units for a
specified period of time for eligible lowincome families. In certain
circumstances HUD may act as the
contract administrator, whereby HUD
will directly enter into a HAP contract
with an owner.
There are seven project-based Section
8 HAP programs administered by the
Office of Multifamily Housing Programs:
The HAP program for New Construction
(24 CFR part 880) and the HAP program
for Substantial Rehabilitation (24 CFR
part 881), which provide rental
assistance in connection with the
development of newly constructed or
substantially rehabilitated privately
owned rental housing; the HAP Program
for State Housing Agencies (24 CFR part
883); the HAP program for New
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Construction financed under Section
515 of the Housing Act of 1949 (24 CFR
part 884), which applies to U.S.
Department of Agriculture rural rental
housing projects; the Loan Management
Set Aside Program (24 CFR part 886,
subpart A), which provides rental
subsidies to HUD-insured or HUD-held
multifamily properties experiencing
immediate or potential financial
difficulties; the Housing Assistance
Program for the Disposition of HUDOwned Projects (24 CFR part 886,
subpart C), which provides Section 8
assistance in connection with the sale of
HUD-owned multifamily rental housing
projects and the foreclosure of HUDheld mortgages on rental housing
projects; and the Section 202/8 Program
(24 CFR part 891, subpart E), which
provides assistance for housing projects
serving elderly or families and
individuals with disabilities.
Section 162 Project Assistance
Contracts (PACs) were authorized under
the now repealed Section 202(h) of the
Housing Act of 1959 (12 U.S.C. 1701q).
Although the program was repealed,
Section 162 PACs are still renewed
under the Section 162 program. Section
162 renewals provide funding for
projects under the Section 202 Direct
Loan Program for the Elderly and
targeted persons with disabilities. A
PAC is similar to the ACC in the Section
8 projects and the program operates
under the same terms as the Section 8
program.
A. Management and Occupancy
Reviews
Contract administrators in the Section
8 above-listed programs are responsible
for assessing the management and
oversight of housing projects and for
ensuring that owners comply with the
requirements of the HAP contract. In
order to assess an owner’s compliance
with the terms and conditions of its
HAP contract, contract administrators
conduct management and occupancy
reviews (MORs).
Under existing regulations, the
frequency of MORs across the seven
project-based Section 8 programs
administered by the Office of
Multifamily Housing is inconsistent.
Contract administrators in the HAP New
Construction Program, HAP Substantial
Rehabilitation Program, and HAP State
Housing Agencies Program are required
to review a project’s operations ‘‘at least
annually’’ to determine whether the
owner is in compliance with the HAP
contract. The regulations for the HAP
Program for Section 515 projects, the
Loan Management Set-Aside Program,
and the Housing Assistance Program for
the Disposition of HUD-Owned Projects
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are less prescriptive and only require
that HUD review project operations ‘‘at
such intervals as it deems necessary’’ to
ensure an owner is in compliance with
its HAP contract. Lastly, the Section
202/8 program regulations provide no
reference to the frequency of MORs.
Completion of MORs can require
Contract Administrators to visit the site
and can cause interruption in project
operations. The Contract Administrator
spends approximately 8 hours of staff
time and additional resources to review
every project. HUD has found that in
recent years projects have been rated
‘‘Above Average’’ or ‘‘Superior’’ 35
percent of the time, ‘‘Satisfactory’’ 57
percent of the time, and ‘‘Below
Average’’ or ‘‘Unsatisfactory’’ eight
percent of the time. A full or limited
review of all projects, including those
that consistently receive high marks,
puts a strain on HUD and project
resources.
B. Vacancy Payments
Under section 8(c)(4) of the United
States Housing Act of 1937, a HAP
contract providing project-based rental
assistance may contain payments for
vacant units. Similarly, a PAC may
contain payments for vacant units. A
contract administrator may continue to
provide assistance under the contract
for a dwelling unit that remains vacant
after the effective date of the contract or
a dwelling unit that becomes vacant
only if the vacancy was not the fault of
the owner of the dwelling unit, and the
agency and the owner take every
reasonable action to minimize the
likelihood and extent of any such
vacancy.
Under current regulations, an owner
is entitled to vacancy payments in the
amount of 80 percent of the contract
rent for a period of no more than 60
days after initial rent up or after an
eligible family vacates the unit. These
vacancy payments are made as part of
an owner’s monthly HAP or PAC
payment. If the vacancy persists past the
60 days, an owner may also receive
additional vacancy payments in an
amount equal to the principal and
interest payments required to amortize
that portion of the debt service
attributable to the vacant unit for up to
12 additional months (debt-service
vacancy payments). Debt-service
vacancy payments are made semiannually by the contract administer
upon request by the owner. In either
case, an owner is not entitled to vacancy
payments for vacant units to the extent
he can collect for the vacancy from
other sources (such as security deposits
and governmental payments under other
programs). Additionally, an owner is
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only eligible for payments if during the
vacancy period for which payment is
claimed an owner continues to market
the unit in accordance with HUD
requirements, takes all feasible actions
to fill the vacancy, does not reject an
eligible applicant except for good cause
acceptable to the contract administrator;
and maintains the unit in decent, safe,
and sanitary conditions.
HUD has observed that the 60-day
period for vacancy payments may be too
long; resulting in contract units staying
vacant for longer periods and extending
the time it takes for eligible families to
secure housing.
II. This Proposed Rule—Overview
A. Management and Occupancy
Reviews
HUD is proposing to revise the
regulations that govern MORs for
Section 8 HAP projects to provide
consistency across programs and allow
HUD the flexibility to set a schedule
that is more in-line with the needs of
the programs. Because many of the
properties that receive assistance under
a Section 8 HAP program have
consistently received high marks on
their MORs, reducing the frequency of
MORs for these properties would result
in fewer interruptions in project
operations and would allow HUD to
focus its staff and resources on areas
that require greater attention. HUD
proposes to amend the project-based
Section 8 HAP program regulations to
require that MORs be conducted in
accordance with a schedule set out by
the Secretary as published in the
Federal Register, following notice and
comment. HUD’s proposal would adopt
this new language in 24 CFR 880.612,
884.224, 886.130, and 886.355, and
would re-title these sections
‘‘Management and occupancy reviews.’’
Additionally, this proposal would add a
new § 891.582, also titled ‘‘Management
and occupancy reviews.’’ Because the
cross-reference in 24 CFR 881.601 and
24 CFR 883.701 includes 24 CFR
880.612, this new MOR requirement
would also apply to the HAP
Substantial Rehabilitation Program and
the HAP Program for State Housing
Agencies, respectively, without changes
being made to the regulations that are
specific for those programs.
The first proposed schedule for MORs
is published elsewhere in today’s
Federal Register and HUD invites
public comment on that schedule. As
provided in that notice, although HUD
is proposing a schedule for MORs that
is based on both a project’s annual MOR
rating and a HUD risk-based
management model, nothing in this
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proposed rule nor the accompanying
notice restricts HUD or the Contract
Administrator from conducting
additional MORs outside of this
schedule pursuant to existing and future
administrative guidelines.
B. Vacancy Payments
HUD is also proposing to revise the
regulations that permit owners of
Section 8 HAP projects and Section 162
PAC projects to collect vacancy
payments in the amount of 80 percent
of the contract rent for the first 60 days
of a vacancy. HUD has observed that
since vacancy payments are only
available once units are ready to be
rented, owners typically turn around a
unit in 30 days rather than collect a
reduced vacancy payment. HUD also
wants to incentivize owners, when
appropriate, to see that vacant units are
rented more expeditiously to eligible
individuals and families. The proposed
rule would provide that owners could
receive vacancy payments in the
amount of 80 percent of the contract
rent for the first 30 days of a vacancy in
place of the current 60 days of a
vacancy. This proposed rule would not
preempt existing HAP contracts and
renewal contracts under the Multifamily
Assisted Housing Reform and
Affordability Act of 1997 (42 U.S.C.
1437f note) (MAHRA) that include a 60
day period for vacancy payments;
however, all future renewal contracts
under MAHRA will reflect this new
requirement. Additionally, the proposed
rule would not preempt existing PAC
and renewals; however, all future
renewals would reflect this requirement.
Owners may still apply for additional
debt-service vacancy payments for up to
12 months after receiving the first 30
days of vacancy payments at 80 percent
of the contract rent.
The proposed change would amend
the vacancy payment references to the
first 60 days in all seven project-based
Section 8 HAP programs administered
by the Office of Multifamily Housing
and Section 162 program regulations.
Specifically, HUD proposes to amend
the ‘‘vacancy payment’’ definition to
remove the reference to the length of the
vacancy period in §§ 880.201, 881.201,
883.302, 891.520, and 891.655. HUD
also proposes to remove the reference to
‘‘the first 60 days’’ and replace it with
‘‘the first 30 days of a vacancy’’ and
remove any cross-references to the 60
day time period by amending the
provisions describing the length of
vacancy payment periods in §§ 880.501,
880.611 881.501, 883.602, 884.106,
886.109, 886.309, 891.560, 891.650,
891.705, and 891.790. This proposed
rule would also amend the provision
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regarding the length of the vacancy
payment period in § 886.309(d) so that
it is consistent with all the other
vacancy length payment provisions, and
amends § 886.109 to distinguish
between vacancies during rent-up,
vacancies after rent-up and debt-service
vacancy payments. Additionally, HUD
proposes to change headings in
§§ 880.611, 886.106, 886.309,
891.650(d), and 891.790 for consistency
with the other sections.
III. Findings and Certifications
Regulatory Review—Executive Orders
12866 and 13563
Under Executive Order 12866
(Regulatory Planning and Review), a
determination must be made whether a
regulatory action is significant and,
therefore, subject to review by the Office
of Management and Budget (OMB) in
accordance with the requirements of the
order. Executive Order 13563
(Improving Regulation and Regulatory
Review) directs executive agencies to
analyze regulations that are ‘‘outmoded,
ineffective, insufficient, or excessively
burdensome, and to modify, streamline,
expand, or repeal them in accordance
with what has been learned.’’ Executive
Order 13563 also directs that where
relevant, feasible, and consistent with
regulatory objectives, and to the extent
permitted by law, agencies are to
identify and consider regulatory
approaches that reduce burdens and
maintain flexibility and freedom of
choice for the public.
This rule was determined to be a
significant regulatory action under
section 3(f) of Executive Order 12866.
More importantly, for HUD program
participants, this rule is part of HUD’s
retrospective review carried out under
Executive Order 13563, and designed to
reduce burden on well-performing
program participants.
Need for Regulatory Action
Executive Order 12866 emphasizes
that ‘‘Federal agencies should
promulgate only such regulations as are
required by law, are necessary to
interpret the law or are made necessary
by compelling public need, such as
material failures of private markets to
protect or improve the health and safety
of the public, the environment, or the
well-being of the American people.’’
Because the schedule for MORs was
established by regulation, HUD (1) can
only reduce burden for those programs
required to have annual MORs, and (2)
bring consistency to the schedule for
MORs for the other programs, through
regulation. Moreover, HUD has
determined that the current MORs
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schedule is inconsistent and, as
currently codified, places a strain on
HUD resources and on projects that
consistently receive high marks on their
MORs. As described in this preamble,
HUD has recently determined that
projects have been rated as ‘‘Above
Average’’, ‘‘Superior’’, or ‘‘Satisfactory’’
92 percent of the time. This fact, and the
costs placed on projects to prepare for
a MOR and that may result from the
interruption in normal operations
caused by a MOR, makes reducing this
burden an important topic for
rulemaking.
Similarly, HUD can only reduce the
period of vacancy payments from 60
days to 30 days for the purpose of
turning units around more quickly for
the next individual or family ready to
occupy the unit by regulation.
Additionally, while vacancy payments
are only available once the unit is ready
to be rented, this rule proposes to
further reduce any incentive for owners
not to rent the unit as quickly as
possible. This is consistent with the
need to ensure a constant supply of
affordable housing. As a result,
consistent with Executive Order 13563,
this rulemaking is intended to modify,
streamline, or repeal burdensome
regulations. Thus, the placement of this
proposed rule on HUD’s Retrospective
Review Plan. See page 6 of HUD’s
updated Retrospective Review Plan at
https://portal.hud.gov/hudportal/
documents/huddoc?id=EO13563_
PLAN.PDF.
Discussion of Costs and Benefits
As discussed in this preamble, the
proposed amendments to the MORs
regulations would provide consistency
to the scheduling of MORs and allow
HUD to issue the schedule by
publishing it in the Federal Register,
subject to public comment. Because
many of the properties that receive
assistance under a Section 8 HAP
contract have consistently received high
marks on their MORs, reducing the
frequency of a MOR would result in
fewer interruptions in project
operations.
The purpose of a MOR is to verify
compliance of the property with the
terms of the HAP contract. Scheduling
of the MOR begins with a letter sent to
the owner generally 30 days, but at least
2 weeks, in advance of the date the
MOR is to be undertaken. The on-site
review by HUD involves inspection of a
sampling of units. The owner is
responsible for providing notice to
residents that their units may be chosen
for inspection. The review also involves
a determination of owner compliance
with civil rights regulations, including
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Title VI, Title VII, the Americans with
Disabilities Act, and Section 504 of the
Rehabilitation Act of 1973. Before the
actual inspection by HUD, HUD will
review property status by referring to
the last inspection performed, and note
any exigent health and safety concerns
previously identified. HUD will also
review complaints from residents,
congressional inquiries and media
reports, if any, to verify all concerns
were responded to in a timely manner.
Any contractual violations and imposed
sanctions will also be reviewed. As this
description of an MOR reveals, it is not
an insignificant process, but for those
properties that consistently receive high
marks, HUD concluded that it can and
should reduce, the frequency of MORs.
In reaching this conclusion, HUD has
also determined that the deficiencies
found in MORs of properties that
receive high marks do not offset the
costs to the project in preparing for the
MOR and in the disruption to normal
property operations that inevitably
accompany a MOR.
With respect to vacancy payments,
the proposed amendments to the
vacancy payments regulations would
make units available to eligible families
earlier rather than later and further
incentivize owners to rent the unit as
quickly as possible. As the need for
affordable housing remains constant, it
is important that owner provide for
occupancy of vacant units at the earliest
date possible. As noted earlier in this
preamble, vacancy payments are only
available once units are ready to be
rented, meaning that units are decent,
safe, and in sanitary condition and are
therefore available for occupancy.
Vacancy payments are not paid for the
days that a unit is being prepared for
occupancy. HUD has observed that
owners typically turn around a unit in
30 days rather than collect a reduced
vacancy payment. Therefore, the
amendment largely reflects existing
practice among owners. The number of
units receiving vacancy payments is
small relative to the total number of
units utilized in project-based section 8.
For those owners that may not move to
rent units as quickly as HUD hopes or
expects, the reduction of vacancy
payments to a 30-day period should
incentivize these owners to take actions
that will result in available units being
promptly rented.
HUD first provided notification of its
intention to reduce vacancy payments
from 60 days to 30 days in its FY 2013
Congressional Justifications.1 HUD was
unable to move to implement the
1 See https://portal.hud.gov/hudportal/HUD?src=/
program_offices/cfo/reports/2013/main_toc.
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proposals in the FY 2013 Congressional
Justification as early as HUD had
intended. However, the proposal to
reduce vacancy payments from 60 days
to 30 days remained in HUD’s FY 2014
Congressional Justification and HUD’s
FY 2015 Congressional Justification 2
and, through this rule, HUD proposes to
proceed to implement the reduced
vacancy payment amendment.
Due to data limitations, HUD is
unable to determine the aggregate saving
resulting from reducing the vacancy
payment to 30 days. HUD estimates,
however, that taxpayers as a whole will
realize a benefit from the shorter
payment period and from the incentive
for owners created by the rule to take
actions that will result in available units
being more promptly rented. These
changes would result in a savings to the
government and represents a transfer
from owners to the taxpayer.
Information Collection Requirements
The information collection
requirements for this rule have been
approved by the Office of Management
and Budget (OMB) under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501–
3520) and assigned OMB control
numbers 2502–0178. In accordance with
the Paperwork Reduction Act, 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 currently valid
OMB control number. The overall
burden of this collection would be
reduced, however, by the reducing the
frequency of MORs for properties that
perform well. As discussed in HUD’s
notice proposing the MOR schedule for
comment published elsewhere in
today’s Federal Register, HUD has
determined that the net reduction of
burden resulting from this rule
represents a 73 percent savings from
that currently codified. The public is
referred to HUD’s notice for addition
information regarding the determination
of this savings.
Environmental Impact
A Finding of No Significant Impact
(FONSI) with respect to the
environment has been made in
accordance with HUD regulations at 24
CFR part 50, which implement section
102(2)(C) of the National Environmental
Policy Act of 1969 (42 U.S.C.
4332(2)(C)). The FONSI is available for
public inspection between 8 a.m. and 5
p.m. weekdays in the Regulations
2 See respectively page Y–2 at https://
portal.hud.gov/hudportal/documents/
huddoc?id=PROJBASEDRA.pdf and page Y–3 at
https://portal.hud.gov/hudportal/documents/
huddoc?id=fy15cj_pbra.pdf.
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Division, Office of General Counsel,
Department of Housing and Urban
Development, 451 7th Street SW., Room
10276, Washington, DC 20410–0500.
Due to security measures at the HUD
Headquarters building, an advance
appointment to review the docket file
must be scheduled by calling the
Regulations Division at 202–708–3055
(this is not a toll-free number). Hearing
or speech-impaired individuals may
access this number through TTY by
calling the toll-free Federal Relay
Service at 800–877–8339.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) (UMRA)
establishes requirements for federal
agencies to assess the effects of their
regulatory actions on state, local, and
tribal governments and on the private
sector. This proposed rule does not
impose a federal mandate on any state,
local, or tribal government, or on the
private sector, within the meaning of
UMRA.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) generally requires an
agency to conduct a regulatory
flexibility analysis of any rule subject to
notice and comment rulemaking
requirements, unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. It is HUD’s
position that the burden reduction
measures provided by this rule would
not have a significant economic impact
(beneficial or adverse) on a substantial
number of small entities.
As noted earlier in this preamble, this
proposed rule is one of the regulatory
actions being undertaken as part of
HUD’s Retrospective Review Plan,
established in accordance with
Executive Order 13563. The primary
focus of this rule is to reduce burden,
but reduce burden for project owners
that manage their projects well in
accordance with HUD regulations. In
establishing requirements as to how
HUD subsidized housing is to be
managed and administered, the
requirements are not based on whether
a project owner is a large entity or small
entity. The focus of such requirements
is on ensuring that the units that HUD
subsidizes are decent, safe and sanitary
and are made available to eligible
tenants in a nondiscriminatory manner.
These are not requirements that HUD
can alter on the basis that a project
owner is a small entity. However, this
rule reduces burden for all project
owners, large or small, that manage their
properties well in accordance with HUD
E:\FR\FM\14JAP1.SGM
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Catalog of Federal Domestic Assistance
Executive Order 13132, Federalism
wreier-aviles on DSK4TPTVN1PROD with PROPOSALS
regulations and score well under the
MOR rating system. This proposed rule
would provide that for these properties
there is no need for an annual MOR,
reduce burden for the project owner,
whether such owner is a large or small
entity.
The proposal to reduce the period in
which HUD will provide vacancy
payments from 60 days to 30 days is
also a proposal directed to project
owners that manage their projects well.
As noted earlier in this preamble, the
majority of project owners rent vacant
units (units ready for occupancy) within
30 days, and therefore the reduction of
the vacancy payment period from 60 to
30 days will have minimal impact. As
also noted earlier in this preamble, since
2013, HUD has alerted owners of its
intention to reduce the vacancy
payment period from 60 to 30 days. For
owners that may regularly or from timeto-time undertake little effort to rent a
vacant unit within 30 days of
availability for occupancy, the reduction
is intended to serve as motivation to
rent the vacant unit within 30 days. The
rule would not remove the option in the
existing regulations that allow owners to
apply for additional debt-service
vacancy payments for up to 12 months
after receiving the first 30-days of
vacancy payments at 80 percent of the
contract rent. Accordingly, the
undersigned certifies that this rule will
not have a significant economic impact
on a substantial number of small
entities.
Notwithstanding HUD’s
determination that this rule will not
have a significant effect on a substantial
number of small entities, HUD
specifically invites comments regarding
any less burdensome alternatives to this
rule that will meet HUD’s objectives as
described in this preamble.
Audit, contract administration,
housing assistance, housing assistance
payments contract, income, inspection,
maintenance, marketing, mortgages,
owner, rehabilitation, rent, section 8,
security deposits, special allocations,
tenants, units, and utility deposits.
Executive Order 13132 (entitled
‘‘Federalism’’) prohibits an agency from
publishing any rule that has federalism
implications if the rule either (1)
imposes substantial direct compliance
costs on state and local governments
and is not required by statute, or (2)
preempts state law, unless the agency
meets the consultation and funding
requirements of section 6 of the
Executive Order. This final rule does
not have federalism implications and
does not impose substantial direct
compliance costs on state and local
governments nor preempt state law
within the meaning of the Executive
Order.
VerDate Sep<11>2014
12:23 Jan 13, 2015
Jkt 235001
The Catalog of Federal Domestic
Assistance number applicable to the
programs that would be affected by this
rule is 14.195.
24 CFR Part 880
24 CFR Part 881
Annual contributions contract, audit,
contract administration, conversion,
housing assistance, housing assistance
payments contract, inspections, lowincome family, owner, public housing
agency, rent, section 8, substantial
rehabilitation, tenants, and units.
24 CFR Part 883
Annual contributions contract, audit,
contract administration, housing finance
agencies, housing assistance, housing
assistance payments contract, lowincome family, owner, rent, section 8,
substantial rehabilitation, state agencies,
tenants, and units.
24 CFR Part 884
Annual contributions contract, audit,
contract administration, conversion,
housing assistance, housing assistance
payments contract, income limit,
inspections, low-income family,
maintenance, new construction, owner,
public housing agency, rent, rural
housing, section 8, security deposits,
tenants, units, and utility deposits.
24 CFR Part 886
24 CFR Parts 891
Capital advances, persons with
disabilities, project rental assistance,
rent, section 8, supportive housing for
persons with disabilities, supportive
services, tenants, and units.
Accordingly, for the reasons described
in the preamble, HUD proposes to
amend 24 CFR part 880, 881, 883, 884,
886, and 891 as follows:
Fmt 4702
2. In § 880.201, revise the definition of
‘‘Vacancy payment’’ to read as follows:
■
Annual contributions contract, audit,
construction, contract administration,
financing, housing assistance, housing
assistance payments contract,
management, new construction, owner,
public housing agency, property
standards, rent, section 8, tenants, and
units.
Frm 00013
1. The authority citation for 24 CFR
part 880 continues to read as follows:
■
Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), 12701, and 13611–13619.
List of Subjects
PO 00000
PART 880—SECTION 8 HOUSING
ASSISTANCE PAYMENTS PROGRAM
FOR NEW CONSTRUCTION
Sfmt 4702
§ 880.201
Definitions.
*
*
*
*
*
Vacancy payment. The housing
assistance payment made to the owner
by the contract administrator for a
vacant assisted unit if certain conditions
are fulfilled.
*
*
*
*
*
■ 3. In § 880.501, revise paragraphs (c),
(d)(2) and (3) to read as follows:
§ 880.501
The contract.
*
*
*
*
*
(c) Housing Assistance Payments to
Owners under the Contract. (1) The
housing assistance payments made
under the Contract are:
(i) Payments to the owner to assist
eligible families leasing assisted units,
and
(ii) Payments to the owner for vacant
assisted units (‘‘vacancy payments’’) if
the conditions specified in § 880.611 are
satisfied.
(2) The housing assistance payments
are made monthly by the contract
administrator upon proper requisition
by the owner, except payments for
vacancies under paragraph (d)(3) of this
section, which are made semi-annually
by the contract administrator upon
requisition by the owner.
(d) * * *
(2) A housing assistance payment will
be made to the owner for a vacant
assisted unit in an amount equal to 80
percent of the contract rent for the first
30 days of a vacancy, subject to the
conditions in § 880.611. If the owner
collects any tenant rent or other amount
for this period which, when added to
this vacancy payment, exceeds the
contract rent, the excess must be repaid
as HUD directs.
(3) For a vacancy that exceeds the
vacancy period in paragraph (d)(2) of
this section, a housing assistance
payment for the vacant unit will be
made, subject to the conditions in
§ 880.611, in an amount equal to the
principal and interest payments
required to amortize that portion of the
debt attributable to the vacant unit for
up to 12 additional months.
*
*
*
*
*
■ 4. In § 880.611, revise the introductory
text of paragraphs (b), (c), and (d) to
read as follows:
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§ 880.611 Conditions for receipt of
vacancy payments.
*
*
*
*
*
(b) Vacancies during Rent-up. For
each assisted unit that is not leased as
of the effective date of the Contract, the
owner is entitled to vacancy payments
in the amount of 80 percent of the
contract rent for the first 30 days of a
vacancy, if the owner: * * *
(c) Vacancies after Rent-Up. If an
eligible family vacates a unit, the owner
is entitled to vacancy payments in the
amount of 80 percent of the contract
rent for the first 30 days of a vacancy,
if the owner: * * *
(d) Debt-service vacancy payments. If
an assisted unit continues to be vacant
after the vacancy period specified in
paragraph (b) or (c) of this section, the
owner may apply to receive additional
vacancy payments in an amount equal
to the principal and interest payments
required to amortize that portion of the
debt service attributable to the vacant
unit for up to 12 additional months for
the unit if:
*
*
*
*
*
■ 5. Revise § 880.612 to read as follows:
§ 880.612
reviews.
Management and occupancy
(a) The contract administrator will
conduct management and occupancy
reviews to determine whether the owner
is in compliance with the Contract.
Such reviews will be conducted in
accordance with a schedule set out by
the Secretary and published in the
Federal Register, following notice and
the opportunity to comment.
(b) HUD may independently inspect
project operations and units at any time.
(c) Equal Opportunity reviews may be
conducted by HUD at any time.
PART 881—SECTION 8 HOUSING
ASSISTANCE PAYMENTS PROGRAM
FOR SUBSTANTIAL REHABILITATION
revise the newly redesignated
paragraph; and
■ c. Revise paragraphs (d)(2) and (3) to
read as follows:
§ 881.501
The contract.
*
*
*
*
*
(c) * * *
(2) Payments to the owner for vacant
assisted units (‘‘vacancy payments’’) if
the conditions specified in § 880.611 of
this chapter are satisfied.
(3) The housing assistance payments
are made monthly by the contract
administrator upon proper requisition
by the owner, except payments under
paragraph (d)(3), which are made semiannually by the contract administrator
upon requisition by the owner.
(d) * * *
(2) A housing assistance payment will
be made to the owner for a vacant
assisted unit in an amount equal to 80
percent of the contract rent for the first
30 days of a vacancy, subject to the
conditions in § 880.611 of this chapter.
If the owner collects any tenant rent or
other amount for this period which,
when added to this vacancy payment,
exceeds the contract rent, the excess
must be repaid as HUD directs.
(3) For a vacancy that exceeds the
vacancy period in paragraph (d)(2), a
housing assistance payment for the
vacant unit will be made, subject to the
conditions in § 880.611 of this chapter,
in an amount equal to the principal and
interest payments required to amortize
that portion of the debt attributable to
the vacant unit for up to 12 additional
months.
*
*
*
*
*
PART 883—SECTION 8 HOUSING
ASSISTANCE PAYMENTS
PROGRAM—STATE HOUSING
AGENCIES
9. The authority citation for 24 CFR
part 883 continues to read as follows:
■
■
6. The authority citation for 24 CFR
part 881 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), and 13611–13619.
Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), 12701, and 13611–13619.
■
7. In § 881.201, revise the definition of
‘‘Vacancy payment’’ to read as follows:
■
§ 881.201
Definitions.
wreier-aviles on DSK4TPTVN1PROD with PROPOSALS
*
*
*
*
Vacancy payment. The housing
assistance payment made to the owner
by the contract administrator for a
vacant assisted unit if certain conditions
are fulfilled.
*
*
*
*
*
■ 8. In § 881.501,
■ a. Revise paragraph (c)(2);
■ b. Redesignate the undesignated
paragraph in paragraph (c) as (c)(3) and
12:23 Jan 13, 2015
§ 883.302
Definitions.
*
*
VerDate Sep<11>2014
10. In § 883.302, revise the definition
of ‘‘Vacancy payment’’ to read as
follows:
Jkt 235001
*
*
*
*
Vacancy payments. The housing
assistance payment made to the owner
by the State Agency for a vacant,
assisted unit if certain conditions are
fulfilled.
*
*
*
*
*
■ 11. In § 883.602:
■ a. Redesignate the undesignated
paragraph in paragraph (b) as (b)(3) and
revise the newly redesignated
paragraph; and
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Fmt 4702
Sfmt 4702
1865
b. Revise paragraphs (c)(2) and (3) to
read as follows:
■
§ 883.602
The contract.
*
*
*
*
*
(b) * * *
(3) The housing assistance payments
are made monthly by the State Agency
upon proper requisition by the owner,
except payments under paragraph (c)(3)
of this section, which are made semiannually by the Agency upon proper
requisition by the owner.
(c) * * *
(2) A housing assistance payment will
be made to the owner for a vacant
assisted unit in an amount equal to 80
percent of the contract rent for the first
30 days of a vacancy, subject to the
conditions in § 880.611 of this chapter.
If the owner collects any tenant rent or
other amount for this period which,
when added to this vacancy payment,
exceeds the contract rent, the excess
must be repaid as the Agency directs in
accordance with HUD guidelines.
(3) For a vacancy that exceeds the
vacancy period in paragraph (c)(2) of
this section, a housing assistance
payment for the vacant unit will be
made, subject to the conditions in
§ 880.611 of this chapter, in an amount
equal to the principal and interest
payments required to amortize that
portion of the debt attributable to the
vacant unit for up to 12 additional
months.
*
*
*
*
*
PART 884—SECTION 8 HOUSING
ASSISTANCE PAYMENTS PROGRAM,
NEW CONSTRUCTION SET-ASIDE FOR
SECTION 515 RURAL RENTAL
HOUSING PROJECTS
12. The authority citation for 24 CFR
part 884 continues to read as follows:
■
Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), and 13611–13619.
13. In § 884.106, revise the
introductory text of paragraphs (b) and
paragraph (c)(1), and revise paragraph
(d)(1) to read as follows:
■
§ 884.106
owners.
Housing assistance payment to
*
*
*
*
*
(b) Vacancies during rent-up. If a
Contract Unit is not leased as of the
effective date of the Contract, the Owner
shall be entitled to housing assistance
payments in the amount of 80 percent
of the Contract Rent for the first 30 days
of a vacancy, in accordance with the
procedure set forth in § 884.213(b):
* * *
(c) Vacancies after rent-up. (1) If an
Eligible Family vacates its unit (other
than as a result of action by the Owner
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which is in violation of the Lease or the
Contract or any applicable law), the
Owner shall receive housing assistance
payments in the amount of 80 percent
of the Contract Rent for the first 30 days
of a vacancy; provided, however, That if
the Owner collects any of the Family’s
share of the rent for this period in an
amount which, when added to the 80
percent payments, results in more than
the Contract Rent, such excess shall be
payable to HUD or as HUD may direct.
(See also § 884.115). The Owner shall
not be entitled to any payment under
this paragraph (c)(1) unless the Owner:
* * *
*
*
*
*
*
(d) Debt-service vacancy payments.
(1) If a unit continues to be vacant after
the vacancy period specified in
paragraph (b) or (c) of this section, the
owner may submit a claim to receive
additional housing assistance payments
on a semiannual basis with respect to
the vacant unit in an amount equal to
the principal and interest payments
required to amortize the portion of the
debt attributable to that unit for the
period of the vacancy, whether the
vacancy commenced during rent-up or
after rent-up.
*
*
*
*
*
■ 14. Revise § 884.224 to read as
follows:
§ 884.224
reviews.
Management and occupancy
(a) The contract administrator will
conduct management and occupancy
reviews to determine whether the owner
is in compliance with the Contract.
Such reviews will be conducted in
accordance with a schedule set out by
the Secretary and published in the
Federal Register, following notice and
the opportunity to comment.
(b) HUD may independently inspect
project operations and units at any time.
(c) Equal Opportunity reviews may be
conducted by HUD at any time.
PART 886—SECTION 8 HOUSING
ASSISTANCE PAYMENTS
PROGRAM—SPECIAL ALLOCATIONS
15. The authority citation for 24 CFR
part 886 continues to read as follows:
■
wreier-aviles on DSK4TPTVN1PROD with PROPOSALS
Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), and 13611–13619.
16. In § 886.109, revise paragraph (c)
and add paragraphs (d), (e), (f), and (g)
to read as follows:
■
§ 886.109
owners.
Housing assistance payments to
*
*
*
*
*
(c) Vacancies during rent-up. If a
Contract unit which is decent, safe and
sanitary and has been accepted by HUD
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12:23 Jan 13, 2015
Jkt 235001
as available as of the effective date of
the Contract is not leased within 15
days of the effective date of the
Contract, the owner will be entitled to
housing assistance payments in the
amount of 80 percent of the Contract
Rent for the first 30 days of a vacancy,
provided that the owner:
(1) Has submitted a list of units leased
as of the effective date and a list of the
units not so leased;
(2) 60 days prior to the completion of
the rehabilitation or the date the
agreement was executed, whichever is
later, had notified the PHA of any units
which the owner anticipated would be
vacant on the anticipated effective date
of the contract;
(3) Has taken and continues to take all
feasible actions to fill the vacancy
including, but not limited to: Contacting
applicants on the owner’s waiting list, if
any, requesting the PHA and other
appropriate sources to refer eligible
applicants, and advertising the
availability of the units in a manner
specifically designed to reach lowincome families; and
(4) Has not rejected any eligible
applicant except for good cause
acceptable to HUD.
(d) Vacancies after rent-up. If an
Eligible Family vacates its unit (other
than as a result of action by the owner
which is in violation of the Lease or the
Contract or any applicable law), the
owner shall receive housing assistance
payments in the amount of 80 percent
of the Contract Rent for the first 30 days
of a vacancy. However, if the owner
collects any of the family’s share of the
rent for this period, the payment must
be reduced to an amount which, when
added to the family’s payments, does
not exceed 80 percent of the Contract
Rent. Any such excess shall be
reimbursed by the owner to HUD or as
HUD may direct. (See also § 886.115.)
The owner shall not be entitled to any
payment under this paragraph unless he
or she:
(1) Immediately upon learning of the
vacancy, has notified HUD of the
vacancy or prospective vacancy and the
reasons for the vacancy,
(2) Has made and continues to make
a good faith effort to fill the vacancy,
including but not limited to, contacting
applicants on the waiting list, if any,
requesting the PHA and other
appropriate sources to refer eligible
applicants, and advertising the
availability of the unit, and
(3) Has not rejected any eligible
applicant, except for good cause
acceptable to HUD.
(e) Payments for units where family is
evicted. If the owner evicts a family, the
owner shall not be entitled to any
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Frm 00015
Fmt 4702
Sfmt 4702
payments pursuant to paragraph (d) of
this section unless the request for such
payment is supported by a certification
that the provisions of § 886.128 and part
247 of this title have been followed.
(f) Prohibition for double
compensation for vacancies. The owner
shall not be entitled to housing
assistance payments with respect to
vacant units under this section to the
extent he or she is entitled to payments
from other sources (for example,
payments for losses of rental income
incurred for holding units vacant for
relocatees pursuant to Title I of the HCD
Act or payments under § 886.116).
(g) Debt-service vacancy payments. (1)
If a contract unit continues to be vacant
after the vacancy period specified in
paragraph (c) or (d) of this section, the
owner may submit a claim and receive
additional housing assistance payments
on a semiannual basis with respect to
such a vacant unit in an amount equal
to the principal and interest payments
required to amortize the portion of the
debt attributable to that unit for the
period of the vacancy, whether such
vacancy commenced during rent-up or
after rent-up.
(2) Additional payments under this
paragraph (g) for any unit shall not be
for more than 12 months for any
vacancy period, and shall be made only
if:
(i) The unit was in decent, safe, and
sanitary condition during the vacancy
period for which payments are claimed.
(ii) The owner has taken and is
continuing to take the actions specified
in paragraphs (c)(1), (2) and (3) or
paragraphs (d)(1) and (2) of this section,
as appropriate.
(iii) The owner has demonstrated, in
connection with the semiannual claim
form and in accordance with the
standards prescribed by HUD, that the
project is not providing the owner with
revenues at least equal to the project
costs incurred by the owner, and that
the amount of the payments requested is
not in excess of that portion of the
deficiency which is attributable to the
vacant units for the period of the
vacancies.
(iv) The owner has submitted, in
connection with the semiannual claim,
a statement with relevant supporting
evidence that there is a reasonable
prospect that the project can achieve
financial soundness within a reasonable
time. The statement shall indicate the
causes of the deficiency; the corrective
steps that have been and will be taken;
and the time by which it is expected
that the project revenues will at least
equal project costs without the
additional payments provided under
this paragraph.
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(3) HUD may deny any claim for
additional payments or suspend or
terminate payments if it determines that
based on the owner’s statement and
other evidence, there is not a reasonable
prospect that the project can achieve
financial soundness within a reasonable
time.
■ 17. Revise § 886.130 to read as
follows:
§ 886.130
reviews.
Management and occupancy
(a) The contract administrator will
conduct management and occupancy
reviews to determine whether the owner
is in compliance with the Contract.
Such reviews will be conducted in
accordance with a schedule set out by
the Secretary and published in the
Federal Register, following notice and
the opportunity to comment.
(b) HUD may independently inspect
project operations and units at any time.
(c) Equal Opportunity reviews may be
conducted by HUD at any time.
■ 18. Amend § 886.309 to read as
follows:
■ a. Revise paragraphs (c) and (d);
■ b. In paragraph (e), remove the phrase
‘‘to § 886.327’’ and add in its place ‘‘to
§ 886.328;’’ and
■ c. In paragraph (g), revise the heading
of paragraph (g) and paragraph (g)(1).
§ 886.309
owners.
Housing assistance payment to
wreier-aviles on DSK4TPTVN1PROD with PROPOSALS
*
*
*
*
*
(c) Vacancies during rent-up. If a
Contract unit which is decent, safe and
sanitary and has been accepted by HUD
as available as of the effective date of
the Contract is not leased within 15
days of the effective date of the
Contract, the Owner will be entitled to
housing assistance payments in the
amount of 80 percent of the Contract
Rent for the first 30 days of a vacancy,
provided that the Owner:
(1) Has submitted a list of units leased
as of the effective date and a list of the
units not so leased;
(2) Sixty days prior to the completion
of the rehabilitation or the date the
agreement was executed, whichever is
later, had notified the PHA of any units
which the owner anticipated would be
vacant on the anticipated effective date
of the contract;
(3) Has taken and continues to take all
feasible actions to fill the vacancy
including, but not limited to:
Contracting applicants on the Owner’s
waiting list, if any, requesting the PHA
and other appropriate sources to refer
eligible applicants, and advertising the
availability of the units in a manner
specifically designed to reach lowincome families; and
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12:23 Jan 13, 2015
Jkt 235001
(4) Has not rejected any eligible
applicant except for good cause
acceptable to HUD.
(d) Vacancies after rent-up. If an
Eligible Family vacates its unit (other
than as a result of action by the Owner
which is in violation of the Lease or the
Contract or any applicable law), the
Owner shall receive housing assistance
payments in the amount of 80 percent
of the Contract Rent for the first 30 days
of a vacancy. However, if the owner
collects any of the family’s share of the
rent for this period, the payment must
be reduced to an amount which, when
added to the family’s payments, does
not exceed 80 percent of the Contract
Rent. Any such excess shall be
reimbursed by the Owner to HUD or as
HUD may direct. (See also § 886.315.)
The owner shall not be entitled to any
payment under this paragraph unless he
or she:
(1) Immediately upon learning of the
vacancy, has notified HUD of the
vacancy or prospective vacancy and the
reasons for the vacancy; and
(2) Has made and continues to make
a good faith effort to fill the vacancy,
including but not limited to, contacting
applicants on the waiting list, if any,
requesting the PHA and other
appropriate sources to refer eligible
applicants, and advertising the
availability of the unit; and
(3) Has not rejected any eligible
applicant, except for good cause
acceptable to HUD.
*
*
*
*
*
(g) Debt-service vacancy payments. (1)
If a contract unit continues to be vacant
after the vacancy period specified in
paragraph (c) or (d) of this section, the
owner may submit a claim and receive
additional housing assistance payments
on a semiannual basis with respect to
such a vacant unit in an amount equal
to the principal and interest payments
required to amortize the portion of the
debt attributable to that unit for the
period of the vacancy, whether such
vacancy commenced during rent-up or
after rent-up.
*
*
*
*
*
■ 19. Revise § 886.335 to read as
follows:
§ 886.335
reviews.
Management and occupancy
(a) The contract administrator will
conduct management and occupancy
reviews to determine whether the owner
is in compliance with the Contract.
Such reviews will be conducted in
accordance with a schedule set out by
the Secretary and published in the
Federal Register, following notice and
the opportunity to comment.
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Sfmt 4702
1867
(b) HUD may independently inspect
project operations and units at any time.
(c) Equal Opportunity reviews may be
conducted by HUD at any time.
PART 891—SUPPORTIVE HOUSING
FOR THE ELDERLY AND PERSONS
WITH DISABILITIES
20. The authority citation for 24 CFR
part 891 continues to read as follows:
■
Authority: 12 U.S.C. 1701q; 42 U.S.C.
1437f, 3535(d), and 8013.
21. In § 891.520, revise the definition
of ‘‘Vacancy payment’’ to read as
follows:
■
§ 891.520
projects.
Definitions applicable to 202/8
*
*
*
*
*
Vacancy payment means the housing
assistance payment made to the owner
by HUD for a vacant assisted unit if
certain conditions are fulfilled.
*
*
*
*
*
■ 22. In § 891.560, remove the word
‘‘Borrower’’ and add in its place the
word ‘‘Owner’’ wherever it appears, and
revise paragraph (c)(2) to read as
follows:
§ 891.560
HAP contract.
*
*
*
*
*
(c) * * *
(2) Payments to the owner for vacant
assisted units (vacancy payments). The
amount of and conditions for vacancy
payments are described in § 891.650.
The housing assistance payments are
made monthly by HUD upon proper
requisition by the owner, except
payments for vacancies under
§ 891.650(d), which are made
semiannually by HUD upon requisition
by the owner.
*
*
*
*
*
■ 23. Add § 891.582 to read as follows:
§ 891.582
reviews.
Management and occupancy
(a) The contract administrator will
conduct management and occupancy
reviews to determine whether the owner
is in compliance with the HAP Contract.
Such reviews will be conducted in
accordance with a schedule set out by
the Secretary and published in the
Federal Register, following notice and
the opportunity to comment.
(b) HUD may independently inspect
project operations and units at any time.
(c) Equal Opportunity reviews may be
conducted by HUD at any time.
■ 24. In § 891.650, remove the word
‘‘Borrower’’ and add in its place the
word ‘‘Owner’’ wherever it appears and
revise the introductory text of
paragraphs (b), (c), and (d) to read as
follows:
E:\FR\FM\14JAP1.SGM
14JAP1
1868
Federal Register / Vol. 80, No. 9 / Wednesday, January 14, 2015 / Proposed Rules
§ 891.650 Conditions for receipt of
vacancy payments for assisted units.
§ 891.790 Conditions for receipt of
vacancy payments for assisted units.
ACTION:
*
*
This proposed rule would
establish regulations for hunting and
trapping seasons, harvest limits, and
methods and means related to taking of
wildlife for subsistence uses during the
2016–17 and 2017–18 regulatory years.
The Federal Subsistence Board is on a
schedule of completing the process of
revising subsistence taking of wildlife
regulations in even-numbered years and
subsistence taking of fish and shellfish
regulations in odd-numbered years;
public proposal and review processes
take place during the preceding year.
The Board also addresses customary and
traditional use determinations during
the applicable cycle. When final, the
resulting rulemaking will replace the
existing subsistence wildlife taking
regulations. This rule would also amend
the general regulations on subsistence
taking of fish and wildlife.
DATES: Public meetings: The Federal
Subsistence Regional Advisory Councils
will hold public meetings to receive
comments and make proposals to
change this proposed rule on several
dates between February 10 and March
19, 2015, and then hold another round
of public meetings to discuss and
receive comments on the proposals, and
make recommendations on the
proposals to the Federal Subsistence
Board, on several dates between August
17 and November 4, 2015. The Board
will discuss and evaluate proposed
regulatory changes during a public
meeting in Anchorage, AK, in April
2016. See SUPPLEMENTARY INFORMATION
for specific information on dates and
locations of the public meetings.
Public comments: Comments and
proposals to change this proposed rule
must be received or postmarked by
March 25, 2015.
ADDRESSES: Public meetings: The
Federal Subsistence Board and the
Federal Subsistence Regional Advisory
Councils’ public meetings will be held
at various locations in Alaska. See
SUPPLEMENTARY INFORMATION for specific
information on dates and locations of
the public meetings.
Public comments: You may submit
comments by one of the following
methods:
• Electronically: Go to the Federal
eRulemaking Portal: https://
www.regulations.gov and search for
FWS–R7–SM–2014–0062, which is the
docket number for this rulemaking.
• By hard copy: U.S. mail or handdelivery to: USFWS, Office of
Subsistence Management, 1011 East
Tudor Road, MS 121, Attn: Theo
Matuskowitz, Anchorage, AK 99503–
6199, or hand delivery to the Designated
*
*
*
*
(b) Vacancies during rent-up. For each
unit that is not leased as of the effective
date of the HAP contract, the owner is
entitled to vacancy payments in the
amount of 80 percent of the contract
rent for the first 30 days of a vacancy,
if the owner:
*
*
*
*
*
(c) Vacancies after rent-up. If an
eligible family vacates a unit, the owner
is entitled to vacancy payments in the
amount of 80 percent of the contract
rent for the first 30 days of a vacancy,
if the owner:
*
*
*
*
*
(d) Debt-service vacancy payments. If
a unit continues to be vacant after the
vacancy period specified in paragraph
(b) or (c) of this section, the owner may
apply to receive additional vacancy
payments in an amount equal to the
principal and interest payments
required to amortize that portion of the
debt service attributable to the vacant
unit for up to 12 additional months for
the unit if:
*
*
*
*
*
■ 25. In § 891.655, revise the definition
of ‘‘Vacancy payment’’ to read as
follows:
§ 891.655
projects.
Definitions applicable to 202/162
*
*
*
*
*
Vacancy payment means the housing
assistance payment made to the owner
by HUD for a vacant assisted unit if
certain conditions are fulfilled.
*
*
*
*
*
■ 26. In § 891.705, remove the word
‘‘Borrower’’ and add in its place the
word ‘‘Owner’’ wherever it appears, and
revise paragraph (c)(2) to read as
follows:
§ 891.705
Project assistance contract.
*
*
*
*
(b) Vacancies during rent-up. For each
unit (or residential space in a group
home) that is not leased as of the
effective date of the PAC, the owner is
entitled to vacancy payments in the
amount of 80 percent of the contract
rent (or pro rata share of the contract
rent for a group home) for the first 30
days of a vacancy, if the owner:
*
*
*
*
*
(c) Vacancies after rent-up. If an
eligible family vacates an assisted unit
(or residential space in a group home)
the owner is entitled to vacancy
payments in the amount of 80 percent
of the contract rent (or pro rata share of
the contract rent for a group home) for
the first 30 days of a vacancy, if the
owner:
*
*
*
*
*
(d) Debt-service vacancy payments. If
an assisted unit (or residential space in
a group home) continues to be vacant
after the vacancy period specified in
paragraph (b) or (c) of this section, the
owner may apply to receive additional
vacancy payments in an amount equal
to the principal and interest payments
required to amortize that portion of the
debt service attributable to the vacant
unit (or, in the case of group homes, the
residential space) for up to 12 additional
months for the unit, if:
*
*
*
*
*
Dated: December 11, 2014.
Biniam Gebre,
Acting Assistant Secretary for Housing—
Federal Housing Commissioner.
[FR Doc. 2015–00357 Filed 1–13–15; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF AGRICULTURE
Forest Service
wreier-aviles on DSK4TPTVN1PROD with PROPOSALS
*
*
*
*
*
(c) * * *
(2) Payments to the owner for vacant
assisted units (vacancy payments). The
amount of and conditions for vacancy
payments are described in § 891.790.
HUD makes the project assistance
payments monthly upon proper
requisition by the owner, except
payments for vacancies under
§ 891.790(d), which HUD makes
semiannually upon requisition by the
owner.
*
*
*
*
*
■ 27. In § 891.790, remove the word
‘‘Borrower’’ and add in its place the
word ‘‘Owner’’ wherever it appears, and
revise the introductory text of
paragraphs (b), (c), and (d) to read as
follows:
VerDate Sep<11>2014
12:23 Jan 13, 2015
Jkt 235001
36 CFR Part 242
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 100
[Docket No. FWS–R7–SM–2014–0062;
FXFR13350700640–156–FF07J00000;
FBMS#4500074738]
RIN 1018–BA39
Subsistence Management Regulations
for Public Lands in Alaska—2016–17
and 2017–18 Subsistence Taking of
Wildlife Regulations
Forest Service, Agriculture;
Fish and Wildlife Service, Interior.
AGENCY:
PO 00000
Frm 00017
Fmt 4702
Sfmt 4702
Proposed rule.
SUMMARY:
E:\FR\FM\14JAP1.SGM
14JAP1
Agencies
[Federal Register Volume 80, Number 9 (Wednesday, January 14, 2015)]
[Proposed Rules]
[Pages 1860-1868]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00357]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 880, 881, 883, 884, 886, and 891
[Docket No. FR-5654-P-01]
RIN 2502-AJ22
Streamlining Management and Occupancy Reviews for Section 8
Housing Assistance Programs and Amending Vacancy Payments for Section 8
and Section 162 Housing Assistance Programs
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would amend existing project-based Section
8 regulations related to Management and Occupancy Reviews (MORs) and
Vacancy Payments for the following programs: the Section 8 Housing
Assistance Payments (HAP) Programs for New Construction, Substantial
Rehabilitation, State Housing Agencies, New Construction financed under
Section 515 of the Housing Act of 1949, the Loan Management Set-Aside
Program, the HAP Program for the Disposition of HUD-Owned Projects, and
the Section 202/8 Program. This rule would also amend the existing
Section 162 regulations related to Vacancy Payments for the Section 202
Projects. Under this rule, MORs would be conducted in accordance with a
schedule published in the Federal Register and subject to public
comment. The first such schedule is being published for comment
concurrently with this proposed rule, and can be found elsewhere in
today's Federal Register. HUD is proposing this change in order to
reduce the frequency of MORs, thereby minimizing interruptions in
property operations created by onsite reviews, preserving staff time,
and reducing costs. In addition, this proposed rule would reduce the
vacancy payments made to the owner by HUD for a vacant assisted unit.
DATES: Comment Due Date. March 16, 2015.
ADDRESSES: Interested persons are invited to submit comments regarding
this rule to the Regulations Division, Office of General Counsel, 451
7th Street SW., Room 10276, Department of Housing and Urban
Development, Washington, DC 20410-0500. Communications must refer to
the above docket number and title. There are two methods for submitting
public comments. All submissions must refer to the above docket number
and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit comments, ensures timely
receipt by HUD, and enables HUD to make them immediately available to
the public. Comments submitted electronically through the
www.regulations.gov Web site can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments
must be submitted through one of the two methods specified above.
Again, all submissions must refer to the docket number and title of
the rule.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. Eastern Time
weekdays at the above address. Due to security measures at the HUD
Headquarters building, an advance appointment to review the public
comments must be scheduled by calling the Regulations Division at 202-
708-3055 (this is not a toll-free number). Individuals with speech or
hearing impairments may access this number through TTY by calling the
Federal Relay Service at 800-877-8339. Copies of all comments submitted
are available for inspection and downloading at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For information about management and
occupancy reviews contact Lauryn Alleva, Program Administration Office,
Office of Housing, Department of Housing and Urban Development, 451 7th
Street SW., Washington, DC 20410-7000; telephone number 202-708-3730
(this is not a toll-free number). For information about vacancy claims,
contact Yvette Viviani, Housing Assistance Policy Division, Office of
Housing Assistance and Grant Administration, Office of Housing,
Department of Housing and Urban Development, 451 7th Street SW.,
Washington, DC 20410-7000; telephone number 202-708-3000 (this is not a
toll-free number). Hearing- and speech-impaired persons may access
these numbers through TTY by calling the Federal Relay Service at 800-
877-8339 (this is a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
Section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f) authorizes one of HUD's primary programs for providing rental
housing assistance (Section 8). The purpose of Section 8 is to provide
low-income families with decent, safe, and sanitary rental housing. The
Section 8 program includes a project-based program and a tenant-based
housing choice program. Under the project-based program, HUD may enter
into an annual contributions contract (ACC) with a public housing
agency (PHA) through which HUD commits to provide the agency with funds
to make housing assistance payments to a project owner. The PHA or
state agency, acting as a contract administrator, then enters into a
Housing Assistance Payments (HAP) contract with the owner. Under the
HAP contract, the contract administrator agrees to subsidize certain
units for a specified period of time for eligible low-income families.
In certain circumstances HUD may act as the contract administrator,
whereby HUD will directly enter into a HAP contract with an owner.
There are seven project-based Section 8 HAP programs administered
by the Office of Multifamily Housing Programs: The HAP program for New
Construction (24 CFR part 880) and the HAP program for Substantial
Rehabilitation (24 CFR part 881), which provide rental assistance in
connection with the development of newly constructed or substantially
rehabilitated privately owned rental housing; the HAP Program for State
Housing Agencies (24 CFR part 883); the HAP program for New
[[Page 1861]]
Construction financed under Section 515 of the Housing Act of 1949 (24
CFR part 884), which applies to U.S. Department of Agriculture rural
rental housing projects; the Loan Management Set Aside Program (24 CFR
part 886, subpart A), which provides rental subsidies to HUD-insured or
HUD-held multifamily properties experiencing immediate or potential
financial difficulties; the Housing Assistance Program for the
Disposition of HUD-Owned Projects (24 CFR part 886, subpart C), which
provides Section 8 assistance in connection with the sale of HUD-owned
multifamily rental housing projects and the foreclosure of HUD-held
mortgages on rental housing projects; and the Section 202/8 Program (24
CFR part 891, subpart E), which provides assistance for housing
projects serving elderly or families and individuals with disabilities.
Section 162 Project Assistance Contracts (PACs) were authorized
under the now repealed Section 202(h) of the Housing Act of 1959 (12
U.S.C. 1701q). Although the program was repealed, Section 162 PACs are
still renewed under the Section 162 program. Section 162 renewals
provide funding for projects under the Section 202 Direct Loan Program
for the Elderly and targeted persons with disabilities. A PAC is
similar to the ACC in the Section 8 projects and the program operates
under the same terms as the Section 8 program.
A. Management and Occupancy Reviews
Contract administrators in the Section 8 above-listed programs are
responsible for assessing the management and oversight of housing
projects and for ensuring that owners comply with the requirements of
the HAP contract. In order to assess an owner's compliance with the
terms and conditions of its HAP contract, contract administrators
conduct management and occupancy reviews (MORs).
Under existing regulations, the frequency of MORs across the seven
project-based Section 8 programs administered by the Office of
Multifamily Housing is inconsistent. Contract administrators in the HAP
New Construction Program, HAP Substantial Rehabilitation Program, and
HAP State Housing Agencies Program are required to review a project's
operations ``at least annually'' to determine whether the owner is in
compliance with the HAP contract. The regulations for the HAP Program
for Section 515 projects, the Loan Management Set-Aside Program, and
the Housing Assistance Program for the Disposition of HUD-Owned
Projects are less prescriptive and only require that HUD review project
operations ``at such intervals as it deems necessary'' to ensure an
owner is in compliance with its HAP contract. Lastly, the Section 202/8
program regulations provide no reference to the frequency of MORs.
Completion of MORs can require Contract Administrators to visit the
site and can cause interruption in project operations. The Contract
Administrator spends approximately 8 hours of staff time and additional
resources to review every project. HUD has found that in recent years
projects have been rated ``Above Average'' or ``Superior'' 35 percent
of the time, ``Satisfactory'' 57 percent of the time, and ``Below
Average'' or ``Unsatisfactory'' eight percent of the time. A full or
limited review of all projects, including those that consistently
receive high marks, puts a strain on HUD and project resources.
B. Vacancy Payments
Under section 8(c)(4) of the United States Housing Act of 1937, a
HAP contract providing project-based rental assistance may contain
payments for vacant units. Similarly, a PAC may contain payments for
vacant units. A contract administrator may continue to provide
assistance under the contract for a dwelling unit that remains vacant
after the effective date of the contract or a dwelling unit that
becomes vacant only if the vacancy was not the fault of the owner of
the dwelling unit, and the agency and the owner take every reasonable
action to minimize the likelihood and extent of any such vacancy.
Under current regulations, an owner is entitled to vacancy payments
in the amount of 80 percent of the contract rent for a period of no
more than 60 days after initial rent up or after an eligible family
vacates the unit. These vacancy payments are made as part of an owner's
monthly HAP or PAC payment. If the vacancy persists past the 60 days,
an owner may also receive additional vacancy payments in an amount
equal to the principal and interest payments required to amortize that
portion of the debt service attributable to the vacant unit for up to
12 additional months (debt-service vacancy payments). Debt-service
vacancy payments are made semi-annually by the contract administer upon
request by the owner. In either case, an owner is not entitled to
vacancy payments for vacant units to the extent he can collect for the
vacancy from other sources (such as security deposits and governmental
payments under other programs). Additionally, an owner is only eligible
for payments if during the vacancy period for which payment is claimed
an owner continues to market the unit in accordance with HUD
requirements, takes all feasible actions to fill the vacancy, does not
reject an eligible applicant except for good cause acceptable to the
contract administrator; and maintains the unit in decent, safe, and
sanitary conditions.
HUD has observed that the 60-day period for vacancy payments may be
too long; resulting in contract units staying vacant for longer periods
and extending the time it takes for eligible families to secure
housing.
II. This Proposed Rule--Overview
A. Management and Occupancy Reviews
HUD is proposing to revise the regulations that govern MORs for
Section 8 HAP projects to provide consistency across programs and allow
HUD the flexibility to set a schedule that is more in-line with the
needs of the programs. Because many of the properties that receive
assistance under a Section 8 HAP program have consistently received
high marks on their MORs, reducing the frequency of MORs for these
properties would result in fewer interruptions in project operations
and would allow HUD to focus its staff and resources on areas that
require greater attention. HUD proposes to amend the project-based
Section 8 HAP program regulations to require that MORs be conducted in
accordance with a schedule set out by the Secretary as published in the
Federal Register, following notice and comment. HUD's proposal would
adopt this new language in 24 CFR 880.612, 884.224, 886.130, and
886.355, and would re-title these sections ``Management and occupancy
reviews.'' Additionally, this proposal would add a new Sec. 891.582,
also titled ``Management and occupancy reviews.'' Because the cross-
reference in 24 CFR 881.601 and 24 CFR 883.701 includes 24 CFR 880.612,
this new MOR requirement would also apply to the HAP Substantial
Rehabilitation Program and the HAP Program for State Housing Agencies,
respectively, without changes being made to the regulations that are
specific for those programs.
The first proposed schedule for MORs is published elsewhere in
today's Federal Register and HUD invites public comment on that
schedule. As provided in that notice, although HUD is proposing a
schedule for MORs that is based on both a project's annual MOR rating
and a HUD risk-based management model, nothing in this
[[Page 1862]]
proposed rule nor the accompanying notice restricts HUD or the Contract
Administrator from conducting additional MORs outside of this schedule
pursuant to existing and future administrative guidelines.
B. Vacancy Payments
HUD is also proposing to revise the regulations that permit owners
of Section 8 HAP projects and Section 162 PAC projects to collect
vacancy payments in the amount of 80 percent of the contract rent for
the first 60 days of a vacancy. HUD has observed that since vacancy
payments are only available once units are ready to be rented, owners
typically turn around a unit in 30 days rather than collect a reduced
vacancy payment. HUD also wants to incentivize owners, when
appropriate, to see that vacant units are rented more expeditiously to
eligible individuals and families. The proposed rule would provide that
owners could receive vacancy payments in the amount of 80 percent of
the contract rent for the first 30 days of a vacancy in place of the
current 60 days of a vacancy. This proposed rule would not preempt
existing HAP contracts and renewal contracts under the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f
note) (MAHRA) that include a 60 day period for vacancy payments;
however, all future renewal contracts under MAHRA will reflect this new
requirement. Additionally, the proposed rule would not preempt existing
PAC and renewals; however, all future renewals would reflect this
requirement. Owners may still apply for additional debt-service vacancy
payments for up to 12 months after receiving the first 30 days of
vacancy payments at 80 percent of the contract rent.
The proposed change would amend the vacancy payment references to
the first 60 days in all seven project-based Section 8 HAP programs
administered by the Office of Multifamily Housing and Section 162
program regulations. Specifically, HUD proposes to amend the ``vacancy
payment'' definition to remove the reference to the length of the
vacancy period in Sec. Sec. 880.201, 881.201, 883.302, 891.520, and
891.655. HUD also proposes to remove the reference to ``the first 60
days'' and replace it with ``the first 30 days of a vacancy'' and
remove any cross-references to the 60 day time period by amending the
provisions describing the length of vacancy payment periods in
Sec. Sec. 880.501, 880.611 881.501, 883.602, 884.106, 886.109,
886.309, 891.560, 891.650, 891.705, and 891.790. This proposed rule
would also amend the provision regarding the length of the vacancy
payment period in Sec. 886.309(d) so that it is consistent with all
the other vacancy length payment provisions, and amends Sec. 886.109
to distinguish between vacancies during rent-up, vacancies after rent-
up and debt-service vacancy payments. Additionally, HUD proposes to
change headings in Sec. Sec. 880.611, 886.106, 886.309, 891.650(d),
and 891.790 for consistency with the other sections.
III. Findings and Certifications
Regulatory Review--Executive Orders 12866 and 13563
Under Executive Order 12866 (Regulatory Planning and Review), a
determination must be made whether a regulatory action is significant
and, therefore, subject to review by the Office of Management and
Budget (OMB) in accordance with the requirements of the order.
Executive Order 13563 (Improving Regulation and Regulatory Review)
directs executive agencies to analyze regulations that are ``outmoded,
ineffective, insufficient, or excessively burdensome, and to modify,
streamline, expand, or repeal them in accordance with what has been
learned.'' Executive Order 13563 also directs that where relevant,
feasible, and consistent with regulatory objectives, and to the extent
permitted by law, agencies are to identify and consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public.
This rule was determined to be a significant regulatory action
under section 3(f) of Executive Order 12866. More importantly, for HUD
program participants, this rule is part of HUD's retrospective review
carried out under Executive Order 13563, and designed to reduce burden
on well-performing program participants.
Need for Regulatory Action
Executive Order 12866 emphasizes that ``Federal agencies should
promulgate only such regulations as are required by law, are necessary
to interpret the law or are made necessary by compelling public need,
such as material failures of private markets to protect or improve the
health and safety of the public, the environment, or the well-being of
the American people.'' Because the schedule for MORs was established by
regulation, HUD (1) can only reduce burden for those programs required
to have annual MORs, and (2) bring consistency to the schedule for MORs
for the other programs, through regulation. Moreover, HUD has
determined that the current MORs schedule is inconsistent and, as
currently codified, places a strain on HUD resources and on projects
that consistently receive high marks on their MORs. As described in
this preamble, HUD has recently determined that projects have been
rated as ``Above Average'', ``Superior'', or ``Satisfactory'' 92
percent of the time. This fact, and the costs placed on projects to
prepare for a MOR and that may result from the interruption in normal
operations caused by a MOR, makes reducing this burden an important
topic for rulemaking.
Similarly, HUD can only reduce the period of vacancy payments from
60 days to 30 days for the purpose of turning units around more quickly
for the next individual or family ready to occupy the unit by
regulation. Additionally, while vacancy payments are only available
once the unit is ready to be rented, this rule proposes to further
reduce any incentive for owners not to rent the unit as quickly as
possible. This is consistent with the need to ensure a constant supply
of affordable housing. As a result, consistent with Executive Order
13563, this rulemaking is intended to modify, streamline, or repeal
burdensome regulations. Thus, the placement of this proposed rule on
HUD's Retrospective Review Plan. See page 6 of HUD's updated
Retrospective Review Plan at https://portal.hud.gov/hudportal/documents/huddoc?id=EO13563_PLAN.PDF.
Discussion of Costs and Benefits
As discussed in this preamble, the proposed amendments to the MORs
regulations would provide consistency to the scheduling of MORs and
allow HUD to issue the schedule by publishing it in the Federal
Register, subject to public comment. Because many of the properties
that receive assistance under a Section 8 HAP contract have
consistently received high marks on their MORs, reducing the frequency
of a MOR would result in fewer interruptions in project operations.
The purpose of a MOR is to verify compliance of the property with
the terms of the HAP contract. Scheduling of the MOR begins with a
letter sent to the owner generally 30 days, but at least 2 weeks, in
advance of the date the MOR is to be undertaken. The on-site review by
HUD involves inspection of a sampling of units. The owner is
responsible for providing notice to residents that their units may be
chosen for inspection. The review also involves a determination of
owner compliance with civil rights regulations, including
[[Page 1863]]
Title VI, Title VII, the Americans with Disabilities Act, and Section
504 of the Rehabilitation Act of 1973. Before the actual inspection by
HUD, HUD will review property status by referring to the last
inspection performed, and note any exigent health and safety concerns
previously identified. HUD will also review complaints from residents,
congressional inquiries and media reports, if any, to verify all
concerns were responded to in a timely manner. Any contractual
violations and imposed sanctions will also be reviewed. As this
description of an MOR reveals, it is not an insignificant process, but
for those properties that consistently receive high marks, HUD
concluded that it can and should reduce, the frequency of MORs. In
reaching this conclusion, HUD has also determined that the deficiencies
found in MORs of properties that receive high marks do not offset the
costs to the project in preparing for the MOR and in the disruption to
normal property operations that inevitably accompany a MOR.
With respect to vacancy payments, the proposed amendments to the
vacancy payments regulations would make units available to eligible
families earlier rather than later and further incentivize owners to
rent the unit as quickly as possible. As the need for affordable
housing remains constant, it is important that owner provide for
occupancy of vacant units at the earliest date possible. As noted
earlier in this preamble, vacancy payments are only available once
units are ready to be rented, meaning that units are decent, safe, and
in sanitary condition and are therefore available for occupancy.
Vacancy payments are not paid for the days that a unit is being
prepared for occupancy. HUD has observed that owners typically turn
around a unit in 30 days rather than collect a reduced vacancy payment.
Therefore, the amendment largely reflects existing practice among
owners. The number of units receiving vacancy payments is small
relative to the total number of units utilized in project-based section
8. For those owners that may not move to rent units as quickly as HUD
hopes or expects, the reduction of vacancy payments to a 30-day period
should incentivize these owners to take actions that will result in
available units being promptly rented.
HUD first provided notification of its intention to reduce vacancy
payments from 60 days to 30 days in its FY 2013 Congressional
Justifications.\1\ HUD was unable to move to implement the proposals in
the FY 2013 Congressional Justification as early as HUD had intended.
However, the proposal to reduce vacancy payments from 60 days to 30
days remained in HUD's FY 2014 Congressional Justification and HUD's FY
2015 Congressional Justification \2\ and, through this rule, HUD
proposes to proceed to implement the reduced vacancy payment amendment.
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\1\ See https://portal.hud.gov/hudportal/HUD?src=/program_offices/cfo/reports/2013/main_toc.
\2\ See respectively page Y-2 at https://portal.hud.gov/hudportal/documents/huddoc?id=PROJBASEDRA.pdf and page Y-3 at https://portal.hud.gov/hudportal/documents/huddoc?id=fy15cj_pbra.pdf.
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Due to data limitations, HUD is unable to determine the aggregate
saving resulting from reducing the vacancy payment to 30 days. HUD
estimates, however, that taxpayers as a whole will realize a benefit
from the shorter payment period and from the incentive for owners
created by the rule to take actions that will result in available units
being more promptly rented. These changes would result in a savings to
the government and represents a transfer from owners to the taxpayer.
Information Collection Requirements
The information collection requirements for this rule have been
approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB
control numbers 2502-0178. In accordance with the Paperwork Reduction
Act, 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 currently valid OMB control number. The overall burden of
this collection would be reduced, however, by the reducing the
frequency of MORs for properties that perform well. As discussed in
HUD's notice proposing the MOR schedule for comment published elsewhere
in today's Federal Register, HUD has determined that the net reduction
of burden resulting from this rule represents a 73 percent savings from
that currently codified. The public is referred to HUD's notice for
addition information regarding the determination of this savings.
Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment has been made in accordance with HUD regulations at 24 CFR
part 50, which implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is
available for public inspection between 8 a.m. and 5 p.m. weekdays in
the Regulations Division, Office of General Counsel, Department of
Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500. Due to security measures at the HUD
Headquarters building, an advance appointment to review the docket file
must be scheduled by calling the Regulations Division at 202-708-3055
(this is not a toll-free number). Hearing or speech-impaired
individuals may access this number through TTY by calling the toll-free
Federal Relay Service at 800-877-8339.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
(UMRA) establishes requirements for federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments and on the private sector. This proposed rule does not
impose a federal mandate on any state, local, or tribal government, or
on the private sector, within the meaning of UMRA.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) generally
requires an agency to conduct a regulatory flexibility analysis of any
rule subject to notice and comment rulemaking requirements, unless the
agency certifies that the rule will not have a significant economic
impact on a substantial number of small entities. It is HUD's position
that the burden reduction measures provided by this rule would not have
a significant economic impact (beneficial or adverse) on a substantial
number of small entities.
As noted earlier in this preamble, this proposed rule is one of the
regulatory actions being undertaken as part of HUD's Retrospective
Review Plan, established in accordance with Executive Order 13563. The
primary focus of this rule is to reduce burden, but reduce burden for
project owners that manage their projects well in accordance with HUD
regulations. In establishing requirements as to how HUD subsidized
housing is to be managed and administered, the requirements are not
based on whether a project owner is a large entity or small entity. The
focus of such requirements is on ensuring that the units that HUD
subsidizes are decent, safe and sanitary and are made available to
eligible tenants in a nondiscriminatory manner. These are not
requirements that HUD can alter on the basis that a project owner is a
small entity. However, this rule reduces burden for all project owners,
large or small, that manage their properties well in accordance with
HUD
[[Page 1864]]
regulations and score well under the MOR rating system. This proposed
rule would provide that for these properties there is no need for an
annual MOR, reduce burden for the project owner, whether such owner is
a large or small entity.
The proposal to reduce the period in which HUD will provide vacancy
payments from 60 days to 30 days is also a proposal directed to project
owners that manage their projects well. As noted earlier in this
preamble, the majority of project owners rent vacant units (units ready
for occupancy) within 30 days, and therefore the reduction of the
vacancy payment period from 60 to 30 days will have minimal impact. As
also noted earlier in this preamble, since 2013, HUD has alerted owners
of its intention to reduce the vacancy payment period from 60 to 30
days. For owners that may regularly or from time-to-time undertake
little effort to rent a vacant unit within 30 days of availability for
occupancy, the reduction is intended to serve as motivation to rent the
vacant unit within 30 days. The rule would not remove the option in the
existing regulations that allow owners to apply for additional debt-
service vacancy payments for up to 12 months after receiving the first
30-days of vacancy payments at 80 percent of the contract rent.
Accordingly, the undersigned certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
Notwithstanding HUD's determination that this rule will not have a
significant effect on a substantial number of small entities, HUD
specifically invites comments regarding any less burdensome
alternatives to this rule that will meet HUD's objectives as described
in this preamble.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either (1) imposes substantial direct compliance costs on state and
local governments and is not required by statute, or (2) preempts state
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This final rule does not have
federalism implications and does not impose substantial direct
compliance costs on state and local governments nor preempt state law
within the meaning of the Executive Order.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number applicable to the
programs that would be affected by this rule is 14.195.
List of Subjects
24 CFR Part 880
Annual contributions contract, audit, construction, contract
administration, financing, housing assistance, housing assistance
payments contract, management, new construction, owner, public housing
agency, property standards, rent, section 8, tenants, and units.
24 CFR Part 881
Annual contributions contract, audit, contract administration,
conversion, housing assistance, housing assistance payments contract,
inspections, low-income family, owner, public housing agency, rent,
section 8, substantial rehabilitation, tenants, and units.
24 CFR Part 883
Annual contributions contract, audit, contract administration,
housing finance agencies, housing assistance, housing assistance
payments contract, low-income family, owner, rent, section 8,
substantial rehabilitation, state agencies, tenants, and units.
24 CFR Part 884
Annual contributions contract, audit, contract administration,
conversion, housing assistance, housing assistance payments contract,
income limit, inspections, low-income family, maintenance, new
construction, owner, public housing agency, rent, rural housing,
section 8, security deposits, tenants, units, and utility deposits.
24 CFR Part 886
Audit, contract administration, housing assistance, housing
assistance payments contract, income, inspection, maintenance,
marketing, mortgages, owner, rehabilitation, rent, section 8, security
deposits, special allocations, tenants, units, and utility deposits.
24 CFR Parts 891
Capital advances, persons with disabilities, project rental
assistance, rent, section 8, supportive housing for persons with
disabilities, supportive services, tenants, and units.
Accordingly, for the reasons described in the preamble, HUD
proposes to amend 24 CFR part 880, 881, 883, 884, 886, and 891 as
follows:
PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW
CONSTRUCTION
0
1. The authority citation for 24 CFR part 880 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
0
2. In Sec. 880.201, revise the definition of ``Vacancy payment'' to
read as follows:
Sec. 880.201 Definitions.
* * * * *
Vacancy payment. The housing assistance payment made to the owner
by the contract administrator for a vacant assisted unit if certain
conditions are fulfilled.
* * * * *
0
3. In Sec. 880.501, revise paragraphs (c), (d)(2) and (3) to read as
follows:
Sec. 880.501 The contract.
* * * * *
(c) Housing Assistance Payments to Owners under the Contract. (1)
The housing assistance payments made under the Contract are:
(i) Payments to the owner to assist eligible families leasing
assisted units, and
(ii) Payments to the owner for vacant assisted units (``vacancy
payments'') if the conditions specified in Sec. 880.611 are satisfied.
(2) The housing assistance payments are made monthly by the
contract administrator upon proper requisition by the owner, except
payments for vacancies under paragraph (d)(3) of this section, which
are made semi-annually by the contract administrator upon requisition
by the owner.
(d) * * *
(2) A housing assistance payment will be made to the owner for a
vacant assisted unit in an amount equal to 80 percent of the contract
rent for the first 30 days of a vacancy, subject to the conditions in
Sec. 880.611. If the owner collects any tenant rent or other amount
for this period which, when added to this vacancy payment, exceeds the
contract rent, the excess must be repaid as HUD directs.
(3) For a vacancy that exceeds the vacancy period in paragraph
(d)(2) of this section, a housing assistance payment for the vacant
unit will be made, subject to the conditions in Sec. 880.611, in an
amount equal to the principal and interest payments required to
amortize that portion of the debt attributable to the vacant unit for
up to 12 additional months.
* * * * *
0
4. In Sec. 880.611, revise the introductory text of paragraphs (b),
(c), and (d) to read as follows:
[[Page 1865]]
Sec. 880.611 Conditions for receipt of vacancy payments.
* * * * *
(b) Vacancies during Rent-up. For each assisted unit that is not
leased as of the effective date of the Contract, the owner is entitled
to vacancy payments in the amount of 80 percent of the contract rent
for the first 30 days of a vacancy, if the owner: * * *
(c) Vacancies after Rent-Up. If an eligible family vacates a unit,
the owner is entitled to vacancy payments in the amount of 80 percent
of the contract rent for the first 30 days of a vacancy, if the owner:
* * *
(d) Debt-service vacancy payments. If an assisted unit continues to
be vacant after the vacancy period specified in paragraph (b) or (c) of
this section, the owner may apply to receive additional vacancy
payments in an amount equal to the principal and interest payments
required to amortize that portion of the debt service attributable to
the vacant unit for up to 12 additional months for the unit if:
* * * * *
0
5. Revise Sec. 880.612 to read as follows:
Sec. 880.612 Management and occupancy reviews.
(a) The contract administrator will conduct management and
occupancy reviews to determine whether the owner is in compliance with
the Contract. Such reviews will be conducted in accordance with a
schedule set out by the Secretary and published in the Federal
Register, following notice and the opportunity to comment.
(b) HUD may independently inspect project operations and units at
any time.
(c) Equal Opportunity reviews may be conducted by HUD at any time.
PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR
SUBSTANTIAL REHABILITATION
0
6. The authority citation for 24 CFR part 881 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
0
7. In Sec. 881.201, revise the definition of ``Vacancy payment'' to
read as follows:
Sec. 881.201 Definitions.
* * * * *
Vacancy payment. The housing assistance payment made to the owner
by the contract administrator for a vacant assisted unit if certain
conditions are fulfilled.
* * * * *
0
8. In Sec. 881.501,
0
a. Revise paragraph (c)(2);
0
b. Redesignate the undesignated paragraph in paragraph (c) as (c)(3)
and revise the newly redesignated paragraph; and
0
c. Revise paragraphs (d)(2) and (3) to read as follows:
Sec. 881.501 The contract.
* * * * *
(c) * * *
(2) Payments to the owner for vacant assisted units (``vacancy
payments'') if the conditions specified in Sec. 880.611 of this
chapter are satisfied.
(3) The housing assistance payments are made monthly by the
contract administrator upon proper requisition by the owner, except
payments under paragraph (d)(3), which are made semi-annually by the
contract administrator upon requisition by the owner.
(d) * * *
(2) A housing assistance payment will be made to the owner for a
vacant assisted unit in an amount equal to 80 percent of the contract
rent for the first 30 days of a vacancy, subject to the conditions in
Sec. 880.611 of this chapter. If the owner collects any tenant rent or
other amount for this period which, when added to this vacancy payment,
exceeds the contract rent, the excess must be repaid as HUD directs.
(3) For a vacancy that exceeds the vacancy period in paragraph
(d)(2), a housing assistance payment for the vacant unit will be made,
subject to the conditions in Sec. 880.611 of this chapter, in an
amount equal to the principal and interest payments required to
amortize that portion of the debt attributable to the vacant unit for
up to 12 additional months.
* * * * *
PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE
HOUSING AGENCIES
0
9. The authority citation for 24 CFR part 883 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
0
10. In Sec. 883.302, revise the definition of ``Vacancy payment'' to
read as follows:
Sec. 883.302 Definitions.
* * * * *
Vacancy payments. The housing assistance payment made to the owner
by the State Agency for a vacant, assisted unit if certain conditions
are fulfilled.
* * * * *
0
11. In Sec. 883.602:
0
a. Redesignate the undesignated paragraph in paragraph (b) as (b)(3)
and revise the newly redesignated paragraph; and
0
b. Revise paragraphs (c)(2) and (3) to read as follows:
Sec. 883.602 The contract.
* * * * *
(b) * * *
(3) The housing assistance payments are made monthly by the State
Agency upon proper requisition by the owner, except payments under
paragraph (c)(3) of this section, which are made semi-annually by the
Agency upon proper requisition by the owner.
(c) * * *
(2) A housing assistance payment will be made to the owner for a
vacant assisted unit in an amount equal to 80 percent of the contract
rent for the first 30 days of a vacancy, subject to the conditions in
Sec. 880.611 of this chapter. If the owner collects any tenant rent or
other amount for this period which, when added to this vacancy payment,
exceeds the contract rent, the excess must be repaid as the Agency
directs in accordance with HUD guidelines.
(3) For a vacancy that exceeds the vacancy period in paragraph
(c)(2) of this section, a housing assistance payment for the vacant
unit will be made, subject to the conditions in Sec. 880.611 of this
chapter, in an amount equal to the principal and interest payments
required to amortize that portion of the debt attributable to the
vacant unit for up to 12 additional months.
* * * * *
PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS
0
12. The authority citation for 24 CFR part 884 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
0
13. In Sec. 884.106, revise the introductory text of paragraphs (b)
and paragraph (c)(1), and revise paragraph (d)(1) to read as follows:
Sec. 884.106 Housing assistance payment to owners.
* * * * *
(b) Vacancies during rent-up. If a Contract Unit is not leased as
of the effective date of the Contract, the Owner shall be entitled to
housing assistance payments in the amount of 80 percent of the Contract
Rent for the first 30 days of a vacancy, in accordance with the
procedure set forth in Sec. 884.213(b): * * *
(c) Vacancies after rent-up. (1) If an Eligible Family vacates its
unit (other than as a result of action by the Owner
[[Page 1866]]
which is in violation of the Lease or the Contract or any applicable
law), the Owner shall receive housing assistance payments in the amount
of 80 percent of the Contract Rent for the first 30 days of a vacancy;
provided, however, That if the Owner collects any of the Family's share
of the rent for this period in an amount which, when added to the 80
percent payments, results in more than the Contract Rent, such excess
shall be payable to HUD or as HUD may direct. (See also Sec. 884.115).
The Owner shall not be entitled to any payment under this paragraph
(c)(1) unless the Owner: * * *
* * * * *
(d) Debt-service vacancy payments. (1) If a unit continues to be
vacant after the vacancy period specified in paragraph (b) or (c) of
this section, the owner may submit a claim to receive additional
housing assistance payments on a semiannual basis with respect to the
vacant unit in an amount equal to the principal and interest payments
required to amortize the portion of the debt attributable to that unit
for the period of the vacancy, whether the vacancy commenced during
rent-up or after rent-up.
* * * * *
0
14. Revise Sec. 884.224 to read as follows:
Sec. 884.224 Management and occupancy reviews.
(a) The contract administrator will conduct management and
occupancy reviews to determine whether the owner is in compliance with
the Contract. Such reviews will be conducted in accordance with a
schedule set out by the Secretary and published in the Federal
Register, following notice and the opportunity to comment.
(b) HUD may independently inspect project operations and units at
any time.
(c) Equal Opportunity reviews may be conducted by HUD at any time.
PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL
ALLOCATIONS
0
15. The authority citation for 24 CFR part 886 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
0
16. In Sec. 886.109, revise paragraph (c) and add paragraphs (d), (e),
(f), and (g) to read as follows:
Sec. 886.109 Housing assistance payments to owners.
* * * * *
(c) Vacancies during rent-up. If a Contract unit which is decent,
safe and sanitary and has been accepted by HUD as available as of the
effective date of the Contract is not leased within 15 days of the
effective date of the Contract, the owner will be entitled to housing
assistance payments in the amount of 80 percent of the Contract Rent
for the first 30 days of a vacancy, provided that the owner:
(1) Has submitted a list of units leased as of the effective date
and a list of the units not so leased;
(2) 60 days prior to the completion of the rehabilitation or the
date the agreement was executed, whichever is later, had notified the
PHA of any units which the owner anticipated would be vacant on the
anticipated effective date of the contract;
(3) Has taken and continues to take all feasible actions to fill
the vacancy including, but not limited to: Contacting applicants on the
owner's waiting list, if any, requesting the PHA and other appropriate
sources to refer eligible applicants, and advertising the availability
of the units in a manner specifically designed to reach low-income
families; and
(4) Has not rejected any eligible applicant except for good cause
acceptable to HUD.
(d) Vacancies after rent-up. If an Eligible Family vacates its unit
(other than as a result of action by the owner which is in violation of
the Lease or the Contract or any applicable law), the owner shall
receive housing assistance payments in the amount of 80 percent of the
Contract Rent for the first 30 days of a vacancy. However, if the owner
collects any of the family's share of the rent for this period, the
payment must be reduced to an amount which, when added to the family's
payments, does not exceed 80 percent of the Contract Rent. Any such
excess shall be reimbursed by the owner to HUD or as HUD may direct.
(See also Sec. 886.115.) The owner shall not be entitled to any
payment under this paragraph unless he or she:
(1) Immediately upon learning of the vacancy, has notified HUD of
the vacancy or prospective vacancy and the reasons for the vacancy,
(2) Has made and continues to make a good faith effort to fill the
vacancy, including but not limited to, contacting applicants on the
waiting list, if any, requesting the PHA and other appropriate sources
to refer eligible applicants, and advertising the availability of the
unit, and
(3) Has not rejected any eligible applicant, except for good cause
acceptable to HUD.
(e) Payments for units where family is evicted. If the owner evicts
a family, the owner shall not be entitled to any payments pursuant to
paragraph (d) of this section unless the request for such payment is
supported by a certification that the provisions of Sec. 886.128 and
part 247 of this title have been followed.
(f) Prohibition for double compensation for vacancies. The owner
shall not be entitled to housing assistance payments with respect to
vacant units under this section to the extent he or she is entitled to
payments from other sources (for example, payments for losses of rental
income incurred for holding units vacant for relocatees pursuant to
Title I of the HCD Act or payments under Sec. 886.116).
(g) Debt-service vacancy payments. (1) If a contract unit continues
to be vacant after the vacancy period specified in paragraph (c) or (d)
of this section, the owner may submit a claim and receive additional
housing assistance payments on a semiannual basis with respect to such
a vacant unit in an amount equal to the principal and interest payments
required to amortize the portion of the debt attributable to that unit
for the period of the vacancy, whether such vacancy commenced during
rent-up or after rent-up.
(2) Additional payments under this paragraph (g) for any unit shall
not be for more than 12 months for any vacancy period, and shall be
made only if:
(i) The unit was in decent, safe, and sanitary condition during the
vacancy period for which payments are claimed.
(ii) The owner has taken and is continuing to take the actions
specified in paragraphs (c)(1), (2) and (3) or paragraphs (d)(1) and
(2) of this section, as appropriate.
(iii) The owner has demonstrated, in connection with the semiannual
claim form and in accordance with the standards prescribed by HUD, that
the project is not providing the owner with revenues at least equal to
the project costs incurred by the owner, and that the amount of the
payments requested is not in excess of that portion of the deficiency
which is attributable to the vacant units for the period of the
vacancies.
(iv) The owner has submitted, in connection with the semiannual
claim, a statement with relevant supporting evidence that there is a
reasonable prospect that the project can achieve financial soundness
within a reasonable time. The statement shall indicate the causes of
the deficiency; the corrective steps that have been and will be taken;
and the time by which it is expected that the project revenues will at
least equal project costs without the additional payments provided
under this paragraph.
[[Page 1867]]
(3) HUD may deny any claim for additional payments or suspend or
terminate payments if it determines that based on the owner's statement
and other evidence, there is not a reasonable prospect that the project
can achieve financial soundness within a reasonable time.
0
17. Revise Sec. 886.130 to read as follows:
Sec. 886.130 Management and occupancy reviews.
(a) The contract administrator will conduct management and
occupancy reviews to determine whether the owner is in compliance with
the Contract. Such reviews will be conducted in accordance with a
schedule set out by the Secretary and published in the Federal
Register, following notice and the opportunity to comment.
(b) HUD may independently inspect project operations and units at
any time.
(c) Equal Opportunity reviews may be conducted by HUD at any time.
0
18. Amend Sec. 886.309 to read as follows:
0
a. Revise paragraphs (c) and (d);
0
b. In paragraph (e), remove the phrase ``to Sec. 886.327'' and add in
its place ``to Sec. 886.328;'' and
0
c. In paragraph (g), revise the heading of paragraph (g) and paragraph
(g)(1).
Sec. 886.309 Housing assistance payment to owners.
* * * * *
(c) Vacancies during rent-up. If a Contract unit which is decent,
safe and sanitary and has been accepted by HUD as available as of the
effective date of the Contract is not leased within 15 days of the
effective date of the Contract, the Owner will be entitled to housing
assistance payments in the amount of 80 percent of the Contract Rent
for the first 30 days of a vacancy, provided that the Owner:
(1) Has submitted a list of units leased as of the effective date
and a list of the units not so leased;
(2) Sixty days prior to the completion of the rehabilitation or the
date the agreement was executed, whichever is later, had notified the
PHA of any units which the owner anticipated would be vacant on the
anticipated effective date of the contract;
(3) Has taken and continues to take all feasible actions to fill
the vacancy including, but not limited to: Contracting applicants on
the Owner's waiting list, if any, requesting the PHA and other
appropriate sources to refer eligible applicants, and advertising the
availability of the units in a manner specifically designed to reach
low-income families; and
(4) Has not rejected any eligible applicant except for good cause
acceptable to HUD.
(d) Vacancies after rent-up. If an Eligible Family vacates its unit
(other than as a result of action by the Owner which is in violation of
the Lease or the Contract or any applicable law), the Owner shall
receive housing assistance payments in the amount of 80 percent of the
Contract Rent for the first 30 days of a vacancy. However, if the owner
collects any of the family's share of the rent for this period, the
payment must be reduced to an amount which, when added to the family's
payments, does not exceed 80 percent of the Contract Rent. Any such
excess shall be reimbursed by the Owner to HUD or as HUD may direct.
(See also Sec. 886.315.) The owner shall not be entitled to any
payment under this paragraph unless he or she:
(1) Immediately upon learning of the vacancy, has notified HUD of
the vacancy or prospective vacancy and the reasons for the vacancy; and
(2) Has made and continues to make a good faith effort to fill the
vacancy, including but not limited to, contacting applicants on the
waiting list, if any, requesting the PHA and other appropriate sources
to refer eligible applicants, and advertising the availability of the
unit; and
(3) Has not rejected any eligible applicant, except for good cause
acceptable to HUD.
* * * * *
(g) Debt-service vacancy payments. (1) If a contract unit continues
to be vacant after the vacancy period specified in paragraph (c) or (d)
of this section, the owner may submit a claim and receive additional
housing assistance payments on a semiannual basis with respect to such
a vacant unit in an amount equal to the principal and interest payments
required to amortize the portion of the debt attributable to that unit
for the period of the vacancy, whether such vacancy commenced during
rent-up or after rent-up.
* * * * *
0
19. Revise Sec. 886.335 to read as follows:
Sec. 886.335 Management and occupancy reviews.
(a) The contract administrator will conduct management and
occupancy reviews to determine whether the owner is in compliance with
the Contract. Such reviews will be conducted in accordance with a
schedule set out by the Secretary and published in the Federal
Register, following notice and the opportunity to comment.
(b) HUD may independently inspect project operations and units at
any time.
(c) Equal Opportunity reviews may be conducted by HUD at any time.
PART 891--SUPPORTIVE HOUSING FOR THE ELDERLY AND PERSONS WITH
DISABILITIES
0
20. The authority citation for 24 CFR part 891 continues to read as
follows:
Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437f, 3535(d), and 8013.
0
21. In Sec. 891.520, revise the definition of ``Vacancy payment'' to
read as follows:
Sec. 891.520 Definitions applicable to 202/8 projects.
* * * * *
Vacancy payment means the housing assistance payment made to the
owner by HUD for a vacant assisted unit if certain conditions are
fulfilled.
* * * * *
0
22. In Sec. 891.560, remove the word ``Borrower'' and add in its place
the word ``Owner'' wherever it appears, and revise paragraph (c)(2) to
read as follows:
Sec. 891.560 HAP contract.
* * * * *
(c) * * *
(2) Payments to the owner for vacant assisted units (vacancy
payments). The amount of and conditions for vacancy payments are
described in Sec. 891.650. The housing assistance payments are made
monthly by HUD upon proper requisition by the owner, except payments
for vacancies under Sec. 891.650(d), which are made semiannually by
HUD upon requisition by the owner.
* * * * *
0
23. Add Sec. 891.582 to read as follows:
Sec. 891.582 Management and occupancy reviews.
(a) The contract administrator will conduct management and
occupancy reviews to determine whether the owner is in compliance with
the HAP Contract. Such reviews will be conducted in accordance with a
schedule set out by the Secretary and published in the Federal
Register, following notice and the opportunity to comment.
(b) HUD may independently inspect project operations and units at
any time.
(c) Equal Opportunity reviews may be conducted by HUD at any time.
0
24. In Sec. 891.650, remove the word ``Borrower'' and add in its place
the word ``Owner'' wherever it appears and revise the introductory text
of paragraphs (b), (c), and (d) to read as follows:
[[Page 1868]]
Sec. 891.650 Conditions for receipt of vacancy payments for assisted
units.
* * * * *
(b) Vacancies during rent-up. For each unit that is not leased as
of the effective date of the HAP contract, the owner is entitled to
vacancy payments in the amount of 80 percent of the contract rent for
the first 30 days of a vacancy, if the owner:
* * * * *
(c) Vacancies after rent-up. If an eligible family vacates a unit,
the owner is entitled to vacancy payments in the amount of 80 percent
of the contract rent for the first 30 days of a vacancy, if the owner:
* * * * *
(d) Debt-service vacancy payments. If a unit continues to be vacant
after the vacancy period specified in paragraph (b) or (c) of this
section, the owner may apply to receive additional vacancy payments in
an amount equal to the principal and interest payments required to
amortize that portion of the debt service attributable to the vacant
unit for up to 12 additional months for the unit if:
* * * * *
0
25. In Sec. 891.655, revise the definition of ``Vacancy payment'' to
read as follows:
Sec. 891.655 Definitions applicable to 202/162 projects.
* * * * *
Vacancy payment means the housing assistance payment made to the
owner by HUD for a vacant assisted unit if certain conditions are
fulfilled.
* * * * *
0
26. In Sec. 891.705, remove the word ``Borrower'' and add in its place
the word ``Owner'' wherever it appears, and revise paragraph (c)(2) to
read as follows:
Sec. 891.705 Project assistance contract.
* * * * *
(c) * * *
(2) Payments to the owner for vacant assisted units (vacancy
payments). The amount of and conditions for vacancy payments are
described in Sec. 891.790. HUD makes the project assistance payments
monthly upon proper requisition by the owner, except payments for
vacancies under Sec. 891.790(d), which HUD makes semiannually upon
requisition by the owner.
* * * * *
0
27. In Sec. 891.790, remove the word ``Borrower'' and add in its place
the word ``Owner'' wherever it appears, and revise the introductory
text of paragraphs (b), (c), and (d) to read as follows:
Sec. 891.790 Conditions for receipt of vacancy payments for assisted
units.
* * * * *
(b) Vacancies during rent-up. For each unit (or residential space
in a group home) that is not leased as of the effective date of the
PAC, the owner is entitled to vacancy payments in the amount of 80
percent of the contract rent (or pro rata share of the contract rent
for a group home) for the first 30 days of a vacancy, if the owner:
* * * * *
(c) Vacancies after rent-up. If an eligible family vacates an
assisted unit (or residential space in a group home) the owner is
entitled to vacancy payments in the amount of 80 percent of the
contract rent (or pro rata share of the contract rent for a group home)
for the first 30 days of a vacancy, if the owner:
* * * * *
(d) Debt-service vacancy payments. If an assisted unit (or
residential space in a group home) continues to be vacant after the
vacancy period specified in paragraph (b) or (c) of this section, the
owner may apply to receive additional vacancy payments in an amount
equal to the principal and interest payments required to amortize that
portion of the debt service attributable to the vacant unit (or, in the
case of group homes, the residential space) for up to 12 additional
months for the unit, if:
* * * * *
Dated: December 11, 2014.
Biniam Gebre,
Acting Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2015-00357 Filed 1-13-15; 8:45 am]
BILLING CODE 4210-67-P