HUD Approval of Requests for Transfers of Multifamily Housing Project-Based Rental Assistance, HUD-Held or Insured Debt, and Income-Based Use Restrictions, 16963-16970 [2015-06776]
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Federal Register / Vol. 80, No. 61 / Tuesday, March 31, 2015 / Rules and Regulations
501, TP–501, TP–502, and EPA
Regulation 40 CFR 59.623.
Because the scope of the consumer
product safety rule is established by the
CGBPA, this rule does not incorporate
by reference the scope section of ASTM
F2517–15 or Appendix X1 that relates to
the scope section of ASTM F2517–15.
V. Effective Date
As discussed in the preceding section,
this is a direct final rule. Unless the
Commission receives a significant
adverse comment by April 3, 2015, the
rule will become effective on April 12,
2015.
VI. Other Relevant Statutory Provisions
A. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
generally requires an agency to prepare
a regulatory flexibility analysis of any
rule subject to notice and comment
rulemaking requirements under the
Administrative Procedure Act or any
other statutes unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. 5 U.S.C. 603
and 605. This rule merely codifies
requirements that will take effect
through operation of law as specified in
the CGBPA. The rule does not impose
any requirements beyond those put in
place by the CGBPA. Thus, the rule does
not create new substantive obligations
for any entity, including any small
entity. Accordingly, the Commission
certifies that the rule will not have a
significant impact on a substantial
number of small entities.
B. Environmental Considerations
The Commission’s regulations
provide a categorical exclusion for the
Commission’s rules from any
requirement to prepare an
environmental assessment or an
environmental impact statement
because they ‘‘have little or no potential
for affecting the human environment.’’
16 CFR 1021.5(c)(2). This rule falls
within the categorical exclusion, so no
environmental assessment or
environmental impact statement is
required.
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C. Paperwork Reduction Act
This direct final rule contains no
collection of information. Therefore,
clearance by the Office of Management
and Budget under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501–
3520) is not required.
2075(a), provides that where a
‘‘consumer product safety standard
under [the CPSA]’’ is in effect and
applies to a product, no state or political
subdivision of a state may either
establish or continue in effect a
requirement dealing with the same risk
of injury unless the state requirement is
identical to the federal standard.
(Section 26(c) of the CPSA also provides
that states or political subdivisions of
states may apply to the Commission for
an exemption from this preemption
under certain circumstances).
As discussed above, under the
CGBPA, the child-resistance
requirements of ASTM F2517–15
became a consumer product standard
for CPSA purposes. Children’s Gasoline
Burn Prevention Act, Pub. L 110–278,
Sec. 2(a) (July 17, 2008). The childresistance requirements of ASTM
F2517–15, which will be codified under
this rule, will invoke the preemptive
effect of section 26(a) of the CPSA.
VIII. Certification
Section 14(a) of the CPSA requires
that products subject to a consumer
product safety rule under the CPSA, or
to a similar rule, ban, standard, or
regulation under any other act enforced
by the Commission, be certified as
complying with all applicable CPSC
requirements. 15 U.S.C. 2063(a). Such
certification must be based on a test of
each product, or on a reasonable testing
program. Because ASTM F2517–15 is
deemed a ‘‘consumer product safety
rule’’ for CPSA purpose, portable
gasoline containers manufactured on or
after April 12, 2015 are subject to the
testing and certification requirements of
section 14 of the CPSA with respect to
ASTM F2517–15.
List of Subjects in 16 CFR Part 1460
Consumer protection, Gasoline,
Incorporation by reference, Safety.
For the reasons stated above, the
Commission adds part 1460 to
subchapter B of title 16 of the Code of
Federal Regulations to read as follows:
PART 1460—CHILDREN’S GASOLINE
BURN PREVENTION ACT
REGULATION
Sec.
1460.1 Scope and application.
1460.2 Definition.
1460.3 Requirements for child-resistance
for closures on portable gasoline
containers.
16963
gasoline containers must comply with
the requirements specified in § 1460.3,
which are considered to be a consumer
product safety rule.
§ 1460.2
Definition.
Portable gasoline container means
any portable gasoline container
intended for use by consumers.
§ 1460.3 Requirements for child-resistance
for closures on portable gasoline
containers.
Each portable gasoline container
manufactured on or after April 12, 2015
for sale in the United States shall
conform to the child-resistance
requirements for closures on portable
gasoline containers specified in sections
2 through 6 of ASTM F2517–15
(including Appendixes X2 and X3
referenced therein), Standard
Specification for Determination of Child
Resistance of Portable Fuel Containers
for Consumer Use, approved on January
1, 2015. The Director of the Federal
Register approves the incorporation by
reference listed in this section in
accordance with 5 U.S.C. 552(a) and 1
CFR part 51. You may obtain a copy of
these ASTM standards from ASTM
International, 100 Barr Harbor Drive, PO
Box C700, West Conshohocken, PA
19428–2959 USA, telephone: 610–832–
9585; https://www.astm.org/. You may
inspect copies at the Office of the
Secretary, U.S. Consumer Product
Safety Commission, Room 820, 4330
East West Highway, Bethesda, MD
20814, telephone 301–504–7923, or at
the National Archives and Records
Administration (NARA). For
information on the availability of this
material at NARA, call 202–741–6030,
or go to: https://www.archives.gov/
federal_register/code_of_
federalregulations/ibr_locations.html.
Alberta E. Mills,
Acting Secretary, U.S. Consumer Product
Safety Commission.
[FR Doc. 2015–07151 Filed 3–30–15; 8:45 am]
BILLING CODE 6355–01–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Chapters VIII and IX
[Docket No. FR–5779–N–01]
Authority: Sec. 2, Pub. L. 110–278, 122
Stat. 2602.
HUD Approval of Requests for
Transfers of Multifamily Housing
Project-Based Rental Assistance, HUDHeld or Insured Debt, and IncomeBased Use Restrictions
VII. Preemption
§ 1460.1
AGENCY:
Section 26(a) of the Consumer
Product Safety Act (CPSA), 15 U.S.C.
In accordance with the Children’s
Gasoline Burn Prevention Act, portable
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Scope and application.
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Office of the Assistant
Secretary for Housing-Federal Housing
Commissioner, HUD.
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Federal Register / Vol. 80, No. 61 / Tuesday, March 31, 2015 / Rules and Regulations
Notice of requirements to
transfer assistance.
ACTION:
This notice establishes the
terms and conditions by which HUD
will approve a request for the transfer of
project-based rental assistance, debt
held or insured by the Secretary, and
statutorily required income-based use
restrictions from one multifamily
housing project to another (or between
several such projects). The Department
of Housing and Urban Development
Appropriations Act, 2014 and the
Department of Housing and Urban
Development Appropriations Act, 2015
give the Secretary the authority to
approve transfer requests for fiscal years
2014 through 2016, provided that the
Secretary publish a notice in the
Federal Register establishing the terms
and conditions for HUD approval of
such transfers no later than 30 days
before such notice takes effect. HUD
believes that publication of the criteria
will assist project owners to determine
whether a transfer is feasible given the
specific circumstances of their
multifamily projects. Publication of the
criteria will also facilitate HUD’s review
of transfer requests by helping owners
formulate their requests in a manner
that adequately addresses the statutory
criteria.
DATES: Effective: April 30, 2015.
FOR FURTHER INFORMATION CONTACT:
Nancie-Ann Bodell, Acting Director,
Office of Asset Management and
Portfolio Oversight of Multifamily
Housing, Office of Housing, Department
of Housing and Urban Development,
451 7th Street SW., Room 6110,
Washington, DC 20410; telephone
number 202–708–2495 (this is not a tollfree number). Persons with hearing or
speech impairments may access this
number through TTY by calling the tollfree Federal Relay Service at 800–877–
8339.
SUPPLEMENTARY INFORMATION:
SUMMARY:
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A. Background
Beginning with section 318 of the
Department of Housing and Urban
Development Appropriations Act, 2006
(Pub. L. 109–115, 119 Stat. 2396,
approved November 30, 2005), HUD
appropriations acts have contained a
general provision authorizing the
Secretary to approve requests from
project owners for the transfer of certain
rental assistance, debt, and incomebased use restrictions between HUDassisted projects. For fiscal years 2014
and 2015, this transfer authority is
provided under section 214 of Title II of
Division L of the Consolidated
Appropriations Act, 2014 (Pub. L. 113–
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76, 128 Stat. 5, approved January 17,
2014) (Section 214).1 Section 214(a)
states that ‘‘[n]otwithstanding any other
provision of law . . . the Secretary of
Housing and Urban Development may
authorize the transfer of some or all
project-based assistance, debt held or
insured by the Secretary and statutorily
required low-income and very lowincome use restrictions if any,
associated with one or more multifamily
housing project or projects to another
multifamily housing project or
projects.’’ Section 214(b) also allows for
phased transfers of project-based
assistance to accommodate the
financing and other requirements
related to rehabilitating or constructing
the project or projects to which the
assistance is transferred.
HUD approval of transfers is subject
to the conditions enumerated in the
appropriations act for the applicable
fiscal year. These statutory terms and
conditions have, in general, been
consistent from one appropriations act
to the next. The statutory criteria for
fiscal years 2014 through 2016 are
enumerated in Section 214(c), which
provides as follows:
• The transfer authorized in
subsection (a) is subject to the following
conditions:
Æ NUMBER AND BEDROOM SIZE OF
UNITS.—
—For occupied units in the transferring
project: The number of low-income
and very low-income units and the
configuration (i.e. bedroom size)
provided by the transferring project
shall be no less than when transferred
to the receiving project or projects and
the net dollar amount of Federal
assistance provided to the transferring
project shall remain the same in the
receiving project or projects.
—For unoccupied units in the
transferring project: The Secretary
may authorize a reduction in the
number of dwelling units in the
receiving project or projects to allow
for a reconfiguration of bedroom sizes
to meet current market demands, as
determined by the Secretary and
provided there is no increase in the
project-based assistance budget
authority.
Æ The transferring project shall, as
determined by the Secretary, be either
physically obsolete or economically
nonviable.
1 Section 212 of Title II of Division K of the
Consolidated and Further Continuing
Appropriations Act, 2015 (Pub. L. 113–235,
approved December 16, 2014) provides the same
authority for fiscal years 2015 and 2016. For the
sake of simplicity, this notice uses ‘‘Section 214’’
to refer to the authority in both Acts, as the
language other than the dates is identical.
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Æ The receiving project or projects
shall meet or exceed applicable physical
standards established by the Secretary.
Æ The owner or mortgagor of the
transferring project shall notify and
consult with the tenants residing in the
transferring project and provide a
certification of approval by all
appropriate local governmental officials.
Æ The tenants of the transferring
project who remain eligible for
assistance to be provided by the
receiving project or projects shall not be
required to vacate their units in the
transferring project or projects until new
units in the receiving project are
available for occupancy.
Æ The Secretary determines that this
transfer is in the best interest of the
tenants.
Æ If either the transferring project or
the receiving project or projects meets
the condition specified in subsection
(d)(2)(A),2 any lien on the receiving
project resulting from additional
financing obtained by the owner shall
be subordinate to any FHA-insured
mortgage lien transferred to, or placed
on, such project by the Secretary, except
that the Secretary may waive this
requirement upon determination that
such a waiver is necessary to facilitate
the financing of acquisition,
construction, and/or rehabilitation of
the receiving project or projects.
Æ If the transferring project meets the
requirements of subsection (d)(2),3 the
owner or mortgagor of the receiving
project or projects shall execute and
record either a continuation of the
existing use agreement or a new use
agreement for the project where, in
either case, any use restrictions in such
agreement are of no lesser duration than
the existing use restrictions.
Æ The transfer does not increase the
cost (as defined in section 502 of the
Congressional Budget Act of 1974, as
amended) of any FHA-insured mortgage,
except to the extent that appropriations
are provided in advance for the amount
of any such increased cost.
HUD has exercised the transfer
authority on a case-by-case basis,
determining compliance with the
statutory criteria based on the specific
circumstances of the projects. Most of
the statutory criteria are prescriptive,
leaving little room for the exercise of
agency discretion (for example, the
requirement that the transfer not
increase the cost of any FHA-insured
mortgage). Others, however, are more
2 Subsection (d)(2)(A) pertains to housing that is
subject to a mortgage insured under the National
Housing Act (12 U.S.C. 1701 et seq.).
3 Subsection (d)(2) defines the term ‘‘multifamily
housing project.’’
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generally phrased, allowing for HUD
interpretation in applying the criteria
(for example, the requirement that the
transferring project be either physically
obsolete or economically nonviable, ‘‘as
determined by the Secretary’’). Over
time, HUD has developed uniform
guidelines to facilitate the review of
transfer requests and aid in determining
compliance with the statutory criteria.
Section 214(e)(1) requires that HUD
publish by notice in the Federal
Register the terms and conditions for
HUD approval of transfers, no later than
30 days before such notice takes effect.
This notice is being issued in
accordance with the publication
requirements of Section 214(e)(1). HUD
believes that publication of the criteria
will assist project owners in
determining whether a transfer is
appropriate given the specific
circumstances of their multifamily
projects. Publication of the criteria will
also facilitate HUD’s review of transfer
requests by helping owners formulate
their requests in a manner that
adequately address the statutory criteria.
Owners of multifamily housing
projects, as defined by subsection (d)(2)
of Section 214, who wish to request a
transfer of rental assistance, debt, or
income-based use restrictions under
Section 214 should submit a package
containing the relevant materials
outlined below to the HUD Hub/
Program Center or Regional Center/
Satellite Office for review. Owners can
submit packages for review on or after
the effective date of this notice. HUD
will issue a subsequent Housing notice
detailing procedural submission
requirements and will follow this notice
with a proposed rule to solicit comment
before regulatory codification of these
criteria.
B. Statutory Terms and Conditions for
HUD Approval of Transfer Requests
Commencing for transfer requests
submitted pursuant to Section 214, HUD
will evaluate the request, on a case-bycase basis, in accordance with the
following criteria. The receiving
property must be a multifamily housing
project prior to or as a result of the
Section 214 transfer. The receiving
project may already be HUD-affiliated,
meaning it has existing HUD projectbased rental assistance, an existing use
restriction, or debt (either HUD-held or
FHA-insured). HUD will approve a
transfer under Section 214 to a HUDaffiliated property if the receiving
property is in compliance with all
business agreements with the
Department or has a HUD-approved
plan in place to correct any identified
deficiencies. The receiving property
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may be existing, under construction,
newly constructed, undergoing
substantial rehabilitation, or undergoing
moderate rehabilitation. Before Section
8 project-based rental assistance is
transferred to the receiving property, the
property must exist and be habitable (as
demonstrated by a certificate of
occupancy or like documentation). The
numbered items below track the
statutory criteria and, where HUD has
been granted flexibility, establishes
requirements and guidance on how
HUD will assess compliance with the
statutory factors.
1. Number and Bedroom Size of Units
For occupied units in the transferring
project: The number of low-income and
very low-income units and the
configuration (i.e. bedroom size)
provided by the transferring project
shall be no less than when transferred
to the receiving project or projects. The
receiving owner 4 must provide detailed
information about the number of units
and the corresponding unit size
occupied by low-income and very-low
income families respectively, as well as
the proposed number of units for low
and very-low income families and the
corresponding unit configuration at the
receiving project. In determining
compliance with this requirement, HUD
will consider the number of units
occupied by low and very low-income
families and their respective unit sizes,
as well as whether the size of the
occupied units is appropriate for the
family size occupying those units. The
net dollar amount of Federal assistance
provided to the transferring project shall
remain the same in the receiving project
or projects. HUD Multifamily Hub/
Program Center or Regional Center/
Satellite Office staff will verify that the
net dollar amount of Federal assistance
transferred remains the same in the
receiving project or projects.
For unoccupied units in the
transferring project: HUD may authorize
a reduction in the number of dwelling
units in the receiving project or projects
to allow for a reconfiguration of
bedroom sizes to meet market demands,
as demonstrated by the transferring
owner, provided there is no increase in
the project-based assistance budget
authority. HUD Multifamily Hub/
Program Center or Regional Center/
Satellite Office staff will verify that the
net dollar amount of Federal assistance
transferred remains the same in the
receiving project or projects. The
transferring owner shall provide
justification for a reduction in the
4 The term ‘‘owner’’ refers to either the
transferring or receiving owner unless specified.
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number of dwelling units in one or more
of the following ways:
a. Evidence of all efforts to market the
unit type proposed for reduction and
evidence of the demand within the
geographic market area for the proposed
new unit type. The documentation may
include evidence of the transferring
owner’s efforts, including:
i. Property traffic reports.
ii. Advertising details.
iii. Age and/or income waivers
requested.
iv. Local housing authority wait list
information or other affordable housing
provider contacts made demonstrating
that there is minimal or no demand for
the unit type.
b. Documentation that the average
vacancy at the transferring property has
been 25 percent or more over the past
24 months.
c. Any other documentation that a
reduction in the number of dwelling
units is necessary to meet market
demand, and approved by HUD.
2. Physical Obsolescence or Economic
Nonviability
Physical obsolescence shall be shown
in one or more of the following ways:
a. A Real Estate Assessment Center
(REAC) physical inspection score of 30
or below.
b. Two or more consecutive REAC
physical inspection scores of below 60.
c. Condemnation or other such notice
by the local or state government
rendering the property uninhabitable.
d. A taking through eminent domain.
e. Evidence that needed capital
repairs cannot be made without the
property losing financial viability.
f. Any other proof of physical
obsolescence provided by the owner
and approved by HUD.
Economic non-viability must be
shown in one or more of the following
ways:
a. A market analysis justifying the
inability of the property to meet current
HUD-imposed affordability restrictions.
b. A market analysis indicating
limited to no market for the unit type(s).
c. A demonstrated average vacancy of
25 percent or more over the past 24
months.
d. Any other proof of economic nonviability provided by the owner and
approved by HUD.
The transferring owner is required to
certify in writing that the material
submitted to demonstrate compliance
with this criterion is true and accurate.
The Multifamily Hub/Program Center
will review all submitted information
and verify its accuracy.
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3. Applicable Physical Standards
The receiving project or projects must
have a REAC physical inspection score
of 60 or above. If the project does not
have a current REAC physical
inspection score, an inspection must be
conducted prior to the transfer and the
project must score 60 or above or have
a HUD-approved plan in place to correct
any deficiencies.
The receiving project must also meet
all applicable accessibility
requirements, including, but not limited
to the accessibility requirements of the
Fair Housing Act, section 504 of the
Rehabilitation Act, and Title II of the
Americans with Disabilities Act. The
owner must provide documentation
acceptable to HUD that the receiving
project is in compliance with all
applicable accessibility requirements.
The HUD Hub/Program Center or
Regional Center/Satellite Office will
review the submitted documentation
and verify acceptability.
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4. Notification and Consultation With
Tenants and Local Governmental
Officials
The transferring owner must give the
tenants and legitimate tenant
organization(s) written notification of
the proposed transfer and provide a
minimum 30-day comment period. HUD
will not accept a Section 214 request for
any project unless the transferring
owner has notified the tenants of the
proposed transfer and has provided the
tenants with an opportunity to comment
on the proposed transfer.
a. The notification should include the
address and phone of the appropriate
HUD office, including the specific
division and/or name and phone
number of a contact at the appropriate
HUD office. The notification should be
provided in appropriate formats as
necessary to meet the needs of all,
including persons with limited English
proficiency and formats for persons
with vision, hearing, and other
communication-related disabilities (e.g.,
Braille, audio, and large type, sign
language interpreters, assistive listening
devices, etc.).
b. The notification will include a
description of the impact of the request
on tenants’ rental assistance and tenant
contributions. The notification must
also explain the tenants’ relocation
rights and responsibilities, including the
assistance that tenants may become
eligible to receive under the Uniform
Relocation Act if acquisition,
rehabilitation or demolition are
involved (see section five below). In
addition, the notification must inform
the tenants that if a Section 8 project-
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based rental assistance contract will be
transferred, and it assists the unit they
inhabit, they may be eligible for tenant
protection vouchers if they choose not
to relocate (see Section C below).
c. The notice must be delivered
directly to each unit in the project or
mailed to each tenant and posted in at
least 3 places/common areas throughout
the project, including any project office.
In a project greater than 4 stories, the
notice may be served either by delivery
to each unit or by posting. If the posting
method is used, the notice must be
posted in at least three conspicuous
places within each building in which
the affected dwelling units are located.
i. The tenants (including any legal or
other representatives acting for the
tenants individually or as a group) have
the right to inspect and copy the
materials that the owner is required to
submit to HUD for a period of 30 days
from the date on which the notice is
served to the tenants. Any tenant
comments must be available in the
project office during normal business
hours for public reading and copying.
ii. The tenants have the right, during
this period, to submit written comments
on the transfer to the transferring owner
and the appropriate HUD office. Tenant
representatives may assist tenants in
preparing these comments.
d. The transferring owner must hold
a meeting with the tenants and
legitimate tenant organizations to
discuss the details of the notification
and answer questions.
e. Upon completion of the tenant
comment period, the transferring owner
must review the comments submitted by
the tenants and their representatives
and prepare a written evaluation of the
comments. Any negative comments
must be addressed. The transferring
owner must then submit the following
materials to the appropriate HUD office
at the time of submission of the request
for transfer under Section 214:
i. A copy of the transferring owner’s
Notification to the tenants;
ii. A sign-in sheet from the tenant
meeting;
iii. A copy of all the tenant comments;
iv. The transferring owner’s
evaluation of the tenant comments and
any responses the owner gave to
negative comments; and
v. A certification by the transferring
owner that it has complied with all of
the requirements of 24 CFR 245.410,
245.415, 245.416 through 245.419, as
applicable, and 245.420. The
transferring owner must identify any
Fair Housing litigation settlement
agreements, voluntary compliance
agreements, or other remedial
agreements signed by the owner and
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HUD. The Office of Fair Housing and
Equal Opportunity (FHEO) will ensure
there is no conflict between the
agreements and the proposed transfer. If
there is a conflict, the transferring
owner may propose modifications to the
remedial agreement as part of the
transfer proposal.
The owner must also provide a
certification of approval from the
relevant local government officials,
which may include but are not limited
to the:
a. Local Mayor.
b. City Council.
c. Planning Commission.
d. Health and Human Services
Commission.
e. Any other pertinent local
government official or government
body.
Although in some cases, a
certification of approval may be
required from multiple local
governmental officials, there must be at
least one certification of approval from
at least one local government official in
all cases to warrant approval of a
request for transfer of assistance, debt,
or use restrictions.
5. Relocation of Tenants
The tenants of the transferring project
who remain eligible to receive
assistance will not be required to vacate
their units in the transferring project
until new units in the receiving project
are available for occupancy. If tenants
must move as a direct result of
acquisition, rehabilitation or demolition
in connection with a transfer of
assistance under Section 214, the
Uniform Relocation Assistance and Real
Property Acquisition Policies Act of
1970, as amended (URA) may apply.
HUD will review tenant relocations
and protections on a case-by case-basis
to ensure tenants are protected from
permanent displacement. Under no
circumstances shall the residents pay
for any relocation costs incurred as a
result of the transfer and the resulting
move to the receiving property. It is
within the owner’s discretion whether
to pay relocation costs for relocations to
locations other than the receiving
property. A Section 214 transaction
where the tenants’ relocation expenses
are not paid, will not be approved by
HUD.
6. Best Interest of the Tenants
HUD will determine that the transfer
is in the best interest of the tenants
based on criteria including, but not
limited to, the following:
a. The transfer will preserve
affordable and/or assisted housing in a
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market area in need of such assistance/
affordability.
b. The transfer complies with section
C of this notice. The site and
neighborhood requirements ensure that
the receiving property is in a location
that affords the tenants at the
transferring property the same or a
better property location than the
transferring site.
c. All current tenants will receive the
same level of assistance they are
currently receiving. Tenants that move
from the transferring project to the
receiving project remain subject to their
existing lease requirements and all
occupancy rules. The receiving owner
may not seek to terminate the lease of
a tenant from the transferring project for
actions that occurred prior to the
Section 214 transfer but the tenant will
be subject to ongoing eligibility
requirements for actions that occur after
the transfer. Any eviction procedures
currently underway at the transferring
project will not be affected by the
transfer of budget authority.
d. In scenarios where a Section 8 HAP
contract will be transferred, and a tenant
assisted by the HAP contract objects to
relocating to the receiving property, the
tenant may be eligible to receive a
tenant protection voucher, subject to the
availability of appropriations. A tenant
may receive a TPV, if they meet the
eligibility requirements for voucher
assistance and the unit that they
currently reside in is supported by a
Section 8 project-based rental assistance
contract that is subject to transfer as part
of the Section 214 transfer. The owner
will notify the tenant of their potential
eligibility to receive a TPV at the time
of tenant notification and subsequently
notify the Multifamily Hub/PC
regarding how many TPVs are
requested. If TPVs are needed, the
Multifamily Hub/PC should work with
the Public and Indian Housing (PIH)
field office to follow the procedures
outlined in PIH Notice 2001–41.
e. To determine if the Section 214
transfer is in the best interest of the
tenants, the transferring owner must
provide documentation that all tenants
residing at the property at the time of
the transfer are relocating to a property
of greater economic solvency or better
physical condition, or accepting a
tenant protection voucher to move to a
property that best meets their housing
needs.
f. If the transferring property is not
fully assisted by a Section 8 projectbased rental assistance contract, HUD
will approve or disapprove the transfer
based upon its review of the information
submitted and all tenant comments
received.
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g. If the transferring property is not
fully assisted by a Section 8 projectbased rental assistance contract, the
transfer will only be approved if:
i. There are no tenants at the
transferring property; or
ii. The property is occupied but the
transfer will be to an immediately
adjacent property; or
iii. The unassisted tenants would
have to move in the absence of the
Section 214 transfer (e.g., the site is
contaminated, the property is or will be
condemned, the property is being taken
via eminent domain, etc.); or
iv. The transfer involves a 202 Direct
Loan or a 202/811 Capital Advance or
PRAC contract that must be transferred
as a result of a state’s response to the
Olmstead Decision or state Medicaid/
Medicare policies on congregate
housing make it economically
impossible to continue operating the
property as originally conceived.
h. If the tenants must be relocated,
they will/did receive the protections
provided under the URA, or other
assistance if the URA is not triggered.
No tenants will be displaced as a result
of the transfer.
7. Subordination of Liens
To demonstrate compliance, the
receiving owner must submit one or
more of the following as documentation:
a.Verification from the FHA lender
that any lien on the receiving project is
subordinate to any FHA-insured
mortgage lien.
b. Other documentation as applicable.
A receiving owner may submit a
waiver request if the receiving owner
believes it is necessary that a lien(s) not
be subordinate to the FHA insured
mortgage to facilitate the financing of
acquisition, construction, or
rehabilitation of the receiving project or
projects. Such a request must
demonstrate that the waiver is necessary
to finance the transaction and that there
is minimal risk to the FHA as a result
of the waiver. HUD must approve all
waiver requests.
8. Use Restrictions
If a use restriction is in place at the
receiving project, the receiving owner
must sign a new or amended use
restriction that includes all income and
eligibility restrictions of the transferring
use restriction and runs for the duration
of the transferring project’s existing use
restriction or the use restriction at the
receiving project, whichever is longer.
9. No Increased FHA-Insured Mortgage
Costs
Transfers must not increase the cost
(as defined in section 502 of the
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16967
Congressional Budget Act of 1874) of
any FHA-insured mortgage. HUD will
consider the transfer of an FHA-insured
mortgage, or Secretary-held formerly
insured mortgage that is subsidized
under either Section 221(d)(3)–(d)(5)
with below market interest rates or
Section 236. In addition, in order to
avoid a claim against the General
Insurance Fund, HUD may approve the
transfer of a non-subsidized FHAinsured mortgage in combination with
the transfer of a project-based rental
assistance contract and/or a use
restriction to a receiving project.
However, HUD will only consider the
transfer of a non-subsidized FHAinsured mortgage when the transferring
project is in danger of imminent default
on its FHA-insured mortgage due to a
finding that the project is physically
obsolete and/or economically nonviable
in compliance with the criteria and
process set forth in this notice.
C. Site and Neighborhood Standards for
the Receiving Property
1. Transfers that involve Section 202
assistance must comply with the site
and neighborhood requirements at 24
CFR 891.125.
2. Transfers that involve Section 811
assistance must comply with the site
and neighborhood requirements at 24
CFR 891.125 and 24 CFR 891.320.
3. All other receiving sites must
comply with the site and neighborhood
requirements below. The receiving
owner must submit the address of the
proposed property with their proposal
and HUD will determine whether the
site meets the following requirements:
a. The site and neighborhood is
suitable from the standpoint of
facilitating and furthering full
compliance with the applicable
provisions of Title VI of the Civil Rights
Act of 1964, Title VIII of the Civil Rights
Act of 1968, Executive Order 11063, and
HUD regulations issued pursuant
thereto.
b. The neighborhood must not be one
that is seriously detrimental to family
life or in which substandard dwellings
or other undesirable conditions
predominate, unless there is actively in
progress a concerted program to remedy
the undesirable conditions.
c. The housing must be accessible to
social, recreational, educational,
commercial, and health facilities and
services, and other municipal facilities
and services that are at least equivalent
to those typically found in
neighborhoods consisting largely of
unassisted, standard housing of similar
market rents.
d. If the receiving project is new
construction, and is not covered by the
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existing regulations cited above for
Section 202/811 properties, it may not
be located in a racially mixed area if the
project will cause a significant increase
in the proportion of minority to
nonminority residents in the area and
may not be located in an area of
minority concentration. If HUD
determines that the receiving project
will be located in an area of minority
concentration, the receiving Owner
must submit supporting data (e.g.
census data, evidence of local
revitalization efforts, etc.) in order for
HUD to determine that they meet one of
the exceptions below:
i. Sufficient, comparable
opportunities exist for housing for
minority households in the income
range to be served by the proposed
project, outside areas of minority
concentration. Sufficient does not
require that in every locality there be an
equal number of assisted units within
and outside of areas of minority
concentration. Rather, application of
this standard should produce a
reasonable distribution of assisted units
each year which over a period of several
years will approach an appropriate
balance of housing opportunities within
and outside areas of minority
concentration. An appropriate balance
in any jurisdiction must be determined
in light of local conditions affecting the
range of housing choices available for
very low-income minority households
and in relation to the racial mix of the
locality’s population.
(A) Units may be considered to be
comparable opportunities if they have
the same household type and tenure
type (owner/renter), require
approximately the same total tenant
payment, serve the same income group,
are located in the same housing market,
and are in standard condition.
(B) Application of this sufficient,
comparable opportunities standard
involves assessing the overall impact of
HUD-assisted housing on the
availability of housing choices for very
low-income minority households, in
and outside areas of minority
concentration, and must take into
account the extent to which the
following factors are present, along with
any other factor relevant to housing
choice:
(1) A significant number of assisted
housing units are available outside areas
of minority concentration.
(2) There is significant integration of
assisted housing projects constructed or
rehabilitated in the past ten years,
relative to the racial mix of the eligible
population.
(3) There are racially integrated
neighborhoods in the locality.
(4) Programs are operated by the
locality to assist minority households,
as applicable, that wish to find housing
outside areas of minority concentration.
(5) Minority households have
benefitted from local activities (e.g.,
acquisition and write-down of sites, tax
relief programs for homeowners,
acquisitions of units for use as assisted
housing units) undertaken to expand
choice for minority households (or
families) outside of areas of minority
concentration.
(6) A significant proportion of
minority households, have been
successful in finding units in
nonminority areas under the Section 8
Certificate and Housing Voucher
programs.
(7) Comparable housing opportunities
have been made available outside areas
of minority concentration through other
programs.
ii. The project is necessary to meet
overriding housing needs that cannot be
met in that housing market area.
Application of the overriding housing
needs criterion, for example, permits
approval of sites that are an integral part
of an overall local strategy for the
preservation or restoration of the
immediate neighborhood and of sites in
a neighborhood experiencing significant
private investment that is demonstrably
changing the economic character of the
area (a ‘‘revitalizing area’’). An
overriding housing need, however, may
not serve as the basis for determining
that a site is acceptable if the only
reason the need cannot otherwise be
feasibly met is that discrimination on
the basis of race, color, creed, sex, or
national origin renders sites outside
areas of minority concentration
unavailable, or if the use of this
standard in recent years has had the
effect of circumventing the obligation to
provide housing choice.
4. All Section 214 transactions
(including those involving Section 202/
811 properties) will be reviewed by
HUD’s Office of Policy Development
and Research to assess whether there is
sufficient demand for affordable rental
housing in the receiving market area
and to ensure that the transfer does not
occur in neighborhoods with highly
concentrated poverty.
Inter-Fair Market Rent (FMR) area transfers
For Inter-FMR Area transfers, there can be two
types: (1) Transferring to a new metropolitan
(metro) area; or (2) transferring to a new nonmetro county.
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New Metro Neighborhood ...........
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Intra-Fair Market Rent (FMR) area transfers
For Intra-FMR transfers, there can be three types: (1)
Within a metro area to a new neighborhood (Small
Area Fair Market Rent (SAFMR)/Zip); (2) within a
metro area, in the same neighborhood (SAFMR/Zip
code); and (3) within a non-metro county.
Within a metro area to a new neighborhood (SAFMR/
Zip code), the receiving property’s neighborhood
must be in a SAFMR area with a poverty rate of
less than 30 percent, unless:
a. The receiving property is in a neighborhood
receiving a Choice Neighborhoods Grant or is
part of a significant state or local revitalization
initiative that will include and result in new
construction and substantial rehabilitation of
mixed income housing; or
b. The receiving property is in a SAFMR area
with a poverty rate between 30 and 40 percent; and either
For moves into a metro area, the receiving property’s
neighborhood must be in a SAFMR area with a
poverty rate of less than 30 percent, unless:
a. The receiving property is in a neighborhood
receiving a Choice Neighborhoods Grant or is
part of a significant state or local revitalization
initiative that will result in new construction
and substantial rehabilitation of mixed income
housing; or
b. The receiving property is in a SAFMR area
with a poverty rate between 30 and 40 percent; and either:
1. Housing market activity within the SAFMR
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Inter-Fair Market Rent (FMR) area transfers
area would indicate that the area is revitalizing; or
2. The poverty rate has seen significant recent decline.
Old Metro Neighborhood .............
N/A: By definition a transfer to a new FMR area will
be a transfer to a new neighborhood.
Non-Metro ...................................
For moves to a non-metro county, the receiving property must be in a county that has a poverty rate
less than 30 percent, unless:
The county poverty rate is between 30 and 40
percent, and:
1. The housing market activity within the
county would indicate that the area is revitalizing; or
2. The poverty rate has seen significant recent decline; or
3. The transaction is part of a statewide
portfolio preservation strategy operated by
a Housing Finance Agency or is part of a
significant state or local revitalization initiative that will result in new construction
and substantial rehabilitation of mixed income housing.
asabaliauskas on DSK5VPTVN1PROD with RULES
D. Additional Requirements of the
Receiving Owner Prior to Approval
The submission to HUD requesting a
transfer under Section 214 must include
the following information from the
receiving owner:
1. Written confirmation of acceptance
of the Housing Assistance Payments
(HAP) contract, Use Agreement, and/or
debt, as applicable, and confirmation
that the transfer is warranted by local
demand for affordable housing.
2. If the transfer involves projectbased section 8 assistance, written
evidence that the transfer of the HAP
contract is warranted by local demands
for affordable housing. Supporting
documentation may include a market
analysis showing eligible families in the
area, a list of current tenants who are
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Intra-Fair Market Rent (FMR) area transfers
1. The proposed receiving site has a higher
SAFMR than the current site; or
2. The proposed receiving site is considered
immediately adjacent (within 1⁄2 mile) to
the current site; or
3. Housing market activity within the SAFMR
area would indicate that the area is revitalizing; or
4. The poverty rate has seen significant recent decline.
Within a metro area, and in the same neighborhood
(SAFMR/Zip code), the receiving property’s neighborhood must be in a SAFMR area with a poverty
rate of less than 30 percent, unless:
a. The receiving property is in a neighborhood
receiving a Choice Neighborhoods Grant or is
part of a significant state or local revitalization
initiative that will result in new construction
and substantial rehabilitation of mixed income
housing; or
b. The SAFMR area is between 30 and 40 percent and at least 50 percent of the units at the
receiving property are unassisted and either:
1. The proposed receiving site is considered
immediately adjacent (within 1⁄2 mile) to
the current site; or
2. Housing market activity within the SAFMR
area would indicate that the area is revitalizing; or
3. The poverty rate has seen significant recent decline.
Within the same non-metro county, the receiving
property must be in a county that has a poverty
rate of less than 30 percent, unless:
The county poverty rate is between 30 and 40
percent and:
1. The housing market activity within the
county would indicate that the area is revitalizing; or
2. The poverty rate has seen significant recent decline; or
3. The transaction is part of a statewide
portfolio preservation strategy operated by
a Housing Finance Agency or is part of a
significant state or local revitalization initiative that will result in new construction
and substantial rehabilitation of mixed income housing.
eligible for Section 8 assistance, or
prospective tenants on waiting lists.
3. If applicable, a written tenant
selection plan, Tenant Relocation Plan
and an Affirmative Fair Housing
Marketing Plan approved by HUD.
4. A narrative detailing the capacity of
the proposed owner and management
agent of the receiving property to own,
operate, manage, and if applicable,
renovate affordable housing.
5. The receiving owner must not be
subject to any of the following actions
that have not been resolved to HUD’s
satisfaction: (1) A charge from HUD
concerning a systemic violation of the
Fair Housing Act or a cause
determination from a substantially
equivalent state or local fair housing
agency concerning a systemic violation
of a substantially equivalent state or
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16969
local fair housing law proscribing
discrimination because of race, color,
religion, sex, national origin, disability,
or familial status; and (2) A Fair
Housing Act lawsuit filed by the
Department of Justice alleging a pattern
or practice of discrimination or denial of
rights to a group of persons raising an
issue of general public interest pursuant
to 42 U.S.C. 3614(a); or (3) A letter of
finding identifying systemic
noncompliance under Title VI of the
Civil Rights Act of 1964, Section 504 of
the Rehabilitation Act of 1973, or
Section 109 of the Housing and
Community Development Act of 1974.
HUD will determine if actions to resolve
the charge, cause determination,
lawsuit, or letter of findings are
sufficient to resolve the matter.
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Examples of actions that would
normally be considered sufficient to
resolve the matter include, but are not
limited to, current compliance with:
a. A voluntary compliance agreement
(VCA) signed by all the parties;
b. A HUD-approved conciliation
agreement signed by all the parties;
c. A conciliation agreement signed by
all the parties and approved by the state
governmental or local administrative
agency with jurisdiction over the matter;
d. A consent order or consent decree;
or
e. A final judicial ruling or
administrative ruling or decision.
6. Documentation to assist HUD in an
environmental review of the transfer
request in accordance with
environmental regulations and
requirements at 24 CFR part 50. HUD
will conduct the environmental review
as required by part 50 prior to approving
a transfer. HUD will document
compliance on Form HUD–4128,
‘‘Environmental Assessment and
Compliance Findings for the Related
Laws.’’ Applicants are responsible for
submitting environmental information
and reports, and should use Chapter 9
of the MAP Guide and the HUD
Environmental Review Web site
(available at https://www.onecpd.info/
environmental-review/) for guidance on
environmental review information
requirements. If the transfer is to a site
that is currently HUD-assisted, HUDinsured or HUD-held, a new Phase I
Environmental Site Assessment (ESA)
in accordance with ASTM E 1527–13 (or
the most recent edition), including a
Vapor Encroachment Screen in
accordance with ASTM E 2600–10 (or
the most recent edition), is not required,
unless the transfer involves:
a. Significant ground disturbance
(digging) or construction not
contemplated in the original application
or incompatible with current
engineering or institutional controls;
b. Site expansion or addition;
c. Transfer to a site for which a Phase
I ESA in accordance with ASTM E
1527–05 (or a more recent edition) has
not been prepared previously; or
d. Any other activities which may
result in contaminant exposure
pathways not contemplated in the
original application or incompatible
with current engineering or institutional
controls.
After a request has been submitted to
HUD, the requestor and other
participants in the proposed transfer,
including owners and contractors on the
receiving project, may not undertake or
commit funds for acquisition,
rehabilitation, conversion, or
construction of the receiving property
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Jkt 235001
until HUD has completed the
environmental review and notified the
requestor that the transfer to the
receiving property is acceptable.
E. Post Approval Requirements
Once HUD has received and reviewed
the materials above and approved the
transfer under Section 214, the owner of
the receiving project must do the
following as applicable:
1. If there is a use restriction at the
transferring property, sign a new or
amended use restriction that includes
all income and eligibility restrictions of
the transferring use restriction and runs
for the duration of the transferring
project’s existing use restriction or the
use restriction at the receiving project,
whichever is longer.
2. If the transfer involves project
based section 8 assistance, renew the
HAP contract for a 20-year term at the
time of the transfer and attach the
Preservation Exhibit agreeing to the
automatic renewal of the Section 8 HAP
contract at the end of the 20-year term,
subject to annual appropriations, for a
minimum of the time remaining on the
HAP contract that was in effect prior to
the transfer under Section 214.
3. Receive approval through the
Previous Participation Process including
a 2530 review. The receiving owner
must be in compliance with all business
agreements for the receiving project and
for any other HUD insured or assisted
projects owned.
4. Comply with all Departmental
statutes, regulations, policies and
procedures related to any assignment or
amendment of a Section 8 HAP contract
or other project-based rental assistance
contract, required modification of loan
documents and legal descriptions, or
other necessary changes as a result of a
Section 214 transfer.
A Finding of No Significant Impact
(FONSI) with respect to the
environment has been made for this
notice in accordance with HUD
regulations at 24 CFR part 50, 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 this HUD
Headquarters Building, an advance
appointment to review the FONSI must
be scheduled by calling the Regulations
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G. Information Collection Requirements
The information collection
requirements contained in this
document 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 Number 2502–
0608. In accordance with the Paperwork
Reduction Act, HUD 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.
H. Implementation
This notice will become effective
April 30, 2015. HUD will begin
accepting requests for transfers pursuant
to this notice on or after the effective
date. For questions regarding the
submission or status of a transfer
request, interested parties should
contact their HUD Multifamily Hub/
Program Center. The list of HUD
Multifamily Hubs and Program Centers
is available at: https://portal.hud.gov/
hudportal/HUD?src=/program_offices/
housing/mfh/hsgmfbus/abouthubspcs.
Dated: March 17, 2015.
Biniam Gebre,
Acting Assistant Secretary for Housing—
Federal Housing Commissioner.
[FR Doc. 2015–06776 Filed 3–30–15; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9716 ]
RIN 1545–BI65
F. Environmental Review
PO 00000
Division at 202–708–3055 (not a toll free
number).
Certain Employee Remuneration in
Excess of $1,000,000 Under Internal
Revenue Code Section 162(m)
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
AGENCY:
This document contains final
regulations relating to the deduction
limitation for certain employee
remuneration in excess of $1,000,000
under the Internal Revenue Code
(Code). These regulations affect publicly
held corporations.
DATES:
Effective date: These regulations are
effective on April 1, 2015.
Applicability date: For dates of
applicability, see § 1.162–27(j)(2)(vi).
SUMMARY:
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]]>Agencies
[Federal Register Volume 80, Number 61 (Tuesday, March 31, 2015)]
[Rules and Regulations]
[Pages 16963-16970]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06776]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Chapters VIII and IX
[Docket No. FR-5779-N-01]
HUD Approval of Requests for Transfers of Multifamily Housing
Project-Based Rental Assistance, HUD-Held or Insured Debt, and Income-
Based Use Restrictions
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
[[Page 16964]]
ACTION: Notice of requirements to transfer assistance.
-----------------------------------------------------------------------
SUMMARY: This notice establishes the terms and conditions by which HUD
will approve a request for the transfer of project-based rental
assistance, debt held or insured by the Secretary, and statutorily
required income-based use restrictions from one multifamily housing
project to another (or between several such projects). The Department
of Housing and Urban Development Appropriations Act, 2014 and the
Department of Housing and Urban Development Appropriations Act, 2015
give the Secretary the authority to approve transfer requests for
fiscal years 2014 through 2016, provided that the Secretary publish a
notice in the Federal Register establishing the terms and conditions
for HUD approval of such transfers no later than 30 days before such
notice takes effect. HUD believes that publication of the criteria will
assist project owners to determine whether a transfer is feasible given
the specific circumstances of their multifamily projects. Publication
of the criteria will also facilitate HUD's review of transfer requests
by helping owners formulate their requests in a manner that adequately
addresses the statutory criteria.
DATES: Effective: April 30, 2015.
FOR FURTHER INFORMATION CONTACT: Nancie-Ann Bodell, Acting Director,
Office of Asset Management and Portfolio Oversight of Multifamily
Housing, Office of Housing, Department of Housing and Urban
Development, 451 7th Street SW., Room 6110, Washington, DC 20410;
telephone number 202-708-2495 (this is not a toll-free number). Persons
with hearing or speech impairments may access this number through TTY
by calling the toll-free Federal Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
A. Background
Beginning with section 318 of the Department of Housing and Urban
Development Appropriations Act, 2006 (Pub. L. 109-115, 119 Stat. 2396,
approved November 30, 2005), HUD appropriations acts have contained a
general provision authorizing the Secretary to approve requests from
project owners for the transfer of certain rental assistance, debt, and
income-based use restrictions between HUD-assisted projects. For fiscal
years 2014 and 2015, this transfer authority is provided under section
214 of Title II of Division L of the Consolidated Appropriations Act,
2014 (Pub. L. 113-76, 128 Stat. 5, approved January 17, 2014) (Section
214).\1\ Section 214(a) states that ``[n]otwithstanding any other
provision of law . . . the Secretary of Housing and Urban Development
may authorize the transfer of some or all project-based assistance,
debt held or insured by the Secretary and statutorily required low-
income and very low-income use restrictions if any, associated with one
or more multifamily housing project or projects to another multifamily
housing project or projects.'' Section 214(b) also allows for phased
transfers of project-based assistance to accommodate the financing and
other requirements related to rehabilitating or constructing the
project or projects to which the assistance is transferred.
---------------------------------------------------------------------------
\1\ Section 212 of Title II of Division K of the Consolidated
and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235,
approved December 16, 2014) provides the same authority for fiscal
years 2015 and 2016. For the sake of simplicity, this notice uses
``Section 214'' to refer to the authority in both Acts, as the
language other than the dates is identical.
---------------------------------------------------------------------------
HUD approval of transfers is subject to the conditions enumerated
in the appropriations act for the applicable fiscal year. These
statutory terms and conditions have, in general, been consistent from
one appropriations act to the next. The statutory criteria for fiscal
years 2014 through 2016 are enumerated in Section 214(c), which
provides as follows:
The transfer authorized in subsection (a) is subject to
the following conditions:
[cir] NUMBER AND BEDROOM SIZE OF UNITS.--
--For occupied units in the transferring project: The number of low-
income and very low-income units and the configuration (i.e. bedroom
size) provided by the transferring project shall be no less than when
transferred to the receiving project or projects and the net dollar
amount of Federal assistance provided to the transferring project shall
remain the same in the receiving project or projects.
--For unoccupied units in the transferring project: The Secretary may
authorize a reduction in the number of dwelling units in the receiving
project or projects to allow for a reconfiguration of bedroom sizes to
meet current market demands, as determined by the Secretary and
provided there is no increase in the project-based assistance budget
authority.
[cir] The transferring project shall, as determined by the
Secretary, be either physically obsolete or economically nonviable.
[cir] The receiving project or projects shall meet or exceed
applicable physical standards established by the Secretary.
[cir] The owner or mortgagor of the transferring project shall
notify and consult with the tenants residing in the transferring
project and provide a certification of approval by all appropriate
local governmental officials.
[cir] The tenants of the transferring project who remain eligible
for assistance to be provided by the receiving project or projects
shall not be required to vacate their units in the transferring project
or projects until new units in the receiving project are available for
occupancy.
[cir] The Secretary determines that this transfer is in the best
interest of the tenants.
[cir] If either the transferring project or the receiving project
or projects meets the condition specified in subsection (d)(2)(A),\2\
any lien on the receiving project resulting from additional financing
obtained by the owner shall be subordinate to any FHA-insured mortgage
lien transferred to, or placed on, such project by the Secretary,
except that the Secretary may waive this requirement upon determination
that such a waiver is necessary to facilitate the financing of
acquisition, construction, and/or rehabilitation of the receiving
project or projects.
---------------------------------------------------------------------------
\2\ Subsection (d)(2)(A) pertains to housing that is subject to
a mortgage insured under the National Housing Act (12 U.S.C. 1701 et
seq.).
---------------------------------------------------------------------------
[cir] If the transferring project meets the requirements of
subsection (d)(2),\3\ the owner or mortgagor of the receiving project
or projects shall execute and record either a continuation of the
existing use agreement or a new use agreement for the project where, in
either case, any use restrictions in such agreement are of no lesser
duration than the existing use restrictions.
---------------------------------------------------------------------------
\3\ Subsection (d)(2) defines the term ``multifamily housing
project.''
---------------------------------------------------------------------------
[cir] The transfer does not increase the cost (as defined in
section 502 of the Congressional Budget Act of 1974, as amended) of any
FHA-insured mortgage, except to the extent that appropriations are
provided in advance for the amount of any such increased cost.
HUD has exercised the transfer authority on a case-by-case basis,
determining compliance with the statutory criteria based on the
specific circumstances of the projects. Most of the statutory criteria
are prescriptive, leaving little room for the exercise of agency
discretion (for example, the requirement that the transfer not increase
the cost of any FHA-insured mortgage). Others, however, are more
[[Page 16965]]
generally phrased, allowing for HUD interpretation in applying the
criteria (for example, the requirement that the transferring project be
either physically obsolete or economically nonviable, ``as determined
by the Secretary''). Over time, HUD has developed uniform guidelines to
facilitate the review of transfer requests and aid in determining
compliance with the statutory criteria.
Section 214(e)(1) requires that HUD publish by notice in the
Federal Register the terms and conditions for HUD approval of
transfers, no later than 30 days before such notice takes effect. This
notice is being issued in accordance with the publication requirements
of Section 214(e)(1). HUD believes that publication of the criteria
will assist project owners in determining whether a transfer is
appropriate given the specific circumstances of their multifamily
projects. Publication of the criteria will also facilitate HUD's review
of transfer requests by helping owners formulate their requests in a
manner that adequately address the statutory criteria.
Owners of multifamily housing projects, as defined by subsection
(d)(2) of Section 214, who wish to request a transfer of rental
assistance, debt, or income-based use restrictions under Section 214
should submit a package containing the relevant materials outlined
below to the HUD Hub/Program Center or Regional Center/Satellite Office
for review. Owners can submit packages for review on or after the
effective date of this notice. HUD will issue a subsequent Housing
notice detailing procedural submission requirements and will follow
this notice with a proposed rule to solicit comment before regulatory
codification of these criteria.
B. Statutory Terms and Conditions for HUD Approval of Transfer Requests
Commencing for transfer requests submitted pursuant to Section 214,
HUD will evaluate the request, on a case-by-case basis, in accordance
with the following criteria. The receiving property must be a
multifamily housing project prior to or as a result of the Section 214
transfer. The receiving project may already be HUD-affiliated, meaning
it has existing HUD project-based rental assistance, an existing use
restriction, or debt (either HUD-held or FHA-insured). HUD will approve
a transfer under Section 214 to a HUD-affiliated property if the
receiving property is in compliance with all business agreements with
the Department or has a HUD-approved plan in place to correct any
identified deficiencies. The receiving property may be existing, under
construction, newly constructed, undergoing substantial rehabilitation,
or undergoing moderate rehabilitation. Before Section 8 project-based
rental assistance is transferred to the receiving property, the
property must exist and be habitable (as demonstrated by a certificate
of occupancy or like documentation). The numbered items below track the
statutory criteria and, where HUD has been granted flexibility,
establishes requirements and guidance on how HUD will assess compliance
with the statutory factors.
1. Number and Bedroom Size of Units
For occupied units in the transferring project: The number of low-
income and very low-income units and the configuration (i.e. bedroom
size) provided by the transferring project shall be no less than when
transferred to the receiving project or projects. The receiving owner
\4\ must provide detailed information about the number of units and the
corresponding unit size occupied by low-income and very-low income
families respectively, as well as the proposed number of units for low
and very-low income families and the corresponding unit configuration
at the receiving project. In determining compliance with this
requirement, HUD will consider the number of units occupied by low and
very low-income families and their respective unit sizes, as well as
whether the size of the occupied units is appropriate for the family
size occupying those units. The net dollar amount of Federal assistance
provided to the transferring project shall remain the same in the
receiving project or projects. HUD Multifamily Hub/Program Center or
Regional Center/Satellite Office staff will verify that the net dollar
amount of Federal assistance transferred remains the same in the
receiving project or projects.
---------------------------------------------------------------------------
\4\ The term ``owner'' refers to either the transferring or
receiving owner unless specified.
---------------------------------------------------------------------------
For unoccupied units in the transferring project: HUD may authorize
a reduction in the number of dwelling units in the receiving project or
projects to allow for a reconfiguration of bedroom sizes to meet market
demands, as demonstrated by the transferring owner, provided there is
no increase in the project-based assistance budget authority. HUD
Multifamily Hub/Program Center or Regional Center/Satellite Office
staff will verify that the net dollar amount of Federal assistance
transferred remains the same in the receiving project or projects. The
transferring owner shall provide justification for a reduction in the
number of dwelling units in one or more of the following ways:
a. Evidence of all efforts to market the unit type proposed for
reduction and evidence of the demand within the geographic market area
for the proposed new unit type. The documentation may include evidence
of the transferring owner's efforts, including:
i. Property traffic reports.
ii. Advertising details.
iii. Age and/or income waivers requested.
iv. Local housing authority wait list information or other
affordable housing provider contacts made demonstrating that there is
minimal or no demand for the unit type.
b. Documentation that the average vacancy at the transferring
property has been 25 percent or more over the past 24 months.
c. Any other documentation that a reduction in the number of
dwelling units is necessary to meet market demand, and approved by HUD.
2. Physical Obsolescence or Economic Nonviability
Physical obsolescence shall be shown in one or more of the
following ways:
a. A Real Estate Assessment Center (REAC) physical inspection score
of 30 or below.
b. Two or more consecutive REAC physical inspection scores of below
60.
c. Condemnation or other such notice by the local or state
government rendering the property uninhabitable.
d. A taking through eminent domain.
e. Evidence that needed capital repairs cannot be made without the
property losing financial viability.
f. Any other proof of physical obsolescence provided by the owner
and approved by HUD.
Economic non-viability must be shown in one or more of the
following ways:
a. A market analysis justifying the inability of the property to
meet current HUD-imposed affordability restrictions.
b. A market analysis indicating limited to no market for the unit
type(s).
c. A demonstrated average vacancy of 25 percent or more over the
past 24 months.
d. Any other proof of economic non-viability provided by the owner
and approved by HUD.
The transferring owner is required to certify in writing that the
material submitted to demonstrate compliance with this criterion is
true and accurate. The Multifamily Hub/Program Center will review all
submitted information and verify its accuracy.
[[Page 16966]]
3. Applicable Physical Standards
The receiving project or projects must have a REAC physical
inspection score of 60 or above. If the project does not have a current
REAC physical inspection score, an inspection must be conducted prior
to the transfer and the project must score 60 or above or have a HUD-
approved plan in place to correct any deficiencies.
The receiving project must also meet all applicable accessibility
requirements, including, but not limited to the accessibility
requirements of the Fair Housing Act, section 504 of the Rehabilitation
Act, and Title II of the Americans with Disabilities Act. The owner
must provide documentation acceptable to HUD that the receiving project
is in compliance with all applicable accessibility requirements. The
HUD Hub/Program Center or Regional Center/Satellite Office will review
the submitted documentation and verify acceptability.
4. Notification and Consultation With Tenants and Local Governmental
Officials
The transferring owner must give the tenants and legitimate tenant
organization(s) written notification of the proposed transfer and
provide a minimum 30-day comment period. HUD will not accept a Section
214 request for any project unless the transferring owner has notified
the tenants of the proposed transfer and has provided the tenants with
an opportunity to comment on the proposed transfer.
a. The notification should include the address and phone of the
appropriate HUD office, including the specific division and/or name and
phone number of a contact at the appropriate HUD office. The
notification should be provided in appropriate formats as necessary to
meet the needs of all, including persons with limited English
proficiency and formats for persons with vision, hearing, and other
communication-related disabilities (e.g., Braille, audio, and large
type, sign language interpreters, assistive listening devices, etc.).
b. The notification will include a description of the impact of the
request on tenants' rental assistance and tenant contributions. The
notification must also explain the tenants' relocation rights and
responsibilities, including the assistance that tenants may become
eligible to receive under the Uniform Relocation Act if acquisition,
rehabilitation or demolition are involved (see section five below). In
addition, the notification must inform the tenants that if a Section 8
project-based rental assistance contract will be transferred, and it
assists the unit they inhabit, they may be eligible for tenant
protection vouchers if they choose not to relocate (see Section C
below).
c. The notice must be delivered directly to each unit in the
project or mailed to each tenant and posted in at least 3 places/common
areas throughout the project, including any project office. In a
project greater than 4 stories, the notice may be served either by
delivery to each unit or by posting. If the posting method is used, the
notice must be posted in at least three conspicuous places within each
building in which the affected dwelling units are located.
i. The tenants (including any legal or other representatives acting
for the tenants individually or as a group) have the right to inspect
and copy the materials that the owner is required to submit to HUD for
a period of 30 days from the date on which the notice is served to the
tenants. Any tenant comments must be available in the project office
during normal business hours for public reading and copying.
ii. The tenants have the right, during this period, to submit
written comments on the transfer to the transferring owner and the
appropriate HUD office. Tenant representatives may assist tenants in
preparing these comments.
d. The transferring owner must hold a meeting with the tenants and
legitimate tenant organizations to discuss the details of the
notification and answer questions.
e. Upon completion of the tenant comment period, the transferring
owner must review the comments submitted by the tenants and their
representatives and prepare a written evaluation of the comments. Any
negative comments must be addressed. The transferring owner must then
submit the following materials to the appropriate HUD office at the
time of submission of the request for transfer under Section 214:
i. A copy of the transferring owner's Notification to the tenants;
ii. A sign-in sheet from the tenant meeting;
iii. A copy of all the tenant comments;
iv. The transferring owner's evaluation of the tenant comments and
any responses the owner gave to negative comments; and
v. A certification by the transferring owner that it has complied
with all of the requirements of 24 CFR 245.410, 245.415, 245.416
through 245.419, as applicable, and 245.420. The transferring owner
must identify any Fair Housing litigation settlement agreements,
voluntary compliance agreements, or other remedial agreements signed by
the owner and HUD. The Office of Fair Housing and Equal Opportunity
(FHEO) will ensure there is no conflict between the agreements and the
proposed transfer. If there is a conflict, the transferring owner may
propose modifications to the remedial agreement as part of the transfer
proposal.
The owner must also provide a certification of approval from the
relevant local government officials, which may include but are not
limited to the:
a. Local Mayor.
b. City Council.
c. Planning Commission.
d. Health and Human Services Commission.
e. Any other pertinent local government official or government
body.
Although in some cases, a certification of approval may be required
from multiple local governmental officials, there must be at least one
certification of approval from at least one local government official
in all cases to warrant approval of a request for transfer of
assistance, debt, or use restrictions.
5. Relocation of Tenants
The tenants of the transferring project who remain eligible to
receive assistance will not be required to vacate their units in the
transferring project until new units in the receiving project are
available for occupancy. If tenants must move as a direct result of
acquisition, rehabilitation or demolition in connection with a transfer
of assistance under Section 214, the Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970, as amended (URA) may
apply.
HUD will review tenant relocations and protections on a case-by
case-basis to ensure tenants are protected from permanent displacement.
Under no circumstances shall the residents pay for any relocation costs
incurred as a result of the transfer and the resulting move to the
receiving property. It is within the owner's discretion whether to pay
relocation costs for relocations to locations other than the receiving
property. A Section 214 transaction where the tenants' relocation
expenses are not paid, will not be approved by HUD.
6. Best Interest of the Tenants
HUD will determine that the transfer is in the best interest of the
tenants based on criteria including, but not limited to, the following:
a. The transfer will preserve affordable and/or assisted housing in
a
[[Page 16967]]
market area in need of such assistance/affordability.
b. The transfer complies with section C of this notice. The site
and neighborhood requirements ensure that the receiving property is in
a location that affords the tenants at the transferring property the
same or a better property location than the transferring site.
c. All current tenants will receive the same level of assistance
they are currently receiving. Tenants that move from the transferring
project to the receiving project remain subject to their existing lease
requirements and all occupancy rules. The receiving owner may not seek
to terminate the lease of a tenant from the transferring project for
actions that occurred prior to the Section 214 transfer but the tenant
will be subject to ongoing eligibility requirements for actions that
occur after the transfer. Any eviction procedures currently underway at
the transferring project will not be affected by the transfer of budget
authority.
d. In scenarios where a Section 8 HAP contract will be transferred,
and a tenant assisted by the HAP contract objects to relocating to the
receiving property, the tenant may be eligible to receive a tenant
protection voucher, subject to the availability of appropriations. A
tenant may receive a TPV, if they meet the eligibility requirements for
voucher assistance and the unit that they currently reside in is
supported by a Section 8 project-based rental assistance contract that
is subject to transfer as part of the Section 214 transfer. The owner
will notify the tenant of their potential eligibility to receive a TPV
at the time of tenant notification and subsequently notify the
Multifamily Hub/PC regarding how many TPVs are requested. If TPVs are
needed, the Multifamily Hub/PC should work with the Public and Indian
Housing (PIH) field office to follow the procedures outlined in PIH
Notice 2001-41.
e. To determine if the Section 214 transfer is in the best interest
of the tenants, the transferring owner must provide documentation that
all tenants residing at the property at the time of the transfer are
relocating to a property of greater economic solvency or better
physical condition, or accepting a tenant protection voucher to move to
a property that best meets their housing needs.
f. If the transferring property is not fully assisted by a Section
8 project-based rental assistance contract, HUD will approve or
disapprove the transfer based upon its review of the information
submitted and all tenant comments received.
g. If the transferring property is not fully assisted by a Section
8 project-based rental assistance contract, the transfer will only be
approved if:
i. There are no tenants at the transferring property; or
ii. The property is occupied but the transfer will be to an
immediately adjacent property; or
iii. The unassisted tenants would have to move in the absence of
the Section 214 transfer (e.g., the site is contaminated, the property
is or will be condemned, the property is being taken via eminent
domain, etc.); or
iv. The transfer involves a 202 Direct Loan or a 202/811 Capital
Advance or PRAC contract that must be transferred as a result of a
state's response to the Olmstead Decision or state Medicaid/Medicare
policies on congregate housing make it economically impossible to
continue operating the property as originally conceived.
h. If the tenants must be relocated, they will/did receive the
protections provided under the URA, or other assistance if the URA is
not triggered. No tenants will be displaced as a result of the
transfer.
7. Subordination of Liens
To demonstrate compliance, the receiving owner must submit one or
more of the following as documentation:
a.Verification from the FHA lender that any lien on the receiving
project is subordinate to any FHA-insured mortgage lien.
b. Other documentation as applicable.
A receiving owner may submit a waiver request if the receiving
owner believes it is necessary that a lien(s) not be subordinate to the
FHA insured mortgage to facilitate the financing of acquisition,
construction, or rehabilitation of the receiving project or projects.
Such a request must demonstrate that the waiver is necessary to finance
the transaction and that there is minimal risk to the FHA as a result
of the waiver. HUD must approve all waiver requests.
8. Use Restrictions
If a use restriction is in place at the receiving project, the
receiving owner must sign a new or amended use restriction that
includes all income and eligibility restrictions of the transferring
use restriction and runs for the duration of the transferring project's
existing use restriction or the use restriction at the receiving
project, whichever is longer.
9. No Increased FHA-Insured Mortgage Costs
Transfers must not increase the cost (as defined in section 502 of
the Congressional Budget Act of 1874) of any FHA-insured mortgage. HUD
will consider the transfer of an FHA-insured mortgage, or Secretary-
held formerly insured mortgage that is subsidized under either Section
221(d)(3)-(d)(5) with below market interest rates or Section 236. In
addition, in order to avoid a claim against the General Insurance Fund,
HUD may approve the transfer of a non-subsidized FHA-insured mortgage
in combination with the transfer of a project-based rental assistance
contract and/or a use restriction to a receiving project. However, HUD
will only consider the transfer of a non-subsidized FHA-insured
mortgage when the transferring project is in danger of imminent default
on its FHA-insured mortgage due to a finding that the project is
physically obsolete and/or economically nonviable in compliance with
the criteria and process set forth in this notice.
C. Site and Neighborhood Standards for the Receiving Property
1. Transfers that involve Section 202 assistance must comply with
the site and neighborhood requirements at 24 CFR 891.125.
2. Transfers that involve Section 811 assistance must comply with
the site and neighborhood requirements at 24 CFR 891.125 and 24 CFR
891.320.
3. All other receiving sites must comply with the site and
neighborhood requirements below. The receiving owner must submit the
address of the proposed property with their proposal and HUD will
determine whether the site meets the following requirements:
a. The site and neighborhood is suitable from the standpoint of
facilitating and furthering full compliance with the applicable
provisions of Title VI of the Civil Rights Act of 1964, Title VIII of
the Civil Rights Act of 1968, Executive Order 11063, and HUD
regulations issued pursuant thereto.
b. The neighborhood must not be one that is seriously detrimental
to family life or in which substandard dwellings or other undesirable
conditions predominate, unless there is actively in progress a
concerted program to remedy the undesirable conditions.
c. The housing must be accessible to social, recreational,
educational, commercial, and health facilities and services, and other
municipal facilities and services that are at least equivalent to those
typically found in neighborhoods consisting largely of unassisted,
standard housing of similar market rents.
d. If the receiving project is new construction, and is not covered
by the
[[Page 16968]]
existing regulations cited above for Section 202/811 properties, it may
not be located in a racially mixed area if the project will cause a
significant increase in the proportion of minority to nonminority
residents in the area and may not be located in an area of minority
concentration. If HUD determines that the receiving project will be
located in an area of minority concentration, the receiving Owner must
submit supporting data (e.g. census data, evidence of local
revitalization efforts, etc.) in order for HUD to determine that they
meet one of the exceptions below:
i. Sufficient, comparable opportunities exist for housing for
minority households in the income range to be served by the proposed
project, outside areas of minority concentration. Sufficient does not
require that in every locality there be an equal number of assisted
units within and outside of areas of minority concentration. Rather,
application of this standard should produce a reasonable distribution
of assisted units each year which over a period of several years will
approach an appropriate balance of housing opportunities within and
outside areas of minority concentration. An appropriate balance in any
jurisdiction must be determined in light of local conditions affecting
the range of housing choices available for very low-income minority
households and in relation to the racial mix of the locality's
population.
(A) Units may be considered to be comparable opportunities if they
have the same household type and tenure type (owner/renter), require
approximately the same total tenant payment, serve the same income
group, are located in the same housing market, and are in standard
condition.
(B) Application of this sufficient, comparable opportunities
standard involves assessing the overall impact of HUD-assisted housing
on the availability of housing choices for very low-income minority
households, in and outside areas of minority concentration, and must
take into account the extent to which the following factors are
present, along with any other factor relevant to housing choice:
(1) A significant number of assisted housing units are available
outside areas of minority concentration.
(2) There is significant integration of assisted housing projects
constructed or rehabilitated in the past ten years, relative to the
racial mix of the eligible population.
(3) There are racially integrated neighborhoods in the locality.
(4) Programs are operated by the locality to assist minority
households, as applicable, that wish to find housing outside areas of
minority concentration.
(5) Minority households have benefitted from local activities
(e.g., acquisition and write-down of sites, tax relief programs for
homeowners, acquisitions of units for use as assisted housing units)
undertaken to expand choice for minority households (or families)
outside of areas of minority concentration.
(6) A significant proportion of minority households, have been
successful in finding units in nonminority areas under the Section 8
Certificate and Housing Voucher programs.
(7) Comparable housing opportunities have been made available
outside areas of minority concentration through other programs.
ii. The project is necessary to meet overriding housing needs that
cannot be met in that housing market area. Application of the
overriding housing needs criterion, for example, permits approval of
sites that are an integral part of an overall local strategy for the
preservation or restoration of the immediate neighborhood and of sites
in a neighborhood experiencing significant private investment that is
demonstrably changing the economic character of the area (a
``revitalizing area''). An overriding housing need, however, may not
serve as the basis for determining that a site is acceptable if the
only reason the need cannot otherwise be feasibly met is that
discrimination on the basis of race, color, creed, sex, or national
origin renders sites outside areas of minority concentration
unavailable, or if the use of this standard in recent years has had the
effect of circumventing the obligation to provide housing choice.
4. All Section 214 transactions (including those involving Section
202/811 properties) will be reviewed by HUD's Office of Policy
Development and Research to assess whether there is sufficient demand
for affordable rental housing in the receiving market area and to
ensure that the transfer does not occur in neighborhoods with highly
concentrated poverty.
------------------------------------------------------------------------
Inter-Fair Market Intra-Fair Market
Rent (FMR) area Rent (FMR) area
transfers transfers
------------------------------------------------------------------------
For Inter-FMR Area For Intra-FMR
transfers, there transfers, there
can be two types: can be three types:
(1) Transferring to (1) Within a metro
a new metropolitan area to a new
(metro) area; or neighborhood (Small
(2) transferring to Area Fair Market
a new non-metro Rent (SAFMR)/Zip);
county. (2) within a metro
area, in the same
neighborhood (SAFMR/
Zip code); and (3)
within a non-metro
county.
New Metro Neighborhood...... For moves into a Within a metro area
metro area, the to a new
receiving neighborhood (SAFMR/
property's Zip code), the
neighborhood must receiving
be in a SAFMR area property's
with a poverty rate neighborhood must
of less than 30 be in a SAFMR area
percent, unless: with a poverty rate
a. The receiving of less than 30
property is in a percent, unless:
neighborhood a. The receiving
receiving a Choice property is in a
Neighborhoods Grant neighborhood
or is part of a receiving a Choice
significant state Neighborhoods Grant
or local or is part of a
revitalization significant state
initiative that or local
will result in new revitalization
construction and initiative that
substantial will include and
rehabilitation of result in new
mixed income construction and
housing; or. substantial
b. The receiving rehabilitation of
property is in a mixed income
SAFMR area with a housing; or
poverty rate b. The receiving
between 30 and 40 property is in a
percent; and SAFMR area with a
either:. poverty rate
1. Housing market between 30 and 40
activity within the percent; and either
SAFMR.
[[Page 16969]]
area would indicate 1. The proposed
that the area is receiving site
revitalizing; or has a higher
2. The poverty rate SAFMR than the
has seen current site;
significant recent or
decline. 2. The proposed
receiving site is
considered
immediately
adjacent (within \1/
2\ mile) to the
current site; or
3. Housing market
activity within the
SAFMR area would
indicate that the
area is
revitalizing; or
4. The poverty rate
has seen
significant recent
decline.
Old Metro Neighborhood...... N/A: By definition a Within a metro area,
transfer to a new and in the same
FMR area will be a neighborhood (SAFMR/
transfer to a new Zip code), the
neighborhood. receiving
property's
neighborhood must
be in a SAFMR area
with a poverty rate
of less than 30
percent, unless:
a. The receiving
property is in a
neighborhood
receiving a Choice
Neighborhoods Grant
or is part of a
significant state
or local
revitalization
initiative that
will result in new
construction and
substantial
rehabilitation of
mixed income
housing; or
b. The SAFMR area is
between 30 and 40
percent and at
least 50 percent of
the units at the
receiving property
are unassisted and
either:
1. The proposed
receiving site is
considered
immediately
adjacent (within \1/
2\ mile) to the
current site; or
2. Housing market
activity within the
SAFMR area would
indicate that the
area is
revitalizing; or
3. The poverty rate
has seen
significant recent
decline.
Non-Metro................... For moves to a non- Within the same non-
metro county, the metro county, the
receiving property receiving property
must be in a county must be in a county
that has a poverty that has a poverty
rate less than 30 rate of less than
percent, unless: 30 percent, unless:
The county poverty The county poverty
rate is between 30 rate is between 30
and 40 percent, and 40 percent and:
and:. 1. The housing
1. The housing market activity
market activity within the county
within the county would indicate that
would indicate that the area is
the area is revitalizing; or
revitalizing; or. 2. The poverty rate
2. The poverty rate has seen
has seen significant recent
significant recent decline; or
decline; or. 3. The transaction
3. The transaction is part of a
is part of a statewide portfolio
statewide portfolio preservation
preservation strategy operated
strategy operated by a Housing
by a Housing Finance Agency or
Finance Agency or is part of a
is part of a significant state
significant state or local
or local revitalization
revitalization initiative that
initiative that will result in new
will result in new construction and
construction and substantial
substantial rehabilitation of
rehabilitation of mixed income
mixed income housing.
housing.
------------------------------------------------------------------------
D. Additional Requirements of the Receiving Owner Prior to Approval
The submission to HUD requesting a transfer under Section 214 must
include the following information from the receiving owner:
1. Written confirmation of acceptance of the Housing Assistance
Payments (HAP) contract, Use Agreement, and/or debt, as applicable, and
confirmation that the transfer is warranted by local demand for
affordable housing.
2. If the transfer involves project-based section 8 assistance,
written evidence that the transfer of the HAP contract is warranted by
local demands for affordable housing. Supporting documentation may
include a market analysis showing eligible families in the area, a list
of current tenants who are eligible for Section 8 assistance, or
prospective tenants on waiting lists.
3. If applicable, a written tenant selection plan, Tenant
Relocation Plan and an Affirmative Fair Housing Marketing Plan approved
by HUD.
4. A narrative detailing the capacity of the proposed owner and
management agent of the receiving property to own, operate, manage, and
if applicable, renovate affordable housing.
5. The receiving owner must not be subject to any of the following
actions that have not been resolved to HUD's satisfaction: (1) A charge
from HUD concerning a systemic violation of the Fair Housing Act or a
cause determination from a substantially equivalent state or local fair
housing agency concerning a systemic violation of a substantially
equivalent state or local fair housing law proscribing discrimination
because of race, color, religion, sex, national origin, disability, or
familial status; and (2) A Fair Housing Act lawsuit filed by the
Department of Justice alleging a pattern or practice of discrimination
or denial of rights to a group of persons raising an issue of general
public interest pursuant to 42 U.S.C. 3614(a); or (3) A letter of
finding identifying systemic noncompliance under Title VI of the Civil
Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, or
Section 109 of the Housing and Community Development Act of 1974. HUD
will determine if actions to resolve the charge, cause determination,
lawsuit, or letter of findings are sufficient to resolve the matter.
[[Page 16970]]
Examples of actions that would normally be considered sufficient to
resolve the matter include, but are not limited to, current compliance
with:
a. A voluntary compliance agreement (VCA) signed by all the
parties;
b. A HUD-approved conciliation agreement signed by all the parties;
c. A conciliation agreement signed by all the parties and approved
by the state governmental or local administrative agency with
jurisdiction over the matter;
d. A consent order or consent decree; or
e. A final judicial ruling or administrative ruling or decision.
6. Documentation to assist HUD in an environmental review of the
transfer request in accordance with environmental regulations and
requirements at 24 CFR part 50. HUD will conduct the environmental
review as required by part 50 prior to approving a transfer. HUD will
document compliance on Form HUD-4128, ``Environmental Assessment and
Compliance Findings for the Related Laws.'' Applicants are responsible
for submitting environmental information and reports, and should use
Chapter 9 of the MAP Guide and the HUD Environmental Review Web site
(available at https://www.onecpd.info/environmental-review/) for
guidance on environmental review information requirements. If the
transfer is to a site that is currently HUD-assisted, HUD-insured or
HUD-held, a new Phase I Environmental Site Assessment (ESA) in
accordance with ASTM E 1527-13 (or the most recent edition), including
a Vapor Encroachment Screen in accordance with ASTM E 2600-10 (or the
most recent edition), is not required, unless the transfer involves:
a. Significant ground disturbance (digging) or construction not
contemplated in the original application or incompatible with current
engineering or institutional controls;
b. Site expansion or addition;
c. Transfer to a site for which a Phase I ESA in accordance with
ASTM E 1527-05 (or a more recent edition) has not been prepared
previously; or
d. Any other activities which may result in contaminant exposure
pathways not contemplated in the original application or incompatible
with current engineering or institutional controls.
After a request has been submitted to HUD, the requestor and other
participants in the proposed transfer, including owners and contractors
on the receiving project, may not undertake or commit funds for
acquisition, rehabilitation, conversion, or construction of the
receiving property until HUD has completed the environmental review and
notified the requestor that the transfer to the receiving property is
acceptable.
E. Post Approval Requirements
Once HUD has received and reviewed the materials above and approved
the transfer under Section 214, the owner of the receiving project must
do the following as applicable:
1. If there is a use restriction at the transferring property, sign
a new or amended use restriction that includes all income and
eligibility restrictions of the transferring use restriction and runs
for the duration of the transferring project's existing use restriction
or the use restriction at the receiving project, whichever is longer.
2. If the transfer involves project based section 8 assistance,
renew the HAP contract for a 20-year term at the time of the transfer
and attach the Preservation Exhibit agreeing to the automatic renewal
of the Section 8 HAP contract at the end of the 20-year term, subject
to annual appropriations, for a minimum of the time remaining on the
HAP contract that was in effect prior to the transfer under Section
214.
3. Receive approval through the Previous Participation Process
including a 2530 review. The receiving owner must be in compliance with
all business agreements for the receiving project and for any other HUD
insured or assisted projects owned.
4. Comply with all Departmental statutes, regulations, policies and
procedures related to any assignment or amendment of a Section 8 HAP
contract or other project-based rental assistance contract, required
modification of loan documents and legal descriptions, or other
necessary changes as a result of a Section 214 transfer.
F. Environmental Review
A Finding of No Significant Impact (FONSI) with respect to the
environment has been made for this notice in accordance with HUD
regulations at 24 CFR part 50, 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 this HUD
Headquarters Building, an advance appointment to review the FONSI must
be scheduled by calling the Regulations Division at 202-708-3055 (not a
toll free number).
G. Information Collection Requirements
The information collection requirements contained in this document
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 Number 2502-0608. In accordance with the Paperwork
Reduction Act, HUD 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.
H. Implementation
This notice will become effective April 30, 2015. HUD will begin
accepting requests for transfers pursuant to this notice on or after
the effective date. For questions regarding the submission or status of
a transfer request, interested parties should contact their HUD
Multifamily Hub/Program Center. The list of HUD Multifamily Hubs and
Program Centers is available at: https://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/hsgmfbus/abouthubspcs.
Dated: March 17, 2015.
Biniam Gebre,
Acting Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2015-06776 Filed 3-30-15; 8:45 am]
BILLING CODE 4210-67-P
