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Capital Fund Regulation Training

Capital Fund Regulation Training


GOOD DAY.
THANK YOU FOR JOINING US TODAY FOR THAT PRESENTATION ON THE
CAPITAL FUND RULE. MY NAME IS JEFF RIDDELL, THE
DIRECTOR OF THE OFFICE OF CAPITAL FUND IMPROVEMENTS, THE
OFFICE THAT ADMINISTERS THE CAPITAL FUND PROGRAM.
WITH ME TODAY ARE THREE OF THE PEOPLE WHO HAVE WORKED
TIRELESSLY TO HELP MAKE THE CAPITAL FUND RULE A REALITY.
>>I’M VIRGINIA MATHIS, THE TEAM LEADER FOR THE CAPITAL FUND.
>>I’M LEANDRA CAMPBELL, A PROGRAM AND MAN LIST.
>>AND I’M LUCY BLACKBURN WITH THE OFFICE OF REVITALIZATION.
>>THANK YOU FOR BEING WITH US TODAY.
WE AND MANY OTHERS HAVE BEEN WORKING ON THE CREATION OF A
CAPITAL FUND RULE FOR LITERALLY THE PAST 15 YEARS, EVER SINCE
THE CAPITAL FUND PROGRAM WAS CREATED WITH THE PASSAGE OF THE
ACT BACK IN 1998. THANKS ARE DUE TO A GREAT NUMBER
OF PEOPLE WHO WORKED ON THIS RULE OVER AN EXTENDED PERIOD OF
TIME, INCLUDING MANY OF THOSE WHO ARE NO LONGER IN THE
DEPARTMENT. I WOULD ESPECIALLY LIKE TO
RECOGNIZE SOME OF MY PREDECESSORS IN THE CAPITAL FUND
WHO WORKED ON THIS RULE AS WELL AS OTHERS WITHIN THE OFFICE OF
GENERAL COUNSEL AND ELSEWHERE. LET’S FIRST TALK ABOUT WHAT
WE’RE TRYING TO ACCOMPLISH. WITH THE CAPITAL FUND PROGRAM,
WE PRIMARILY WANT TO HAVE A PROGRAM THAT FUNCTIONS WITH
TRANSPARENCY AND ACCOUNTABILITY AND EFFECTIVENESS WHILE ALSO
MEETING THE STATUTORY AND REGULATORY NEEDS OF THE PROGRAM.
WHAT WE BELIEVE WE HAVE WITH THIS CAPITAL FUND RULE IS A
PROGRAM FUNCTION THAT GIVES A BETTER UNDERSTANDING OF THE
REQUIREMENTS AND ENABLES THE FUNDS TO BE USED MORE
EFFECTIVELY. WE BELIEVE THE RULE WILL ALSO
ENABLE BOTH HEADQUARTERS AND HUD FIELD OFFICE STAFF TO MORE
EFFECTIVELY AND EFFICIENTLY MANAGE AND MONITOR THE PROGRAM.
AT THE SAME TIME, WE BELIEVE THAT THIS RULE WILL HELP MORE —
DIRECT MORE FUNDS TOWARD MODERNIZATION, GIVEN THE LIMITED
PHYSICAL FUNDS AVAILABLE IN THIS CURRENT ENVIRONMENT, AND WILL
ALSO HELP ACHIEVE OTHER DEPARTMENTAL GOALS SUCH AS
ENERGY EFFICIENCY. THE CAPITAL FUND RULE IN THIS
FINAL REGULATION COMBINES AND STREAMLINES WHAT HAS BEEN
SEPARATE DEVELOPMENT AND MODERNIZATION REQUIREMENTS
LOCATED AT DIFFERENT POINTS WITHIN THE CODE OF FEDERAL
REGULATION. WITH THE PASSAGE OF THIS CAPITAL
FUND RULE, THE REGULATIONS ARE COMBINED INTO A SINGLE PROGRAM
AT PART 905. IN SO DOING, EXISTING
REGULATIONS FOR MODERNIZATION CURRENTLY FOUND IN 24 CFR PART
968 AS WELL AS MIXED FINANCE AND DEVELOPMENT REGULATIONS IN 24
CFR 941 WILL BE ELIMINATED. PRIOR TO THE PASSAGE OF THIS
RULE, CAPITAL FUNDS WERE — THE CAPITAL FUND PROGRAM WAS
OPERATING UNDER INTERIM GUIDANCE IN TERMS OF NOTICES AND OUTDATED
GUIDEBOOKS SUCH AS THE COMPREHENSIVE GRANT PROGRAM
GUIDEBOOK WHICH WAS ISSUED PREQUAUR RA.
PHAs WERE REQUIRED TO LOOK IN DIFFERENT REGULATIONS AND
DIFFERENT STATUTES TO DETERMINE PROGRAM REQUIREMENTS.
WITH THIS REGULATION COMBINED WITH A GUIDEBOOK WHICH IS NOW
UNDER DEVELOPMENT TO BE COMPLETED THIS SPRING, BOTH
HOUSING AUTHORITIES AND HUD OFFICES AND THE GENERAL PUBLIC
WILL HAVE A BETTER UNDERSTANDING OF WHAT THE REQUIREMENTS ARE AND
BE ABLE TO IMPLEMENT THE PROGRAM MORE EFFECTIVELY.
THE PROGRAM FOR TODAY INCLUDES AN OVERVIEW OF THE RULE AND SOME
OF ITS BENEFITS TO PHAs. WE’LL THEN REVIEW SPECIFIC
SECTIONS OF THE RULE AND FOLLOWING THAT PRESENTATION, WE
WILL ADDRESS A FEW OF THE QUESTIONS WHICH WE HAVE
RECEIVED. WE WILL NOT BE ABLE TO TAKE LIVE
QUESTIONS DURING THIS BROADCAST, BUT WE HAVE ESTABLISHED A
MAILBOX WHICH YOU WILL SEE ON THE SCREEN LATER ON AT
[email protected] SO WHICH YOU CAN SUBMIT QUESTIONS EITHER TODAY
AND IN THE COMING WEEKS. IN THE NEXT FEW SLIDES, I’LL GO
THROUGH AN OVERVIEW OF SOME OF THE KEY PROVISIONS OF THE RULE
AND ITS BENEFITS TO HOUSING AUTHORITIES.
ON THIS SLIDE, WE SEE FIRST WHAT SOME OF THE BENEFITS ARE IN
TERMS OF THE SUBMISSION REQUIREMENTS.
WITH THE PASSAGE OF THE HOUSING AND ECONOMIC RECOVERY ACT, THERE
WERE VARYING PROGRAM REQUIREMENTS AND SIMPLIFIED
REQUIREMENTS FOR QUALIFIED HOUSING AUTHORITIES.
THE CAPITAL FUND RULE PLACES THE SUBMISSION REQUIREMENTS IN ONE
CENTRALIZED LOCATION AND IN SO DOING, DECOUPLES THE CAPITAL
FUND FORMS AND SUBMISSIONS FROM THE LARGER PHA AGENCY PLAN
SUBMISSION. IT ALLOWS HOUSING AUTHORITIES TO
SUBMIT THE CAPITAL FUND REQUIREMENTS ALONG WITH THEIR
ACC AMENDMENT AND ELIMINATES THE NEED TO MULTIPLE BUDGETS WHILE
STILL ENABLING A PHA TO ONLY HOLD ONE HEARING.
THE RULE ALSO HAS AN ADDITIONAL BENEFIT IN THAT IT PROVIDES MORE
FLEXIBILITY ON THE USE OF FUNDS THAT ARE RECEIVED EITHER THROUGH
DEMOLITION OR DISPOSITION. A NEW CATEGORY OF FUNDING,
DEMOLITION/DISPOSITION TRANSITIONAL FUNDING IS CREATED
WHICH CAN BE USED MORE FLEXIBLY INCLUDING FOR MODERNIZATION AS
WELL AS DEVELOPMENT. AT THE SAME TIME, THE MORE
CUMBERSOME SEPARATE GRANTS FOR RHF, REPLACEMENT HOUSING FACTOR
FUNDS W SEPARATE USE AND REPORTING REQUIREMENTS ARE, ARE
PHASED OUT, ELIMINATING OR CHANGING THE ELIGIBILITY FROM
TEN YEARS TO FIVE YEARS ALSO ALLOWS INCREASED FUNDING TO GO
TO PHAs GENERALLY AND MORE DISCUSSION ON DDTF WILL BE HELD
LATER ON THE PRESENTATION. ANOTHER SIGNIFICANT BENEFIT OF
THIS RULE TO BOTH PHAs AND RESIDENTS IS THAT IT TARGETS
MORE FUNDS TO MAINTAINING THE PHYSICAL INVENTORY.
IT DOES THIS IN A COUPLE OF DIFFERENT WAYS.
ONE BY REDUCING THE ALLOWABLE LEVEL FOR MANAGEMENT
IMPROVEMENTS FROM 20% TO 10%, AND PHASING THAT REQUIREMENT IN
OVER A PERIOD OF TIME TO GIVE HOUSING AUTHORITIES THE
OPPORTUNITY TO ADJUST FOR THOSE THAT HAD BEEN SPENDING AT THE
HIGHER END OF THE RANGE, AND IT ALSO CLARIFIES THE ELIGIBLE AND
INELIGIBLE USES FOR MANAGEMENT IMPROVEMENTS.
AS INDICATED PREVIOUSLY, THE REDUCTION IN REPLACEMENT HOUSING
FACTOR FUNDS ALSO MAKES MORE MODERNIZATION FUNDING AVAILABLE
TO PHAs. AN ADDITIONAL BENEFIT OF THIS
RULE IS THAT IT STREAMLINES MIXED FINANCE REQUIREMENTS.
THIS INCLUDES AN OPPORTUNITY THAT HUD HAS AND IS INTENDING TO
EXERCISE TO LIMIT THE NUMBER OF EVIDENTIARY LEGAL DOCUMENTS THAT
ARE SUBMITTED TO HUD AS PART OF THE FIXED FINANCE REVIEW.
IT ALSO ELIMINATES THE REQUIREMENT FOR A SEPARATE
WAIVER FOR IDENTITY OF INTEREST APPROVALS WHEN THERE’S A
COMMONALITY OF INTEREST IN THE ENTITY THAT ALSO DEVELOPS AND
WILL BE THE GENERAL MANAGER OF THE PROJECT.
THIS RULE ALSO EXPANDS THE ENERGY EFFICIENCY REQUIREMENTS
AND OPPORTUNITIES IN A NUMBER OF DIFFERENT WAYS.
IT PROVIDES AN EXCEPTION TO TOTAL DEVELOPMENT COSTS, TDC,
FOR ENERGY CONSERVATION AND EFFICIENCY MEASURES.
IT ALSO IMPLEMENTS THE USE OF ENERGY STAR REQUIREMENTS IN NEW
DEVELOPMENT AND IT PROVIDES FOR STANDARDIZED ENERGY CODE
REQUIREMENTS, INCLUDING THOSE FOUND IN THE INTERNATIONAL
ENERGY CONSERVATION CODE, AS WELL AS REQUIREMENTS FOR
HIGH-RISE DEVELOPMENTS. WITH THOSE COMMENTS, I WILL TURN
THE PROGRAM OVER TO VIRGINIA MATHIS.
>>WE’RE MOVING NOW FROM THE OVERVIEW DISCUSSION OF THE
REGULATION TO THE SECTION BY SECTION DISCUSSION.
I’M GOING TO DISCUSS WITH YOU BRIEFLY PART 100 AND PART 200.
PART 100 OF THE REGULATION GIVES A GENERAL OVER VIEW OF THE
PURPOSE AND APPLICABILITY OF THE REGULATION.
OF COURSE, THE PURPOSE IS TO PROVIDE — OF THE CAPITAL FUND
IS TO PROVIDE FINANCIAL ASSISTANCE TO HOUSING
AUTHORITIES AND RMCs SO THAT THEY CAN MAKE IMPROVEMENTS ON
PUBLIC HOUSING. THIS RULE APPLIES TO PUBLIC
HOUSING AUTHORITIES THAT ARE UNDER THE ACC.
TWO VERY IMPORTANT SECTIONS HERE.
THE STATEMENT OF COMPLIANCE. BY EXECUTING THE ACC AMENDMENT
AND BY DISBURSING CAPITAL FUNDS, THE HOUSING AUTHORITY IS
CERTIFYING THAT IT’S GOING TO COMPLY WITH PART 905 AS WELL AS
ALL OTHER PUBLIC HOUSING REQUIREMENTS.
THAT’S LATER DEFINED IN THIS SECTION, PUBLIC HOUSING
REQUIREMENTS GENERALLY COVERS NOT ONLY THE 1937 ACT, THIS
PART, THIS PARTICULAR REGULATION 905, HUD NOTICES AS WELL AS
OTHER FEDERAL REGULATIONS. IF A HOUSING AUTHORITY DOES NOT
COMPLY WITH THE PUBLIC HOUSING REQUIREMENTS, HUD CAN INSTITUTE
SANCTIONS AND THOSE SANCTIONS ARE DESCRIBED IN THE END OF THE
RULE IN PART 800. PHAs ARE GIVEN AN OPPORTUNITY TO
APPEAL WHEN THEY GET THE WRITTEN FINDING.
ANOTHER PART OF THIS SECTION IS 905-108.
IMS THE SECTION ON — IT’S THE SECTION ON DEFINITIONS.
ALL TOGETHER, THERE ARE ABOUT 40 DEFINITIONS IN THIS SECTION THAT
APPLY GENERALLY THROUGHOUT THE RULE.
IN THE RULE LATER, IN PART 905-604, THERE’S AN ADDITIONAL
SECTION WHICH HAS DEFINITIONS. THOSE DEFINITIONS PREDOMINANTLY
APPLY TO MIXED FINANCE. EVEN THOUGH THERE ARE ABOUT 40
DEFINITIONS, I’VE PULLED UP FOR NOW ABOUT FIVE OF THEM I WANT
YOU TO LOOK AT, AND AS YOU CAN SEE, WHENEVER WE HAVE A NEW
REQUIREMENT, WE’VE PUT IN BRIGHT RED “NEW” SO THAT YOU WILL STOIX
ON THOSE AS WE GO — FOCUS ON THOSE AS WE GO THROUGH THE
SLIDES. ONE OF THE DEFINITION IS CAPITAL
FUND PROGRAM FREE. THIS IS A NEW DEFINITION.
IS THE FEE THE PHA CAN CHARGE TO THE CAPITAL FUND GRANT TO COVER
THE COST OF MANAGEMENT AND THOSE FUNDS THEN ARE ALLOWED TO GO TO
THE COCC. FUNGIBILITY, ANOTHER DEFINITION
YOU WILL FIND IN THIS SECTION THAT ALLOWS PHAs TO SUBSTITUTE
WORK ITEMS FROM AMONG WORK ITEMS IN THEIR APPROVED FIVE-YEAR
ACTION PLAN AND THEY CAN DO THIS USING FUNGIBILITY WITHOUT PRIOR
HUD APPROVAL. THE DEFINITION OBLIGATION.
OBLIGATION IS A BINDING AGREEMENT FOR WORK AND FOR — OR
FOR FINANCING THAT WILL RESULT IN OUTLAYS OF CAPITAL FUNDS,
EITHER IMMEDIATELY OR IN THE FUTURE.
I WANT YOU TO FOCUS ON THE LAST PART OF THIS DEFINITION.
CAPITAL FUNDS THAT ARE TRANSFERRED TO OPERATIONS, WHICH
IS 14 ON 6, ARE — 1406 ARE OBLIGATED WHEN THEY ARE BUDGETED
AND THEN DRAWN DOWN. WE’RE GOING TO LOOK AT TWO MORE
DEFINITIONS. I RELATED — I REFERRED TO THIS
ONE EARLIER. PUBLIC HOUSING REQUIREMENTS.
THIS TERM IS USED THROUGHOUT THE REG TO REFER BACK TO ALL THE
REQUIREMENTS THAT THE PHA IS RESPONSIBLE FOR FOLLOWING AND
THE DEFINITION OF QUALIFIED PHAs.
QUALIFIED PHAs WERE ESTABLISHED AS A CATEGORY IN HIRA AND THIS
IS PUBLIC HOUSING AUTHORITIES THAT ADMINISTER 550 OR FEWER
UNITS AND THOSE — THAT’S A COMBINATION OF PUBLIC HOUSING
UNITS AND SECTION 8 UNITS. THE PHA, TO BE QUALIFIED AND TO
BE ABLE TO HAVE THE ABILITIES OF A QUALIFIED PHA, CANNOT BE
TROUBLED UNDER CMAP OR UNDER FAS.
SO IN SUMMARY, THIS SECTION, 905-100, A MAJOR PART OF IT IS
THE DEFINITIONS FOUND IN 108 WHICH I’VE LISTED SOME, BUT ALSO
AGAIN, IT GIVES YOU A SETTING FOR THE REGULATION AS IT RELATES
TO COVERAGE, APPLICABILITY, PURPOSE AS WELL.
PART 200. PART 200 HAS THREE MAJOR
SECTIONS. FIRST, THERE’S A DISCUSSION OF
ELIGIBLE ACTIVITIES THAT CAN BE COMPLETED, DONE WITH CAPITAL
FUNDS MONEY. THERE’S A SECTION ON INELIGIBLE
ACTIVITIES, AND THEN FINALLY, THERE’S A DISCUSSION ABOUT THE
RESERVE FOR EMERGENCIES AND NATURAL DISASTERS.
SO GENERALLY, THE ELIGIBLE ACTIVITIES INCLUDE
MODERNIZATION, DEVELOPMENT, AND FINANCING.
THERE ARE ABOUT 18 SEPARATE ACTIVITIES THAT ARE DESCRIBED IN
THIS SECTION. THERE’S A BRIEF DESCRIPTION OF
EACH OF THEM. OTHER ACTIVITIES THAT ARE
MENTIONED INCLUDE ENERGY AUDITS, DEMOLITION, FINANCING, SO THERE
ARE A VARIETY OF ITEMS LISTED UNDER HERE THAT YOU CAN LOOK AT.
TWO OF THE THINGS THAT NEED TO BE REMEMBERED, THAT TO BE AN
ELIGIBLE ACTIVITY UNDER CAPITAL FUND, THE ACTIVITY HAS TO BE
INCLUDED IN THE FIVE-YEAR ACTION PLAN OF THE PHA THAT’S BEEN
APPROVED BY HUD UNLESS THE ACTIVITY IS APPROVED BY HUD AS
AN EMERGENCY OR A DISASTER AND GIVEN ASSISTANCE UNDER THE
RESERVE. SOME OF THE ELIGIBLE ACTIVITIES
THAT YOU WILL FIND IN 905-202 ARE COSTS THAT ARE NOT
ASSOCIATED WITH THE PHA’S PROJECT OR DEVELOPMENT, ALSO
COSTS THAT ARE COVERED UNDER THE OPERATING PROGRAM EXCEPT COSTS
THAT ARE RELATED TO 905-314-L. THAT REFERS TO THE PHA’S ABILITY
TO MOVE, IF THEY’RE LARGE, UP TO 20%, AND IF YOU’RE SMALL, UP TO
100% IF YOU MEET CERTAIN CRITERIA TO OPERATIONS.
THE DIRECT PROVISION OF SOCIAL SERVICES, EITHER BY FORCE
ACCOUNT OR CONTRACT LABOR, IS NOT ELIGIBLE UNDER THE CAPITAL
FUND, AND DUPLICATION OF COSTS THAT WOULD BE PAID FOR THROUGH
ANOTHER METHOD, INCLUDING OPERATING FUND OR ANOTHER
FEDERAL OR NON-FEDERAL SOURCE, YOU CANNOT USE CAPITAL FUNDS TO
DUPLICATE FUNDING. MANAGEMENT IMPROVEMENTS IS ONE
OF THE MANY ELIGIBLE ACTIVITIES LISTED IN THIS SECTION.
I’M GOING TO GIVE YOU AN OVERVIEW.
MANAGEMENT IMPROVEMENTS REFERS TO NON-CAPITAL ACTIVITIES THAT
ARE NEEDED TO UPGRADE AND IMPROVE THE OPERATION OF THE
HOUSING AUTHORITY OR THE MAINTENANCE.
IT CAN BE PROJECT SPECIFIC OR THEY CAN BE PHA-WIDE.
THEY COULD BE PROMOTING ENERGY CONSERVATION, ASSISTING IN
SUSTAINING THE PHYSICAL IMPROVEMENT, OR CORRECTING
MANAGEMENT DEFICIENCIES. THE PHA NEEDS TO BE ABLE TO
DEMONSTRATE THE LINGAGE BETWEEN THE — LINKAGE BETWEEN THE
MANAGEMENT IMPROVEMENT AND THE IDENTIFIED MANAGEMENT
DEFICIENCY. THESE IMPROVEMENTS ARE FUNDED
THROUGHOUT THE TIME OF THE PHYSICAL IMPROVEMENT AND THERE
ARE SOME EXCEPTIONS IN THE REGULATION WHERE THEY CAN BE
FUNDED FOR A LONGER PERIOD OF TIME.
ELIGIBLE MANAGEMENT IMPROVEMENTS, THIS IS A LIST OF
A FEW OF THEM THAT ARE IDENTIFIED IN THE REGULATION.
MANY OF THEM RELATE TO TRAINING OF PERSONNEL, RESIDENT TRAINING,
ECONOMIC SELF-SUFFICIENCY FOR RESIDENTS, SOME SECURITY,
PROJECT SECURITY. WHEN I’M SPEAKING OF SECURITY
HERE, I’M SPEAKING OF EQUIPMENT. THESE ARE SOME OF THE AREAS THAT
ARE IDENTIFIED AS ELIGIBLE MANAGEMENT ACTIVITIES IN THE
REGULATION. THE REGULATION ALSO CLARIFIES
INELIGIBLE MANAGEMENT IMPROVEMENTS.
FOR EXAMPLE, THE COST OF FUNDING SECURITY GUARDS OR OTHER ONGOING
SERVICES, AND WHEN I SPEAK OF THE SECURITY GUARDS
SPECIFICALLY, THE SALARIES AND BENEFITS FOR SECURITY GUARDS.
GENERAL REMEDIAL EDUCATION, JOB COUNSELING, JOB DEVELOPMENT,
HIRING OF A RESIDENT COORDINATOR, ALL ARE ITEMS THAT
ARE IDENTIFIED EXPLICITLY AS BEING INELIGIBLE CAPITAL FUND
EXPENSES. ANOTHER PORTION OF THIS PART,
PART 200, IS A DISCUSSION OF EMERGENCY AND NATURAL DISASTERS.
YOU CAN SEE, THIS IS THE DEFINITION OF AN EMERGENCY.
THE EMERGENCY IS UNFORESEEN, UNPREVENTABLE EVENT OR AN
OCCURRENCE THAT POSES AN EMINENT THREAT TO THE HEALTH AND SAFETY
OF RESIDENTS, AND IT MUST BE CORRECTED IN ONE YEAR.
THE DEFINITION OF DISASTER HAS CHANGED FROM THE PREVIOUS RULE.
RECENTLY, SECTION 9-K OF THE ’37 ACT WAS REPEALED, SO UNDER
CAPITAL FUND, ONLY NON-PRESIDENTIAL DISASTERS CAN
BE FUNDED. SO A LITTLE INFORMATION ABOUT
THE RESERVE. IT HAS BEEN AROUND FOR A LONG
TIME. THIS PAST YEAR, IN 2013, THE
RESERVE WAS ABOUT $18.9 MILLION. IT IS CONGRESSIONALLY MANDATED
THROUGH OUR APPROPRIATIONS ACT. WE FUND APPROVABLE APPLICATIONS
FOR DISASTER AND EMERGENCY IN THE ORDER THAT THEY HAVE
RECEIVED. WE ALSO USE THIS POT OF MONEY TO
FUND SAFETY AND SECURITY GRANTS, WHICH WE HAVE DONE FOR THE LAST
SEVERAL YEARS. THERE WAS $3 MILLION FUNDED FOR
SAFETY AND SECURITY GRANTS. THE DEPARTMENT CAN ASK THE PHA
TO USE ITS UNOBLIGATED OR A PORTION OF ITS UNOBLIGATED
CAPITAL FUNDS BEFORE BEING FUNDED FOR AN EMERGENCY OR A
NATURAL DISASTER GRANT. THE PROCESS FOR SUBMISSION OF AN
APPLICATION, THE PHA SHOULD SEND THEIR REQUEST FOR EITHER THE
EMERGENCY OR DISASTER, AGAIN A NON-PRESIDENTIALLY DECLARED
DISASTER, SO THEIR LOCAL HUD FIELD OFFICE.
THE FIELD OFFICE WILL REVIEW THE APPLICATION AND FORWARD THE
APPLICATION TO HEADQUARTERS FOR OUR REVIEW ALONG WITH A
RECOMMENDATION FROM THE FIELD OFFICE MANAGER.
IN THE CASES — IN THE CASE OF A DISASTER WHERE MONEY IS NEEDED
IMMEDIATELY, HUD WILL ACCEPT PRELIMINARY APPLICATION AND THE
REQUIREMENTS FOR A PRELIMINARY APPLICATION FOR DISASTER ARE
LESS DEMANDING AND FUNDS CAN BE SENT TO THE HOUSING AUTHORITY
MUCH MORE QUICKLY WHEN IT’S NEEDED.
SO A SUMMARY OF THE CHANGES OF THIS SECTION, THE ELIGIBLE
ACTIVITIES HAVE BEEN EXPANDED WITH SOME NEW ONES.
INELIGIBLE ACTIVITIES HAVE BEEN REVIEWED, CLARIFIED IN SOME
CASES, AND THE RESERVE FOR EMERGENCIES AND DISASTERS IS
ALSO DISCUSSED. AN EXPLANATION OF THE CHANGE FOR
THE DISASTER GRANTS ONLY BEING NON-PRESIDENTIALLY DECLARED
DISASTERS. HOWEVER, YOU REALIZE THAT FEMA
WILL FUND PRESIDENTIALLY DECLARED DISASTERS FOR PHAs.
LEANDRA CAMPBELL IS GOING TO DISCUSS SECTIONS 300 AND 400 OF
THE REG.>>SUBPART C OF THE REGULATION
DESCRIBES GENERAL CAPITAL FUND PROGRAM REQUIREMENTS.
PART 300 DESCRIBES THE NEW CAPITAL FUND SUBMISSION
REQUIREMENTS. WITH THE IMPLEMENTATION OF THIS
REGULATION, THE CAPITAL FUND SUBMISSION IS DECOUPLED FROM THE
ANNUAL PHA PLAN SUBMISSION AND WILL BE SUBMITTED WHEN THE PHA
SUBMIT ITS CAPITAL FUND ACC AMENDMENT.
THE CAPITAL FUND SUBMISSION REQUIREMENTS WILL APPLY TO BOTH
QUALIFIED AND NON-QUALIFIED PHAs, AND ALL PHAs WILL BE
REQUIRED TO COMPLETE A COMPREHENSIVE P AND A.
THIS SLIDE FURTHER EXPLAINS THE CAPITAL FUND SUBMISSION BEING
DECOUPLED FROM THE PHA PLAN. THE CAPITAL FUND SUBMISSION IS A
SEPARATE REQUIREMENT THAN THE PHA PLAN SUBMISSION DESCRIBED IN
PART 903 THAT IS APPLICABLE TO BOTH QUALIFIED AND NONQUALIFIED
PHAs. RATHER THAN SUBMITTING THE
REQUIREMENT WITH THE PHA’S PLAN, PHAs WILL SUBMIT IT WHEN THEY
SUBMIT THE CAPITAL FUND ACC AMENDMENT AND AS A RESULT WILL
NO LONGER HAVE TO SUBMIT BOTH THE PRELIMINARY BUDGET AND A
FINAL BUDGET. UNDER THE CAPITAL FUND
SUBMISSION REQUIREMENTS, PHAs ARE REQUIRED TO HOLD A PUBLIC
HEARING AND A RESIDENT ADVISORY BOARD CONSULTATION, BUT THIS
HEARING CAN BE COMBINED WITH THE HEARING REQUIRED UNDER 903 FOR
THE PHA PLAN. EACH PHA MUST SUBMIT A CAPITAL
FUND FIVE-YEAR ACTION PLAN. THE FIVE-YEAR ACTION PLAN SHOULD
CONTAIN A BUDGET FOR EACH OF THE FIVE YEARS AND ALL REQUIRED
CERTIFICATIONS. THE PHA IS REQUIRED TO HOLD A
PUBLIC HEARING AND A RESIDENT ADVISORY BOARD CONSULTATION AND
MUST SUBMIT ANY COMMENTS RECEIVED FROM THESE HEARINGS.
EACH PHA MUST ALSO MAINTAIN A DAUPTED PERFORMANCE AND —
UPDATED PERFORMANCE AND EVALUATION REPORT ON FILE WHICH
CAN BE REQUESTED BY HUD AT ANY TIME.
SUBPART C ALSO CONTAINS SOME NEW PROVISIONS IN DESIGN AND
CONSTRUCTION. IT STANDARDIZES THE ENERGY CODE
BY IMPLEMENTING THE 2009 INTERNATIONAL ENERGY
CONSERVATION CODE. THIS SECTION ALSO REQUIRES THAT
ALL MODERNIZATION PROJECTS BE DESIGNED AND CONSTRUCTED IN
COMPLIANCE WITH COST-EFFECTIVE ENERGY CONSERVATION MEASURES
IDENTIFIED IN THE PHA’S MOST RECENT ENERGY AUDIT.
ADDITIONALLY, IT STATES THAT PHAs MUST PURCHASE ENERGY STAR
OR FEDERAL ENERGY MANAGEMENT PROGRAM DESIGNED PRODUCTS UNLESS
PURCHASING THESE PRODUCTS IS NOT COST EFFECTIVE.
905-314 DESCRIBES COST LIMITS. THIS REGULATION PROVIDES A TDC
LIMIT EXCEPTION FOR CAPITAL AND MANAGEMENT ACTIVITIES THAT
PROMOTE ENERGY CONSERVATION AND EFFICIENCY.
FOR NON-ASSET MANAGEMENT PHAs, ADMINISTRATIVE COSTS ARE LIMITED
TO 10% OF THE ANNUAL CAPITAL FUND GRANT.
FOR PHAs UNDER ASSET MANAGEMENT, THE CAPITAL FUND PROGRAM FEE IS
LIMITED TO 10% OF THE ANNUAL CAPITAL FUND GRANT.
THE ADMINISTRATIVE COST LIMITS FOR DEVELOPMENT WORK WITH
CAPITAL FUND OR RHF GRANTS IS 3% OF THE TOTAL PROJECT BUDGET OR
UP TO 6% WITH HUD’S APPROVAL. THIS TABLE SHOWS HOW THE
MANAGEMENT IMPROVEMENT COST LIMIT WILL BE PHASED DOWN FROM
20% TO 10% OVER THE NEXT FIVE YEARS.
IN FISCAL YEAR 2014, PHAs WILL BE LIMITED TO USING 18% OF THE
ANNUAL CAPITAL FUND GRANT FOR MANAGEMENT IMPROVEMENT COSTS.
THIS LIMIT WILL DECREASE BY 2% EACH FISCAL YEAR AND WILL BE
LIMITED TO 10% IN FISCAL YEAR 2018 AND AFTER.
A PHA MAY USE CAPITAL FUNDS FOR OPERATING COSTS IF IT IS
INCLUDED IN ITS APPROVED FIVE-YEAR ACTION PLAN.
PHAs WITH 250 OR MORE UNITS MAY USE UP TO 20% OF THE ANNUAL
CAPITAL FUND GRANT FOR OPERATING COSTS.
PHAs WITH LESS THAN 250 UNITS THAT ARE NOT TROUBLED AND HAVE
MET ALL SIGNIFICANT NEEDS, EMERGENCY NEEDS, AND DEBT
SERVICE PAYMENTS, MAY USE UP TO 100% OF THE ANNUAL CAPITAL FUND
GRANT FOR OPERATING COSTS. PHAs WILL LESS THAN 250 UNITS
THAT ARE DESIGNATED AS TROUBLED ARE LIMITED TO USING UP TO 20%
OF THE ANNUAL CAPITAL FUND GRANT FOR OPERATING COSTS.
IT’S IMPORTANT TO REMEMBER THAT CAPITAL FUNDS THAT ARE
TRANSFERRED TO OPERATIONS ARE NOT CONSIDERED OBLIGATED UNTIL
THE FUNDS HAVE BEEN BUDGETED AND DRAWN DOWN BY THE PHA.
ONCE THE FUNDS HAVE BEEN TRANSFERRED TO OPERATIONS, THE
PHA MUST FOLLOW THE REQUIREMENTS OF PART 990.
THESE NEXT TWO SLIDES SUMMARIZE THE MAJOR CHANGES IN SUBPART C
OF THE RULE. THE FIRST CHANGE IS THAT THE P
AND A IS NOW REQUIRED OF ALL PHAs.
ANOTHER CHANGE IS THAT THE CAPITAL FUND SUBMISSION IS
DECOUPLED FROM THE PHA PLAN. THIS SECTION ALSO IMPLEMENTS THE
2009 IECC AND THE REQUIREMENT THAT PHAs PURCHASE ENERGY STAR
PRODUCTS. SUBPART C INCLUDES A TDC
EXCEPTION FOR ACTIVITIES THAT PROMOTE ENERGY CONSERVATION.
IT ALLOWS PHAs TO USE UP TO 10% OF THE ANNUAL CAPITAL FUND GRANT
FOR ADMINISTRATIVE COSTS OR FOR THE CAPITAL FUND PROGRAM FEE.
AND THE LAST MAJOR CHANGE DESCRIBED IN THIS SECTION IS THE
MANAGEMENT IMPROVEMENTS COST LIMIT PHASE-DOWN FROM 20% TO 10%
OF THE ANNUAL CAPITAL FUND GRANT.
905-400 DESCRIBES THE CAPITAL FUND FORMULA CALCULATION.
IN THIS SECTION OF THE REGULATION, IT CLARIFIES THAT
RECONFIGURATION OR CONVERSION OF UNITS CAUSES THE PHA’S FORMULA
SHARE TO BE CALCULATED BASED ON THE UNIT COUNT AFTER THE
RECONFIGURATION. THIS IS THE POLICY THAT HUD HAS
CONSISTENTLY IMPLEMENTED AS IT WAS NEVER THE INTENT OF THE
FORMULA CALCULATION TO FUND THE MODERNIZATION NEEDS OF UNITS
THAT NO LONGER EXIST. 905-400 ALSO DESCRIBES
REPLACEMENT HOUSING FACTOR FUNDING WHICH PROVIDES UP TO TEN
YEARS OF FUNDING FOR UNITS REMOVED FROM INVENTORY DUE TO
DEMOLITION OR DISPOSITION PRIOR TO SEPTEMBER 30th, 2013.
THIS FUNDING WAS GIVEN AS A SEPARATE ANNUAL GRANT FOR TWO
FIVE-YEAR INCREMENTS. THIS FUNDING WAS USED FOR
DEVELOPMENT OF REPLACEMENT HOUSING.
PART 400 IMPLEMENTS DEMOLITION AND DISPOSITION TRANSITIONAL
FUNDING WHICH WILL REPLACE RHF. DDTF WILL PROVIDE FIVE YEARS OF
FUNDING FOR UNITS REMOVED FROM A PHA’S INVENTORY DUE TO
DEMOLITION OR DISPOSITION ON OR AFTER OCTOBER 1st, 2013.
PHAs WILL AUTOMATICALLY RECEIVE THIS FUNDING UNLESS THEY REJECT
IT IN WRITING. DEMOLITION/DISPOSITION
TRANSITIONAL FUNDING WILL BE INCLUDED IN THE PHA’S ANNUAL
CAPITAL FUND GRANT AND THE PHA WILL BE ALLOWED TO USE THIS
FUNDING FOR ANY ELIGIBLE ACTIVITIES UNDER THE CAPITAL
FUND PROGRAM. THIS FUNDING MUST BE OBLIGATED
AND EXPENDED IN ACCORDANCE WITH THE REQUIREMENT OF THE CAPITAL
FUND GRANT IN WHICH THE FUNDING HAS BEEN INCLUDED.
SO PHAs WILL HAVE 24 MONTHS TO OBLIGATE 90% OF THE GRANT AND 48
MONTHS TO EXPEND 100% OF THE GRANT.
THIS TABLE SHOWS THE MAJOR DIFFERENCES BETWEEN RHF AND
DDTF. THE FIRST DIFFERENCE IS THAT
PHAs WILL ALLOWED TO ACCUMULATE RHF GRANTS UNTIL THEY HAD
ADEQUATE FUNDING FOR DEVELOPMENT.
UNDER DDTF, THERE IS NO ACCUMULATION OF GRANTS SINCE IT
IS INCLUDED IN THE ANNUAL CAPITAL FUND GRANT AND NOT GIVEN
AS A SEPARATE GRANT. THE NEXT DIFFERENCE IS
INELIGIBLE ACTIVITIES FOR THE FUNDING.
RHF FUNDING COULD ONLY BE USED TO DEVELOP REPLACEMENT UNITS
WHILE DDTF CAN BE USED FOR ANY ELIGIBLE CAPITAL FUND
ACTIVITIES, INCLUDING MODERNIZATION.
AS MENTIONED BEFORE, RHF WAS GIVEN IN A SEPARATE ANNUAL GRANT
AND DDTF WILL BE INCLUDED IN THE ANNUAL CAPITAL FUND GRANT.
FINALLY, RHF PROVIDED UP TO TEN YEARS OF REPLACEMENT FUNDING AND
DDTF WILL PROVIDE UP TO FIVE YEARS.
THERE WILL BE A SMOOTH TRANSITION PERIOD FOR PHAs FROM
RHF TO DDTF THAT WILL ALLOW PHAs CURRENTLY RECEIVING RHF TO BE
FUNDED FOR UP TO TEN YEARS. PHAs THAT REMOVE UNITS FROM
INVENTORY ON OR AFTER OCTOBER 1st, 2013, WILL RECEIVE FIVE
YEARS OF DDTF AND WILL NOT RECEIVE ANY RHF FUNDING FOR
THOSE UNITS. PHAs THAT RECEIVED YEARS ONE
THROUGH FOUR OF A FIRST INCREMENT RHF IN FISCAL YEAR
2013, WILL RECEIVE RHF GRANTS FOR THE REMAINING YEARS OF THE
FIRST INCREMENT AND IF THESE PHAs ARE ELIGIBLE FOR A SECOND
FIVE-YEAR INCREMENT OF RHF, THEY WILL RECEIVE FIVE YEARS OF DDTF
TO REPLACE FIVE YEARS OF SECOND INCREMENT RHF GRANTS.
PHAs THAT RECEIVE YEARS SIX THROUGH NINE OF THE SECOND
INCREMENT RHF GRANT IN FISCAL YEAR 2013 WILL RECEIVE THE
REMAINING YEARS OF THE SECOND INCREMENT IN RHF GRANTS.
THE MAJOR CHANGES IN SUBPART D, 905-400, INCLUDED A
CLARIFICATION ON RECONFIGURATION, THE CREATION OF
A DEMOLITION/DISPOSITION TRANSITIONAL FUNDING TO REPLACE
RHF, AND THE TRANSITIONAL PERIOD TO DDTF.
NOW LUCY BLACKBURN WILL DISCUSS SUBPART F OF THE RULE WHICH
INCLUDES INFORMATION ON DEVELOPMENT AND MIXED FINANCE.
>>SUBPART F OF THE RULE, WHICH BEGINS AT 905-600 ADDRESSES THE
DEVELOPMENT OF PUBLIC HOUSING. AS JEFF MENTIONED EARLIER, ALL
THE VARIOUS REQUIREMENTS PREVIOUSLY LOCATED IN SEPARATE
REGULATIONS HAVE NOW BEEN CONSOLIDATED INTO ONE PLACE.
THIS INCLUDES THE REGULATIONS PREVIOUSLY FOUND IN 24 CFR 941.
SUBPART F PROVIDES GUIDANCE AN ALL ASPECTS OF PUBLIC HOUSING
DEVELOPMENT, INCLUDING METHODS OF DEVELOPMENT, FINANCING, HUD
REQUIREMENTS, MIXED FINANCE DEVELOPMENT, THE APPROVAL
PROCESS AND THE EXPENDITURE OF FUNDS.
IN OTHER WORDS, IT PROVIDES EVERYTHING YOU NEED TO KNOW
BEFORE, DURING, AND AFTER DEVELOPMENT.
IN ADDITION, THE RULE HAS PROVIDED HUD WITH THE
OPPORTUNITY TO STREAMLINE CERTAIN ELEMENTS OF THE
DEVELOPMENT PROCESS TO MAKE IT EASIER TO NAVIGATE.
IN THE FOLLOWING SLIDES, I’LL PROVIDE AN OVERVIEW OF THE MAJOR
PROVISIONS OF THE RULE RELATED TO DEVELOPMENT AND HIGHLIGHT THE
CHANGES THAT HAVE BEEN MADE. SUBPART F OF THE RULE BEGINS AT
905-600. HERE, THE GENERALLY ACCEPTED
METHODS OF PUBLIC HOUSING DEVELOPMENT ARE DISCUSSED AND
THESE INCLUDE METHODS SUCH AS CONVENTIONAL DEVELOPMENT BY
PUBLIC HOUSING AUTHORITY, TURNKEY DEVELOPMENT USING A
DEVELOPER, ACQUISITION OF EXISTING STRUCTURES, AND MIXED
FINANCE DEVELOPMENT. REGARDLESS OF THE METHOD OF
DEVELOPMENT, PHAs MUST NOW CONSULT WITH RESIDENTS WHO WILL
BE AFFECTED BY A PROPOSED DEVELOPMENT AND SOLICIT THEIR
INPUT ON THE DEVELOPMENT. THIS MUST BE DONE PRIOR TO A PHA
SUBMITTING THE DEVELOPMENT PROPOSAL TO HUD FOR APPROVAL.
THE NEXT SECTION, SECTION 905-602, LAYS OUT THE VARIOUS
HUD REQUIREMENTS THAT RELATE TO DEVELOPMENT OF ALL PUBLIC
HOUSING REGARDLESS OF THE METHOD OF DEVELOPMENT.
ONE KEY REQUIREMENT RELATES TO WHAT IS CALLED THE FAIRCLOTH
LIMIT. A PHA MAY NOT USE ITS CAPITAL
FUNDS TO PAY FOR DEVELOPMENT OF PUBLIC HOUSING UNITS THAT WOULD
RESULT IN AN INCREASE IN THE NUMBER OF PUBLIC HOUSING UNITS
OWNED OR OPERATED BY A PHA ON OCTOBER 1st, 1999.
THE RULE CLARIFIES THAT DEVELOPMENT OF PUBLIC HOUSING
UNITS MEANS NOT ONLY CONSTRUCTING NEW UNITS, BUT
ACQUISITION OF EXISTING UNITS AS WELL.
ANOTHER IMPORTANT HUD REQUIREMENT INCLUDED IN THE RULE
IS THAT EACH SITE TO BE NEWLY ACQUIRED FOR CONSTRUCTION OR
REHAB OF PUBLIC HOUSING UNITS MUST BE IN COMPLIANCE WITH SITE
AND NEIGHBORHOOD STANDARDS. THE HUD FIELD OFFICES WILL
CONTINUE TO BE RESPONSIBLE FOR THIS REVIEW.
IN ADDITION, 905-602 INCLUDES THE REQUIREMENT THAT THE COST OF
NEW CONSTRUCTION CANNOT BE HIGHER THAN THE COST OF
ACQUISITION WITH OR WITHOUT REHAB.
THIS MUST BE DEMONSTRATED BY A PHA THROUGH EITHER, ONE, DOING
AN ACTUAL ANALYSIS THAT COMPARES THE COST OF NEW CONSTRUCTION TO
THE COST OF ACQUIRING A SIMILAR UNIT, OR, TWO, THROUGH PROVISION
OF DOCUMENTATION THAT SHOWS THERE IS INSUFFICIENT HOUSING IN
THE NEIGHBORHOOD AVAILABLE FOR ACQUISITION.
LASTLY, THE RULE INCLUDES THE VERY IMPORTANT PROVISION THAT
ALL DEVELOPMENT ACTIVITIES ARE SUBJECT TO ENVIRONMENTAL
REGULATIONS AT 24 CFR PART 58 OR PART 50.
REGARDLESS OF THE METHOD OF DEVELOPMENT, THE FIELD OFFICE
WILL CONTINUE TO DO ENVIRONMENTAL COMPLIANCE REVIEW.
WHILE SUBJECT TO ALL THE REQUIREMENTS APPLICABLE TO
CONVENTIONAL PUBLIC HOUSING DEVELOPMENT, MIXED FINANCE
PROJECTS DO HAVE SOME OTHER SPECIFIC REQUIREMENTS.
THESE REQUIREMENTS ARE INCLUDED IN 905-604.
THIS SECTION GOINS BY GIVING A — BEGINS BY GIVING A VERY
CLEAR DEFINITION OF WHAT MIXED FINANCE DEVELOPMENT IS.
MIXED FINANCE PROJECTS ARE THOSE WHERE THE PUBLIC HOUSING UNITS
BEING DEVELOPED WILL BE OWNED BY AN ENTITY OTHER THAN THE PHA,
INCLUDING THE PHA AFFILIATE OR INSTRUMENTALITY.
ON THE OTHER HAND, IF THE UNITS WILL BE OWNED BY A PHA, THIS IS
NOT MIXED FINANCE DEVELOPMENT, JUST CONVENTIONAL PUBLIC HOUSING
DEVELOPMENT. ALL MIXED FINANCE PROJECTS WILL
BE PROCESSED AT HEADQUARTERS BY THE OFFICE OF PUBLIC HOUSING
INVESTMENTS. FIELD OFFICES ARE RESPONSIBLE
FOR CONVENTIONAL OR NON-MIXED FINANCE DEVELOPMENT PROJECTS.
THE RULE HAS PROVIDED HUD THE OPPORTUNITY TO STREAMLINE
SEVERAL PROVISIONS RELATED TO MIXED FINANCE DEVELOPMENT.
FOR EXAMPLE, THE RULE NOW ALLOWS MIXED FINANCE PROJECTS THAT
INVOLVE MODERNIZATION OF PUBLIC HOUSING UNITS TO MAINTAIN THEIR
EXISTING DOSA DATES AS A MATTER OF RIGHT WITHOUT REQUESTING
SPECIAL APPROVAL. ALSO, THE APPROVAL PROCESS FOR A
PROJECT WITH AN IDENTITY OF INTEREST ISSUE HAS BEEN
STREAMLINED. AN IDENTITY OF INTEREST ISSUE IS
WHEN THE DEVELOPER OR OWNER OF A PROJECT ALSO WANTS TO SERVE AS
THE GENERAL CONTRACTOR. WHILE THE RULE STILL REQUIRES
THE SAME DOCUMENTATION BE SUBMITTED TO HUD, A WAIVER FROM
THE ASSISTANT SECRETARY IS NO LONGER NEEDED.
THE IDENTITY OF INTEREST CAN BE APPROVED AS PART OF THE
DEVELOPMENT PROPOSAL APPROVAL PROCESS.
905-604 ALSO INCLUDES THE REQUIREMENT THAT MIXED FINANCE
PROJECTS MEET WHAT WE CAW THE PRO RATA TEST.
TO MEET THIS TEST, THE PROPORTION OF PUBLIC HOUSING
FUNDS CONTRIBUTED TO A PROJECT CANNOT EXCEED THE PROPORTION OF
PUBLIC HOUSING UNITS. THE RULE PROVIDES THE FOLLOWING
EXAMPLE OF THE PRO RATA TEST. IF THERE ARE 120 UNITS IN A
PROJECT AND 50 ARE PUBLIC HOUSING, THE PUBLIC HOUSING
UNITS ARE 42% OF THE TOTAL. THIS MEANS THAT THE AMOUNT OF
PUBLIC HOUSING FUNDS CONTRIBUTED TO THE PROJECT CANNOT EXCEED 42%
OF THE TOTAL PROJECT BUDGET. THE MIXED FINANCE REQUIREMENTS
ALSO INCLUDE REGULATIONS RELATED TO SECTION 35-H OF THE 1937
HOUSING ACT WHICH HAVE NOT PREVIOUSLY BEEN AVAILABLE.
SECTION 35-H ALLOWS OWNERS OF MIXED FINANCE PROJECTS TO
DEVIATE FROM APPLICABLE PUBLIC HOUSING REQUIREMENTS REGARDING
RENTS, INCOME ELIGIBILITY AND OTHER AREAS OF PUBLIC HOUSING
MANAGEMENT IF THERE IS A REDUCTION IN THE PROVISION OF
OPERATING SUBSIDY THAT NEGATIVELY IMPACTS THE FINANCIAL
FEASIBILITY OF THE PROJECT. HOWEVER, PRIOR TO IMPLEMENTING
ANY DEVIATIONS, PHAs MUST PREPARE AND SUBMIT AN
ALTERNATIVE MANAGEMENT PLAN TO HUD HEADQUARTERS FOR APPROVAL.
THE REQUIRED ELEMENTS OF THE ALTERNATIVE MANAGEMENT PLAN ARE
INCLUDED IN THE RULE AS IS A DISCUSSION OF HUD’S REVIEW
CRITERIA. THE PLAN MUST BE UPDATED AND
RESUBMITTED TO HUD ANNUALLY. PRIOR TO MOVING FORWARD WITH
DEVELOPMENT OF PUBLIC HOUSING, PHAs MUST SUBMIT A DEVELOPMENT
PROPOSAL TO HUD FOR REVIEW AND APPROVAL.
A DEVELOPMENT PROPOSAL IS REQUIRED FOR ALL TYPES OF
DEVELOPMENT, INCLUDING MIXED FINANCE.
THERE IS NO LONGER A SEPARATE MIXED FINANCE PROPOSAL.
FIELD OFFICES WILL REVIEW DEVELOPMENT PROPOSALS FOR
CONVENTIONAL DEVELOPMENT AND HEADQUARTERS WILL REVIEW
DEVELOPMENT PROPOSALS RELATED TO MIXED FINANCE DEVELOPMENT.
THE SPECIFIC ELEMENTS OF A DEVELOPMENT PROPOSAL ARE
OUTLINED IN 905-606. THESE ELEMENTS ARE THE SAME FOR
ALL TYPES OF DEVELOPMENT AND INCLUDE SUCH THINGS AS PROJECT
DESCRIPTION, PROJECT FINANCING, PROJECT SCHEDULE, BUDGET, AND
TDC CALCULATION. PREVIOUSLY FOR MIXED FINANCE
DEVELOPMENT, COPIES OF ALL EVIDENTIARY DOCUMENTS WERE
REQUIRED TO BE SUBMITTED TO HUD FOR REVIEW PRIOR TO APPROVAL OF
THE DEVELOPMENT PROPOSAL AND THEN RESUBMITTED AFTER EXECUTION
OF THE DOCUMENTS. THIS REQUIREMENT HAS BEEN
STREAMLINED. HUD WILL NOW REQUIRE SUBMISSION
OF ONLY CERTAIN DOCUMENTS SPECIFICALLY RELATED TO THE
PUBLIC HOUSING UNITS. THE MAJOR ONES ARE THE
REGULATORY AND OPERATING AGREEMENT, THE DECLARATION OF
RESTRICTIVE COVENANTS, THE LEASE, SURVEY AND TITLE POLICY,
AND THE MIXED FINANCE ACC AMENDMENT.
IF A PHA WANTS TO ACQUIRE VAI SCANS LAND FOR FUTURE PUBLIC
HOUSING DEVELOPMENT, THE PHA MUST SUBMIT AN ACQUISITION
PROPOSAL TO THE FIELD OFFICE FOR APPROVAL PRIOR TO ACQUISITION.
SPECIFIC ELEMENTS OF AN ACQUISITION PROPOSAL ARE
INCLUDED IN 905-608. ONCE THE PHA IS READY TO MOVE
FORWARD WITH DEVELOPMENT, IT MUST THEN SUBMIT A DEVELOPMENT
PROPOSAL. SECTION 905-610 DISCUSSES HUD’S
REVIEW OF DEVELOPMENT PROPOSALS. IMPORTANT ELEMENTS ARE, ONE,
WHETHER THE PROPOSAL IS IN COMPLIANCE WITH ALL THE
APPLICABLE REGULATIONS. TWO, WHETHER OR NOT SOURCES AND
USES OF FUNDS ARE ELIGIBLE AND REASONABLE.
THREE, WHETHER THE FINANCING IS VIABLE.
AND FOUR, WHETHER A TEN-YEAR OPERATING PRO FORMA DEMONSTRATES
FEASIBILITY. THE RULE ALSO INCORPORATES THE
REQUIREMENT THAT A SUBSIDY LAYERING ANALYSIS BE DONE TO SAY
INSURE THAT THE AMOUNT OF — ASSURE THAT THE AMOUNT OF HUD
FUNDING BEING PROVIDED TO A PROJECT IS NOT MORE THAN IS
NECESSARY TO MAKE THE PROJECT FEASIBLE.
HUD HEADQUARTERS WILL PERFORM THE SUBSIDY LAYERING ANALYSIS
FOR ALL MIXED FINANCE PROJECTS. MIXED FINANCE PROJECTS MUST ALSO
COMPLY WITH HUD’S COST CONTROL AND SAFE HARBOR STANDARDS WHICH
PROVIDE GUIDANCE AS TO THE AMOUNT OF FEES THAT CAN BE PAID
TO PROJECT PARTICIPANTS LIKE THE DEVELOPER OR THE GENERAL
CONTRACTOR. AFTER APPROVAL OF A DEVELOPMENT
OR ACQUISITION PROPOSAL, ANY MATERIAL CHANGE MUST FIRST BE
APPROVED BY HUD. MATERIAL CHANGE IS DEFINED AS,
ONE, A CHANGE IN THE NUMBER OF PUBLIC HOUSING UNITS; TWO, A 10%
CHANGE IN BEDROOM SIZE; THREE, A 10% CHANGE IN COST OR FINANCING;
AND FOUR, A CHANGE IN THE SITE. FINANCIALLY, SECTION 905-612
DISCUSSES THE ACTUAL DISBURSEMENT OF PUBLIC HOUSING
FUNDS FOR PROJECT DEVELOPMENT. THE RULE ALLOWS PREDEVELOPMENT
COSTS TO BE PAID UP FRONT SUBJECT TO CERTAIN PROVISIONS.
PREDEVELOPMENT COSTS ARE DEFINED AS COSTS RELATED TO THE
PREPARATION OF A PROPOSAL, PROJECT SOFT COSTS, AS WELL AS
DEMOLITION. PREDEVELOPMENT DOES NOT INCLUDE
SITE WORK, INFRASTRUCTURE, OR OTHER HARD COSTS.
FOR NON-MIXED FINANCE PROJECTS, AFTER A PROJECT HAS BEEN
INCLUDED IN THE PHA’S FIVE-YEAR ACTION PLAN AND APPROVED BY THE
PHA BOARD, A PHA MAY USE UP TO 5% OF THE PUBLIC HOUSING FUNDS
IT’S COMMITTED TO A PROJECT TO PAY FOR PREDEVELOPMENT COSTS
WITHOUT HUD APPROVAL. THIS AMOUNT WAS PREVIOUSLY ONLY
3%. HOWEVER, THERE HAS BEEN NO
CHANGE IN THE PROVISIONS FOR MIXED FINANCE PROJECTS.
NO PREDEVELOPMENT FUNDS MAY BE SPENT WITHOUT HUD APPROVAL.
SO TO RECAP THE MAJOR CHANGES RELATED TO DEVELOPMENT FOUND IN
THE RULE, ONE, THERE’S A CLEAR DEFINITION OF MIXED FINANCE.
THE DEVELOPMENT PROCESS HAS BEEN STREAMLINED RELATED TO IDENTITY
OF INTEREST APPROVAL AND RELATED TO DOCUMENTATION THAT NEEDS TO
BE SUBMITTED FOR MIXED FINANCE REVIEW.
PROCEDURES ARE PROVIDED RELATED TO APPROVAL TO DEVIATE FROM
PUBLIC HOUSING REQUIREMENTS UNDER SECTION 35-H, AND PHAs CAN
NOW SPEND UP TO 5% OF THEIR FUNDS ON PREDEVELOPMENT EXPENSE
WITHOUT HUD APPROVAL. THAT CONCLUDES THE OVERVIEW OF
THE RULE IN SECTION 905-600. I’M NOW GOING TO TURN IT BACK TO
VIRGINIA MATHIS TO DISCUSS SECTION 800 OF THE RULE.
>>THANK YOU. SECTION 800 OF THE RULE BRINGS
US TO CONCLUSION. AT THE BEGINNING, PART 100, WE
TALKED ABOUT THE OVERVIEW OF THE RULE, THE COVERAGE, THE
APPLICABILITY, THE COMPLIANCE REQUIREMENT.
HERE IN PART 800, WE’RE TALKING ABOUT THE REQUIREMENTS FOR HUD
REVIEW OF PHA PERFORMANCE AND THERE’S A LIST OF THINGS THAT
HUD WILL LOOK AT DURING, AT A MINIMUM DURING A REVIEW OF A PHA
PERFORMANCE. IDENTIFIED HERE ARE THREE OF
THOSE THINGS. FOR EXAMPLE, HUD WILL LOOK TO
SEE HOW THE PHA HAS CARRIED OUT ITS ACTIVITIES UNDER ITS CAPITAL
FUND FIVE-YEAR ACTION PLAN AND WERE THOSE ACTIVITIES CARRIED
OUT IN A TIMELY MANNER, ETCETERA.
ALSO, HUD CAN REVIEW HOW THE PHA IS REPORTING.
ARE THEY REPORTING ACCURATELY ON THEIR OBLIGATION AND EXPENDITURE
REPORTS, IN LOCKS, AND ARE THE REPORTS DONE IN A TIMELY MANNER?
ANOTHER THING THAT HUD COULD DO AT A MINIMUM IN REVIEW IS LOOK
AT THE ACCURACY OF THE PHA’S REPORT IN TIC OF ITS BUILDINGS
AND UNIT DATA SO THAT — SINCE THIS DATA IS USED IN THE
CALCULATION OF THE CAPITAL FUND FORMULA.
WHERE A PHA IS NOT IN COMPLIANCE WITH THE PUBLIC HOUSING
REQUIREMENTS THAT ARE IDENTIFIED, HUD HAS THE OPTION
OF IMPOSING SANCTIONS AND THERE ARE A VARIETY OF SANCTIONS THAT
ARE IDENTIFIED IN 905-804. I DO WANT TO MENTION THAT
SANCTIONS THAT ARE ASSOCIATED WITH FAILURE TO OBLIGATE AND
EXPEND IN A TIMELY MANNER THAT RELATE TO SECTION 9-J OF THE
ACT, THOSE SANCTIONS ARE DISCUSSED THOROUGHLY IN 905-306
AS WELL AS A DISCUSSION OF THE OPPORTUNITY FOR A PHA TO REQUEST
AN EXTENSION WHERE — ON THE OBLIGATION END DATE.
OTHER SANCTIONS ARE IDENTIFIED IN 905-804.
FOR EXAMPLE, FAILURE TO COMPLY WITH PUBLIC HOUSING REQUIREMENTS
COULD RESULT IN HUD ISSUING A CORRECTIVE ACTION ORDER,
REQUIRING A PHA TO REIMBURSE HUD FROM NON-HUD SOURCES, A LIMIT OR
WITHHOLDING OR TERMINATE CAPITAL FUNDING OR OPERATING FUND
ASSISTANCE. THE LIST IS LONGER THAN THOSE
IDENTIFIED. THESE ARE JUST EXAMPLES OF THE
TYPE OF SANCTIONS THAT HUD CAN IMPOSE.
IF HUD ELECTS TO IMPOSE A SANCTION, HUD WILL NOTIFY THE
PHA IN WRITING OF THE PROPOSED ACTION AND THE PHA MAY APPEAL
DURING A CERTAIN TIME PERIOD, THE SANCTION THAT IS PROPOSED.
905-800, THE MAJOR CHANGES ARE A DESCRIPTION OF THOSE MINIMUM
PERFORMANCE REVIEW REQUIREMENTS FOR A PHA AND, AGAIN, A LIST OF
THE POSSIBLE SANCTIONS IF A PHA FAILS TO COMPLY WITH PUBLIC
HOUSING REQUIREMENTS. WE HAVE RECEIVED SEVERAL
QUESTIONS ON CAPITAL FUND RULES AND WE’D LIKE TO GIVE YOU A FEW
Q’S AND A’S SO YOU CAN SEE AT THIS POINT ANSWERS TO THE MOST
FREQUENT QUESTIONS THAT WE’VE RECEIVED SO FAR.
ONE OF THE QUESTIONS IS, WHEN WILL THE CAPITAL FUND’S FINAL
RULE BE EFFECTIVE AND ARE ALL THE PROVISIONS OF THE RULE
EFFECTIVE ON THAT DATE? GENERALLY SPEAKING, THIS RULE IS
EFFECTIVE ON NOVEMBER 25th, 2013, 30 DAYS AFTER IT WAS
PUBLISHED IN THE FEDERAL REGISTER.
THERE ARE SOME PROVISIONS THAT WILL BE EFFECTIVE IMMEDIATELY ON
THAT DATE. FOR EXAMPLE, SOME OF THE THINGS
THAT LUCY DESCRIBED ABOUT THE IDENTITY OF INTEREST, TDC
WAIVERS FOR ENERGY EFFICIENCY, THE NEW ALTERNATIVE MANAGEMENT
PLAN. THESE PROVISIONS ARE EFFECTIVE
IMMEDIATELY. PHAs MAY USE THOSE PROVISIONS.
I DO WANT TO POINT OUT, HOWEVER, THAT THERE ARE PROVISIONS IN THE
RULE THAT ARE CLARIFICATIONS OF EXISTING POLICY AND PROCEDURES.
THOSE ITEMS CONTINUE TO BE IN EFFECT.
THE EXAMPLES INCLUDE THE INELIGIBILITY OF SALARIES AND
BENEFITS OF SECURITY GUARDS. ALSO THE LIMIT ON DEVELOPMENT
WHICH WE REFERRED TO FREQUENTLY AS THE FAIRCLOTH AMENDMENT.
THE LIMIT ON DEVELOPMENT, THAT IS, NEW CONSTRUCTION AND REHAB.
THOSE ARE EXISTING REQUIREMENTS AND THEY CONTINUE TO BE IN
EFFECT NOW. ANOTHER QUESTION THAT HAS BEEN
ASKED IS HOW DOES THE RULE CHANGE THE SUBMISSION OF CAPITAL
FUND FORMS AND INFORMATION? AND DO THE CHANGES AFFECT
QUALIFIED PHAs AS WELL AS NON-QUALIFIED PHAs?
FIRST OF ALL, NON-QUALIFIED PHAs NO LONGER HAVE TO SUBMIT THE
CAPITAL FUND FORMS AND INFORMATION ALONG WITH THEIR PHA
PLAN, AND THE FIELD OFFICES WILL NOT BE REVIEWING THE CAPITAL
FUND FORMS AT THAT TIME. IN 2014, SOME NEW THINGS WILL
HAPPEN, HOWEVER. WHEN WE GIVE OUT THE CAPITAL
FUND FORMULA, PHAs WILL BE REQUIRED TO USE THE NEW CAPITAL
FUND SUBMISSION PROCESS DESCRIBED IN THE RULE.
ALSO, WHEN WE GIVE OUT THE FORMULA, THE NEW DDTF WILL BE
EFFECTIVE IN 2014 AND THE TRANSITION — RHF TRANSITION
WILL BE EFFECTIVE IN 2014. ALSO, I WANT YOU TO NOTE THAT
THE LIMIT ON MANAGEMENT IMPROVEMENTS, THE COST LIMIT,
WILL BE 18% IN 2014. BASED ON THE CLARIFICATION IN
905-202 OF THE FINAL RULE, HOW WILL THE FY 2013 PHA PLAN
BUDGETS BE HANDLED? SPECIFICALLY, AS IT RELATES TO
THE SALARIES FOR SECURITY GUARDS.
SALARIES FOR SECURITY GUARDS AND THE DIRECT PROVISION OF SOCIAL
SERVICES REMAIN INELIGIBLE ACTIVITIES.
THE ANNUAL STATEMENTS FOR FY 2013 SHOULD BE REVIEWED.
IF THOSE ANNUAL STATEMENTS INCLUDE INELIGIBLE ITEMS, THEY
SHOULD BE REMOVED FROM THE BUDGET AND THE BUDGET SHOULD BE
RESUBMITTED TO THE FIELD OFFICE. EVENTUALLY, THE FIELD OFFICE
WILL TAKE THE REVISED BUDGET AND SPREAD THAT IN LOCS.
THIS IS TO REMIND YOU, HOWEVER, THAT LARGE PHAs CAN TRANSFER UP
TO 20% OF THEIR CAPITAL FUND BUDGET TO VLI 1406 FOR
OPERATIONS. WHEN THAT MONEY IS TRANSFERRED
TO OPERATIONS AND DRAWN DOWN, THE PHA CAN USE THOSE FUNDS TO
FUND THINGS SUCH AS SECURITY GUARDS, DIRECT PROVISION OF
SOCIAL SERVICES.>>THANK YOU VERY MUCH FOR
LISTENING TO THIS PRESENTATION. WE HOPE IT WAS HELPFUL.
I’D LIKE TO ESPECIALLY THANK THE PEOPLE WHO HAVE WORKED ON THE
DEVELOPMENT OF THE CAPITAL FUND RULE OVER SUCH AN EXTENDED
PERIOD OF TIME. ESPECIALLY THE PARTICIPANTS IN
THIS PANEL, VIRGINIA MATHIS, LEANDRA CAMPBELL, AND LUCY
BLACKBURN, FOR THEIR EXTRAORDINARY EFFORTS.
MOST ESPECIALLY, WE’D LIKE TO THANK PUBLIC HOUSING AUTHORITIES
THAT ARE WORKING SO DILIGENTLY ON SUCH AN IMPORTANT MISSION IN
PROVIDING HOUSING AND OTHER PROGRAMS FOR THE LOW INCOME
FAMILIES THAT WE SERVE. WE GREATLY APPRECIATE AND VALUE
YOUR DEDICATION AND COMMITMENT TO THIS IMPORTANT MISSION.
AS HAS BEEN MENTIONED, WE ARE SINCERELY INTERESTED IN GETTING
ANY FEEDBACK, IN ANSWERING ANY QUESTIONS YOU MAY HAVE, EITHER
TODAY, OVER THE COMING DAYS OR OVER THE COMING WEEKS.
WE ENCOURAGE YOU TO SUBMIT QUESTIONS TO THE MAILBOX WHICH
YOU’VE HEARD THE ADDRESS FOR, [email protected] AND WE’LLS DEFER
TO ANSWER THOSE QUESTIONS EITHER — ENDEAVOR TO ANSWER
THOSE QUESTIONS EITHER THROUGH DIRECT CONTACT OR POSTING THEM
TO THE WEBSITE. AGAIN, THANK YOU VERY MUCH FOR
YOUR ATTENDANCE AND DEDICATION TODAY.
WE HOPE IT WAS BENEFICIAL TO YOU.
HAVE A GREAT DAY.

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