(c) Manufactured housing. Purchase and/or rehabilitation of a manufactured housing unit qualifies as affordable housing only if, at the time of project completion, the unit—

(1) Is situated on a permanent foundation (except when assisting existing unit owners who rent the lot on which their unit sits);

(2) Is connected to permanent utility hook-ups;

(3) Is located on land that is held in a fee-simple title, land-trust, or longterm ground lease with a term at least equal to that of the appropriate affordability period;

(4) Meets the construction standards established under 24 CFR 3280 if produced after June 15, 1976. If the unit was produced prior to June 15, 1976, it must comply with applicable State or local codes;

(5) Meets all requirements of Section 92.254(a) and (b), as applicable. In cases where the owner of a manufactured housing unit does not hold feesimple title to the land on which the unit is located, the owner may be assisted to purchase the land under paragraph (b) of this section.

(Approved by the Office of Management and Budget under OMB control number 2501-0013)

[56 FR 65338, Dec. 16, 1991, as amended at 57 FR 60967, Dec. 22, 1992]

§ 92.255 Mixed-income project.

Housing that accounts for less than 100 percent of the dwelling units in a project qualifies as affordable housing if the housing meets the criteria of § 92.252 or § 92.254. Each building in the project must contain housing that meets the requirements of § 92.252 or § 92.254. See § 92.219 for matching contribution requirements concerning mixed-income projects.

(Approved by the Office of Management and Budget under OMB control number 2501-0013)

§ 92.256 Mixed-use project.

Housing in a project that is designed in part for uses other than residential use qualifies as affordable housing if such housing meets the criteria of § 92.252 or § 92.254. A project that contains, in addition to dwelling unit,

laundry and community facilities for the exclusive use of the project residents and their guests, does not consti tute a project that is designed in part for uses other than residential use. Residential living space must constitute at least 51 percent of the project space. Each building within the project must contain residential living space. See § 92.219 for matching contribution requirements concerning mixed-use projects.

(Approved by the Office of Management and Budget under OMB control number 2501-0013)

§ 92.257 Religious organizations.

HOME funds may not be provided to primarily religious organizations, such as churches, for any activity including secular activities. In addition, HOME funds may not be used to rehabilitate or construct housing owned by primarily religious organizations or to assist primarily religious organizations in ac quiring housing. However, HOME funds may be used by a secular entity to acquire housing from a primarily religious organization, and a primarily religious entity may transfer title to property to a wholly secular entity and the entity may participate in the HOME program in accordance with the requirements of this part. The entity may be an existing or newly es tablished entity (which may be an entity established, but not controlled, by the religious organization. The completed housing project must be used exclusively by the owner entity for secular purposes, available to all persons regardless of religion. In par ticular, there must be no religious or membership criteria for tenants of the property.

§ 92.258 Limitation on the use of HOME funds with FHA mortgage insurance. When HOME funds are to be used in connection with housing in which se quisition, new construction, or reha bilitation is financed with a mortgage insured by HUD under chapter II of this title, then, for rental housing, the period that the project must remain affordable as provided in binding com mitments meeting the requirements of by § 92.252(a)(5) or, for homeowner

Subpart G-Community Housing
Development Organizations

§ 92.300 Set-aside for community housing development organizations.

(a) For a period of 18 months after the allocation (including, for a state, funds reallocated under § 92.451(c)(2)(i) and, for a unit of general local government, an allocation transferred from а state under § 92.102(b)) is made available to a participating jurisdiction, the participating jurisdiction must reserve not less than 15 percent of these funds for investment only in housing to be developed, sponsored, or owned by community housing development organizations. The funds must be provided to a community housing development organization and the funds are reserved when a participating jurisdiction enters into a written agreement with the community housing development organization. If a community housing development organization's involvement in a project is as an owner it must have control of the project, as evidenced by legal title or a valid contract of sale. If it owns the project in partnership, it or its wholly owned forprofit subsidiary must be the managing general partner. In acting in any of the capacities specified, the community housing development organization must have effective management control.

(b) Each participating jurisdiction must make reasonable efforts to identify community housing development organizations that are capable, or can reasonably be expected to become capable, of carrying out elements of the jurisdiction's approved housing strategy and to encourage such community housing development organizations to do so.

(c) Up to 10 percent of the HOME funds reserved may be used for activities specified under § 92.301.

in

(d) These HOME funds are subject to reduction, as provided § 92.500(d).

(Approved by the Office of Management and Budget under OMB control number 2501-0013)

[56 FR 65338, Dec. 16, 1991, as amended at 57 FR 60968, Dec. 22, 1992]

§ 92.301 Project-specific

assistance to community housing development organizations.

(a) Project-specific technical assistance and site control loans—(1) General. Within the percentage specified in § 92.300(c), HOME funds may be used by a participating jurisdiction to provide technical assistance and site control loans to community housing development organizations in the early stages of site development for an eligible project. These loans may not exceed amounts that the participating jurisdiction determines to be customary and reasonable project preparation costs allowable under paragraph (a)(2) of this section. All costs must be related to a specific eligible project or projects.

(2) Allowable expenses. A loan under this paragraph (a) of this section may be provided to cover project expenses necessary to determine project feasibility (including costs of an initial feasibility study), consulting fees, costs of preliminary financial applications, legal fees, architectural fees, engineering fees, engagement of a development team, site control and title clearance. General operational expenses of the community housing development organization are not allowable expenses.

(3) Repayment. A community housing development organization that receives a loan under paragraph (a) of this section must repay the loan to the participating jurisdiction from construction loan proceeds or other project income. The participating jurisdiction may waive repayment of the loan, in part or in whole, if there are impediments to project development that the participating jurisdiction determines are reasonably beyond the control of the borrower.

(b) Project-specific seed money loans (1) General. Within the limit specified in paragraph (a) of this section, HOME funds may be used to provide loans to community housing development organizations to cover preconstruction project costs that the

participating jurisdiction determines to be customary and reasonable, including, but not limited to the costs of obtaining firm construction loan commitments, architectural plans and specifications, zoning approvals, engineering studies, and legal fees.

(2) Eligible sponsors. A loan under paragraph (b) of this section may be provided only to a community housing development organization that has, with respect to the project concerned, site control (evidenced by a deed, a sales contract, or an option contract to buy the property), a preliminary financial commitment, and a capable development team.

(3) Repayment. A community housing development organization that receives a loan under paragraph (b) of this section must repay the loan to the participating jurisdiction from construction loan proceeds or other project income. The participating jurisdiction may waive repayment of the loan, in whole or in part, if there are impediments to project development that the participating jurisdiction determines are reasonably beyond the control of the community housing development organization.

(Approved by the Office of Management and Budget under OMB control number 2501-0013)

§ 92.302 Housing education and organizational support.

(a) General. HUD is authorized to provide education and organizational support assistance, in conjunction with HOME funds made available to community housing development organizations:

(1) To facilitate the education of low-income homeowners and tenants; and

(2) To promote the ability of community housing development organizations to maintain, rehabilitate and construct housing for low-income and moderate-income families in conform ance with the requirements of this part.

(b) Delivery of assistance. HUD will provide assistance under this section only through contract

(1) With a nonprofit intermediary organization that, in the determination of HUD

(i) Customarily provides, in more than one community, services related to the provision of decent housing that is affordable to low-income and moderate-income persons or the revitalization of deteriorating neighborhoods;

(ii) Has demonstrated experience in providing a range of assistance (such as financing, technical assistance, construction and property management assistance, capacity building, and training) to community housing development organizations or similar organizations that engage in community revitalization;

(iii) Has demonstrated the ability to provide technical assistance and training for community-based developers of affordable housing; and

(iv) Has described the uses to which such assistance will be put and the intended beneficiaries of the assistance;

or

(2) With another organization, if a participating jurisdiction demonstrates that the organization is qualified to carry out eligible activities and that the jurisdiction would not be served in a timely manner by interme. diaries specified under paragraph (b)(1) of this section. Contracts under paragraph (b)(2) of this section must be for activities specified in an application from the participating jurisdiction. The application must include a certification that the activities are necessary to the effective implementation of the participating jurisdiction's approved housing strategy.

(c) Eligible activities. Assistance under this section may be used only for the following eligible activities:

(1) Organizational support. Organizational support assistance may be made available to community housing development organizations to cover operational expenses and to cover expenses for training and technical, legal, engineering and other assistance to the board of directors, staff, and members of the community housing development organization.

(2) Housing education. Housing education assistance may be made available to community housing development organizations to cover expenses for providing or administering programs for educating, counseling, or or

ganizing homeowners and tenants who are eligible to receive assistance under other provisions of this part.

(3) Program-wide support of nonprofit development and management. Technical assistance, training, and continuing support may be made available to eligible community housing development organizations for managing and conserving properties developed under this part.

(4) Benevolent loan funds. Technical assistance may be made available to increase the investment of private capital in housing for very low-income families, particularly by encouraging the establishment of benevolent loan funds through which private financial institutions will accept deposits at below-market interest rates and make those funds available at favorable rates to developers of low-income housing and to low-income homebuy

ers.

(5) Community development banks and credit unions. Technical assistance may be made available to establish privately owned, local community development banks and credit unions to finance affordable housing.

(d) Limitations. (1) A community housing development organization may not receive assistance under paragraphs (c)(1) (organizational support) and (c)(2) (housing education) of this section for any fiscal year in an amount that, together with other federal assistance, provides more than 50 percent of the organization's total operating budget in the fiscal year.

(2) Contracts under this section with any one contractor for a fiscal year may not

(1) Exceed 20 percent of the amount appropriated for this section for such fiscal year; or

(ii) Provide more than 20 percent of the operating budget (which may not include funds that are passed through to community housing development organizations) of the contracting organization for any one year.

(e) Single-state contractors. Not less than 40 percent of the funds made available for this section in an appropriations Act in any fiscal year must be made available for eligible contractors that have worked primarily in one state.

(f) Notice of funding. HUD will publish a notice in the FEDERAL REGISTER announcing the availability of funding under this section, as appropriate.

§ 92.303 Tenant participation plan.

A community housing development organization that receives assistance under this part must adhere to a fair lease and grievance procedure approved by the participating jurisdiction and provide a plan for and follow a program of tenant participation in management decisions.

(Approved by the Office of Management and Budget under OMB control number 2501-0013)

Subpart H-Other Federal
Requirements

§ 92.350 Equal opportunity and fair housing.

(a) Equal opportunity. No person in the United States shall on the grounds of race, color, national origin, religion, or sex be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with HOME funds. In addition, HOME funds must be made available in accordance with the following:

(1) The requirements of the Fair Housing Act (42 U.S.C. 3601-20) and implementing regulations at 24 CFR part 100; Executive Order 11063, as amended by Executive Order 12259 (3 CFR, 1958-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing) and implementing regulations at 24 CFR part 107; and title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR part 1;

(2) The prohibitions against discrimination on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing regulations at 24 CFR part 146, and the prohibitions against discrimination against handicapped individuals under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8;

341-078 0-93-21

(3) The requirements of Executive Order 11246 (3 CFR 1964-65, Comp., p. 339) (Equal Employment Opportunity) and the implementing regulations issued at 41 CFR chapter 60;

(4) The requirements of section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) that—

(i) To the greatest extent feasible, opportunities for training and employment arising in connection with the planning and carrying out of any project assisted with HOME funds be given to low-income persons residing within the unit of general local government or the metropolitan area (or nonmetropolitan county) as determined by HUD, in which the project is located; and

(ii) To the greatest extent feasible, contracts for work to be performed in connection with any such project be awarded to business concerns, including but not limited to individuals or firms doing business in the field of planning, consulting, design, architecture, building construction, rehabilitation, maintenance, or repair, which are located in or owned in substantial part by persons residing in the same metropolitan area (or nonmetropolitan county) as the project; and

(5) The requirements of Executive Orders 11625 and 12432 (concerning Minority Business Enterprise), and 12138 (concerning Women's Business Enterprise). Consistent with HUD's responsibilities under these Orders, each participating jurisdiction must make efforts to encourage the use of minority and women's business enterprises in connection with HOME-funded activities. A participating jurisdiction must prescribe procedures acceptable to HUD to establish and oversee a minority outreach program within its jurisdiction to ensure the inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women, including, without limitation, real estate firms, construction firms, appraisal firms, management firms, financial institutions, investment banking firms, underwriters, accountants, and providers of legal services, in all contracts entered into by the participating jurisdiction with such persons or entities, public and private, in order to facilitate the ac

tivities of the participating jurisdic tion to provide affordable housing authorized under this Act or any other federal housing law applicable to such jurisdiction. Section 85.36(e) of this title describes actions to be taken by & participating jurisdiction to assure that minority business enterprises and women business enterprises are used when possible in the procurement of property and services.

(b) Fair housing. In accordance with the certification made with its housing strategy, each participating jurisdic tion must affirmatively further fair housing. Actions described in § 570.904(c) of this title will satisfy this requirement.

(Approved by the Office of Management and Budget under OMB control number 2501-0013)

§ 92.351 Affirmative marketing.

(a) Each participating jurisdiction must adopt affirmative marketing procedures and requirements for HOME assisted housing containing 5 or more housing units. Affirmative marketing steps consist of actions to provide information and otherwise attract eligi ble persons from all racial, ethnic, and gender groups in the housing market area to the available housing. (The affirmative marketing procedures do not apply to families with housing assistance provided by the PHA or families with tenant based rental assistance provided with HOME funds.) The par ticipating jurisdiction must annually assess the affirmative marketing program to determine the success of affirmative marketing actions and any necessary corrective actions. (These requirements and procedures are comparable to the affirmative marketing requirements and procedures for the Rental Rehabilitation Program CFR part 511), and jurisdictions that have participated in that program should consider basing their require ments and procedures on their exist. ing Rental Rehabilitation Program requirements and procedures.)

(24

(b) The affirmative marketing requirements and procedures adopted must include:

(1) Methods for informing the public, owners, and potential tenants