Part II FY 2010 Sec 202/811 NOFA. Discussion of Legal Related Issues.

Part II

FY 2010 Sec 202/811 NOFA

Discussion ofLegal Related Issues

Legal Authorities

What about the Section 202 Supportive Housing for the Elderly Act of 2010 and the Frank Melville Supportive Housing Investment Act of 2010 ?

• Statutory, Regulatory, HUD Notices• HUD Notice of Funding Availability• HUD 202 / 811 Handbooks

Legal Issues Where to find all this information ?

http://www.hud.gov/offices/adm/hudclips/index.cfm

http://www.gpoaccess.gov

Legal Issues Eligible Applicant

Who can be a sponsor of a Section

202 and 811 project ?

5 PRONG TEST

Legal Issues Eligible Applicant

1) for 202: must have 501(c)(3) or 501(c)(4), for 811: must be 501(c)(3);

2) No part of the net earnings of which inures to the benefit of any member, founder, contributor or individual;

3) Must not be controlled by, or under the direction of, persons or firms seeking to derive profit or gain there-from;

4) Must have a governing board; and

5) approved by HUD as to administrative and financial responsibility.

Legal Issues

202 Sponsor• cannot be a public body or instrumentality of a

public body

• can be a consumer cooperative

• cannot be an Indian Housing Authority, tribe, instrumentality or agency of a tribe or IHA**

what about nonprofits associated with PHAs, IHAs or tribes ?**

Legal Issues

EXHIBIT 2: LEGAL STATUS

(a)Articles of Incorporation, Constitution or other organizational documents

(b) By-laws

(c) IRS tax exemption

Legal Issues

EXHIBIT 2: Legal Status

* Co-sponsors

* Begin and End dates

* IRS tax Exemption Ruling

Legal IssuesExhibit 2: What is Legal Review looking for?

Whether sponsor has the legal authority to sponsor the project, to assist the owner and to apply for the capital advance.

Whether there are inconsistencies between sponsor’s legal documents and HUD’s statutory, regulatory and NOFA requirements.

Legal Issues

EXHIBIT 2: Legal Status

there is nothing in the Sponsor’s by-laws or other legal documents that allows any part of their net

earnings to inure to the benefit of any private party, including member, founder, contributor or individual

Legal Issues Exhibit 4(d): Site Control

202 vs. 811

202: Insufficient evidence of site control. Rejection.

811: Insufficient evidence of site control. Category B.

Legal Issues

1. Deed or long-term leasehold Title or leasehold interest must commence prior to

the application deadline date

2. Contract of sale Cannot require closing earlier than 12 month

following application deadline date

Legal Issues

3. Option to purchase or for a long-term leasehold

Must state a firm price Be in effect for a minimum of six months and must be

renewable for a minimum of an additional six-month term

Refer to NOFA for additional details

Legal Issues

4. Site covered by a HUD mortgage.

5. Sites acquired from a public body

If PHA applied for HUD permission, approval must be received prior to Hub’s selection recommendation to HQ

Legal Issues Title to the site Must provide current title report or title

policy is mandatory Legal opinions acceptable. See NOFA for

specific requirements

Mortgage liens that will be satisfied by initial closing are not considered limitations. See NOFA for specific requirements

Prohibited Relationships

• 24 CFR 891.130

Conflict of Interest versus

Identity of Interest

Permissible Relationships

• Conflict of Interest:

• Describes in what circumstances a contract between X and Y is not permissible

• Describes in what circumstances a contract between X and Y is permissible

• Sponsor must sign HUD-92041, Sponsor Conflict of Interest Resolution

Permissible Relationships

• Identity of interest:

• In the simplest terms, describes when one person can’t wear two hats.

“An identity of interest between the Sponsor or Ownerand any development team member or between development team members is prohibited until two years after final closing.”

Economic and MarketDiscussion

FY2010 Section 202 Allocation Formula

One-person Very Low-Income Renter Households Age 62+ With Housing Conditions

Incomes at or below the 1 person Section 8

Income Limit (Very Low-Income Limit)


With Housing Conditions: - Living in a unit lacking plumbing

or kitchen facilities - Overcrowded - Excess Rent Burden: More than 30% of income for rent

Data Source: 2000 Census Special Tabulations of Households


Eighty-five percent of the capital advance funds are allocated to metropolitan areas and 15 percent to nonmetropolitan areas

Each HUB jurisdiction is allocated funds for a metropolitan share and a non-metropolitan share.

FY2010 Section 202Evidence of Need

Sponsor’s evidence of need should include:

• Estimate of demand• Market conditions in existing supply (Pub.

Hsg., RHS, LIHTC, Sec. 8, & 202)• Assisted housing under construction

FY2010 Section 202Evidence of Possible Lack of

Demand• Projected long-term decline in age-cohorts

for target population• Slow absorption in newer units• Persistently high vacancies• Widespread use of Age-waivers• Evidence of new projects filling at the

expense of existing ones

FY2010 Section 202EMAD Points Awarded for

Market NeedOnly projects in market areas with sufficient

demand will be rated.

Projects will receive 0 to 10 points based upon the unmet needs ratio: proposed project units divided by the unmet need (expressed as a percent)


Market Need

Unmet need is the number of one-person renter households age 75 and older with very-low incomes and with housing conditions, minus any rental assistance provided since 1999


Market NeedUnmet Needs Ratio (UNR) Points Awarded

0.00 ≤ UNR ≤ 0.25 100.25 < UNR ≤ 0.50 90.50 < UNR ≤ 1.00 81.00 < UNR ≤ 1.50 71.50 < UNR ≤ 2.50 62.50 < UNR ≤ 5.00 55.00 < UNR ≤7.50 4

7.50 < UNR ≤ 10.00 310.00 < UNR ≤ 12.50 212.50 < UNR ≤ 15.00 1

15.00 < UNM or UNR < 0.00 0

FY2010 Section 811

EMAD will not conduct market reviews of Section 811 applications and will not assign rating points

EMAD will provide assistance to the field Housing staff in cases where there is a concern about market conditions

FY2010 Section 202

Special Tabulations of Households for 1990 and 2000

http://www.huduser.org/portal/datasets/spectabs.html

Questions?

Please contact your local field economist with any questions regarding the data, metropolitan definitions, or evidence of need.

Fair Housing and Equal Opportunity (FHEO)

FHEO Legal OverviewFHEO’s Role

• FHEO implements and enforces:

– The Fair Housing Act (Title VIII of the Civil Rights Act of 1968);

– Title VI of the Civil Rights Act of 1964 (“Title VI”);

– Section 504 of the Rehabilitation Act of 1973 (“Section 504”); and

– Other applicable civil rights and nondiscrimination laws.

FHEO Legal OverviewLegal Requirements Incorporated

into 202/811 NOFAs

• Obligations stemming from these statutes, their implementing regulations, and 202/811 program regulations (24 CFR 891.155) are incorporated into each NOFA in the program requirements and rating factor sections.

FHEO Legal Overview Legal Requirements Incorporated

into 202/811 NOFAs Cont’d

• Some of the fair housing/nondiscrimination requirements are also found in the 202/811 FY 2010 NOFA rating factors:

– Providing meaningful access to persons with limited English Proficiency (LEP);

– Affirmative Fair Housing Marketing (AFHM); and

– Site and Neighborhoods Standards (SNS)

FHEO Legal OverviewLimited English Proficiency (LEP)

• Sources of legal authority for LEP:1) Title VI (prohibition against national origin

discrimination)2) 24 CFR Part 1 (Title VI implementing regs.);3) Executive Order 13166 (2001); and4) HUD’s LEP Final Guidance (72 FR 2732, January 22, 2007)

• LEP persons: persons for whom English is not their primary language; limited ability to read, write, speak, or understand English.

FHEO Legal OverviewLEP Cont’d

• Recipients of federal financial assistance, including recipients of 202/811 funds, must take reasonable steps to ensure meaningful access to their programs and activities by LEP persons.

• Both the 202 and 811 FY 2010 NOFAs incorporate LEP requirements within the rating factors (section 3.b).

Legal OverviewLEP Cont’d

• Applicants should consult HUD’s Final LEP Guidance when determining how to prepare their narrative responses to earn this point.

• LEP Guidance available at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/promotingfh/lep

Legal OverviewAffirmatively Furthering Fair Housing

(AFFH)• Sources of Legal Authority for AFFH generally:

1) Fair Housing Act

Section 808 (e)(5) of the Fair Housing Act requires HUD to “administer the programs and activities related to housing and urban development in a manner affirmatively to further the policies of [the Fair Housing Act].” 42 U.S.C. § 3608(e)(5).

Legal OverviewAFFH Cont’d

• Sources of Legal Authority for AFFH generally:

2) Executive Order 11063 (Nov. 20, 1962)

Executive Order 11063 directs agencies that provide housing, including HUD, to “take all action necessary and appropriate to prevent discrimination because of race, color, creed, or national origin.”


• The Fair Housing Act and EO 11063 impose a duty on HUD to affirmatively further fair housing.

• HUD discharges this duty by requiring NOFA funding recipients to affirmatively further fair housing.


• AFFH: implementing a range of standards, policies, and procedures that not only refrain from discriminating, but also actively promote integration and fair housing choice.

Legal OverviewAffirmative Fair Housing Marketing

(AFHM)• Sources of legal authority for AFHM:

1) Fair Housing Act2) EO 11063 (Nov. 20, 1962)3) 24 CFR 891.155 (incorporating by reference Part 200 AFHM regs.)4) 24 CFR 200.600 et. seq. (AFHM regs.)

• Engaging in AFHM is generally one way NOFA recipients can work toward satisfying AFFH obligations/requirements.

Legal OverviewAFHM Cont’d

• AFHM process: comparing demographic data of the project and the housing market area and, based on the results, developing a marketing plan that will reach those applicants that are least likely to apply.


• Goal: to target such marketing so as to “achieve a condition in which individuals of similar income levels in the same market housing area have a like range of housing choices available to them regardless of race, color, religion, sex, handicap, familial status or national origin.” 24 CFR 200.600


• 202 and 811 NOFAs incorporate AFHM requirements within the rating factors (section 3.b).

Legal OverviewSite and Neighborhood Standards (SNS)

General Sources of legal authority:

1) Title VI and implementing regs. (24 CFR 1.4(b)(3)) prohibiting site selection that discriminates based

on race, color, or national origin); and

2) Section 504 and implementing regs. (24 CFR 8.4(b)(5))

prohibiting site selection that discriminates based on disability).

Legal OverviewSNS Cont’d

Section 202 and 811-specific (programmatic) sources of legal authority:

1)24 CFR 891.125 (202 and 811); and

2) 24 CFR 891.320 (disability-specific SNS for 811 only)

Legal OverviewSNS Cont’d

• SNS: 202 and 811 recipients must select a site that will promote greater choice of housing opportunities for minority elderly (202) and minority persons with disabilities (811).

• The concept is related to AFFH.• 202 and 811 NOFAs incorporate SNS

within rating factors (section 3.b).

Fair Housing and Civil Rights

Rating Factors

Office of Fair Housing and Equal Opportunity

Rating Factors Overview

• Civil Rights Threshold Review• Rating Factors 1.b.(1), (2), and (3)• Rating Factor 2.b.• Rating Factors 3.b.(1), (2), and (3)• Rating Factor 3.e. – Section 811• Rating Factor 3.i. – Section 202• Rating Factors 3.k.(1) and (2) – Section 811• Rating Factor 3.l. – Section 202• Rating Factor 3.m. – Section 202

Civil Rights Threshold Review

• Section III.C.2.d. of the General Section to HUD’s FY2010 NOFAs for Discretionary Programs.– Applicants must not have outstanding

unresolved civil rights matters.

Quality of Experience

Rating Factor 1.b.(1)

•Scope, extent, and quality of your experience in providing housing to minority persons or minority families.

•Maximum of two (2) points.



• The scope, extent, and quality of the applicant’s experience in providing services to minority persons or minority families.

• Maximum of one (1) point.

Significant Previous Experience

Rating Factors 1.b.(1) and (2)

• Previous housing assistance or related services to minorities, elderly, and disabled communities.

• Percentage of minorities being provided housing or related services in the applicant’s current developments, are equal to or greater than the percentage of minorities in the housing market area where the housing or services are provided.


Rating Factor 1.b.(3)• The scope, extent, and quality of the

applicant’s ties to the community at large.

• Maximum of five (5) points.

Project’s Connection with Community Planning Documents

Rating Factor 2.b.

• Connection between the project and the community’s planning document (such as an Analysis of Impediments to Fair Housing Choice or Consolidated Plan) that analyzes local fair housing issues.

• Maximum of two (2) points. – Section 202• Maximum of three (3) points. – Section 811

Affirmatively Furthering Fair Housing

Rating Factor 3.b.

• The applicant should demonstrate how the proposed project will address one or more impediments identified in the applicable local community’s Analysis of Impediments to Fair Housing Choice.

Limited English Proficiency (LEP)


• Conducted a four factor analysis of language needs for the jurisdiction(s).

• Implemented a language implementation plan for written and oral language interpretation.

• Trained staff members on LEP.• Translated vital documents in target

language(s).• Maximum of one (1) point.

Affirmative Fair Housing Marketing


• Describe past strategies to reach persons that are least likely to apply for the housing, and address planned improvements.

• Methods may include various media outlets, informational brochures, working with community leaders, LEP services, and other new and innovative approaches.

• Maximum of two (2) points.

Site and Neighborhood StandardsRating Factor 3.b.(3)

• Choose a site location that provides desirable housing to residents and promotes greater choice of housing opportunities for minority elderly/disabled persons/families.

• HUD will assess whether the site meets the site and neighborhood standards at 24 CFR 891.125(b) and (c) by examining relevant data in the application or in the local HUD Office.

• Where appropriate, HUD may visit the site.

• Maximum of two (2) points.

Target Involvement of Program Population

Rating Factors 3.e. – Section 8113.i. – Section 202

•Inclusion of the target population (elderly and persons with disabilities, including minorities) in the development and implementation of the project.•Maximum of two (2) points. – Section 811•Maximum of one (1) point. – Section 202

Section 3 of the HUD Act of 1968

Rating Factor 3.k.(1) – Section 8113.l. – Section 202

•Number of new employment opportunities.•Type and amount of contracting opportunities.•How Section 3 residents and business concerns will be targeted for these opportunities.

Section 3 of the HUD Act of 1968

Rating Factor 3.k.(1) – Section 811 3.l. – Section 202

•Efforts to facilitate the employment and/or awarding of contracts to these individuals.•Processes used to ensure contractor compliance.•Staff persons responsible for ensuring compliance with this requirement.•Maximum of one (1) point.

Policy Priority Job Creation/Employment

Rating Factors 3.k.(2) – Section 8113.m. – Section 202

•The activities must be more comprehensive and exceed those required under HUD’s Section 3 requirements.

•The description must address the extent to which the activities that the applicant undertakes are focused on improved access to skills training, building and strengthening of partnerships with community-based organizations, and increased collaborating with federal, state, and local entities.

•Maximum of one (1) policy priority point.

Contact InformationGloria Bizzell

Office of Fair Housing and Equal Opportunity202-708-0617

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Questions

Part II FY 2010 Sec 202/811 NOFA. Discussion of Legal Related Issues.

Documents

Transcript of Part II FY 2010 Sec 202/811 NOFA. Discussion of Legal Related Issues.