U. S. DEPARTMENT DEVELOPMENT CAPITAL FUND FINAL RULE

Transcription

1 U. S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT CAPITAL FUND FINAL RULE

2 CGP BEFORE (RULE PUBLISHED) CIAP Statutes Capital Fund Rule Benefits Statutes PDEV PHAs must search different HUD regulations and multiple statutes Statutes 2

3 HIGHLIGHTS OF FINAL RULE Officially defines qualified PHAs, which are not required to file annual plans Expands HUD s current PNA (Physical Needs Assessment) requirement to include small PHAs as well as large PHAs Management improvements capped at 10% (rather than 20%), but the cap is phased in over 5 years Allows PHAs to request a total development cost (TDC) exception to promotes energy conservation and efficiency Updates regulations for continuing operation of low-income housing after completion of debt service Removed need for general contractor IOI waiver. Removes 24 CFR Parts 941, 968 and 969

4 HIGHLIGHTS OF FINAL RULE (CONT D) Provides for penalties for the slow obligation and expenditure of Capital Funds Establishes 5 years of a Demolition or Disposition Transitional Funding (DDTF) grant that will be included in the regular Capital Fund formula grant, to replace the Replacement Housing Factor (RHF) Decouples CFP informational reporting requirements from the PHA Annual Plan requirements.

5 DEFINITIONS New -Capital Fund Program Fee is a fee that a PHA may charge a Capital Fund grant to cover costs associated with oversight and management of the Capital Fund Program by the PHA s Central Office Cost Center (COCC). Fungibility allows PHAs to substitute work items, without prior HUD approval, between any of the years within the PHA s latest approved 5-Year Action Plan. Obligation is a binding agreement for work or financing that will result in outlays, immediately or in the future. All obligations must be incorporated in the 5-year Action Plan, approved by HUD and by the PHA s Board. This includes funds obligated by the PHA for work to be performed by contract labor or by force account labor. Capital Funds that are to be transferred to operations (BLI 1406) are obligated once the funds have been budgeted and drawn down. 5

6 DEFINITIONS New - Public Housing Requirements consist of the 1937 Act, HUD regulations, the Consolidated Annual Contributions Contract (including amendments), HUD notices, applicable federal statutes, applicable executive orders, and applicable regulatory requirements. New (903.3) - Qualified PHAs are PHAs that administer 550 or fewer units (the sum of public housing units and vouchers under Section 8(o)), that are not designated as a troubled PHA under section 6(j)(2), and that do not have a failing score under the Section 8 Management Assessment Program (SEMAP) during the prior 12 months. PHAs that meet this definition are not required to file the PHA Annual Plan called for in section 5A(b)(1) of the 1937 Act. 6

7 MAJOR CHANGES ELIGIBLE & INELIGIBLE Clarification of eligibility of energy audit or updated energy audits Eligible: Use of Energy Star appliances where cost effective Capital Fund Program Fee for asset management PHAs Ineligible: Direct provision of social services through either force account or contract labor Costs for security guard salaries or ongoing services 7

8 (Subpart B) Eligible Items Include: Modernization as defined in Development Financing Vacancy Reduction Non-routine Maintenance Planned code compliance 8

9 Capital Fund Rule (Subpart B) Eligible Items (Continued): Resident Self-Sufficiency Demolition and Reconfiguration Resident Relocation and Mobility Counseling Safety and Security Homeownership Capital Fund Related Legal Costs Energy Efficiency Administrative Costs Audit Capital Fund Program Fee Emergency Activities 9

10 Capital Fund Rule (Subpart B) Ineligible Items (Continued) Ineligible management improvements include but are not limited to: (1) Salaries for security guards or ongoing security services (2) General remedial education; and (3) Job counseling, job development and placement, supportive services during training and the hiring of a resident coordinator. 10

11 MAJOR CHANGES EMERGENCIES AND NATURAL DISASTERS Repeal of 9k (CFR) PHAs should seek funding from FEMA for Presidentially declared disasters PHAs can continue to request funding from the reserve for non-presidentially declared disasters 11

12 CFP 5 YEAR ACTION PLAN SUBMISSION REQUIREMENTS Capital Fund Budget for each of the 5 Years Required Certifications: Civil Rights, Lobbying Form- SFLLL, Certification of Compliance w/public Hearing Annual Public Hearing & RAB Consultation Submission of Public & RAB Comments Performance & Evaluation Report 12

13 MAJOR CHANGES PNA required of all PHAs (large and small) Implementation of the PNA requirement for small PHAs will be by Notice Uniform Requirements for Qualified and Non- Qualified PHAs New Capital Fund Submission Process decoupled from PHA Plan Compliance with a national building code, i.e. IECC, required for all development projects Energy Star or comparable products and appliances required 13

14 MAJOR CHANGES TDC exceptions for cost-effective capital activities that promote energy conservation and efficiency Administrative Costs and Capital Fund Program Fees (for PHAs under asset management) are limited to 10% Management Improvements will phase down to 10% by 2018 Starting with an 18% limit in FY 2014 and decreasing by 2% each subsequent FY 14

15 NEW PROVISIONS IN DESIGN AND CONSTRUCTION All development projects shall be designed and constructed in compliance with: A national building code (i.e. International Code Council) and the 2009 International Energy Conservation Code (IECC), or ASHRAE standard for multifamily high-rises All modernization projects shall be designed and constructed in compliance with: Cost-effective energy conservation measures identified in the PHA s most recently updated energy audit. PHAs must purchase appliances that are Energy Star or Federal Energy Management Program designed products Exceptions given if purchase of these appliances is not cost effective 15

16 FISCAL CLOSEOUT After completion of work and expenditure all funds must close out projects Modernization: Must submit an Actual Modernization Cost Certificate (AMCC) 12 months after expenditure deadline Final Performance and Evaluation Report Development: Must submit an Actual Development Cost Certificate (ADCC) 12 months after Date of Full Availability (DOFA) 16

17 FISCAL CLOSEOUT Submit ADCC or AMCC to HUD for approval IF PHA receives more than $500,000: ADCC and AMCC is included in the audit. After audit, no exceptions, HUD approves. If exceptions, PHA must correct. After correction, HUD approves. If PHA does not receive more than $500,000, HUD may approve. 17

18 MAJOR CHANGES Clarification on payment of Capital Funds for Units after Reconfiguration Creation of the Demolition and Disposition Transitional Funding (DDTF) RHF Transition for PHAs that began receiving RHF in FY 2013 and prior 18

19 NEW CAPITAL FUND FORMULA DEMOLITION AND DISPOSITION TRANSITIONAL FUNDING (DDTF) Provides 5 years of funding for units removed from a PHA s inventory due to demolition or disposition on or after October 1, 2013 PHAs that remove units due to demo/dispo are automatically eligible unless they reject the funding in writing. If the PHA has received funding for units that will replace the lost units through another program, e.g., Choice Neighborhoods or HOPE VI, it is not eligible for DDTF. 19

20 CAPITAL FUND FORMULA RHF VS DDTF - MAJOR CHANGES Changes RHF DDTF Accumulation Yes No, follows same obligation and expenditure requirements as the Capital Fund formula grants Eligible Activities Development of Replacement Units Modernization or Development (including homeownership) Funding Delivery In a separate RHF grant each FY Included in the PHA s annual Capital Fund Grant Years of Funding Up to

21 MAJOR CHANGES A definition of mixed-finance development is provided Identify of Interest issues now approved as part of the development process Submission of evidentiary documents for mixed-finance projects has been streamlined Clarification that development of units under Faircloth includes acquisition Regulations related to deviation under 35(h) are provided PHAs can now spend up to 5% of the Public Housing Funds committed to a project to pay for pre-development costs without HUD approval 21

22 MIXED-FINANCE Sets forth the requirements specific to mixed-finance Definition of mixed-finance development: Development of public housing units which will be owned in whole or part by an entity other than a PHA Units which will be owned by a PHA are not mixed-finance 22

23 MIXED-FINANCE CONTINUED HQ Office of Public Housing Investments (OPHI)processes mixed-finance projects; Field Offices process conventional development New- Projects doing only modernization can keep existing DOFAs automatically New-Identify of Interest now approved as part of development process Projects must meet the pro rata test 23

24 MIXED-FINANCE Sets forth the requirements specific to mixed-finance Definition of mixed-finance development: Development of public housing units which will be owned in whole or part by an entity other than a PHA Units which will be owned by a PHA are not mixed-finance 24

25 MIXED-FINANCE CONTINUED New Provides regulations pursuant to section 35(h) of the Act Process for HUD approval to deviate from public housing requirements if reduction in operating subsidy impacts project feasibility PHAs must prepare an Alternative Management Plans for HUD approval 25

26 DEVELOPMENT PROPOSAL Prior to developing public housing, PHAs must submit a Development Proposal Specific elements of a Development Proposals are identified Elements are the same for both conventional &mixedfinance Project Description Site Information Description of all Participants Project Schedule Description of Compliance with Accessibility requirements New Legal documents required to be submitted for mixed-finance reduced No more mixed-finance proposal 26

27 DISBURSEMENT OF FUNDS Funding of predevelopment expenses New - 5% of total public housing funds may be spent for predevelopment costs once the Development Proposal is approved by HUD without further HUD review, except for mixedfinance no predevelopment funds spent without HUD HQ approval for mixed-finance New Model Request Letter on Mixed Finance website prior to expending funds, HUD must approve final, executed evidentiary documents previously submitted in draft form 27

28 MAJOR CHANGES Clarifies minimum performance review standards for PHAs Lists possible noncompliance sanctions 28

29 SANCTIONS Sanctions associated with failure to obligate or expend in a timely manner are specified at Other possible noncompliance sanctions may include, but are not limited to: Issue a corrective action order. Require reimbursement from non-hud sources. Limit, withhold, reduce, or terminate Capital Fund or Operating Fund assistance. Issue a Limited Denial of Participation or Debar responsible PHA officials. Withhold assistance to the PHA under section 8 of the Act, 42 U.S.C. 1437f. Declare a breach of the CF ACC with respect to some or all of the PHA s functions HUD shall notify the PHA of its finding and proposed action PHA has a limited time to appeal 29

30 Capital Fund Rule Benefits A better understanding of program requirements for PHAs and residents to more effectively use Capital Funds; More efficient and consistent management of the Capital Fund Program by Headquarters and HUD Field Offices; Directs more funds toward modernization, given our limited fiscal environment; Incorporates the Department s Energy Efficiency strategic goals; 30

31 HOW WILL THE RULE BENEFIT PHAS AND RESIDENTS? New- Decouples Capital Fund forms from the larger PHA Plan Submission Allows PHAs to submit Capital Fund requirements with the ACC Amendment Eliminates requirements to submit a preliminary budget and a final budget to HUD for Review (1 budget submission) Enables PHAs to only hold 1 public hearing 31

32 HOW WILL THE RULE BENEFIT PHAS AND RESIDENTS? New - Streamlines Mixed Finance Requirements Requires submission of evidentiary documents for mixed finance projects at HUD s discretion Eliminates the requirement for a separate waiver to use Identity of Interest approvals as part of the development process no longer require separate waivers 32

33 HOW WILL THE RULE BENEFIT PHAS AND RESIDENTS? New -Provides a TDC limit exception for energy conservation and efficiency Allows PHAs to request a total development cost exception for integrated utility management, capital planning, and other capital and management activities that promote energy conservation and efficiency New - Implements Energy Star requirements Puts into regulation that Energy Star appliances are eligible Capital Fund costs New - Standardizes the Energy Code Implements the 2009 International Energy Conservation Code (IECC), or ASHRAE standard for multifamily high-rises (four stories or higher, which is consistent with the standard used in over 40 states throughout the US 33

34 QUESTIONS AND ANSWERS 34