proceeds plus required escrows to build the project, and (2) that the rental or project income will be sufficient to meet all operating expenses and mortgage payments during the full term. Nonprofit sponsors should understand, however, that owning and operating a housing project involves difficult and trying problems, including the possibility that some unforeseen circumstances could cause project funds to run short. They should understand that FHA would expect them to cope with these problems at the time of need by all means at their disposal, such as promotional help, contributive management or services, appeals to membership or affiliated organizations. They are not legally required to provide such support, but any nonprofit sponsor should by definition feel a strong sense of moral duty to help in these circumstances. There is no reason to distinguish between a housing project and any other social purpose asset of a nonprofit organization, such as an elderly home, a medical facility, a convalescent center or a day-care facility.

It is stressed, however, that FHA does not insist upon or require a pledge or guaranty, except in rare cases where deficits are anticipated during "rent-up." What is required is a full understanding of responsibility on the part of the nonprofit sponsor. Sponsors must, of course, establish that they have the capabilities to meet expenses prior to the drawdown of mortgage funds, including expenses for architectural services, legal and other professional services, etc. Such expenses need not be covered by the sponsor's funds alone. They may be met through assured advances from such other parties as a bank, a federal, state or municipal fund, a foundation, a chuch hierarchy, or another nonprofit organization.

It is permissible to borrow funds from the contractor or other parties connected with the project if they are for items to be covered by the insured mortgage and if such sums are paid in full at the time the mortgage proceeds are advanced.

Potential sponsors. Although it is not desirable to attempt to establish rigid criteria for determining eligibility of nonprofit sponsors, certain factors will indicate strength, other factors will suggest weakness, and some factors will make the sponsor ineligible. An evaluation of factors applicable to a particular sponsor will assist in reaching a judgment about the eligibliity of the sponsor and his ability to successfully carry out the proposed project.

Among factors which indicate strength are: (1) A serious desire to provide housing for qualified low- and moderate-income families and individuals, (2) deep roots in the neighborhood and community, (3) previous experience in successfully operating housing projects, (4) widespread support for the proposal within the membership of the non

profit organization, (5) profession tise within the nonprofit organi available to it from qualified sources, (6) adequate financial ca meet initial expenses and to provid foreseen contingencies during con and operation of the project, an sence of conflicts of interest.

Among factors which suggest are: (1) No previous housing exper no previous experience or contract neighborhood in which the propose would be located, (3) evidence that er, landowner, consultant, or som party expecting to benefit financi initiated the project and domina sponsorship, (4) lack of assured co of support by the nonprofit gro whole, or the support of individu may not continue their association sponsoring organization, (5) heavy ments in other fields which would financial capacity of the group and its support of the proposed project i of stress, and (6) lack of professional tence to build and operate the proje cessfully.

Eligible nonprofit sponsors will be among organizations such as:

A strong local chapter of a nationa ice organization.

A broadly based community group-such could be recently form there is positive assurance of continuit An established church with a good of social services.

A National or State church organizat An active charitable foundation of standing-such could be a family found with unquestionable motivation, conti and no relationship to profit parties.

A labor union with an active local an support of the membership.

An outstanding local service organiz such as a Junior Chamber of Commerce

Some sponsors are clearly ineligible out considering factors of strength weakness, such as a nonprofit founda controlled by the builder or his family by any other person or persons who w derive a profit or fee from the project.

Special Considerations for Section 22 Rehabilitation Sales Sponsorship. nature of the program; i.e., the rehabil tion and sale of properties to low-inco purchasers, requires a special type of sp sorship.

The responsibility as it pertains to real estate is relatively short term; wher the responsibility for continued social se ices to the individual low-income owners i long-term one. The sponsor must have t capacity or ability to arrange for the conti ued services required to aid the purchase to become responsible home owners.

§ 50.1 Purpose and authority.

(a) The National Environmental Policy Act of 1969 (Pub. L. 91-190, 42 U.S.C. 4321 et seq.) as amended (hereinafter called NEPA) establishes national policy, goals and procedures for protecting and enhancing environmental quality. It directs the Federal Government to use all practicable means, including financial and technical assistance, to implement the national policy. NEPA, as implemented by Executive Order 11514 (March 5, 1970) and amended by Executive Order 11991 (May 24, 1977), and the National Environmental Policy Act Regulations (40 CFR Parts 1500-1508, dated November 29, 1978), requires that all agencies of the Federal Government adopt implementing procedures and prepare detailed environmental statements on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment.

(b) The purpose of these regulations is to establish Departmental environmental policy, to assign responsibilities, and to provide procedural guidance to all headquarters and field offices for HUD environmental clearances under NEPA, and establish a procedure for commenting on Environmental Impact Statements (EIS) initi

ated by other Federal Agencies. These regulations apply to HUD legislative proposals, guidance documents, and individual project approval actions on insurance, loans and grants, subsidies, and certain demonstration projects.

(c) These regulations do not apply to projects carried out by the applicant under Title I of the Housing and Community Development Act of 1974, as amended, which has special environmental regulations for applicant review as set forth in 24 CFR Part 58.

(d) Other applicable authorities. The environmental review process must also consider, where applicable, the criteria, standards, policies and regulations under the following:

(1) Historic properties. The National Historic Preservation Act of 1966 (Pub. L. 89-665); Preservation of Historic and Archeological Data Act of 1974 (Pub. L. 93-291); Executive Order 11593, Protection and Enhancement of the Cultural Environment, 1971; Procedures for Protection of Historic and Cultural Properties, Advisory Council on Historic Preservation, 36 CFR Part 800. HUD Counterpart Regulations (24 CFR Part 59) shall be used when they become effective;

(2) Noise. Noise Abatement and Control (24 CFR Part 51), Subpart B;

(3) Floodplains. Flood Disaster Protection Act of 1973 (Pub. L. 93-234) and Implementing Regulations; National Flood Insurance Act of 1968, as amended (42 U.S.C. 4001 et seq.); Executive Order 11988 Floodplain Management (May 24, 1977); and applicable HUD implementing regulations;

(4) Wetlands. Executive Order 11990 Protection of Wetlands (May 24, 1977) and applicable HUD implementing regulations;

(5) Coastal zones. Coastal Zone Management Act of 1972 as amended (16 U.S.C. 1451 et seq.); Management and Approval Regulations (15 CFR Part 923, dated March 28, 1979); and applicable State legislation or regulations;

(6) Air quality. Clean Air Act (Pub. L. 90-148) and Clean Air Act Amendments of 1970 (Pub. L. 91-604) as amended; and the applicable implementing regulations of the U.S. Environmental Protection Agency (EPA);

(7) Water quality. Federal Water Pollution Control Act (Pub. L. 93-500);

Safe Drinking Water Act of 19 L. 93-523); and applicable U ronmental Protection Agenc menting regulations;

(8) Wildlife. Fish and Wil ordination Act (Pub. L. 85-624

(9) Endangered species. Th gered Species Act of 1973 (Pu 205); and the Endangered Sp Amendments of 1978 (Pub. L and The Procedural Regulati erning Interagency Coopera FR 870);

(10) Solid waste disposal. T Waste Disposal Act as amende Resource Conservation and F Act (Pub. L. 94-580) and ap U.S. Environmental Protection

implementing regulations.

§ 50.2 [Reserved]

§ 50.3 Terminology.

For the purpose of this part, lowing terminology shall app supplement the uniform termi provided in the NEPA Regulati CFR Part 1508).

Areas of jurisdiction by law cial expertise. The areas in whi agency is asked to comment on actions by another agency in a ance with NEPA.

Comments. Formal reactions mitted by one Federal Agency t proposed action or the Draft EIS formal reactions of State and agencies or of public or private g or individuals to the proposed a Each Federal Agency, including I which receives comments on its I EIS shall take them into accour the Final EIS and in the approv disapproval of the proposal.

Cooperating Agency. “Coopera Agency" means any Federal Age other than a Lead Agency which jurisdiction by law or special exper with respect to any environme impact involved in a proposal (0 reasonable alternative) for legislat or other major Federal action sign cantly affecting the quality of human environment.

Cumulative impact. "Cumulati impact" is the impact on the enviro ment which results from the incr mental impact of the action whe added to present, and reasonably for

future actions regardless of gency (Federal or non-Federal) on undertakes such other acCumulative impacts can result dividually minor but collectiveficant actions taking place over 1 of time.

ion points. Those points of I commitment in the decision: process concerning proposed s and undertakings before environmental assessments and : preservation procedures must pleted. Specific decision points HUD's various types of proare set forth in Appendices A-1 -2 of these regulations. HUD ance with these regulations at escribed decision point shall be

ronmental Assessment. A conocumented analysis of environ1 conditions sufficient to deterwhether to prepare an EIS or to re a Finding of No Significant t. For HUD purposes, the Enviental Assessment may include the Normal and Special Clearor either one.

Environmental Assessment shall include brief discussions of the for the proposal; for Special ances, alternatives as required by ›n 102(2)(E) of the National Enviental Policy Act of 1969; and the 'onmental impacts of the prod action.

vironmental impact. An environtal impact is any alteration of enamental conditions or creation of w set of environmental conditions, erse or beneficial, caused or ined by the actions or set of actions er consideration. Environmental act includes the secondary or indi, as well as the primary or direct sequences of a proposed action, h as the effects of the proposed ion on population and growth. Assment of the significance of the enonmental impact generally involves o major elements: A quantitative asure of magnitude and a qualitae measure of importance. Such a dermination is a matter of judgment d is governed by HUD environmenl policies and standards. Environmental Impact Statement upplement. For the purpose of these

procedures, the term "EIS Supplement" shall be used to identify a product and a two-stage process, for updating a Final EIS when additional information is discovered or when actions are being contemplated which would change the basic assumptions of the most recent Final EIS. The EIS Supplement is limited to contemplated actions which are subsequent to HUD's approval of, or commitment to, the project's original proposals.

Finding of No Significant Impact. A determination made in accordance with this part that no EIS is required for the proposed HUD action under consideration. The Finding of No Significant Impact is the result of an Environmental Assessment.

HUD Environmental Policies and Standards. National, Departmental, and program objectives, policies, standards, and procedures. These include: (1) National environmental goals and policies as expressed in NEPA, other statutes and Executive Orders, and Regulations issued by the Council on Environmental Quality; (2) Department-wide standards and policies; and (3) environmental considerations contained in program policy and guidance documents, including environment-related project selection criteria, minimum property standards, and environmental elements of program circulars, handbooks and other issuances.

Human environment. Human environment is defined in § 1508.14 of the NEPA Regulations. It is also clear from section 102(2) of NEPA that the term "Environment" is meant to be interpreted broadly and is to include physical, social, cultural, and aesthetic dimensions. Examples are: Air and water quality, erosion control, preservation of floodplain and wetland values, natural hazards, land use planning, site selection and design, subdivision development, conservation of flora and fauna, urban congestion, overcrowding, displacement and relocation resulting from public or private action or natural disaster, noise pollution, urban blight, code violations and building abandonment, urban sprawl, urban growth policy, social services and amenities, preservation of cultural resources, including properties on, or

eligible for listing on, the National Register of Historic Places, urban design and quality of the built environment, and the impact of the environment on people and their activities. Major amendatory. A change by HUD in the approved Urban Renewal Plan which:

(1) Increases the overall building density (Floor Area Ratio) of any primary land use by 20% or more; or

(2) Changes the area within project boundaries devoted to any one of the primary land uses (i.e., commercial, residential, industrial, or public) by 20% or more; or

(3) Changes in project boundaries or project area by 20% or more; or

(4) Adds or deletes a public facility which serves the Plan or project; or

(5) Involves the acquisition and/or demolition of property which had not been part of the previously approved Urban Renewal Plan.

An Environmental Assessment and/or an EIS carried out pursuant to § 50.1 and Appendix A-1 of this part shall be limited to the factor or factors requiring the environmental review.

Major Federal actions. Those actions taken by a Federal Agency which require EISS in accordance with section 102(2)(C) of NEPA. As HUD processes thousands of applications per year at the project level, not including insurance actions on individual houses, the two level environmental assessment process defined in this part shall be used to determine which action is a major Federal action significantly affecting the quality of the human environment.

Scoping. "Scoping" is a process as defined in § 50.31 (e) and (f) that aims to identify the range of significant actions, alternatives impacts which an EIS should address and which identifies related projects and environmental data as well as cooperating agencies that may aid in preparing the EIS. The process involves appropriate Notices, communications and meetings deemed feasible or necessary for the proposed action.

Significantly. The word "significantly" as used in the phrase "significantly affecting the quality of the human environment" is defined in § 1508.27 of the NEPA Regulations. For the pur

pose of this part it is used to the qualitative effect of an a the human environment.

Threshold. A criterion of siz ronmental impact above whic vironmental Assessment for Clearance or an EIS is Thresholds for EISS represen of action that automatically i ed as a major Federal action cantly affecting the quality human environment. The thr designed to screen out the n portant HUD actions for speci tion. HUD thresholds are set Appendix A-1 of this part.

Tiering. "Tiering" refers to erage of general matters in EIS with subsequent narrowe ments of Environmental Asses incorporating only by referer analysis of the broader stateme subsequent narrower statemen mally will concentrate on issues ic to the project being proposed.

§ 50.4 [Reserved]

§ 50.5 General policy.

(a) It is the policy of the D ment to reject proposals which unacceptable environmental im based on HUD environmental p and standards, which cannot be ed, and to encourage modificati project proposals or plans in ord enhance environmental quality minimize environmental harm. each stage of the environmental ance HUD officials shall work the applicant to seek means for a ing adverse environmental im maximizing environmental qua and considering superior alternativ

(b) When Environmental Ass ments or EISS reveal conditions safeguards which should be im mented once a project is approved order to protect and enhance envir mental quality or minimize adverse vironmental impacts, such conditio or safeguards shall be set forth as quirements in the contract, grant, other documents which delineate t obligations of the recipient. The co tractor's performance in meeting sud conditions shall be monitored an evaluated as part of HUD's project