§ 720.74

Federally-assisted housing.

Section 8 of the United States Housing Act of 1937, as amended (42 U.S.C. 1437 (f), authorizes the making of housing assistance payments on behalf of lower income families renting housing pursuant to the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.), including such families renting such housing in new community Projects. The policies and procedures applicable to this program are contained in 24 CFR, Ch. II.

Subpart F-Fee and Charge Schedule § 720.80

Applicability of this Subpart.

This Subpart specifies the fees and charges which have been established for payment to HUD in connection with applications for and approval of guarantees and other assistance.

(a) Application charge. A non-refundable application charge of $10,000 shall accompany the initial submission of all or part of an application by a Public or Private Developer for guarantee assistance or a Determination of Eligibility ($ 720.44; § 720.49).

(b) Commitment charge. A commitment charge equal to 0.5 percent of the principal amount of the guarantee commitment by the Secretary up to $30 million, and in addition, 0.1 percent of the principal amount above $30 million shall be paid by the Developer upon acceptance of an offer of commitment (§ 720.46(c)) or at the time a guarantee is made ($720.48), whichever occurs first. Should the Project become impractical, infeasible, or impossible to undertake prior to issuance of a guarantee, the Secretary may refund such portion of the commitment charge as he deems equitable.

(c) Reopening charge. A timely reopening request (§ 720.46(c)) shall be accompanied by a charge of 0.05 percent of the expired offer of commitment for guarantee assistance. An offer of commitment which has expired because of the failure to pay the commitment charge may be reopened and accepted only upon payment by the Developer of the commitment charge and the reopening charge.

(d) Guarantee fee. A guarantee fee equal to 3 percent of the principal amount of guaranteed debt obligations shall be paid by the Developer at the time of the issuance of such obligations, subject to waiver in whole or in part at the discretion of the Secretary.

(e) Annual fee. An annual fee equal to 0.5 percent of the average principal amount of guaranteed debt obligations and unused guarantee commitment, outstanding during the preceding year, shall be paid on the first anniversary date of the guarantee, until the seventh anniversary date. Thereafter an annual fee of 1 percent of the average principal amount of guaranteed debt obligations and unused guarantee commitment outstanding during the preceding year shall be paid on each subsequent anniversary date of the initial guarantee until the total debt obligation is paid in full. Annual fees may, however, be waived in whole or in part at the discretion of the Secretary.

(f) Transfer charge. Upon application for approval of a substitution of Developers (§ 720.21 (d) ), a transfer charge of 0.05 percent of the unused portion of the commitment for guarantee assistance shall be paid by either the initial Developer or the substitute Developer.

[Appendices I, II, III, VII, IX, XIV, XV, XVII, XVIII, XIX, and XX, which relate to internal HUD processing procedures, are not included herein, but do appear in the HUD New Construction Handbook]

Appendix IV: New Construction-Invitation for Proposals.

Appendix V: Management Capability and
Proposed Management Program.
Appendix VI: LHA Review Checklist for Sec-
tion 23 New Construction Proposals.
Appendix VIII: Notification of Developer
Selection.

Appendix X: Annual Contributions Contract.
Appendix XI: Agreement to Enter Into Hous-
ing Assistance Payments Contract.
Appendix XII: Housing Assistance Payments
Contracts.

Appendix XIII: Determination of Family
Eligibility and Lease Approval.
Appendix XVI: Security Deposit Agreement.

AUTHORITY: Sec. 7(d), Department of Housing and Urban Development Act (42 U.S.C. 3535 (d)); sec. 10(b) of the U.S. Hous

ing Act of 1937 (42 U.S.C. 1410(b)); sec. 23 of the U.S. Housing Act of 1937 (42 U.S.C. 1421(b)).

SOURCE: 39 FR 14303 Apr. 22 1974, unless otherwise noted. Redesignated at 40 FR 15580, Apr. 7, 1975.

Subpart A Applicability, Scope, and Basic Policies

§ 800.101 Applicability and scope.

(a) The policies and procedures contained herein are applicable to the making of housing assistance payments on behalf of eligible low-income families leasing newly constructed housing developed under the new construction method pursuant to the provisions of section 23 of the U.S. Housing Act of 1937.

(b) For the purposes of this part, "new construction" shall mean newly constructed housing for which, prior to the start of construction: (1) An Annual Contributions Contract (ACC) is executed between the Department of Housing and Urban Development (HUD) and the Local Housing Authority (LHA); and (2) an Agreement to Enter Into Housing Assistance Payments Contract ("Agreement") is executed between the LHA and the owner, except that developers of housing already under construction are eligible for participation in this program, provided that all requirements of the program can be met. Unless specific approval is obtained from HUD, the policies and procedures contained herein shall apply to all new construction projects for which ACCS have not yet been executed. With respect to projects under executed ACCs, these standards may be applied to a project if the LHA and owner/developer, if designated, agree to do so.

(c) This part (1) covers policies and procedures relating to the roles and responsibilities of HUD, the LHA and the owner/developer; the application process; the project development format; the determination of the amount of annual contributions; and invitation, evaluation, and selection of developers' proposals and (2) contains prescribed contracts, agreements and other documents.

§ 800.102 Definitions.

(a) Fair market rent and gross rent. Fair market rent is the gross rent (including utilities, ranges and refrig

erators, parking, and all maintenance and management services) for dwelling units of varying size (number of bedrooms) and structure type, which, as determined at least annually by HUD, would be required to be paid in each housing market area in order to obtain privately developed and owned, newly constructed rental housing of modest (nonluxury) nature meeting the objectives of the HUD Minimum Property Standards. Gross rent includes all utilities (except telephone) whether or not paid directly to the utility company by the family. In order to allow for the period of construction, the fair market rent, as determined by HUD, will include HUD's estimate of anticipated rent increases during a period of two years from the date of the fair market rent determination.

(b) Gross family contribution. The portion of the rent to owner payable by a family plus the utility allowance established by the LHA for any utilities (except telephone) payable directly by the family. In no event shall the gross family contribution exceed one-fourth of the family's adjusted income as defined by HUD.

(c) Utility allowance. An amount, determined by the LHA and approved by HUD as an allowance for the cost of tenant-purchased utilities, which is deducted from the fair market rent for purposes of determining the maximum rent to owner and is included in the gross family contribution.

(d) Annual contributions contract (ACC). A written agreement between HUD and an LHA to provide annual contributions to the LHA for participation in the Housing Assistance Payments Program. (See Appendix X to this part.)

(e) Agreement to enter into housing assistance payments contract ("Agreement"). A written agreement between an LHA and an owner/developer that upon satisfactory completion of the housing by the owner/developer pursuant to agreed upon plans, specifications and other requirements as set forth in the Agreement, the LHA will enter into a Housing Assistance Payments Contract with the owner. (See Appendix XI to this part.)

(f) Housing assistance payments contract ("Contract"). A HUD-approved

written Contract between an LHA and an owner for the purpose of providing housing assistance payments on behalf of eligible families. (See Appendix XII to this part.)

(g) Eligible families. Those families determined by the LHA to meet the requirements for admission into housing assisted hereunder. Families shall not be eligible for housing assistance payments when the LHA determines that 25 percent of adjusted family income (as defined by HUD) equals or exceeds the gross rent for the unit leased. The ineligibility of such families for housing assistance payments shall not affect the family's other rights under its lease.

(h) Certificate of family participation. The certificate issued by an LHA declaring a family to be eligible for participation in this program and stating the terms and conditions of such eligibility. (See Appendix XIII to this part.)

(i) Lease. An LHA-approved written agreement between a private owner and an eligible family for the leasing of a decent, safe, and sanitary dwelling unit. The lease shall contain the required provisions specified in the Contract.

§ 800.102 Basic policies.

(a) Limitation on use of newly constructed housing. New Construction projects shall be permitted: (1) In those localities where HUD determines that there is not and there is not likely soon to be an adequate supply of existing housing which, with the aid of housing assistance payments provided under this program, can meet the housing needs of low-income families, or (2) in certain areas in which the proposed housing is required and such projects are specifically approved by HUD in accordance with priorities established from time to time by the Secretary.

(b) Development process- -(1) Projects involving 20 percent or less assistance. LHAS may negotiate directly with developers, in accordance with the provisions of § 800.204 of this part, for housing projects in which 20 percent or less of the units will be assisted in a single structure or complex of five or more units.

(2) Projects involving more than 20 percent assistance. For projects which will provide housing assistance under this

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