Capital Fund Guidebook - United States …

1 Department of Housing and Urban Development Office of Public and Indian HousingCapital Fund Guidebook4/1/16 ii | 4/1 Department of Housing and Urban Development Office of Public and Indian HousingCapital Fund Guidebook 4/1/16 | iiiTable of ContentsChapter 1 Background and Introduction .. General Overview.. Types of Capital Funds Grants .. History of the Public Housing Program ..3 Exhibit Example Opinion Regarding Declaration of Trust ..6 Chapter 2 Eligible Activities and Cost Limits .. Eligible Activities Overview .. Development .. Financing.. Modernization and Physical Work .. Soft Costs.. Safety and Security.. Other Costs.. Ineligible Activities.. Cost and Other Limitations..21 Chapter 3 Planning, Annual Submission, and Distribution of Funds .. Overview..26 Capital Fund Program (CFP) Annual Formula Grant Process.

2 Planning Physical Needs Assessment (PNA).. Planning Energy Audit.. Planning Public Hearing.. Planning Pre-Submission Details.. Capital Fund Submission.. Amending the 5-Year Action Plan.. Relationship Between Capital Fund Submission and PHA Plan.. Approval of 5-Year Action Plan.. Spreading Capital Fund Grants into LOCCS..36 iv | 4/1 Initial Disbursement of Capital Funds.. Moving to Work (MTW) PHAs..37 Exhibit Capital Fund Submission: PHAs other than MTW PHAs ..40 Exhibit Capital Fund Submission: MTW PHAs ..41 Chapter 4 Capital Fund Formula Calculation .. PIC/IMS Certification .. Unit Count for Formula Calculation .. Computation of Formula Shares .. Faircloth Limit .. High Performer Bonus ..44 Chapter 5 Replacement Housing Factor Grants and Demolition and Disposition Transitional Funding.

3 Replacement Housing Factor Grants (RHF) .. RHF Planning Requirements .. Obligation End Date and Expenditure End Date Requirements for RHF Grants . Rejection of RHF Grants .. DDTF .. Transition from RHF to DDTF .. Determining Demolition or Disposition Date ..51 Exhibit Detailed Description of RHF to DDTF Transition ..52 Exhibit Model RHF Plan Submission ..53 Chapter 6 General Program Requirements and Implementation .. Environmental Reviews [Reserved] .. Real Property Acquisition and Relocation .. Wage Rates .. Procurement and Contract Requirements .. Force Account Labor..60 4/1/16 | Contract Administration and Acceptance of Work .. Nondiscrimination and Equal Opportunity Requirements .. Compliance with Physical Standards .. Affordability Requirements.

4 69 Exhibit Mandatory Contract Clauses ..71 Exhibit Mandatory Contract Clauses all purchases ..72 Exhibit Periodic Part 58 Broad Scope Review of Categorically Excluded CFP Activities ..75 Exhibit Environmental Review Process ..77 Chapter 7 Obligation, Budget Revision, Expenditure, and Closeout .. What is an Obligation? .. Obligation Requirements of Capital Fund Grants.. OED Extension .. PHA Reporting .. HUD Monitoring .. Consequences of Noncompliance with the Obligation End Date Penalties and Sanctions .. Types of Budget Revisions .. Budget Revision Procedures .. Expenditure of Capital Fund Grants .. Fiscal Closeout ..92 Exhibit Obligation End Dates and Expenditure End Date ..95 Chapter 8 Emergency, Non-Presidentially Declared Natural Disaster, and Safety and Security Grants.

5 Overview.. Emergency and Non-Presidentially Declared Natural Disaster Grants.. Eligible and Ineligible Uses: Emergency and Non-Presidentially Declared Natural Disaster Grants .. Preliminary Funding: Non-Presidentially Declared Natural Disasters Only ..100 vi | 4/1 Emergency and Non-Presidentially Declared Natural Disaster Grant Applications .. Managing the Emergency and Non-Presidentially Declared Natural Disaster Grant .. Safety and Security Grants .. Eligible and Ineligible Uses: Safety and Security Grants .. Safety and Security Grant Applications .. Obligation and Expenditure of Safety and Security Grants .. Grant Closeout for Emergency and Non-Presidentially Declared Natural Disaster Grants & Safety and Security Grants ..107 Chapter 9 Public Housing Development .. Methods of Public Housing Development.

6 Development Process Overview.. Sources of Funding For General Program Requirements.. Mixed-Finance Development .. Site Acquisition Proposal .. Development Proposal .. Review of a Development Proposal .. Funding and Disbursements ..127 Exhibit Site Acquisition Checklist ..129 Exhibit Development Proposal Checklist (Non-Mixed-Finance)..131 Exhibit Field Office Responsibilities for Mixed-Finance Projects ..135 Chapter 10 DEMONSTRATION PROGRAMS: RAD AND MTW .. Rental Assistance Demonstration (RAD) .. Procedure for RAD Conversion .. Moving to Work (MTW) ..140 Chapter 11 Security Interests and Financing Activities .. Capital Fund Financing Program (CFFP)(24 CFR Part 905, Subpart E) ..143 4/1/16 | Operating Fund Financing Program (OFFP) .. Public Housing Mortgage Program (PHMP or Section 30).

7 Capital Fund Education and Training Community Facilities (CFCF) Program .. Capital Financing Not Secured By Public Housing Property ..156 Exhibit HUD Review Checklist for Section 30 Proposals Related to EPC .. Transactions ..159 Chapter 12 Compliance, Penalties and Sanctions ..163 Appendix 1. Definitions: The following definitions apply to this Guidebook : ..166 Appendix 2. Eligible Activities Chart ..176 Appendix 3. Guide for Registration in SAM ..189 1 | 4/1/16 Chapter 1 Background and General Overview. The Capital Fund Program (CFP) provides financial assistance in the form of grants to public housing agencies (PHAs) to carry out Capital and management activities including those listed in Section 9(d)(1) of the United States Housing Act of 1937 (1937 Act). Capital Fund (CF) grants can also be entered into with resident management corporations (RMCs) (see 24 CFR (h)).

8 The Capital Fund Program financial assistance may also be provided to mixed-finance projects that contain public housing units provided Amendments are entered into under the Mixed Finance Annual Contributions Contract (ACC) Amendment and Capital Fund ACC Amendment. Eligible Capital Fund activities are further described in this Guidebook . Regulations on Capital Funds are at 24 Code of Federal Regulation (CFR) part provides Capital Funds through annual appropriations. In order to receive a CFP grant, a PHA must meet three administrative prerequisites which are to:1. Validate project-level information in HUD s data systems,2. Have an approved 5-Year Action Plan and 3. Enter into a Capital Fund Annual Contributions Contract Amendment with HUD. The Annual Contribution Contract (ACC) has broader compliance requirements, but this Guidebook concerns only the CF ACC addition to these administrative requirements, there are also legal requirements.

9 PHAs must be able to provide written certification and counsel s opinion that property receiving CFP assistance is under a current ( , have not expired and will not expire during the use term associated with the use of the CF grant) and effective ( , no liens or encumbrances prior to the Declaration of Trust (DOT) or Declaration of Restrictive Covenants (DORC)), ACC and is in compliance with HUD requirements. Every public housing project must be under a DOT or DORC as required. See all DOT and DORC requirements at 24 CFR (b), , , , , (c), , , Exhibit presents a sample was created by an amendment to the 1937 Act by the Quality Housing and Work Responsibility Act (QHWRA) in 1998 (adding Section 9(d) to the 1937 Act merging previous modernization and development programs). The Housing and Economic Recovery Act (HERA) of 2008 affected PHA s planning process for not only Capital Funds, but also Operating Funds and Section recent regulatory consolidation of 24 CFR Part 905 incorporated the remaining applicable sections of Parts 941 and 968 of the CFR for HUD along with existing provisions of Part 905 which included the CF formula, eligible CF activities, CF obligation and expenditure requirements and Capital Fund Financing Program (CFFP).

10 4/1/16 | 2 Guidebook users will recognize that the new regulations introduced many reforms. Structurally, the regulations combine the Capital Fund requirements for modernization and development into a single regulation. These regulations also update and streamline many of the Capital Fund and development requirements, incorporate recent energy requirements, and direct more funding towards modernization by way of the new Demolition and Disposition Transitional Funding (DDTF). All PHAs that have public housing units under an ACC entered into HUD s data systems are eligible to receive CFP grants. HUD approvals required by the CFP must be in writing from an authorized PHA official. Types of Capital Funds GrantsTypeDescriptionFormulaThis type of grant is an allocation of Capital Funds to PHAs in accordance with the Capital Fund formula, as further described in Chapter 4.