Section 50. Program requirements

A. Lower income benefit. Each grantee must use at least 70% of its rental rehabilitation grant to benefit lower income families in accordance with 24 CFR 511.10(a)(2). This benefit standard must be maintained by each grantee in its program at all times unless waived by the authority. A waiver will only be approved when such a waiver will not prevent the authority from achieving an overall 70% benefit standard in the Virginia Rental Rehabilitation Program.

B. Family benefit. Each grantee must use at least 70% of its rental rehabilitation grant to rehabilitate units containing two or more bedrooms in accordance with 24 CFR 511.10(b). This standard must be maintained by each grantee in its program at all times unless waived by the authority. A waiver will only be approved when such a waiver will not prevent the authority from achieving an overall 70% standard in the Virginia Rental Rehabilitation Program, except in cases where the authority has applied for and received from HUD a special waiver from the 70% standard.

C. Funding priorities. Each grantee must include the following priorities in its method for selecting projects to receive rental rehabilitation funds.

1. Units occupied by very low income families. Each grantee must give funding priority to projects which contain substandard units which, prior to rehabilitation, are occupied by very low income families. This priority may include unoccupied units if the units could be expected to be occupied by very low income families but for the units' substandard condition.

2. Efficient use of grant funds. Each grantee must give funding priority to projects which require a minimum percentage of rental rehabilitation grant subsidy.

Proposed projects meeting these priorities, which are financially feasible and which meet all other program requirements, must be selected for funding prior to projects which do not meet the priorities. In cases where these priorities conflict, the first priority must be given precedence by grantees.

D. Adequate maintenance and operation of rehabilitated units. Each grantee must adopt one or more of the following measures to ensure adequate maintenance and operation of projects receiving rental rehabilitation funds:

1. Establishment of minimum equity requirements for investors;

2. Assignment of priority to projects in which private investors and lenders are taking a long-term financial risk in project success;

3. Restriction of funding to investors with a satisfactory record of maintaining and operating rental housing (the applicant must have standards and procedures for assessing an investor's record); or

4. Establishment of other reasonable standards and/or procedures for ensuring adequate maintenance and operation of rehabilitated units.

E. Project funding limits. Each grantee must comply with the maximum project funding limits set by 24 CFR 511.11(e).

F. Minimum level of rehabilitation. A grantee may establish a minimum level of rehabilitation to be required for participation in its rental rehabilitation program in excess of that established in 24 CFR 511.10(d).

G. Eligible rehabilitation costs. A grantee may use a rental rehabilitation grant only to cover costs permitted under 24 CFR 511.10(f). No more than 20% of the rental rehabilitation funds assigned to a project may be used to make relocation payments to tenants who are displaced by rehabilitation activity.

H. Displacement and tenant assistance. A grantee must provide any lower income family displaced from a project assisted by a rental rehabilitation grant with financial and advisory assistance as required by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 USC 4601. A family will be determined to be displaced in accordance with the definitions contained in 24 CFR 511.14. No tenant will be considered displaced if the tenant has been offered a decent, safe and sanitary dwelling unit in the project at an affordable rent.

I. Affirmative marketing. 00N2 Each grantee must ensure the affirmative marketing of units in rehabilitated projects with five or more residential units for a period of 10 years beginning on the date on which all the units in a project are completed, in accordance with 24 CFR 511.13(b). "Affirmative marketing" is defined as adherence to federal, state and local fair housing laws, and positive efforts to ensure that persons of similar income levels in the same housing market area are made aware of a housing project and its benefits regardless of race, creed, religion, national origin, sex or handicap. All fair housing laws must be scrupulously observed by those who participate in the Virginia rental rehabilitation program. Failure to comply with affirmative marketing requirements will subject the grantee and/or property owner to sanctions.

In order to meet its affirmative marketing responsibilities, each grantee must comply with, or ensure property owner compliance with, the following requirements and procedures:

1. General requirement. In conjunction with the marketing of all rehabilitated units, except for units occupied by families receiving Section 8 certificates or vouchers, the following five specific requirements must be met:

a. All advertising, brochures, leaflets and other printed material must include the Equal Housing Opportunity logo and the slogan or statement, and all advertising depicting persons must depict persons of majority and minority groups, including both sexes;

b. The Equal Housing Opportunity slogan, "Equal Housing Opportunity," utilized in the newspaper classified advertisements should be at least eight point boldface type, and display advertising must include the Equal Housing logo and slogan;

c. If other logotypes are used in the advertisement, then the Equal Opportunity logotype should be of a size equal to the largest of other logotypes;

d. All signs, off-site and on-site, must prominently display the logo and slogan, or the statement in a size that would not be smaller than the largest letters used on the sign; and

e. The logo and slogan, or the statement and the HUD Equal Housing Opportunity Poster (HUD Form 928.1 dated 7-75), must be prominently displayed in the on-site office or wherever applications are being taken.

2. Affirmative marketing plan. Any local government making application to the authority for a rental rehabilitation grant must submit as part of its application, on a form supplied by the authority, a local affirmative marketing plan covering the leasing of all rehabilitated units, except for those occupied by families receiving Section 8 certificates or vouchers. Such plan must include the following information for each neighborhood in which the local government proposes to operate a rental rehabilitation program:

a. An identification of the predominant racial/ethnic composition of the neighborhood;

b. An identification of the group(s) in the housing market area that are least likely to apply for housing in the neighborhood because of its location and other factors without special outreach efforts;

c. An identification of the types of advertising and outreach procedures (e.g., use of community contacts) which participating property owners may use to meet their affirmative marketing responsibilities;

d. A description of the information to be provided to participating property owners, their staff or managing agents to enable them to carry out their affirmative marketing and fair housing responsibilities; and

e. The anticipated results of the local affirmative marketing plan (i.e., the percent of vacancies expected to be filled by the identified target group(s)).

3. Affirmative marketing agreements. Any property owner applying for rental rehabilitation funds from a grantee must submit to such grantee a description of its proposed affirmative marketing procedures which must conform with the grantee's affirmative marketing plan. This description must be in a form prescribed by the grantee, and must include the form(s) of advertising and community contacts to be used by the owner or the owner's managing agent in publicizing all vacancies, except for units rented to families receiving Section 8 certificates or vouchers, in order to attract the group(s) identified by the grantee as being least likely to apply.

Upon approval of proposed efforts, owners must enter into a compliance agreement with the grantee which must include:

a. An agreement to comply with federal, state and local fair housing laws;

b. An agreement to carry out specified affirmative marketing procedures;

c. An agreement to maintain records on the racial/ethnic and gender characteristics of tenants occupying units before and after rehabilitation, records on tenants moving from and (initially after rehabilitation) into rehabilitated units, records on applications for tenancy within 90 days following completion of rehabilitation, data on the race and ethnicity of displaced households and, if available, the address of the housing units to which each displaced household relocated, and information documenting affirmative marketing efforts in a form specified by the grantee;

d. An agreement to report such information to the grantee on an annual basis; and

e. Sanctions to be imposed by the grantee in the event of noncompliance by the property owner.

Such agreement must be effective for a period of seven years beginning on the date on which the rehabilitation of the units in the projects is completed.

4. Grantee requirements. Each grantee shall be responsible for:

a. Informing property owners' staff and owners' managing agents of their responsibility to comply with federal, state and local fair housing laws;

b. Informing property owners of the affirmative marketing requirements of the Virginia Rental Rehabilitation Program, as well as the provisions of the grantee's affirmative marketing plan;

c. Reviewing and approving affirmative marketing procedures proposed by property owners;

d. Entering into legally binding affirmative marketing agreements with property owners;

e. Monitoring compliance by property owners with affirmative marketing agreements and imposing prescribed sanctions as necessary; and

f. Collecting, and reporting to the authority on an annual basis, information regarding the racial/ethnic and gender characteristics of tenants occupying units before and after rehabilitation, information on tenants moving from and (initially after rehabilitation) into rehabilitated units, records on applications for tenancy within 90 days following completion of rehabilitation, data on the race and ethnicity of displaced households and, if available, the address of the housing units to which each displaced household relocated, and information documenting property owner compliance with affirmative marketing requirements (e.g., records of all advertisements, notices and marketing information).

J. Use of minority and women's business enterprises. Each grantee must encourage the use of minority and women's business enterprises in connection with activities funded with rental rehabilitation grant monies in accordance with 24 CFR 511.13. Such efforts must include the following activities.

1. Targets. Upon entering into a grant agreement with the authority, each grantee must establish local dollar or other measurable targets based on factors that the grantee regards as appropriate and related to the purpose of its rental rehabilitation program. A copy of such targets must be forwarded to the authority prior to the drawing down of any grant funds.

2. List of businesses. Upon entering into a grant agreement with the authority, each grantee must prepare a list of minority and women's business enterprises which are potential suppliers or rehabilitation services and materials to property owners receiving grant assistance. A grantee should make use of the services of the Virginia Office of Minority Business Enterprise and appropriate federal agencies, as needed, in preparing such a list. Each grantee must forward a copy of the list to the authority prior to drawing down any grant funds.

3. Bid solicitation. Each grantee must make reasonable efforts to include qualified minority and women's business enterprises on bid solicitation lists and to ensure that such businesses are solicited whenever they are potential sources of services and materials.

4. Negotiated contracts. Whenever competitive bidding is not required of a property owner, the grantee must provide the property owner with a list of minority and women's business enterprises which are potential sources of services or materials.

5. Subcontracts. Each grantee must ensure that property owners require that all subcontractors be provided with a list of minority and women's businesses which are potential suppliers of materials or services.

6. Records. Each grantee must keep records of the number and dollar amount of participation by minority and women's business enterprises, including subcontractors and owners of rental properties, in connection with activities funded with rental rehabilitation grant monies.

K. Use of local area and minority contractors, suppliers and employees. Each grantee must encourage the use of local area and minority contractors, suppliers and employees in connection with activities funded with rental rehabilitation grant monies in accordance with 24 CFR 511.13. Such activities must include the development of a plan that includes the following elements:

1. Area definition. The plan must include a definition of the local area in which residents and businesses are the intended beneficiaries of rental rehabilitation activities (usually the applicant locality or, in the case of a town or small city, the locality plus the adjacent county).

2. Procedures. The plan must include procedures to be followed to encourage the use of local area and minority contractors, suppliers and employees in connection with activities funded with rental rehabilitation grant monies.

A copy of this plan (such federally required plans are often referred to as "Section 3 Plans") must be forwarded to the authority prior to the drawing down of any grant funds.

L. Architectural barriers to the handicapped. Each grantee must ensure that, in the case of projects involving the rehabilitation of 25 or more units where the cost of rehabilitation is greater than or equal to 75% of the value of the project after rehabilitation, the owner improves any unit occupied by a handicapped person prior to rehabilitation in a manner which removes architectural barriers in accordance with the requirements of 24 CFR 511.16(c).

M. Age discrimination in employment. Each grantee must ensure that property owners do not discriminate against employees based on age, nor that property owners use contractors who so discriminate, in accordance with 24 CFR 511.13(a)(2).

N. Labor standards. Each grantee must ensure that all laborers and mechanics, except laborers and mechanics employed by a local government acting as the principal contractor on the project, employed in the rehabilitation of a project receiving rental rehabilitation grant assistance that contains 12 or more units, are paid at the prevailing wage rates set under the Davis Bacon Act, 40 USC 276a, and that contracts involving their employment are subject to the provisions of the Contract Work Hours and Safety Standards Act, 40 USC 327, in accordance with the requirements of 24 CFR 511.16(a).

O. Environmental and historic reviews. Each grantee must comply with the environmental and historic review requirements contained in 24 CFR Part 58. Grantees must submit requests for release of funds to the authority for review. The authority will forward its recommendation, together with the request, the environmental certification and the objections, to HUD. All approvals for release of funds will be made by HUD.

P. Conflicts of interest. Each grantee must comply with the conflict of interest requirements contained in 24 CFR 511.12.

Q. Lead-based paint. Each grantee must ensure that any property owner receiving rental rehabilitation grant assistance takes steps to remove the hazards of lead-based paint in accordance with the requirements of 24 CFR Part 35.

R. Use of debarred, suspended or ineligible contractors. Each grantee must comply with the requirements of 24 CFR Part 24 in the employment, engagement of services, awarding of contracts, or funding of any contractors or subcontractors with rental rehabilitation grant funds.

S. Legal agreement with property owner. Each grantee must execute an agreement with the owner of a property receiving rental rehabilitation assistance, including a cooperative or mutual housing association, under which the owner:

1. Agrees, for a period of at least 10 years beginning on the date on which the rehabilitation of the units in the project is completed, not to:

a. Discriminate against prospective tenants on the basis of their receipt of, or eligibility for, housing assistance under any federal, state or local housing assistance program;

b. Discriminate against prospective tenants on the basis that the tenants have a minor child or children who will be residing with them, except for housing projects for elderly persons; and

c. Convert the units to condominium ownership or any form of ineligible cooperative ownership.

2. Agrees, for a period of 10 years beginning on the date on which the rehabilitation of the units in the project is completed, to:

a. Comply with federal, state or local fair housing laws;

b. Carry out specified affirmative marketing procedures; and

c. Maintain records on the racial/ethnic and gender characteristics of tenants occupying units before and after rehabilitation, records on tenants moving from and (initially after rehabilitation) into rehabilitated units, records on applications for tenancy within 90 days following completion of rehabilitation, data on the race and ethnicity of displaced households and, if available, the address of the housing units to which each displaced household relocated, and information documenting affirmative marketing efforts in a form specified by the grantee, and to report such information to the grantee on an annual basis (see 13VAC10-90-50 I 3).

Such agreement must contain sanctions to be imposed by the grantee in the event of noncompliance by the property owner. Guidelines are contained in 24 CFR 511.11(d)(1)(ii) and (iii).

Historical Notes

Derived from VR400-02-0008 § 5, eff. December 18, 1984; amended, Volume 04, Issue 21, eff. June 21, 1988; Volume 05, Issue 21, eff. July 1, 1989; Volume 07, Issue 25, eff. August 20, 1991.

Statutory Authority

§ 36-55.30:3 of the Code of Virginia.