legal issues eligible applicant

Legal Issues Eligible Applicant


Who can be a sponsor of a Section 202 and 811 project ?

5 PRONG TEST

Who can be a sponsor of a Section 202 and 811 project ?

5 PRONG TEST



1) 202: must have 501(c)(3) or 501(c)(4), 811: must be 501(c)(3)

2) No part of the net earnings can inure to the benefit of any member, founder, contributor or individual

3) Must not be controlled by, or under the direction of, persons or firms seeking to derive profit or gain there-from

4) Must have a governing board

5) Must be approved by HUD as to administrative and financial responsibility

1) 202: must have 501(c)(3) or 501(c)(4), 811: must be 501(c)(3)

2) No part of the net earnings can inure to the benefit of any member, founder, contributor or individual

3) Must not be controlled by, or under the direction of, persons or firms seeking to derive profit or gain there-from

4) Must have a governing board

5) Must be approved by HUD as to administrative and financial responsibility

Legal Issues Legal Issues

Sponsor

• Cannot be a public body or instrumentality of a public body. If associated with public body, 202 applicants need attorney’s opinion.

• 202 Sponsor can be a consumer cooperative.

• Cannot be an Indian Housing Authority, tribe, instrumentality or agency of a tribe or IHA.

Sponsor

• Cannot be a public body or instrumentality of a public body. If associated with public body, 202 applicants need attorney’s opinion.

• 202 Sponsor can be a consumer cooperative.

• Cannot be an Indian Housing Authority, tribe, instrumentality or agency of a tribe or IHA.

Legal IssuesAttorney’s OpinionLegal IssuesAttorney’s Opinion

Must state that under state or tribal law entity is not an instrumentality, and

Meets the definition of “private nonprofit organization” under Part 891, and

Has Articles of Incoproration which provide no more than minority control by public body or tribe, and

Is not receiving a majority of its operational funding from public body or tribe

Must state that under state or tribal law entity is not an instrumentality, and

Meets the definition of “private nonprofit organization” under Part 891, and

Has Articles of Incoproration which provide no more than minority control by public body or tribe, and

Is not receiving a majority of its operational funding from public body or tribe

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Legal IssuesLegal Issues

Exhibit 2: What is Legal Review looking for?

Whether sponsor has the legal authority to sponsor the project, to assist the owner and to apply for the capital advance.

Whether there are inconsistencies between sponsor’s legal documents and HUD’s statutory, regulatory and NOFA requirements.

Exhibit 2: What is Legal Review looking for?

Whether sponsor has the legal authority to sponsor the project, to assist the owner and to apply for the capital advance.

Whether there are inconsistencies between sponsor’s legal documents and HUD’s statutory, regulatory and NOFA requirements.


Site Control

202 vs. 811

202: Insufficient evidence of site control. Rejection.

811: Insufficient evidence of site control. Category B.

Site Control

202 vs. 811

202: Insufficient evidence of site control. Rejection.

811: Insufficient evidence of site control. Category B.

Types of Site Control Types of Site Control

1. Deed or long-term leasehold Title or leasehold interest must commence prior

to the application deadline date

2. Contract of sale Cannot require closing earlier than 12 month

following application deadline date

1. Deed or long-term leasehold Title or leasehold interest must commence prior

to the application deadline date

2. Contract of sale Cannot require closing earlier than 12 month

following application deadline date


3. Option to purchase or for a long-term leasehold

Must state a firm price

Be in effect for a minimum of six months and must be renewable for a minimum of an additional six-month term

Refer to NOFA for additional details

3. Option to purchase or for a long-term leasehold

Must state a firm price

Be in effect for a minimum of six months and must be renewable for a minimum of an additional six-month term

Refer to NOFA for additional details


4. Site covered by a HUD mortgage. Must show requested release of site.

5. Sites acquired from a public body have special requirements. See NOFA.

4. Site covered by a HUD mortgage. Must show requested release of site.

5. Sites acquired from a public body have special requirements. See NOFA.


Title to the site

Must provide current title report or policy, provide all referenced docs.

Legal opinions acceptable. See NOFA for specific requirements

Mortgage liens that will be satisfied by initial closing are not considered limitations. See NOFA for specific requirements

Title to the site

Must provide current title report or policy, provide all referenced docs.

Legal opinions acceptable. See NOFA for specific requirements

Mortgage liens that will be satisfied by initial closing are not considered limitations. See NOFA for specific requirements

Prohibited RelationshipsProhibited Relationships

Conflict of Interest:

Officers/directors of Sponsor and Owner cannot have any financial interest in any contract with the Owner.

Conflict of Interest:

Officers/directors of Sponsor and Owner cannot have any financial interest in any contract with the Owner.

Permissible RelationshipsPermissible Relationships

• Identity of interest:In the simplest terms, describes when

one person can’t wear two hats.

“An identity of interest between the Sponsor or Owner and any development team member or between development team members is prohibited until two years after final closing.” Some exceptions.

• Identity of interest:In the simplest terms, describes when

one person can’t wear two hats.

“An identity of interest between the Sponsor or Owner and any development team member or between development team members is prohibited until two years after final closing.” Some exceptions.

FY2010 Section 202Evidence of Need

FY2010 Section 202Evidence of Need

Sponsor’s evidence of need should include:

• Estimate of demand (see EMAD handout)• Market conditions in existing supply (Pub.

Hsg., RHS, LIHTC, Sec. 8, & 202)• Assisted housing under construction

Sponsor’s evidence of need should include:

• Estimate of demand (see EMAD handout)• Market conditions in existing supply (Pub.

Hsg., RHS, LIHTC, Sec. 8, & 202)• Assisted housing under construction

FY2010 Section 202Evidence of Possible Lack of

Demand

FY2010 Section 202Evidence of Possible Lack of

Demand

• Projected long-term decline in age-cohorts for target population

• Slow absorption in newer units• Persistently high vacancies• Widespread use of Age Waivers• Evidence of new projects filling at the

expense of existing ones

• Projected long-term decline in age-cohorts for target population

• Slow absorption in newer units• Persistently high vacancies• Widespread use of Age Waivers• Evidence of new projects filling at the

expense of existing ones

FY2010 Section 202FY2010 Section 202

Special Tabulations of Households for 1990 and 2000 at:

http://www.huduser.org/portal/datasets/spectabs.html

Special Tabulations of Households for 1990 and 2000 at:

http://www.huduser.org/portal/datasets/spectabs.html

FHEO Legal Overview Legal Requirements Incorporated

into 202/811 NOFAs

FHEO Legal Overview Legal Requirements Incorporated

into 202/811 NOFAs

• The fair housing/nondiscrimination requirements found in the 202/811 FY 2010 NOFA rating factors:

– Providing meaningful access to persons with limited English Proficiency (LEP);

– Affirmatively further Fair Housing through Marketing (AFHM); and

– Site and Neighborhoods Standards (SNS)

• The fair housing/nondiscrimination requirements found in the 202/811 FY 2010 NOFA rating factors:

– Providing meaningful access to persons with limited English Proficiency (LEP);

– Affirmatively further Fair Housing through Marketing (AFHM); and

– Site and Neighborhoods Standards (SNS)

FHEO Legal OverviewLimited English Proficiency (LEP)

FHEO Legal OverviewLimited English Proficiency (LEP)

LEP persons: persons for whom English is not their primary language; limited ability to read, write, speak, or understand English.

LEP persons: persons for whom English is not their primary language; limited ability to read, write, speak, or understand English.

FHEO Legal OverviewLEP Cont’d

FHEO Legal OverviewLEP Cont’d

• Recipients of federal financial assistance, including recipients of 202/811 funds, must take reasonable steps to ensure meaningful access to their programs and activities by LEP persons.

• Both the 202 and 811 FY 2010 NOFAs incorporate LEP requirements within the rating factors (section 3.b).

• Recipients of federal financial assistance, including recipients of 202/811 funds, must take reasonable steps to ensure meaningful access to their programs and activities by LEP persons.

• Both the 202 and 811 FY 2010 NOFAs incorporate LEP requirements within the rating factors (section 3.b).

Legal OverviewLEP Cont’d

Legal OverviewLEP Cont’d

• Applicants should consult HUD’s Final LEP Guidance when determining how to prepare their narrative responses to earn this point.

• LEP Guidance available at:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/promotingfh/lep

• Applicants should consult HUD’s Final LEP Guidance when determining how to prepare their narrative responses to earn this point.

• LEP Guidance available at:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/promotingfh/lep

Affirmatively further Fair Housing

Affirmatively further Fair Housing

Implementing a range of standards, policies, and procedures that not only refrain from discriminating, but also actively promote integration and fair housing choice.

Implementing a range of standards, policies, and procedures that not only refrain from discriminating, but also actively promote integration and fair housing choice.

Legal OverviewAFHM Cont’d

Legal OverviewAFHM Cont’d

Goal: to target such marketing so as to “achieve a condition in which individuals of similar income levels in the same market housing area have a like range of housing choices available to them regardless of race, color, religion, sex, handicap, familial status or national origin.” 24 CFR 200.600

Goal: to target such marketing so as to “achieve a condition in which individuals of similar income levels in the same market housing area have a like range of housing choices available to them regardless of race, color, religion, sex, handicap, familial status or national origin.” 24 CFR 200.600

AFHM Cont’dAFHM Cont’d

Compare demographic data of the project and the housing market area and, based on the results, developing a marketing plan that will reach those applicants that are least likely to apply.

Compare demographic data of the project and the housing market area and, based on the results, developing a marketing plan that will reach those applicants that are least likely to apply.

Affirmative Fair Housing MarketingAffirmative Fair Housing Marketing

• Describe past strategies to reach persons that are least likely to apply for the housing, and address planned improvements.

• Methods may include various media outlets, informational brochures, working with community leaders, LEP services, and other new and innovative approaches.

• Describe past strategies to reach persons that are least likely to apply for the housing, and address planned improvements.

• Methods may include various media outlets, informational brochures, working with community leaders, LEP services, and other new and innovative approaches.

Site and Neighborhood Standards

Site and Neighborhood Standards

• SNS: 202 and 811 recipients must select a site that will promote greater choice of housing opportunities for minority elderly (202) and minority persons with disabilities (811).

• The concept is related to AFFH.

• 202 and 811 NOFAs incorporate SNS within rating factors (section 3.b).

• SNS: 202 and 811 recipients must select a site that will promote greater choice of housing opportunities for minority elderly (202) and minority persons with disabilities (811).

• The concept is related to AFFH.

• 202 and 811 NOFAs incorporate SNS within rating factors (section 3.b).

Civil Rights Threshold ReviewCivil Rights Threshold Review

Applicants must not have outstanding unresolved civil rights matters.Applicants must not have outstanding unresolved civil rights matters.

Affirmatively Furthering Fair HousingAffirmatively Furthering Fair Housing

The applicant should demonstrate how the proposed project will address one or more impediments identified in the applicable local community’s Analysis of Impediments to Fair Housing Choice.

The applicant should demonstrate how the proposed project will address one or more impediments identified in the applicable local community’s Analysis of Impediments to Fair Housing Choice.

Site and Neighborhood Standards Site and Neighborhood Standards

• Choose a site location that provides desirable housing to residents and promotes greater choice of housing opportunities for minority elderly/disabled persons/families.

• HUD will assess whether the site meets the site and neighborhood standards at 24 CFR 891.125(b) and (c) by examining relevant data in the application or in the local HUD Office.

• Choose a site location that provides desirable housing to residents and promotes greater choice of housing opportunities for minority elderly/disabled persons/families.

• HUD will assess whether the site meets the site and neighborhood standards at 24 CFR 891.125(b) and (c) by examining relevant data in the application or in the local HUD Office.

Target Involvement of Program Population Target Involvement of Program Population

Inclusion of the target population (elderly and persons with disabilities, including minorities) in the development and implementation of the project.

Inclusion of the target population (elderly and persons with disabilities, including minorities) in the development and implementation of the project.

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QuestionsQuestions

legal issues eligible applicant

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