Displacement Plan for CDBG and HOME

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Federal Register / Vol. 54. No. 40 / Thursday. March 2. 1989 / Rules and Regulations displaced person to sub -standard Mg. One way to effectively provide Nos,tallment payments, either to the ,eplaced person or to the person and ' Au persons landlord. without ,`continuing agency supervision. Is to place the payment in an escrow account Beat will be disbursed according to a pre -determined schedule. This method could also serve for disbursement of housing of last resort payments. which are also vested. The method of disbursement remains the Agency's discretion. It should be understood that. under vesting. the only times a rental assistance payment should change are during the one-year period described in 24.402(a)(1). and then only if tenant elects to up -grade bis or her housing to receive the full amount of the original computed rental assistance payment based on a comparable dwelling. or changes his or her status from tenant to owner and therefore becomes eligible for an additional payment (see 24,403(ell• Section 24.402(c) Downpayment assistance payment. Twenty-one comments were received concerning downpayment assistance. Only 4 of the 21 commenters believed that the amount available for downpayment assistance should be limited to the computed amount of the rental assistance payment for tenants. The malarity stated that agencies should reR downpayment assistance payments of up to $5.250. with most recommending that the payment be restricted to the amount necessary to obtain conventional loan fmandng for purchase of a replacement dwelling. The main concern expressed was that allowing each agency to select a procedure for computing the down payment assistance payment did not promote uniformity. Since the legislation does not give the lead agency the authority to selects particular procedure. but reserves such authority to the displacing agencies. we have elected to retain the existing language. As several commenters suggested displacing agencies may want to coordinate with other agencies within the State or jurisdiction where they are located to reach a consensus on the procedure to be followed at State or jurisdiction. FHWA will appreciate being advised of the experience of the various agencies in the implementation of this procedure. if the experience indicates that a change is needed to affect a more uniform implementation. we will seek a. legislative change. Regardless of the procedure selected a rental assistance payment will.have to be initially computed kr tenants. If the computed rental assistance payment is zero, then the downpayment assistance is zero unless the agency has elected to make downpayment assistance payments of up to $5.250. If their eligibility is greater than 35.250 for rental assistance, they will be eligible for housing of last resort for rental assistance or downpayment assistance. As is required by statute. eligibility for owners of more than 90 days but less than 7130 days for downpayment assistance will be limited to the amount that would have been computed had they been 190 day owners. Section 24.403 Additional Rules Governing Replacement Housing Payments Several comments were received concerning the requirement in 24.403(1)(1) that en adjustment be made to the asking price of any dwelling used to compute the replacement housing payment to the extent justified by local market data. This procedure has been a part of the gavernmentwide common rule since it was first published in March 1985. It requires that adjustments be made in the asking price of comparable dwellings to the extent that the market demonstrates that expected sale prices will be less than the asking prises. A clarification of the use of this procedure las been added to Appendix A In 124.403(a)(2). for clarity and as suggested by several commenters, FHWA has separated the procedures for major exterior attributes and buildable residential lots Into two paragraphs. Section 24 4ort(c)(8). Several comments were received concerning the use of current fair market value for the acquisition price of a previously owned dwelling when it is used as the replacement dwelling. The current fair market value is used because (1) It is the amount that would have been paid if the dwelling were purchased on the current market as a replacement residence. (2) the displacedawner could have acquired any other dwelling as a replacement and (3) the use of the previously awned dwelling is the conversion of an existing asset to replacement housing purposes. This regulation operates the same whether the previously -owned dwelling is mortgaged or unencumbered. in response to one commenter, the coat of an appraisal of the previously owned dwelling is a reimbursable cost if the agency considers en appraisal to be appropr10te and neceaPpry. 8925 Section 24.404 Replacement Housing of Lost Resort There were 13 comments on replacement housing of last resort. Several concerned the requirement that the use of housing of last resort be justified. Such justification is considered important for good program management and is consistent with the requirement. added by the 1987 Amendments. that any payment provided for housing of last resort that exceeds the maximum amounts provided to tenants and owners by 3124.401 and 24.402 must be justified. A slight modification was made to 24.404(a)(2)(i) at the recommendation of one commenter to clarify that justification for lad resort housing assistance may be for an entire project or program area. if appropriate. without additional case-by-case justification. A number of comments were received about the change in status of a displaced person from a tenant to an owner. FHWA has clarified that such a change in status must be with the concurrence of the displaced person. The concurrence of the displaced person should be received prior to the execution of any of the methods of viding for housing of lut resort Several general comments ware received about the concept of replacement housing of last resort Replacement housing of last resort is a Legislatively authorized continuation of the replacement housing assistance provided by 31 24.401 and 24.402 of this part, and provides for comparable replacement housing for displaced persons not adequately provided for under those sections. or who do not meet the eligibility requirements of those sections. Additional fleadbility is provided to displacing agencies for the provision of housing of last resort so that housing needs are met for owners and tenants in the most cost-effective, yet equitable way. Subpart F—Mobile Homes Section41.502 Moving orjd Related Expenses -Mobile Homes Only one comment was received on this subpart. in response, 324.502(a) has been modified to state more clearly that, even though asoven ant whose mobile home le not acquired may receive replacement housing under 24.503(a)(3). and therefore is not eligible for payment for moving the mobile home. ha may be eligible for payment for moving personal property from the mobile home. Also, the commenter thought that all mobile homes should be treated as real