HTF Rental Development

HTF regulations establish specific property standards for housing developments that are assisted with HTF funds. These standards include Environmental Provisions for projects involving new construction and rehabilitation. The HTF Environmental Provisions for new construction and rehabilitation under the Property Standards at 24 CFR § 93.301(f)(1) and (2) are similar to HUD’s Environmental Regulations at 24 CFR Parts 50 and 58. HTF projects are subject to the same environmental concerns that HUD-assisted projects are subject to. The main difference is that the HTF Environmental Provisions are outcome-based and exclude consultation procedures that would be applicable if HTF project selection were a federal action. Parts 50 and 58 are process based and include consultation procedures for several laws and authorities where there may be environmental impacts.

Click here for a web-based training regarding HTF Environmental Provisions.

The following Federal nondiscrimination and equal opportunity guidelines apply to all Rental Housing projects and affect both the development and operation of assisted housing:

1. The Fair Housing Act (42 U.S.C. 3601‐19) and implementing regulations at 24 CFR part 100 et seq.
2. Executive Order 11063, as amended by Executive Order 12259 (3 CFR, 1959‐1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part 107.
3. Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d‐2000d‐4) (Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR part 1.
4. The Age Discrimination Act of 1975 (42 U.S.C. 6101‐6107) and implementing regulations at 24 CFR part 146.
5. Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8.
6. Title II of the Americans with Disabilities Act, 42 U.S.C. 12101 et seq.
7. 24 CFR part 8.
8. Executive Order 11246, as amended by Executive Orders 11375, 11478, 12086, and 12107 (3 CFR,1964‐1965 Comp., p. 339; 3 CFR, 1966‐ 1970 Comp., p. 684; 3 CFR, 1966‐1970 Comp., p. 803; 3 CFR, 1978 Comp., p. 230; and 3 CFR, 1978 Comp., p. 264, respectively) (Equal Employment Opportunity Programs) and implementing regulations at 41 CFR chapter 60.
9. Executive Order 11625, as amended by Executive Order 12007 (3 CFR, 1971‐ 1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business Enterprises).
10. Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business Enterprise Development).
11. Executive Order 12138, as amended by Executive Order 12608 (3 CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise).

For more resources, click here.

Disclosure Requirements

The disclosure requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR part 87; and the requirements for funding competitions established by the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3531 et seq.).

Debarred, Suspended, Or Ineligible Contractors

The prohibitions at 2 CFR part 2424 on the use of debarred, suspended, or ineligible contractors and participants.

Drug-Free Work

The Drug-Free Workplace Act of 1988 (41 U.S.C. 701, et seq.) and HUD's implementing regulations at 2 CFR part 2429.

Housing Counseling

1. Any housing counseling, including rental housing counseling, required under or provided in connection with any program administered by HUD shall be provided only by organizations and counselors certified by the Secretary under 24 CFR part 214 to provide housing counseling, consistent with 12 U.S.C. 1701x.
2. Required under or provided in connection with any program administered by HUD means:
   1. Housing counseling required by statute, regulation, Notice of Funding Availability (NOFA), or otherwise required by HUD;
   2. Housing counseling that is funded under a HUD program;
   3. Housing counseling that is required by MHC or subgrantee of a HUD program as a condition of receiving assistance under the HUD program; or
   4. Housing counseling to which a family assisted under a HUD program is referred, by MHC or subgrantee of the HUD program.

HTF‐funded projects consisting of 5 or more units must establish an Affirmative Fair Housing Marketing Plan detailing marketing procedure to attract eligible occupants without regard to race, color, national origin, sex, religion, familial status, disability, or sexual orientation. If MHC’s regulatory agreement with the project owner permits the rental housing project to limit tenant eligibility or to have a tenant preference, the owner must have affirmative marketing procedures and requirements that apply in the context of the limited/preferred tenant eligibility for the project.

The affirmative marketing requirements and procedures adopted must include:

1. Methods for informing the public, owners, and potential tenants about Federal fair housing laws and the owner’s affirmative marketing policy (e.g., the use of the Equal Housing Opportunity logotype or slogan in press releases and solicitations for owners, and written communication to fair housing and other groups);
2. Requirements and practices the owner must adhere to carry out MHC’s affirmative marketing procedures and requirements (e.g., use of commercial media, use of community contacts, use of the Equal Housing Opportunity logotype or slogan, and display of fair housing poster);
3. Procedures to be used by the owner to inform and solicit applications from persons in the housing market area who are not likely to apply for the rental housing or homeownership assistance program without special outreach (e.g., using community organizations, places of worship, employment centers, fair housing groups, or housing counseling agencies);
4. Records that will be kept describing actions taken by the owner to affirmatively market rental housing units, and records to assess the results of these actions.

HTF-assisted housing is subject to the regulations at 24 CFR Part 34, Subparts A, B, J, K, and R, which govern lead-based paint poisoning prevention in residential structures. Applicants, developers, and builders of any project requiring the rehabilitation of structures built before 1978 must comply with this regulation.

Every effort will be made to avoid the permanent displacement of all persons due to an HTF-funded project. MHC reserves the right to reject any application that fails to minimize the permanent displacement of tenants. If temporary relocation or permanent displacement is necessary, MHC will comply and will require compliance by owners with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA).

All rental housing projects fall under the requirements of the URA. Applicants must further document that any purchase of property meets the requirements of URA, including the provision of notices to the seller identifying the transaction as a voluntary sale not under the threat of eminent domain.

Additionally, for properties occupied by commercial or residential tenants at the time of application, URA requires certain notices to tenants in place as of the application for federal funds. Failure to provide such notices may result in substantial compliance costs or render a project ineligible. To ensure compliance with URA, applicants should consult the Grants Management staff before the submission of any application involving an occupied property to understand the requirements of URA.

For more information regarding URA, click here.

To comply with HTF requirements and to maintain a high standard of accountability to the public, conflicts of interest and perceived conflicts of interest must be avoided. Owners shall maintain compliance with all HUD conflict of interest provisions as stated in 24 CFR 93.353 for HTF.

Applicant and Related Parties. Developers and owners with employees, family members, consultants, or agents that are otherwise eligible to occupy HTF‐funded units must receive approval from MHC before entering a lease with HTF-eligible employees, family members, consultants, or agents 24 CFR 93.353(f) provisions apply to all HTF projects.

Conflict of Interest applies to any person who is an employee, agent, consultant, officer, or elected official, or appointed official of the grantee or sub-grantee. No persons described above who exercise or have exercised any functions or responsibilities with respect to activities assisted with HTF funds or who are in a position to participate in a decision-making process or gain inside information with regard to these activities may obtain a financial interest or financial benefit from a HTF assisted activity, or have a financial interest in any contract, subcontract, or agreement with respect to HTF- assisted activity, either for themselves or those with whom they have business or immediate families ties, during their tenure or for one year, thereafter.

The HTF assistance provided to subgrantees and recipients shall be considered a Federal award for purposes of the Federal Funding Accountability and Transparency Act of 2006 (31 U.S.C. 6101 note).

MHC’s compliance monitoring requirements apply to all HTF projects; however, additional compliance requirements may be applicable based on other funding sources in addition to those required under HTF.

MHC will monitor HTF-assisted units for the following:

1. Compliance with HTF regulations/requirements/policies and procedures
2. Impact of HTF-funded projects that reached targeted populations.
3. Community Certification of Supportive Services
4. Affirmative Furthering Fair Housing
5. The extent to which beneficiaries and communities live improved and were enhanced.
6. Recordkeeping and Retention

The owner of a low-income housing project must keep records for each HTF-assisted project for each year of the compliance period and the extended use period to allow effective oversight of funded projects and document compliance with applicable HTF requirements. All projects must submit periodic reports to MHC. MHC reserves the right to require additional reporting or to alter the reporting format or frequency based on future changes to HTF requirements or its policy and procedures guidelines. In addition, MHC reserves the right to require additional or more frequent reporting for projects with compliance deficiencies.

Developers must maintain an MBE/WBE plan that demonstrates marketing and solicitation of MBE/WBE businesses and contractors for the construction of the project. Contracts awarded and payments made to MBE/WBE businesses and contractors must be reported quarterly during the construction phase.

For more information regarding MBE/WBE, click here.

Owners and developers of construction projects exceeding $200,000 in aggregate HUD funding (including HOME or HTF as well as HOME, CDBG, or other similar funding from a local government) are subject to the requirements of Section 3 of the Housing and Community Development Act of 1968 as outlined in 24 CFR 75. The purpose of Section 3 is to provide economic opportunities, particularly employment, generated by HUD-assisted development activity to low- and very low-income persons. In practice, MHC expects that all HOME/NHTF projects will be subject to Section 3.

Projects subject to Section 3 are required to take steps to achieve HUD-specified benchmarks (and maintain records and provide reporting) on total labor hours worked including by eligible “Section 3 workers” (25% of total labor hours) and by “Targeted Section 3 workers” (5% of total labor hours). More information is available on the HUD Exchange’s Section 3 page (Section 3 - HUD Exchange). The Section 3 report must be submitted quarterly during the construction phase.

The Build America, Buy America Act (BABA) requires that all iron, steel, manufactured products, and construction materials used for federally funded infrastructure projects are produced in the United States, unless otherwise exempt or subject to an approved waiver. This requirement is known as the “Buy America Preference (BAP),” and the specific requirements are codified in 2 CFR 184. BAP will apply to all HTF rental projects committed with HUD funds appropriated on or after August 23, 2024.

Products covered under the BAP include:

1. Iron and steel: The cost of the iron and steel content exceeds 50% of the total cost of all the item’s components. All manufacturing processes, starting from the initial melting stage and continuing through the application of coatings, must occur in the United States.
2. Construction materials: All manufacturing processes for the construction material must occur in the United States.
   • Specifically Listed Construction Materials: Items include (1) non-ferrous metals; (2) lumber; and (3) plastic- and polymer-based composite building materials, pipe, and tube.
   • Not Listed Construction Materials: Items include (1) all other plastic- and polymer-based materials (such as polymers used in fiber optic cables), (2) glass, (3) fiber optic cable, (4) optical fiber, (5) engineered wood, and (6) drywall.
3. Manufactured products: Manufactured products must meet two production requirements. First, the final product must be manufactured in the United States. Second, at least 55% of the cost of the components making up the manufactured product must be associated with components that were mined, produced, or manufactured in the United States. Includes articles, materials, or supplies that have either been:
   • Processed into a specific form or shape, or
   • Combined with other articles, materials, or supplies to create a product with different properties than the individual articles, materials, or supplies.

Products should be classified into just one of these categories. The classification must be made based on the product’s status when brought to the work site.

BABA Waivers

HUD has defined two types of BABA waivers:

1. General Waivers - Public Interest waivers granted at the departmental level that apply to all HUD-funded projects that meet the waiver criteria.

HUD general waivers offer flexibility to all HUD-funded infrastructure projects and should be carefully considered before pursuing a project-specific waiver. No formal request to HUD is needed to use these waivers. Applicants should maintain documentation that demonstrates the applicability of the waiver to a project, consistent with program regulations, and inform MHC that they intend to utilize a specific general waiver.

HUD currently has five general waivers available:

• • Exigent Circumstances Waiver: The BAP may be waived if projects must be completed immediately to protect life, ensure safety, or prevent the destruction of property. Expires November 23, 2027.
  • Tribal Recipients Waiver: For awards on or after January 10, 2025: BABA does not apply to awards and subawards to Tribes of $2.5 million or less. Expires January 10, 2030. Waiver for all manufactured products for Tribes. Expires September 30, 2026.
  • Pacific Island Territories Waiver: The BAP is currently waived for all Federal financial assistance for infrastructure projects in the Northern Mariana Islands, American Samoa, and Guam. Expires January 10, 2030. Exceptions for some critical supply chains.
  • Small Grants Waiver: The BAP can be waived for an entire project if the total project cost (including all sources of funding) is $250,000 or less. Expires November 23, 2027.
  • De Minimis Waiver: If none of the other general waivers apply to a project, the de minimis waiver gives grantees additional flexibility to waive the BAP for a portion of a project. The de minimis waiver allows grantees to waive the BAP for materials whose total cost is less than 5% of all materials used in a project (up to $1,000,000).
    • The total cost of materials includes all iron and steel, construction materials, and manufactured products, regardless of where the project falls in HUD's phased implementation. Example: $500,000 (total cost of (total cost ofÞmaterials) x 5% = $25,000 De Minimis limit
    • If a grantee has a particular product(s) that is below the de minimis limit and no domestically produced equivalent is available, the BAP can be waived for that product(s) only.
    • The BAP will still apply to the rest of the materials used in the project.

2. Project-/Product-Specific Waivers - Targeted waivers that individual grantees may apply for. Applied to a specific project or a specific product(s) used in a project.

Before applying for a project-/product-specific waiver, the Applicant must confirm that the project is subject to the BAP; no general waivers apply to the project; the products for which you need a waiver exceed the de minimis limit; complete market research to attempt to locate domestic made equivalents for products that exceed the de minimis limit (NIST MEP supplier scouting); and submit the waiver application as early as possible and before funds have been spent on the project, if possible (OMB Made in America Office (MIAO) will not approve retroactive waivers for items that have already been purchased).

Only the direct recipient of Federal funding (MHC) can submit a waiver application. Applicants should coordinate with MHC for waiver submission.

HUD has defined three types of project-/product-specific waivers:

• Non-availability: No domestic product is available.
• Unreasonable Cost: Inclusion of a domestically produced product would increase the cost of the overall project by more than 25%.
• Public Interest: Complying with BABA would be inconsistent with the public interest.

The waiver process is anticipated to take a minimum of 6-8 weeks to complete.

• Complete 6-step analysis (Applicant).
• Complete online waiver application (MHC).
• Waiver application is reviewed by HUD. HUD may request additional supporting information.
• If approved by HUD, waiver is sent to OMB MIAO for review, including a 15-day public comment period.
• OMB MIAO will issue final decision, which HUD will communicate to MHC.

Minimum Documentation Requirements

1. Determination of BAP applicability to the project - Even if the project is determined to be exempt, documentation should be retained in the grant files. The Optional BAP Applicability Checklist posted to HUD Exchange can assist with documentation.
2. If a project is subject to the BAP, documentation that all Covered Materials subject to the BAP were procured from BABA-compliant sources.
3. If a general waiver was applied to the project, documentation that supports that the project meets the conditions of the waiver.
4. If a project-/product-specific waiver was obtained for the project, a copy of the approved waiver and market research supporting the need for the waiver.

For more information regarding the BAP, click here.

HTF-assisted projects must comply with the requirements of the Violence Against Women Act (VAWA) as required by 24 CFR 93. VAWA provides certain additional tenant protections to applicants and tenants who are victims of domestic violence, sexual assault, and/or stalking. In general, among other requirements owners must provide notices to all tenants of the VAWA provisions, may not deny an application, or terminate or refuse to renew a lease because of a person’s status as a victim or based on criminal activity related to such status, and must allow for the bifurcation of a lease to evict the perpetrator of such criminal activity while allowing the victim to maintain occupancy.

For more information regarding VAWA, click here.

Recipients of federal financial assistance, including HTF funds, are required to provide meaningful access to their programs and services for persons with limited English proficiency (LEP). The U.S. Supreme Court has held that failing to take reasonable steps to ensure meaningful access for LEP persons is a form of national origin discrimination prohibited by Title VI of the Civil Rights Act of 1964.

Recipients of HTF funds should develop, and periodically update, a written LEP plan that describes their language assistance services and explains how staff and LEP people can access those services. Guidance regarding LEP compliance can be accessed on the HUD website here.

MHC will not fund projects owned, developed, or otherwise sponsored by any individual, corporation, or other entity that is suspended, debarred, or otherwise precluded from receiving federal awards. Furthermore, the owner may not contract with any other entity (including but not limited to builders/general contractors, property management companies, or other members of the development team) that is suspended, debarred, or otherwise so precluded. Similarly, the general contractor will be required to determine that subcontractors are not so precluded (www.sam.gov).