Section 0770-03-02-.03 - ASSISTANCE TO OWNERS AND SELECTION OF UNITS(1) Initial Inspection.(a) For all proposals not rejected in the initial screening, the Public Housing Authority must inspect the property with the Owner and tenant(s) if possible. A determination must be made by the Public Housing Authority as to the specific work items which need to be accomplished to bring the unit(s) to be assisted up to the Housing Quality Standards specified in Section 882.109 and Section 882.405 (or other standards as approved in the Public Housing Authority's application) and/or to repair or replace major building systems or components in danger of failing. The Public Housing Authority, as soon as possible following the inspection, must provide the Owner with a written list of deficiencies.(2) Preliminary Feasibility Analysis. (a) A rough cost estimate and cash flow analysis of the property following rehabilitation must be made by the Public Housing Authority. A determination of the necessity for any permanent displacement and/or temporary relocation and a preliminary estimate of the cost of any temporary relocation must be made by the Public Housing Authority. If the proposal is determined to be feasible, analysis of additional energy conserving improvements which may be cost effective and which may be accomplished within the Fair Market Rent limitations of the Program must be made. The Owner must be required to provide energy conserving improvements in accordance with Section 882.405 (a). A preliminary estimate of Gross Rents should be made based upon the estimates of rehabilitation, temporary relocation and energy conserving improvements costs.(3) Selection of proposals. (a) After the initial inspection and preliminary feasibility analysis, the Public Housing Authority should select among Owner proposals those proposals which it will approve. The Public Housing Authority must establish a method of selecting among Owner proposals and must make this method known to any Owner submitting or planning to submit a proposal. Proposals must be approved in accordance with criteria established by the Public Housing Authority, including any Public Housing Authority rules for preferences as approved by HUD (see Section 882.503 (b) (4) (ii)) and in accordance with the following requirements:1. No proposal found infeasible by the Public Housing Authority in the preliminary feasibility analysis may be approved unless the Owner can demonstrate that the allowable rent win be sufficient to rehabilitate, manage and maintain the unit(s) adequately;2. If, during the preliminary feasibility analysis, it is determined by the Public Housing Authority that the work necessary to bring a unit(s) to the Housing Quality Standards, or other standards approved for the Program, or to repair or replace major systems is not sufficient to meet the $1,000 per unit minimum amount of rehabilitation requirement, that unit(s) may not be assisted under the Program.3. If a unit(s) does not meet the requirement of the preceding subdivision of this rule but the Owner is proposing to accomplish at least $1,000 per unit of rehabilitation by including work to make the unit(s) accessible to a handicapped or disabled individual occupying the unit(s) or expected to occupy the unit(s), the Agency may approve such units not to exceed 5 percent of the units under its Program. The rehabilitation must make the Unit(s), and access and agrees to the unit(s), barrier-free with respect to the handicap or disability of the individual in residence or expected to be in residence.4. A preference must be provided to those proposals which indicate in the preliminary feasibility analysis the greatest dollar amount of necessary rehabilitation per unit. This preference need not be adhered to strictly if the Agency is proposing to use the Program for deconcentration and the proposals indicating the greatest amount of rehabilitation are located in areas of minority concentration.5. Prior to the approval of any unit(s) owned by a State or unit of general local government, the Agency must contact HUD and request HUD review of the site. The Agency may not enter into an Agreement on any such unit(s) until HUD approval of the site is obtained and the State or unit of general local government has sold the unit(s) to another Owner.(4) Notification of Owners.(a) When the Agency has selected the proposals which it plans to approve, the Agency must notify all Owners specifying:1. Whether their proposal has been rejected or approved;2. If the proposal was rejected, the reason(s) for rejection and the Owner's right to appeal to the Agency;3. The tentative number of units to be assisted; and4. That the Owner should request all tenants residing in units tentatively selected for participation in the Program to contact the Agency to submit an application for rental assistance.(5) Selection of Units. (a) Tennessee Housing Development Agency will take the applications and determine the eligibility of all tenants residing in approved units who wish to apply for the Program. After eligibility of all tenants has been determined, the Owner will be informed of any adjustment in the number of units to be assisted. In order to make the most efficient use of housing assistance funds, an Agreement may not be entered into covering any unit occupied by a family which is not eligible to receive housing assistance payments. Therefore, the number of units approved by the Agency for a particular proposal will be adjusted to exclude any unit(s) determined by the Agency to be occupied by a family not eligible to receive housing assistance payments. Eligible Families must also be briefed at this stage as to their rights and responsibilities under the Program.(6) Work Write-ups and Cost Estimates. (a) Should the Owner agree with the assessment of the Agency as to the work that must be accomplished, the preliminary feasibility of the proposal, and the number of units to be assisted, the Owner, with the assistance of the Agency where necessary, will prepare detailed work write-ups including specifications and plans (where necessary) so that a cost estimate may be prepared. The work write-up will describe how the deficiencies specified in Rule 0770-3-2-.03(1) are to be corrected including minimum acceptable levels of workmanship and materials. From this work write-up, the Owner, with the assistance of the Agency, must prepare a cost estimate for the accomplishment of all items specified in this section. While this work write-up may include items of routine maintenance or other items which are not among the deficiencies specified in the initial inspection (0700-3-2-.03(l)) these extra items may not be included in the rehabilitation cost upon which the Contract Rent(s) is based.(7) Selection of Contractor. (a) Tennessee Housing Development Agency should discuss with the Owner the selection of a competent contractor to undertake the rehabilitation. The Agency will provide the Owner a list of contractors, including minority contractors, and will require that these contractors be provided an opportunity to submit bids or proposals for the work. The Agency will also, to the fullest extent possible, promote opportunities for minority contractors to participate in the Program.(8) Feasibility Analysis. (a) After a firm price has been secured from the contractor selected by the Owner, a feasibility analysis of the proposal will be conducted by the Agency. This analysis will be similar to the preliminary analysis specified in Rule 0770-3-2-.03(2). The work to be accomplished and/or rents to be specified in the Agreement may be adjusted to reflect the contractor's price.(9) Financing. (a) Tennessee Housing Development Agency will finance the cost of rehabilitating the unit and provide the permanent mortgage. The Agency may provide the construction financing in some instances.(10) Lease Form. (a) Tennessee Housing Development Agency must approve all lease forms. All forms must meet the necessary requirements of Tennessee Law and such other federal requirements as are necessary pursuant to 24 C.F.R. 882.Tenn. Comp. R. & Regs. 0770-03-02-.03
Original rule filed July 13, 1982; effective August 12, 1982.Authority: T.C.A. § 13-23-115(18).