How does the capital fund final rule affect PHAs? Part I
Late last year, HUD published the much-anticipated capital fund final rule in the Federal Register. Effective November 25, 2013, the new regulation combined and streamlined former capital fund program (CFP) requirements for rehabilitation and development into one comprehensive regulation.
It goes without saying that while much has remained the same, some significant changes have occurred, and understanding these changes is crucial for efficient and uniform program implementation and management. We hope that this blog series will provide you not only with an overview of the final rule, but also the answers to some questions you many have, and that it will ultimately help you navigate these changes.
- Part I: Background, and where to find the regulation
- Part II: Who does the rule apply to, and what are some of the major changes?
- Part III: What can CFP funds be used for?
- Part IV: What do I need to know about changes to mixed-finance requirements and energy efficiency?
Background
Before getting into the rule itself, some background information is in order. The final rule implements Section 9 of the U.S. Housing Act of 1937, which created the capital fund program as part of the Quality Housing and Work Responsibility Act of 1998 (QHWRA). Before publication of the final rule, PHAs were required to reference three different regulations and two different statutes in order to understand the program requirements. Under the final rule, all of these requirements have been put together in one place, drawing from legacy public housing capital programs such as the Comprehensive Grant Program (CGP), the Comprehensive Improvement Assistance Program (CIAP), and the Public Housing Development Program (which encompasses mixed-finance development).
The basic idea is that PHAs will now have a clear picture of eligible activities, the planning process, and the requirements for rehabilitation and development activities in a format that is much more accessible. This is a major step up from the multiple sources, interim guidance from HUD notices, and outdated 1996 guidebook for the Comprehensive Grant Program (issued pre-QHWRA) that PHAs had to work from previously.
Where can I find the regulation?
All of the CFP legacy programs and regulations concerning different parts of the CFP are now located at 24 CFR Part 905: not just the previous statues and guidance, but also regulations that used to exist elsewhere. This means that the previous regulations for modernization, formerly found at Part 968, and those for development and mixed finance at Part 941, have been eliminated and are now incorporated into Part 905. Additionally, the Capital Fund Financing Program (CFFP) regulation, published in the Federal Register October 21, 2010, is also contained there.
In Part II, we'll discuss the major changes brought about by the capital fund final rule and whether they apply to your PHA.
Kaylene Holvenstot has been a technical writer at NMA since 2008. She contributes to and edits NMA Master Books, seminars, and model policies while researching and analyzing the latest HUD guidance to ensure that all course material is always up to date and fully accurate.
NMA’s Capital Fund Program seminar provides you with the information you need to understand and accurately apply the capital fund final rule. Don't miss the upcoming session in Cincinnati this October — save 10% when you register before August 30!