Intermediaries to Administer Technical Assistance Grants (ITAG)
for the Mark-to-Market (M2M) Program

PROGRAM DESCRIPTION: Approximately $9.0 million is being competed in Intermediary Technical Assistance Grant (ITAG) funds for Intermediaries to administer the ITAG Mark-to-Market technical assistance grant program ($1.0 million is available in FY 1998; it is anticipated that $8.0 million may be available in FY 1999, subject to appropriations). The purpose of the M2M program is to reduce the cost of above market Section 8 assistance, preserve affordable housing stock, and streamline the administration of federal housing subsidies. The Intermediary will award technical assistance grants to sub-recipients consisting of resident groups, tenant affiliated community-based nonprofit organizations or public entities. These grants will be in the form of either Resident Capacity or Predevelopment Grants to groups affiliated with projects that are eligible under the M2M program, or Public Entity Grants available to public entities who will carry out M2M related activities for M2M projects throughout its jurisdiction.

APPLICATION DUE DATE: Completed applications must be received no later than 12:00 midnight, Eastern time on July 21, 1998 to HUD Headquarters. Please the General Section of this SuperNOFA for specific procedures governing the form of application submission (e.g., mailed applications, express mail, overnight delivery, or hand carried).

ADDRESS FOR SUBMITTING APPLICATIONS: Completed applications (one original and two copies) must be submitted to: the Office of Portfolio Reengineering, Room 6130, HUD Headquarters, 451 Seventh Street, SW, Washington, DC 20410. When submitting your application, please refer to ITAG, and include your name, mailing address (including zip code) and telephone number (including area code).

For Application Kits. For an application kit and any supplemental information please call the SuperNOFA Information Center at 1-800-HUD-8929. Persons with hearing or speech impairments may call the Center's TTY number at 1-800-HUD-2209. The application kit also will be available on the Internet through the HUD web site at http://www.hud.gov. When requesting an application kit, please refer to ITAG and provide your name, address (including zip code), and telephone number (including area code).

For Further Information. Arthur Goldstein at (202) 708-2300, extension 2657. Persons with speech or hearing impairments may call HUD's TTY number (202) 708-0770, or 1-800-877-8399 (the Federal Information Relay Service TTY). Other than the "800" number, these numbers are not toll-free. Mr. Goldstein can also be reached via the Internet at arthur_d._goldstein@HUD.gov.

For Technical Assistance. An information broadcast via satellite will be held for potential applicants to learn more about the program and preparation of an application. For more information about the date and time of the broadcast, please consult the HUD web site at the web address listed above.

Applicants should take care in reviewing this section to ensure they are eligible to apply for funds and that they meet the program requirements described.

(A) Authority. Section 514(f)(3) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (Pub.L. 105-65, 111 Stat. 1394, October 27, 1997) authorizes not more than $10,000,000 annually for technical assistance under the M2M program from amounts made available under appropriations Acts for the M2M program or previously made available for technical assistance under the Preservation program. This ITAG program is one element of the M2M technical assistance.

(B) Purpose. The ITAG program provides technical assistance grants through Intermediaries to sub-recipients consisting of: (1) resident groups or tenant affiliated community-based nonprofit organizations in properties that are eligible under the M2M program to help tenants participate meaningfully in the M2M process, and have input into and set priorities for project repairs; or (2) public entities to carry out M2M related activities for M2M-eligible projects throughout its jurisdiction.

(C) Amount Allocated. The competition in this program is to select intermediaries to administer grants to eligible subrecipients. During FY 1998, $1.0 will be available for grants. Subject to the availability of appropriations, $8.0 million may be made available in FY 1999.

(D) Grant Amount, Terms. HUD will accept applications from Intermediaries that propose a term of two years. The term begins on the date of the execution of the grant agreement. The amount of funding that an Intermediary can receive depends on the funding level associated with the state-grouping for which an applicant has applied. A specific amount of funds have been allocated to each state-grouping (See Appendix B). Activities must be completed in a timely manner and may not, in any case exceed a two-year time period. HUD reserves the right to reallocate funds allocated to the Interimediary under the grant agreement if there is insufficient need.

Three forms of technical assistance grants will be made available through Intermediaries:

(1) Resident Capacity Grants (RCG), with a maximum dollar amount of $20,000;

(2) Predevelopment Grants (PDG), with a maximum of $70,000; and

(3) Public Entity Grants (PEG), with a maximum of $20,000.

(E) Eligible Applicants. Eligible applicants to serve as Intermediaries are: (1) A national nonprofit. Applicant must have been in existence for at least five years and be classified as an exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986;

(2) A regional, State or local nonprofit. Applicant must have been in existence for at for at least three years and either be classified as an exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986 or be recognized otherwise as a tax-exempt entity; or

(3) A State or local agency.

An eligible intermediary applicant must have as a central purpose of its organization the preservation of low-income housing and the prevention of displacement of low-and moderate income residents. Applicants must not receive direct Federal appropriations for operating support. In addition, all intermediaries should have a record of at least one year of service to low-income individuals or community-based nonprofit housing developers in multiple communities and must have at least one year of experience with the allocation and administration of grant or loan funds.

(F) Intermediary Fees. Each selected intermediary will receive processing fees. The fees will include a start-up fee of $40,000 and an additional fee of five percent of each technical assistance grant voucher that the intermediary submits, which will be disbursed conterminous with the voucher draw-downs of the RCGs, PDGs and PEGs. These fees are based on the intermediary performing the specific tasks listed in the Program Requirements section.

All intermediaries will receive the start-up fee when the intermediary contract is executed. If an intermediary reviews and rejects a technical assistance application, it will receive an administrative fee of $600. If the intermediary receives no technical assistance grant applications, it will receive only its start-up fee. On occasion, the M2M staff will review grant activity to determine if reallocation of funds between geographic regions is necessary.

(G) Ineligible Activities. Neither intermediaries, nor their employees, officers or affiliated entities, may receive payment, directly or indirectly from the proceeds of grants they have approved. In addition, intermediaries may not provide other services to grant recipients with respect to the specific properties for which the grant has been awarded.

In addition to the program requirements listed in the General Section of this SuperNOFA, intermediaries must meet the following program requirements:

(A) General Requirements. Intermediaries are responsible for the award and administration of grants to sub-recipients. In order to effectively perform these responsibilities, the intermediary must, at a minimum, perform the following:

(1) Advertise fund availability for the geographic jurisdiction overseen;

(2) Seek out eligible applicants, using at least the following methods: (a) contact all of the Outreach and Training Organizations that have been selected in areas within the Intermediary's state-grouping. This list can be obtained from the M2M person in the Office of Multifamily Housing Mortgage and Housing Assistance Restructuring (OMAR), (b) contact the National Alliance of HUD Tenants who may be able to provide a list of active client groups in the state-grouping, (c) Contact the Corporation for Public Service who can provide a list of AMERICORPS Vista volunteers in properties within the state-grouping, (d) utilize the property address list of eligible M2M properties and mail ITAG grant information sheets to tenant groups in those properties. The list of eligible M2M properties can be found at the end of the application kit.

(3) Produce and distribute grant application kits (applicant must provide a sample grant application kit with its application);

(4) Review, approve or reject grant applications;

(5) Execute grant agreements;

(6) Vouchering and disbursing grant funds;

(7) Monitor activities under the grant, including compliance under the grant agreement, throughout the term of the grant;

(8) Create an information network (e.g. newsletter, website, monthly or bi-monthly update, etc.) which information can be disbursed to subrecipients and subrecipients can ask program questions and receive responses and all recipients have access;

(9) Report to M2M staff at least quarterly on the status of grant awards, grantee activities and funds expended; and

(10) Maintain documentation for HUD monitoring and audits in accordance with 24 CFR Part 84.

(B) Reporting Requirements.

(1) Intermediaries must comply with all requirements of 24 CFR Part 84.

(2) Intermediaries must submit a quarterly performance report to the Director of the Office of Mortgage and Housing Assistance Restructuring (OMAR).

(3) These reports are to list the properties and number of tenants assisted by the activities being performed that quarter, including a narrative indicating issues that need to be resolved and tangible benefits resulting from the assistance. Please provide a sample report with your application.

(4) Administrative fees may be frozen until receipt of an acceptable performance report.

(C) Records Retention and Access Requirements. All accounting and other records associated with Grant Administration must be retained and made available to HUD or its designee in accordance with 24 CFR �84.53.

(D) Auditing Requirements. Intermediaries must comply with the audit requirements set forth in 24 CFR Part 45.

(D) Conflict of Interest (CI) Requirements. Funds received under this SuperNOFA shall not be used to supplant or duplicate other resources for the proposed activities. In carrying out its duties, any intermediary must avoid even the appearance of a conflict of interest. All executives, board members, key management personnel, or any other person or entity with direct or indirect control, is required to execute a CI Certification at the time of execution of a grant agreement and on each anniversary date of execution.

Two types of reviews will be conducted: a threshold review to determine applicant eligibility; and a technical review to rate the application based on the rating factors in this Section III.

(A) Additional Threshold Criteria For Funding Consideration. Under the threshold review, the applicant will be rejected from the competition if the applicant is not in compliance with the requirements of the General Section of the SuperNOFA and if the applicant does not qualify as an Eligible Applicant as defined in Section I(E) of this ITAG Section of the SuperNOFA.

(B) Factors For Award Used To Evaluate and Rate Applications. The factors for rating and ranking applicants, and maximum points for each factor, are provided below. The maximum number of points for this program is 100. This ITAG section of the SuperNOFA does not include EZ/EC bonus points.

This factor addresses the extent to which the applicant has the organizational resources necessary to successfully implement the proposed activities in a timely manner. The rating of the "applicant" or the "applicant's organization and staff" for technical merit or threshold compliance, unless otherwise specified, will include any faculty, subcontractors, consultants, and members of consortia which are firmly committed to the project.

Experience and Capability to administer a Intermediary Technical Assistance Grant (ITAG) program over the state-grouping area for which the applicant is applying is a threshold requirement for award. If an applicant is found to lack sufficient experience and capability, their application will be eliminated from further consideration. This is particularly important if the applicant is applying for more than one state-grouping. This criterion can be demonstrated through past performance, as evidenced by previous experience and success in administering a Federal housing grant program, such as the Preservation ITAG program.

In rating organizational capacity and staffing to carry out activities of the kind proposed in the application, HUD will consider the extent to which the proposal demonstrates:

(a) The knowledge and direct experience of the proposed project director and staff, including the day-to-day program manager, consultants and contractors, in awarding and administering grant programs. The applicant will be judged in terms of recent, relevant and successful experience in undertaking activities similar to those required of an intermediary.

The applicant has sufficient personnel, or access to qualified experts or professionals, enabling delivery of the proposed activities in each proposed service area in a timely and effective fashion. Capacity also includes the readiness and ability of the applicant to immediately begin the proposed work program, and a communication system that allows subrecipients consistent, reliable and expeditious access to the intermediary grant administrator.

(b) The applicant's experience in managing programs similar in scope or nature directly relevant to the work activities proposed and carrying out grant management responsibilities. If the applicant has managed large, complex, interdisciplinary programs, the applicant should include the information supporting this claim in their response.

(c) If the applicant received funding in previous years, the applicant's past experience will be evaluated in terms of their ability to attain demonstrated measurable progress in the implementation of their most recent grant awards, as measured by expenditures and measurable progress in achieving the purpose for which funds were provided. However, an applicant must also demonstrate how the applicant will successfully undertake additional activities effectively under this ITAG section of the SuperNOFA.

(d) The applicant's ability and comprehensive plan to market the ITAG grant programs to those eligible subrecipients in the geographic area(s) for which it has responsibility. The marketing plan must specify the applicant's proposed efforts for outreach to all states within their state grouping.

(e) The applicant's fiscal capability in meeting the reporting and audit requirements of 24 CFR part 84. The ability of the applicant's key staff to handle, manage, and adequately account for financial resources, and to use acceptable financial control procedures, demonstrated through past performance of the applicant entity or key staff with Federal, State or local funds, or an explanation of how such capability can be obtained.

Rating Factor 2: Soundness of Approach (30 Points)

This factor addresses the quality and cost-effectiveness of the applicant's proposed activities. There must be a clear relationship between the proposed activities, state-grouping needs and the purpose of the program funding for an applicant to receive points for this factor. The factor will be evaluated based on the extent to which the proposed activities will:

(a) Identify all areas within the state-grouping with M2M eligible properties and effectively promote the existence of funds to all eligible properties. HUD's goal is to disburse technical assistance funds to the widest possible geographic area. This should include rural, as well as urban areas.

(b) Achieve the purposes of the program for which funding is requested and result in measurable accomplishments that are consistent with the purposes of the program and will result in a goal being met/product produced within a timeframe appropriate and reasonable for the program.

(c) Be undertaken using technically competent methodologies for conducting the work to be performed and uses a cost effective plan for designing, organizing and carrying out the proposed activities. The proposed cost estimates should be reasonable for the work to be performed and consistent with rates established for the level of expertise required to perform the work in the proposed geographic area.

(d) Yield innovative strategies or "best practices" that can be replicated and disseminated to other organizations, including nonprofit organizations, State and local governments. HUD will assess the transferability of results in terms of model programs or lessons learned from the work performed under the award. Applicants will be required to prepare an analysis of best practices as part of their reports to HUD that may be used by HUD to inform others who may be interested in learning from the experiences gained from the work performed under awards funded through this ITAG section of the SuperNOFA.

This factor addresses the ability of the applicant to secure community assets, resources and/or financing to achieve program purposes. In evaluating this factor HUD will consider:

(a) The extent to which the applicant has leveraged resources, such as funding and/or in-kind services from governmental entities, private organizations, resident management organizations, educational institutions, or other entities in order to achieve the purposes of the award the applicant is requesting.

(b) The extent to which the applicant has partnered with other entities to make more effective use of available public or private resources. Partnership arrangements may include, but are not limited to, funding or in-kind services from local governments or government agencies, non-profit or for-profit entities, private organizations, educational institutional or other entity that is willing to partner with the applicant on proposed activities in order to leverage resources, or partnering with other program funding recipients to make more effective use of resources within the geographic area covered by the award either within the community or within the field office jurisdiction in which activities are occurring. Applicants may partner directly or through a consortium of applicants to more effectively address needs of underserved populations, rural areas, minority groups or other client groups that need attention either in the target area or the area covered by the field office jurisdiction in which the activities are to take place.

Evidence of commitment should include organization names, their proposed level of effort, resources, and responsibilities of these participants. Applicants must provide indications of participation by including in the application letters of firm commitments, memoranda of understanding or agreements, or letters indicating participation and levels of effort and responsibility to receive rating points for this factor. Letters of commitment, memoranda of understanding, or agreements to participate must be signed by an official of the organization legally able to make commitments for the organization.

This factor addresses the extent to which the applicant coordinates its activities with other known organizations, participates or promotes participation in a community's Consolidated Planning process, and is working towards addressing a need in a holistic and comprehensive manner through linkages with other activities in the community.

In evaluating this factor, HUD will consider the extent to which the applicant demonstrates it has:

(1) Coordinated its proposed activities with those of other groups or organizations prior to submission in order to best complement, support and coordinate all known activities and if funded, the specific steps it will take to share information on solutions and outcomes with others. Any written agreements, memoranda of understanding in place, or that will be in place after award should be described.

(2) Taken or will take specific steps to become active in the community's Consolidated Planning process (including the Analysis of Impediments to Fair Housing Choice) established to identify and address a need/problem that is related to the activities the applicant proposes. In the case of technical assistance providers, the applicant should describe the specific steps it will take to work with recipients of technical assistance services to inform them of, and get them involved in, the community's Consolidated Planning process. HUD will review more favorably those applicants who can demonstrate they are active, will become active, or in the case of technical assistance providers work with recipients of technical assistance to get them involved in the local Consolidated Planning (CP) process.

(3) Taken or will take specific steps to develop linkages to coordinate comprehensive solutions through meetings, information networks, planning processes or other mechanisms with:

(a) Other HUD-funded projects/activities outside the scope of those covered by the Consolidated Plan; and

(b) Other Federal, State or locally funded activities, including those proposed or on-going in the community.

(C) Selections. HUD will review each Intermediary application and assign up to 100 points, in accordance with the criteria described in this Section. In order to be considered for selection, an applicant must receive a minimum score of 60. After rating, the M2M staff will rank the applications for each separate state-grouping according to score and will select the highest rated applicant in each state-grouping. If an applicant is the highest rated for two or more state-groupings, HUD will perform a second review to assure that the applicant has the capacity to effectively perform in that number of groupings. If it is determined, using the information from Rating Factor 1, that the applicant does not have sufficient capacity to adequately perform in all state-groupings for which it is the highest rated applicant, HUD will notify the applicant of the number of state-groupings for which it has been found to have capacity and will allow that applicant to choose in which state-grouping(s) it will perform. HUD will then select the second highest rated applicant for each state-grouping not selected by the highest rated applicant. If a second highest rated applicant is selected for two or more state-groupings, HUD will perform a second review of that applicant to assure that the applicant has the capacity to effectively perform in that number of groupings. HUD will perform the same review until an intermediary has been selected to perform in all five state-groupings. .

If there is a state-grouping for which HUD receives no qualified applicants, HUD may request the highest ranking applicant found to have adequate capacity to perform in that state-grouping.

After all applications have been rated and ranked and selections have been made, HUD may require that all winners participate in negotiations to determine the specific terms of the Statement of Work and the grant budget. In cases where HUD cannot successfully conclude negotiations, or a selected applicant fails to provide HUD with requested information, awards will not be made. In such instances, HUD may elect to offer an award to the next highest ranking applicant, and proceed with negotiations with the next highest ranking applicant.

(A) Submission Requirements. An applicant must provide a completed application, including the following, as applicable:

(1) OMB Standard Forms 424;

(2) Identification of proposed state-grouping(s) in which the applicant will perform intermediary activities;

(3) Information about how the applicant meets the Factors for Award listed in Section III(C)., "Selection Criteria", Rating Factors 1-4.

(4) Information about the applicant, including its history, its staff and qualifications, and its experience.

(5) Summary of plan to advertise grant availability, distribution of applications, review applications, disburse funds, set up information network, and monitor activities under the grant;

(6) Evidence of tax-exempt status, if applicable;

(7) Required Certifications relating to this grant;

(8) Other disclosures and assurances as required under this SuperNOFA;

(9) Other information/materials described in application kit.

(B) Application Selection Timeframe. HUD will publish in the Federal Register the list of selected intermediaries within 30 days of the date that HUD's intermediary selection process is completed. That publication will include information for potential subrecipients on how to obtain application kits and will list contact names at the intermediary organizations selected to administer the grants.

Once intermediaries are selected and agreements are executed, intermediaries will have 30 days to put the necessary mechanisms in place prior to accepting grant applications.

(A) General. Intermediaries will be responsible for performing the tasks listed in Section II "Program Requirements" of this ITAG section of the SuperNOFA.

(B) Timeframes. Once funding availability is advertised by the intermediary for its "state-grouping", potential sub-recipients can submit technical assistance applications to the intermediary on an ongoing basis. If the applications are acceptable, grants must be awarded no later than 30 calendar days after a complete application is received by the intermediary (first come, first served). If the application is found to be substantially complete (i.e., there are no missing exhibits), but technically deficient (i.e., an exhibit does not adequately meet the application requirements), the intermediary will send the applicant a deficiency letter and allow 14 days for resubmission on the deficient exhibits. The intermediary will have an additional 30 days to review and approve an application, following receipt of application revisions. If the application is not substantially complete, it will be rejected.

(C) Technical Assistance Grants.

(1) Resident Capacity Grants (RCG). An RCG can be approved for a maximum of $20,000. Resident Capacity applicants will receive an application kit, which will be produced and distributed by the intermediary. A sample application kit will be provided by HUD to the intermediaries. Applications will be accepted on an ongoing basis, and all acceptable applications will be approved unless there are no funds available for Resident Capacity grants. Intermediaries must review and approve or reject applications for Resident Capacity grants based on the following threshold criteria:

(a) The applicant meets the eligible applicant criteria listed in paragraph A of Appendix A of this ITAG section of the SuperNOFA.

(b) The applicant is applying for funds for eligible activities listed in paragraph D(1) of Appendix A to this ITAG section of the SuperNOFA.

(c) The applicant has notified the residents of its application in accordance with paragraph B of Appendix A of this ITAG section of the SuperNOFA.

(d) The plan for promoting the ability of residents to participate meaningfully in the M2M process is reasonable and feasible.

(e) The budget submitted with the application reflects reasonable costs directly associated with the grant activities.

(f) The estimate of time necessary to achieve completion of activities and delivery of products is reasonable and realistic and within the time frames set forth in the applicable program regulation.

(2) Predevelopment Grants (PDG). A PDG can be approved for a maximum of $70,000. All PDG applicants will receive an application kit that will have been produced and distributed by the intermediary. A sample application kit will be provided by HUD to the intermediaries. Applications will be accepted on an ongoing basis, and all acceptable applications will be approved unless there are no funds available for Predevelopment grants. Intermediaries must review and approve or reject applications for Predevelopment grants based on the following threshold criteria:

(a) The applicant meets the eligible applicant criteria listed in paragraph A of Appendix A to this ITAG section of the SuperNOFA;

(b) The applicant is applying for eligible activities listed in paragraph D(2) of Appendix A to this ITAG section of the SuperNOFA;

(c) The applicant has notified the residents of its application in accordance with paragraph B of Appendix A to this ITAG section of the SuperNOFA;

(d) The plan for promoting and achieving a resident supported purchase of the property must be reasonable and feasible and in conformance with the appropriate program regulations and guidelines. This will include an evaluation of the experience and capacity of the applicant's development team;

(e) A plan for promoting and achieving the sale of the property to an eligible nonprofit organization.

(f) The budget submitted with the application reflects reasonable costs directly associated with the grant activities that would result in the development of a feasible purchase; and

(g) The estimate of time necessary to achieve completion of activities and delivery of products is reasonable and realistic and within the time frames set forth in the applicable program regulation.

(3) Public Entity Grant (PEG). A PEG can be approved for a maximum of $20,000. Public entities eligible to apply for such a grant include: community action, legal services and fair housing counseling agencies; State, county or local government agencies; intermediaries and others deemed appropriate by the ITAG administrator.

The intent of the PEG program is for a public agency or organization with expertise in multifamily rental housing, tenant affairs or other preservation of affordable housing issues, to initiate activities that can further the M2M program. An example: A city or county office of landlord tenant affairs can proactively seek out those tenant groups or organizations of properties that are eligible to participate in the M2M program and initiate a conference, training sessions, direct on site training, brochures, etc., to facilitate the persons in the property understanding the procedures in dealing with and the landlord of the property and general property management. A second example is: An office of building permits and code enforcement could give training or technical assistance to tenant groups in eligible M2M properties who are dealing with property repairs.

(4) Competing Grant Applications. If a second technical assistance application is received within 30 days of receipt of the first application for any property, and if that application is for the same grant category, the intermediary shall have an additional 20 days to review both applications. The total review time for any grant cannot exceed 50 days after receipt of a complete application. If the competing applications are for Resident Capacity grants, resident groups and Resident Councils shall have priority over other applicants. If the competing applications are for Predevelopment grants, and both are found technically acceptable, the Intermediary will return the applications with instructions that the applicants meet together and with the residents to reach a resolution for a final application. If no compromise is reached, the intermediary will approve the applicant that the intermediary finds most capable of performing grant and nonprofit sponsor activities. In addition, in the case of any application, if there is an indication that a majority of the residents oppose the applicant's selection, that application shall be denied.

(5) Decision Not To Fund. In any denial of award letter, the intermediary shall be required to explain the reasons for its determination. In addition, if the intermediary makes a determination that results in a reduction of proposed grant funds, that determination shall also be explained in writing.

(6) Appeals. If an application for either a RCG, PDG or PEG is denied, the applicant will have the right to appeal that denial to HUD. The appeal must be made within 45 days of application rejection to: M2M Staff, Office of OMAR, Department of Housing and Urban Development, 451 Seventh Street, NW., Room 6284, Washington DC, 20410. HUD will make a binding determination within 45 days of the appeal.

(7) Award Notification. If an applicant is awarded and accepts a RCG or PDG, the applicant must inform the residents of the property about the award, by posting a notice or through a resident meeting or both, within three weeks of the applicant's acceptance of the award.

The General Section of the SuperNOFA provides procedures for corrections to deficient applications.

In accordance with 24 CFR 50.19(b)(8) and (9), the assistance provided under this program relates only to the provision of engineering costs and technical assistance and therefore is categorically excluded from the requirements of the National Environmental Policy Act and is not subject to environmental review under the related laws and authorities. This determination is based on the ineligibility of real property acquisition, construction, rehabilitation, conversion,leasing, or repair for HUD assistance under this program.

A. Eligible Applicants

(1) General Definition. An eligible applicant must notify residents of all occupied units that it is applying for a grant. That notification shall meet the specifications of paragraph B below. An eligible applicant is one of the entities described in the following paragraphs (a) through (d) that complies with the applicable criteria:

(a) Resident Group. Resident Groups are eligible for Resident Capacity grants only. For an applicant to be considered a resident group, the following must be submitted:

(i) Evidence that the greater of 5% of the occupied units or 10 units of the subject property have heads of households that are members;

(ii) A copy of a notice announcing an organizational meeting to discuss resident participation in decisions affecting the project;

(iii) A copy of the agenda of the organizational meeting referred to in item (ii) of this paragraph; and

(iv) A list of attendees of the organizational meeting referred to in item (ii) of this paragraph.

(b) Resident Council (RC). For an applicant to be considered an RC, it must meet the definition of ``resident council'' as set out in 24 CFR 248.101. Specifically, a RC is any incorporated nonprofit organization or association in which membership is available to all the tenants, and only the tenants, of a particular project and:

(i) Is representative of the residents of the project;

(ii) Adopts written procedures providing for the election of officers on a regular basis; and

(iii) Has a democratically elected governing board, elected by the residents of the project.

(c) Community-Based Nonprofit Housing Developer (CBD). For an applicant to be considered a CBD it must submit evidence that it:

(i) Is classified as tax exempt under section 501(c)(3) of the IRS Code of 1986;

(ii) Has been in existence for at least two years, and has at least two years of housing and community development experience, prior to date of application;

(iii) Has a record of service to low- and moderate-income people in the community in which the project is located;

(iv) Is organized at the neighborhood, city, county or a multi-county level;

(v) In the case of an organization seeking to acquire eligible housing, it agrees to form a purchasing entity that conforms to the definition of a community-based nonprofit organization (CBO) in 24 CFR 248.101;

(vi) Agrees to use its best efforts to secure majority tenant consent to the acquisition of the project for which grant assistance is requested. Evidence of ``best efforts'' shall include a plan in the application which details method for securing such support. In addition, continued evidence of ``best efforts,'' such as additional resident meetings and notices, is required as a grantee moves towards a purchase.

(d) Public Entity. For an applicant to be considered a public entity, it must be an organization affiliated with State, county or local government, or a community action agency, legal services or fair housing counseling agency, intermediary, or others deemed appropriate by the ITAG administrator.

(2) Resident Capacity Grant Applicants. Applicants for Resident Capacity grants must meet the eligibility criteria listed in paragraph A(1) of this Appendix. In addition, these grants may be made only with respect to eligible M2M housing.

(3) Predevelopment Grant Applicants. Predevelopment grant applicants must be RCs or CBDs meeting the criteria listed in paragraph A(1) of this Appendix. These grants may be made only to organizations seeking to purchase the property, with the support of a majority of the residents. The owner of the property must have entered into a binding agreement to sell the housing to the applicant organization. This binding agreement shall not necessarily be a formal sales contract; rather, it may state that the owner will neither work with nor accept a purchase offer from any other entity during the term of the grant, as long as the grantee is progressing towards a purchase offer and acquisition in a reasonable period of time.

(4) Conflict of Interest. Each applicant must certify that its organization is not a ``Related Party'', as set forth in 24 CFR part 84, and that no individual that has, or has had within the last five years, a personal or professional relationship with the owner entity will receive financial benefit from the grant funds. This certification shall prohibit using mutual consultants, attorneys, etc. It shall not explicitly prohibit using architects or engineers that have worked with the owner or in the property in the past, as long as there is no ongoing professional relationship with the owner that could be perceived as a conflict of interest. A nonprofit general partner of an eligible property that is attempting to buy out its limited distribution partners is exempt from this part of the conflict of interest requirement. The certification shall also require disclosure, to the intermediary and the tenants, of any relationship with ownership, management, or any other parties to a sale, and will state that the applicant will not seek any financial benefit from project ownership or operations other than those disclosed.

B. Resident Notification.

Each applicant will be required to notify residents of the property of its application prior to submitting the application package to the intermediary. That notification shall be in writing, be distributed to each resident of the property, and include a summary of the applicant's plan for the property. The notification shall also include a statement that residents can themselves become eligible applicants under the M2M Technical Assistance grant program. In addition, the applicant must meet with the residents of the property at least two weeks prior to application submission, and give the residents at least two weeks notification of such meeting. In that meeting, the applicant must provide the following information to the residents:

� A summary of the grant proposal;

� A list of members of the board of directors, if known;

� A list of the proposed development team and management company, if known;

� A list of all proposed consultants and attorneys;

� Disclosure of any relationship with ownership, management, or any other parties related to the owner or, if applicable, related to the sale; and

� Information on how the residents may comment to the intermediary on the applicant's proposal and that residents shall have 14 days to submit comments to the applicant and to the intermediary on the proposal. This information shall include a name and contact number for the intermediary and a name and phone number for a contact person in the applicant organization. If the applicant is unable to make this notification due to lack of access to the property or lack of resident addresses, the applicant may contact the intermediary for assistance. The intermediary may contact the owner to request access or resident addresses for the applicant. If the owner is uncooperative, the intermediary may contact the HUD field office for assistance. If residents make substantive comments to the intermediary, the

applicant will be required to address these comments prior to any grant award from the intermediary.

C. Ineligible Technical Assistance Applicants.

(1) Entities that have applications pending for funds under the HOPE 2 program are not eligible to apply for funding under this ITAG section of the SuperNOFA.

(2) Entities that have been awarded grants under the Preservation Technical Assistance Grants NOFA (entitled ``Technical Assistance Planning Grants for Resident Groups, Community Groups, and Community-Based Nonprofit Organizations and Resident Councils'') issued April 6, 1994, may not receive funds under this ITAG section of the SuperNOFA for any properties for which those grants were funded either until all funds awarded to the grantee under the 1994 NOFA have been expended, or until the grant under the April 6, 1994, NOFA has been terminated as a result of a new grant approval under this ITAG section of the SuperNOFA. The total funds received from the April 6, 1994, NOFA plus the total grant award for this ITAG section of the SuperNOFA may not exceed the funding limits established in this ITAG section of the SuperNOFA. A grantee under the April 6, 1994 NOFA is eligible for funds under this ITAG section of the SuperNOFA only if it also meets the eligibility criteria of this ITAG section of the SuperNOFA and meets the notification requirements of paragraph B ("Resident Notification") above.

D. Eligible Technical Assistance Grant Activities.

(1) Resident Capacity Grants. Resident Capacity grants may be used to cover expenses for the following activities:

� Resident outreach and coordination;

� Legal services to incorporate the resident organization or RC, establish a board of directors, write by-laws, or establish nonprofit status;

� Accounting services for budgeting, planning, and creation of accounting systems that are in compliance with OMB Circular A-110 or A-122;

� Conducting resident meetings and democratic elections;

� Training residents and developing resident leadership;

� Hiring an architect or engineer to advise the residents during the M2M need assessment; and

� Other technical assistance related to developing the capacity of the residents of the organization to meaningfully participate in decisions related to the project.

(2) Predevelopment Grants. Predevelopment grants may be used to cover consultant costs, and grantee staff and overhead costs related to the following activities:

� Legal services to organize a purchasing entity;

� Accounting services for budgeting, planning, and creation of accounting systems that are in compliance with OMB Circular A-110 or A-122;

� Preparing bona fide offers including contracts and other documents to purchase the property;

� Training residents, resident council staff and board members on the M2M process and in skills related to the operation and management of the project;

� Developing and negotiating management contracts, related contract monitoring, and management procedures;

� Engineering studies, such as site, water, and soil analysis, mechanical inspections; and estimations of the cost of rehabilitation and of meeting local building and zoning codes, in anticipation of purchasing a property;

� Securing financing and preparation of mortgage documents, transfer documents, and other documentation incident to closing a purchase offer;

� Preparing feasibility analyses, market studies and management plans;

� If applicable, creating a Community-Based Nonprofit Organization that conforms to the definition of such organization under 24 CFR Sec. 248.101;

� Other activities related to promoting the ability of eligible applicants to acquire, rehabilitate and competently own and manage eligible housing.

(3)Public Entity Grants may be used to cover the following activities:

� All activities listed under resident capacity and predevelopment and,

� Training tenants or organizations affiliated with a M2M eligible property in that area of expertise in which the public entity has been associated.

E. Ineligible Grant Activities.

Examples of activities that are not eligible to be funded for technical assistance grantees include:

� Earnest money deposits as part of a purchase offer;

� Purchase of land or buildings or any improvements to land or buildings;

� Activities not directly related to eligible activities listed in paragraph D of this Appendix A;

� Payments of fees for lobbying services;

� Activities funded from other sources;

� Activities completed prior to time applicant becomes eligible for a grant; and

� Activities performed by the administering intermediary.

HUD determined the allocation of funds by State-Grouping by estimating the total number of M2M projects based on FY 1997, 1998, and 1999 data, dividing this number into total funds expected to be available, and multiplying the result by the number of projects in a State-Grouping. HUD reserves the right to periodically assess activity levels and, if necessary, reallocate funds among intermediaries. The following table contains the estimated State-Grouping allocations based on FY 1998 funding and subject to FY 1999 appropriations, if any:

Return to the 1998 Funds Available