24 C.F.R. PART 590—URBAN HOMESTEADING
Title 24 - Housing and Urban Development
Authority: 12 U.S.C. 1706e; 42 U.S.C. 3535(d).
Source: 54 FR 23937, June 2, 1989, unless otherwise noted.
This part applies to the completion of activities remaining under the Urban Homesteading Program authorized under section 810(b) of the Housing and Community Development Act of 1974 (12 U.S.C. 1706e). Authority to reimburse Federal agencies for transfer of additional properties to LUHAs under this part was repealed effective October 1, 1991. [61 FR 7062, Feb. 23, 1996] Act means section 810 of the Housing and Community Development Act of 1974, as amended from time to time. Applicant means any State or unit of general local government that applies for HUD approval of a local urban homesteading program under these regulations. Homesteader means an individual or family that participates in a local urban homesteading program by agreeing to rehabilitate and occupy a property in accordance with §590.7(b)(5). Local urban homesteading agency (LUHA) means a State, a unit of general local government, or a public agency or qualified community organization designated in accordance with §590.7(c) by a State or a unit of general local government. Local urban homesteading program means the operating procedures and requirements developed by a LUHA and approved by HUD in accordance with this part for selecting and conveying federally-owned properties to qualified homesteaders. Low-income families means those families and individuals whose adjusted incomes do not exceed 80 per centum of the median income for the area, as determined by the Secretary under section 3(b)(2) of the United States Housing Act of 1937. Under the provision of 24 CFR part 813, the Secretary's income limits for this purpose are updated annually and are are available from the Housing Management Division in HUD field offices. Qualified community organization has the meaning specified in §590.7(c)(4). Section 810 funds means funds available to reimburse HUD, FmHA, VA, or RTC (as applicable) for federally-owned property transferred to LUHAs in accordance with this part. State means any State of the United States, any instrumentality of a State approved by the Governor, and the Commonwealth of Puerto Rico. Unit of general local government means any city, county, town, township, parish, village, or other general purpose political subdivision of a State, Guam, the Virgin Islands, or American Samoa, or any general purpose political subdivision thereof; the District of Columbia; the Trust Territory of the Pacific Islands; and Indian tribes, bands, groups, and nations of the United States, including Alaska Indians, Aleuts, and Eskimos. Urban homesteading neighborhood means any geographic area approved by HUD for the conduct of a local urban homesteading program that meets the requirements of this part. [54 FR 23937, June 2, 1989, as amended at 54 FR 39525, Sept. 27, 1989; 56 FR 6808, Feb. 20, 1991; 61 FR 5211, Feb. 9, 1996; 61 FR 7062, Feb. 23, 1996] (a) [Reserved] (b) Development of local urban homesteading program. The applicant shall develop, in compliance with this part, a local urban homesteading program containing the following major elements: (1) Selection and management of properties. The program shall include procedures for selecting federally-owned properties suitable for homesteading and for managing the properties before conditional conveyance to homesteaders. The program shall also provide that, by accepting title to a property under this part, the LUHA assumes liability for injury or damage to persons or property by reason of a defect in the dwelling, its equipment or appurtenances, or for any other reason related to ownership of the property. (2) Homesteader selection. The program shall include equitable procedures for homesteader selection which: (i) Exclude prospective homesteaders who own other residential property; (ii) Take into account a prospective homesteader's capacity to make or cause to be made the repairs and improvements required under the homesteader agreement, including the capacity to contribute a substantial amount of labor to the rehabilitation process, or to obtain assistance from private sources, community organizations, or other sources; (iii) Provide that membership in, or other ties to, any private organization (including a qualified community organization) may not be made a factor affecting selection as a homesteader; (iv) Include locally adopted criteria reasonably matching family size to the number of bedrooms in each property for which a homesteader is being selected, provided that a prospective homesteader who is a one person household shall not be permitted to receive a property having more than two bedrooms, unless there are no larger households on the waiting list, notwithstanding the relative standing of the respective households under the low-income priority (see §590.7(b)(2)(v)). (v) Provide that, before a property is offered to other prospective homesteaders who are eligible, the property will be offered to eligible low-income families, except that properties obtained under the RTC's Affordable Housing Disposition Program (12 CFR part 1609) must be transferred to low-income families; and (vi) Include other reasonable selection criteria which are consistent with this §590.7(b)(2) and which shall be specified in the applicant's application pursuant to §590.11(a) and approved by HUD under §590.13. Such selection criteria may include preferences for the selection of neighborhood residents or other local residents, but only to the extent that they are not inconsistent with this section and with affirmative marketing objectives under §590.11(d)(5)(ii). Such preferences based on residential location may not be based upon the length of time the prospective homesteader has resided in the jurisdiction or the neighborhood. Also, persons who are employed, or who have been notified that they have been hired, in the jurisdiction shall be extended any preference available to current residents. (3) Conditional conveyance. The program shall provide for the conditional conveyance of federally-owned properties to homesteaders without any substantial consideration within one year, or less, of title transfer to the LUHA, unless otherwise approved by HUD in writing prior to the transfer. (4) Financing. The program shall provide procedures for the LUHA to undertake, or to assist the homesteader in arranging, financing for the rehabilitation required under the homesteader agreement. Where direct Federal loans under section 312 of the Housing Act of 1964 (42 USC 1452b) are used as a rehabilitation financing resource by the LUHA, the LUHA shall make reasonable efforts to assist HUD in monitoring and securing compliance with the terms of the loan during the homesteader's conditional title period. (5) Homesteader agreement. The program shall provide for the execution, concurrent with or as a part of the conditional conveyance, of a homesteader agreement between the LUHA and the homesteader which shall require the homesteader: (i) To repair, within one year from the date of conditional conveyance of the property to the homesteader, any defects that pose a substantial danger to health and safety; (ii) To make or cause to be made additional repairs and improvements necessary to meet the applicable local standards for decent, safe, and sanitary housing within three years from the date of conditional conveyance of the property to the homesteader, and to comply with any energy conservation measures designated by the LUHA as part of the repairs; (iii) To occupy the property as his or her principal residence for not less than five consecutive years from the date of initial occupancy except as otherwise approved in writing by HUD on a case-by-case basis when emergency conditions make compliance with this requirement infeasible; (iv) To permit reasonable inspections at reasonable times by employees or designated agents of the LUHA to determine compliance with the agreement; and (v) To surrender possession of, and any interest in, the property upon material breach of the homesteader agreement (including default on any rehabilitation financing secured by the property), as determined by the LUHA in accordance with this part. (6) Monitoring and selecting successor homesteaders. The program shall provide that the LUHA will monitor the homesteader's compliance with the homesteader agreement, will revoke the conditional conveyance and homesteader agreement upon any material breach by the homesteader, and, to the extent necessary and practicable, will select one or more successor homesteaders for the property. The LUHA shall make reasonable efforts to assure that any proposed successor homesteader assumes any section 312 loan on the property, subject to HUD approval of the terms of the assumption. If the LUHA selects a successor homesteader, it shall require the successor homesteader to assume the original homesteader's remaining obligations under his/her homesteader agreement and conditional conveyance in compliance with this part. (7) Fee simple title. The program shall provide for the conveyance of fee simple title to the property from the LUHA to the homesteader, or successor homesteader, without substantial consideration upon compliance with the terms of the homesteader agreement and conditional conveyance. (8) Homesteading infeasible; alternative use. If completion of homesteading proves, in the judgment of HUD, to be infeasible for any reason after a LUHA has accepted title to a federally-owned property, the LUHA shall not demolish, dispose of, rent or otherwise convert the property to its own use until HUD approves an alternative use. (c) Designation of LUHA—(1) Responsibilities. Under the requirements of this §590.7(c), the applicant shall designate a LUHA, which shall have primary responsibility for administering the local urban homesteading program for the applicant. Although the applicant may at any time amend its local urban homesteading program to designate a new LUHA, subject to HUD approval, neither the applicant nor the designated LUHA may delegate or contract out to another legal entity the function of accepting and conveying in its own name title to properties for homesteading purposes under this part. To the extent permitted by the applicant, the LUHA may use third parties as contractors, consultants, or agents to assist if in carrying out other functions and responsibilities with respect to the local urban homesteading program, by entering into a written agreement between the LUHA and the third party. No such agreement shall be deemed to relieve the LUHA or the applicant of responsibility for the thrid party's actions in connection with the local urban homesteading program. (2) Identity of LUHA. The LUHA must have legal authority to carry out a local urban homesteading program as described in this part, including the authority to accept and convey title to properties under paragraph (b) of this §590.7. To the extent consistent therewith, the applicant State or unit of general local government may: (i) Act as LUHA in its own name, while identifying within its administrative organization a lead department or agency to act as the primary contact point for HUD; (ii) Designate, and enter into a written agreement with, a legally separate public body or agency to act as LUHA in accordance with this part; or (iii) Designate, and enter into a written agreement with, a qualified community organization (as defined in the Act) to act as LUHA in accordance with this part. [54 FR 23937, June 2, 1989, as amended at 56 FR 6808, Feb. 20, 1991; 61 FR 7062, Feb. 23, 1996] Participants receiving Community Development Block Grant (CDBG) funds may charge eligible administrative expenses incurred in operating their urban homesteading programs to their otherwise available CDBG administrative funds, provided such administrative expenditures would satisfy other title I requirements. [56 FR 6809, Feb. 20, 1991, as amended at 61 FR 7062, Feb. 23, 1996] (a) Initiation of close-out. The LUHA shall institute close-out procedures, as prescribed by HUD. (b) Close-out may be subject to later audit in accordance with §590.27(b). (c) Close-out conditions. Upon completion of HUD close-out review, HUD will send the LUHA a letter of completion, which HUD may condition. Conditions may reflect unmet obligations, deadlines to meet them, and a statement of any required interim reporting procedures. In addition to any other conditions that may be specifically set forth in the letter of completion, the LUHA remains reponsible after close-out to take whatever actions may be necessary to enforce the homesteader agreement and complete final fee simple conveyance to the homesteader or a successor homesteader, or to obtain alternative use approval from HUD under §590.7(b)(8), for properties conveyed to the LUHA for homesteading prior to close-out. [54 FR 23937, June 2, 1989, as amended at 61 FR 7062, Feb. 23, 1996] The LUHA shall maintain adequate financial records, property disposition documents, supporting documents, statistical records, and all other records pertinent to the local urban homesteading program until fee simple title has been conveyed to all homesteaders, generally a five-year period. The LUHA will also maintain current and accurate data on the race and ethnicity of program beneficiaries. (a) Access to records. The Secretary, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to all books, accounts, records, reports, files, and other papers or property of LUHAs pertaining to funds or property transferred under this part, for the purpose of making surveys, audits, examinations, excerpts, and transcripts. (b) Audit. The LUHA's financial management system shall provide for audits in accordance with 24 CFR part 44. (a) HUD may review the performance of each active LUHA as necessary, as determined by HUD, to determine whether: (1) The program complies with the urban homesteading program participation agreement and certifications, the Act, this part, and other applicable Federal laws and regulations; (2) The LUHA is carrying out its program substantially as approved by HUD; (3) The federally-owned properties the LUHA selects are suitable for homesteading and rehabilitation; (4) The LUHA is making reasonable progress in moving properties through the stages of the homesteading process, including acquisition, homesteader selection, conditional conveyance, rehabilitation, and final conveyance. (5) The improvements in neighborhood public facilities and services provided for in the coordinated approach toward neighborhood improvement are occurring on a timely basis; and (6) The LUHA has a continuing administrative and legal capacity to carry out the approved program in a cost-effective and timely manner. (b) In reviewing a LUHA's performance, HUD will consider all available evidence, which may include, but need not be limited to, the following: (1) Records maintained by the LUHA; (2) Results of HUD's monitoring of the LUHA's performance; (3) Audit reports, whether conducted by the LUHA or by HUD auditors; (4) Records of comments and complaints by citizens and organizations; and (5) Litigation history. (c) LUHAs shall supply data and make available records necessary for HUD's monitoring of the LUHA's local urban homesteading program. [54 FR 23937, June 2, 1989, as amended at 61 FR 7063, Feb. 23, 1996] When HUD determines on the basis of its review that the LUHA's performance does not meet the standards specified in §590.29(a), HUD shall take one or more of the following corrective or remedial actions, as appropriate in the circumstances: (a) Issue a letter of warning that advises the LUHA of the deficiency and puts it on notice that HUD will take more serious corrective and remedial action if the LUHA does not correct the deficiency, or if it is repeated; (b) Advise the LUHA to suspend, discontinue or not incur costs for identified defective aspects of the local program; (c) [Reserved] (d) In cases of continued substantial noncompliance, terminate the urban homesteading program participation agreement, close out the program and advise the LUHA of the reasons for such action; or (e) Where HUD determines that a LUHA has, contrary to its obligations under §590.7(b), converted a property received under this part to its own use, failed to adequately preserve and protect the property, failed to timely secure a homesteader for the property, or received excessive consideration for conveyance of the property, HUD may direct the LUHA to repay to HUD either the amount of compensation HUD finds that the LUHA has received for the property or the amount of section 810 funds expended for the property, as HUD determines appropriate. [54 FR 23937, June 2, 1989, as amended at 61 FR 7063, Feb. 23, 1996]
Title 24: Housing and Urban Development
PART 590—URBAN HOMESTEADING
Section Contents
§ 590.1 General.
§ 590.3 [Reserved]
§ 590.5 Definitions.
§ 590.7 Program requirements.
§ 590.9-590.18 [Reserved]
§ 590.19 Use of section 810 funds.
§ 590.21 [Reserved]
§ 590.23 Program close-out.
§ 590.25 Retention of records.
§ 590.27 Audit.
§ 590.29 HUD review of LUHA performance.
§ 590.31 Corrective and remedial action.
§ 590.1 General.
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§ 590.3 [Reserved]
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§ 590.5 Definitions.
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§ 590.7 Program requirements.
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§ 590.9-590.18 [Reserved]
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§ 590.19 Use of section 810 funds.
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§ 590.21 [Reserved]
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§ 590.23 Program close-out.
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§ 590.25 Retention of records.
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§ 590.27 Audit.
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§ 590.29 HUD review of LUHA performance.
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§ 590.31 Corrective and remedial action.
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