FY 19 SHOP NOFA 7.9.19.pdf

U.S. Department of Housing and Urban Development

Community Planning and Development

Self-Help Homeownership Opportunity Program (SHOP)

FR-6300-N-19

Application Due Date: 09/10/2019

Self-Help Homeownership Opportunity Program (SHOP)

FR-6300-N-19

TABLE OF CONTENTS

I. Funding Opportunity Description.

II. Award Information.

III. Eligibility.

A. Eligible Applicants.

B. Ineligible Applicants.

C. Cost Sharing or Matching.

D. Threshold Eligibility Requirements.

E. Statutory and Regulatory Requirements Affecting Eligibility.

F. Program-Specific Requirements Affecting Eligibility.

G. Criteria for Beneficiaries.

IV. Application and Submission Information.

A. Obtaining an Application Package.

B. Content and Form of Application Submission.

C. System for Award Management (SAM) and Dun and

Bradstreet Universal Numbering System (DUNS) Number.

D. Application Submission Dates and Times.

E. Intergovernmental Review.

F. Funding Restrictions.

G. Other Submission Requirements.

V. Application Review Information.

A. Review Criteria.

B. Review and Selection Process.

VI. Award Administration Information.

A. Award Notices.

B. Administrative, National and Department Policy

Requirements for HUD recipients.

C. Reporting.

D. Debriefing.

VII. Agency Contacts.

VIII. Other Information.

IX. Appendix.

U.S. Department of Housing and Urban Development

Program Office: Community Planning and Development

Self-Help Homeownership Opportunity Program (SHOP) Initial

FR-6300-N-19

14.247 09/10/2019

Funding Opportunity Title:

Announcement Type:

Funding Opportunity Number:

Primary CFDA Number:

Due Date for Applications:

Overview Prospective applicants should carefully read all instructions in all sections to avoid sending an incomplete or ineligible application. HUD funding is highly competitive. Failure to respond accurately to any submission requirement could result in an incomplete or noncompetitive proposal.

HUD is prohibited from disclosing 1) information regarding any applicant’s relative standing,

2) the amount of assistance requested by an applicant, and 3) any information contained in the application. Prior to the application deadline, HUD may not disclose the identity of any applicant or the number of applicants that have applied for assistance.

For Further Information Regarding this NOFA: Please direct questions regarding the specific program requirements of this Program Notice of Funding Availability (NOFA) to the office contact identified in Section VII.

OMB Approval Number(s): 2506-0157

Paperwork Reduction Act.

I. Funding Opportunity Description.

A. Program Description.

1. Purpose.

The Self-Help Homeownership Opportunity Program (SHOP) awards grant funds to eligible national and regional non-profit organizations and consortia to purchase home sites and develop or improve the infrastructure needed to set the stage for sweat equity and volunteer-based homeownership programs for low-income persons and families. Through this NOFA, HUD is making $10,000,000 of FY2019 Self-Help Homeownership Opportunity Program (SHOP) grant funds available to national and regional non-profit organizations and consortia. SHOP funds must be used for eligible expenses to develop decent, safe and sanitary non-luxury housing for low-income persons and families who otherwise would not be able to afford to become homeowners. SHOP units must be decent, safe, and sanitary non-luxury dwellings that comply with state and local codes, ordinances, and zoning requirements, and with all other SHOP requirements.

Only national and regional non-profit organizations and consortia with experience facilitating innovative homeownership opportunities through the provision of self-help homeownership housing programs are eligible to apply. Applicants must propose to use a significant amount of SHOP grant funds in at least two states. Individuals are not eligible applicants for SHOP grant funds. Applications received from individuals will not be reviewed by HUD.

Land acquisition, infrastructure improvements, and reasonable and necessary planning and administration costs (not to exceed 20 percent) are the only eligible uses for SHOP grant funds.

The average SHOP expenditure for the combined costs of land acquisition and infrastructure improvements cannot exceed $15,000 per SHOP unit. Successful applicants must leverage other public and private funds to pay for the construction or rehabilitation costs of each SHOP unit and for any other program costs that are not assisted with SHOP grant funds.

The SHOP units must be sold to homebuyers at prices below the prevailing market price.

Homebuyers must be low-income and must contribute a significant amount of sweat equity towards the development of the SHOP units. Reasonable accommodations must be permitted for individuals with disabilities in order for such individuals to meet hourly sweat equity requirements. A homebuyer’s sweat equity contribution cannot be mortgaged or otherwise restricted upon future sale of the SHOP unit. Volunteer labor is also required.

SHOP Grantees may award SHOP grant funds to local non-profit affiliate organizations to carry out the Grantee’s SHOP program. These affiliate organizations must be located within the Grantee’s service area.

2. Changes from Previous NOFA.

The FY 2019 SHOP NOFA includes changes to the following:

Preference Points Under V.A.2, Other Factors HUD encourages activities in Opportunity Zones (OZ) and activities in collaboration with HBCUs. HUD may award two (2) points for qualified activities supporting either or both initiative(s). In no case will HUD award more than two preference points for these activities.

(1) Opportunity Zones (OZ) HUD encourages activities in Opportunity Zones (OZ) communities. HUD will award two (2) points for qualified activities within a designated zone or area. Applicants must specify the impact that they intend to have in an Opportunity Zone. For example, “The proposed home sites and the development or improvement for infrastructure will be done in an Opportunity Zone. This includes the construction of decent, safe, and sanitary non-luxury housing for low-income persons and families who otherwise would not be able to become homeowners."

(2) Historically Black Colleges and Universities (HBCU) Applicants partnering with a Historically Black College or University will receive two (2) HBCU preference points when their applications include a letter of Commitment certifying that an HBCU Partnership is in place and signed by an authorizing official of the HBCU and documentation of the college or university’s status as a HBCU. Applicants designated by the U.S. Department of Education as Historically Black College or University HBCUs are not eligible to apply for grant funds or receive points under this NOFA.

3. Definitions.

a. Standard Definitions

Affirmatively Furthering Fair Housing (AFFH) Regulations. Statutory obligation to affirmatively further the purposes and policies of the Fair Housing Act and guidance promulgated thereunder.

Assurances. By submitting your application, you provide assurances that, if selected to receive an award, you will comply with U.S. statutory and public policy requirements, including, but not limited to civil rights requirements.

Authorized Organization Representative (AOR) is the person authorized to submit applications on behalf of the organization via Grants.gov. The AOR is authorized by the E-Biz point of contact in the System for Award Management. The AOR is listed in item 21 on the SF- 424.

Award, as used in this NOFA means a federal grant OR cooperative agreement as specified in Section II.E (Type of Funding Instrument).

Catalog of Federal Domestic Assistance (CFDA) is a directory of the various Federal listings, projects, services and activities offering financial and non-financial assistance and benefits to the American public. CFDA Number is the unique number assigned to each program, project, service or activity listed in the Catalog of Federal Domestic Assistance (CFDA).

Consolidated Plan is a document developed by states and local jurisdictions. This plan is completed by engaging in a participatory process to assess their affordable housing and community development needs and market conditions, and to make data-driven, place-based investment decisions with funding from formula grant programs. (See 24 CFR part 91 for more information about the Consolidated Plan and related Annual Action Plan).

Contract means a legal instrument by which a non-Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used in this NOFA does not include a legal instrument, even if the non-Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward (See 2 CFR 200.22.)

Contractor means an entity receiving a contract.

Deficiency is information missing or omitted within a submitted application. Deficiencies typically involve missing documents, information on a form, or some other type of unsatisfied information requirement (e.g., an unsigned form, unchecked box.). Depending on specific criteria, deficiencies may be either curable or non-curable.

Curable Deficiency – Applicants may correct a curable deficiency with timely action.

To be curable the deficiency must:

o Not be a threshold requirement, except for documentation of applicant eligibility;

o not influence how an applicant is ranked or scored versus other applicants; and o be remedied within the time frame specified in the notice of deficiency.

Non-Curable Deficiency – An applicant cannot correct a non-curable deficiency after the submission deadline.

Non-curable deficiencies are deficiencies that, if corrected, would change an applicant’s score or rank versus other applicants. Non-curable deficiencies may result in an application being marked ineligible, or otherwise adversely affect an application’s score and final determination.

DUNS Number is the nine-digit identification number assigned to a business or organization by Dun & Bradstreet and provides a means of identifying business entities on a location-specific basis. Requests for a DUNS number can be made by visiting the Online DUNS Request Portal.

Eligibility requirements are mandatory requirements for an application to be eligible for funding.

Federal Awardee Performance and Integrity Information System (FAPIIS) is a database that has been established to track contractor misconduct and performance.

Grants.gov is the website serving as the Federal government’s central portal for searching and applying for federal financial assistance throughout the Federal government. Registration in Grants.gov is required for submission of applications to prospective agencies.

Historically Black Colleges and Universities (HBCUs). -The Higher Education Act of 1965 defines historically Black colleges and universities (HBCUs) as "any historically Black college or university that was established prior to 1964, whose principal mission was, and is, the education of Black Americans, and that is accredited by a nationally recognized accrediting agency or association determined by the Secretary to be a reliable authority as to the quality of training offered or is, according to such an agency or association, making reasonable progress toward accreditation…"

Institution of Higher Education (IHE), has the meaning given at 20 U.S.C. 1001.

Non-Federal Entity means a state, local government, Indian tribe, institution of higher education (IHE), or non-profit organization carrying out a Federal award as a recipient or sub recipient.

Nongovernmental organizations include Non-Federal entities and for-profit entities for the purpose of calculating indirect cost proposals accompanying applications submitted under this

NOFA.

Personally identifiable information (PII) means information that can be used to distinguish or trace an individual's identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual. The definition of PII is not anchored to any single category of information or technology. Rather, it requires a case-by-case assessment of the specific risk that an individual can be identified. For more detail, refer to 2

CFR 200.79.

Point of Contact (POC) is the person who may be contacted with questions about the application submitted by the AOR. The point of contact is listed in item 8F on the SF-424.

Opportunity Zone according to the IRS, is an “economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.”

Opportunity Zones are further defined in 26 U.S.C. 1400Z.

Promotores/Promotoras are Spanish-speaking Community Health Workers who work in their communities to reduce barriers to health services and make health care systems more responsive.

Recipient means a non-Federal entity receiving an award directly from HUD to carry out an activity under a HUD program.

Section 3 Business Concern means a business concern: (1) 51 percent or more owned by Section 3 residents; (2) of which at least 30 percent of permanent, full-time employees are currently Section 3 residents, or were Section 3 residents within three years of the date of first employment with the business concern; or (3) provides evidence of a commitment to subcontract over 25 percent of the dollar award of all subcontracts to be awarded to business concerns meeting the qualifications in this definition.

Section 3 Residents means: 1) Public housing residents; or 2) Low and very-low income persons, as defined in 24 CFR 135.5, who live in the metropolitan area or non-metropolitan county where Section 3 covered assistance is expended.

Standard Form 424 (SF-424) means the government-wide forms required to apply for Application for Federal Assistance Programs, required by discretionary Federal grants and other forms of financial assistance programs. Applicants for this Federal assistance program must submit all required forms in the SF-424 Family of forms, including SF-424B. For an application under this notice to be complete, the applicant must sign and submit all required forms in the SF-424 Family.

Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the recipient. It does not include payments to a contractor or payments to an individual beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. The legal agreement must contain the subrecipient’s assurance of compliance with program requirements, including but not limited to nondiscrimination and equal opportunity requirements.

Subrecipient means a non-Federal entity receiving a subaward from a pass-through entity to carry out part of a HUD program; but does not include an individual beneficiary of such program. A subrecipient may also receive other Federal awards directly from a Federal awarding agency (including HUD).

System for Award Management (SAM), is an official website of the U.S. government. SAM is a U.S. Government system that consolidated the capabilities of Central Contractor Registry (CCR), Excluded Parties List System (EPLS) and the Online Representations and Certifications Application (ORCA). Registration with Sam.gov is required for submission of applications via Grants.gov. You can access the website at Sam.gov There is no cost to use SAM.

Threshold Requirement – Threshold requirements are a type of eligibility requirement.

Threshold requirements must be met for an application to be reviewed; are not curable, except for documentation of applicant eligibility and are listed in Section III.D Threshold Eligibility Requirements. Similarly, there are eligibility requirements under Section III.E, Statutory and Regulatory Requirements Affecting Eligibility.

4. Program Definitions.

(1) Lots Acquired - Lots acquired using SHOP funds that will be used for construction or rehabilitation of a SHOP Unit and conveyance to a SHOP eligible homebuyer.

(2) Units Under Construction - Units for which ground has been broken and construction is underway but not completed.

(3) Units Completed - Units for which a Certificate of Occupancy has been issued but the units have not been conveyed.

(4) Units Conveyed - Units for which titles have been conveyed to SHOP eligible homebuyers.

(5) Units Occupied - Units occupied by SHOP eligible homebuyers.

5. Web Resources.

Affirmatively Furthering Fair Housing Regulations Code of Conduct list Do Not Pay Dun & Bradstreet Equal Participation of Faith-Based Organizations Federal Awardee Performance and Integrity Information System FFATA Subaward Reporting System https://www.hudexchange.info/programs/affh/ https://portal.hud.gov/hudportal/HUD?src=/program_offices/spm/gmomgmt/grantsinfo/conduct http://donotpay.treas.gov/ http://fedgov.dnb.com/webform https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=1&SID=d67b2c9e097a45629d959d63e5e4f297&ty=HTML&h=L&mc=true&r=SECTION&n=se24.1.5_1109 https://www.fapiis.gov/fapiis/index.action https://www.fsrs.gov/

Grants.gov Healthy Homes Strategic Plan Healthy Housing Reference Manual HUD Funding Opportunities HUD’s Strategic Plan HUD Grants Limited English Proficiency NOFA webcasts Opportunity Zone Procurement of recovered materials Section 3 Business Registry State Point of Contact List System for Award Management (SAM) Uniform Relocation Act – Real Property Acquisition and Relocation Requirements USA Spending

B. Authority.

SHOP is authorized by Section 11 of the Housing Opportunity Program Extension Act of 1996 (Public Law 104-120, as amended, 42 U.S.C. 12805 note). HUD's authority for making funding available under this NOFA is the Consolidated App ropriations Act, 2019, Public Law 116-6, approved February 15, 2019.

II. Award Information.

A. Available Funds.

Funding of up to $10,000,000 is available through this NOFA.

Additional funds may become available for award under this NOFA, because of HUD's efforts to recapture unused funds, use carryover funds, or because of the availability of additional appropriated funds. Use of these funds is subject to statutory constraints. All awards are subject to the applicable funding restrictions contained in this NOFA.

B. Number of Awards.

HUD expects to make approximately 4 awards from the funds available under this NOFA.

C. Minimum/Maximum Award Information.

Estimated Total Funding: Up to $10,000,000 is available to fund SHOP grant awards under the FY2019 SHOP NOFA.

Minimum Award Amount: HUD has not established a minimum award amount; however, the Grantee must complete a minimum of 30 SHOP units. The maximum average SHOP https://grants.gov https://www.hud.gov/sites/documents/DOC_13701.PDF https://www.cdc.gov/nceh/publications/books/housing/housing_ref_manual_2012.pdf https://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/grants/fundsavail https://www.hud.gov/program_offices/spm/strategicplan2014_2018 https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo https://www.hud.gov/program_offices/fair_housing_equal_opp/limited_english_proficiency_0 https://portal.hud.gov/hudportal/HUD?src=/press/multimedia https://www.cdfifund.gov/Pages/Opportunity-Zones.aspx https://www.ecfr.gov/cgi-bin/text-idx?SID=91f378a1992b84880fbe5823086278fc&mc=true&node=pt2.1.200&rgn=div5#se2.1.200_1322 https://portalapps.hud.gov/Sec3BusReg/BRegistry/What https://www.whitehouse.gov/wp-content/uploads/2017/11/SPOC-Feb.-2018.pdf https://beta.sam.gov/ https://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/library/relocation https://www.usaspending.gov/Pages/Default.aspx investment for land acquisition and infrastructure improvements cannot exceed $15,000 per unit. In addition, up to 20 percent may be approved for reasonable and necessary planning and administration costs.

Maximum Award Amount: $10,000,000.

Estimated Total Funding: $10,000,000 Minimum Award Amount: $1,145,000 Per Project Period Maximum Award Amount: $10,000,000 Per Project Period

D. Period of Performance.

The Grantee must expend all SHOP grant funds within 24 months of the date that HUD makes the SHOP grant funds available for drawdown in the Grantee’s line of credit. However, grant funds provided to a SHOP affiliate that develops five or more SHOP units must be expended within 36 months of the date that HUD makes the SHOP grant funds available for drawdown in the Grantee’s line of credit. The Grantee’s administrative costs directly related to the management and oversight of affiliates developing five or more SHOP units must also be expended within 36 months of the date the SHOP grant funds are made available in the Grantee’s line of credit. HUD will establish a 24-month period of performance in the Disaster Recovery Grant Reporting (DRGR) system. Sixty (60) days before the expiration date of this 24-month period of performance, the Grantee must notify HUD in accordance with instructions in the grant agreement of any affiliates that are developing 5 or more SHOP units and have not fully drawn down their SHOP grant funds in DRGR.

Estimated Project Start Date: 10/15/2019 Estimated Project End Date: 10/14/2021 Length of Project Periods: Other Length of Project Periods Explanation of Other: Timely Performance. The Grantee and its affiliates must develop and convey all SHOP units within 36 months of the end of the applicable period of performance.

HUD may grant an extension to a Grantee’s performance schedule only when justified by good cause. HUD will require corrective actions when a Grantee fails to satisfy its approved schedule. HUD will note any failure to perform as required under the award as poor performance which may negatively affect an applicant’s future SHOP funding.

E. Type of Funding Instrument.

Funding Instrument Type: Grant

F. Supplementation.

Not Applicable.

III. Eligibility.

A. Eligible Applicants.

Nonprofits having a 501(c)(3) status with the IRS, other than institutions of higher education Nonprofits having a 501(c)(3) or 501(c)(4) status with the IRS, other than institutions of higher education. Eligible applicants include public or private non-profit organizations, or a consortium of public or private non-profit organizations, that have the capacity and experience to provide or facilitate self-help homeownership opportunities on a national or regional basis.

Grantees must directly undertake eligible SHOP activities and/or enter into a written agreement with one or more non-profit affiliate organizations to carry out eligible SHOP activities.

The term “you” as used in this NOFA refers to the SHOP applicant, including all consortium members. The term “consortium” refers to all consortium members. The term “Grantee” refers to a successful SHOP applicant, including all consortium members, that have been awarded SHOP grant funds under this NOFA. The term “affiliate” refers to an eligible non-profit organization that is an affiliate of a SHOP grantee.

1. Definitions

a. Eligible SHOP Applicant

(i) National Organization. A national organization is a public or private non-profit organization that carries out self-help homeownership housing activities or funds affiliates that carry out self-help homeownership housing activities on a national scale.

(ii) Regional Organization. A regional organization is a public or private non-profit organization that carries out self-help homeownership housing activities or funds affiliates that carry out self-help homeownership housing activities on a regional scale.

A regional area is a geographic area, such as the Southwest or Northeast that includes at least two states. The states in the region need not be contiguous, and the service area of the organization need not precisely conform to state boundaries.

(iii) Consortium. A consortium is two or more public or private non-profit organizations located in at least two states that enter into an agreement to submit a single application for SHOP grant funds to carry out self-help homeownership housing activities on a national or regional basis. Individual consortium members may carry out self-help homeownership housing activities or fund affiliates to carry out self-help homeownership housing activities. The consortium must designate one member as the lead entity to act on behalf of all consortium members. The lead entity must be responsible and accountable for the timely performance and compliance of all consortium members. The consortium must execute a new written agreement with each affiliate that is participating in the consortium's FY2019 SHOP program. The consortium cannot amend a prior written agreement.

b. Affiliate Organization ("Affiliate")

Applicants may undertake eligible SHOP activities directly and/or enter into a written agreement with one or more non-profit, affiliate organizations to carry out the SHOP activities. If the applicant will use affiliate organizations, the affiliate must satisfy the following:

(i) Type of Organization: Your affiliates must be:

(a) Subordinate Organization. A local non-profit self-help homeownership housing organization that is a subordinate organization (i.e., chapter, local, post, or unit) of your central organization and covered by the group exemption issued to the central organization under section 501(c) (3) or 501(c)(4) of the Internal Revenue Code; or

(b) Organization with an Existing Relationship. A local non-profit self-help homeownership housing organization with which you have an existing relationship (e.g., you have provided technical assistance, mentoring or funding to the local self-help homeownership housing organization); or

(c) Organization with a Future Relationship. A local non-profit self-help homeownership housing organization with which you do not have an existing relationship, but to which you will provide technical assistance, mentoring or funding in accordance with your SHOP application.

(ii) Service Area. Your affiliate must be located within your service area.

(iii) Written Agreement. You must have a written agreement with each of your affiliates that incorporates the requirements of this NOFA. Your written agreement must describe the SHOP responsibilities of your affiliate. If you are a consortium, each of your affiliates must be linked to an individual consortium member by a written agreement. You must execute a new written agreement with each affiliate that is participating in your FY2019 SHOP program. You cannot amend a prior written agreement.

B. Ineligible Applicants.

C. Cost Sharing or Matching.

This Program requires cost sharing, matching or leveraging as described below.

Generally, federal sources are not allowed to be used as cost share or match unless otherwise permitted by a program’s authorizing statute.

There is no matching requirement for SHOP; however, the Grantee is required to leverage resources for the cost of construction and/or rehabilitation of self-help homeownership housing units assisted with SHOP grant funds, and for any other program costs that are not funded with SHOP grant funds. Refer to SHOP NOFA “Rating Factor 4: Leveraging Resources.”

D. Threshold Eligibility Requirements.

Applicants who fail to meet any of the following threshold eligibility requirements will be deemed ineligible. Applications from ineligible applicants will not be evaluated.

Outstanding civil rights matters must be resolved to HUD’s satisfaction prior to grant award, provided that all applicable legal processes have been satisfied.

1. Timely Submission of Applications. – Applications submitted after the deadline stated within this NOFA that do not meet the requirements of the grace period policy will be marked late. Late applications are ineligible and will not be considered for funding. See also Section IV Application and Submission Information, part D. Application Submission Dates and Times.

a. Application Threshold Requirements (i). Timely Application Receipt. You must submit a timely SHOP application. HUD will not consider an application that does not meet the timely application receipt requirements of this SHOP NOFA. Refer to SHOP NOFA Section IV.D. "Application Submission Dates and Times."

(ii). No Duplicate Submissions. You must not propose to fund any affiliate or consortium member under your SHOP application that is also seeking FY2019 SHOP grant funds from another SHOP applicant. If an affiliate or consortium member applies for SHOP grant funds through more than one applicant, HUD will disqualify that affiliate or consortium member from receiving funding.

(iii). Dun and Bradstreet Data Universal Numbering System (DUNS) and System for Award Management (SAM). You must have a Dun and Bradstreet Universal Numbering System (DUNS) identifier and maintain active registration in the System for Award Management (SAM), which includes maintaining current information.

Detailed instructions for registration are located on the Grants.gov web page. To apply or search for a DUNS identified, please visit https://fedgov.dnb.com/webform.

Registration instructions for SAM are available at www.sam.gov.

(iv). Certification of Consistency with the Consolidated Plan. This requirement does not apply to the SHOP Program.

b. Applicant Threshold Requirements (i). Eligible Applicant. HUD may only award SHOP grant funds to organizations that meet all of the following criteria:

(a) Non-profit Status - An eligible public or private non-profit organization under Federal, state or tribal law;

(b) Service Area – A national or regional organization or consortia (see Section III.A.

“Eligible SHOP Applicants” of this NOFA) that serves at least two states; and

(c) Self-help Homeownership Housing Experience - An organization experienced in providing or facilitating self-help homeownership housing opportunities as demonstrated by the successful completion of at least 30 self-help homeownership housing units in a national or regional area, consisting of at least two states, within the 24-month period preceding the http://Grants.gov http://www.sam.gov submission of your SHOP application. This may include self-help homeownership housing units completed by one or more of your affiliates during this time period, provided these units were undertaken in accordance with a written agreement between you and your affiliate(s). For a dwelling to qualify as a self-help homeownership housing unit, a homebuyer (defined as the individual or individuals who own the completed unit) must have contributed a significant amount of sweat-equity toward the construction or rehabilitation of the unit as set forth in the SHOP NOFA Section III.F.(8) “Sweat Equity.”

(ii). Consortium Agreement. If you are a consortium, all consortium members must sign and date a written Consortium Agreement for the purpose of applying for SHOP grant funds and carrying out SHOP activities in compliance with this NOFA. This Consortium Agreement must designate a lead entity authorized to submit the SHOP application on behalf of all consortium members. The Consortium Agreement must also state that the lead entity will be accountable for the performance and compliance of the Consortium's SHOP program in accordance with all requirements of this NOFA, and that each consortium member is responsible and accountable for the performance and compliance of its affiliates.

If funded, each consortium member must enter into a separate written agreement with the lead entity. This agreement must include the requirements of the FY2019 SHOP Grant Agreement executed between HUD and the consortium, and set forth each consortium member’s responsibilities as described in your approved SHOP application. If the consortium uses affiliates, each affiliate must be linked to a consortium member that is responsible for the timely performance and SHOP compliance of that affiliate.

(iii). Code of Conduct. You must develop, maintain and follow a written code of conduct in accordance with 2 CFR 200.318. Your Code of Conduct must be dated and signed by your Executive Director, or the Chair of the governing body of your organization.

(iv). Section 3 Reporting Requirements. The Section 3 regulations at 24 CFR part 135, subparts B and E, impose certain reporting requirements on recipients, including the submission of an annual report, using form HUD-60002 on HUD's online system, Section 3 Performance Evaluation and Reporting System (SPEARS) at http://portal.hud.gov/hudportal/HUD?src =/programoffices /fairhousingequalopp/section3/section3.

E. Statutory and Regulatory Requirements Affecting Eligibility.

Eligibility Requirements for Applicants of HUD's Grants Programs.

The following requirements affect applicant eligibility. Detailed information on each requirement is posted on HUD’s Funding Opportunities Page (click here).

Outstanding Delinquent Federal Debts Debarments and/or Suspensions Pre-selection Review of Performance Sufficiency of Financial Management System False Statements Mandatory Disclosure Requirement Prohibition Against Lobbying Activities Equal Participation of Faith-Based Organizations in HUD Programs and Activities http://portal.hud.gov/hudportal/HUD?src=/programoffices%20/fairhousingequalopp/section3/section3 http://portal.hud.gov/hudportal/HUD?src=/programoffices%20/fairhousingequalopp/section3/section3 https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps

F. Program-Specific Requirements Affecting Eligibility.

(1) Number of SHOP Units. The SHOP statute requires the Grantee to develop a specific and reasonable number of dwellings using the grant amounts, which number shall be established taking into consideration costs and economic conditions in the areas in which the dwellings will be developed, but in no case shall be less than 30 SHOP units. A "SHOP unit" means a self-help homeownership housing unit on land acquired with SHOP grant funds or for which infrastructure costs are paid with SHOP grant funds. You must propose to complete and convey a minimum of 30 SHOP units. The average SHOP grant expenditure for the combined costs of land acquisition and infrastructure improvements cannot exceed $15,000 per homeownership unit.

(2) Service Area. You must propose to use a significant amount of SHOP grant funds in a national or regional service area consisting of at least two states.

(3) Eligible Activities. The SHOP statute requires that “amounts from grants..., including any recaptured amounts, shall be used only for eligible expenses in connection with developing new decent, safe, and sanitary, non-luxury dwellings.” There are three categories of eligible SHOP activities. You must propose to use SHOP grant funds only for the cost of eligible SHOP activities. Eligible pre-agreement costs must be incurred on or after the publication date of this NOFA. You may carry out the eligible activities yourself or fund affiliates to carry out your eligible activities. Refer to SHOP NOFA Section IV.F. “Funding Restrictions” for additional guidance on pre-agreement costs, ineligible costs and other restrictions.

(a) Land Acquisition. The acquisition of land (including financing and reasonable and customary closing costs) for the purpose of developing or rehabilitating SHOP units is an eligible activity.

(i) “Land” shall mean real property acquired by the Grantee or its affiliate pursuant to a deed or a lease with a term of 99 years or more; except for Guam, the Northern Mariana Islands, the United States Virgin Islands, and American Samoa, the lease term must be 40 years or more, and for Indian trust or restricted lands the lease term must be 50 years or more. Upon request, HUD may approve other lease terms for good cause on a case-by-case basis.

(ii) If you or your affiliate use SHOP grant funds to acquire land with a building or other improvement affixed to it, you or your affiliate must allocate a portion of the acquisition cost to the land and a portion of the acquisition cost to the building or other improvements.

Only the portion of the acquisition cost allocated to the land is an eligible land acquisition cost.

Land acquisition is subject to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (URA). See Section VI.B-Real Property Acquisition & Relocation for additional information.

(iii) You or your affiliate must own the land acquired with SHOP grant funds through completion of the SHOP unit. HUD may grant an exception to the ownership requirement for units also assisted through the United States Department of Agriculture's (USDA) Mutual Self-Help Housing Technical Assistance grants when the potential homebuyer is receiving a USDA Section 502 Direct Loan. The Grantee must submit to HUD a written request for an exception to the ownership requirement prior to the investment of any SHOP grant funds for land acquisition and/or infrastructure improvements.

(iv) On or after the date of this NOFA, you and your affiliate may expend non-grant funds subject to any requirements that govern the use of such other funds to acquire land, including land acquired before completion of the environmental review process. You may use SHOP grant funds to reimburse these costs after your SHOP Grant Agreement has been executed and the required environmental review process has been successfully completed. Any advances to acquire land prior to successful completion of the required environmental review process are made at the risk of the Grantee and its affiliates, and reimbursement from SHOP grant funds for such advances will depend on the result of the environmental review. These pre-agreement costs must be identified in your SHOP application. Refer to this SHOP NOFA Section IV.F. “Funding Restrictions.”

(b) Infrastructure Improvements. The installation, extension, construction, rehabilitation, or other improvement of utilities and other infrastructure (including the removal of environmental hazards) in support of the development or rehabilitation of SHOP units are eligible activities. Eligible infrastructure improvement activities include the cost of utility and hook-up fees. Eligible infrastructure improvement activities exclude financing and closing costs.

(i) You or your affiliate must own the land on which infrastructure improvements are undertaken through completion of the SHOP unit. HUD may grant an exception to the ownership requirement for units also assisted through the USDA's Mutual Self-Help Housing Technical Assistance grants when the potential homebuyer is receiving a USDA Section 502 Direct Loan. The Grantee must submit to HUD a written request for an exception to the ownership requirement prior to the investment of any SHOP grant funds for land acquisition and/or infrastructure improvements.

(ii) You or your affiliate must not incur infrastructure improvement costs before the required environmental review process has been successfully completed.

(c) Planning and Administration. The reasonable and necessary cost of the planning and administration of your SHOP grant program and activities, including the reasonable and necessary planning and administration costs of your affiliates, is an eligible activity. Eligible costs include staff and overhead costs of implementing your SHOP grant program and activities; providing information to the public about your SHOP grant program and activities which also include costs associated with taking reasonable steps to provide information in the most appropriate manner and language for persons with limited English proficiency and/or persons with disabilities; costs of providing civil rights and fair housing training to your local affiliates; and any expenses involved in affirmatively furthering fair housing.

The indirect costs (such as rent and utilities) of you and your affiliates in carrying out your SHOP grant program and activities are also eligible. You must charge indirect costs in accordance with 2 CFR part 200, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.”

You cannot use SHOP grant funds for planning and administration expenses that are not related to your SHOP grant program and activities. Eligible planning and administration costs cannot exceed 20 percent of your SHOP grant.

(4) Eligible Forms of Ownership. "Homeownership,” “ownership,” and “own” mean fee simple title or a 99-year renewable lease, or an equivalent form of ownership approved by HUD. In Guam, the Northern Mariana Islands, the United States Virgin Islands, and American

Samoa, the definition includes renewable leases of 40 years or more. For Indian Trust or restricted lands, the definition includes renewable leases of 50 years or more. Ownership may be subject to mortgages, deeds of trust, or other liens or instruments securing the debt on the property as allowable under State law.

(5) Property Standards. The SHOP statute requires that funds be used for quality “decent, safe and sanitary non-luxury dwellings” that “comply with local building safety codes and standards.” You must ensure that all SHOP units developed by you and your affiliates are inspected and comply with all SHOP standards, including but not limited to the following:

(a) State and Local Building Codes and Standards. You must ensure that you and your affiliates inspect for and comply with all applicable state and local codes, ordinances, and zoning requirements.

(b) Energy Efficiency. You are strongly encouraged, but not required, to meet the standard for ENERGY STAR Certified New Homes (single-family homes and low-rise multifamily properties up to three stories), or for ENERGY STAR Multifamily High Rise (four or more stories). Incorporating energy-efficiency measures in the design, construction, and/or rehabilitation of self-help units reduces the energy cost burden on low-income homebuyers and improve the sustainability and longevity of the units. All applicants are strongly encouraged, but not required, to use ENERGY STAR-labeled appliances and products (when such ENERGY STAR appliances and products exist). You are strongly encouraged, but not required, to provide appropriate guidance to all SHOP homebuyers on the proper use and maintenance of the energy-saving appliances and products installed in their units. Information about ENERGY STAR can be found at https://www.energystar.gov/.

(c) Water Conservation. You must incorporate specific water conservation measures in the construction and/or rehabilitation of the SHOP units developed by you and your affiliates.

All water-usage products installed or replaced in SHOP units, including toilets, showers and faucets, must bear the “WaterSense” label when such WaterSense products exist. You must provide guidance to all SHOP homebuyers on the proper use and maintenance of the water conservation products installed in their units. WaterSense is a water conservation program sponsored by the U.S. Environmental Protection Agency (EPA). Information about WaterSense products can be found at https://www.epa.gov/watersense.

(d) Accessibility for Qualified Individuals with Disabilities. You and your affiliates must comply with Section 504 of the Rehabilitation Act of 1973 and HUD’s implementing regulations at 24 CFR part 8 concerning accessibility for qualified individuals with disabilities.

Your SHOP units must be newly constructed or rehabilitated and meet the requirements of the Uniform Federal Accessibility Standards (UFAS) to be accessible upon request of the homebuyer in accordance with 24 CFR 8.29. You and your affiliates must also comply with accessibility requirements under the Americans with Disabilities Act (ADA) when applicable.

(6) Homebuyer Income Eligibility. The SHOP statute requires that funds benefit “low-income families and individuals who otherwise would be unable to afford to purchase a dwelling.” Eligible homebuyer households are low-income individuals and families whose annual incomes do not exceed 80 percent of the median income for the area, as established by HUD with adjustments for household size. You must use income limits for the HOME Investment Partnerships Program, which are updated annually and available at:

https://www.hudexchange.info/manage-a-program/home-income-limits/. You must use one of the following definitions of “annual income” to determine whether a homebuyer is income-eligible. You must have procedures to clearly document that assisted homebuyers are income-eligible.

(a) Annual Income as defined at 24 CFR 5.609; or

(b) Adjusted Gross Income as defined for purposes of reporting under the IRS Form 1040 series for individual Federal annual income tax purposes; or

(c) Grantee Definition. You may adopt your own definition of “annual income” to determine whether a homebuyer is income-eligible. This definition must be included in your SHOP Program Design and Scope of Work and approved by HUD.

(7) Housing Counseling. If SHOP grantees or affiliates require housing counseling or refer eligible homebuyers to housing counseling, the housing counseling may be subject to HUD’s Housing Counseling rule. Pursuant to § 5.111, beginning August 1, 2020, any 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.

(8) Sweat Equity. The SHOP statute requires that self-help homeownership housing opportunities be provided “under which the homeowner contributes a significant amount of sweat equity toward the construction of the new dwellings.”

(a) Minimum Sweat Equity Contribution. You must require each SHOP homebuyer, including those with disabilities, to contribute a minimum number of sweat equity hours toward the construction or rehabilitation of the homebuyer’s SHOP unit and/or the homes of other homebuyers participating in the self-help homeownership housing program administered by you or your affiliates. If the homebuyer is one individual, the homebuyer must contribute a minimum of 50 hours of sweat equity. If the homebuyer is more than one individual, the homebuyer must contribute a minimum of 100 hours of sweat equity. Sweat equity includes home construction training, but excludes homebuyer counseling and home maintenance training. You may not make exceptions to these requirements, except that HUD may approve a request to allow volunteers to provide the required sweat equity for a homebuyer who becomes unable to complete his/her sweat equity requirement due to military deployment.

You must grant reasonable accommodations for persons with disabilities in order for them to meet the hourly sweat equity requirements. For example, homebuyers with disabilities may work on less physical tasks or administrative tasks or use volunteers to provide the required sweat equity. If a homebuyer with disabilities uses volunteers, the homebuyer with disabilities must enter into a written three-party agreement with the affiliate or the Grantee (if the Grantee directly administers the program) and the volunteer working on behalf of the homebuyer.

(b) Value of Sweat Equity Contribution. You must establish a fair and reasonable method for valuing a homebuyer’s sweat equity contribution that provides, at a minimum, an average hourly rate or equivalent value of $1,000 per 100 hours of sweat equity for multi-person households, and $500 per 50 hours of sweat equity for individual member households. The full value of the homebuyer’s sweat equity contribution must count as an equity contribution towards the purchase of the homebuyer’s SHOP unit through either a reduction in the unit’s sale price, or as a credit towards the unit’s contract sale price. The homebuyer’s sweat equity contribution cannot be mortgaged or otherwise restricted upon the future sale of the homebuyer's SHOP unit. Refer to SHOP NOFA Section III.E.(11) “Mortgages and Other Loans” for additional guidance.

(9) Homebuyer Financial Contribution. The SHOP statute requires that dwellings developed in connection with SHOP assistance be provided to “families and persons who otherwise would be unable to afford to purchase a dwelling.” You and your affiliates cannot require the homebuyer to make any upfront financial contribution towards the purchase of the homebuyer's SHOP unit, other than cash contributed for a down payment, and reasonable and customary closing costs.

(10) Sale Price. The SHOP statute requires that dwellings constructed in connection with SHOP assistance be made “available at prices below the prevailing market prices.” You must sell each SHOP unit below the appraised value of the property. Lenders may charge reasonable and customary closing costs for the area in which the unit is located. The amount of the SHOP unit mortgage or loan may include these closing costs, but the amount of closing costs must be separately identified and not included in the sale price. Refer to SHOP NOFA Section III.F.(11) “Mortgages and Other Loans” for additional guidance.

(11) Mortgages and Other Loans. The homebuyer’s sweat equity contribution cannot be mortgaged or otherwise restricted upon the future sale of the SHOP unit. To make the cost of homeownership transparent to individual homebuyers, at or before closing you must provide each homebuyer with unit-specific information on the cost and carrying charges for the homebuyer’s SHOP unit similar to information required on the HUD-1 “Settlement Charges.” The following examples demonstrate compliance…