Economic Development and Empowerment

Funding Availability for the Economic Development Initiative (EDI)

Program Overview

    Purpose of the Program. EDI funds are used to enhance the security
of the Section 108 guaranteed loan for the same project or to improve
the viability of a project financed with a Section 108-guaranteed loan.

An EDI grant is required to be used in conjunction with a new Section 108 guaranteed loan commitment.
    Available Funds. Approximately $35 million is available for EDI
grants under this SuperNOFA.
    Eligible Applicants. Any public entity eligible to apply for
Section 108 loan guarantee assistance in accordance with 24 CFR 570.702
may apply for EDI assistance under section 108 (q) and this SuperNOFA.
(See Section III(B) below for additional information regarding eligible
applicants.)
    Application Deadline. June 11, 1999.
    Match. None.

Additional Information:

    If you are interested in applying for funding under this program,
please review carefully the General Section of this SuperNOFA and the
following additional information.

I. Application Due Date, Application Kits, Further Information, and
Technical Assistance

    Application Due Date. Submit your completed applications (one
original and two copies) on or before 12:00 midnight, Eastern time, on
June 11, 1999, to the addresses shown below.
    See 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. To HUD Headquarters. Submit
your completed application (an original and one copy) to: Processing
and Control Unit, Room 7251, Office of Community Planning and
Development, Department of Housing and Urban Development, 451 Seventh
Street, SW, Washington, DC 20410,
    Attention: EDI Grant, by mail or hand delivery.
    To the Appropriate CPD Field Office. At the same time you submit
your application to HUD Headquarters, you must submit an additional
copy of your application to the Community Planning and Development
Division of the appropriate HUD Field Office for your jurisdiction.
    When submitting your application, please refer to EDI, 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 HUD's SuperNOFA Information line toll free at
1-800-HUD-8929. When requesting the application kit, please refer to
EDI. Please provide your name, address (including zip code), and
telephone number (including area code). The application kit also will
be available on the Internet through the HUD web site at http://
www.hud.gov. Persons with hearing or speech impairments may call the
Center's TTY number at 1-800-HUD-2209 to obtain an application kit.
    For Further Information and Technical Assistance. Contact either
Stan Gimont or Paul Webster, Financial Management Division, Office of
Block Grant Assistance, Department of Housing and Urban Development,
451 Seventh Street, SW, Room 7178, Washington, DC 20410; telephone
(202) 708-1871 (this is not a toll-free number). Persons with speech or
hearing impairments may access this number via TTY by calling the toll-
free Federal Information Relay Service at 1-800-877-8339.
    See the General Section of this SuperNOFA for guidance on technical
assistance. With respect to the Section 108 Loan Guarantee program,
which is not a competitive program and thus not subject to those
provisions of the HUD Reform Act pertaining to competitions, HUD staff
will be available to provide advice and assistance to develop Section
108 loan applications.

II. Amount Allocated

    HUD has available a maximum of $35 million for the EDI program, as
appropriated in Pub.L. 105-276 (the FY 1999 VA-HUD Appropriations Act).
If any additional EDI grant monies for this SuperNOFA become available,
HUD may either fund additional applicants in accordance with this
SuperNOFA during Fiscal Year 1999 or may add any funds that became
available to funds that are available for any future EDI competitions.
    As part of EDI, HUD is developing a program enhancement designed to
reduce the risk that CDBG funds will have to be used to repay Section
108 loans that finance economic development projects. This mechanism
will allow public entities to pool economic development loans and
related reserves. The diversification created by the pooling of loans
and reserves will reduce the risk that a public entity will incur a
catastrophic loss to its CDBG program if a business defaults on an
economic development loan made with Section 108 funds. The CDBG Risk
Reduction Pool will also assist public entities in satisfying the
collateral requirements for Section 108 loans. The pool's reserves and
incremental cash flows will provide an additional credit enhancement
for the Section 108 loan and thereby satisfy Section 108 additional
collateral requirements.
    HUD is developing this pooling mechanism in consultation with other
Federal agencies and outside experts. HUD is considering a $10 to $20
million demonstration in FY 1999 (only $10 million of this
demonstration will be from FY 1999 funds). If the demonstration occurs,
then $25 million will be available for the EDI competition announced in
this SuperNOFA. In this event, HUD will publish a notice announcing the
availability of the funds for the FY 1999 demonstration of this
mechanism. Should there be no demonstration in FY 1999, then HUD
reserves the right to utilize the $10 million in FY 1999 funds for the
EDI competition announced in this SuperNOFA, making the total amount
available $35 million.

III. Program Description; Eligible Applicants; Eligible Activities.

(A) Program Description.

    EDI is designed to enable local governments to enhance both the
security of loans guaranteed through HUD's Economic Development Loan
Fund (also known as the Section 108 loan guarantee program) and the
feasibility of the economic development and revitalization projects
that Section 108 guarantees finance. EDI accomplishes this by providing
grants to local governments to be used in conjunction with Section 108
loan guarantees.
    (1) Definitions. Terms used in this program section of this
SuperNOFA have the meanings given in 24 CFR part 570 unless otherwise
specified.
    Act means Title I, Housing and Community Development Act of 1974,
as amended, (42 U.S.C. 5301-et seq.).
    CDBG funds means those funds collectively defined at 24 CFR 570.3,
including grant funds received pursuant to section 108(q) of the Act
and this program section of this SuperNOFA.
    Economic Development Initiative (EDI) means the provision of
economic development grant assistance under section 108(q) of the Act,
as authorized by Section 232 of the Multifamily Housing Property
Disposition Reform Act of 1994 (Pub.L. 103-233, approved April 11,
1994).

[[Page 9792]]

    Economic development project means an activity or activities
(including mixed use projects with housing components) that are
eligible under the Act and under 24 CFR 570.703, and that increase
economic opportunity for persons of low- and moderate-income or that
stimulate or retain businesses or jobs or that otherwise lead to
economic revitalization.
    Empowerment Zone or Enterprise Community means an urban area so
designated by the Secretary of HUD pursuant to 24 CFR part 597 or 598,
or a rural area so designated by the Secretary of Agriculture pursuant
to 7 CFR part 25, subpart B.
    Strategic Plan means a strategy developed and agreed to by the
nominating local government(s) and State(s) and submitted in partial
fulfillment of the application requirements for an Empowerment Zone or
Enterprise Community designated pursuant to 24 CFR part 597 or 598.
    (2) Background. (a) HUD has multiple programs which are intended to
stimulate and promote economic and community development. Primary among
HUD's resources are the Community Development Block Grant (CDBG)
program and the Section 108 loan guarantee program.
    (b) The CDBG program provides grant funds (approximately $4.232
billion in FY 1999) by formula to local governments (either directly or
through States) to carry out community and economic development
activities. The Section 108 loan guarantee program provides local
governments with a source of financing for economic development,
housing rehabilitation and other eligible large scale physical
development projects. HUD is authorized pursuant to Section 108 to
guarantee notes issued by CDBG entitlement communities and non-
entitlement units of general local government eligible to receive funds
under the State CDBG program. The Section 108 program is subject to the
regulations of 24 CFR part 570 applicable to the CDBG program, with the
exception of changes embodied in 24 CFR part 570, subpart M. EDI grants
support Section 108 loan guarantees as generally described under the
above section entitled ``Purpose of the Program.''
    (c) For FY 1999, the Section 108 program is authorized at $1.261
billion in loan guarantee authority. The full faith and credit of the
United States will be pledged to the payment of all guarantees made
under Section 108. Under this program, communities (and States, if
applicable) pledge their future years' CDBG allocations as security for
loans guaranteed by HUD. The Section 108 program, however, does not
require CDBG funds to be escrowed for loan repayment (unless such an
arrangement is specifically negotiated as loan security and included in
the applicable ``Contract for Loan Guarantee Assistance''). This means
that a community can ordinarily continue to spend its existing
allocation for other CDBG purposes, unless needed for loan repayment.
    (3) EDI Program. The EDI program was enacted in 1994 and is
intended to complement and enhance the Section 108 Loan Guarantee
program. A purpose of EDI grant funds is to further minimize the
potential loss of future CDBG allocations:
    (a) By strengthening the economic feasibility of the projects
financed with Section 108 funds (and thereby increasing the probability
that the project will generate enough cash to repay the guaranteed
loan);
    (b) By directly enhancing the security of the guaranteed loan; or
    (c) Through a combination of these or other risk mitigation
techniques.
    (4) Purpose of EDI Funding. HUD intends the approximately $35
million in EDI funds to stimulate economic development by local
governments and private sector parties. HUD desires to see EDI and
Section 108 funds used to finance projects and activities that will
provide near-term results and demonstrable economic benefits, such as
job creation and increases in the local tax base.
    (5) Additional Security for Section 108 Loan Guarantee. Public
entities should be mindful of the need to provide additional security
for the Section 108 loan guarantee pursuant to 24 CFR 570.705(b)(3).
Although a public entity is required by the Act to pledge its current
and future CDBG funds as security for the Section 108 loan guarantee,
the public entity will usually be required to furnish additional
collateral. In most cases, the additional collateral consists (in whole
or in part) of the asset financed with the Section 108 loan funds
(e.g., a loan made to a business as part of an economic development
project). Applications proposing uses for EDI funding that enhance the
viability of projects will help ensure that the project-based asset(s)
will satisfy the additional collateral requirements.
    (6) Typical Project Structures. Provided that proposals are
consistent with other CDBG requirements, including national objectives,
HUD envisions that the following project structures could be typical:
    (a) Funding Reserves. The cash flow generated by an economic
development project may be expected to be relatively ``thin'' in the
early stages of the project, i.e. potentially insufficient cash flows
to meet operating expenses and debt service obligations. The EDI grant
can make it possible for reserves to be established in a way that
enhances the economic feasibility of the project.
    (b) Over-Collateralizing the Section 108 Loan. (i) The use of EDI
grant funds may be structured in appropriate cases so as to improve the
likelihood that project-generated cash flow will be sufficient to cover
debt service on the Section 108 loan and directly to enhance the
guaranteed loan. One technique for accomplishing this approach is over-
collateralization of the Section 108 loan.
    (ii) An example is the creation of a loan pool funded with Section
108 and EDI grant funds. The community would make loans to various
businesses from the combined pool at an interest rate equal to or
greater than the rate on the Section 108 loan. The total loan portfolio
would be pledged to the repayment of the Section 108 loan.
    (c) Direct Enhancement of the Security of the Section 108 Loan. The
EDI grant can be used to cover the cost of providing credit
enhancements. An example of how the EDI grant can be used for this
purpose is by using the grant funds to cover the cost of a standby
letter of credit, issued in favor of HUD. This letter of credit will be
available to fund amounts due on the Section 108 loan if other sources
fail to materialize and thus will serve to protect the public entity's
future CDBG funds.
    (d) Provision of Financing to For-Profit Businesses at a Below
Market Interest Rate. (i) While the rates on loans guaranteed under
Section 108 are only slightly above the rates on comparable U.S.
Treasury obligations, they may nonetheless be higher than can be
afforded by businesses in severely economically distressed
neighborhoods. The EDI grant can be used to make Section 108 financing
affordable.
    (ii) EDI grant funds could serve to ``buy down'' the interest rate
up front, or make full or partial interest payments, allowing the
businesses to be financially viable in the early start-up period not
otherwise possible with Section 108 alone. This strategy would be
particularly useful where a community was undertaking a large
commercial/retail project in a distressed neighborhood to act as a
catalyst for other development in the area.

[[Page 9793]]

    (e) Combination of Techniques. You could employ a combination of
these or other techniques in order to implement a strategy that carries
out an economic development project.

(B) Eligible Applicants.

    Any public entity eligible to apply for Section 108 loan guarantee
assistance pursuant to 24 CFR 570.702 may apply for EDI grant
assistance under Section 108(q). Eligible applicants are CDBG
entitlement units of general local government and non-entitlement units
of general local government eligible to receive loan guarantees under
24 CFR part 570, subpart M. Urban Counties, as defined at 24 CFR 570.3
and 570.307, are eligible applicants for EDI funds; units of general
local government which participate in an Urban County program are not
independently eligible applicants. For non-entitlement applicants other
than those in the States of Hawaii and New York, non-entitlement
applicants will be required to provide proof that the State will
support the related Section 108 loan with a pledge of its CDBG funds
pursuant to the requirements of 24 CFR 570.705(b)(2). Note that
effective January 25, 1995, non-entitlement public entities in the
states of New York and Hawaii were authorized to apply to HUD for
Section 108 loans (see 59 FR 47510, December 27, 1994). Thus, non-
entitlement public entities in all 50 states and Puerto Rico are
eligible to participate in the Section 108 and EDI programs.

(C) Eligible Activities and National Objectives.

    (1) EDI grant funds may be used for activities listed at 24 CFR
570.703, provided such activities are carried out as part of an
economic development project as described in Section III(A) of this EDI
section of this SuperNOFA. If your application fails to meet the
requirements for an EDI project as set forth in this SuperNOFA, HUD
will not give it a rating.
    (2) Each activity assisted with Section 108 loan guarantee or EDI
funds must meet a national objective of the CDBG program as described
in 24 CFR 570.208. You must clearly identify in your narrative
statement (as described in Section V.(B) below) the CDBG national
objective your proposed project will achieve and provide the
appropriate CDBG national objectives regulatory citation found at 24
CFR 570.208. Also, you must address, when applicable, how your proposed
activities will comply with the public benefit standards of the CDBG
program as reflected in the regulation at 24 CFR 570.209 for the CDBG
Entitlement program and 24 CFR 570.482 for the State CDBG program.
    (3) In the aggregate, your use of CDBG funds, including any Section
108 loan guarantee proceeds and section 108(q) (EDI) funds provided
pursuant to this program section of this SuperNOFA, must comply with
the CDBG primary objectives requirement as described in section 101(c)
of the Act and 24 CFR 570.200(c)(3), or 24 CFR 570.484 in the case of
State grantees.

IV. Program Requirements

(A) CDBG Program Regulations

    In addition to 24 CFR 570.701 (Definitions), 570.702 (Eligible
applicants), and 570.703 (Eligible activities), as explained elsewhere
in this program section of the SuperNOFA, the CDBG regulatory
requirements cited in 24 CFR 570.707, including subparts J (Grant
Administration), K (Other Program Requirements), and O (Performance
Reviews) govern the use of EDI funds, as applicable.

(B) Compliance with Applicable Laws

    An award of EDI funding does not in any way relieve you or third
party users of EDI funds from compliance with all applicable Federal,
State and local laws.

(C) Related Section 108 Loan Guarantee Application

    (1) Each EDI application must be accompanied by a request for new
Section 108 loan guarantee assistance. Both the EDI and Section 108
funds must be used in conjunction with the same economic development
project. This request may take any of several forms as defined below.
    (a) A formal application for new Section 108 loan guarantee(s),
including the documents listed at 24 CFR 570.704(b).
    (b) A brief description (not to exceed three pages) of a new
Section 108 loan guarantee application(s). Such 108 application(s) will
be submitted within 60 days, with HUD reserving the right to extend
such period for good cause on a case-by-case basis, of a notice of EDI
selection. EDI awards will be conditioned on approval of actual Section
108 loan commitments. This Section 108 application description must be
sufficient to support the basic eligibility of the proposed project or
activities for Section 108 assistance. (See Section III(C) of this
program section of this SuperNOFA.).
    (c) A copy of a pending, unapproved Section 108 loan guarantee
application, and any proposed amendments to the Section 108 application
which are related to the EDI application. The applicant's submission of
such a EDI/Section 108 application shall be deemed by HUD to constitute
a request to suspend separate processing of the Section 108
application. The Section 108 application will not be approved until on
or after the date of the related EDI award.
    (d) A request for a Section 108 loan guarantee amendment (analogous
to Section IV(C)(1)(a) or (b) above) that proposes to increase the
amount of a previously approved application. However, any amount of
Section 108 loan guarantee authority approved before HUD's announcement
of an EDI grant for the same project pursuant to this SuperNOFA is not
eligible to be used in conjunction with a EDI grant under this
SuperNOFA.
    (2) Further, a Section 108 loan guarantee amount that is required
to be used in conjunction with a prior EDI or Brownfields Economic
Development Initiative (BEDI) grant award, whether or not the Section
108 loan guarantee has been approved as of the date of this SuperNOFA,
is not eligible for an EDI award under this SuperNOFA. For example, if
a public entity has a previously approved Section 108 loan guarantee
commitment of $12 million, even if none of the funds have been
utilized, or if the public entity had previously been awarded an EDI
grant of $1 million and had certified that it will submit a Section 108
loan application for $10 million in support of that EDI grant, the
public entity's EDI application under this SuperNOFA must propose to
increase the amount of its total Section 108 loan guarantee commitments
beyond those amounts (the $12 million or $10 million in this example)
to which it has previously agreed.

(D) Limitations on Use of EDI and Section 108 Funds

    Certain restrictions shall apply to the use of EDI and Section 108
funds:
    (1) EDI grants must not be used as a resource to immediately repay
the principal of a loan guaranteed under Section 108. Repayment of
principal is only permissible with EDI grant funds as a matter of
security if other sources projected for repayment of principal prove to
be unavailable.
    (2) You should not use Section 108 funds to finance activities that
also include financing generated through the issuance of federally tax
exempt obligations. Pursuant to Office of Management and Budget (OMB)
Circular A-129 (Policies for Federal Credit Programs and Non-Tax
Receivables), Section 108 guaranteed loan funds may not directly or

[[Page 9794]]

indirectly support federally tax-exempt obligations.
    (3) HUD will not consider for funding any EDI proposal in which the
related Section 108 loan guarantee would be used solely as security.
EDI funds are to be used to support and enhance activities financed
with Section 108 loan guarantee proceeds from HUD's interim lending or
public offering mechanisms and thereby leverage greater use of the
Section 108 program. Awarding EDI funds to a project which would use
the Section 108 guarantee only as a security guarantee for other
financing can be tantamount to making a simple grant to the project and
thereby fails to fulfill the goals of the EDI program.

(E) Limitations on Grant Amounts

    (1) HUD expects to approve EDI grant amounts for approvable
applications at a range of ratios of EDI grant funds awarded to new
Section 108 loan guarantee commitments, but the minimum ratio will be
$1 of Section 108 loan guarantee commitments for every $1 of EDI grant
funds. However, if you propose a leverage ratio of 1:1, you will not
receive any points under Rating Subfactor 4(1): ``Leverage of Section
108 Funds.'' For example, an applicant requesting an EDI grant of $1
million will be required to leverage a minimum of at least $1 million
in new Section 108 loan guarantee commitments. This will be a special
condition of the EDI grant award. Of course, even though there is a
minimum ratio of 1:1, applications with higher ratios will receive more
points under Rating Factor 4, ``Leveraging Resources/Financial Need''
and, all other things being equal, will be more competitive. You should
propose projects with a greater leverage ratio of new Section 108 to
EDI grant funds (assuming such projects are financially viable). For
example, $1 million of EDI could leverage $12 million of new Section
108 loan commitments. HUD intends that the EDI funds will be used for
projects which leverage the greatest possible amount of Section 108
loan guarantee commitments. Because a fundable application is
competitive in part because of the applicant's proposed ratio of EDI
funds to funds guaranteed by a Section 108 loan guarantee, HUD will
condition a EDI grant award on the grantee's achievement of that
specific ratio. Your failure to meet that condition by obtaining timely
HUD approval of a commitment for, and issuance of, the required Section
108 guaranteed obligations ratio may result in the cancellation and
recapture of all or a proportionate share of the EDI grant award.
    (2) HUD will cap EDI awards at a maximum of $2 million. Any
application in excess of $1 million may be reduced below the amount
requested by the applicant if HUD determines that such a reduction is
appropriate.
    (3) If additional EDI grant funds become available to HUD as the
result of recaptures prior to the date of this SuperNOFA, HUD reserves
the right to award grants under this SuperNOFA whose aggregate total
may exceed the $35 million announced in this SuperNOFA, up to the
maximum amount authorized by law.
    (4) In the event you are awarded an EDI grant that has been reduced
below the original request (e.g. the application contained some
activities that were ineligible or there were insufficient funds to
fund the last competitive application at the full amount requested),
you will be required to modify your project plans and application to
conform to the terms of HUD's approval before HUD will execute a grant
agreement. HUD also will proportionately reduce or deobligate the EDI
award if you do not submit approvable Section 108 loan guarantee
applications on a timely basis (including any extension authorized by
HUD) in the amount required by the EDI/108 leveraging ratio which will
be approved by HUD as a special condition of the EDI grant award (see
Section IV(E)(1) above of this program section of the SuperNOFA). Any
modifications or amendments to your application approved pursuant to
this SuperNOFA, whether requested by you or by HUD, must be within the
scope of the approved original EDI application in all respects material
to rating the application, unless HUD determines that the revised
application remains within the competitive range and is otherwise
approvable under this SuperNOFA competition.
    (5) In the case of requested amendments to a previously approved
Section 108 loan guarantee commitment (as further discussed in Section
IV(C)(1)(d), above), the EDI assistance approved will be based on the
increased amount of Section 108 loan guarantee assistance.
    (6) Pursuant to another portion of this SuperNOFA, HUD is
simultaneously announcing the availability of $25 million of
Brownfields Economic Development Initiative (BEDI) funds. While HUD
will permit applicants to pursue BEDI and EDI funds for the same
project, HUD requires that the BEDI and EDI applications (and their
components) be independent of one another. Thus, each application
should have an identifiable amount of Section 108 funding associated
with its respective request for EDI and BEDI funds for purposes of
determining the leverage of Section 108 funding to the corresponding
amount of EDI or BEDI funds requested. Further, the proposed amount of
Section 108 borrowing associated with the BEDI or EDI grant shall not
be used to determine leverage of other financial resources under Rating
Subfactor 4(3). Further, if you seek both BEDI and EDI funds for the
same project, you must include in your response to Rating Factor 3 and
the ``Financial feasibility'' portion of Rating Factor 4 a discussion
of how the project can be financed and implemented if you fail to
obtain either BEDI or EDI funds under this SuperNOFA.

(F) Timing of Grant Awards

    (1) To the extent you submit a full Section 108 application with
your EDI grant application, HUD will evaluate the Section 108
application concurrently with the request for EDI grant funds. Note
that EDI grant assistance cannot be used to leverage a Section 108 loan
guarantee approved prior to the date of HUD's announcement of an EDI
grant pursuant to this SuperNOFA. However, the EDI grant may be awarded
before HUD approval of the Section 108 commitment if HUD determines
that such award will further the purposes of the Act.
    (2) HUD notice to you of the amount and conditions of EDI funds
awarded, based upon review of the EDI application, constitutes an
obligation of grant funds, subject to compliance with the conditions of
award and execution of a grant agreement. EDI funds must not be
disbursed to the public entity before the issuance of the related
Section 108 guaranteed obligations.

(G) Economic Opportunities for Low and Very Low-Income Persons (Section
3)

    Section 3 of the Housing and Urban Development Act of 1968 (12
U.S.C. 1701u) is applicable to EDI grant recipients. Please see Section
II(E) of the General Section of the SuperNOFA.

V. The Application Selection Process

(A) Rating and Ranking

    (1) Each rating factor and the maximum number of points is provided
below. The maximum number of points to be awarded is 102. This includes
two EZ/EC bonus points as described in the General Section of this
SuperNOFA.
    (2) Once scores are assigned, all applications will be ranked in
order of points assigned, with the applications receiving more points
ranking above those receiving fewer points.

[[Page 9795]]

Applications will be funded in rank order.
    (3) Prior to award, if HUD determines that your application rated,
ranked and fundable could be funded at a lesser EDI grant amount than
requested consistent with feasibility of the funded project or
activities and the purposes of the Act, HUD reserves the right to
reduce the amount of the EDI award and/or increase the Section 108 loan
guarantee commitment, if necessary, in accordance with such
determination. An application in excess of $1 million may be reduced
below the amount requested by the applicant if HUD determines that such
a reduction is appropriate.
    (4) HUD may decide not to award the full amount of EDI grant funds
available under this program section of this SuperNOFA and may make any
remaining amounts available under a future SuperNOFA, or under a
supplementary notice.
    (5) HUD desires to fund projects which will quickly produce
demonstrable results. EDI grant awards will contain conditions
requiring you to adhere to your stated timeframes for implementing your
proposed projects and drawing Section 108 and EDI funds. If you fail to
adhere to these schedules, HUD may recapture the EDI funds.

(B) Narrative Statement

    (1) Provide narrative statements describing the activities that you
will carry out with the EDI grant funds. Your narrative statement must
not exceed three (3) 8.5'' by 11'' pages.
    (2) Describe how your proposed uses of EDI funds will meet the
national objectives under 24 CFR 570.208 for the CDBG program and
qualify as eligible activities under 24 CFR 570.703. You must include
citations to the specific regulatory subsections supporting eligibility
and national objective. (See Section III(D) of this program section of
this SuperNOFA).
    (3) Respond to the rating factors below. Each of the listed rating
factors (or, where applicable, each subfactor) below also has a
separate page limitation specified.
    (4) Print your narrative statement in 12 point type/font, and use
sequentially numbered pages.

(C) Factors for Award Used to Evaluate and Rate Applications

    HUD will consider your application for selection based on the
following factors that demonstrate the quality of your proposed project
or activities, and your creativity, capacity and commitment to obtain
maximum benefit from the EDI funds, in accordance with the purposes of
the Act.
Rating Factor 1: Capacity of the Applicant and Relevant Organizational
Experience (15 Points)
    [Your response to this factor is limited to three (3) pages.]
    This factor addresses the extent to which you have the
organizational resources necessary to successfully implement your
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
subcontractors, consultants, subrecipients, and members of consortia
that are firmly committed (i.e., has a written agreement or a signed
letter of understanding with the applicant agreeing in principle to its
participation and role in the project). In rating this factor, HUD will
consider the following:
    (1) With regard to the EDI/Section 108 project you propose, you
should demonstrate that you have the capacity to implement the specific
steps required to successfully carry out your proposed EDI/Section 108
project. This includes factors such as your:
    (a) Performance in the administration of your CDBG, HOME or other
programs;
    (b) Previous experience, if any, in administering a Section 108
loan guarantee;
    (c) Performance and capacity in carrying out economic development
projects;
    (d) Ability to conduct prudent underwriting;
    (e) Capacity to manage and service loans made with the guaranteed
loan funds or previous EDI or BEDI grant funds;
    (f) Capacity to carry out your projects and programs in a timely
manner; and,
    (g) If applicable, your capacity to manage projects under this
program section of this SuperNOFA along with any federal funds awarded
as a result of a federal urban Empowerment Zone/Enterprise Community
designation (including Enhanced Enterprise Community (EEC)
designation).
    (2)(a) If you have previously received an EDI or BEDI grant
award(s), you must describe the status of the implementation of those
project(s) assisted with EDI or BEDI funds, any delays that have been
encountered and the actions you are taking to overcome any such delays
in order to carry out the project in a timely manner. For such
previously funded EDI or BEDI grant projects, HUD will consider the
extent to which you have used the awarded EDI or BEDI grant funds and
the associated Section 108 guaranteed loan funds.
    (b) Further, if you have EDI or BEDI funds and related Section 108
loan guarantee authority available as a result of earlier HUD awards
and commitments for activities such as (but not limited to) economic
development loan funds, community development banks, and community and
individual investment corporations, you should use those existing
financial resources before applying for additional EDI or BEDI funds
and Section 108 commitments. If HUD determines that you could fund your
project from such existing resources, HUD will reduce your score under
this rating factor to 0.
    (3) The capacity of subrecipients, nonprofit organizations and
other entities that have a role in implementing the proposed program
will be included in this review. HUD also may rely on information from
performance reports, financial status information, monitoring reports,
audit reports and other information available to HUD in making its
determination under this factor.
Rating Factor 2: Distress/Extent of the Problem (15 Points)
    [Your response to this factor is limited to three (3) pages.]
    This factor addresses the extent to which there is need for funding
your proposed activities based on levels of distress, and an indication
of the urgency of meeting the need/distress in your target area.
    (1) In applying this factor, HUD will consider current levels of
distress in the immediate community to be served by your project and
the jurisdiction applying for assistance. If you are able to indicate a
level of distress in the immediate project area that is greater than
the level of distress in your jurisdiction as a whole, HUD will give
your application a higher score under this factor than other
applications that do not. HUD requires you to use sound and reliable
data that is verifiable to support the level of distress you claim in
your application. You must provide a source for all information you
cite and indicate the publication date or origination date of the data.
    (2) In previous EDI competitions, the poverty rate was often
considered the best indicator of distress. You must provide the poverty
rate for your jurisdiction as a whole and for the areas to be served
and/or where the EDI/Section 108 funded project is located; however, in
addition, you may demonstrate the level of distress with other factors
such as income levels and unemployment rates.

[[Page 9796]]

    (3) To the extent that your Consolidated Plan and your Analysis of
Impediments to Fair Housing choice (AI) identifies the level of
distress in the community and the neighborhood in which your project is
being carried out, you should include references to such documents in
preparing your response to this factor. Also, you should discuss the
extent to which the analysis of impediments identifies unhealthy
environmental conditions in your project area, and how such conditions
negatively impact your target neighborhood.
Rating Factor 3: Soundness of Approach (25 Points)
    [Your response to this factor is limited to three (3) pages.]
    This factor addresses the quality and cost-effectiveness of your
proposed plan. There must be a clear relationship between the proposed
activities, community needs and purposes of the program funding for you
to receive points for this factor. In rating this factor, HUD will
consider the following:
    (1) The quality of your plan/proposal for the use of EDI funds and
Section 108 loan funds, including the extent to which your proposed
plan for effective use of EDI grant/Section 108-guaranteed loan funds
will address the needs you described in Rating Factor 2 above regarding
the distress and extent of the problem in your immediate community and/
or jurisdiction. As part of the response to this factor, you should
identify the eligible activities you will carry out and fully describe
how your project will achieve a national objective. You should make
substantial efforts to demonstrate how your proposed project would
mitigate or otherwise address the distress identified in Rating Factor
2 above.
    (2) The extent to which the plan is logically, feasibly, and
substantially likely to achieve its stated purpose. HUD's desire is to
fund projects and activities which will quickly produce demonstrable
results and advance the purposes of the EDI program, including the
number of jobs to be created by the project and the impact of the
project on job creation that will benefit individuals on or previously
on welfare. You should demonstrate that you have a clear understanding
of the steps required to implement your project, the actions that you
and others responsible for implementing your project must complete. You
must include a reasonable time schedule for carrying out your project.
The application kit contains a timeline form that you must use to
indicate your project timing.
    (3) The extent to which your proposed project addresses your
Analysis of Impediments and the needs identified in Rating Factor 2;
the extent to which such project activities will result in the physical
and economic improvement for the residents in the neighborhood in which
your project will be carried out; the extent to which you will offer
residents an opportunity to relocate to environmentally healthy housing
or neighborhoods; or the extent to which residents will benefit from
the funded project to enable them to continue to live in a redeveloped
or revitalized neighborhood and thus share in the anticipated economic
benefits your project is expected to generate.
    (4) The extent to which your project incorporates one or more
elements that facilitate a successful transition of welfare recipients
from welfare to work. Such an element could include, for example,
linking your proposed project or loan fund to social and/or other
services needed to enable welfare recipients to successfully secure and
carry out full-time jobs in the private sector; provision of job
training to welfare recipients who might be hired by businesses
financed through the proposal; and/or incentives for businesses
financed with EDI/section 108 funds to hire and train welfare
recipients.
    (5) Due to an order of the U.S. District Court for the Northern
District of Texas, Dallas Division, with respect to any application
submitted by the City of Dallas, Texas, HUD's consideration of the
response to this factor, ``Soundness of Approach,'' will include the
extent to which Dallas' plan for the use of EDI funds and Section 108
loans will be used to eradicate the vestiges of racial segregation in
the Dallas Housing Authority's programs consistent with the Court's
order. Up to two (2) additional points will be awarded to any
application submitted by the City of Dallas, Texas, to the extent this
subfactor is addressed.
Rating Factor 4: Leveraging Resources/Financial Need (35 Points)
    [Page limits for the response to this factor are listed separately
for each subfactor under this factor.]
    In evaluating this factor, HUD will consider the extent to which
your response demonstrates the financial need and feasibility of your
project and the leverage ratio of Section 108 loan proceeds to EDI
grant funds. This factor has three subfactors, each with its own
maximum point total:
    (1) Leverage of Section 108 funds (20 points). Your response to
this subfactor is limited to one (1) page. The minimum ratio of Section
108 funds to EDI funds in any project may not be less than 1:1. The
extent to which your proposed project leverages an amount of Section
108 funds beyond the 1:1 ratio will be considered a positive factor. If
you have a ratio of 1:1, your application will not receive any points
under this subfactor. If you use your EDI grant to leverage more new
Section 108 commitments, your application will receive more points
under this subfactor.
    (2) Financial feasibility (10 points). [Your response to this
subfactor is limited to three (3) pages.] HUD will consider the extent
to which you demonstrate that your project is financially feasible. In
responding to this subfactor, you must clearly address the question of
why the EDI funds are critical to the success of this project. This may
include factors such as:
    (a) Project costs and financial requirements. You should provide a
funding sources and uses statement (not included in the 3 page
narrative limit), as well as justifications for project costs.
    (b) The amount of any debt service or operating reserve accounts
you will establish in connection with the economic development project.
    (c) The reasonableness of the costs of any credit enhancement paid
with EDI grant funds.
    (d) The amount of program income (if any) you will receive each
year during the repayment period for the guaranteed loan.
    (e) Interest rates on those loans to third parties (other than
subrecipients) (either as an absolute rate or as a plus/minus spread to
the Section 108 rate).
    (f) Underwriting criteria that you will use in determining project
feasibility.
    (3) Leverage of other financial resources (5 points). [Your
response to this subfactor is limited to one (1) page plus supporting
documentation evidencing third party commitment (written and signed) of
funds.] HUD will evaluate the extent to which you leverage other funds
(public or private) with EDI grant funds and Section 108 guaranteed
loan funds and the extent to which such other funds are firmly pledged
to the project. This could include the use of CDBG funds, other Federal
or state grants or loans, your general funds, project equity or
commercial financing provided by private sources or funds from non-
profits or other sources. Funds will be considered pledged to the
project if there is evidence of the third party's written commitment to
make the funds available for the EDI/108 project, subject to approval
of the EDI and Section 108 assistance and completion of any
environmental review required under 24

[[Page 9797]]

CFR part 50 for the project. Note, that with respect to CDBG funds,
your pledge of its CDBG funds will be considered sufficient commitment.
Rating Factor 5: Comprehensiveness and Coordination (10 Points)
    [Your response to this factor is limited to two (2) pages.]
    This factor addresses the extent to which you have coordinated your
activities with other known organizations; you participate or promote
participation in your or a State's Consolidated Planning process; and
you are working towards addressing a need in a comprehensive manner
through linkages with other activities in the community.
    In evaluating this factor, HUD will consider the extent to which
you demonstrate you have:
    (1) Coordinated your proposed activities with those of other groups
or organizations before submission, in order to best complement,
support and coordinate all known activities; and developed specific
steps to share information on solutions and outcomes with others.
Describe any written agreements, memoranda of understanding in place,
or that will be in place after award.
    (2) Developed linkages, or specific steps to develop linkages with
other activities, programs or projects (through meetings, information
networks, planning processes or other mechanisms to coordinate its
activities), so that solutions are holistic and comprehensive. Describe
any linkages with other HUD-funded projects/activities outside the
scope of those covered by the Consolidated Plan, as well as established
linkages and outreach with residents of your project area.

VI. Application Submission Requirements

    (A) Public entities seeking EDI assistance must make a specific
request for that assistance, in accordance with the requirements of
this program section of this SuperNOFA.
    (B) You must submit an original and one copy of the items listed
below to HUD Headquarters (see the section ``Addresses For Submitting
Applications in this program section of this SuperNOFA). In addition,
you must submit one additional copy directly to the Community Planning
and Development Division of the appropriate HUD Field Office for your
jurisdiction.
    (C) Your EDI application shall consist of the following items:
    (1) Your transmittal letter;
    (2) Table of contents;
    (3) Application check list (supplied in application kit);
    (4) A request for loan guarantee assistance under Section 108 as
further described in Section IV(C) of this program section of the
SuperNOFA. Application guidelines for the Section 108 loan guarantee
program are found at 24 CFR 570.704;
    (5) As described in Section V(B) of this program section of this
SuperNOFA, a narrative statement (3 page limit) describing the
activities that you will carry out with the EDI grant funds;
    (6) Responses to each of the rating factors (within the page limits
provided for each factor or subfactor as applicable);
    (7) Completion of a funding sources and uses statement and a EDI
and Section 108 eligibility statement (see the application kit);
    (8) Written agreements or signed letters of understanding in
support of Rating Factor 1: ``Capacity of the Applicant and Relevant
Organizational Experience;''
    (9) Signed third party commitment letters pledging funds in support
of subfactor 4(2): ``Leverage of other financial resources;''
    (10) In addition to the certifications specified in section II(G)
of the General Section of this SuperNOFA, the forms and certifications
required at 24 CFR 570.704(b)(3), (b)(4), (b)(8)(i), (b)(8)(ii),
(b)(8)(vi), (b)(8)(vii), (b)(8)(viii), (b)(8)(x), and (b)(9); and
    (11) Acknowledgement of Application Receipt form.
    (D) A single application must contain a request for funds for a
single EDI project. You may submit more than one application for each
additional unrelated EDI project. Each application will be rated and
ranked individually. In no event will HUD rate and rank more than one
EDI project per application.
    (E) Your application must meet all of the applicable threshold
requirements of Section IIB of the General Section of this SuperNOFA.

VII. Corrections to Deficient Applications

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

VIII. Environmental Requirements

(A) Environmental Review

    After the completion of this competition and after HUD's award of
EDI grant funds, pursuant to 24 CFR 570.604, each project or activity
assisted under this program is subject to the provisions of 24 CFR part
58, including limitations on the EDI grant and Section 108 public
entity's commitment of HUD and non-HUD funds prior to the completion of
environmental review, notification and release of funds. No such
assistance will be released by HUD until a request for release of funds
is submitted and the requirements of 24 CFR part 58 have been met. All
public entities, including nonentitlement public entities, shall submit
the request for release of funds and related certification, required
pursuant to 24 CFR part 58, to the appropriate HUD field office for
each project to be assisted.

(B) Environmental Justice

    Executive Order 12898 (Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations) directs
Federal agencies to develop strategies to address environmental
justice. Environmental justice seeks to rectify the disproportionately
high burden of environmental pollution that is often borne by low-
income, minority, and other disadvantaged communities, and to ensure
community involvement in policies and programs addressing this issue.

IX. Authority

    Section 108(q), Title I, Housing and Community Development Act of
1974, as amended, (42 U.S.C. 5301-5320); 24 CFR part 570.

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Funding Availability for the Brownfields Economic Development
Initiative (BEDI)

Program Overview

    Purpose of the Program. BEDI funds are used to enhance the security
of the Section 108 guaranteed loan for the same project or to improve
the viability of a project financed with a Section 108-guaranteed loan.
A BEDI grant is required to be used in conjunction with a new Section
108 guaranteed loan commitment.
    Available Funds. Approximately $25 million is available for BEDI
grants under this SuperNOFA.
    Eligible Applicants. Any public entity eligible to apply for
Section 108 loan guarantee assistance in accordance with 24 CFR 570.702
may apply for BEDI grant assistance under section 108(q) and this
SuperNOFA. (See Section III(B) below for additional information
regarding eligible applicants.)
    Application Deadline. June 25, 1999.
    Match. None.

Additional Information

    If you are interested in applying for funding under this program,
please review carefully the General Section of this SuperNOFA and the
following additional information.

I. Application Due Date, Application Kits, Further Information, and
Technical Assistance.

    Application Due Date. Submit your completed applications (one
original and two copies) on or before 12:00 midnight, Eastern time, on
June 25, 1999, to the addresses shown below.
    See 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).
    Addresses for Submitting Applications. To HUD Headquarters. Submit
your completed application (an original and one copy) to: Processing
and Control Unit, Room 7251, Office of Community Planning and
Development, Department of Housing and Urban Development, 451 Seventh
Street, SW, Washington, D.C. 20410, Attention: BEDI Grant, by mail or
hand delivery.
    To the Appropriate CPD Field Office. At the same time you submit
your application to HUD Headquarters, you must submit an additional
copy of the application to the Community Planning and Development
Division of the appropriate HUD Field Office for your jurisdiction.
    When submitting your application, please refer to BEDI, and include
your name, mailing address (including zip code) and telephone number
(include area code).
    For Application Kits. For an application kit and any supplemental
information, please call HUD's SuperNOFA Information line toll free at
1-800-HUD-8929. When requesting an application kit, please refer to
BEDI. Please be sure to provide your name, address (including zip
code), and telephone number (including area code). Persons with hearing
or speech impairments may call the Center's TTY number at 1-800-HUD-
2209 to obtain an application kit. The application kit will also be
available on the Internet through the HUD web site at http://
www.hud.gov.
    For Further Information and Technical Assistance. Contact either
Stan Gimont or Paul Webster, Financial Management Division, Office of
Block Grant Assistance, Department of Housing and Urban Development,
451 Seventh Street, SW, Room 7178, Washington, DC 20410, telephone
(202) 708-1871 (this is not a toll-free number). Persons with speech or
hearing impairments may access this number via TTY by calling the toll-
free Federal Information Relay Service at 1-800-877-8339.
    See the General Section of this SuperNOFA for guidance on technical
assistance. With respect to the Section 108 Loan Guarantee program,
which is not a competitive program and thus not subject to those
provisions of the HUD Reform Act pertaining to competitions, HUD staff
will be available to provide advice and assistance to develop Section
108 loan applications.

II. Amount Allocated

    HUD has available a maximum of $25 million for the BEDI program, as
appropriated in Pub.L. 105-276 (the FY 1999 VA-HUD Appropriations Act)
for the purpose of assisting public entities in the redevelopment of
brownfields.

III. Program Description; Eligible Applicants; Eligible Activities

    (A) Program Description.
    BEDI is designed to help cities redevelop abandoned, idled, or
underutilized industrial and commercial facilities where expansion or
redevelopment is complicated by real or perceived environmental
contamination--brownfields. BEDI accomplished this by providing funding
to local governments to be used in conjunction with Section 108 loan
guarantees to finance redevelopment of brownfield sites.
    (1) Definitions. Unless otherwise defined herein, terms defined in
24 CFR part 570 and used in this program section of this SuperNOFA
shall have the respective meanings given thereto in that part.
    Act means Title I, Housing and Community Development Act of 1974,
as amended, (42 U.S.C. 5301 et seq.).
    Brownfield means abandoned, idled, or under-used real property
(including industrial and commercial facilities) where expansion or
redevelopment is complicated by real or perceived contamination.
    Brownfields Economic Development Initiative (BEDI) means the
competitive award of up to $25 million, as appropriated in the FY 1999
VA-HUD Appropriations Act, for economic development grant assistance
under section 108(q) of the Act for the purpose of assisting public
entities in the redevelopment of brownfields.
    Brownfields economic development initiative (BEDI) project means an
activity or activities (including mixed use projects with housing
components) that are eligible under the Act and under 24 CFR 570.703,
and that increase economic opportunity for persons of low- and
moderate-income or that stimulate or retain businesses or jobs or that
otherwise lead to economic revitalization in connection with
brownfields.
    CDBG funds means those funds collectively defined at 24 CFR 570.3,
including grant funds received pursuant to section 108(q) and this
program section of this SuperNOFA.
    Economic Development Initiative (EDI) means the provision of
economic development grant assistance under section 108(q) of the Act,
as authorized by Section 232 of the Multifamily Housing Property
Disposition Reform Act of 1994 (Pub. L. 103-233, approved April 11,
1994).
    Empowerment Zone or Enterprise Community means an urban area so
designated by the Secretary of HUD pursuant to 24 CFR part 597 or 598,
or a rural area so designated by the Secretary of Agriculture pursuant
to 7 CFR part 25, subpart B.
    EPA means the U.S. Environmental Protection Agency.
    Showcase Community means an applicant chosen by the Federal
Government's Brownfields National Partnership for inclusion in the
Federal Government's Brownfields Showcase Communities program.
    Strategic Plan means a strategy developed and agreed to by the
nominating local government(s) and State(s) and submitted in partial
fulfillment of the application requirements for an Empowerment Zone

[[Page 9802]]

or Enterprise Community designated pursuant to 24 CFR part 597 or 598.
    (2) Background.
    (a) HUD has multiple programs which are intended to stimulate and
promote economic and community development and can be effectively
employed to address and remedy brownfield conditions. Primary among
HUD's resources are the Community Development Block Grant (CDBG)
program and the Section 108 loan guarantee program.
    (b) The CDBG program provides grant funds (approximately $4.232
billion in FY 1999) by formula to local governments (either directly or
through States) to carry out community and economic development
activities. The Section 108 loan guarantee program provides local
governments with a source of financing for economic development,
housing rehabilitation, and other eligible large scale physical
development projects. HUD is authorized pursuant to Section 108 to
guarantee notes issued by CDBG entitlement communities and non-
entitlement units of general local government eligible to receive funds
under the State CDBG program. Regulations governing the Section 108
program are found at 24 CFR part 570, subpart M. It must be noted that
the Section 108 program is subject to the regulations of 24 CFR part
570 applicable to the CDBG program with the exception of changes
embodied in 24 CFR part 570, subpart M. EDI and BEDI grants support
Section 108 loan guarantees as generally described under the above
section entitled ``Purpose of the Program.''
    (c) For FY 1999, the Section 108 program is authorized at $1.261
billion in loan guarantee authority. The full faith and credit of the
United States will be pledged to the payment of all guarantees made
under Section 108. Under this program, communities (and States, if
applicable) pledge their future years' CDBG allocations as security for
loans guaranteed by HUD. The Section 108 program, however, does not
require CDBG funds to be escrowed for loan repayment (unless such an
arrangement is specifically negotiated as loan security) and included
in the applicable ``Contract for Loan Guarantee Assistance.'' This
means that a community can ordinarily continue to spend its existing
allocation for other CDBG purposes, unless needed for loan repayment.
    (3) EDI Program. The EDI program was enacted in 1994 and is
intended to complement and enhance the Section 108 Loan Guarantee
program. A purpose of EDI (and BEDI) grant funds is to further minimize
the potential loss of future CDBG allocations:
    (a) By strengthening the economic feasibility of the projects
financed with Section 108 funds (and thereby increasing the probability
that the project will generate enough cash to repay the guaranteed
loan);
    (b) By directly enhancing the security of the guaranteed loan; or
    (c) Through a combination of these or other risk mitigation
techniques.
    (4) BEDI Program. For FY 1999, Congress has made a specific
appropriation of $25 million for the EDI program to assist in financing
``brownfields'' redevelopment. HUD intends the $25 million in
Brownfields EDI (BEDI) funds available pursuant to this program section
of this SuperNOFA to be used with a particular emphasis upon the
redevelopment of brownfield sites consistent with the statutory purpose
of the FY 1999 HUD Appropriations Act. Accordingly, BEDI funds shall be
used as the stimulus for local governments and private sector parties
to commence redevelopment or continue phased redevelopment efforts on
brownfield sites where contamination is known or suspected and a
redevelopment plans exist. HUD desires to see BEDI and Section 108
funds used to finance projects and activities that will provide near-
term results and demonstrable economic benefits, such as job creation
and increases in the local tax base. HUD does not encourage
applications whose scope is limited only to site acquisition and/or
remediation (i.e., land banking), where there is no immediately planned
redevelopment.
    (5) Redevelopment Focus. The redevelopment focus for BEDI-assisted
projects is also prompted by the need to provide additional security
for the Section 108 loan guarantee pursuant to 24 CFR 570.705(b)(3).
While public entities are required by the Act to pledge their current
and future CDBG funds as a source of security for the Section 108 loan
guarantee, the public entity will usually be required to furnish
additional collateral which, ideally, will be the assets financed with
the Section 108 loan funds. Clearly, a redevelopment focus for the BEDI
funds will help achieve this goal by enhancing the value and improving
the viability of projects assisted with Section 108 financing.
    (6) Integration of Other Government Brownfield Programs. HUD
expects and encourages local governments which are designated through
(a) the Federal Government's Brownfields Showcase Community program,
(b) other Federal brownfields programs (e.g., EPA's Assessment Pilot or
Revolving Loan Fund programs), (c) a State-supported brownfields
program, or (d) a State or local related economic development program,
to integrate efforts arising from those programs in developing projects
for assistance under HUD's BEDI and Section 108 programs. Applicants
should elaborate upon these ties in their response to the rating
factors, where appropriate (e.g. ``Capacity of the Applicant,''
``Soundness of Approach,'' ``Leveraging Resources,'' or
``Comprehensiveness and Coordination,''--Rating Factors 1, 3, 4, and 5
respectively.)
    (7) Typical Project Structures. Provided that proposals are
consistent with other CDBG requirements, including national objectives,
HUD envisions that the following project structures could be typical:
    (a) Land Writedowns. Local governments may use a combination of
Section 108 and BEDI funds to acquire a brownfield site for purposes of
reconveying the site to a private developer at a discount from its
purchase price. This approach would provide the developer with an asset
of enhanced value which could be used as collateral for other sources
of funding. Such other sources of financing could be used to finance
environmental remediation or other development costs. In theory, the
level of BEDI assistance would approximate the difference between the
original cost of the site and its remediation in comparison to the
market value of the remediated property.
    (b) Site Remediation Costs. Local governments may use BEDI funds in
any of several ways to address site remediation costs. If the local
government used Section 108 funds to acquire real property, BEDI funds
could be used to address assessment and site remediation costs as part
of demolition, clearance, or site preparation activities. If the local
government used Section 108 funds to make a loan to a developer, BEDI
funds could be granted to the developer for the purpose of addressing
remediation costs as part of an economic development activity.
    (c) Funding Reserves. The cash flow generated by an economic
development project may be expected to be relatively ``thin'' in the
early stages of the project, i.e. potentially insufficient cash flows
to meet operating expenses and debt service obligations. The BEDI grant
can make it possible for reserves to be established in a way that
enhances the economic feasibility of the project.
    (d) Over-Collateralizing the Section 108 Loan.

[[Page 9803]]

    (i) The use of BEDI grant funds may be structured in appropriate
cases so as to improve the likelihood that project-generated cash flow
will be sufficient to cover debt service on the Section 108 loan and
directly to enhance the guaranteed loan. One technique for
accomplishing this approach is over-collateralization of the Section
108 loan.
    (ii) An example is the creation of a loan pool made up of Section
108 and BEDI grant funds. The community would make loans to various
businesses from the combined pool at an interest rate equal to or
greater than the rate on the Section 108 loan. The total loan portfolio
would be pledged to the repayment of the Section 108 loan.
    (e) Direct Enhancement of the Security of the Section 108 Loan. The
BEDI grant can be used to cover the cost of providing enhanced
security. An example of how the BEDI grant can be used for this purpose
is by using the grant funds to cover the cost of a standby letter of
credit, issued in favor of HUD. This letter of credit will be available
to fund amounts due on the Section 108 loan if other sources fail to
materialize and thus will serve to protect the public entity's future
CDBG funds.
    (f) Provision of Financing to For-Profit Businesses at a Below
Market Interest Rate.
    (i) While the rates on loans guaranteed under Section 108 are only
slightly above the rates on comparable U.S. Treasury obligations, they
may nonetheless be higher than can be afforded by businesses in
severely economically distressed neighborhoods. The BEDI grant can be
used to make Section 108 financing affordable.
    (ii) BEDI grant funds could serve to ``buy down'' the interest rate
up front, or make full or partial interest payments, allowing the
businesses to be financially viable in the early start-up period not
otherwise possible with Section 108 alone. This strategy would be
particularly useful where a community was undertaking a large
commercial/retail project in a distressed neighborhood to act as a
catalyst for other development in the area.
    (g) Combination of Techniques. An applicant could employ a
combination of these or other techniques in order to implement a
strategy that carries out an economic development project.
    (B) Eligible Applicants. Any public entity eligible to apply for
Section 108 loan guarantee assistance in accordance with 24 CFR 570.702
may apply for BEDI grant assistance under section 108(q). Eligible
applicants are CDBG entitlement units of general local government and
non-entitlement units of general local government eligible to receive
loan guarantees under 24 CFR part 570, subpart M. Urban Counties, as
defined at 24 CFR 570.3 and 570.307, are eligible applicants for BEDI
funds; units of general local government which participate in an Urban
County program are not independently eligible applicants. Non-
entitlement applicants, other than those in the States of Hawaii and
New York, will be required to provide proof that the State will support
the related Section 108 loan with a pledge of its CDBG funds pursuant
to the requirements of 24 CFR 570.705(b)(2). Note that effective
January 25, 1995, non-entitlement public entities in the states of New
York and Hawaii were authorized to apply to HUD for Section 108 loans
(see 59 FR 47510, December 27, 1994). Thus non-entitlement public
entities in all 50 states and Puerto Rico are eligible to participate
in the Section 108 and BEDI programs.

(C) Eligible Activities and National Objectives

    (1) BEDI grant funds may be used for activities listed at 24 CFR
570.703, provided such activities are carried out as part of a BEDI
project as defined in Section III(A) of this BEDI section of this
SuperNOFA. You are required to submit applications that seek funding
for BEDI projects that will contribute to the redevelopment and
revitalization of brownfields. Applications that fail to meet the
requirements for a BEDI project as set forth in this SuperNOFA will not
be rated by HUD.
    (2) Each activity assisted with Section 108 loan guarantee or BEDI
funds must meet a national objective of the CDBG program as described
in 24 CFR 570.208. Applicants must clearly identify in their narrative
statement (as described in Section V.(B) below) the CDBG national
objective to be achieved by the proposed project and provide the
appropriate CDBG national objective regulatory citation found at 24 CFR
570.208. Applicants must also address, when applicable, how the
proposed activities will comply with the public benefit standards of
the CDBG program as reflected in the regulation at 24 CFR 570.209 for
the Entitlement program and 24 CFR 570.482 for the State CDBG program.
    (3) In the aggregate, a grantee's use of CDBG funds, including any
Section 108 loan guarantee proceeds and section 108(q) (EDI) funds
provided pursuant to this program section of this SuperNOFA, must
comply with the CDBG primary objectives requirements as described in
section 101(c) of the Act and 24 CFR 570.200(c)(3) or 570.484 in the
case of State grantees.

IV. Program Requirements

(A) CDBG Program Regulations

    In addition to 24 CFR 570.701 (Definitions), 570.702 (Eligible
applicants), and 570.703 (Eligible activities), as explained elsewhere
in this program section of the SuperNOFA, the CDBG regulatory
requirements cited in 24 CFR 570.707, including subparts J (Grant
Administration), K (Other Program Requirements), and O (Performance
Reviews) govern the use of BEDI funds, as applicable.

(B) Compliance with Applicable Laws

     Applicants are advised that an award of BEDI funding does not in
any way relieve the applicant or third party users of BEDI funds from
compliance with all applicable Federal, State and local laws,
particularly those addressing the environment. Applicants are further
advised that HUD may require evidence that any project involving
remediation has been or will be carried out in accordance with State
law, including voluntary clean up programs.

(C) Related Section 108 Loan Guarantee Application

    (1) Each BEDI application must be accompanied by a request for new
Section 108 loan guarantee assistance. Both the BEDI and Section 108
funds must be used in conjunction with the same BEDI project. The
request may take any of several forms as defined below.
    (a) A full application for new Section 108 loan guarantee(s),
including the documents listed at 24 CFR 570.704(b).
    (b) A brief description (not to exceed three pages) of a new
Section 108 loan guarantee application(s). Such 108 application(s) will
be submitted within 60 days of a notice of BEDI selection, with HUD
reserving the right to extend such period for good cause on a case-by-
case basis. BEDI awards will be conditioned on approval of actual
Section 108 loan commitments. The application description must be
sufficient to support the basic eligibility of the proposed project or
activities for Section 108 assistance. (See Section III(C) of this
program section of this SuperNOFA.); or
    (c) A copy of a pending, unapproved Section 108 loan guarantee
application, and any proposed amendments to the Section 108 application
which are related to the BEDI application. The applicant's submission
of such a BEDI/Section 108 application shall be deemed by HUD to
constitute a request to

[[Page 9804]]

suspend separate processing of the Section 108 application. The Section
108 application will not be approved until on or after the date of the
related BEDI award.
    (d) A request for a Section 108 loan guarantee amendment (analogous
to Section IV(C)(1)(a) or (b) of this BEDI section of the SuperNOFA)
that proposes to increase the amount of a previously approved
application. However, any amount of Section 108 loan guarantee
authority approved before HUD's announcement of a BEDI grant for the
same project pursuant to this SuperNOFA is not eligible to be used in
conjunction with a BEDI grant under this SuperNOFA.
    (2) Further, a Section 108 loan guarantee amount that is required
to be used in conjunction with a prior EDI or BEDI grant award, whether
or not the Section 108 loan guarantee has been approved as of the date
of this SuperNOFA, is not eligible for a BEDI award under this
SuperNOFA. For example, if a public entity has a previously approved
Section 108 loan guarantee commitment of $12 million, even if none of
the funds have been utilized, or if the public entity had previously
been awarded an EDI grant of $1 million and had certified that it will
submit a Section 108 loan application for $10 million in support of
that EDI grant, the public entity's application under this program
section of this SuperNOFA must propose to increase the amount of its
total Section 108 loan guarantee commitments beyond those amounts (the
$12 million or $10 million in this example) to which it has previously
agreed.

(D) Limitations on Use of BEDI and Section 108 Funds

    Certain restrictions shall apply to the use of BEDI and Section 108
funds:
    (1) BEDI grants shall not be used as a resource to immediately
repay the principal of a loan guaranteed under Section 108. Repayment
of principal is only permissible with BEDI grant funds as a matter of
security if other sources projected for repayment of principal prove to
be unavailable.
    (2) You should not use Section 108 funds to finance activities
which also include financing generated through the issuance of
federally tax exempt obligations. Pursuant to Office of Management and
Budget (OMB) Circular A-129 (Policies for Federal Credit Programs and
Non-Tax Receivables), Section 108 guaranteed loan funds may not
directly or indirectly support federally tax-exempt obligations.
    (3) HUD will not consider for funding any BEDI proposal in which
the related Section 108 loan guarantee would be used solely as
security. BEDI funds are to be used to support and enhance activities
financed with Section 108 loan guarantee proceeds from HUD's interim
lending or public offering mechanisms and thereby leverage greater use
of the Section 108 program. Awarding BEDI funds to a project which
would use the Section 108 guarantee only as a security guarantee for
other financing can be tantamount to making a simple grant to the
project and thereby fails to fulfill the goals of the BEDI program.
    (4) BEDI grant funds shall not be used in any manner by grantees to
provide public or private sector entities with funding to remediate
conditions caused by their actions, where the public entity (or other
known prospective beneficiary of the proposed BEDI grant) has been
determined responsible for causation and remediation by order of a
court or a Federal, State, or local regulatory agency, or is
responsible for the remediation as part of a settlement approved by
such a court or agency.
    (5) Applicants may not propose projects on sites which are listed
or proposed to be listed on EPA's National Priority List (NPL).
Further, applicants are cautioned against proposing projects on sites
where the nature and degree of environmental contamination is not well
quantified or which are the subject of on-going litigation or
environmental enforcement action.

(E) Limitations on Grant Amounts

    (1) HUD expects to approve BEDI grant amounts for approvable
applications at a range of ratios of BEDI grant funds awarded to new
Section 108 loan guarantee commitments but the minimum ratio will be $1
of Section 108 loan guarantee commitments for every $1 of BEDI grant
funds. However, if you propose a leverage ratio of 1:1, your
application will not receive any points under the Rating Subfactor
4(1): ``Leverage of Section 108 Funds.''
    For example, if you request a BEDI grant of $1 million, you will be
required to leverage a minimum of at least $1 million in new Section
108 loan guarantee commitments. Of course, even though there is a
minimum ratio of 1:1, applications with higher ratios will receive more
points under Rating Factor 4, ``Leveraging Resources/Financial Need''
and, all other things being equal, will be more competitive. You are
encouraged to propose projects with a greater leverage ratio of new
Section 108 to BEDI grant funds (assuming such projects are financially
viable). For example $1 million of BEDI could leverage $12 million of
new Section 108 loan commitments. HUD intends that the BEDI funds will
be used for projects that leverage the greatest possible amount of
Section 108 loan guarantee commitments. Because a fundable application
is competitive in part because of the applicant's proposed ratio of
BEDI funds to funds guaranteed by a Section 108 loan guarantee, HUD
will condition a BEDI grant award on the grantee's achievement of that
specific ratio. Your failure to meet that condition by obtaining timely
HUD approval of a commitment for, and issuance of, the required Section
108 guaranteed obligations ratio may result in the cancellation and
recapture of all or a proportionate share of the BEDI grant award.
    (2) HUD will cap BEDI awards at a maximum of $2 million. Any
application in excess of $1 million may be reduced below the amount
requested by the applicant if HUD determines that such a reduction is
appropriate.
    (3) In the event you are awarded a BEDI grant that has been reduced
below the original request (e.g., your application contained some
activities that were ineligible or there were insufficient funds to
fund the last competitive application at the full amount requested),
you will be required to modify your project plans and application to
conform to the terms of HUD approval before execution of a grant
agreement. HUD also will proportionately reduce or deobligate the BEDI
award if you do not submit an approvable Section 108 loan guarantee
application on a timely basis (including any extension authorized by
HUD) in the amount required by the BEDI/108 leveraging ratio, which
will be approved by HUD as a special condition of the BEDI grant award
(see Section IV(E)(1) above of this program section of the SuperNOFA).
Any modifications or amendments to your application approved pursuant
to this SuperNOFA, whether requested by you or by HUD, must be within
the scope of the approved original BEDI application in all respects
material to rating the application, unless HUD determines that your
revised application remains within the competitive range and is
otherwise approvable under this SuperNOFA competition.
    (4) In the case of requested amendments to a previously approved
Section 108 loan guarantee commitment (as further discussed in section
IV(C)(1)(d) above), the BEDI assistance approved will be based on the
increased amount of Section 108 loan guarantee assistance.

[[Page 9805]]

    (5) Pursuant to another portion of this SuperNOFA, HUD is
simultaneously announcing the availability of up to $35 million of EDI
funds. While HUD will permit you to pursue BEDI and EDI funds for the
same project, HUD requires that your BEDI and EDI applications (and
components contained in the applications) be independent of one
another. Thus, each application should have an identifiable amount of
Section 108 funding associated with its respective request for EDI and
BEDI funds, for purposes of determining the leverage of Section 108
funding to the corresponding amount of EDI or BEDI funds requested.
Further, the proposed amount of Section 108 borrowing associated with
either the BEDI or EDI grant must not be used to determine leverage of
other financial sources under Rating Subfactor 4(3). Further, if you
seek both BEDI and EDI funds for the same project, you must include, in
your response to Rating Factor 3 and the ``Financial feasibility''
portion of Rating Factor 4, a discussion of how your project can be
financed and implemented if you fail to obtain either BEDI or EDI funds
under this SuperNOFA.

(F) Timing of Grant Awards

    (1) To the extent you submit a full Section 108 application with
the BEDI grant application, HUD will evaluate your Section 108
application concurrently with your request for BEDI grant funds. Note
that BEDI grant assistance cannot be used to leverage a Section 108
loan guarantee approved prior to the date of HUD's announcement of a
BEDI grant pursuant to this SuperNOFA. However, the BEDI grant may be
awarded prior to HUD approval of the Section 108 commitment if HUD
determines that such award will further the purposes of the Act.
    (2) HUD's notice to you of the amount and conditions of BEDI funds
awarded, based upon review of the BEDI application, constitutes an
obligation of grant funds, subject to compliance with the conditions of
award and execution of a grant agreement. BEDI funds will not be
disbursed to the public entity before the issuance of the related
Section 108 guaranteed obligations.

(G) Economic Opportunities for Low and Very Low-Income Persons (Section
3)

    Section 3 of the Housing and Urban Development Act of 1968 (12
U.S.C. 1701u) is applicable to BEDI grant recipients. Please see
Section II(E) of the General Section of the SuperNOFA.

V. The Application Selection Process

(A) Rating and Ranking

    (1) Each rating factor and the maximum number of points is provided
below. The maximum number of points to be awarded is 102. This includes
two EZ/EC bonus points as described in the General Section of the
SuperNOFA, or two bonus points for having received a Federal
designation as a Brownfields Showcase Community. (Please note that in
any event, the maximum number of bonus points is limited to a total of
two (2).)
    (2) Once scores are assigned, HUD will rank all applications in
order of points assigned, with the applications receiving more points
ranking above those receiving fewer points. Applications will be funded
in rank order.
    (3) Prior to award, if HUD determines that an application rated,
ranked and fundable could be funded at a lesser BEDI grant amount than
requested consistent with feasibility of the funded project or
activities and the purposes of the Act, HUD reserves the right to
reduce the amount of the BEDI award and/or increase the Section 108
loan guarantee commitment, if necessary, in accordance with such
determination. An application in excess of $1 million may be reduced
below the amount requested by the applicant if HUD determines that such
a reduction is appropriate.
    (4) HUD may decide not to award the full amount of BEDI grant funds
available under this program section of this SuperNOFA and may make any
remaining amounts available under a future SuperNOFA.
    (5) HUD desires to fund projects which will quickly produce
demonstrable results. BEDI grant awards will contain conditions
requiring you to adhere to your stated timeframes for implementing your
proposed projects and drawing Section 108 and EDI funds. Failure to
adhere to these schedules may be cause for HUD to recapture the BEDI
funds.

(B) Narrative Statement

    (1) Provide a narrative statement describing the activities that
you will carry out with the BEDI grant funds, explaining the nature and
extent of the Brownfield's problems(s) affecting the project. Your
narrative statement must not exceed three (3) 8.5'' by 11'' pages for
the description of the activities to be carried out with the BEDI grant
funds.
    (2) Describe how your proposed uses of BEDI funds will meet the
national objectives for the CDBG program under 24 CFR 570.208 and
qualify as eligible activities under 24 CFR 570.703. You must include
citations to the specific regulatory subsections supporting eligibility
and national objectives. (See Section III(C) of this program section of
this SuperNOFA.)
    (3) Respond to the rating factors below. Each of the listed rating
factors (or, where applicable, each subfactor) below also has a
separate page limitation specified.
    (4) Print your narrative statement in 12 point type/font, and use
sequentially numbered pages.

(C) Factors for Award Used to Evaluate and Rate Applications

    HUD will consider your application for selection based on the
following factors that demonstrate the quality of your proposed project
or activities, and your creativity, capacity and commitment to obtain
maximum benefit from the BEDI funds, in accordance with the purposes of
the Act.
Rating Factor 1: Capacity of the Applicant and Relevant Organizational
Experience (15 Points)
    [Your response to this factor is limited to three (3) pages.]
    This factor addresses the extent to which you have 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
subcontractors, consultants, subrecipients, and members of consortia
that are firmly committed (i.e. have a written agreement or a signed
letter of understanding with you agreeing in principle to their
participation and role in the project). In rating this factor, HUD will
consider the following:
    (1) With regard to the BEDI/Section 108 project you propose, you
should demonstrate that you have the capacity to implement the specific
steps required to successfully carry out the proposed BEDI/Section 108
project. This includes factors such as your:
    (a) Performance in the administration of your CDBG, HOME or other
programs;
    (b) Previous experience, if any, in administering a Section 108
loan guarantee;
    (c) Performance and capacity in carrying out economic development
projects;
    (d) Performance and capacity to carry out Brownfields redevelopment
projects;
    (e) Ability to conduct prudent underwriting;

[[Page 9806]]

    (f) Capacity to manage and service loans made with the guaranteed
loan funds or previous EDI or BEDI grant funds;
    (g) Capacity to carry out your projects and programs in a timely
manner; and,
    (h) If applicable, your capacity to manage projects under this
program section of this SuperNOFA along with any federal funds awarded
as a result of a federal urban Empowerment Zone/Enterprise Community
designation (including Enhanced Enterprise Community (EEC)
designations).
    (2)(a) If you have previously received an EDI or BEDI grant
award(s), you must describe the status of the implementation of those
project(s) assisted with EDI or BEDI funds, any delays that have been
encountered and the actions you are taking to overcome any such delays
in order to carry out the project in a timely manner. For such
previously funded EDI or BEDI grant projects, HUD will consider the
extent to which you have used the awarded EDI or BEDI grant funds and
the associated Section 108-guaranteed loan funds.
    (b) Further, if you have EDI or BEDI funds and related Section 108
loan guarantee authority available as a result of earlier HUD awards
and commitments for activities such as (but not limited to) economic
development loan funds, community development banks, and community and
individual investment corporations, you should use those existing
financial resources before applying for additional BEDI or EDI funds
and Section 108 commitments. If HUD determines that you could fund your
project from such existing resources, HUD will reduce your score under
this rating factor to 0.
    (3) The capacity of subrecipients, nonprofit organizations and
other entities that have a role in implementing your proposed program
will be included in this review. HUD also may rely on information from
performance reports, financial status information, monitoring reports,
audit reports and other information available to HUD in making its
determination under this factor.
Rating Factor 2: Distress/Extent of the Problem (15 Points)
    [Your response to this factor is limited to three (3) pages.]
    This factor addresses the extent to which there is need for funding
your proposed activities based on levels of distress, and an indication
of the urgency of meeting the need/distress in your target area.
    (1) In applying this factor, HUD will consider current levels of
distress in the immediate community to be served by your project and
the jurisdiction applying for assistance. If you are able to indicate a
level of distress in the immediate project area that is greater than
the level of distress in your jurisdiction as a whole, HUD will give
your application a higher score under this factor than other
applications that do not. HUD requires you to use sound and reliable
data that is verifiable to support the level of distress you claim in
your application. You must provide a source for all information you
cite and indicate the publication date or origination date of the data.
    (2) In previous EDI competitions, the poverty rate was often
considered the best indicator of distress. You must provide the poverty
rate for your jurisdiction as a whole and for the areas to be served
and/or where the BEDI/Section 108-funded project is located; however,
in addition, you may demonstrate the level of distress with other
factors such as income levels and unemployment rates.
    (3) To the extent that your Consolidated Plan and its Analysis of
Impediments to Fair Housing choice (AI) identifies the level of
distress in the community and the neighborhood in which your project is
being carried out, you should include references to such documents in
preparing your response to this factor. Also, you should discuss the
extent to which the analysis of impediments identifies unhealthy
environmental conditions, such as contaminated soil and/or water and
how such conditions negatively impact your target neighborhood.
Rating Factor 3: Soundness of Approach (25 Points)
    [Your response to this factor is limited to three (3) pages.]
    This factor addresses the quality and cost-effectiveness of your
proposed plan. There must be a clear relationship between the proposed
activities, community needs and purposes of the program funding for you
to receive points for this factor. In rating this factor, HUD will
consider the following:
    (1) The quality of your plan/proposal for using BEDI funds and
Section 108 loan funds, including the extent to which your proposed
plan for effective use of BEDI grant/Section 108-guaranteed loan funds
will address the needs you described in Rating Factor 2 above regarding
the distress and extent of the problem in your immediate community and/
or jurisdiction. As part of the response to this factor, you should
identify the eligible activities you will carry out and fully describe
how your project will achieve a CDBG national objective. You should
make substantial efforts to demonstrate how your proposed project would
mitigate or otherwise address the distress you identified in Rating
Factor 2 above.
    (2) The extent to which your plan is logically, feasibly, and
substantially likely to achieve your stated purpose. HUD's desire is to
fund projects and activities that will quickly produce demonstrable
results and advance the public interest including the number of jobs to
be created by the project. You should demonstrate that you have a clear
understanding of the steps required to implement your project, the
actions that you and others responsible for implementing the project
must complete. You must include a reasonable time schedule for carrying
out your project. The application kit contains a timeline form that you
must use to indicate your project timing.
    (3) The extent to which your response to this factor takes into
account certain site selection, planning, and environmental issues.
Further, you are cautioned against proposing projects on sites where
the nature and degree of environmental contamination is not well
quantified or that are the subject of on-going litigation or
environmental enforcement. Sites with unknown or exceptionally
expensive contamination problems may be beyond the scope of the BEDI
program's financial resources, and sites subject to pending and current
litigation may not be available for remediation and development in a
timeframe consistent with HUD's desire for rapid progress in the use of
BEDI and Section 108 funds.
    (4) The extent to which your projects will integrate environmental
justice concerns and provide demonstrable benefits for affected
communities and their residents. The BEDI program is intended to
promote the clean up and redevelopment of brownfield sites.
    (5) The extent to which your proposed project addresses your
Analysis of Impediments and the needs identified in Rating Factor 2;
the extent to which such project activities will result in the physical
and economic improvement for the residents in the neighborhood in which
your project will be carried out; the extent to which you will offer
residents an opportunity to relocate to environmentally healthy housing
or neighborhoods; or the extent to which residents will benefit from
the funded project to enable them to continue to live in a redeveloped
or revitalized neighborhood and thus share in the anticipated economic
benefits and environmental improvements your project is expected to
generate.
    (6) The extent to which your project incorporates one or more
elements that

[[Page 9807]]

facilitate a successful transition of welfare recipients from welfare
to work. Such an element could include, for example, linking your
proposed project or loan fund to social and/or other services needed to
enable welfare recipients to successfully secure and carry out full-
time jobs in the private sector; provision of job training to welfare
recipients who might be hired by businesses financed through the
proposal; and/or incentives for businesses financed with BEDI/section
108 funds to hire and train welfare recipients.
    (7) Due to an order of the U.S. District Court for the Northern
District of Texas, Dallas Division, with respect to any application
submitted by the City of Dallas, Texas, HUD's consideration of the
response to this factor, ``Soundness of Approach'' will include the
extent to which Dallas' plan for BEDI funds and Section 108 loans will
speed eradication of the vestiges of racial segregation in the Dallas
Housing Authority's programs consistent with the Court's order. Up to
two (2) additional points will be awarded to any application submitted
by the City of Dallas, Texas, to the extent this subfactor is
addressed.
Rating Factor 4: Leveraging Resources/Financial Need (35 Points)
    [Page limits for the response to this factor are listed separately
for each subfactor under this factor.]
    In evaluating this factor, HUD will consider the extent to which
your response demonstrates the financial need and feasibility of your
project and the leverage ratio of Section 108 loan proceeds to BEDI
grant funds. This factor has three subfactors, each with its own
maximum point total:
    (1) Leverage of Section 108 funds (20 points). [Your response to
this subfactor is limited to one (1) page.] The minimum ratio of
Section 108 funds to BEDI funds in any project may not be less than
1:1. The extent to which your proposed project leverages an amount of
Section 108 funds beyond the 1:1 ratio will be considered a positive
factor. If you have a ratio of 1:1, your application will not receive
any points under this subfactor. If you use your BEDI grant to leverage
more new Section 108 commitments, your application will receive more
points under this subfactor.
    (2) Financial feasibility (10 points). [Your response to this
subfactor is limited to three (3) pages.] HUD will consider the extent
to which you demonstrate that your project is financially feasible. In
responding to this subfactor, you must clearly address the question of
why the BEDI funds are critical to the success of your project. This
may include factors such as:
    (a) Project costs and financial requirements. You should provide a
funding sources and uses statement (not included in the 3 page
narrative limit), as well as justifications for project costs.
    (b) The amount of any debt service or operating reserve accounts
you will establish in connection with your economic development
project.
    (c) The reasonableness of the costs of any credit enhancement you
pay with BEDI grant funds.
    (d) The amount of program income (if any) you will receive each
year during the repayment period for the guaranteed loan.
    (e) Interest rates on those loans to third parties (other than
subrecipients) (either as an absolute rate or as a plus/minus spread to
the Section 108 rate).
    (f) Underwriting criteria that you will use in determining project
feasibility.
    (3) Leverage of other financial resources (5 points). [Your
response to this subfactor is limited to one (1) page plus supporting
documentation evidencing third party commitment (written and signed) of
funds.] HUD will evaluate the extent to which you leverage other funds
(public or private) with BEDI grant funds and section 108 guaranteed
loan funds, and the extent to which such other funds are firmly pledged
to the project. This could include the use of CDBG funds, other Federal
or state grants or loans, your general funds, project equity or
commercial financing provided by private sources or funds from non-
profits or other sources. Funds will be considered pledged to your
project if there is evidence of the third party's written commitment to
make the funds available for the BEDI/108 project, subject to approval
of the BEDI and Section 108 assistance and completion of any
environmental clearance required under 24 CFR part 58 for the project.
Note that with respect to CDBG funds, your pledge of your CDBG funds
will be considered sufficient commitment.
Rating Factor 5: Comprehensiveness and Coordination (10 Points)
    [Your response to this factor is limited to two (2) pages.]
    This factor addresses the extent to which you have coordinated your
activities with other known organizations; you participate or promote
participation in your or a State's Consolidated Planning process; and
you are working towards addressing a need in a comprehensive manner
through linkages with other activities in the community.
    In evaluating this factor, HUD will consider the extent to which
you demonstrate you have:
    (1) Coordinated your proposed activities with those of other groups
or organizations before submitting your application, in order to best
complement, support and coordinate all known activities; and developed
specific steps to share information on solutions and outcomes with
others. Describe any written agreements, memoranda of understanding in
place, or that will be in place after award.
    (2) Developed linkages, or specific steps to develop linkages with
other activities, programs or projects (through meetings, information
networks, planning processes or other mechanisms to coordinate your
activities), so that solutions are holistic and comprehensive. Describe
any linkages with other HUD-funded projects/activities outside the
scope of those covered by the Consolidated Plan, as well as established
linkages and outreach with residents of your project area.
    (3) Coordinated your efforts with other Federal, State or locally
supported activities, including EPA's various Brownfields initiatives,
and those proposed or on-going in the community.

VI. Application Submission Requirements

    (A) Public entities seeking BEDI assistance must make a specific
request for that assistance, in accordance with the requirements of
this program section of this SuperNOFA.
    (B) You must submit an original and one copy of the items listed
below to HUD Headquarters (see the section ``Addresses For Submitting
Applications in this program section of this SuperNOFA). In addition,
you must submit one additional copy directly to the Community Planning
and Development Division of the appropriate HUD Field Office for your
jurisdiction.
    (C) Your BEDI application consists of the following items:
    (1) Your transmittal letter;
    (2) Table of contents;
    (3) Application check list (supplied in application kit);
    (4) A request for loan guarantee assistance under Section 108, as
further described in Section IV(C) of this program section of this
SuperNOFA. Application guidelines for the Section 108 program are found
at 24 CFR 570.704;
    (5) As described in Section V(B) of this program section of this
SuperNOFA, a narrative statement (3 page limit) describing the
activities that

[[Page 9808]]

you will carry out with the BEDI grant funds;
    (6) Responses to each of the rating factors (within the page limits
provided for each factor or subfactor as applicable);
    (7) Completion of a funding sources and uses statement and a BEDI
and Section 108 eligibility statement (see the application kit);
    (8) Written agreements or signed letters of understanding in
support of Rating Factor 1: ``Capacity of the Applicant and Relevant
Organizational Experience;''
    (9) Signed third party commitment letters pledging funds in support
of subfactor 4(2): ``Leverage of other financial resources;''
    (10) In addition to the certifications specified in section II(G)
of the General Section of this SuperNOFA, the forms and certifications
required at 24 CFR 570.704(b)(3), (b)(4), (b)(8)(i), (b)(8)(ii),
(b)(8)(vi), (b)(8)(vii), (b)(8)(viii), (b)(8)(x), and (b)(9); and
    (11) Acknowledgement of Application Receipt form.
    (D) A single application must contain a request for funds for a
single BEDI project. You may submit more than one application for each
additional unrelated BEDI project. Each application will be rated and
ranked individually. In no event will HUD rate and rank more than one
BEDI project per application.
    (E) Your application must meet all of the applicable threshold
requirements of Section II.B. of the General Section of this SuperNOFA.

VII. Corrections to Deficient Applications

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

VIII. Environmental Requirements

(A) Environmental Review

    After the completion of this competition and after HUD's award of
BEDI grant funds, pursuant to 24 CFR 570.604, each project or activity
assisted under this program is subject to the provisions of 24 CFR part
58, including limitations on the EDI grant and Section 108 public
entity's commitment of HUD and non-HUD funds prior to the completion of
environmental review, notification and release of funds. HUD will not
release such assistance until you submit a request for release of funds
and you satisfy the requirements of 24 CFR part 58. All public
entities, including nonentitlement public entities, must submit the
request for release of funds and related certification, pursuant to 24
CFR part 58, to the appropriate HUD field office for each project to be
assisted.

(B) Environmental Justice

    (1) Executive Order 12898 (Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations directs
Federal agencies to develop strategies to address environmental
justice. Environmental justice seeks to rectify the disproportionately
high burden of environmental pollution that is often borne by low-
income, minority, and other disadvantaged communities, and to ensure
community involvement in policies and programs addressing this issue.
    (2) Brownfields are often located in distressed neighborhoods,
contribute to neighborhood blight, and lower the quality of social,
economic, and environmental health of communities. The BEDI program is
intended to promote the clean up and redevelopment of brownfield sites
and, to this end, HUD expects that projects presented for BEDI funding
will integrate environmental justice concerns and provide demonstrable
benefits for affected communities and their residents.

IX. Authority

    Section 108(q), Title I, Housing and Community Development Act of
1974, as amended, (42 U.S.C. 5301-5320); 24 CFR part 570.

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Funding Availability for Self-Help Homeownership Opportunity (SHOP)
Program

Program Overview

    Purpose of the Program. To facilitate and encourage innovative
homeownership opportunities through self-help housing where the
homebuyer contributes a significant amount of sweat-equity toward the
construction of the new dwelling.
    Available Funds. $20,000,0000.
    Eligible Applicants. You must be a nonprofit national or regional
organization or consortium.
    Application Deadline. April 29, 1999.
    Match. None.

Additional Information

    If you are interested in applying for funding under this program,
please review carefully the General Section of this SuperNOFA and the
following additional information:

I. Application Due Date, Standard Forms, Further Information, and
Technical Assistance

    Application Due Date. Applications for SHOP grants must be
physically received by HUD on or before 12:00 midnight Eastern Time on
April 29, 1999.
    See 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. Submit one original and two
copies of the application to Department of Housing and Urban
Development, Office of Community Planning and Development, Processing
and Control Unit, 451 Seventh Street, SW, Room 7251, Washington, DC
20410, ATTN: Self-Help Program.
    Standard Forms. No kit will be made available. For copies of the
standard forms, please call HUD's SuperNOFA Information Center at: 1-
800-HUD-8929. Please refer to the ``Self-Help Program'' in your
request.
    Further Information. Further information and technical assistance
is available from Joan Morgan, Office of Affordable Housing Programs,
Department of Housing and Urban Development, room 7168, 451 Seventh
Street, SW, Washington, DC 20410; telephone (202) 708-3226, ext. 2213;
(this is not a toll-free number). This number can be accessed via TTY
by calling the Federal Information Relay Service Operator at 1-800-877-
TDDY (1-800-877-8339).

II. Amount Allocated

    The amount available for this program is $20,000,000

III. Program Description; Eligible Applicants; Eligible Activities

(A) Program Description

    SHOP is intended to facilitate and encourage innovative
homeownership opportunities on a national geographically-diverse basis
through self-help housing where the homebuyer contributes a significant
amount of sweat-equity toward the construction or rehabilitation of the
dwelling.
    Decent, safe, and sanitary non-luxury dwellings developed under
SHOP must be made available to eligible homebuyers at prices below the
prevailing market prices. Eligible homebuyers are low-income families
(families whose annual incomes do not exceed 80 percent of the median
income for the area, as established by HUD) who are unable to purchase
a dwelling. Housing assisted under this Notice must involve community
participation through the use of homebuyers and/or volunteers in the
construction of dwellings and by other activities which involve the
community in the project.

(B) Eligible Applicants

    You must be a nonprofit national or regional organization or
consortium that has the capacity and experience to provide or
facilitate self-help housing homeownership opportunities. Local
affiliates of national or regional organizations or consortia must
apply as part of the national or regional organization and may not
apply for SHOP independently. ``Regional'' is defined for the purpose
of this program section of the SuperNOFA to be a ``regional area'' such
as the Southwest or Northeast which must include at least two or more
States (the States need not be contiguous and the operational
boundaries of the organization need not precisely conform to State
boundaries). If you are a consortium, one organization must be chosen
as the lead entity. The lead entity must submit the application and, if
selected for funding, will execute the grant agreement and assume
primary responsibility for carrying out grant activities in compliance
with all program requirements. Other participants in your consortium
must be identified in your application.
    Your application may not propose a partnership with or funding for
any affiliate or consortium member which is also included in another
SHOP application. You must assure that any affiliate, consortium
member, or potential subrecipient under your FY 1999 application is not
also seeking funding from another SHOP applicant for FY 1999 funds.

(C) Eligible Activities

    The only eligible activities are land acquisition (including
financing and closing costs), infrastructure improvement (installing,
extending, constructing, rehabilitating, or otherwise improving
utilities and other infrastructure, including removal of environmental
hazards), and administration, planning and management development (as
defined under the HOME Investment Partnerships Program (24 CFR Part
92.207) and not to exceed 20 percent of any SHOP grant). Costs
associated with the rehabilitation, improvement, or construction of
dwellings are not eligible uses of program funds.

IV. Program Requirements

    In addition to the program requirements listed in the General
Section of this SuperNOFA, you are subject to the following SHOP
requirements:

(A) Statutory Requirements

    You must comply with all statutory requirements applicable to SHOP
as cited in Section VIII below. There are no regulations for this
program. You must be capable of:
    (1) Developing, through significant amounts of sweat-equity and
volunteer labor, at least 30 dwellings at an average cost of no more
than $10,000 per unit in SHOP funds;
    (2) Using your grant to leverage other sources of funding,
including private or other public funds;
    (3) Developing quality dwellings that comply with local building
and safety codes and standards and which will be available to
homebuyers at prices below the prevailing market price; and
    (4) Scheduling activities to expend all grant funds awarded and
substantially fulfill your construction obligations under your grant
agreement within 24 months after grant funds are first made available
to you.

(B) Economic Opportunities for Low and Very Low-Income Persons (Section
3)

    If you fund infrastructure improvements under this program, you are
required to comply with Section 3 of the Housing and Urban Development
Act of 1968, 12 U.S.C. 1701u (Economic Opportunities for Low and Very
Low-Income Persons) and the HUD regulations at 24 CFR part 135,
including the reporting requirements subpart E. Section 3 requires that
you

[[Page 9812]]

provide training, employment and other economic opportunities, to the
greatest extent feasible, to (1) low and very low income persons,
particularly those who are recipients of government assistance for
housing and (2) business concerns which provide economic opportunities
to low and very low income persons.

V. Application Selection Process

(A) Rating

    HUD will review all applications in accordance with the Application
Selection Process in the General Section of this SuperNOFA. HUD will
review all applications based on the threshold factors listed in
Section V.(C) below. Applications which meet all threshold requirements
will be rated according to the selection factors in this section of the
SuperNOFA. Applications which do not meet all threshold factors will be
rejected and will not be rated.

(B) Ranking and Selection Procedures

    Applications that receive a total rating of 60 points or more
(without the addition of EC/EZ bonus points) will be eligible for
selection, and HUD will place them in rank order. After adding any
bonus points for EC/EZ, HUD will select these applications based on
rank order, up to and including the last application that can be
funded, up to amount of funding available.
    HUD reserves the right to fund less than the full amount requested
in any application to ensure fair distribution of the funds and that
dwellings will be developed on a national geographically-diverse basis
as required by the statute. HUD may choose not to fund portions of your
application that are ineligible for funding under program statutory
requirements, or which do not meet the requirements of the General
Section of this SuperNOFA or the requirements in the SHOP section of
the SuperNOFA, and fund eligible portions of your applications. HUD
will not fund any eligible applicant for less than the minimum amount
necessary to complete at least 30 homes (at a maximum of $10,000 per
home or a lesser amount if lower costs are reflected in the
application). If funds remain after all selections have been made,
these funds may be available for other competitions.

(C) Threshold Requirements

    The following threshold requirements apply specifically to SHOP.
You must also be sure to address the threshold requirements listed in
the General Section of the SuperNOFA and must submit all forms,
certifications, and assurances identified in the General Section.
    (1) You, the applicant, must be eligible to apply under SHOP (see
Section III(B) of this program section of the SuperNOFA.
    (2) The amount of funding you request must support no less than 30
self-help units and may not exceed an average amount of $10,000 per
unit.
    (3) The population you plan to serve must be eligible under SHOP
(see Section III(A) of this program section of the SuperNOFA.
    (4) You must demonstrate that you have completed at least 30 self-
help homeownership units within a national or regional area (where the
homebuyers contributed a significant amount of sweat-equity and/or
volunteer labor toward the construction of the dwellings) within the 24
month period preceding the publication of this SuperNOFA.

Submission Requirements for Thresholds:

    (1) Evidence of your non-profit status, such as a copy of a current
Internal Revenue Service ruling that your organization is exempt from
taxation under section 501(c)(3) or 501(c)(4) of the Internal Revenue
Code of 1986. Where an IRS ruling is unavailable, you may submit a
certified copy of your approved charter, articles of incorporation or
bylaws demonstrating that you are established as a nonprofit
organization under state law. If you are a consortium, each participant
in your consortium must be a nonprofit organization, but only the lead
entity should submit evidence of its nonprofit status. However, the
lead entity must maintain a copy of the above-described documentation
for each participant in your consortium.
    Submission requirements (2) through (4) require no additional
submissions, these requirements are addressed under the submission
requirements for the rating factors listed in Section V(D) of this
program section of the SuperNOFA below.

(D) Factors for Award Used to Evaluate Applications

    HUD will rate all SHOP applications that successfully complete
technical processing using the Rating Factors and the Application
Submission Requirements described below. The maximum number of points
for this program is 102. This includes two EZ/EC bonus points, as
described in the General Section of the SuperNOFA.
Rating Factor 1: Capacity of the Applicant and Relevant Organizational
Staff (20 Points)
    This factor examines the extent to which you, as a single applicant
or as a consortium (including sub-recipients and/or members of the
consortium, if any), have the experience and organizational resources
necessary to carry out the proposed activities in a timely manner.
    In evaluating this factor, HUD will consider your recent and
relevant experience in carrying out the activities you propose, and
your administrative ability, and fiscal management ability. HUD may
also rely on information from performance reports, financial status
information, monitoring reports, audit reports and other information
available to HUD in making its determination under this factor. If you
are not a current recipient of HUD funds, you may submit evidence of
internal or external performance reports or other information which
will assist HUD in making this determination.

Submission Requirements for Factor 1

    (1) You must describe your past experience in carrying out
activities that are the same as, or similar to, the activities you
propose for funding, and demonstrate reasonable success in carrying out
those activities. You may demonstrate such reasonable success by
showing that your previous activities were carried out as proposed and
in a timely manner. You must show that established benchmarks were met
and performance reports were prepared, as required. You must also
describe any delays that were encountered, and the actions you took to
overcome such delays to successfully complete your program.
    (2) You must demonstrate that you have completed at least 30 self-
help homeownership units within a national or regional area (where the
homebuyers contributed sweat-equity and/or volunteer labor toward the
construction of the dwellings) within the 24 month period preceding the
publication of this SuperNOFA.
    (3) You must provide a description of your management structure.
You must also describe how you will staff and manage your proposed
activities.
    (4) You must demonstrate your ability to handle financial resources
with adequate financial control and accounting procedures. Your
existing financial control procedures must meet 24 CFR Part 84.21,
``Standards for Financial Management Systems''. You must provide a copy
of your most recent audit (only an audit of the lead entity

[[Page 9813]]

must be provided with an application for a consortium).
    (5) You must demonstrate your experience and ability in
constructing and altering homes with accessibility features, when
necessary.
Rating Factor 2: Need/Extent of the Problem (15 Points)
    This factor examines the extent to which you identify the community
need, or problem, or distress that your proposed activities will
target, and the urgency of meeting that need.
    The purpose of this factor is to make sure that funding is provided
where a need for funding exists. Under this factor, you must identify
the need or needs in the community that your proposed activities are
designed to address or, if you plan to select specific subrecipients
only after you receive SHOP funding, you must demonstrate how you plan
to identify need prior to your selection of any subrecipients.
    Submission Requirements for Factor 2.
    (1) Identify the communities or areas in which your proposed
activities will be carried out or how you will select communities or
projects based on need after you have received an award under SHOP.
    (2) Depending on the type of activities proposed, the kind of
information you submit to demonstrate the need or needs in the target
area may include, but is not limited to, one or more of the following:
    (a) Housing market data such as information included in the local
Five Year Comprehensive Plan or other data sources;
    (b) Data dealing with such factors as housing density, housing
affordability, housing age or deterioration, and lack of adequate
infrastructure or utilities;
    (c) Data on the need for accessible homes in the area;
    (d) Evidence of housing discrimination;
    (e) Evidence from the local Analysis of Impediments to Fair Housing
Choice which shows the need for this program.
Rating Factor 3: Soundness of Approach (40 Points)
    This factor examines the quality of your plan of proposed
activities. In evaluating this factor HUD will consider the specificity
in your plan; your established benchmarks for performance; your
schedule; your proposed budget and the cost effectiveness of your
program; and your plans to reach all potentially-eligible homebuyers,
including those with disabilities or least-likely to apply.
    In addition, HUD will consider how your planned activities further
one or more of the policy priorities of the Department. Department
policy priorities are: (i) Affirmatively furthering fair housing by
promoting greater opportunities for housing choice for all segments of
the population regardless of race, color, religion, national origin,
sex, familial status and disability; (ii) Promoting healthy homes;
(iii) Providing opportunities for self-sufficiency, particularly for
persons enrolled in Welfare to Work programs; (iv) Providing
educational and job training opportunities through such initiatives as
Neighborhood Networks, and linking programs to AmeriCorps activities;
and (v) Enhancing on-going efforts to eliminate drugs and crime from
neighborhoods through program policy efforts such as ``One Strike and
You're Out'' or the ``Officer Next Door'' initiative.
    Submission Requirements for Factor 3.
    (1) You must identify all activities you propose to fund with SHOP.
    (2) Provide a timetable for the selection of your participating
local affiliates or partners, if they are not specified in the
application.
    (3) You must submit a construction and completion schedule which
expends SHOP funds within 24 months.
    (4) List the benchmarks against which HUD is to measure your
performance progress in expending funds, completing activities, and
substantially fulfilling the obligations of SHOP.
    (5) Describe how your proposed activities address the need or needs
you have identified under Factor 2, above.
    (6) List the long and short term benefits from your activities to
the community and targeted groups within the community, and describe
how you will ascertain and measure the benefits.
    (7) Provide a detailed budget with a break-out for each proposed
task and each budget category in the SF-424A.
    (8) Demonstrate that projected costs for the proposed activities do
not deviate substantially from the norm in the locale in which your
activities will take place, will not exceed an average cost of $10,000
per home in SHOP funds, and your ability to carry out your proposed
activities cost effectively.
    (9) Describe how the policy priorities of the Department are
furthered by your proposed activities.
    (10) Describe how you will reach potential homebuyers through the
use of services and materials that are accessible or visitable to all
persons, including persons with disabilities (e.g., languages, formats,
locations, distribution, use of minority media to attract those least
likely to apply).
    (11) Describe how activities will benefit eligible homebuyers and
your selection factors for participating homebuyers.
    (12) Describe how your proposed activities will yield long-term
results and innovative strategies or ``best practices'' that can be
readily disseminated to other organizations, communities, and/or State
and local governments.
Rating Factor 4: Leveraging Resources (15 Points)
    This factor addresses your ability to secure other resources that
can be combined with HUD's program resources to achieve the purposes of
SHOP. HUD will consider the extent to which you document firm
commitments of resources in the form of cash funding, in-kind
contributions, or personnel from Federal, State, local, and private
sources, who are jointly referred to as your leverage partners. HUD
will also consider the extent that the applicant's proposed sweat-
equity requirements and other leveraged resources will serve to reduce
costs to the homebuyers.
    Submission Requirements for Factor 4.
    (1) Provide a list of amounts and sources of all firm commitments
of cash funding, in-kind contributions, or personnel from other
Federal, State, local, and private sources which will be available to
complete your project. Together with the grant funds, these commitments
must be sufficient to develop not less than 30 units.
    (2) Provide copies of written evidence to support your list of firm
commitments from the source of the commitment. There must be a written
agreement to provide the resources. The written agreement may be
contingent upon you receiving a grant award.
    (3) You must provide a description of the individual sweat-equity
requirements of your program and how this contribution of labor will
serve to reduce the costs of the home to the homebuyer. Reasonable
accommodation must be allowed for persons with a variety of
disabilities to participate in your program.
Rating Factor 5: Comprehensiveness and Coordination (10 Points)
    This factor addresses the extent to which your application reflects
a coordinated, comprehensive approach to identifying community needs
and addressing them on an ongoing basis. In evaluating this factor, HUD
will consider:
    (1) The extent to which you demonstrate the support and
participation of the community's

[[Page 9814]]

residents, organizations, businesses, and government in the design and
implementation of the proposed activities.
    (2) The specific steps you will take to share information on
solutions, outcomes, and best practices resulting from the activities,
if funded.
    (3) The specific steps you have taken or will take to coordinate,
through meetings, information networks, planning processes, or other
mechanisms, your activities with other proposed or on-going activities
in the community funded by Federal, State, local, or private sources.

Submission Requirements for Factor 5

    (1) Describe what role residents, community leaders and
organizations, and government and private entities in the targeted
community have had, or will have, in planning the activities described
in your application and what role they will have in carrying out such
activities.
    (2) Describe how you will share with others information on
solutions and outcomes resulting from the activities, if funded.
    (3) Describe the specific steps you have taken or will take to
become active in the community's Consolidated Plan and Analysis of
Impediments to Fair Housing Choice process; or the community's Indian
Housing Plan process; and to address, through these processes, the
needs that are the focus of the proposed activities.
    (4) Describe the specific steps you have taken, or will take, to
coordinate your activities with other proposed or on-going activities
in the community funded by Federal, State, local, or private sources
(through meetings, information networks, planning processes, or other
mechanisms).

VI. Checklist for Application Submission

______Standard Form 424, Application for Federal Assistance
______Signed by organization eligible to receive funds
______ Evidence of Non-Profit status
Narrative Statement Addressing:
______ Factor 1--Capacity of the Applicant and Relevant Organizational
Staff
______ Factor 2--Need/Extent of the Problem
______ Factor 3--Soundness of Approach
______ Factor 4--Leveraging Resources
______ Factor 5--Comprehensiveness and Coordination Forms,
Certifications and Assurances:
______ SF 424A, Budget Information, Non-Construction Programs
______ SF 424B, Assurances--Non-Construction Programs
______ SF 424M, Federal Assistance Funding Matrix
______ HUD-50070, Certification for a Drug-Free Workplace
______ HUD-50071, Certification of Payment to Influence Federal
Transactions
______ SF LLL, Disclosure of Lobbying Activity
______ HUD-2880, Applicant/Recipient Disclosure/Update Report
______ HUD-2990, Certification of Consistency with the EZ/EC Strategic
Plan
______ HUD-2992, Certification Regarding Debarment and Suspension
______ Acknowledgement of Application Receipt

    Note: No kit will be made available. (See Section I for
information on how to obtain standard forms.)

VII. Corrections to Deficient Applications

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

VIII. Environmental Requirements

    The provisions contained in Section 305(c) of the Multifamily
Housing Property Disposition Reform Act of 1994, Environmental Review,
implemented in the Environmental Review regulations at 24 CFR part 58,
are applicable to properties assisted with SHOP funds. All SHOP
assistance is subject to the National Environmental Policy Act of 1969
and related federal environmental authorities. SHOP grant applicants
are cautioned that no federal or non-federal funds or assistance which
limits reasonable choices or could produce a significant adverse
environmental impact may be committed to a project until all required
environmental reviews and notifications have been completed by a unit
of general local government, tribe or State and until HUD approves a
recipient's request for release of funds under the environmental
provisions contained in 24 CFR part 58.

VIII. Authority

    The funding made available under this program section of the
SuperNOFA is authorized by section 11 of the Housing Opportunity
Program Extension Act of 1996 (42 U.S.C. 12805 note) (the ``Extension
Act''). No separate implementing regulations will be issued.

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[[Page 9817]]

Funding Availability for the Youthbuild Program

Program Overview

    Purpose of the Program. The purpose of the Youthbuild program is to
provide disadvantaged young adults with education, employment, and
leadership skills.
    Available Funds. Approximately $40,000,000 is available for the
Youthbuild Program.
    Eligible Applicants. Eligible applicants are public or private
nonprofit agencies, State or local housing agencies or authorities,
State or local units of general local government, or any entity
eligible to provide education and employment training under other
Federal employment training programs, as further defined in 24 CFR
585.4.
    Application Deadline. April 30, 1999.
    Match. None.

Additional Information

    If you are interested in applying for funding under this program,
please review carefully the General Section of this SuperNOFA and the
following additional information.

I. Application Due Date, Application Kits, Further Information, and
Technical Assistance

    Application Due Date. Your completed application (one original and
two copies) is due on or before 12:00 midnight, Eastern time, on April
30, 1999.
    See the General Section of this SuperNOFA for specific procedures
that you must follow for the form of application submission (e.g.,
mailed applications, express mail, overnight delivery, or hand
carried).
    Addresses for Submitting Applications. To HUD Headquarters. Submit
your original completed application (that contains the original
application and one copy), by hand or mail delivery, to: Processing and
Control Branch, Office of Community Planning and Development,
Department of Housing and Urban Development, 451 Seventh Street, SW,
Room 7255, Washington, D.C. 20410, Attention: Youthbuild Grant.
    To the Appropriate CPD Field Office. Submit the second copy of your
application to the Community Planning and Development Division of the
appropriate HUD Field Office for your jurisdiction.
    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 1-800-483-2209. An 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 Youthbuild and provide
your name, address (including zip code), and telephone number
(including area code).
    For Further Information. Phyllis Williams, Office of Economic
Development and Empowerment Service in the Office of Community Planning
and Development, Department of Housing and Urban Development, 451
Seventh Street, SW, Room 7140, Washington, DC 20410, telephone (202)
708-2035. 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.
    For Technical Assistance. Peter Twichell, YouthBuild USA, 58 Day
Street, Somerville, MA 02144, telephone (617) 623-9900, ext. 1211,
under contract with HUD to provide technical assistance in developing
your application.

II. Amount Allocated

    Approximately $40,000,000 is available for the Youthbuild Program.
The net available program funds will be divided between two categories
of grants (as further specified in Section III(C)):
    1. $ 4,800,000--Grants for new applicants for up to $300,000; and
    2. $35,200,000--Grants for up to $700,000.

III. Program Description; Eligible Applicants; Eligible Activities;
Eligible Participants

(A) Program Description

    The purposes of the Youthbuild Program are:
    (1) To provide economically-disadvantaged young adults with
opportunities to obtain education, employment skills, and meaningful
on-site construction work experience as a service to their communities
and a means to achieve self-sufficiency;
    (2) To foster the development of leadership skills and commitment
to community;
    (3) To expand the supply of permanent affordable housing for
homeless and low- and very low-income persons by providing
implementation grants for carrying out a Youthbuild program.
    (4) To provide disadvantaged young adults with meaningful on-site
training experiences in housing construction and rehabilitation to
enable them to provide a service to their communities by helping to
meet the housing needs of homeless and low-income families;
    (5) To give, to the greatest extent feasible, job training,
employment, contracting and other economic opportunities to low-income
persons.

(B) Eligible Activities

    (1) Work and activities associated with the acquisition,
rehabilitation or construction of the housing and related facilities to
be used in the program;
    (2) Relocation payments and other assistance required to comply
with 24 CFR 585.308;
    (3) Costs of ongoing training and technical assistance needs
related to carrying out a Youthbuild program;
    (4) Education, job training, counseling, employment leadership
development services and activities;
    (5) Wages, benefits, and need-based stipends for participants; and
(6) Administrative costs--Youthbuild funds for these costs should not
exceed 15 percent of the total amount of Youthbuild assistance, unless
a higher amount is justified to support capacity development by a
private nonprofit organization.
    Please refer to 24 CFR 585.305 for further details on eligible
activities.

(C) Eligible Participants

    Participants in a Youthbuild program must be very low-income high
school dropouts between the ages of 16 and 24, inclusive, at the time
of enrollment. Up to 25 percent of participants may be above very low-
income or high school graduates (or equivalent), but must have
educational needs that justify their participation in the program.

IV. Program Requirements

    In addition to the program requirements listed in the General
Section of this SuperNOFA, as an applicant you must comply with the
following requirements:

(A) Resources From Other Federal, State, Local or Private Entities

    You should use existing housing and homeless assistance programs
administered by HUD or other Federal, State, local, or private and
nonprofit housing programs as part of your Youthbuild program. In
addition, you should use other non-Youthbuild funds available for
vocational, adult, and bilingual education programs or for job training
under the Job Training Partnership Act and the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996. The

[[Page 9818]]

selection process described in this Youthbuild Program section of the
SuperNOFA provides for applicants to receive points where grant
applications contain firm commitments from Federal, State, local, or
private sources to provide resources to carry out Youthbuild
activities.

(B) Grant Period

    You should expend funds awarded within 30 months of the effective
date of the grant agreement, or such other period specified.

(C) Locational Limitations

    You may submit more than one application in the current competition
if your program's participant recruitment and housing areas are in
different jurisdictions. Each application you submit may only propose
activities to carry out one Youthbuild program, i.e., to start a new
Youthbuild program or to fund new classes of Youthbuild participants
for an existing program.

(D) Youthbuild Program Components

    Youthbuild programs that receive assistance under this Youthbuild
Program section of the SuperNOFA must contain the three components
described in paragraphs (1), (2), and (4) below. Other activities
described in paragraph (3) are optional.
    (1) Educational and job training services.
    (2) Leadership training, counseling, and other support activities.
    (3) Special activities such as entrepreneurial training, drivers'
education, internships, programs for those with learning disabilities,
and in-house staff training. (Optional)
    (4) On-site training through actual housing rehabilitation and/or
construction work, including the provision of alternative training
experiences that are necessary as reasonable accommodation for students
with disabilities. Each program must be structured so that 50 percent
of each participant's time is spent in on-site training.

(E) Desirable Elements of a Youthbuild Program

    You should document the extent to which HUD's policy priorities are
furthered by the proposed activities. Such policy priority areas are:
    (1) Affirmatively furthering fair housing by promoting greater
opportunities for housing choice for minorities and persons with
disabilities;
    (2) Promoting healthy homes;
    (3) Providing opportunities for self-sufficiency, particularly for
persons enrolled in welfare to work programs;
    (4) Providing educational and job training opportunities and
linking programs to Americorps activities; and
    (5) Promoting welfare reform. Refer to 24 CFR 585.3 for a detailed
description of program components.

V. Application Selection Process

    You, the applicant, must meet all of the applicable threshold
requirements of Section II(B) of the General Section of the SuperNOFA.
HUD will review each application and assign points in accordance with
the selection factors described in this section. The maximum number of
points is 102 (except for an application submitted by the City of
Dallas, Texas, which would be eligible for a maximum of 104 points, in
accordance with Rating Factor 3, paragraph (3), below). This maximum
includes two EZ/EC bonus points as described in the General Section of
the SuperNOFA.
    To afford applicants every opportunity to submit a ratable
application, while at the same time ensure the fairness, integrity and
timeliness of the selection process, the following application
submission and selection procedures apply to this program:
    (A) Rating and Ranking. HUD will rate each eligible application
based upon the rating factors described in Section V of this Youthbuild
Program section of the SuperNOFA. Using the scores assigned, HUD will
place the application in rank order within each category. HUD will
select applications for funding in accordance with their rank order. An
application will be eligible for EZ/EC bonus points and for the Housing
Program Priority points in Rating Factor 3, paragraph (2), only if the
application receives a combined score of at least 50 points for Rating
Factor 1, Rating Factor 2, and Rating Factor 3, paragraph (1), under
this Section V.
    If two or more applications are rated fundable, and have the same
score, but there are insufficient funds to fund all of them, HUD will
select the application(s) with the highest score for Rating Factor 3(1)
under Soundness of Approach.
    (B) Initial Screening. During the period immediately following the
application deadline, HUD will screen each application to determine
eligibility. Applications will be rejected if they:
    (1) Are submitted by ineligible applicants, or
    (2) Propose a program for which significant activities are
ineligible.
    (C) Categories of Grants.
    HUD will award Youthbuild implementation grants only to eligible
applicants for the purpose of carrying out Youthbuild programs in
accordance with subtitle D of title IV of the Act. HUD will select
applications in a competition in accordance with the grant selection
process described in Section V of this Youthbuild Program section of
the SuperNOFA.
    HUD will make grants in two categories:
    (1) Grants for new applicants that have not previously received
Youthbuild Implementation Grants and that have elected not to apply
under category (2), below. These grants will be limited to $300,000,
for a period of 18 months, with a maximum of 20 students.
    (2) Grants for up to $700,000 to implement a full range of
Youthbuild activities for up to a 30-month period. HUD will award half
the funding in this category to applicants that propose grants of
$400,000 or less for up to 24 months. Applicants in category (1) will
receive twelve percent of the funds available. Applicants in category
(2) will receive the remainder of the funds available, which in turn
will be split evenly between grants for up to and including $400,000,
and grants over $400,000. If you have not received funding before, you
may apply in either category. If you have received funding before for
implementation, you may apply only in category (2).
    (D) Maximum Awards.
    Under the competition established by this Youthbuild Program
section of the SuperNOFA, the maximum award for a Youthbuild grant is
$700,000. HUD reserves the right to determine the maximum or minimum of
any Youthbuild award per application, project, program or budget line
item. HUD will not make amendments to awards under this competition
that will increase previously approved grant amounts. In order to
ensure reasonable geographic diversity, HUD will not give a CDBG
entitlement jurisdiction more than $2.1 million in Youthbuild grants.
    (E) Potential Environmental Disqualification. HUD reserves the
right to disqualify an application where one or more environmental
thresholds are exceeded if HUD determines that it cannot conduct the
environmental review and satisfactorily complete the review within the
HUD review period. (See 24 CFR 585.307.)
    (F) Notification of Approval or Disapproval. HUD will notify you
whether or not you have been selected for an award. If you are
selected, HUD's notice to you of the amount of the grant award based on
the approved

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application will constitute HUD's preliminary approval, subject to
execution of the grant agreement by HUD.
    (G) Economic Opportunities for Low and Very Low-Income Persons
(Section 3). Section 3 of the Housing and Urban Development Act of 1968
(12 U.S.C. 1701u) is applicable to Youthbuild implementation grant
recipients. Please see Section II(E) of the General Section of the
SuperNOFA.
    (H) Factors for Award Used to Evaluate and Rate Applications.
Rating Factor 1: Capacity of the Applicant and Relevant Organizational
Experience (30 Points)
    This factor addresses the qualification and experience of the
applicant and participating parties to implement a successful young
adult education and training program within a reasonable time period.
HUD will review and evaluate the information provided documenting
capability. In assigning points for this criterion, HUD will consider
evidence in the application that demonstrates the following:
    (1) Experience in implementing a comprehensive, integrated,
multidisciplinary program with the following components:
    (a) Young adult education and training programs, including programs
for low-income persons from economically distressed neighborhoods.
    (b) Young adult leadership development training and related
activities for young adults.
    (c) Young adult on-site training in housing construction or
rehabilitation for the production of sound and affordable housing for
the homeless and low-income families.
    (2) The extent to which you or participating parties have been
successful in past education, training, and employment programs and
activities, including Federally-funded Youthbuild programs. If you have
received a Youthbuild grant, you must submit a performance narrative as
outlined in the application package, and copies of your last two
progress reports or, if applicable, a closeout report. In applying the
rating criteria, HUD will take into consideration your performance
(including meeting target dates and schedules) as reported.
    (3) The extent to which you, including your program director,
principal staff, or participating parties have demonstrated past
ability to leverage other resources to cover administrative,
educational, and training costs.
    (4) Staff capacity should address the extent to which you
demonstrate that your proposed Staff and Program Manager possess the
background, experience, and capacity to conduct the proposed project,
as evidenced by recent work experience in managing projects of the same
or similar size, dollar amount, and types of activities as those
proposed in the application.
Rating Factor 2: Need/Extent of the Problem (15 Points)
    This factor addresses the extent to which there is a need for
funding the proposed program activities and an indication of the
urgency of meeting the need in the target area. Documentation of need
should address the extent to which you document a critical level of
need for the proposed activities in the area where activities will be
implemented. The documentation must apply to the targeted area rather
than the entire locality. If the target area is an entire locality or
State, then documenting need at this level is appropriate.
    Your documentation of need should demonstrate the extent and
urgency of the problem the proposed activities address. To the extent
that your community's Consolidated Plan or Analysis of Impediments to
Fair Housing Choice (AI) identifies the level of the problem and the
urgency in meeting the need, you should include references to these
documents in your response. HUD will review more favorably those
applicants that use these documents to identify need, when applicable.
Examples of data you might use to demonstrate need include, but are not
limited to, economic and demographic data relevant to the target area,
including poverty and unemployment rates; levels of homelessness;
extent of drug usage and crime statistics; lead poisoning rates;
housing market data available from HUD or other data sources including
the Public Housing Authorities' Five Year Comprehensive Plan, State or
local Welfare Department's Welfare Reform Plan (including, where
applicable, the Welfare to Work Plan Addendum); and/or lack of other
Federal, State, or local funding that could be or are used to address
the problem HUD program funds are designed to address. If the proposed
activity is not covered under the scope of the Consolidated Plan and
AI, you should indicate such, and use other sound data sources to
identify the level of need and the urgency in meeting the need. Types
of other sources include, but are not limited to, Census reports,
Continuum of Care gaps analysis, law enforcement agency crime reports,
Public Housing Authorities' Five Year Comprehensive Plan, etc.
Rating Factor 3: Soundness of Approach (40 Points)
    (1) (30 points) HUD will consider the overall quality and
feasibility of the proposed program as measured by the principles and
goals of the proposed program; whether proposed program activities meet
the overall objectives of the Youthbuild program; whether the proposed
program activities will be accomplished within the projected time
frame; whether the proposed program activities are comprehensive and
integrated; and the potential for success of the proposed program.
Areas HUD will consider in evaluating the overall quality of the
proposed program are:
    (a) Outreach, recruitment and selection activities including:
    (i) Specific steps you will take to attract potential eligible
participants who are unlikely to be aware of this program (because of
race, ethnicity, sex or disability) and selection strategies;
    (ii) Special outreach efforts you will make to recruit eligible
young women, young women with dependent children, and persons receiving
public assistance; and
    (iii) Recruitment arrangements you have made with public agencies,
courts, homeless shelters, local school systems, local workforce
development systems, community-based organizations, etc.
    (b) Educational and job training services and activities including:
    (i) The types of instructional services you will provide;
    (ii) The number and qualification of program instructors and ratio
of instructors to participants;
    (iii) Realistic scheduling plan for classroom and on-the-job
training; and
    (iv) Reasonable payments of participants' wages, stipends, and
incentives.
    (c) Leadership development, including the leadership development
training you will offer to participants, and including the strategies,
activities, and plans to build group cohesion and peer support.
    (d) Support services, including documentation of counseling and
referral services to be offered to participants, including the type of
counseling, social services, and/or need-based stipends you will
provide (supported by letters of commitments from providers).
    (e) On-site training, including:
    (i) The housing construction or rehabilitation activities
participants will undertake at the site(s) to be used for the on-site
training component of the program;
    (ii) The qualification and number of on-site supervisors;

[[Page 9820]]

    (iii) The ratio of trainers to students;
    (iv) The number of students per site; and
    (v) The amounts, reasonable wages, and/or stipends you will pay to
participants during on-site work.
    (f) Job placement assistance, including your commitments,
strategies, and procedures for:
    (i) Participant placement in meaningful employment, enrollment in
postsecondary education programs, job development, starting business
enterprises, or other opportunities leading to economic independence;
and
    (ii) Follow-up assistance and support activities to program
graduates.
    (g) Americorps support or participation as evidenced by approval of
Americorps or appropriate State agency.
    (2) (10 points) HUD will assign Housing Program Priority Points to
all applications that contain evidence that housing resources from
other Federal, State, local, or private sources that are available to
cover the cost, in full, for the following housing activities for the
proposed Youthbuild program: acquisition, architectural and engineering
fees, construction, and rehabilitation. It also is imperative that your
proposed housing sites provide quality training. The number of units
you propose to rehabilitate or construct is secondary in rating this
factor. Applications that do not include proper documentation of
commitment of non-Youthbuild resources or propose to use Youthbuild
grant funds, in whole or in part, for any one of the housing activities
listed above will not be entitled to the full priority points. HUD will
not use housing resources in evaluating the Leveraging Resources
factor.
    HUD considers that the quality of the training to be provided is
more important than the number of units per se, in evaluating housing
sites proposed for Youthbuild training.
    (3) HUD will award up to two (2) additional points to any
application submitted by the City of Dallas, Texas, to the extent this
subfactor is addressed. Due to an order of the U.S. District Court for
the Northern District of Texas, Dallas Division, with respect to any
application submitted by the City of Dallas, Texas, HUD will consider
the extent to which the application's proposed activities will
eradicate the vestiges of racial segregation in the Dallas Housing
Authority's programs consistent with the Court's order.
Rating Factor 4: Leveraging Resources (10 Points)
    This factor addresses the extent to which firm commitment of
resources are obtained from Federal, State, local, and private and
nonprofit sources other than the applicant. In assigning points for
this criterion, HUD will consider the level of nonhousing resources
obtained for cash or in-kind contribution to cover the following kinds
of areas:
    (1) Social services (i.e., counseling and training);
    (2) Use of existing vocational, adult, and bilingual educational
courses;
    (3) Donation of labor, resource personnel, supplies, materials,
classroom, and/or meeting space;
    (4) Other commitments.
    In rating this element, HUD will consider only those contributions
for which current firm commitments have been provided. HUD will
evaluate the level of nonhousing resources proposed based on their
importance to the total program.
Rating Factor 5: Comprehensiveness and Coordination (5 Points)
    This factor addresses the extent to which your program reflects a
coordinated, community-based process of identifying needs and building
a system to address the needs by using available HUD funding resources
and other resources available to the community.
    In evaluating this factor, HUD will consider the extent to which
you demonstrate that you have:
    (1) Coordinated your proposed activities with those of other groups
or organizations in order to best complement, support, and coordinate
all known activities, and the specific steps you will take to share
information on solutions and outcomes with others. You should describe
any written agreements, memoranda of understanding in place, or those
that will be in place after award.
    (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 you propose.
    (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 activities funded by HUD, Federal, State, or local
sources, including those proposed or on-going in the community(s)
served.

VI. Application Submission Requirements

    You must complete and submit your application for a Youthbuild
grant in accordance with the instructions in the FY 1999 Youthbuild
application kit. The application kit will request information in
sufficient detail for HUD to determine whether your proposed activities
are feasible and meet all the requirements of applicable statutes and
regulations. The application kit requires you to describe: your and
participating parties' experiences in young adult and housing programs;
your proposed Youthbuild program; the other public and private
resources to be used for the program, including other housing resources
(including documentation of these). In addition, you must submit a
schedule for the program, budgets, identification of housing sites, and
demonstration of site access. The application kit also contains
necessary certifications regarding Federal requirements. In addition,
you must provide the required certification that the proposed
activities are consistent with the HUD-approved Consolidated Plan in
accordance with 24 CFR part 91. You should refer to the Youthbuild
application kit for further instructions and take into account the
uniform guidebook available to all applicants.

VII. Corrections to Deficient Applications

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

VIII. Environmental Requirements

    Environmental procedures apply to HUD approval of grants when you
propose to use Youthbuild funds to cover any costs for the lease,
acquisition, rehabilitation, or new construction of real property
proposed for housing project development. Environmental procedures do
not apply to HUD approval of your application when you propose to use
your Youthbuild funds solely to cover costs for classroom and/or on-
the-job construction training and support services.
    If you propose to use your Youthbuild funds to cover any costs of
the lease, acquisition, rehabilitation, or new construction of real
property, you must submit all relevant environmental information in
your application to support HUD decisionmaking in accordance with the
environmental

[[Page 9821]]

procedures and standards set forth in 24 CFR 585.307.

IX. Authority

    This program is authorized under subtitle D of title IV of the
Cranston-Gonzalez National Affordable Housing Act (the Act), as added
by section 164 of the Housing and Community Development Act of 1992
(Pub. L. 102-550, 106 Stat. 3723, 42 U.S.C. 12899). The Youthbuild
Program regulations are found in 24 CFR part 585.

BILLING CODE 4210-32-P

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