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Notice of Funding Availability (NOFA) for the Research Studies on Homeownership and Affordable Lending Fiscal Year (FY 2002)

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Start Preamble Start Printed Page 27680


Office of Policy Development and Research, HUD.


Notice of funding availability (NOFA).


Purpose of the NOFA. The purpose of this NOFA is to fund technical studies that will guide development of public policy to increase affordable lending, reduce downpayment constraints, and promote homeownership, especially for low- and moderate-income and minority families and in geographical areas which have been underserved by the mortgage finance system. HUD particularly seeks studies that will provide empirical basis for its regulation and monitoring of two Government-Sponsored Enterprises (GSEs)—Fannie Mae and Freddie Mac, including the effects of such regulation and monitoring on affordable lending in the primary mortgage market. Specific topics of interest include:

1. Homeownership

a. Factors underlying the increase in homeownership during the 1990s and policy implications for the current decade;

b. Accounting for the remaining income and racial disparities in homeownership rates, and policy approaches that could remove barriers for prospective low-income and minority homeowners; and

c. Supply constraints and regulatory barriers that impact homeownership opportunities and could potentially impair the effectiveness of affordable lending programs.

2. Affordable Lending

a. Determinants of problems faced by low-income and minority families in accessing mortgage credit;

b. Determinants of downpayments;

c. The role of major mortgage market institutions such as Fannie Mae, Freddie Mac, the Federal Housing Administration, and depository institutions in increasing credit access for low- and moderate-income and minority families and their communities; and

d. Effects on targeted populations of setting alternative levels of the GSE affordable housing goals and defining the goals in alternative ways.

Available Funds. $570,000 from HUD's FY 2002 research and technology appropriation. HUD anticipates funding 15 to 20 studies on these topics; studies will be funded through cooperative agreements, up to a maximum of $40,000.

Eligible Applicants. Academic and not-for-profit institutions located in the U.S., state and local governments, and federally recognized Indian tribes are eligible to apply. For-profit businesses also are eligible; however, they are not allowed to earn a fee or profit.

Application Deadline. July 21, 2003.

Match. None required.

Additional Information

I. Application Due Date, Further Information and Technical Assistance

Application Due Date. Your completed application is due on or before July 21, 2003.

Address for Submitting Applications. All applications must be either mailed or sent via overnight/express mail delivery, addressed to: Department of Housing and Urban Development, Financial Institutions Regulation Division, Office of Policy Development and Research, 451 Seventh St., SW., Room 8212, Washington, DC 20410.

Application Submission Requirements. New Security Procedures. HUD has implemented new security procedures that affect application submission procedures. Please read the following instructions carefully and completely. HUD will not accept hand-delivered applications. Applications may be mailed using the United States Postal Service (USPS) or may be shipped via one of the following delivery services: DHL, Falcon Carrier, FedEx, United Parcel Service (UPS), or United States Postal Service Express Mail. No other delivery services are permitted into HUD Headquarters without escort. You must, therefore, use one of these carriers.

Mailed Applications. Your application will be considered timely filed if your application is postmarked on or before 12 midnight on the application due date and received by the designated HUD office on or within fifteen (15) calendar days of the application due date. All applicants must obtain and save a Certificate of Mailing showing the date when the application was submitted to the USPS. The Certificate of Mailing (which is USPS Form 3817) will be your documentary evidence that your application was timely filed.

Applications Sent by Overnight/Express Mail Delivery. If your application is sent by overnight delivery or express mail, your application will be timely filed if it is received before or on the application due date, or when you submit documentary evidence that your application was placed in transit with the overnight delivery/express mail service by no later than the application due date. Due to new security measures, you must use either USPS express mail or one of four carrier services that do business with HUD headquarters regularly. These services are DHL, Falcon Carrier, FedEx, and UPS. Delivery by these services must be made during HUD's headquarters business hours, i.e., between 8:30 a.m. and 5:30 p.m. eastern time, Monday through Friday.

Other Transmission Methods. Only applications submitted via mail or one of the express carrier services identified above will be accepted. Facsimile, e-mail, or other types of transmission are not acceptable.

For Further Information. You may contact: Dr. John Gardner, Financial Institutions Regulation Division, at the Department of Housing and Urban Development, Financial Institutions Regulation Division, Office of Policy Development and Research, 451 Seventh St., SW., Room 8212, Washington, DC 20410, telephone (202) 708-0614, extension 5868, or Mr. Patrick Tewey, Grants Officer, extension 4098 (these are not toll-free numbers). Hearing- and speech-impaired persons may access the above telephone number via TTY by calling the toll-free Federal Information Relay Service at 1-800-877-8339.

II. Amount Allocated

Approximately $570,000 from HUD's FY 2002 Research and Technology appropriation will be available to fund research studies proposals in FY 2002. Cooperative agreements will be awarded on a competitive basis according to the Rating Factors described in Section VII(D). HUD anticipates awarding 15 to 20 cooperative agreements ranging up to $40,000 each. Applications exceeding this amount (unless the excess is provided through cost-sharing) will be deemed to be non-responsive.

III. Program Description; Eligible Applicants; Eligible Activities

(A) Program Description. Background.

(1) General Goals and Objectives. Homeownership. HUD invites proposals for studies of:

(i) Homeownership changes during the 1990s, particularly models that explain national and local trends in home buying, and policy implications of the changes; Start Printed Page 27681

(ii) How economic, demographic, and other factors influence gains and losses in homeownership across metropolitan and rural housing markets;

(iii) Factors that enable low-income families to stay in their homes;

(iv) House price changes and associated impacts on affordability;

(v) Effects of supply constraints, including zoning or other types of regulations, that restrict housing supply and could create barriers to homeownership and lessen the impacts of targeted affordable housing programs; and

(vi) Issues related to immigrant homeownership, the causes of racial gaps in homeownership, and other important policy issues and topics related to homeownership. These studies should provide diverse insights on homeownership across local housing markets, which will help HUD identify the best vehicles to advance its future homeownership strategies to close existing gaps in homeownership.

Affordable Lending. HUD invites proposals for studies of:

(i) The effects on lower-income families of the increase in low-downpayment mortgage programs and the growth of affordable lending during the 1990s, and particularly the programs of Fannie Mae and Freddie Mac;

(ii) The role of major mortgage market institutions such as Fannie Mae, Freddie Mac, the Federal Housing Administration, and depository institutions in increasing credit access for low- and moderate-income and minority families and their communities;

(iii) The extent to which low-downpayment initiatives have furthered affordable lending and homeownership;

(iv) Effects on targeted populations of setting alternative levels of the GSE affordable housing goals and defining the goals in alternative ways; and

(v) Barriers that limit access to credit for low-income and minority families and families in inner cities and low-income neighborhoods.

(2) Background on Homeownership. Promoting homeownership has been a long-standing goal of HUD. Underlying this goal is the belief that homeownership is an important aspiration of many American families and that homeownership confers advantages to the homeowner family as well as to society at large. An owned home can provide a decent and safe living environment and is an important source of wealth accumulation. The wealth accumulated from homeownership has made possible the funding of college education of children and a secure retirement for many American families. The homeownership rate is at a record high, not only for the entire population, but also for the major minority groups in the nation. Even with the current high homeownership rates, many American families who do not yet own a home continue to aspire for homeownership. Homeownership studies are part of an ongoing agenda at HUD to increase opportunities for homeownership for low-income and minority households.[1] HUD recently sponsored studies of the benefits of homeownership [2] and the impact of the GSE housing goals on homeownership.[3] HUD's Office of Policy Development and Research recently published staff research on homeownership issues.[4] HUD has an ongoing study on the determinants of homeownership gaps among low-income and minority borrowers and neighborhoods.[5] The studies under this Request for Applications will complement these other studies.

(3) Background on Affordable Lending. Growth of Affordable Lending During the 1990s. Economic expansion and lower mortgage rates substantially improved housing affordability during the 1990s. These underlying economic developments were enhanced by new and expanded affordable lending programs developed by primary mortgage market originators, private mortgage insurers, nonprofits, and Fannie Mae and Freddie Mac. During the 1990s, FHA also continued to offer its low-downpayment program that was particularly attractive to low-income and minority first-time homebuyers. As a result of initiatives in both the conventional and government markets, many young, low-income, and minority families who were closed out of the housing market during the 1980s re-entered the market during the 1990s. However, many households still lacked the financial resources and earning power to take advantage of housing opportunities in recent years. Several trends contributed to the reduction in the real earnings of young adults without college education over the last 15 years, including technological changes that favored white-collar employment, losses of manufacturing jobs, and wage pressures exerted by globalization. Fully 45 percent of the nation's population between the ages of 25 and 34 have no advanced education and are therefore at risk of being unable to afford homeownership. This is especially true of African Americans and Hispanics, who have lower average levels of educational attainment than whites.

HUD's Secondary Mortgage Market Regulatory Role. Fannie Mae and Freddie Mac, government-sponsored enterprises (GSEs) in the secondary mortgage market, are the two largest sources of housing finance in the United States. They play a dominant role in determining the nature and volume of affordable lending activities in the primary mortgage market. They provide funding for additional mortgage lending by purchasing loans from mortgage lenders and holding purchased loans in portfolio. Fannie Mae and Freddie Mac also issue mortgage-backed securities (MBS), which are then sold in the capital markets to a wide variety of investors.

In 1992, Congress enacted the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (FHEFSSA). This act established the current regulatory structure for the GSEs. One important aspect of this legislation required the Secretary of HUD to establish annual affordable and geographic goals for the GSEs' purchases of mortgages. Under this authority, the Secretary initially set goals for 1993-95 (referred to as the “transition period”), raised them for 1996-2000, and raised them again for 2001-03. The three broad goals include:

1. A low- and moderate-income goal, which focuses on families with below-median incomes;

2. An underserved areas goal, targeted to low-income and minority census tracts in metropolitan areas and counties in non-metro areas; and Start Printed Page 27682

3. A special affordable goal, directed to very low-income families and low-income families in low-income areas.

Congress also expressed concern in 1992 about an “information vacuum” with regard to the activities of Fannie Mae and Freddie Mac. Thus, FHEFSSA required the GSEs to submit loan-level data to the Secretary about their mortgage purchases, including detailed information on borrower, property, and mortgage characteristics. It also required HUD, after taking proprietary considerations into account, to make the loan-level data submitted by the GSEs available to interested parties in the form of a public use database. The studies to be funded under this NOFA will further this mission of providing state-of-the-art research on the affordable lending efforts of Fannie Mae and Freddie Mac.

Previous and Ongoing PD&R Research. The Financial Institutions Regulation Division of the Office of Policy Development and Research (PD&R) has conducted considerable internal research on affordable lending in recent years, and it has contracted for or provided grants for additional research.

Specifically, the Division inaugurated a series of studies, Working Papers in Housing Finance, which has resulted in the publication of 16 reports to date. The most recent papers are “The GSEs' Funding of Affordable Loans: A 2000 Update,” by Harold L. Bunce, and “Black and White Disparities in Subprime Mortgage Refinance Lending,” by Randall M. Scheessele, both published in April 2002, and “Goal Performance and Characteristics of Mortgages Purchased by Fannie Mae and Freddie Mac, 1998-2000,” by Paul B. Manchester, published in May 2002.

In 1997, the Division funded grants for 11 studies on various aspects of the GSEs' mortgage purchase activities. These studies provided useful background information for the reconsideration of the housing goals in 2000. Five of these studies were published in PD&R's journal Cityscape, Volume 5, Number 3 (2001), and four more were published in Cityscape, Volume 6, Number 1 (2002). The other two studies have been published in professional journals.

Examples of recent contract studies funded by the Financial Institutions Regulation Division include three studies by the Urban Institute: A Study of the GSEs' Single Family Underwriting Guidelines (February 1999); Subprime Markets, the Role of the GSEs, and Risk-Based Pricing (March 2002); and, An Analysis of the Effects of the GSE Affordable Goals on Low- and Moderate-Income Families (May 2002). In addition, Abt Associates wrote A Study of Multifamily Underwriting and the GSEs' Role in the Multifamily Market (August 2001). Additional studies are underway.

(4) Background on Relevant Data Sources. HUD anticipates that a variety of mortgage and housing market data sources may be used, including the 1990 and 2000 censuses, Home Mortgage Disclosure Act (HMDA) data, American Housing Survey, Panel Survey of Income Dynamics, Survey of Consumer Finance, Survey of Residential Finance, and databases on mortgages insured by the Federal Housing Administration and mortgages purchased or securitized by Fannie Mae and Freddie Mac, among others. For example, the Census 2000 long-form data on family incomes and housing characteristics provide an important data source for examining issues covered by this solicitation. HUD anticipates that these studies will be among the first to utilize these newly available Census data to examine issues related to homeownership and affordable lending. The American Housing Survey offers a consistent longitudinal sample to study homeownership and affordable lending issues through 2001.

The GSEs have provided HUD with loan-level data on each of their mortgage transactions since the beginning of 1993. From this database, HUD has extracted a Public Use Data Base for each calendar year from 1993 through 2001. The single-family component of the Public Use Data Base is structured as three separate loan-level data files including fields such as the loan amount, the census tract location of each property backing a GSE mortgage acquisition, demographic characteristics of these tracts, loan-to-value ratio, degree of affordability, demographic information on the borrower, loan purpose (refinance/purchase), and whether the property is owner-occupied.

(B) Eligible Activities.

Below you will find a listing of major topics and questions on which HUD seeks information. HUD is interested in high-quality research that offers a unique contribution to the literature on affordable lending and homeownership.

  • Your study may combine descriptive and analytical approaches.
  • Your study may identify or measure the factors associated with particular outcomes and the underlying causes of particular outcomes.
  • You may describe and analyze the impacts of existing policies, and in this case your proposal should highlight the policy implications of the potential findings of your proposed research, particularly with respect to affordable lending and homeownership policies that have been successful in underserved markets.
  • Your methodology may include statistical techniques, econometric estimation, application of geographic information systems (GIS) techniques, case studies, or critical review of the present state of knowledge and meta-analysis of existing studies. In each case, the methodology must reflect the state-of-the-art in the respective discipline.
  • If your study is empirical, your final report must include a succinct discussion of the literature related to the issue being analyzed that provides background for the methodology of the study and a useful context for identifying the analytical and policy contributions of the study.

(1) Studies on Homeownership.

(a) Changes in Homeownership Rates. The release of the 2000 Census data (short and long form data) now presents an opportunity to study changes in homeownership over the past decade (1990-2000), at both the national and local levels. Similarly, the recent release of the 2001 American Housing Survey offers the opportunity to study homeownership changes over the past 10-15 years with that database as well. The 1990s was a decade that saw a great emphasis on promoting homeownership. Significant housing policy measures such as the setting of quantitative goals for GSE purchase activity were implemented in this decade. There was a greater emphasis in the 1990s on promoting homeownership among first-time homebuyers, low-income families, minority families, and families living in underserved areas. Research under this sub-topic includes, but is not limited to, the following:

(i) What are the general policy implications of the changes in homeownership rates in the decade 1990-2000 and specific implications arising from the pattern of changes across regions, locations, income groups, racial and ethnic groups, groups such as the elderly and the disabled, and household types?

(ii) Are there significant differences in the homeownership rates of recent immigrant groups compared with non-immigrants? What is the pattern of homeownership rate changes for particular immigrant groups? What factors influence the greater likelihood of homeownership among certain recent immigrant groups compared with other recent immigrant groups?

(iii) What factors are responsible for the changes in homeownership rates Start Printed Page 27683experienced between 1990 and 2000? What is the relative importance of different factors, such as demographic factors (age composition and household composition of the population, cultural background, etc.); economic factors (income and wealth, interest rates, house prices and their appreciation); and public policy factors, in determining the changes in homeownership rates?

(iv) What changes were seen in the home value of owner-occupied homes over 1990-2000 (or some similar recent period)? What patterns may be discerned from the changes in home value? Was there greater home value appreciation in certain regions and locations? Did home value changes vary by the minority status of owner-occupants or the minority composition of the tract? Did these results hold after certain relevant factors were controlled for?

(v) How have recent changes in house prices (as measured by repeat sales and other house price indexes) affected the affordability of homeownership, in the nation as a whole, in particular regions and metropolitan areas, and for particular groups such as minorities and immigrants?

(vi) What have been the changes in homeownership in rural areas over the decade, 1990-2000? What have been the changes in home values in rural areas over 1990-2000? What factors explain these changes?

(vii) How has the geography of homeownership changed between 1990 and 2000? Has there been greater suburbanization of homeownership over this period? What was the nature of homeownership gains in our inner cities in terms of the types of homes owned, home values, and income and racial/ethnic characteristics of homeowners? (viii) Did minority homeowners live in more segregated or less segregated neighborhoods in 2000 than in 1990? How has the degree of integration changed over this period?

Many of these research topics could be addressed using the 1990 and 2000 Census data (short and long forms).[6] While homeownership data are available in the short form data, home value is available only in the long form data. Longer-term comparisons may be made using data from the Censuses before 1990. The Census data may be supplemented with other databases such as the Home Mortgage Disclosure Act (HMDA) data, the American Housing Survey data (including the geocoded version of that database), or other national or local databases. Tract-level analyses may be conducted using these multiple databases. In addition, there are several available measures of house prices and their change that could be used for this analysis (e.g., NAR median house price series, Freddie Mac's repeat sales index, AHS and Census home value information).

(b) Sustaining Homeownership and Wealth-Accumulation for Low- and Moderate-Income and Minority Families.[7] While increasing numbers of low- and moderate-income and minority families have achieved the American Dream of homeownership, sustaining the Dream has sometimes presented enormous challenges. The difficulty in making mortgage, insurance, tax and utility payments on time has put many households on the brink of foreclosure or other hardship. Many benefits of homeownership such as gains from price appreciation accrue only after a certain period of sustained homeownership. Thus, ensuring that new homeowners can sustain their homeownership is integral to realizing the American Dream of homeownership as a public policy goal. Even with sustained homeownership, the wealth accumulated in home equity can be dissipated through refinances that overtap equity. In recent times, many households have engaged in such refinances, and often repeatedly. Low-income and elderly households are particularly affected by such transactions. Refinance counseling to educate homeowners of the possibility of erosion in accumulated wealth in the home through refinances is seen as necessary. Research related to sustaining homeownership for low- and moderate-income and minority families includes, but is not limited to, the following:

(i) What has been the recent experience of low- and moderate-income and minority households with respect to sustained homeownership? How many low- and moderate-income and minority households have sustained homeownership for several years?

(ii) Have low- and moderate-income and minority families built assets (wealth) through homeownership? Have refinances resulted in erosion of accumulated housing wealth? What has been the level of appreciation in the values of the homes that low- and moderate-income and minority households have owned for different time horizons (but at least eight years)? How is the home value appreciation distributed across different locations (e.g., regional, urban versus suburban, neighborhoods) and population groups (e.g., different racial groups and their neighborhoods)? What are the policy implications of these developments?

(iii) What factors can be identified as being associated with sustained homeownership among low- and moderate-income and minority families? What is the relative importance of the socio-economic characteristics of these families, the role of institutions (such as special mortgage lending programs and homeownership and refinance counseling programs), and the state of the economy (local and national) in helping sustain homeownership among low- and moderate-income and minority families?

(iv) How many low- and moderate-income and minority households failed to sustain homeownership in spite of having wanted to remain homeowners? What were the causes of failure to sustain homeownership? Can failure to sustain homeownership be reliably predicted using available data sets?

(v) What housing adjustments and non-housing adjustments have homeowners, on the brink of losing their homes, made in order to sustain homeownership? Has housing counseling made a difference?

(vi) Are difficulties with sustaining homeownership associated more with certain types of mortgages? If so, are mortgage characteristics responsible for the difficulties; or are the characteristics of the households (who are more likely to use such mortgages), their housing units, or neighborhoods, responsible?

(vii) What role have non-profit organizations, such as Community Development Corporations (CDCs), faith-based organizations and HUD-approved counseling agencies [8] played in helping sustain homeownership? What types of programs of these institutions (such as financial counseling, job training, providing micro-finance and assistance with renovations) have been most effective in helping sustain homeownership?

Longitudinal panel data, such as the AHS (panel of non-mover sample), Survey of Income and Program Participation (SIPP), Panel Study of Income Dynamics (PSID) and the National Longitudinal Surveys (NLS), are examples of databases that could be used to address these topics. Other special purpose databases may also be available. Case studies on Start Printed Page 27684homeownership experiences may be used where appropriate.

(c) Barriers to Homeownership. Aspiration for homeownership is widespread among American families who are not yet owners. Many such families perceive barriers that prevent them from becoming homeowners. Financial barriers, including down payment and credit constraints, are faced by many households. Other barriers to homeownership include discrimination and information barriers. Studying the nature and significance of these barriers is a first step towards designing policies to remove, minimize, or overcome these barriers. Research on barriers to homeownership includes, but is not limited to, the following:

(i) What are the main barriers to homeownership that American families currently face?

(ii) What is the relative importance of homeownership barriers such as financial barriers, poor credit history, information barriers, discrimination barriers, lack of availability of affordable housing stock, and lack of personal capacities to manage homeownership? What is the relative importance of these barriers for different population groups such as minorities, the elderly, the disabled, and first-time homebuyers?

(iii) To what extent is a downpayment constraint a barrier to homeownership? What are the common sources of downpayment for American homebuyers? Is homeownership for persons below a certain age related to parental wealth? What roles do family gifts and gifts from others play in opening up homeownership opportunities for young, low-income, and minority families?

(iv) Are homeownership rates among minority groups in particular locations related to some measure of the degree of discrimination that the minority groups face at those locations? Researchers may use long-range panel data like the PSID to address some of these questions. Researchers may also use the Survey of Consumer Finances (SCF), AHS, HMDA data, and other databases.

(v) To what extent do housing supply constraints affect homeownership? For example, do zoning or other types of regulations that restrain housing supply tend to create barriers to homeownership through their effects on housing prices? Are there barriers and supply constraints specifically in underserved neighborhoods that lessen the impacts of targeted affordable housing programs?

(d) Promoting Homeownership. There are a number of programs and policies aimed at promoting homeownership in the U.S. Some of these directly address the barriers to homeownership mentioned above. The mortgage finance industry clearly has a vital role to play in promoting homeownership. The role of secondary mortgage market institutions, including the GSEs, in promoting homeownership is of critical interest. FHA has played a major role in the first-time homebuyer market. It is important to study the role played by these institutions in the past and present, as well as their potential role in promoting homeownership in the future. Many first-time homebuyers with low-income, as well as other buyers, have benefited from the efforts of non-profit organizations such as Community Development Corporations (CDCs) and faith-based organizations. The efforts of these institutions include promoting innovative homeownership programs, such as sweat-equity programs, rent-to-own programs and co-operative forms of ownership, and providing micro-finance and homeownership counseling to households. HUD has worked with non-profit organizations in promoting homeownership through a number of its programs, including the Self-Help Housing Opportunity Program (SHOP). HUD's Homeownership Voucher Program specifically addresses the downpayment constraint that low-income households face. Research related to promoting homeownership includes, but is not limited to, the following:

(i) What has been the role of secondary mortgage market institutions in promoting homeownership? What role have the GSEs (including Fannie Mae, Freddie Mac, Federal Home Loan Banks), and the Federal Housing Administration played in promoting homeownership? Has the introduction of quantitative housing goals for Fannie Mae and Freddie Mac in 1993 directly increased homeownership among low- and moderate-income households and among households in underserved areas?[9]

(ii) How has the purchase activity of Fannie Mae and Freddie Mac with respect to mortgages obtained by low-income, minority or first-time homebuyers changed over the recent years? Can these changes be seen as being beneficial to the promotion of homeownership among these groups?

(iii) What is the evidence on the effectiveness of pre- and post-purchase homeownership counseling programs of HUD-approved counseling agencies, and programs sponsored by FHA, the GSEs and other organizations? Does homeownership counseling adequately address homeowners' decisions to refinance?

(iv) What is the role of manufactured housing in promoting homeownership through providing affordable housing? Are first-time homebuyers, low-income households, and minority households more likely to achieve homeownership through purchasing manufactured housing? What are the barriers (such as financial, technological, informational and attitudinal) to homeowners achieving homeownership through buying manufactured homes?

(v) What has been the role of non-profits, Community Development Corporations (CDCs) and faith-based organizations in promoting homeownership? What types of programs of these institutions have been most effective in increasing homeownership? What constraints do these institutions face in promoting homeownership in their communities? What is the scope for HUD programs (existing and new) to help overcome some of these constraints?

Researchers may use the Fannie Mae and Freddie Mac Public Use Data Base (PUDB), HMDA data, case studies, AHS, and other databases in addressing these research areas.

(2) Studies on Affordable Lending.

(a) Studies on Barriers to Credit Access. Barriers to credit access include limited savings to make a downpayment, insufficient income to afford the requisite monthly payments, high debt burdens, and an inadequately documented or poor credit history. In some or many cases, obtaining credit to purchase a home may not be realistic, and such families may need to rent for a time to build their savings, increase their incomes, reduce their debts, and establish a satisfactory credit history. However, in many other cases, credit may be obtainable if lenders adopt more flexible underwriting guidelines and devote additional time to reviewing applications that do not qualify under the automated underwriting programs commonly in use in today's mortgage market.

An additional barrier to obtaining credit is the fear and uncertainty about the buying process and the risks of ownership. To overcome this, a number of programs have been developed to enhance education about the credit process in recent years, including Freddie Mac's “Don't Borrow Trouble” campaign. Also, despite progress in recent years, there is evidence that discrimination in mortgage lending Start Printed Page 27685continues to exist.[10] Disparities in treatment between borrowers of different races and neighborhoods of different racial makeup have been well documented.

HUD seeks information on these various barriers to credit access and feasible steps that might be taken to improve such access among minorities and other groups that have traditionally had difficulty in obtaining credit. Study topics include, but are not limited to, the following:

(i) The effectiveness of credit education programs established by various participants in the mortgage process in recent years.

(ii) The nature and adequacy of lender reviews of mortgage applications that don't qualify for approval under automated underwriting.

(iii) The effects on savings for down payments of various policy initiatives in recent years, such as Individual Development Accounts (IDAs), under which participants' savings in restricted accounts are matched by outside sources, and under which these matching funds can only be withdrawn for program-specified purposes, such as to put a down payment on a home.

(b) Impacts of Broad Initiatives to Promote Affordable Lending. HUD is interested in quantitative studies of the impacts of broad initiatives to promote affordable lending. Data sources for such studies are listed above in section III (A)(4), but other databases may also yield useful insights.

These studies could utilize econometric techniques to evaluate these questions. An example of this type of study is a recent report prepared for HUD by the Urban Institute. This report, authored by Brent Ambrose, Thomas Thibodeau, and Ken Temkin, is titled An Analysis of the Effects of the GSE Affordable Goals on Low- and Moderate-Income Families. The report presented several theoretical models and developed empirical analyses relating to the relationships among GSE market shares and interest rates, financing for target groups, and homeownership.

Study topics could include, but are not limited to, the following:

(i) Factors accounting for changes in GSE market shares over time.

(ii) Effects of HUD's GSE affordable housing goals on homeownership rates for underserved groups and areas targeted by the goals.

(iii) Relationship between GSE market share in specific metropolitan areas and the homeownership rate for targeted groups in those areas.

(c) Evaluation of Specific Affordable Lending Programs. In addition to the quantitative studies outlined in the previous section, HUD seeks information on the effects, costs, and benefits of various affordable lending programs developed in the 1990s. Programs that could be analyzed include, but are not limited to, the following:

(i) Freddie Mac's affordable lending programs. Information on these programs is available from Freddie Mac's Web site and from its Annual Housing Activity Reports (AHARs) submitted to HUD.

(ii) Fannie Mae's affordable lending programs. With respect to Fannie Mae, information is available on Fannie Mae's Web site and from its AHARs submitted to HUD.

(iii) Programs of primary mortgage market lenders.

(iv) Programs of primary mortgage market insurers, including private insurers and the Federal Housing Administration (FHA).

(d) Studies on Down Payments. Several studies have suggested that the greatest barrier to affordable lending is not the inability to make monthly mortgage payments; rather it is the lack of sufficient resources to make the initial down payment. While FHA has traditionally been the main source of low-downpayment loans for first-time homebuyers, data suggest that conventional lenders increased their low-downpayment lending during the latter half of the 1990s. Fannie Mae and Freddie Mac began offering less-than-five-percent down payment programs during that period. There has been little recent research on the determinants of down payments and on the characteristics of conventional low-downpayment loans originated during the mid-to-late 1990s. Research is particularly needed on the relationship between the new conventional programs and first-time homeownership. Are these conventional and GSE low-downpayment programs providing an avenue for cash-constrained families to obtain first-time homeownership, along the same lines that FHA has been doing? Topics, issues, and questions that could be analyzed include:

(i) Market sectors (e.g., FHA, depositories, the GSEs) that provide substantial numbers of low-downpayment mortgages for low-income and minority families and for first-time homebuyers.

(ii) Characteristics that differentiate between low-income and minority borrowers who are able to make substantial down payments and those who are not able to do so.

(iii) The GSEs' role in the low-downpayment mortgage market. Do their low-downpayment loans go to low-income and minority homebuyers? To first-time homebuyers?

(iv) Comparisons of the down payment characteristics of mortgages originated in the entire primary conventional mortgage market and mortgages purchased by the GSEs.

(v) In order for HUD to define the GSE housing goals in precise terms and set the goals at specific levels, HUD is seeking research that will determine whether the goals affect supply in the market. Specifically, HUD is interested in a model that can provide quantitative estimates of the impact of setting the goals at various levels on the financial condition of the GSEs and on targeted outcomes.

IV. Cooperative Agreement Structure; Publication of Studies

The awards will be structured as cooperative agreements, in order to provide latitude to researchers to proceed independently, but with opportunity for HUD to provide comments at appropriate points in the research. As detailed below, HUD's participation in the research will include review and comment on the detailed study design, review and comment on the draft final report, and organizing and participating in a seminar on the research. If you believe that a greater extent of HUD involvement in your project would be advantageous for the successful accomplishment of your research objectives, please include in your project description/narrative a discussion of the desired HUD resources and the rationale. (This is item 6 in the list of application items provided in section VI.A, below.) Formal commitments regarding this aspect of the cooperative agreement would then become a matter for negotiation prior to award.

The technical study plan portion of your application (see item 3 in Section VI(A)(5) below) must include provisions for the following work steps to be performed by you and by HUD:

(a) You must submit a detailed study design, comprising identified research issue(s), a technical proposal, and methodological approach. This will be due no later than six weeks from the Start Printed Page 27686date of award, unless you indicate a specific rationale for a different schedule. HUD will provide comments to you on the study design.

(b) You must submit a draft report to HUD no later than twenty (20) weeks prior to the scheduled ending date of the project. HUD will provide comments on the draft report, which may include comments of peer reviewers engaged by HUD.

(c) Travel to Washington (or another location, as mutually agreed) to present the study, at a time to be arranged with HUD representatives, subsequent to submission of the draft final report. Your project budget must include provision for this.

(d) You must submit a final report taking account of the comments.

A cost-reimbursement award based on the negotiated budget is anticipated.

A payment schedule based on the completion of project milestones will be established in negotiation. An amount equal to 20 percent of the total amount of the cooperative agreement will be withheld and paid by HUD only after the final project report has been received and accepted by HUD.

The terms and conditions of the cooperative agreement will include restrictions against release of work products, quotation or paraphrasing from work products, or disclosures of interim findings prior to 60 days after HUD acceptance of your final report except with HUD approval. Thereafter, recipients are free to publish without HUD approval. The present provisions of OMB-Circular A-110, and HUD regulations at 24 CFR part 84 subpart C shall govern the right to intellectual or intangible property developed as a result of a recipient's performance under a cooperative agreement.

V. Program Requirements.

(A) Threshold Requirements.

(1) Eligible Applicants. Academic and not-for-profit institutions located in the U.S., state and local governments, and federally recognized Indian tribes are eligible to apply under this NOFA. For-profit firms also are eligible; however, they are not allowed to earn a fee (i.e., no profit can be made from the project). Federal agencies and federal employees are not eligible to submit applications.

(2) Compliance with Fair Housing and Civil Rights Laws.

(a) With the exception of federally recognized Indian tribes and their instrumentalities, all applicants and their subrecipients must comply with all Fair Housing and Civil Rights laws, statutes, regulations, and Executive Orders as enumerated in 24 CFR 5.105(a). If you are a federally recognized Indian tribe, you must comply with the non-discrimination provisions enumerated at 24 CFR 1003.601, as applicable.

(b) If you, the applicant:

(i) Have been charged with a systemic violation of the Fair Housing Act alleging ongoing discrimination;

(ii) Are a defendant in a Fair Housing Act lawsuit filed by the Department of Justice alleging an on-going pattern or practice of discrimination; or,

(iii) Have received a letter of non-compliance findings under title VI, section 504, or section 109, and if the charge, lawsuit, or letter of findings has not been resolved to HUD's satisfaction before the application deadline stated in this NOFA, then you may not apply for assistance under this NOFA. HUD will not rate and rank your application. HUD's decision regarding whether a charge, lawsuit, or a letter of findings has been satisfactorily resolved will be based upon whether appropriate actions have been taken to address allegations of on-going discrimination in the policies or practices involved in the charge, lawsuit, or letter of findings.

(3) Conducting Business In Accordance With Core Values and Ethical Standards. Entities subject to 24 CFR parts 84 and 85 (most non-profit organizations and state, local and tribal governments or government agencies or instrumentalities that receive federal awards of financial assistance) are required to develop and maintain a written code of conduct (see §§ 84.42 and 85.36(b)(3)). Consistent with regulations governing specific programs, your code of conduct must: prohibit real and apparent conflicts of interest that may arise among officers, employees, or agents; prohibit the solicitation and acceptance of gifts or gratuities by your officers, employees, and agents for their personal benefit in excess of minimal value; and, outline administrative and disciplinary actions available to remedy violations of such standards. If awarded assistance under this NOFA, you will be required, prior to entering into a cooperative agreement with HUD, to submit a copy of your code of conduct and describe the methods you will use to ensure that all officers, employees, and agents of your organization are aware of your code of conduct.

(B) Program Requirements.

(1) Number of Proposals and Topics. A particular author or group of co-authors may submit separate research proposals on more than one topic, but no more than one award will be made to any one such author or group of co-authors.

You may address more than one of the technical study topic areas within your proposal or submit separate applications for different topic areas. Projects need not address all of the objectives within a given topic area. While you will not be penalized for not addressing all of the specific objectives for a given topic area, if two applications for technical study in a given topic have equal scores, HUD will select the applicant whose project addresses the most objectives.

(2) Period of Performance. The period of performance may not exceed 18 months from the time of award.

(3) Conflict of Interest. You must include information in your proposal concerning any past and current relationships that you and any other individuals, contractors, subcontractors or consultants proposed to be involved in the work may have with Fannie Mae or Freddie Mac. Substantial conflict of interest may be a basis for HUD disapproval of a proposed investigator's involvement.

If your study bears in any way on the role or activities of financial institutions, you will be required upon the completion of your work to provide to HUD a succinct statement summarizing any past or current relationships between project personnel (either individually or through their institutions), and Fannie Mae, or Freddie Mac. In any subsequent public release of the research by the Office of Policy Development and Research, either through formal publication or otherwise, this statement will be included, to inform readers of the nature and extent of any such relationships.

(4) Existing Resources. HUD technical studies funds may not replace existing resources dedicated to any ongoing project.

(5) Protection of Human Subjects. Human research subjects must be protected from research risks in conformance with Federal Policy for the Protection of Human Subjects, codified by HUD at 24 CFR part 60.

(6) Ensuring the Participation of Small Businesses, Small Disadvantaged Businesses, and Women-Owned Businesses. HUD is committed to ensuring that small businesses, small disadvantaged businesses, and women-owned businesses participate fully in HUD's direct contracting and in contracting opportunities generated by HUD cooperative agreement funds. Too often, these businesses still experience difficulty accessing information and successfully bidding on federal contracts. State, local, and tribal governments are required by 24 CFR 85.36(e), and non-profit recipients of assistance by 24 CFR 84.44(b), to take all necessary affirmative steps in contracting for purchase of goods or Start Printed Page 27687services to assure that minority firms, women's business enterprises, and labor surplus area firms are used when possible.

(7) Additional Non-Discrimination Requirements. You, the applicant, and your subrecipients must comply with the Americans with Disabilities Act of 1990 (42 U.S.C. 1201 et seq.) and title IX of the Education Amendments Act of 1972 (20 U.S.C. 1681 et seq.)

(8) Prohibition Against Lobbying Activities. Applicants for funding under this NOFA are subject to the provisions of section 319 of the Department of Interior and Related Agencies Appropriation Act for Fiscal Year 1991 (31 U.S.C. 1352) (the Byrd Amendment) and to the provisions of the Lobbying Disclosure Act of 1995 (Pub. L. 104-65, approved December 19, 1995).

The Byrd Amendment, which is implemented in regulations at 24 CFR part 87, prohibits applicants for federal contracts and grants from using appropriated funds to attempt to influence federal executive or legislative officers or employees in connection with obtaining such assistance, or with its extension, continuation, renewal, amendment, or modification. The Byrd Amendment applies to the funds that are the subject of this NOFA. Therefore, applicants must file a certification stating that they have not made and will not make any prohibited payments and, if any payments or agreement to make payments of non-appropriated funds for these purposes have been made, a form SF-LLL disclosing such payments must be submitted.

The Lobbying Disclosure Act of 1995 (Pub. L. 104-65, approved December 19, 1995), which repealed section 112 of the HUD Reform Act, requires all persons and entities who lobby covered executive or legislative branch officials to register with the Secretary of the Senate and the Clerk of the House of Representatives, and file reports concerning their lobbying activities.

VI. Application Submission Requirements

(A) Applicant Information.

Your application must contain the items listed in this section VI, as follows:

(1) A transmittal letter (limited to one page) which identifies the purpose for which the technical study program funds are requested, the dollar amount requested, and the applicant or applicants submitting the application. If two or more organizations are working together on the project, a primary applicant must be designated.

(2) Checklist and submission table of contents (see Appendix A).

(3) Name of primary applicant and any sub-recipients (such as consortium associates, partners, subcontractors, joint venture participants, or others contributing resources to your project), with contact information (i.e., name, mailing address, and telephone number of principal contact person) for each.

(4) An abstract (limited to two pages) containing the following information: The project title, the names and affiliations of all investigators, and a summary of the research problem and study design as described in the project narrative.

(5) A project narrative (limited to a total of 25 pages) that discusses your qualifications and your study plan and addresses the following topics, which correspond to the rating factors for award of funding as stated in section VII(D), below. The narrative statement must be organized in sections numbered in accordance with this outline:

1. Applicant and organizational qualifications, including qualifications of the principal investigator and key personnel, experience in managing similar projects, and past performance in managing project funds. See the discussion of Rating Factor 1 in section VII(D).

2. The problem to be addressed. See Rating Factor 2.

3. Technical study plan, including study design, quality assurance mechanisms, and project management plan. See Rating Factor 3; also see section IV, above.

4. Statement of non-HUD resources to be applied, if any. See Rating Factor 4.

5. Statement on coordination, self-sufficiency, and sustainability of your work. See Rating Factor 5. Any pages in excess of the 25-page limit will not be read.

(6) Discussion of desired HUD resources, if applicable. See section IV.

(7) Conflict of interest disclosure. See section V(B)(3).

(8) You may provide attachments, appendices, bibliography, or other relevant materials that support your project narrative, but these must not exceed 20 pages in the aggregate. Any pages in excess of this limit will not be read.

(9) The resumes of the principal investigator and other key personnel. Resumes shall not exceed three pages each and are limited to information that is relevant in assessing the qualifications of key personnel to conduct and/or manage the proposed technical studies.

(10) Indirect Cost Rate Agreement, if available. Applicants that have established indirect cost rate agreements shall provide a copy of the agreement from their cognizant Federal agency. The cognizant agency is the Federal agency responsible for negotiating.

(B) Standard Forms, Certifications and Assurances.

You, the applicant, are required to submit signed copies of the following forms, certifications, and assurances:

(i) Application for Federal Assistance (HUD-424);

(ii) Applicant Assurances and Certifications (HUD-424-B);

(iii) Detailed Budget (HUD-424-CB);

(iv) Detailed Budget Worksheet (HUD-424-CBW);

Note that the thoroughness, clarity, and coherence of the budget information that you provide on the Detailed Budget Worksheet will be evaluated under Rating Factor 3, item 4. You must thoroughly document and justify all budget categories and costs and all major tasks, for yourself and any sub-recipients contributing resources to the project. Your budget should include the cost of travel to Washington for at least one investigator to meet with HUD representatives or participate in a research seminar or symposium.

(v) If required, the Disclosure Form Regarding Lobbying (SF-LLL). See the first paragraph under “certifications” on page 2 of form HUD-424. See also section V(B)(8) above;

(vi) Disclosure/Update Report (HUD-2880);

(vii) Acknowledgment of Application Receipt (HUD-2993); and

(viii) Client Comments and Suggestions (HUD 2994).

Copies of these standard forms, with instructions as applicable, are appended to this NOFA.

VII. Application Selection Process

(A) Program Threshold Requirements. HUD will review your application to determine whether it meets all of the program threshold requirements described in section V(A) above. Only applications that meet all of the threshold requirements will be eligible to be rated and ranked.

(B) Rating. Applications that meet all of the threshold requirements will be eligible to be scored and ranked, based on the total number of points allocated for each of the rating factors described below. Your application must receive a total score of at least 70 points to remain in consideration for funding.

(C) Ranking and Selection. Selection of award recipients will be based on the ranking of aggregate scores, within the limits of funding availability. Awards may be made to two or more recipients proposing work on a particular topic, if deemed to be in the best interests of the government. HUD reserves the right to Start Printed Page 27688select applications out of rank order to achieve balance among the topics selected for funding.

(D) Rating Factors. The factors for rating and ranking applicants, and maximum points for each factor, are provided below. The maximum number of points to be awarded is 100.

Rating Factor 1: Capacity of the Applicant and Relevant Organizational Experience (30 Points)

Points will be awarded under the following three sub-factors, based on the extent to which your proposal indicates that you have the ability and organizational resources necessary to implement successfully your proposed activities in a timely manner. The rating of you, the “applicant,” will include any sub-recipients that will contribute resources to the project. In rating this factor, HUD will consider and award points based on the extent to which your application demonstrates:

(1) That the principal investigator and key personnel are capable and qualified to accomplish the proposed research, based on their education/training and previous completed research. (15 points.) Qualifications to carry out the proposed study will be evaluated based on the academic background of personnel, relevant publications, and recent (within the past 10 years) research experience relevant to the type of work proposed. Publications and research experience are considered relevant if they required the acquisition and use of knowledge and skills that can be applied in the planning and execution of the technical study that is proposed.

(2) That the project manager(s) have demonstrated ability to manage this research, based on past performance in managing similar projects. (10 points.) Points will be awarded based on demonstrated ability to successfully manage your study in such areas as personnel management, project management, data management, quality control, community study involvement (if applicable), and report writing, as well as overall success in project completion (i.e., projects completed on time and within budget). You should also demonstrate that your project would have adequate administrative support, including clerical and specialized support in areas such as accounting and equipment maintenance, as relevant.

(3) That the primary applicant and any sub-recipients are capable of managing project funds, based on past performance. (5 points.) Points will be awarded based on the extent of demonstrated ability to account for funds appropriately as well as on timely use of funds received either from HUD or from other Federal, state, or local programs, or private programs. HUD may consider information at hand or available from public sources such as, but not limited to, newspapers, Inspector General or Government Accounting Office Reports or Findings, and/or hotline complaints that have been proven to have merit.

Rating Factor 2: Need/Extent of the Problem (10 Points)

Points will be awarded based on the extent to which your proposal establishes that your proposed research will address documented problems, target areas or target groups. In responding to this factor, you should document in detail how your project would make a significant contribution towards achieving some or all of HUD's stated goals and objectives for one or more of the topic areas described in section III (A).

Rating Factor 3: Soundness of Technical Study Approach (50 Points)

Points will be awarded based on the quality of the technical study plan portion of your application, under the following four sub-factors. Specific components that will be evaluated include the following:

(1) Soundness of the study design. (30 points.) The thoroughness and feasibility of your project description/study design, and the extent to which it reflects a comprehensive understanding of the relevant technical literature. It should clearly describe how your study builds upon the current state of knowledge for your focus area. If possible, your study should be designed to address testable hypotheses, which are clearly stated. Your study design should be statistically based, with sufficient data to provide an adequate test of your stated hypotheses. The study design should be presented as a logical sequence of steps or phases, with individual activities or tasks described for each. You should identify any important “decision points” in your study plan, and you should discuss plans for data management, analysis and archiving.

(2) Quality assurance mechanisms. (10 points.) The adequacy of quality assurance mechanisms that will be integrated into your project design to ensure the validity and quality of the results. Areas to be addressed include acceptance criteria for data quality, procedures for selection of samples/sample sites, sample handling, measurement and analysis, and any standard/nonstandard quality assurance/control procedures to be followed. Documents (e.g., government reports, peer-reviewed academic literature) that provide the basis for your quality assurance mechanisms should be cited.

(3) Project management plan. (8 points.) The extent to which your schedule for the completion of major activities, tasks and deliverables, and your budget, confirm that there will be adequate resources (e.g., personnel, financial) to carry out your study design successfully within the proposed time frame, taking account of timing requirements stated in section IV, above.

(4) Budget proposal. (2 Points) Two points will be awarded if your budget proposal on the HUD-424CB thoroughly estimates all applicable direct and indirect costs and is presented in a clear and coherent format as provided in section VI (B). One point, or no point, will be awarded if your budget proposal is deficient in these regards, based on the degree of deficiency.

Rating Factor 4: Leveraging of Resources (5 Points)

You are encouraged to demonstrate that the effectiveness of HUD's funds will be increased by securing other public and/or private resources or by structuring the project in a cost-effective manner, such as integrating the project into an existing study. Resources may include funding or in-kind contributions (such as services, facilities or equipment) allocated to the purpose(s) of your project. Staff and in-kind contributions should be given a monetary value. Larger commitments of this kind will be awarded more points under this rating factor.

You should provide evidence of leveraging/partnerships by attaching to your application letters of firm commitment, memoranda of understanding, or agreements to participate from those entities identified as partners in the project efforts. Each letter of commitment, memorandum of understanding, or agreement to participate must include the organization's name, proposed level of commitment (with monetary value) and responsibilities as they relate to specific activities or tasks of your proposed program. The commitment must also be signed by an official of the organization legally able to make commitments on behalf of the organization.

Rating Factor 5: Coordination, Self-Sufficiency and Sustainability (5 Points)

(1) The extent to which you have coordinated your activities with other organizations that have been or are in Start Printed Page 27689the process of conducting similar or related work.

(2) Evidence that your proposed study builds upon the existing body of related work and it does not significantly duplicate work that is currently being conducted, or has been conducted, by other organizations (to the extent that this can be ascertained).

(3) The extent to which your project will help generate practical solutions that can be implemented on the local or national level for increasing homeownership and/or improving housing affordability for low- and moderate-income families, minority families, and families in underserved geographical areas.

(E) Adjustments to Funding.

(1) HUD reserves the right to fund less than the full amount requested in your application to ensure the fair distribution of the funds and that the purposes of this program are met.

(2) HUD will not fund any portion of your application that is not eligible for funding under specific program statutory or regulatory requirements; does not meet the requirements of this NOFA; or that may be duplicative of other funded programs or activities from previous years' awards or other selected applicants. Only the eligible portions of your application (including non-duplicative portions) may be funded.

(3) Purchase or lease of equipment having a per unit cost in excess of $5,000 will not be funded unless prior written approval is obtained from HUD.

(4) If funds remain after funding the highest-ranking applications, HUD may fund all or part of the next highest-ranking application in a given program. If you, the applicant, turn down an award offer, HUD will make an offer of funding to the next highest-ranking application. If funds remain after all selections have been made, remaining funds may be available for other competitions for each program where there is a balance of funds.

(5) In the event HUD commits an error that, when corrected, would result in selection of an otherwise eligible applicant during the funding round of this NOFA, HUD may select that applicant when sufficient funds become available.

(F) Audit.

Grantees/applicants that expend $300,000 or more in a year in federal awards shall have a single or program-specific audit conducted for that year in accordance with OMB Circular A-133. Grantees/applicants shall ensure that their most recent completed audit has been submitted to the Federal Audit Clearinghouse for review by HUD (refer to Grantees that do not have such an audit or are not subject to OMB Circular A-133 will be asked to provide a copy of their organization's most recent audit or other evidence that financial controls are in place before an award can be finalized.

VIII. Corrections, Debriefing

(A) Corrections to Deficient Applications. After the application due date, HUD may not, consistent with its regulations in 24 CFR part 4, subpart B, consider any unsolicited information you, the applicant, may want to provide. HUD may contact you to clarify an item in your application or to correct technical deficiencies. HUD may not seek clarification of items or responses that improve the substantive quality of your response to any rating factors. In order not unreasonably to exclude applications from being rated and ranked, HUD may contact applicants to ensure proper completion of the application and will do so on a uniform basis for all applicants. Examples of curable (correctable) technical deficiencies include failure to submit the proper certifications or failure to submit an application that contains an original signature by an authorized official. In each case, HUD will notify you in writing by describing the clarification or technical deficiency. HUD will notify applicants by facsimile (FAX) or by USPS, return receipt requested. Clarifications or corrections of technical deficiencies in accordance with the information provided by HUD must be submitted within 14 calendar days of the date of receipt of the HUD notification. (If the due date falls on a Saturday, Sunday, or Federal holiday, your correction must be received by HUD on the next day that is not a Saturday, Sunday, or Federal holiday.) If the deficiency is not corrected within this time period, HUD will reject the application as incomplete and it will not be considered for funding.

(B) Applicant Debriefing. Beginning not less than 30 days after the awards for assistance are announced in the Federal Register, and for at least 120 days after awards for assistance are announced, HUD will provide any requesting applicant with a debriefing on their application. All requests for debriefing must be made by the principal investigator for the proposed study or by the authorized official whose signature appears on the HUD-424 or his or her successor in office. Submit your request to Mr. Patrick Tewey, who may be reached at (202) 702-0614, extension 4098 (this is not a toll-free number). Information provided to you during your debriefing will include, at a minimum, the final score you received for each rating factor, final evaluator comments for each rating factor, and the final assessment indicating the basis upon which assistance was provided or denied.

IX. Findings and Certifications

(A) Federalism Impact. Executive Order 13132 (captioned “Federalism”) prohibits, to the extent practicable and permitted by law, an agency from promulgating a regulation that has federalism implications and either imposes substantial direct compliance costs on state and local governments and is not required by statute, or preempts state law, unless the relevant requirements of section 6 of the Executive Order are met. This NOFA does not have federalism implications and does not impose substantial direct compliance costs on state and local governments nor preempt state law within the meaning of the Executive Order.

(B) Accountability in the Provision of HUD Assistance.

Section 102 of the Department of Housing and Urban Development Reform Act of 1989 (HUD Reform Act) and the regulations in 24 CFR part 4, subpart A contain a number of provisions that are designed to ensure greater accountability and integrity in the provision of certain types of assistance administered by HUD. On January 14, 1992 (57 FR 1942), HUD published a notice that also provides information on the implementation of section 102. HUD will comply with the documentation, public access, and disclosure requirements of section 102 with regard to the assistance awarded under this NOFA, as follows:

(1) Documentation and public access requirements. HUD will ensure that documentation and other information regarding each application submitted pursuant to this NOFA are sufficient to indicate the basis upon which assistance was provided or denied. This material, including any letters of support, will be made available for public inspection for a 5-year period beginning not less than 30 days after the award of the assistance. Material will be made available in accordance with the Freedom of Information Act (5 U.S.C. 552) and HUD's implementing regulations at 24 CFR part 15.

(2) Disclosures. HUD will make available for public inspection for 5 years all applicant disclosure reports (HUD Form 2880) submitted in connection with this NOFA. Update reports (also reported on HUD Form 2880) will be made available along with the applicant disclosure reports, but in no case for a period of less than three Start Printed Page 27690years. All reports, both applicant disclosures and updates, will be made available in accordance with the Freedom of Information Act (5 U.S.C. 552) and HUD's implementing regulations at 24 CFR part 15.

(3) Publication of Recipients of HUD Funding. HUD's regulations at 24 CFR part 4 provide that HUD will publish a notice in the Federal Register to notify the public of all decisions made by the Department to provide:

(i) Assistance subject to section 102(a) of the HUD Reform Act; and/or,

(ii) Assistance provided through grants or cooperative agreements on a discretionary (non-formula, non-demand) basis, but that is not provided on the basis of a competition.

(C) Section 103 HUD Reform Act. HUD will comply with section 103 of the Department of Housing and Urban Development Reform Act of 1989 and HUD's implementing regulations in subpart B of 24 CFR part 4 with regard to the funding competition announced today. These requirements continue to apply until the announcement of the selection of successful applicants. HUD employees involved in the review of applications and in the making of funding decisions are limited by section 103 from providing advance information to any person (other than an authorized employee of HUD) concerning funding decisions, or from otherwise giving any applicant an unfair competitive advantage. Persons who apply for assistance in this competition should confine their inquiries to the subject areas permitted under section 103 and subpart B of 24 CFR part 4.

Applicants or employees who have ethics related questions should contact the HUD Ethics Law Division at (202) 708-3815 (this is not a toll-free number). For HUD employees who have specific program questions, such as whether particular subject matter can be discussed with persons outside HUD, the employee should contact the appropriate Field Office Counsel.

(D) Paperwork Reduction Act Statement. The information collection requirements in this NOFA have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The OMB control number is 2528-0228. Under the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a valid control number.

(E) Environmental Requirements. This NOFA does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate, real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise or provide for standards for construction or construction materials, manufactured housing, or occupancy. In accordance with 24 CFR 50.19(b)(1) of HUD regulations, activities under this program are categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321), and are not subject to environmental review under the related laws and authorities.

(F) Catalog of Federal Domestic Assistance Numbers. The Federal Domestic Assistance number for this program is 14.506.

X. Authority

These cooperative agreements are authorized under sections 501 and 502 of the Housing and Urban Development Act of 1970 (12 U.S.C. 1701z-1 et seq.).

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Dated: May 9, 2003.

Christopher Lord,

Deputy Assistant Secretary for Policy Development and Research.

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1.  In this NOFA, “low-income households” refers generally to households with incomes below 80 percent of area median income. Details appear in HUD's regulation on its oversight of Fannie Mae and Freddie Mac, at 24 CFR part 81.

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2.  Robert Dietz and Donald R. Haurin, “The Social and Private Consequences of Homeownership.” Report submitted to the U.S. Department of Housing and Urban Development, Office of Policy Development and Research, May 15, 2001, Grant P-CHI-00615.

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3.  Brent Ambrose, Thomas Thibodeau, and Ken Temkin, An Analysis of the Effects of the GSE Affordable Goals on Low- and Moderate-Income Families. Conducted under contract by the Urban Institute for the U.S. Department of Housing and Urban Development, Office of Policy Development and Research, April 2002.

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4.  Recent examples include “First-Time Homebuyers: Trends From The American Housing Survey,” U.S. Housing Market Conditions, 3rd Quarter 2001, U.S. Department of Housing and Urban Development, Office of Policy Development and Research, November 2001; and “Changing Importance of Unmarried Women as Homebuyers: Trends From The American Housing Survey,” U.S. Housing Market Conditions, 4th Quarter 2001, U.S. Department of Housing and Urban Development, Office of Policy Development and Research, February 2002.

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5.  A HUD-funded study, “Homeownership Gaps Among Low-Income and Minority Borrowers and Neighborhoods,” is being conducted by Abt Associates under contract C-OPC-21895 Task Order 4.

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6.  Applicants should take note of changes in minority categorization, metropolitan area specification, etc. that became effective with the 2000 Census.

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7.  “Families” and “households” are also used interchangeably here.

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8.  HUD-approved housing counseling agencies are listed on the Internet at​offices/​hsg/​sfh/​hcc/​hccprof14.cfm.

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9.  The Urban Institute has recently completed a report for HUD, “An Analysis of the Effects of the GSE Affordable Goals on Low- and Moderate-Income Families.” The study is a significant first step in addressing this issue.

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10.  Recent studies include What We Know About Mortgage Lending Discrimination in America, U.S. Department of Housing and Urban Development, Office of Policy Development and Research, September 1999, and All Other Things Being Equal: A Paired Testing Study of Mortgage Lending Institutions, report prepared by The Urban Institute for the U.S. Department of Housing and Urban Development, Office of Fair Housing and Equal Opportunity, April 2002.

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[FR Doc. 03-12458 Filed 5-19-03; 8:45 am]