Title 47 Ill. Adm. Code — Housing and Community Development

Chapter I Department of Commerce and Economic Opportunity

Part 1 Standard Grant Administrative Requirements

47 Ill. Adm. Code 1.10 Purpose

The Department of Commerce and Community Affairs is responsible for the administration of various state and federally authorized programs. For the purpose of those programs, the Department establishes grants with entities throughout the State for their implementation and operation. These rules prescribe standard requirements which govern the administration of such grants and where applicable, various program rules will incorporate these provisions by reference. Any administrative requirements which are unique to a program will continue to be addressed in the individual rules which are program specific.

History

• Source: Amended at 11 Ill. Reg. 5920, effective March 19, 1987

47 Ill. Adm. Code 1.20 Definitions

Department – The Department of Commerce and Community Affairs.

Director – The Director of the Department of Commerce and Community Affairs.

Equipment – Nonexpendable personal property having a useful life of more than one year and an acquisition cost of $300 or more per unit.

Grant Document – Contract documents between the Department and Grantee for a specific program period which details the responsibility of each party.

Grantee – The local organization or entity receiving grant funds and administering grant program.

Municipality – City, village or incorporated town.

OMB – The federal Office of Management and Budget.

47 Ill. Adm. Code 1.30 Record Retention Requirements

a) The Grantee will, as often as deemed necessary by the Department, the Attorney General of the State of Illinois, the Auditor General of the State of Illinois, the Comptroller of the State of Illinois, the Comptroller General of the United States, or any of their duly authorized representatives, permit the Department, the Attorney General of the State of Illinois, the Auditor General of the State of Illinois, the Comptroller of the State of Illinois, the Comptroller General of the United States, or any of their duly authorized representatives to have full access to and the right to examine any pertinent books, documents, papers and records of the Grantee involving transactions related to a grant under this program for three (3) years from the date of submission of the final expenditure report or until audit findings have been resolved, whichever is later. The Grantee shall include in all its contracts under state/federal grant programs a provision that the Department, the Attorney General of the State of Illinois, the Auditor General of the State of Illinois, the Comptroller of the State of Illinois, the Comptroller General of the United States, or any of their duly authorized representatives will have full access to and the right to examine any pertinent books, documents, papers and records of any such contractor involving transactions related to the contract for three (3) years from the final payment under the contract. The term "contract" as used in this clause excludes purchase orders not exceeding $2,500.00.

b) All Grantees must adhere to the provisions contained in the Secretary of State's Regulations (44 Ill. Adm. Code 4000) of the Local Records Commission and Local Records Act (Ill. Rev. Stat. 1983, ch. 116, par. 43.101 et seq.).

History

• Source: Amended at 11 Ill. Reg. 5920, effective March 19, 1987

47 Ill. Adm. Code 1.35 Fees

The Grantee shall not pay a fee from grant funds awarded by the Department for the purpose of developing an application for financial assistance from the Department.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.40 Property Management

a) The Grantee retains title to all equipment purchased with grant funds for program operations. The Grantee shall maintain appropriate property records and periodically, at intervals not to exceed two years, conduct an inventory of all equipment or nonexpendable personal property purchased with grant funds. Equipment must be used on the original project as long as needed. While being used on the original project, equipment may be made available for "shared use" with other activities, provided that use will not interfere with its use for the original project. When no longer needed for the original purpose, equipment may be used for other projects (projects of the Department are to be given first priority if there is a choice). The Grantee shall determine whether there is a continued need for equipment, in terms of the original project or purpose.

b) An Equipment Purchase/Acquisition Inventory Listing form indicating equipment or materials purchased with program funds shall accompany the program close-out package, which is sent to the Department following the end of the grant period, if the unit cost is $300.00 or more and the unit has a life span of one or more years.

47 Ill. Adm. Code 1.50 Cash Management

a) Grantees shall make all cash depositories in accounts covered under Federal Depositors Insurance Corporation or Federal Savings and Loan Insurance Corporation agreements.

b) In the event the Department employs a letter of credit procedure, separate accounts must be used by Grantees for each letter of credit.

c) Grantees shall provide for bonding of fiscal employees (i.e., the amount of coverage shall be higher of $100,000 or the highest cash drawdown planned during the grant period). (Refer to Appendices A and B regarding bonding requirements.)

d) The Grantee shall maintain no more than the minimum amount of cash on hand necessary to operate the program (i.e., three days of average cash disbursements).

47 Ill. Adm. Code 1.60 Interest on Grant Funds

In accordance with Section 10 of the Illinois Grant Funds Recovery Act (Ill. Rev. Stat. 1987, ch. 127, par. 2310 as amended by P.A. 85-1214, effective August 30, 1988), all interest earned on funds held by the Grantee under this grant shall become part of the grant principal when earned unless the grant agreement provides otherwise. However, any interest earned on funds subject to a Department grant after the grant's expiration date shall become part of the grant principal and shall be so treated for all purposes.

History

• Source: Amended at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.70 Program Income

Earnings by the Grantee, including interest income, realized from grant supported activities will be incorporated into the program funding and expended for grant purposes.

History

• Source: Amended at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.80 Travel Expenses

Costs in accordance with the State of Illinois Department of Central Management Services Travel Regulations (80 Ill. Adm. Code 2800) or travel policies set forth in the Grantee's approved budget are allowable for expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business related to the state/federal grant program. If the State of Illinois Travel Regulations are not followed by the Grantee, the Grantee must have on file its travel policy for reference by the Department, the Attorney General of the State of Illinois, the Auditor General of the State of Illinois, the Comptroller of the State of Illinois, Comptroller General of the United States, or any of their duly authorized representatives. The Grantee must retain receipts on file as source documentation for travel expenses of its employees.

History

• Source: Amended at 11 Ill. Reg. 5920, effective March 19, 1987

47 Ill. Adm. Code 1.85 Procurement

The Grantee shall adhere to the following procurement systems and procedures:

a) The Grantee may use any part or all of its own procurement systems and procedures to the extent that such systems and procedures or any part thereof do not conflict with Attachment O of Appendices A and B of this Part. Executive Orders and regulations.

b) Except as otherwise authorized by applicable state or federal law or regulations the Grantee shall conduct all procurement transactions, regardless of dollar amount or method of procurement, in a manner that provides for open and free competition.

c) The Grantee shall establish a written code of standards and conduct which will govern the performance of its officers, employees or agents in contracting with or otherwise procuring supplies, equipment, construction or services with funds provided under the agreement.

d) The Grantee shall certify that it has not been convicted of bribery or attempting to bribe an officer or employee of the State of Illinois, nor has the Grantee made an admission of guilt of such conduct which is a matter of record, nor has any official agent, or employee of the Grantee committed bribery or attempted bribery on behalf of the Grantee and pursuant to the direction or authorization of a responsible official of the Grantee (Ill. Rev. Stat. 1987, ch. 127, par. 132.10-1).

e) No officer or employee of the Grantee and no member of its governing body and no public official of the locality in which the program objectives will be carried out who exercises any functions or responsibilities in the review or approval of the undertaking or carrying out of such objectives shall:

1. participate in any decision relating to any contract negotiated under this Grant which affects his personal interest or the interest of any corporation, partnership, or association in which he is, directly or indirectly, interested, or

2. have any financial interest, direct or indirect, in such contract or in the work to be performed under such contract.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.90 Financial Management Standards

The Grantee's financial management system shall be structured under the Accounting Standards of the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (AICPA) (June 1984) to maintain control and accountability over program funds. In addition the Grantee shall keep records which detail the Grantee's expenditures of grant funds and accurately document the Grantee's Expenditure Summary and Payment Request forms submitted to the Department.

47 Ill. Adm. Code 1.100 Method of Compensation

Payments to the Grantee are subject to the initiation of an invoice voucher. The first payment may be an advance, at the request of the Grantee, to offset initial cost associated with program start up. Such an advance shall not exceed three (3) days operating needs.

a) The total amount payable to the Grantee shall be paid upon the Department's approval of the Grantee's utilization of the grant funds in conformance with the Grant Budget and with the following requirements:

1. Public Bodies

A) OMB Circular A-87: Cost Principles for State and Local Governments as specified in 4l CFR l-l5.7 (July 1, 1984).

B) OMB Circular A-102: Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments as specified in Appendix A of this Part.

2. Private Not-for-Profit Organizations

A) OMB Circular A-122: Cost Principles for Nonprofit Organizations as specified in 41 CFR 1-15.6 (July 1, 1984) and "Lobbying" Revision as added to Attachment B 21. (49 FR 18276, April 27, 1984). (NOTE: For the purpose of this Part, the definition of equipment provided in Section 1.20 is applicable; the definition contained in Attachment B, Item 13(a)(1) of OMB Circular A-122 is not applicable.)

B) OMB Circular A-110: Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Nonprofit Organizations as specified in Appendix B of this Part.

b) If the Grantee expends grant funds contrary to the provisions of the Grant Document, such action shall require the repayment of those funds if the expenditure violated the statutory provisions. The Department may require repayment of Grantee expenditures that do not conform to the provisions of the Grant Document but do not violate statutory provisions.

c) In accordance with Section 4 of the Illinois Grant Funds Recovery Act (Ill. Rev. Stat. 1987, ch. 127, par. 2304), the Grantee upon submission of the final Expenditure Summary Report, the audit report, or the close-pocket package or within 45 days of the expiration of the grant, whichever occurs first, shall refund to the Department any balance of funds which were unexpended or unobligated at the end of the grant period. In addition, the Grantee agrees to repay the Department for any funds that are determined by the Department to have been spent in violation of the Grant Document.

History

• Source: Amended at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.105 Modification and Amendment of Grant Document

This grant is subject to revision as follows:

a) Modifications by Operation of Law

This Grant document is subject to such modifications as may be required by changes in state or federal law or regulations. Any such required modification shall be incorporated into and be part of this grant document as fully as if set forth herein.

b) Other Modifications by Department or Grantee

If either the Department or the Grantee desires to modify the terms of this grant document other than as set forth in subsection (a), written notice of the proposed modification shall be given to the other party. No modification shall take effect unless agreed to in writing by both the Department and the Grantee, except that if the Department gives the Grantee written notice of a proposed modification without the prior written approval of the Grantee, the failure of the Grantee to object (in writing, specifying the reason(s) for objection), within thirty (30) calendar days from the date of the Department's letter notifying the Grantee of such modification, shall be deemed approval of the modification by the Grantee. The Department's notice to the Grantee shall contain the grantee name, grant number, modification number, purpose of the revision and signature of the Department's Director.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.110 Suspension and Termination

a) Suspension – If the Grantee fails to comply with the special conditions and/or the general terms and conditions of the grant award, the Department shall, after notice to the Grantee, suspend the grant and withhold further payments and prohibit the Grantee from incurring additional obligations of grant funds, pending the Grantee's implementation of a corrective action plan, which provides a strategy to correct areas of noncompliance, or a decision to terminate.

b) Termination – Grant shall be terminated for loss of funding, for cause, or for convenience as follows:

1. Termination due to Loss of Funding – In the absence of state/federal funding for a grant year, all grants for that year will be terminated in full. In the event of a partial loss of state/federal funding, the Department will make proportionate cuts to all Grantees. In the event the Department suffers such a loss of funding in full or part, the Department will give the Grantee written notice setting forth the effective date of full or partial termination, or if a change in funding is required setting forth the change in funding and changes in the approved budget.

2. Termination for Cause

A) If the Department determines that the Grantee has failed to comply with the special conditions and/or the general terms and conditions of the Grant Document, the Department may terminate the grant in whole, or in part, at any time before the date of completion. Circumstances which will result in the termination of a grant include, but are not necessarily limited to the following: consistent failure to submit required reports; failure to maintain required records; failure to protect inventory; misuse of equipment purchased with grant funds; evidence of fraud and abuse; consistent failure to meet performance standards and failure to resolve points of the agreement (i.e., narrative, number to be served).

B) The Department shall promptly notify the Grantee in writing of the determination to terminate, the reasons for such termination, and the effective date of the termination. Payments made to the Grantee or recoveries by the Department shall be made in accordance with legal rights and liabilities of the parties explained in the Grant Document.

3. Termination for Convenience – The Department or the Grantee shall terminate the grant in whole, or in part, when the Department and the Grantee agree that the continuation of the program objectives would not produce beneficial results commensurate with the further expenditures of funds. The Department and the Grantees shall agree upon termination conditions, including the effective date and, in the case of partial termination, the portion to be terminated. The Grantee shall not incur new obligations for the terminated portion after the effective date, and shall cancel as many outstanding obligations as possible. The Department shall allow full credit to the Grantee for the Department's share of the noncancellable obligations, properly incurred by the Grantee prior to termination.

History

• Source: Amended at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.120 Monitoring and Evaluation

Grantees must permit any agent authorized by the Department, upon presentation of credentials to, in accordance with the constitutional limitation on administrative searches, have full access to and the right to examine any documents, papers, and records of the Grantee involving transactions related to a grant from the Department.

47 Ill. Adm. Code 1.130 Audits

a) In compliance with Section 1745(a) of P.L. 97-35 (31 U.S.C. 1243), the Department shall have prepared an annual independent financial and compliance audit of its Community Development Assistance Program, Illinois Home Energy Assistance Program, and Community Service Block Grant Program (CSBG) grants, and Neighborhood Corps Program grants supported by CSBG funds.

b) Grantees who are subject to the Single Audit Act of 1984 (31 U.S.C. 7501-7507) and OMB Circular A-128: Audits of State and Local Governments (50 FR 19114, May 6, 1985) must comply with the provisions of same.

c) Grantees intending to procure and manage a financial and compliance audit of their grant, must inform the Department in writing during the first quarter of the grant period. The Grantee must set aside grant funds to support such audit; the Department will not reserve funds for the purpose of auditing a grant for which the grantee has indicated it will procure and manage an audit. If the Grantee fails to have an audit performed within one year from the end of its fiscal year, the Department will withhold current grant funds from the Grantee until previous audit commitments have been met.

d) The following requirements will apply to financial and compliance audits procured and managed by the Department.

1. The Department will procure and manage the audit of grants, except in the case where the Grantee is conducting the audit in accordance with subsection (c) or an audit is conducted as a mandatory requirement of a federal OMB Circular. Such audits will satisfy the Department's audit requirements where grant activities are included in the audits and the audits are performed and the reports prepared per federal and state requirements.

2. The Department will make payment for audits of Illinois Home Energy Assistance Program grants. The CSBG Grantee will make payment for audits of CSBG grants and Neighborhood Corps Programs administered through CSBG grantees.

3. Audits of appropriate program records must be performed by an independent public accountant, certified and licensed by authority of the State of Illinois. The audit must be conducted in accordance with generally accepted government auditing standards adopted by the AICPA (1981).

4. When audits are procured by the Department, the Grantee will:

A) work cooperatively with the audit firm selected;

B) actively work with both the audit firm and the Department to resolve any and all audit findings; and

C) work cooperatively with the Department's staff in preparing for, conducting, and resolving audits.

e) The following requirements will apply to a Grantee which procures the financial and compliance audit of its grant(s).

1. The Grantee shall be responsible for having an annual audit of all grant records and such audit must be performed by an independent public accountant, certified and licensed by authority of the State of Illinois. The Audit must be conducted in accordance with generally accepted government auditing standards adopted by the AICPA (1981).

2. The Grantee may secure an independent audit of its grant in the same manner as it secures its regular audits, provided it provides for maximum open and free competition. The grant audit should be conducted as part of the Grantee's annual audit. Where federal funds are to be audited the Grantee must procure the audit firm in compliance with Appendix A, Attachment O of this Part.

3. That portion of the Grantee's annual audit which addresses grant activities shall be paid for by the Grantee with grant funds.

4. The Grantee will provide the Department with 6 copies of its annual audit which addresses Department grant(s). In instances where the grant period or term does not coincide with the Grantee's fiscal year, two fiscal audit reports shall be forwarded to the Department.

f) The Department's audit resolution process is as follows:

1. Upon receipt of an audit, Department staff review the audit to assure it is complete (i.e., required information in accordance with generally accepted government auditing standards and contractual requirements with the audit firm such as Statement of Revenues and Expenditures, report on internal control, report on compliance, audit concurrence which is written correspondence from the grantee stating that it agrees with the contents of the audit report, findings, recommendations and responses, and auditors opinion on the financial statement) and accurate as evidenced through a verification of any mathematical calculations contained in the audit. If the audit is incomplete or inaccurate, the audit firm is contacted in writing and required to submit necessary additional/revised information.

2. If all audit findings are resolved (i.e. the grantee repays any misspent funds and/or the grantee has taken corrective action to ensure that the problems/findings are corrected), a final determination letter is transmitted to the grantee and indicates:

A) the Department has accepted grantee's responses to any audit findings as contained in the audit report;

B) procedures governing the grantee's remittance of any grant funds on hand and due to the Department;

C) the Federal grantor agency has final authority relative to the allowability of costs for funds audited and the Department reserves the right to obtain any resultant reimbursement from the grantee; and

D) the decision to disallow certain questioned costs is subject to the appeal provisions of 47 Ill. Adm. Code 10 (Review and Appeal Procedures).

3. If the audit contains unresolved findings, the Department transmits a certified letter to the grantee requesting written response to audit findings within thirty (30) days.

A) If the grantee fails to respond within thirty (30) days, a final determination letter is transmitted to the grantee disallowing any costs associated with audit findings and demanding reimbursement to the Department for such costs within thirty (30) days. Formal debt collection procedures are then initiated if funds are not received by final date payment is due.

B) Upon receipt of grantee's response, an initial determination letter is transmitted indicating any responses to audit findings which were accepted by the Department and requiring payment of funds due to the Department within thirty (30) days. The grantees's failure to remit funds, as required, to the Department results in transmittal of a final determination letter to the grantee demanding payment within thirty (30) days. If reimbursement to the Department is not received within required time frame, a first demand letter requiring payment within ten (10) days is transmitted to the grantee. If payment again is not received by date due, a second demand letter stating that legal action will be initiated if payment is not received within the required time frame is transmitted to the grantee. Failure of grantee to comply within ten (10) days will result in Department initiating formal debt collection procedures.

g) The Department reserves the right to conduct special audits, including but not limited to an agency-wide audit, at any time during normal working hours of funds expended under Department grants.

h) Any independent public accounting firm that provides consulting services to a Grantee is prohibited from conducting an audit of that Grantee for the program year during which services were rendered.

History

• Source: Amended at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.140 Complaint Process

In the event of a Grantee complaint, the Department will follow the procedures outlined in the Administrative Review Law (Ill. Rev. Stat. 1985, ch. 110, pars. 3-101 et seq.)

History

• Source: Amended at 10 Ill. Reg. 10994, effective June 6, 1986

47 Ill. Adm. Code 1.150 Incorporation by Reference

No incorporation by reference of the rules of a federal agency or standards of a nationally recognized organization include any additions or deletions after the date specified in the incorporation.

47 Ill. Adm. Code 1.160 Nondiscrimination

a) In carrying out the program, the Grantee shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, ancestry, age, physical or mental handicap unrelated to ability, marital status, or unfavorable discharge from military service. The Grantee shall take affirmative action to insure that applicants for employment are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, national origin, ancestry, age, physical or mental handicap unrelated to ability, marital status, or unfavorable discharge from military service. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Grantee shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the Government setting forth the provisions of this nondiscrimination clause. The Grantee shall state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, ancestry, age, physical or mental handicap unrelated to ability, marital status, or unfavorable discharge from military service.

b) The Grantee shall refrain from unlawful discrimination in employment and will undertake affirmative action to assure equality of employment opportunity and eliminate the effects of past discrimination in accordance with the Illinois Human Rights Act (Ill. Rev. Stat. 1987, ch. 68, pars. 1-101 et seq.); Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); the Age Discrimination Act of 1975 (42 U.S.C. 6106-6107); and Title VI of the Civil Rights Act of 1964 (24 CFR I).

c) The Grantee shall cause or require to be inserted in any contract and subcontract for work, or modification thereof, all applicable Federal Equal Employment Opportunity Provisions including, but not limited to, the provisions contained in subsections (a) and (b).

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.170 Assurances

The Grantee assures that with respect to the Grant that:

a) It possesses legal authority to apply for the Grant and to execute the grant agreement and to carry out the proposed program.

b) It will comply with the state Freedom of Information Act (Ill. Rev. Stat. 1987, ch. 116, pars. 201 et seq.) and when applicable, the federal Freedom of Information Act (5 U.S.C. 552).

c) Grantees receiving federal grant funds will comply with the provisions of the Hatch Act (5 U.S.C. 1501-1508) which limits the political activity of employees.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.175 Integration Clause

Each grant document shall contain an agreement between the parties that the agreement, with attachments, as written, is the full and complete agreement between the parties and that there are no oral agreements or understandings between the parties other than what has been reduced to writing therein.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.180 Severability Clause

If any provision under the agreement or its application to any person or circumstance is held invalid by any court of competent jurisdiction, this invalidity does not affect any other provision or its application of the agreement which can be given effect without the invalid provision of application.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.185 Waivers

A waiver of any conditions of the grant must be in writing from the Director of the Department or his designee.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.190 State Not Liable

The Grantee shall save the State of Illinois harmless from any and all claims, demands, and actions based upon or arising out of any services performed by themselves or by their associates and employers under this Grant. The Department by entering into this grant agreement does not pledge or promise to pledge the assets of the State, nor does it promise to pay any compensation payable to the Grantee or its subrecipients from any monies of the treasury of the State except such monies as shall be granted and paid to the Grantee by the Department.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.195 Insurance

a) The Grantee agrees to assume all risk of loss and to indemnify and hold the Department, its officers, agents and employees, harmless from and against any and all liabilities, demands, claims, damages, suits, costs, fees, and expenses incident thereto, for injuries or death to persons and for loss of, damage to, or destruction of property because of Grantee's negligence, intentional acts or omissions. In the event of any demand or claim, the Department will notify the Grantee in writing. The Department may elect to defend any such demand or claim against the Department and will be entitled to be paid by the Grantee for all damages.

b) The Grantee shall provide workers' compensation insurance where the same is required, and shall accept full responsibility for the payment of unemployment insurance, premiums for Workers' Compensation, Social Security, and retirement and health insurance benefits, as well as all income tax deductions and any other taxes or payroll deductions required by law for its employees who are performing services specified by the grant document.

History

• Source: Added at 13 Ill. Reg. 20321, effective December 15, 1989

47 Ill. Adm. Code 1.APPENDIX A Office of Management and Budget Circular a-102

Uniform Requirements for Assistance to State and Local Governments (January, 1981)

Attachment A: Cash Depositories

1. This Attachment sets forth standards governing the use of banks and other institutions as depositories of funds advanced under grants.

2. Except for situations described in paragraphs 3, 4, and 5, no grantor agency shall:

a. Require physical segregation of cash depositories for funds which are provided to a grantee.

b. Establish any eligibility requirements for cash depositories for funds which are provided to a grantee.

3. A separate bank account shall be required when applicable letter-of-credit agreements provide that drawdowns will be made when the grantee's checks are presented to the bank for payment.

4. Any moneys advanced to a grantee which are subject to the control or regulation of the United States or any of its officers, agents or employees (public moneys as defined in Treasury Circular No. 176 (31 CFR 202 (1984)), as amended) must be deposited in a bank with Federal Deposit Insurance Corporation (FDIC) insurance coverage and the balance exceeding the FDIC coverage must be collaterally secured.

5. Consistent with the national goal of expanding the opportunities for minority business enterprises, grantees and subgrantees shall be encouraged to use minority banks (a bank which is owned at least 50 percent by minority group members). A list of minority owned banks can be obtained from the Office of Minority Business Enterprise, Department of Commerce, Washington, D.C. 20230

Attachment B: Bonding and Insurance

1. This Attachment sets forth bonding and insurance requirements for grants. No other bonding and insurance requirements shall be imposed other than those normally required by the grantee.

2. Except as otherwise required by law, a grant that requires the contracting (or subcontracting) for construction or facility improvements shall provide for the grantee to follow its own requirements relating to bid guarantees, performance bonds, and payment bonds unless the construction contract or subcontract exceeds $100,000. For those contracts or subcontracts exceeding $100,000, the Federal agency may accept the bonding policy and requirements of the grantee provided the Federal agency has made a determination that the Government's interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows:

a. A bid guarantee from each bidder equivalent to five percent of the bid price. - The "bid guarantee" shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of his bid, execute such contractual documents as may be required within the time specified.

b. A performance bond on the part of the contractor for 100 percent of the contract price. - A "performance bond" is one executed in connection with a contract to secure fulfillment of all contractor's obligations under such contract.

c. A payment bond on the part of the contractor for 100 percent of the contract price. - A "payment bond" is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract.

3. Where the Federal Government guarantees or insures the repayment of money borrowed by the grantee, the Federal agency, at its discretion, may require adequate bonding and insurance if the bonding and insurance requirements of the grantee are not deemed adequate to protect the interest of the Federal Government. (See 47 Ill. Adm. Code 1.50(c), Cash Management)

4. Where bonds are required in the situations described above, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties (31 CFR 223).

Attachment C: Retention and Custodial Requirements for Records

1. This Attachment sets forth record retention requirements for grants. Federal grantor agencies shall not impose any record retention requirements upon grantees other than those described below.

2. Financial records, supporting documents, statistical records, and all other records pertinent to a grant shall be retained for a period of three years, with the following qualifications.

a. If any litigation, claim or audit is started before the expiration of the 3-year period, the records shall be retained until all litigations, claims, or audit findings involving the records have been resolved.

b. Records for nonexpendable property acquired with Federal funds shall be retained for 3 years after its final disposition.

c. When records are transferred to or maintained by the Federal sponsoring agency, the 3-year retention requirement is not applicable to the grantee.

3. The retention period starts from the date of the submission of the final expenditure report or, for grants that are renewed annually, from the date of the submission of the annual financial status report.

4. Grantees should be authorized by the Federal grantor agency, if they so desire, to substitute microfilm copies in lieu of original records. (The Department will forward all requests to microfilm records to the Secretary of State's Record Commission, which will render a decision based on the Secretary of State Regulations (44 Ill. Adm. Code 4000) of the Local Records Commission and Local Records Act (Ill. Rev. Stat. 1983, ch. 116, pars. 43.102 et seq.).)

5. The Federal grantor agency shall request transfer of certain records to its custody from grantees when it determines that the records possess long-term retention value. However, in order to avoid duplicate record-keeping, a Federal grantor agency may make arrangements with grantees to retain any records that are continuously needed for joint use. (The Department will take possession of grant records only when the Grantee no longer exists.)

6. The head of the Federal grantor agency and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any pertinent books, documents, papers, and records of grantees and subgrantees to make audits, examinations, excerpts and transcripts.

7. Unless otherwise required by law, no Federal grantor agency shall place restrictions on grantees that will limit public access to the records of grantees that are pertinent to a grant except when the agency can demonstrate that such records must be kept confidential and would have been excepted from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) if the records had belonged to the grantor agency.

Attachment E: Program Income

1. Federal grantor agencies shall apply the standards set forth in this Attachment in requiring grantees to account for program income related to projects financed in whole or in part with Federal grant funds. Program income means gross income earned by the grantee from grant-supported activities. Such earnings exclude interest earned on advances and may include, but will not be limited to, income from service fees, sale of commodities, usage or rental fees, and royalties on patents and copyrights.

2. Interest earned on advances of Federal funds shall be remitted to the Federal agency except for interest earned on advances to States or instrumentalities of a State as provided by the Intergovernmental Cooperation Act of 1968 (Public Law 90-577)) and advances made to tribal organizations pursuant to section 102, 103, or 104 of the Indian Self Determination Act (Public Law 93-638).

3. Proceeds from the sale of real and personal property, either provided by the Federal Government or purchased in whole or part with Federal funds, shall be handled in accordance with Attachment N to this Circular pertaining to Property Management.

4. Unless the grant agreement provides otherwise, grantees shall have no obligation to the Federal Government with, respect to royalties received as a result of copyrights or patents produced under the grant or other agreement. (See paragraph 7, Attachment N.)

5. All other program income earned during the grant period shall be retained by the grantee and, in accordance with the grant agreement, shall be:

a. Added to funds committed to the project by the grantor and grantee and be used to further eligible program objectives.

b. Used to finance the non-Federal share of the project when approved by the Federal Sponsoring agency; or

c. Deducted from the total project costs for the purpose of determining the net costs on which the Federal share of costs will be based.

6. Federal grantor agencies shall require the grantees to record the receipt and expenditure of revenues (such as taxes, special assessments, levies, fines, etc.) as a part of grant project transactions when such revenues are specifically earmarked for a grant project in accordance with grant agreements.

Attachment F: Matching Share

1. This Attachment sets forth criteria and procedures for the allowability of cash in-kind contributions made by grantees, subgrantees or third parties in satisfying cost sharing and matching requirements of Federal grantor agencies.

2. The following definitions apply for the purpose of this Attachment:

a. Project Costs. Project costs are all allowable costs as set forth in Federal Management Circular No. 74-4 incurred by a grantee and the value of the in-kind contribution made by the grantee or third parties in accomplishing the objectives of the grant during the project or program period.

b. Cost Sharing and Matching. In general, cost sharing and matching represents that portion of project costs not borne by the Federal Government. Usually, a minimum percentage for matching share is prescribed by program legislation, and matching share requirements are included in the grant agreements.

c. Cash Contributions. Cash contributions represent the grantee's cash outlay, including the outlay of money contributed to the grantee by other public agencies and institutions, and private organizations and individuals. When authorized by Federal legislation, Federal funds received from other grants may be considered as grantees' cash contributions.

d. In-kind Contributions. In-kind contributions represent the value of noncash contributions provided by the grantee, and non-Federal parties. Only when authorized by Federal legislation may property purchased with Federal funds be considered as the grantee's in-kind contributions. In-kind contributions may be in the form of charges for real property and nonexpendable personal property and the value of goods and services directly benefiting and specifically identifiable to the project or program.

3. General guidelines for computing cost sharing or matching are as follows:

a. Cost sharing or matching share may consist of:

1. Charges incurred by the grantee as project costs. (Not all charges require cash outlays during the grant period by the grantee; examples are depreciation and use charges for buildings and equipment.)

2. Project costs financed with cash contributed or donated to the grantee by other non-Federal public agencies and institutions, and private organizations and individuals.

3. Project costs represented by services and real or personal property, or use thereof, donated by other public agencies and institutions, and private organizations and individuals.

b. All contributions, both cash and in-kind, shall be accepted as part of the grantee's matching share when such contributions meet all of the following criteria:

1. Are verifiable from the grantee's records;

2. Are not included as contributions for any other federally-assisted program;

3. Are necessary and reasonable for proper and efficient accomplishment of project objectives;

4. Are types of charges that would be allowable under FMC 74-4.

5. Are not paid by the Federal Government under another assistance agreement unless authorized under the other agreement and the laws and regulations it is subject to.

6. Are provided for in the approved budget when required by the Federal agency; and

7. Conform to other provisions of this Attachment.

4. Values for grantee in-kind contributions will be established at the grantee's actual cost in accordance with FMC 74-4.

5. Specific procedures for the grantees in establishing the value of in-kind contributions from non-Federal third parties are set forth below:

a. Valuation of volunteer services. Volunteer services may be furnished by professional and technical personnel, consultants, and other skilled and unskilled labor. Volunteered service may be counted as cost sharing or matching if the service is an integral and necessary part of an approved program. ("Integral and necessary" is defined as an allowable cost for the program if purchased.)

1. Rates for volunteer services. Rates for volunteers should be consistent with those paid for similar work in other activities of the State or local government. In those instances in which the required skills are not found in the grantee organization, rates should be consistent with those paid for similar work in the labor market in which the grantee competes for the kind of services involved. (Rates shall be based on the Department of Employment Security's Occupational Employment Statistic Survey.)

2. Volunteers employed by other organizations. When an employer other than the grantee furnishes the services of an employee, these services shall be valued at the employee's regular rate of pay (exclusive of fringe benefits and overhead cost) provided these services are in the same skill for which the employee is normally paid.

b. Valuation of donated expendable personal property. Donated expendable personal property includes such items as expendable equipment, office supplies, laboratory supplies, or workshop and classroom supplies. Values assessed to expendable personal property included in the cost or matching share should be reasonable and should not exceed the fair market value of the property at the time of the donation.

c. Valuation of donated nonexpendable personal property, buildings and land or use thereof.

1. The method used for charging matching share for donated nonexpendable personal property, buildings, and land may differ depending upon the purpose of the grant as follows:

a) If the purpose of the grant is to furnish equipment, buildings, or land to the grantee or otherwise provide a facility, the total value of the donated property may be claimed as a matching share.

b) If the purpose of the grant is to support activities that require the use of equipment, buildings, or land on a temporary or part-time basis, depreciation or use charges for equipment and buildings may be made. The full value of equipment or other capital assets and fair rental charges for land may be made provided that the grantor agency has approved the charges.

2. The value of donated property will be determined in accordance with the usual accounting policies of the grantee with the following qualifications:

a) Land and Buildings. The value of donated land and buildings may not exceed its fair market value, at the time of donation to the grantee as established by an independent appraiser (e.g., certified real property appraiser or GSA representatives) and certified by a responsible official of the grantee.

b) Nonexpendable personal property. The value of donated nonexpendable personal property shall not exceed the fair market value of equipment and property of the same age and condition at the time of donation.

c) Use of space. The value of donated space shall not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality.

d) Loaned equipment. The value of loaned equipment shall not exceed its fair rental value.

6. The following requirements pertain to the grantee's supporting records for in-kind contributions from non-Federal third parties.

a. Volunteer services must be documented and, to the extent feasible, supported by the same methods used by the grantee for its employees.

b. The basis for determining the valuation for a personal services, material, equipment, buildings, and land must be documented.

Attachment G: Standards for Grantee Financial Management Systems

1. This Attachment prescribes standards for financial management systems of grant-supported activities of State, local, and federally recognized Indian tribal governments. Federal grantor agencies shall not impose additional standards on grantees unless specifically provided for in other Attachments to this Circular. However, grantor agencies are encouraged to make suggestions and assist the grantees in establishing or improving financial management systems when such assistance is needed or requested.

2. Grantee financial management systems shall provide for:

a. Accurate, current, and complete disclosure of the financial results of each grant program in accordance with reporting requirements set forth in Attachment H to this Circular. When a Federal grantor agency requires reporting on an accrual basis, the grantee shall not be required to establish an accrual accounting system but shall develop such accrual data on its reports on the basis of an analysis of the documentation on hand.

b. Records that identify adequately the source and application of funds for grant-supported activities. These records shall contain information pertaining to Federal awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.

c. Effective control over and accountability for all funds, property, and other assets. Grantees shall adequately safeguard all such assets and shall assure that they are used solely for authorized purposes. (See 47 Ill. Adm. Code 1.90, Financial Management Standards.)

d. Comparison of actual outlays with budgeted amounts for each grant. Also, relation of financial information with performance or productivity data, including the production of unit cost information whenever appropriate and required by the grantor agency.

e. Procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement by the grantee, whenever funds are advanced by the Federal Government. When advances are made by a letter-of-credit method, the grantee shall make drawdowns from the U.S. Treasury as close as possible to the time of making the disbursements. Advances made by primary recipient organizations (those which receive payments directly from the Federal Government) to secondary recipients shall conform substantially to the same standards of timing and amount as apply to advances by Federal agencies to primary recipient organizations.

f. Procedures for determining reasonableness, allowability and allocability of costs in accordance with the provisions of Federal Management Circular 74-4.

g. Accounting records that are supported by source documentation.

h. A systematic method to assure timely and appropriate resolution of audit findings and recommendations.

3. Primary grantees shall require subgrantees to adopt the standards in paragraph 2, above, except for the requirement in subparagraph 2a, regarding reporting forms and frequencies prescribed in Attachment H to this Circular.

Attachment H: Financial Reporting Requirements

1. This Attachment prescribes uniform reporting procedures for grantees to: summarize expenditures made and Federal funds unexpended for each award, report the status of Federal cash advanced, request advances and reimbursement when the letter-of-credit method is not used; and promulgates standard forms incident thereto. Grantees when obtaining financial information required by Federal agencies from subgrantees are not required to use the forms contained in this Attachment.

2. The following definitions apply for purposes of this Attachment:

a. Accrued expenditures. Accrued expenditures are the charges incurred by the grantee during a given period requiring the provision of funds for: (1) goods and other tangible property received; (2) services performed by employees, contractors, subgrantees, and other payees; and (3) other amounts becoming owed under programs for which no current services or performance is required such as annuities, insurance claims, and other benefit payments.

b. Accrued income. Accrued income is the sum of (1) earnings during a given period from (i) services performed by the grantee; and (ii) goods and other tangible property delivered to purchasers; and (2) amounts becoming owed to the grantee for which no current services or performance is required by the grantee.

c. Federal funds authorized. Federal funds authorized are the total amount of Federal funds obligated by the Federal Government for use by the grantee. This amount may include any authorized carryover of unobligated funds from prior fiscal years when permitted by law or agency regulation.

d. In-kind contributions. In-kind contributions are defined in Attachment F to this Circular.

e. Obligations. Obligations are the amounts of orders placed, contracts and grants awarded, services received, and similar transactions during a given period that will require payment by the grantee during the same or a future period.

f. Outlays. Outlays or expenditures represent charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of actual cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of in-kind contributions applied, and the amount of cash advances and payments made to subgrantees. For reports prepared on an accrual basis, outlays are the sum of actual cash disbursements for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decrease) in the amounts owed by the grantee for goods and other property received, for services performed by employees, contractors, subgrantees and other payees and other amounts becoming owed under programs for which no current services or performance are required such as annuities, insurance claims, and other benefit payments.

g. Program income. Program income is defined in Attachment E of this Circular. It may be reported on a cash or accrual basis, whichever is used for reporting outlays.

h. Unobligated balance. The unobligated balance is the portion of the funds authorized by the Federal agency that has not been obligated by the grantee and is determined by deducting the cumulative obligations from the cumulative funds authorized.

i. Unliquidated obligations. For reports prepared on a cash basis, unliquidated obligations represent the amount of obligations incurred by the grantee that has not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the grantee for which an outlay has not been recorded.

Attachment I: Monitoring and Reporting of Program Performance

1. This Attachment sets forth the procedures for monitoring and reporting program performance under Federal grants. These procedures are designed to place greater reliance on grantees to manage the day-to-day operations of the grant-supported activities.

2. Grantees shall constantly monitor the performance under grant-supported activities to assure that time schedules are being met, projected work units by time periods are being accomplished, and other performance goals are being achieved. This review shall be made for each program, function, or activity of each grant as set forth in the approved grant application or award document.

3. Grantees shall submit a performance report for each grant which briefly presents the following for each program, function, or activity involved as prescribed by the Federal agency:

a. A comparison of actual accomplishments to the goals established for the period. Where the output of grant programs can be readily quantified, such quantitative data should be related to cost data for computation of unit costs.

b. Reasons why established goals were not met.

c. Other pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.

4. Between the required performance reporting dates, events may occur which have significant impact upon the project or program. In such cases, the grantee shall inform the grantor agency as soon as the following types of conditions become known:

a. Problems, delays, or adverse conditions which will materially affect the ability to attain program objectives, prevent the meeting of time schedules and goals, or preclude the attainment of project work units by established time periods. This disclosure shall be accompanied by a statement of the action taken, or contemplated, and any Federal assistance needed to resolve the situation.

b. Favorable developments or events which enable meeting time schedules and goals sooner than anticipated or producing more work units than originally projected.

5. If any performance review conducted by the grantee discloses the need for change in the budget estimates, the grantee shall submit a request for budget revision.

6. The grantor agency shall make site visits as frequently as practicable to:

a. Review program accomplishments and management control systems.

b. Provide such technical assistance as may be required.

Attachment L: Grant Closeout Procedures

1. This Attachment prescribes uniform closeout procedures for grantees.

2. The following definitions shall apply for the purpose of the Attachment:

a. Grant closeout. The closeout of a grant is the process by which a Federal grantor agency determines that all applicable administrative actions and all required work of the grant have been completed by the grantee and the grantor.

b. Date of completion. The date when all work under a grant is completed or the date in the grant award document, or any supplement or amendment thereto, on which Federal assistance ends.

c. Termination. The termination of a grant means the cancellation of Federal assistance, in whole or in part, under a grant at any time prior to the date of completion.

d. Suspension. The suspension of a grant is an action by a Federal grantor agency which temporarily suspends Federal assistance under the grant pending corrective action by the grantee or pending a decision to terminate the grant by the grantor agency.

e. Disallowed costs. Disallowed costs are those charges to a grant which the grantor agency or its representative determines to be unallowable. (See Federal Management Circular No. 74-4.)

3. All Federal grantor agencies shall establish grant closeout procedures which include the following requirements:

a. Upon request, the Federal grantor agency shall make prompt payments to a grantee for allowable reimbursable costs under the grant being closed out.

b. The grantee shall immediately refund to the grantor agency any balance of unobligated (unencumbered) cash advanced to the grantee that is not authorized to be retained by the grantee for use on other grants.

c. The grantor agency shall obtain from the grantee within 90 days after the date of completion of the grant all financial, performance, and other reports required as a condition of the grant. The agency may grant extensions when requested by the grantee. (This federal requirement is further restricted by the Grants Funds Recovery Act (Ill. Rev. Stat. 1984 Supp., ch. 127, pars. 2301 et seq.) which does not allow extensions.)

d. When authorized by the grant the grantor agency shall make a settlement for any upward or downward adjustments to the Federal share of costs after these reports are received.

e. The grantee shall account for any property acquired with grant funds, or received from the Government in accordance with the provisions of Attachment N to this Circular.

f. In the event a final audit has not been performed prior to the closeout of the grant, the grantor agency shall retain the right to recover an appropriate amount after fully considering the recommendations on disallowed costs resulting from the final audit.

4. All Federal grantor agencies shall provide procedures to be followed when a grantee has failed to comply with the grant award stipulations, standards,or conditions. When that occurs, the grantor agency may, on reasonable notice to the grantee, suspend the grant, and withhold further payments, or prohibit the grantee from incurring additional obligations of grant funds, pending corrective action by the grantee or a decision to terminate in accordance with paragraph 5.a. The grantor agency shall allow all necessary and proper costs which the grantee could not reasonably avoid during the period of suspension provided that they meet the provisions of Federal Management Circular No. 74-4.

5. Subject to the provisions of paragraph 5 of the basic Circular, of which this Attachment is a part, all Federal grantor agencies shall provide for the systematic settlement of terminated grants including the following:

a. Termination for cause. The grantor agency may terminate any grant in whole, or in part, at any time before the date of completion, whenever it is determined that the grantee has failed to comply with the conditions of the grant. The grantor agency shall promptly notify the grantee in writing of the determination and the reasons for the termination, together with the effective date. Payments made to grantees or recoveries by the grantor agencies under grants terminated for cause shall be in accord with the legal rights and liabilities of the parties.

b. Termination for convenience. The grantor agency or grantee may terminate grants in whole, or in part, when both parties agree that the continuation of the project would not produce beneficial results commensurate with the further expenditure of funds. The two parties shall agree upon the termination conditions, including the effective date and, in the case of partial terminations, the portions to be terminated. The grantee shall not incur new obligations for the terminated portion after the effective date, and shall cancel as many outstanding obligations as possible. The Federal agency shall allow full credit to the grantee for the Federal share of the noncancellable obligations, properly incurred by the grantee prior to termination.

Attachment N: Property Management Standards

1. This Attachment prescribes uniform standards governing the utilization and disposition of property furnished by the Federal Government or acquired in whole or in part with Federal funds or whose cost was charged to a project supported by a Federal grant. Federal grantor agencies shall require grantees to observe these standards under grants from the Federal Government and shall not impose additional requirements unless specifically required by Federal law. The grantees shall be authorized to use their own property management standards and procedures as long as the provisions of this Attachment are included.

2. The following definitions apply for the purpose of this Attachment:

a. Real property. Real property means land, including land improvements, structures and appurtenances thereto, excluding movable machinery and equipment.

b. Personal property. Personal property of any kind except real property. It may be tangible -- having physical existence, or intangible -- have no physical existence, such as patents, inventions, and copyrights.

c. Nonexpendable personal property. Nonexpendable personal property means tangible personal property having a useful life of more than one year and an acquisition cost of $300 or more per unit. A grantee may use its own definition of nonexpendable personal property provided that such definition would at least include all tangible personal property as defined above.

d. Expendable personal property. Expendable personal property refers to all tangible personal property other than nonexpendable property.

e. Excess property. Excess property means property under the control of any Federal agency which, as determined by the head thereof, is no longer required for its needs or discharge of its responsibilities.

f. Acquisition cost of purchased nonexpendable personal property. Acquisition cost of an item of purchased nonexpendable personal property means the net invoice unit price of the property including the cost of modifications, Attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the grantee's regular accounting practices.

g. Exempt property. Exempt property means tangible personal property acquired in whole or in part with Federal funds, and title to which is vested in the recipient without further obligation to the Federal Government except as provided in subparagraph 6a below. Such unconditional vesting of title will be pursuant to any Federal legislation that provides the Federal sponsoring agency with adequate authority.

3. Real property. Each Federal grantor agency shall prescribe requirements for grantees concerning the use and disposition of real property funded partly or wholly by the Federal Government. Unless otherwise provided by statute, such requirements, as a minimum, shall contain the following:

a. Title to real property shall vest in the recipient subject to the condition that the grantee shall use the real property for the authorized purpose of the original grant as long as needed.

b. The grantee shall obtain approval by the grantor agency for the use of the real property in other projects when the grantee determines that the property is no longer needed for the original grant purposes. Use in other projects shall be limited to those under other Federal grant programs, or programs that have purposes consistent with those authorized for support by the grantor.

c. When the real property is no longer needed as provided in a and b above, the grantee shall request disposition instructions from the Federal agency or its successor Federal agency. The Federal agency shall observe the following rules in the disposition instructions:

1. The grantee may be permitted to retain title after it compensates the Federal Government in an amount computed by applying the Federal percentage of participation in the cost of the original project to the fair market value of the property.

2. The grantee may be directed to sell the property under guidelines provided by the Federal agency and pay the Federal Government an amount computed by applying the Federal percentage of participation in the cost of the original project to the proceeds from sale (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the grantee is authorized or required to sell the property, proper sales procedures shall be established that provide for competition to the extent practicable and result in the highest possible return.

3. The grantee may be directed to transfer title to the property to the Federal Government provided that in such cases the grantee shall be entitled to compensation computed by applying the grantee's percentage of participation in the cost of the program or project to the current fair market value of the property.

4. Federally-owned nonexpendable personal property. Title to federally-owned property remains vested in the Federal Government. Recipients shall submit annually an inventory listing of federally-owned property in their custody to the Federal agency. Upon completion of the agreement or when the property is no longer needed, the grantee shall report the property to the Federal agency for further agency utilization.

If the Federal agency has no further need for the property, it shall be declared excess and reported to the General Services Administration. Appropriate disposition instructions will be issued to the recipient after completion of the Federal agency review.

5. Exempt property. When statutory authority exists title to nonexpendable personal property acquired with project funds shall be vested in the recipient upon acquisition unless it is determined that to do so is not in the furtherance of the objectives of the Federal sponsoring agency. When title is vested in the recipient the recipient shall have no other obligation or accountability to the Federal Government for its use or disposition except as provided in 6a below.

6. Other nonexpendable property. When other nonexpendable tangible property is acquired by a grantee with project funds title shall not be taken by the Federal Government but shall vest in the grantee subject to the following conditions:

a. Right to transfer title. For items of nonexpendable personal property having a unit acquisition cost of $1,000 or more, the Federal agency may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such reservation shall be subject to the following standards:

1. The property shall be appropriately identified in the grant or otherwise made known to the grantee in writing.

2. The Federal agency shall issue disposition instructions within 120 calendar days after the end of the Federal support of the project for which it was acquired. If the Federal agency fails to issue disposition instructions within the 120 calendar-day period, the grantee shall apply the standards of subparagraph 6b and 6c as appropriate.

3. When the Federal agency exercises its right to take title, the personal property shall be subject to the provisions for federally-owned nonexpendable property discussed in paragraph 4, above.

4. When title is transferred either to the Federal Government or to a third party, the provisions of subparagraph 6c(2)(b) should be followed.

b) Use of other tangible nonexpendable property for which the grantee has title.

1. The grantee shall use the property in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When no longer needed for the original project or program, the grantee shall use the property in connection with its other federally sponsored activities, in the following order of priority:

a) Activities sponsored by the same Federal agency.

b) Activities sponsored by other Federal agencies.

2. Shared use. During the time that nonexpendable personal property is held for use on the project or program for which it was acquired, the grantee shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the property was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by the Federal agency that financed the property; second preference shall be given to projects or programs sponsored by other Federal agencies. If the property is owned by the Federal Government, use on other activities not sponsored by the Federal Government shall be permissible if authorized by the Federal agency. User charges should be considered if appropriate.

c. Disposition of other nonexpendable property. When the grantee no longer needs the property as provided in 6b above, the property may be used for other activities in accordance with the following standards:

1. Nonexpendable property with a unit acquisition cost of less than $1,000. The grantee may use the property for other activities without reimbursement to the Federal Government or sell the property and retain the proceeds.

2. Nonexpendable personal property with a unit acquisition cost of $1,000 or more. The grantee may retain the property for other uses provided that compensation is made to the original Federal agency or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the property. If the grantee has no need for the property and the property has further use value, the grantee shall request disposition instructions from the original grantor agency.

The Federal agency shall determine whether the property can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the property shall be reported, in accordance with the guidelines of the Federal Property Management Regulations (FPMR), to the General Services Administration by the Federal agency to determine whether a requirement for the property exists in other Federal agencies. The Federal agency shall issue instructions to the grantee no later than 120 days after the grantee request and the following procedures shall govern:

a) If so instructed or if disposition instructions are not issued within 120 calendar days after the grantee's request, the grantee shall sell the property and reimburse the Federal agency an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the grantee shall be permitted to deduct and retail from the Federal share $100 or ten percent of the proceeds, whichever is greater, for the grantee's selling and handling expenses.

b) If the grantee is instructed to ship the property elsewhere the grantee shall be reimbursed by the benefiting Federal agency with an amount which is computed by applying the percentage of the grantee participation in the cost of the original grant project or program to the current fair market value of the property, plus any reasonable shipping or interim storage costs incurred.

c) If the grantee is instructed to otherwise dispose of the property, the grantee shall be reimbursed by the Federal agency for such costs incurred in its disposition.

d. Property management standards for nonexpendable property. The grantee's property management standards for nonexpendable personal property shall include the following procedural requirements:

1. Property records shall be maintained accurately and shall include:

a) A description of the property.

b) Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification number.

c) Source of the property including grant or other agreement number.

d) Whether title vests in the grantee or the Federal Government.

e) Acquisition date (or date received, if the property was furnished by the Federal Government) and cost.

f) Percentage (at the end of the budget year) of Federal participation in the cost of the project or program for which the property was acquired. (Not applicable to property furnished by the Federal Government.)

g) Location, use and condition of the property and the date the information was reported.

h) Unit acquisition cost.

i) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a grantee compensates the Federal agency for its share.

2. Property owned by the Federal Government must be marked to indicate Federal ownership.

3. A physical inventory of property shall be taken and the results reconciled with the property records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the difference. The grantee shall, in connection with the inventory, verify the existence, current utilization, and continued need for the property.

4. A control system shall be in effect to insure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage or theft of nonexpendable property shall be investigated and fully documented; if the property was owned by the Federal Government, the grantee shall promptly notify the Federal agency.

5. Adequate maintenance procedures shall be implemented to keep the property in good condition.

6. Where the grantee is authorized or required to sell the property, proper sales procedures shall be established which would provide for competition to the extent practicable and result in the highest possible return.

7. Expendable personal property. Title to expendable personal property shall vest in the grantee upon acquisition. If there is a residual inventory of such property exceeding $1,000 in total aggregate fair market value, upon termination or completion of the grant, and if the property is not needed for any other federally sponsored project or program, the grantee shall retain the property for use on nonfederally sponsored activities, or sell it, but must in either case, compensate the Federal Government for its share. The amount of compensation shall be computed in the same manner as nonexpendable personal property.

8. Intangible property.

a. Inventions and patents. If any program produces patentable items, patent rights, processes, or inventions, in the course of work sponsored by the Federal Government, such fact shall be promptly and fully reported to the Federal agency. Unless there is a prior agreement between the grantee and the Federal agency on disposition of such items, the Federal agency shall determine whether protection on the invention or discovery shall be sought. The Federal agency will also determine how the rights in the invention or discovery, including rights under any patent issued thereon, shall be allocated and administrated in order to protect the public interest consistent with "Government Patent Policy" (President's Memorandum for Heads of Executive Department and Agencies, August 23, 1971, and statement of Government Patent Policy as printed in 36 FR 16889).

b. Copyrights. Except as otherwise provided in the terms and conditions of the agreement the author or the grantee organization is free to copyright any books, publications, or other copyrightable materials developed in the course of or under a Federal agreement, but the Federal agency shall reserve a royalty-free nonexclusive and irrevocable right to reproduce, publish, or otherwise use, and to authorize others to use the work for Government purposes.

9. Excess personal property. When title to excess property is vested in grantees such property shall be accounted for and disposed of in accordance with paragraphs 6c and 6d of this Attachment.

Attachment O: Procurement Standards

1. Applicability

a. This Attachment establishes standards and guidelines for the procurement of supplies, equipment, construction and services for Federal assistance programs. These standards are furnished to ensure that such materials and services are obtained efficiently and economically and in compliance with the provisions of applicable Federal law and executive orders.

b. No additional procurement requirements or subordinate regulations shall be imposed upon grantees by executive agencies unless specifically required by Federal law or executive orders or authorized by the Administrator for Federal Procurement Policy. This prohibition is not applicable to payment conditions issued in accordance with Treasury Circular 1075, individual grantee requirements pursuant to Section 10 of the basic circular or the provisions of this or other OMB circulars.

c. Provisions of current subordinate requirements not conforming to this Attachment shall be rescinded by grantor agencies unless approved by the Office of Federal Procurement Policy (OFPP).

2. Grantee/Grantor Responsibility

a. These standards do not relieve the grantee of any contractual responsibilities under its contracts. The grantee is responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements entered in support of a grant. These include but are not limited to source evaluation, protests, disputes, and claims. Executive agencies shall not substitute their judgement for that of the grantee unless the matter is primarily a Federal concern. Violations of law are to be referred to the local, State, or Federal authority having proper jurisdiction.

b. Grantees shall use their own procurement procedures which reflect applicable State and local laws and regulations, provided that procurements for Federal Assistance Programs conform to the standards set forth in this Attachment and applicable Federal law.

3. Grantee Procurement Improvement. Executive agencies awarding Federal grants or other assistance which require or allow procurement by the recipients are encouraged to assist recipients in improving their procurement capabilities by providing them with technical assistance training, publications, and other aid.

4. Procurement System Reviews

a. Executive agencies are encouraged to perform reviews of their grantees' procurement systems if a continuing relationship with the grantee is anticipated or a substantial amount of the Federal assistance is to be used for procurement and review of individual contracts is anticipated. The purpose of the review shall be to determine: (1) whether a grantee's procurement system meets the standards prescribed by this Attachment or other criteria acceptable to the OFPP, such provisions of the Model Procurement Code for State and local government; and (2) whether the grantee's procurement system should be certified by the reviewing agency. Such a review will also give an agency an opportunity to give technical assistance to a grantee to remedy its procurement system if it does not fully comply. In addition, such a review may provide a basis for deciding whether the grantee's contracts and related procurement documents should be subject to the grantor's prior approval, as provided by Section 6.

b. In conducting procurement system review, grantor agencies will evaluate a grantee's procurement system in terms of whether it complies with the standards prescribed by this Attachment and represents a fair, efficient and effective procurement system. To the maximum extent feasible, reviewers will rely upon State or local evaluations and analyses performed by agencies or organizations independent of the grantee contracting activity.

c. When a Federal grantor agency completes a procurement review, it shall furnish a report to the grantee, with a copy to OFPP.

d. All agencies should normally rely upon the resultant findings or certification for a period of 24 months before another review is performed.

e. Reviews shall be conducted in accordance with standards and guidelines approved or issued by OFPP.

f. The reviews authorized by Section 6 are waived if a grantee's procurement system is certified.

5. Protest Procedures

a. Grantor agencies may develop an administrative procedure to handle complaints or protests regarding grantee contractor selection actions. The procedure shall be limited as follows:

b. No protest shall be accepted by the grantor agency until all administrative remedies at the grantee level have been exhausted.

c. Review is limited to:

1. Violations of Federal law or regulations. Violations of State or local law shall be under the jurisdiction of State or local authorities.

2. Violations of grantee's protest procedures or failure to review a complaint or protest.

6. Grantor Review of Proposed Contracts. Federal grantor pre-award review and approval of the grantee's proposed contracts and related procurement documents, such as requests for proposal and invitations for bids, is permitted only under the following circumstances:

a. The procurement is expected to exceed $10,000 and is to be awarded without competition or only one bid or offer is received in response to solicitation.

b. The procurement expected to exceed $10,000 specifies a "brand name" product; or

c. The grantee's procurement procedures or operation fails to comply with one or more significant aspects of this Attachment. The grantor agency shall notify the grantee in writing, with a copy of such notification to the OFPP.

7. Code of Conduct. Grantees shall maintain a written code or standards of conduct which shall govern the performance of their officers, employees or agents engaged in the award and administration of contracts supported by Federal funds. No employee, officer or agent of the grantee shall participate in selection, or in the award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when:

a. The employee, officer or agent;

b. Any member of his immediate family;

c. His or her partner; or

d. An organization which employs, or is about to employ, any of the above, has a financial or other interest in the firm selected for award.

The grantee's officers, employees or agents shall neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors, or parties to subagreements. Grantees may set minimum rules where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value.

To the extent permitted by the State or local law or regulations, such standards of conduct shall provide for penalties, sanctions, or other disciplinary actions for violations of such standards by the grantee's officers, employees, or agents, or by contractors or their agents.

8. Procurement Procedures. The grantee shall establish procurement procedures which provide that proposed procurement actions shall be reviewed by grantee officials to avoid the purchase of unnecessary or duplicative items. Consideration should be given to consolidation or breaking out to obtain a more economical purchase. Where appropriate, an analysis shall be made of lease versus purchase alternatives, and any other appropriate analysis to determine which approach would be the most economical. To foster greater economy and efficiency, grantees are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.

9. Contracting with Small and Minority Firms, Women's Business Enterprise and Labor Surplus Area Firms

a. It is national policy to award a fair share of contracts to small and minority business firms. Accordingly, affirmative steps must be taken to assure that small and minority businesses are utilized when possible as sources of suppliers, equipment, construction and services. Affirmative steps shall include the following:

1. Including qualified small and minority businesses on solicitation lists.

2. Assuring that small and minority businesses are solicited whenever they are potential sources.

3. When economically feasible, dividing total requirements into smaller tasks or quantities so as to permit maximum small and minority business participation.

4. Where the requirement permits, establishing delivery schedules which will encourage participation by small and minority business.

5. Using the services and assistance of the Small Business Administration, the Office of Minority Business Enterprise of the Department of Commerce and the Community Services Administration as required.

6. If any subcontracts are to be let, requiring the prime contractor to take the affirmative steps in 1 through 5 above.

b. Grantees shall take similar appropriate affirmative action in support of women's business enterprises.

c. Grantees are encouraged to procure goods and services from labor surplus areas.

d. Grantor agencies may impose additional regulations and requirements in the foregoing areas only to the extent specifically mandated by statute or presidential direction.

10. Selection Procedures

a. All procurement transactions, regardless of whether by sealed bids or by negotiation and without regard to dollar value, shall be conducted in a manner that provides maximum open and free competition consistent with this Attachment. Procurement procedures shall not restrict or eliminate competition. Example of what is considered to be restrictive of competition include, but are not limited to: (1) placing unreasonable requirements on firms in order for them to qualify to do business; (2) noncompetitive practices between firms; (3) organizational conflicts of interest; and (4) unnecessary experience and bonding requirements.

b. The grantee shall have written selection procedures which shall provide, as a minimum, the following procedural requirements:

1. Solicitations of offers, whether by competitive sealed bids or competitive negotiation shall:

a) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description shall not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary, shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a "brand name or equal" description may be used as a means to define the performance or other salient requirements of a procurement. The specific features of the named brand which must be met by offerors shall be clearly stated.

b) Clearly set forth all requirements which offerors must fulfill and all other factors to be used in evaluating bids or proposals.

2. Awards shall be made only to responsible contractors that possess the potential ability to perform successfully under the terms and conditions of a proposed procurement. Consideration shall be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.

11. Method Procurement. Procurement under grants shall be made by one of the following methods, as described herein: (a) small purchase procedures; (b) competitive sealed bids (formal advertising); (c) competitive negotiation; (d) noncompetitive negotiation.

a. Small purchase procedures are those relatively simple and informal procurement methods that are sound and appropriate for a procurement of services, supplies or other property, costing in the aggregate not more than $10,000. Grantees shall comply with State or local small purchase dollar limits under $10,000. If small purchase procedures are used for a procurement under a grant, price or rate quotations shall be obtained from an adequate number of qualified sources.

b. In competitive sealed bids (formal advertising), sealed bids are publicly solicited and a firm-fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is lowest in price.

1. In order for formal advertising to be feasible, appropriate conditions must be present, including, as a minimum, the following:

a) A complete, adequate and realistic specification or purchase description is available.

b) Two or more responsible suppliers are willing and able to compete effectively for the grantee's business.

c) The procurement lends itself to a firm-fixed-price contract, and selection of the successful bidder can appropriately be made principally on the basis of price.

2. If formal advertising is used for a procurement under a grant the following requirements shall apply:

a) A sufficient time prior to the date set for opening of bids, bids shall be solicited from an adequate number of known suppliers. In addition, the invitation shall be publicly advertised.

b) The invitation for bids, including specifications and pertinent Attachments, shall clearly define the items or services needed in order for the bidders to properly respond to the invitation.

c) All bids shall be opened publicly at the time and place stated in the invitation for bids.

d) A firm-fixed-price contract award shall be made by written notice to that responsible bidder whose bid, conforming to the invitation for bids, is lowest. Where specified in the bidding documents, factors such as discounts, transportation costs and life cycle costs shall be considered in determining which bid is lowest. Payment discounts may only be used to determine low bid when prior experience of the grantee indicates that such discounts are generally taken.

e) Any or all bids may be rejected when there are sound documented business reasons in the best interest of the program.

c. In competitive negotiation, proposals are requested from a number of sources and the Request for Proposal is publicized, negotiations are normally conducted with more than one of the sources submitting offers, and either a fixed-price or cost-reimbursable type contract is awarded, as appropriate. Competitive negotiation may be used if conditions are not appropriate for the use of formal advertising. If competitive negotiation is used for a procurement under a grant, the following requirements shall apply:

1. Proposals shall be solicited from an adequate number of qualified sources to permit reasonable competition consistent with the nature and requirements of the procurement. The Request for Proposal shall be publicized and reasonable requests by other sources to compete shall be honored to the maximum extent practicable.

2. The Request for Proposal shall identify all significant evaluation factors, including price or cost where required and their relative importance.

3. The grantee shall provide mechanisms for technical evaluation of the proposals received, determinations of responsible offerors for the purpose of written or oral discussions, and selection for contract award.

4. Award may be made to the responsible offeror whose proposal will be most advantageous to the procuring party, price and other factors considered. Unsuccessful offerors should be notified promptly.

5. Grantees may utilize competitive negotiation procedures for procurement of architectural/engineering professional services, whereby competitors' qualifications are evaluated and the most qualified competitors' is selected, subject to negotiation of fair and reasonable compensation.

d. Noncompetitive negotiation is procurement through solicitation of a proposal from only one source, or after solicitation of a number of sources, competition is determined inadequate. Noncompetitive negotiation may be used when the award of a contract is unfeasible under small purchase, competitive bidding (formal advertising) or competitive negotiation procedures. Circumstances under which a contract may be awarded by noncompetitive negotiation are limited to the following:

1. The item is available only from a single source;

2. Public exigency or emergency when the urgency for the requirement will not permit a delay incident to competitive solicitation;

3. The Federal grantor agency authorizes noncompetitive negotiation; or

4. After solicitation of a number of sources, competition is determined inadequate.

e. Additional innovative procurement methods may be used by grantees with the approval of the grantor agency. A copy of such approval shall be sent to the OFPP.

12. Contract Pricing. The cost plus a percentage of cost and percentage of construction cost method of contracting shall not be used. Grantees shall perform some form of cost or price analysis in connection with every procurement action including contract modifications. Costs or prices based on estimated costs for contracts under grants shall be allowed only to the extent that costs incurred or cost estimates included in negotiated prices are consistent with Federal cost principles.

13. Grantee Procurement Records. Grantees shall maintain records sufficient to detail the significant history of a procurement. These records shall include, but are not necessarily limited to information pertinent to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the cost or price.

14. Contract Provision. In addition to provisions defining a sound and complete procurement contract, any recipient of Federal grant funds shall include the following contract provisions or conditions in all procurement contracts and subcontracts as required by the provision, Federal law or the grantor agency.

a. Contracts other than small purchases shall contain provisions or conditions which will allow for administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as may be appropriate.

b. All contracts in excess of $10,000 shall contain suitable provisions for termination by the grantee including the manner by which it will be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.

c. All contracts awarded in excess of $10,000 by grantees and their contractors or subgrantees shall contain a provision requiring compliance with Executive Order 11246, entitled "Equal Employment Opportunity," as amended by Executive Order 11375, and as supplemented in Department of Labor regulations (41 CFR Part 60).

d. All contracts and subgrants for construction or repair shall include a provision for compliance with the Copeland "Anti-Kickback" Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR, Part 3). This Act provides that each contractor or subgrantee shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he is otherwise entitled. The grantee shall report all suspected or reported violations to the grantor agency.

e. When required by the Federal grant program legislation, all construction contracts in excess of $2,000 awarded by grantees and subgrantees shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 276a to a-7) as supplemented by Department of Labor regulations (290 CFR, Part 5). Under this Act contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less often than once a week. The grantee shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The grantee shall report all suspected or reported violations to the grantor agency.

f. Where applicable, all contracts awarded by grantees and subgrantees in excess of $2,000 for construction contracts and in excess of $2,500 for other contracts which involve the employment of mechanics or laborers shall include a provision for compliance with Sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-330) as supplemented by Department of Labor regulations (29 CFR, Part 5). Under Section 103 of the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of standard workday of 8 hours and a standard workweek of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than 1-1/2 times the basic rate of pay for all hours worked in excess of 8 hours in any calendar day or 40 hours in the work week. Section 107 of the Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous to his health and safety as determined under construction, safety and health standards promulgated by the Secretary of Labor. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market or contracts for transportation or transmission of intelligence.

g. The contract shall include notice of grantor agency requirements and regulations pertaining to reporting and patent rights under any contract involving research, developmental, experimental or demonstration work with respect to any discovery or invention which arises or is developed in the course of or under such contract, and of grantor agency requirements and regulations pertaining to copyrights and rights in data.

h. All negotiated contracts (except those awarded by small purchase procedures) awarded by grantees shall include a provision to the effect that the grantee, the Federal grantor agency, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the contractor which are directly pertinent to that specific contract, for the purpose of making audit, examination, excerpts, and transcriptions.

Grantees shall require contractors to maintain all required records for three years after grantees make final payments and all other pending matters are closed.

i. Contracts, subcontracts, and subgrants of amounts in excess of $100,000 shall contain a provision which requires compliance with all applicable standards, orders, or requirements issued under Section 306 of the Clean Air Act (42 U.S.C. 1857(h)), Section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order 11738, and Environmental Protectional Agency (USEPA) regulations (40 CFR, Part 15), which prohibit the use under non-exempt Federal contracts, grants or loans of facilities included on the EPA List of Violating Facilities. The provision shall require reporting of violations to the grantor agency and to the USEPA Assistant Administrator for Enforcement (EN-329).

j. Contracts shall recognize mandatory standards and policies relating to energy efficiency which are contained in the State energy conservation plan issued in compliance with the Energy Policy and Conservation Act (P.L. 94-163).

Grantor agencies are permitted to require changes, remedies, changed conditions, access and record retention and suspension of work clauses approved by the Office of Federal Procurement Policy.

15. Contract Administration. Grantees shall maintain a contract administration system ensuring that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.

Attachment P: Audit Requirements

1. This Attachment establishes audit requirements for State and local governments, and Indian tribal governments that receive Federal assistance. It provides for independent audits of provisions of Federal law and regulation. The requirements are established to ensure that audits are made on an organization-wide basis, rather than on a grant-by-grant basis. Such audits are to determine whether (a) financial operations are conducted properly, (b) the financial statements are presented fairly, (c) the organization has complied with laws and regulations affecting the expenditure of Federal funds, (d) internal procedures have been established to meet the objectives of federally assisted programs, and (e) financial reports to the Federal Government contain accurate and reliable information. Except where specifically required by law, no additional requirements for audit will be imposed unless approved by the Office of Management and Budget.

2. Definitions. "Cognizant agency" means the Federal agency that is assigned audit responsibility for a particular recipient organization by the Office of Management and Budget.

"Recipient organization" means a State department, a local government, an Indian tribal government, or a subdivision of such entities, that receives Federal assistance. It does not include State and local institutions of higher education or hospitals, which are covered by Circular A-110.

3. State and local governments and Indian tribal governments shall use their own procedures to arrange for independent audits, and to prescribe the scope of audits, provided that the audits comply with the requirements set forth below. Where contracts are awarded for audit services, the contracts shall include a reference to this Attachment.

4. The provisions of this Attachment do not limit the authority of Federal agencies to make audits of recipient organizations. However, if independent audits arranged for by recipients meet the requirements prescribed below, all Federal agencies shall rely on them, and any additional audit work shall build upon the work already done.

5. Audits shall be made in accordance with the General Accounting Office Standards for Audits of Governmental Organizations, Programs, Activities and Functions, the Guidelines for Financial and Compliance Audits of Federally Assisted Programs, any compliance supplements approved by OMB, and generally accepted auditing standards established by the American Institute of Certified Public Accountants.

6. Audits will include, at a minimum, an examination of the systems of internal control, systems established to ensure compliance with laws and regulations affecting the expenditure of Federal funds, financial transactions and accounts, and financial statements and reports of recipient organizations. These examinations are to determine whether:

a. There is effective control over and proper accounting for revenues, expenditures, assets, and liabilities.

b. The financial statements are presented fairly in accordance with generally accepted accounting principles.

c. The Federal financial reports (including Financial Status Reports, Cash Reports, and claims for advances and reimbursements) contain accurate and reliable financial data, and are presented in accordance with the terms of applicable agreements, and in accordance with Attachment H of this Circular.

d. Federal funds are being expended in accordance with the terms of applicable agreements and those provisions of Federal law or regulations that could have a material effect on the financial statements or on the awards tested.

7. In order to accomplish the purposes set forth above, a representative number of charges to Federal awards shall be tested. The test shall be representative of (1) the universe of Federal awards received, and (2) all costs categories that materially affect the award. The test is to determine whether the charges:

a. Are necessary and reasonable for the proper administration of the program.

b. Conform to any limitations or exclusions in the award.

c. Were given consistent accounting treatment and applied uniformly to both federally assisted and other activities of the recipient.

d. Were net of applicable credits.

e. Did not include costs properly chargeable to other federally assisted programs.

f. Were properly recorded (i.e., correct amount, date) and supported by source documentation.

g. Were approved in advance, if subject to prior approval in accordance with Circular 74-4.

h. Were incurred in accordance with competitive purchasing procedures if covered by Attachment O of this Circular.

i. Were allocated equitably to benefiting activities, including non-Federal activities.

8. Audits usually will be made annually, but not less frequently than every two years.

9. If the auditor becomes aware of irregularities in the recipient organization, the auditor shall promptly notify the cognizant agency and recipient management officials above the level of involvement. Irregularities include such matters as conflicts of interest, falsification of records or reports, and misappropriation of funds or other assets.

10. The audit report shall include:

a. Financial statements, including footnotes, of the recipient organization.

b. The auditors' comments on the financial statements which should:

1. Identify the statements examined, and the period covered.

2. Identify the various programs under which the organization received Federal funds, and the amount of the awards received.

3. State that the audit was done in accordance with the standards in paragraph 5.

4. Express an opinion as to whether the financial statements are fairly presented in accordance with generally accepted accounting principles. If an unqualified opinion cannot be expressed, state the nature of the qualification.

c. The auditors' comments on compliance and internal control should:

1. Include comments on weaknesses in and noncompliance with the system of internal control, separately identifying material weaknesses.

2. Identify the nature and impact of any noted instances of noncompliance with the terms of agreements and those provisions of Federal law or regulations that could have a material effect on the financial statements and reports.

3. Contain an expression of positive assurance with respect to compliance with requirements for tested items, and negative assurance for untested items.

d. Comments on the accuracy and completeness of financial reports and claims for advances or reimbursement of Federal agencies.

e. Comments on the accuracy and completeness of financial reports and claims for advances or reimbursement to Federal agencies.

11. Work papers and reports shall be retained for a minimum of three years from the date of the audit report unless the auditor is notified in writing by the cognizant agency of the need to extend the retention period. The audit workpapers shall be made available upon request to the cognizant agency or its designees and the General Accounting Office or its designees.

12. The Office of Management and Budget will work with Federal agencies and State and local governments to assure that recipient audits are made in accordance with the standards set forth in paragraph 5.

13. The Office of Management and Budget will designate cognizant agencies for major recipient organizations.

14. The cognizant agency shall have the following responsibilities:

a. Obtain or make quality assessment reviews of work of non-Federal audit organizations, and provide the results to other interested audit agencies. (If a non-Federal audit organization is responsible for audits of recipients that have different cognizant audit agencies, a single quality assessment review should be arranged.)

b. Assure that all audit reports of recipients that affect federally assisted programs are received, reviewed, and distributed to appropriate Federal audit officials. These officials will be responsible for distributing audit reports to their program officials.

c. Whenever significant inadequacies in an audit are disclosed, the recipient organization will be advised and the auditor will be called upon to take corrective action. If corrective action is not taken, the cognizant agency shall notify the recipient organization and Federal awarding agencies of the facts and its recommendation. Major inadequacies or repetitive substandard performance of independent auditors shall be referred to appropriate professional bodies.

d. Assure that satisfactory audit coverage is provided in a timely manner and in accordance with the provisions of this Attachment.

e. Provide technical advice and act as a liaison between Federal agencies, independent auditors, and recipient organizations.

f. Maintain a followup system on audit findings and investigative matters to assure that audit findings are resolved.

g. Inform other affected audit agencies of irregularities uncovered. The audit agencies, in turn, shall inform all appropriate officials in their agencies. State or local government law enforcement and prosecuting authorities shall also be informed of irregularities within their jurisdiction.

15. Recipients shall require subrecipients that are State and local governments or Indian tribal governments to adopt the requirements in paragraph 1 through 11 above. The recipient shall ensure that the subrecipient audit reports are received as required, and shall submit the reports to the cognizant agency. The cognizant agency will have the responsibility for these reports described in paragraph 14.

16. Small business concerns and business concerns owned and controlled by socially and economically disadvantaged individuals shall have the maximum practicable opportunity to participate in the performance of contracts awarded with Federal funds. Grantees of Federal funds shall take the following affirmative action to further this goal:

a. Assure that small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals as defined in P.L. 95-507 are used to the fullest extent practicable.

b. Make information on forthcoming opportunities available, and arrange time frames for the audit so as to encourage and facilitate participation by small or disadvantaged audit firms.

c. Consider in the contract process whether firms competing for larger audits intend to subcontract with small or disadvantaged firms.

d. Encourage contracting with small or disadvantaged audit firms which have traditionally audited government programs, and in such cases where this is not possible, assure that these firms are given consideration for audit subcontracting opportunities.

e. Encourage contracting with consortiums of small or disadvantaged audit firms as described in paragraph a. when a contract is too large for an individual small or disadvantaged audit firm.

f. Use the services and assistance, as appropriate, of the Small Business Administration, the Minority Business Development Agency of the Department of Commerce, and the Community Services Administration in the solicitation and utilization of small or disadvantaged audit firms.

47 Ill. Adm. Code 1.APPENDIX B Office of Management and Budget Circular a-110

Grants and Agreements with Institutions of Higher Education, Hospital, and Other Nonprofit Organization

Uniform Administrative Requirements

(July 20, 1976)

Attachment A: Cash Depositories

1. This attachment sets forth standards governing the use of banks and other institutions as depositories of funds advanced under grants and other agreements.

2. Except for situations described in paragraphs 3, 4, and 5, no Federal sponsoring agency shall:

a. Require physical segregation of cash depositories for funds which are provided to a recipient.

b. Establish any eligibility requirements for cash depositories for funds which are provided to a recipient.

3. A separate bank account shall be required when applicable letter-of-credit agreements provide that drawdowns will be made when the recipient's checks are presented to the bank for payment.

4. Any moneys advanced to a recipient which are subject to the control or regulation of the United States or any of its officers, agents or employees (public moneys as defined in Treasury Circular No. 176 (31 CFR 202 (1984)), as amended) must be deposited in a bank with Federal Deposit Insurance Corporation (FDIC) insurance coverage and the balance exceeding the FDIC coverage must be collaterally secured.

5. Consistent with the national goal of expanding the opportunities for minority business enterprises, recipients and subrecipients shall be encouraged to use minority banks (a bank which is owned at least 50 percent by minority group members).

Attachment B: Bonding and Insurance

1. This attachment sets forth bonding and insurance requirements for grants and other agreements with recipients. No other bonding and insurance requirements shall be imposed other than those normally required by the recipient.

2. Except as otherwise required by law, a grant or other agreement that requires the contracting (or subcontracting) for construction or facility improvements shall provide for the recipient to follow its own requirements relating to bid guarantees, performance bonds, and payment bond unless the construction contract or subcontract exceeds $100,000. For those contracts or subcontracts exceeding $100,000, the Federal agency may accept the bonding policy and requirements of the grantee provided the Federal agency has made a determination that the Government's interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows:

a. A bid guarantee from each bidder equivalent to five percent of the bid price. - The "bid guarantee" shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of his bid, execute such contractual documents as may be required within the time specified.

b. A performance bond on the part of the contractor for 100 percent of the contract price. - A "performance bond" is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract.

c. A payment bond on the part of the contractor for 100 percent of the contract price. - A "payment bond" is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract.

3. Where the Federal Government guarantees or insures the repayment of money agency, at its discretion, may require adequate bonding and insurance if the bonding and insurance requirements of the recipient are not deemed adequate to protect the interest of the Federal Government. (See 47 Ill. Adm. Code 1.50(c), Cash Management)

4. The Federal sponsoring agency may require adequate fidelity bond coverage where the recipient has no coverage and the bond is needed to protect the Government's interest.

5. Where bonds are required in the situations described above, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties (31 CFR 223).

Attachment C: Retention and Custodial Requirement for Records

1. This attachment sets forth record retention requirements for grants and other agreements with recipients. Federal sponsoring agencies shall not impose any record retention requirements upon recipients other than those described below.

2. Except for paragraph 1, this attachment also applies to subrecipients as referred to in paragraph 5 of the basic circular.

3. Financial records, supporting documents, statistical records, and all other records pertinent to an agreement shall be retained for a period of three years, with the following qualifications:

a. If any litigation, claim or audit is started before the expiration of the 3-year period, the records shall be retained until all litigations, claims, or audit findings involving the records have been resolved.

b. Records for nonexpendable property acquired with Federal funds shall be retained for 3 years after its final disposition.

c. When records are transferred to or maintained by the Federal sponsoring agency, the 3-year retention requirements is not applicable to the recipient.

4. The retention period starts from the date of the submission of the final expenditure report or, for grants and other agreements that are renewed annually, from the date of the submission of the annual financial status report.

5. Recipient organizations should be authorized by the Federal sponsoring agency, if they so desire, to substitute microfilm copies in lieu of original records. (The Department will forward all requests to microfilm records to the Local Records Commission, which will render a decision based on the Local Records Commission Regulations (44 Ill. Adm. Code 4000) of the Local Records Commission and Local Records Act (Ill. Rev. Stat. 1983, ch. 116, pars. 43.102 et seq.).)

6. The Federal sponsoring agency shall request transfer of certain records to its custody from recipient organizations when it determines that the records possess long-term retention value. However, in order to avoid duplication record-keeping, a Federal sponsoring agency may make arrangements with recipient organizations to retain any records that are continuously needed for joint use. (The Department will take possession of grant records only when the Grantee no longer exists.)

7. The head of the Federal sponsoring agency and the Comptroller General of the United States, or any of their duly authorized representative, shall have access to any pertinent books, documents, papers, and records of the recipient organization, and their subrecipients, to make audits, examinations, excerpts and transcripts.

8. Unless otherwise required by law, no Federal sponsoring agency shall place restrictions on recipient organizations that will limit public access to the records of recipient organizations that are pertinent to a grant or agreement except when the agency can demonstrate that such records must be kept confidential and would have been excepted from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) if the records had belonged to the Federal sponsoring agency.

Attachment D: Program Income

1. Federal sponsoring agencies shall apply the standards set forth in this attachment in requiring recipient organizations to account for program income related to projects financed in whole or in part with Federal funds. Program income represents gross income earned by the recipient from the federally supported activities. Such earnings exclude interest earned on advances and may include, but will not be limited to, income from service fees, sale of commodities, usage or rental fees, and royalties on patents and copyrights.

2. Interest earned on advances of Federal funds shall be remitted to the Federal agency except for interest earned on advances to States or instrumentalities of a State as provided by the Intergovernmental Cooperation Act of 1968 (Public Law 90-577).

3. Proceeds from the sale of real and personal property either provided by the Federal Government or purchased in whole or in part with Federal funds, shall be handled in accordance with Attachment N to this circular pertaining to property management.

4. Unless the agreement provides otherwise, recipients shall have no obligation to the Federal Government with respect to royalties received as a result of copyrights or patents produced under the grant or other agreement (see paragraph 8, Attachment N).

5. All other program income earned during the project period shall be retained by the recipient and, in accordance with the grant or other agreement, shall be:

a. Added to funds committed to the project by the Federal sponsoring agency and recipient organization and be used to further eligible program objectives;

b. used to finance the non-federal share of the project when approved by the Federal sponsoring agency; or

c. Deducted from the total project costs in determining the net costs on which the Federal share of costs will be based.

Attachment E: Cost Sharing and Matching

1. This attachment sets forth criteria and procedures for the allow- ability of cash and in-kind contributions made by recipients or subrecipients (as referred to in paragraph 5 of the basic circular), or third parties in satisfying cost sharing and matching requirements of Federal sponsoring agencies. This attachment also establishes criteria for the evaluation of in-kind contributions made by third parties.

2. The following definitions apply for the purpose of this attachment:

a. Project costs. - Project costs (as set forth in the applicable Federal cost principles) incurred by a recipient and the value of the in-kind contributions made by the recipient or third parties in accomplishing the objectives of the grant or other agreement during the project or program period.

b. Cost sharing and matching. - In general cost sharing and matching represent that portion of project or program costs not borne by the Federal Government.

c. Cash contributions. - Cash contributions represent the recipients cash outlay, including the outlay of money contributed to the recipient by non-Federal third parties.

d. In-kind contributions. - In-kind contributions represent the value of noncash contributions provided by the recipients and non-Federal third parties. Only when authorized by Federal legislation, may property purchased with Federal funds be considered as the recipient's in-kind contributions. In-kind contributions may be in the form of charges for real property and non-expendable personal property, and the value of goods and services directly benefiting and specifically identifiable to the project or program.

3. General guidelines for computing cost sharing or matching are as follows:

a. Cost sharing or matching may consist of:

(1) Charges incurred by the recipient as project costs. (Not all charges require cash outlays by the recipient during the project period: examples are depreciation and use charges for building and equipment.)

(2) Project costs financed with cash contribution or donated to the recipient by other non-Federal public agencies and institutions, and private organizations and individuals, and

(3) Project costs represented by services and real and personal property, or used thereof, donated by other non-Federal publics agencies and institutions, and private organizations and individuals.

b. All contributions both cash and in-kind, shall be accepted as part of the recipient's cost sharing and matching when such contributions meet all of the following criteria:

(1) Are verifiable from the recipient's records;

(2) Are not included as contributions for any other federally- assisted program;

(3) Are necessary and reasonable for proper and efficient accomplishment of project objectives;

(4) Are types of charges that would be allowable under the applicable cost principles;

(5) Are not paid by the Federal Government under another assistance agreement (unless the agreement is authorized by Federal law to be used for cost sharing or matching);

(6) Are provided for in the approved budget when required by the Federal agency; and

(7) Conform to other provisions of this attachment

4. Specific procedures for the recipients in establishing the value of in-kind contribution from non-Federal third parties are set forth below:

a. Valuation of volunteer services. - Volunteer services may be furnished by professional and technical personnel, consultants, and other skilled and unskilled labor. Volunteer services may be counted as cost sharing or matching if the service is an integral and necessary part of an approved program. ("Integral and necessary" is defined as an allowable cost for the program if purchased.)

(1) Rates for volunteer services. - Rates for volunteers should be consistent with those paid for similar work in the recipient's organization. In those instances in which the required skills are not found in the recipient organization, rates should be consistent with those paid for similar work in the labor market in which recipient competes for the kind of services involved. (Rates shall be based on the Department of Employment Security's Occupational Employment Statistics Survey.)

(2) Volunteers employed by other organizations. - When an employer other than the recipient furnishes the services of an employee, these services shall be valued at the employee's regular rate of pay (exclusive of fringe benefits and overhead cost) provided these services are in the same skill for which the employee is normally paid.

b. Valuation of donated, expendable personal property. - Donated expendable personal property includes such items as expendable equipment, office supplies, laboratory supplies or workshop and classroom supplies. Value assessed to expendable personal property included in the cost or matching share should be reasonable and should not exceed the market value of the property at the time of the donation.

c. Valuation of donated, nonexpendable personal property, buildings, and land or use thereof.

(1) The method used for charging cost sharing or matching for donated nonexpendable personal property, buildings and land may differ according to the purpose of the grant or other agreement as follows:

(a) If the purpose of grant or other agreement is to assist the recipient in the acquisition of equipment, buildings or land, the total value of the donated property may be claimed as cost sharing or matching.

(b) If the purpose of the agreement is to support activities that require the use of equipment, buildings or land, depreciation or use charges for equipment and buildings may be made. The full value of equipment or other capital assets and fair rental charges for land may be allowed provided that the Federal agency has approved the charges.

(2) The value of donated property will be determined in accordance with the usual accounting policies of the recipient with the following qualifications.

(a) Land and buildings. - The value of donated land and buildings may not exceed its fair market value, at the time of donation to the recipient as established by an independent appraiser (e.g., certified real property appraiser or GSA representatives) and certified by a responsible official of the recipient.

(b) Nonexpendable personal property. - The value of donated nonexpendable personal property shall not exceed the fair market value of equipment and property of the same age and condition at the time of donation.

(c) Use of space. - The value of donated space shall not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality.

(d) Loaned equipment. - The value of loaned equipment shall not exceed its fair rental value.

5. The following requirements pertain to the recipient's supporting records for in-kind contributions from non-Federal third parties.

a. Volunteer services must be documented and, to the extent feasible, support by the same methods used by the recipient for its employees.

b. The basis for determining the valuation for personal services, material, equipment, buildings and land must be documented.

Attachment F: Standards for Financial Management Systems

1. This attachment prescribes standards for financial management systems of recipients. Federal sponsoring agencies shall not impose additional standards on recipients unless specifically provided for in the applicable statutes (e.g., the Joint Funding Simplification Act, P.L. 93-510) or other attachments to this circular. However, Federal sponsoring agencies are encouraged to make suggestions and assist recipients in establishing or improving financial management systems when such assistance is needed or requested.

2. Recipients' financial management systems shall provide for:

a. Accurate, current and complete disclosure of the financial results of each federally sponsored project or program in accordance with the reporting requirements set forth in Attachment G to this circular. When a Federal sponsoring agency requires reporting on an accrual basis, the recipient shall not be required to establish an accrual accounting system but shall develop such accrual data for its reports on the basis of an analysis of the documentation on hand.

b. Records that identify adequately the source and application of funds for federally sponsored activities. These records shall contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, outlays, and income.

c. Effective control over and accountability for all funds, property and other assets. Recipients shall adequately safeguard all such assets and shall assure that they are used solely for authorized purposes. (See 47 Ill. Adm. Code 1.90, Financial Management Standards.)

d. Comparison of actual outlays with budget amounts for each grant or other agreement. Whenever appropriate or required by the Federal sponsoring agency, financial information should be related to performance and unit cost data.

e. Procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement by the recipient, whenever funds are advanced by the Federal Government. When advances are made by a letter-of-credit method, the recipient shall make drawdowns as close as possible to the time of making disbursements.

f. Procedures for determining the reasonableness, allowability and allocability of costs in accordance with the provisions of the applicable Federal cost principles and the terms of the grant or other agreement.

g. Accounting records that are supported by source documentation.

h. Examinations in the form of audits or internal audits. Such audits shall be made by qualified individuals who are sufficiently independent of those who authorize the expenditure of Federal funds, to produce unbiased opinions, conclusions or judgments. These examinations are intended to ascertain the effectiveness of the financial management systems and internal procedures that have been established to meet the terms and conditions of the agreements. It is intended that each agreement awarded to the recipient be examined. Generally, examinations should be conducted on an organization wide basis to test the fiscal integrity of financial transactions, as well as compliance with the terms and conditions of the Federal grants and other agreements. Such tests would include an appropriate sampling of Federal agreements. Examinations will be conducted with reasonable frequency, on a continuing basis or at scheduled intervals, usually annually, but not less frequently than every two years. The frequency of these examinations shall depend upon the nature, size and the complexity of the activity. These examinations do not relieve Federal agencies of their audit responsibilities, but may affect the frequency and scope of such audits.

i. A systematic method to assure timely and appropriate resolution of audit findings and recommendations.

3. Primary recipients shall require subrecipients (as defined in paragraph 5 of the basic circular) to adopt the standards in paragraph 2, above except for the requirement in subparagraph 2e, regarding the use of the letter-of-credit method and that part of subparagraph 2a, regarding reporting forms and frequencies prescribed in Attachment G to this circular.

Attachment G: Financial Reporting Requirements

1. This attachment prescribes uniform reporting procedures for recipients to: summarize expenditures made and Federal funds unexpended for each award, report the status of Federal cash advanced, request advances and reimbursement when the letter-of-credit method is not used; and promulgates standard forms incident thereto.

2. The following definitions apply for purposes of this attachment:

a. Accrued expenditures. - Accrued expenditures are the charges incurred by the recipient during a given period requiring the provision of funds for (1) goods and other tangible property received; (2) services performed by employees, contractors, subrecipients, and other payees, and (3) other amounts becoming owed under programs for which no current services or performance is required.

b. Accrued income. - Accrued income is the sum of (1) earnings during a given period from (i) services performed by the recipient; and (ii) goods and other tangible property delivered to purchasers; and (2) amounts becoming owed to the recipient for which no current services or performance is required by the recipient.

c. Federal funds authorized. - Federal funds authorized are the total amount of Federal funds obligated by the Federal Government for use by the recipient. This amount may include any authorized carry-over of unobligated funds from prior fiscal years when permitted by law or agency regulation.

d. In-kind contributions. - In-kind contributions are defined in Attachment E to this circular.

e. Obligations. - Obligations are the amounts of orders placed, contracts and grants awarded, services received, and similar transactions during a given period that will require payment by the recipient during the same or a future period.

f. Outlays. - Outlays or expenditures represent charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of actual cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of in-kind contributions applied, and the amount of cash advances and payments made to subrecipients. For reports prepared on an accrual basis, outlays are the sum of actual cash disbursements for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decrease) in the amounts owed by the recipient for goods and other property received, for services performed by employees, contractors, subrecipients and other payees and other amounts becoming owed under programs for which no current services or performance are required.

g. Program income. - Program income is defined in Attachment D of this circular. It may be reported on a cash or accrual basis, whichever is used for reporting outlays.

h. Unobligated balance. - The unobligated balance is the portion of the funds authorized by the Federal sponsoring agency that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the cumulative funds authorized.

i. Unliquidated obligations. - For reports prepared on a cash basis, unliquidated obligations represent the amount of obligations incurred by the recipient that has not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the recipient for which an outlay has not been recorded.

Attachment H: Monitoring and Reporting Program Performance

1. This attachment sets forth the procedures for monitoring and reporting program performance of recipients.

2. Recipients shall monitor the performance under grants and other agreements and, where appropriate, ensure that time schedules are being met, projected work units by time periods are being accomplished, and other performance goals are being achieved. This review shall be made for each program, function, or activity of each agreement as set forth in the approved application or award document.

3. Recipients shall submit a performance report (technical report) for each agreement that briefly presents the following information for each program, function, or activity involved as prescribed by the Federal sponsoring agency:

a. A comparison of actual accomplishments with the goals established for the period, the findings of the investigator, or both. If the output of programs or projects can be readily quantified, such quantitative data should be related to cost data for computation of units costs.

b. Reasons why established goals were not met.

c. Other pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.

4. Between the required performance reporting dates, events may occur that have significant impact upon the project or program. In such instances, the recipient shall inform the Federal sponsoring agency as soon as the following types of conditions become known:

a. Problems, delays, or adverse conditions that will materially affect the ability to attain program objectives, prevent the meeting of time schedules and goals, or preclude the attainment of project work units by established time periods. This disclosure shall be accompanied by a statement of the action taken, or contemplated, and any Federal assistant needed to resolve the situation.

b. Favorable developments or events that enable time schedules to be met sooner than anticipated or more work units to be produced than originally projected.

5. If any performance review conducted by the recipient discloses the need for change in the budget estimates, the recipient shall submit a request for budget revision.

6. The Federal sponsoring agency shall make site visits as frequently as practicable to:

a. Review program accomplishments and management control systems, and

b. Provide such technical assistance as may be required.

Attachment N: Property Management Standards

1. This attachment prescribes uniform standards governing management of property furnished by the Federal Government or whose cost was charged to a project supported by a Federal grant or other agreement. Federal sponsoring agencies shall require recipients to observe these standards under grants and other agreements and shall not impose additional requirements unless specifically required by Federal law. The recipient may use its own property management standards and procedures provided it observes the provisions of this attachment. This attachment also applies to subrecipients as referred to in paragraph 5 of the basic circular.

2. The following definitions apply for the purpose of this attachment:

a. Real property. - Real property means land, including land improvements, structures and appurtenances thereto, but excluding movable machinery and equipment.

b. Personal property. - Personal property of any kind except real property. It may be tangible-having physical existence, or intangible-having no physical existence, such as patents, inventions and copyrights.

c. Nonexpendable personal property. - Nonexpendable personal property means tangible personal property having a useful life of more than one year and an acquisition cost of $300 or more per unit. A recipient may use its own definition of nonexpendable personal property provided that the definition would at least include all tangible personal property as defined above.

d. Expendable personal property. - Expendable personal property refers to all tangible personal property other than nonexpendable property.

e. Excess property. - Excess property means property under the control of any Federal agency that, as determined by the head thereof, is no longer required for its needs or the discharge of its responsibilities.

f. Acquisition cost of purchased nonexpendable personal property. - Acquisition cost of an item of purchased nonexpendable personal property means the net invoice unit price of the property including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the recipient's regular accounting practices.

g. Exempt property. - Exempt property means tangible personal property acquired in whole or in part with Federal funds, and title to which is vested in the recipient without further obligation to the Federal Government except as provided in subparagraph 6a below. Such unconditional vesting of title will be pursuant to any Federal legislation that provides the Federal sponsoring agency with adequate authority.

3. Real property. - Each Federal sponsoring agency shall prescribe requirements for recipients concerning the use and disposition of real property acquired partly or wholly under grants or other agreements. Unless otherwise provided by statute, such requirements, as a minimum, shall contain the following:

a. Title to real property shall vest in the recipient subject to the condition that the recipient shall use the real property for the authorized purpose of the project, as long as it is needed.

b. The recipient shall obtain approval by the Federal sponsoring agency for the use of real property in other projects when the recipient determines that the property is no longer needed for the purpose of the original project. Use in other projects shall be limited to those under other federally sponsored projects (i.e., grants or other agreements) or programs that have purposes consistent with those authorized for support by the Federal sponsoring agency.

c. When the real property is no longer needed as provided in a and b above, the recipient shall request disposition instructions from the Federal sponsoring agency or its successor Federal sponsoring agency. The Federal sponsoring agency shall observe the following rules in the disposition instructions:

(1) The recipient may be permitted to retain title after it compensates the Federal Government in an amount computed by applying the Federal percentage of participation in the cost of the original project to the fair market value of the property.

(2) The recipient may be directed to sell the property under guidelines provided by the Federal sponsoring agency and pay the Federal Government an amount computed by applying the Federal percentage of participation in the cost of the original project to the proceeds from sale (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the recipient is authorized or required to sell the property, proper sales procedures shall be established that provide for competition to the extent practicable and result in the highest possible return.

(3) The recipient may be directed to transfer title to the property to the Federal Government provided that in such cases the recipient shall be entitled to compensation computed by applying the recipient's percentage of participation in the cost of the program or project to the current fair market value of the property.

4. Federally-owned nonexpendable personal property. - Title to federally-owned property remains vested in the Federal Government. Recipients shall submit annually an inventory listing of federally-owned property in their custody to the Federal sponsoring agency. Upon completion of the agreement or when the property is no longer needed, the recipient shall report the property to the Federal sponsoring agency for further agency utilization.

If the Federal sponsoring agency has no further need for the property, it shall be declared excess and reported to the General Services Administration. Appropriate disposition instructions will be issued to the recipient after completion of the Federal agency review.

5. Exempt property. - When statutory authority exists, (e.g., P.L. 85-934, 42 U.S.C. 1982) title to nonexpendable personal property acquired with project funds, shall be vested in the recipient upon acquisition unless it is determined that to do so is not in furtherance of the objectives of the Federal sponsoring agency. When title is vest in the recipient, the recipient shall have no other obligation or accountability to the Federal Government for its use or disposition except as provided in 6a below.

6. Other nonexpendable property. - When other nonexpendable tangible personal property is acquired by a recipient with project funds, title shall not be taken by the Federal Government but shall vest in the recipient subject to the following conditions:

a. Right to transfer title. - For items of nonexpendable personal property having a unit acquisition cost of $1,000 or more, the Federal sponsoring agency may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such reservation shall be subject to the following standards.

(1) The property shall be appropriately identified in the grant or other agreement or otherwise made known to the recipient in writing.

(2) The Federal sponsoring agency shall issue disposition instructions within 120 calendar days after the end of the Federal support of the project for which it was acquired. If the Federal sponsoring agency fails to issue disposition instructions within the 120 calendar day period, the recipient shall apply the standards of subparagraphs 6b and 6c as appropriate.

(3) When the Federal sponsoring agency exercises its right to take title, the personal property shall be subject to the provisions for federally-owned nonexpendable property discussed in paragraph 4, above.

(4) When title is transferred either to the Federal Government or to a third party the provisions of subparagraph 6c(2)(b) should be followed.

b. Use of other tangible nonexpendable property for which the recipient has title.

(1) The recipient shall use the property in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When no longer needed for the original project or program, the recipient shall use the property in connection with its other federally sponsored activities, in the following order of priority:

(a) Activities, in the following order of priority;

(b) Activities sponsored by other Federal agencies.

(2) Shared use. - During the time that nonexempt nonexpendable personal property is held for use on the project or program for which it was acquired, the recipient shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the property was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by the Federal agency that financed the property; second preference shall be given to projects or programs sponsored by other Federal agencies. If the property is owned by the Federal Government, use on other activities not sponsored by the Federal Government shall be permissible if authorized by the Federal agency. User charges should be considered if appropriate.

c. Disposition of other nonexpendable property. - When the recipient no longer needs the property as provided in 6b above, the property may be used for other activities in accordance with the following standards:

(1) Nonexpendable property with a unit acquisition cost of less than $1,000. - The recipient may use the property for other activities without reimbursement to the Federal Government or sell the property and retain the proceeds.

(2) Nonexpendable personal property with a unit acquisition cost of $1,000 or more. - The recipient may retain the property for other uses provided that compensation is made to the original Federal sponsoring agency or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of property. If the recipient has no need for the property and the property has further use value, the recipient shall request disposition instructions from the original sponsoring agency. The Federal sponsoring agency shall determine whether the property can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the property shall be reported to the General Services Administration by the Federal agency to determine whether a requirement for the property exists in other Federal agencies. The Federal sponsoring agency shall issue instructions to the recipient no later than 120 days after the recipient's request and the following procedures shall govern:

(a) If so instructed or if disposition instructions are not issued within 120 calendar days after the recipient's request, the recipient shall sell the property and reimburse the Federal sponsoring agency an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the recipient shall be permitted to deduct and retain from the Federal share $100 or ten percent of the proceeds, whichever is greater, for the recipient's selling and handling expenses.

(b) If the recipient is instructed to ship the property elsewhere, the recipient shall be reimbursed by the benefiting Federal agency with an amount which is computed by applying the percentage of the recipient's participation in the cost of the original grant project or program to the current fair market value of the property, plus any reasonable shipping or interim storage costs incurred.

(c) If the recipient is instructed to otherwise dispose of the property, the recipient shall be reimbursed by the Federal sponsoring agency for such costs incurred in its disposition.

(d) Property management standards for nonexpendable property. - The recipient's property management standards for nonexpendable personal property shall include the following procedural requirements:

(1) Property records shall be maintained accurately and shall include:

(a) A description of the property.

(b) Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification number.

(c) Source of the property, including grant or other agreement number.

(d) Whether title vests in the recipient or the Federal Government.

(e) Acquisition date (or date received, if the property was furnished by the Federal Government) and cost.

(f) Percentage (at the end of the budget year) of the project or program for which the property was acquired. (Not applicable to property furnished by the Federal Government.)

(g) Location, use the and condition of the property and the date the information was reported.

(h) Unit acquisition cost.

(i) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates the Federal sponsoring agency for its share.

(2) Property owned by the Federal Government must be marked to indicate Federal ownership.

(3) A physical inventory of property shall be taken and the results reconciled with the property records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the account records shall be investigated to determine the causes of the difference. The recipient shall, in connection with the inventory, verify the existence, current utilization, and continued need for the property.

(4) A control system shall be in effect to insure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft of nonexpendable property shall be investigated and fully documented; if the property was owned by the Federal Government, the recipient shall promptly notify the Federal sponsoring agency.

(5) Adequately maintenance procedures shall be implemented to keep the property in good condition.

(6) Where the recipient is authorized or required to sell the property, proper sales procedures shall be established which would provide for competition to the extent practicable and result in the highest possible return.

7. Expendable personal property. - Title to expendable personal property shall vest in the recipient upon acquisition. If there is a residual inventory of such property exceeding $1,000 in total aggregate fair market value, upon termination or completion of the grant or other agreement, and the property is not needed for any other federally sponsored project or program, the recipient shall retain the property for use on nonfederally sponsored activities, or sell it, but must in either case, compensate the Federal Government for its share. The amount of compensation shall be computed in the same manner as nonexpendable personal property.

8. Intangible property

a. Inventions and patents. - If any program produces patentable items, patent rights, processes, or inventions, in the course of work sponsored by the Federal Government, such fact shall be promptly and fully reported to the Federal sponsoring agency. Unless there is a prior agreement between the recipient and the Federal sponsoring agency on disposition of such items, the Federal sponsoring agency shall determine whether protection on the invention or discovery shall be sought. The Federal sponsoring agency will also determine how the rights in the invention or discovery - including rights under any patent issued there on - shall be allocated and administered in order to protect the public interest consistent with "Government Patent Policy" (President's Memorandum for Heads of Executive Departments and Agencies, August 23, 1971, and statement of Government Patent Policy as printed in 36 F.R. 16889).

b. Copyrights. - Except as otherwise provided in the terms and conditions of the agreement, the author or the recipient organization is free to copyright any books, publications, or other copyrightable materials developed in the course of or under a Federal agreement, but the Federal sponsoring agency shall reserve a royalty-free, nonexclusive and irrevocable right to reproduce, publish, or otherwise use, and to authorize others to use, the work for Government purposes.

Attachment O: Procurement Standards

1. This attachment provides standards for use by recipients in establishing procedures for the procurement of supplies, equipment, construction and other services with Federal funds. These standards are furnished to ensure that such materials and services are obtained in an effective manner and in compliance with the provisions of applicable Federal law and executive orders. No additional procurement standards or requirements shall be imposed by the Federal sponsoring agencies upon recipients unless specifically required by Federal statute or executive orders.

2. The standards contained in this attachment do not relieve the recipient of the contractual responsibilities arising under its contracts. The recipients is the responsible authority, without recourse to the Federal sponsoring agency regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into, in support of a grant or other agreement. This includes disputes, claims, protests of award, source evaluation or other matters of a contractual nature. Matters concerning violation of law are to be referred to such local, State or Federal authority as may have proper jurisdiction.

3. Recipients may use their own procurement policies and procedures. However, all recipients shall adhere to the standards set forth in paragraphs 3 and 4.

a. The recipient shall maintain a code or standards of conduct that shall govern the performance of its officers, employees or agents engaged in the awarding and administration of contracts using Federal funds. No employee, officer or agent shall participate in the selection, award or administration of a contract in which Federal funds are used, where, to his knowledge, he or his immediate family, partners, or organization in which he or his immediate family or partner has a financial interest or with whom he is negotiating or has any arrangement concerning prospective employment. The recipients' officers, employees or agents shall neither solicit nor accept gratuities, favor or anything of monetary value from contractors or potential contractors. Such standards shall provide for disciplinary actions to be applied for violations of such standards by the recipients' officers, employees or agents.

b. All procurement transactions shall be conducted in a manner to provide, to the maximum extent practical, open and free competition. The recipient should be alert to organizational conflicts of interest or noncompetitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, invitations for bids and/or requests for proposals should be excluded from competing for such procurements. Awards shall be made to the bidder/offeror whose bid/offer is responsive to the solicitation and is most advantageous to the recipient, price and other factors considered. Solicitations shall clearly set forth all requirements that the bidder/offeror must fulfill in order for his bid/offer to be evaluated by the recipient. Any and all bids/offers may be rejected when it is in the recipient's interest to do so.

c. All recipients shall establish procurement procedures that provide for, at a minimum, the following procedural requirements.

(1) Proposed procurement actions shall follow a procedure to assure the avoidance of purchasing unnecessary or duplicative items. Where appropriate, an analysis shall be made of lease and purchase, alternatives to determine which would be the most economical, practice procurement.

(2) Solicitations for goods and services shall be based upon a clear and accurate description of the technical requirements for the materials, product or service to be procured. Such a description shall not, in competitive procurements, contain features which unduly restrict competition. "Brand name or equal" descriptions may be used as a means to define the performance or other salient requirements of a procurement, and when so used the specific features of the named brand which must be met by bidders/offerors shall be clearly specified.

(3) Positive efforts shall be made by the recipients to utilize small business and minority-owned business sources of supplies and services. Such efforts should allow these sources the maximum feasible opportunity to compete for contracts utilizing Federal funds.

(4) The type of procuring instruments used, e.g., fixed price contracts, cost reimbursable contracts, purchase orders, incentive contracts, shall be determined by the recipient but must be appropriate for the particular procurement and for promoting the best interest of the program involved. The "cost-plus-a-percentage-of-cost" method of contracting shall not be used.

(5) Contracts shall be made only with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of a proposed procurement. Consideration shall be given to such matters as contractor integrity, record of past performance, financial and technical resources or accessibility to other necessary resources.

(6) All proposed sole source contracts or where only one bid or proposal is received in which the aggregate expenditure is expected to exceed $5,000 shall be subject to prior approval at the discretion of the Federal sponsoring agency.

(7) Some form of price or cost analysis should be made in connection with every procurement action. Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability and allowability.

(8) Procurement records and files for purchase in excess of $10,000 shall include the following:

(a) Basis for contractor selection;

(b) Justification for lack of competition when competitive bids or offers are not obtained;

(c) Basis for award cost or price.

(9) A system for contract administration shall be maintained to ensure contractor conformance with terms, conditions and specifications of the contract, and to ensure adequate and timely followup of all purchases.

4. The recipient shall include, in addition to provisions to define a sound and complete agreement, the following provisions in all contracts. These provisions shall also be applied to subcontractors.

a. Contracts in excess of $10,000 shall contain contractual provisions or conditions that will allow for administrative, contractual or legal remedies in instances in which contractors violate or breach contract terms, and provide for such remedial actions as may be appropriate.

b. All contracts in excess of $10,000 shall contain suitable provisions for termination by the recipient including the manner by which termination will be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances be beyond the control of the contractor.

c. In all contracts for construction or facility improvement awarded for more than $100,000, recipients shall observe the bonding requirements provided in Attachment B to this circular.

d. All contracts awarded by recipients and their contractors or subgrantees having a value of more than $10,000, shall contain a provision requiring compliance with Executive Order 11246, entitled "Equal Employment Opportunity," as amended by Executive Order 11375, and as supplemented in Department of Labor regulations (41 CFR, Part 60).

e. All contracts and subgrants in excess of $2,000 for construction or repair awarded by recipients and subrecipients shall include a provision for compliance with the Copeland "Anti-Kick Back" Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR, Part 3). This Act provides that each contractor or subgrantee shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he is otherwise entitled. The recipient shall report all suspected or reported violations to the Federal sponsoring agency.

f. When required by the Federal program legislation, all construction contracts awarded by the recipients and subrecipients of more than $2,000 shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 276a to a-7) and as supplemented by Department of Labor regulations (29 CFR, Part 5). Under this Act contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less than once a week. The recipient shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The recipient shall report all suspected or reported violations to the Federal sponsoring agency.

g. Where applicable, all contracts awarded by recipients in excess of $2,000 for construction contracts and in excess of $2,500 for other contracts that involve the employment of mechanics or laborers, shall include a provision for compliance with sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-330) as supplemented by Department of Labor regulations (29 CFR, Part 5). Under section 103 of the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard work day of 8 hours and a standard work week of 40 hours. Work in excess of the standard workday or workweek is permissible provided that the worker is compensated at a rate of not less than 1 1/2 times the basic rate of pay for all hours worked in excess of 8 hours in any calendar day or 40 hours in the workweek. Section 107 of the Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous to his health and safety as determined under construction safety and health standards promulgated by the Secretary of Labor. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.

h. Contracts or agreements, the principal purpose of which is to create, develop or improve products, processes or methods, or for exploration into fields that directly concern public health, safety or welfare; or contracts in the field of science or technology in which there has been little significant experience outside of work funded by Federal assistance, shall contain a notice to the effect that matters regarding rights to inventions and materials generated under the contract or agreement are subject to the regulations issued by the Federal sponsoring agency and the recipient. The contractor shall be advised as to the source of additional information regarding these matters.

i. All negotiated contracts (except those of $10,000 or less) awarded by recipients shall include a provision to the effect that the recipient, the Federal sponsoring agency, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers and records of the contractor which are directly pertinent to a specific program for the purpose of making audits, examinations, excerpts and transcriptions.

j. Contracts and subgrants of amounts in excess of $100,000 shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clear Air Act of 1970 (42 U.S.C. 187 et seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.) as amended. Violations shall be reported to the Federal sponsoring agency and the Regional Office of the Environmental Protection Agency.

History

• Source: Amended at 10 Ill. Reg. 3585, effective February 3, 1986

Part 100 Low Income Home Energy Assistance Program

47 Ill. Adm. Code 100.10 Legislative Base

a) Federal

1. On July 31, 1981, Congress passed the Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35) which established seven block grant programs. These block grants replaced a large number of programs previously administered by the federal government. The Omnibus Budget Reconciliation Act of 1981 also transferred primary responsibility for the administration of the block grant programs to the states and conferred substantial discretion on the states as to the use of block grant funds.

2. Title XXVI of the Omnibus Budget Reconciliation Act of 1981 established the Low-Income Home Energy Assistance Act of 1981 and replaced the Home Energy Assistance Act of 1980.

3. The Low-Income Home Energy Assistance Act of 1981 authorized the Low Income Home Energy Assistance Block Grant. States were eligible to receive funds under the Low Income Home Energy Assistance Block Grant on October 1, 1981.

4. On November 3, 1990, the Low-Income Home Energy Assistance Act of 1981 was amended by the Augustus F. Hawkins Human Services Reauthorization Act of 1990 (P.L. 101-501).

b) State

On August 2, 1989, the Governor signed the Energy Assistance Act of 1989. The Governor has officially designated the Department of Commerce and Community Affairs as the official administering agency for the Energy Assistance Act, which includes the Low Income Home Energy Assistance Block Grant. On December 15, 1981, the Department of Commerce and Community Affairs submitted the application document to the U.S. Department of Health and Human Services. As part of the application, the State certified that it agreed to use funds available under the Low Income Home Energy Assistance Block Grant to provide assistance to eligible households to meet the costs of home energy. On July 24, 1991, the Governor signed an amendment to the Energy Assistance Act [305 ILCS 20], as amended by P.A. 87-14, effective July 24, 1991. This amendment established the Low Income Home Energy Assistance Program (LIHEAP). On December 16, 1997, the Governor signed an amendment to the Energy Assistance Act, as amended by P.A. 86-127, Section 13, added by P.A. 90-561, Art. 7, Section 85, effective December 16, 1997. This amendment established the Supplemental Low-Income Energy Assistance Fund. On January 10, 2001, the Governor signed an amendment to the Energy Assistance Act, as amended by P.A. 86-127, Section 85, added by P.A. 91-936, effective January 10, 2001. This amendment provides the Department with the flexibility to establish annual eligibility levels up to a maximum of 150% of OMB Poverty guidelines. On April 1, 2004, responsibility for the administration of the Act was transferred to the Department of Public Aid. On March 24, 2009, responsibility for the administration of the Act was transferred back to the Department of Commerce and Economic Opportunity.

History

• Source: Section 100.10 recodified from 89 Ill. Adm. Code 109.10 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.20 Purpose and Scope

a) The LIHEAP has been established to carry out the provisions of the Energy Assistance Act . The State will use the funds available under the Low Income Home Energy Assistance Block Grant to provide assistance to eligible households to meet the costs of home energy, and more specifically to provide:

1. assistance in the form of a cash payment made directly to the eligible household should that household purchase home energy as an undesignated portion of rent;

2. payments to a home energy provider on behalf of the eligible household or direct to the household if its winter energy services are provided by a non-participating home energy provider;

3. low cost weatherization and/or energy-related home repairs applied directly to an eligible household's residence; and

4. emergency services to an eligible household in an energy-related life-or-health threatening situation.

b) This Part specifies program guidelines whereby the Department will provide comprehensive energy and weatherization assistance to low-income citizens.

History

• Source: Section 100.20 recodified from 89 Ill. Adm. Code 109.20 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.30 Definitions

"Act": The Energy Assistance Act [305 ILCS 20].

"Customer of record": Any person who is receiving home energy services from a home energy provider and has agreed to pay for those services or did receive home energy services during the program year from a home energy provider and has not changed the home energy provider for that type of home energy service.

"Department": The Illinois Department of Commerce and Economic Opportunity.

"Disabled Person": A person who is and who is expected to continue indefinitely to be subject to a physical, developmental, visual, hearing or mental disability, as defined in Section 4A of the Illinois Identification Card Act [15 ILCS 335/4A].

"DOE": United States Department of Energy.

"Dwelling Unit": A house, including a stationary mobile home, an apartment, or a room or group of rooms occupied as separate, independent living quarters.

"Elderly Person": A person who is 60 years of age or older.

"Energy Crisis Intervention": Weather-related and supply shortage emergencies.

"Good Faith Effort": The household making payment to the household's energy vendors of 10% of the household's income for the past 90 days or 20% of the total amount owed for both primary and secondary utilities, whichever method is more beneficial to the household, but in no case less than $75.

"Grant Agreement": The contractual agreement between the Department and Local Administering Agency, which includes the scope of work to be provided, the budget, and all terms and conditions of the contract.

"HHS": United States Department of Health and Human Services.

"Home Energy": A fuel used for space heating, space cooling, water heating, cooking or in electrical appliances in residential dwellings.

"Home Energy Provider": Any utility, municipal utility, cooperative utility, sole proprietorship, partnership, joint venture, corporation, company or other established business which provides primary and/or secondary energy, including fuel, to residential dwellings and has elected to participate in the LIHEAP. The primary energy provider is a home energy provider that provides the primary source of energy; and the secondary energy provider is a home energy provider that provides the secondary source of energy.

"Household": All individuals who occupy a dwelling unit.

"Household Income": Gross income received by all members of the household who are residing in the household at the time of application. Under the Energy Assistance Act, household income will be calculated for the past 30 days. Households applying for Weatherization Assistance who have not been approved to receive energy assistance under the Low-Income Home Energy Assistance Act of 1981, will have their income calculated for the past 12 months, in accordance with 10 CFR 440 (1995). Income does not include the following:

Payments for vocational rehabilitation transportation and maintenance;

Reimbursement for medical expenses;

Payments made to others on the household's behalf provided that such payments were not directed by the household (i.e., bills paid or purchases made by others);

Loans (including student loans);

Scholarships, subsistence amounts or student grants;

Assets drawn down as withdrawals from a bank;

Sale of property;

Sale of house or car;

Tax refunds;

Gifts;

One-time insurance payments or compensation for injury;

Non-cash income;

One-time payments (e.g., death-related benefits, Circuit Breaker Benefits);

Foster-grandparents and Senior Companions stipends;

Foster-parent reimbursement;

Food Stamps;

Workforce Investment Act of 1998 benefits;

Allowances, earnings and payments to individuals participating in programs under the Act; and

Earned income of dependent minors (children under 18).

"IHWAP": The Illinois Home Weatherization Assistance Program, referring to all components of the weatherization program that are designed to help low-income Illinois residents save fuel and money while increasing the comfort of their homes.

"Kitchen Facilities": An area used to store and prepare food.

"Landlord": A person that receives payment for the rental of his/her dwelling unit.

"Local Administering Agency (LAA)": A community action agency or other community-based organization or unit of general purpose local government or public agency which is authorized, in accordance with Section 100.40, to administer LIHEAP funds received from the Department.

"Low-Income Home Energy Assistance Act of 1981": Established by the Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35, Title XXVI – Low Income Home Energy Assistance) and amended by the Augustus F. Hawkins Human Services Reauthorization Act of 1990 (P.L. 101-501).

"Multi-Unit Building": A structure containing two or more dwelling units.

"Owner Occupied Building": A building in which the owner is a permanent resident in the building.

"Primary Energy Source": The energy or fuel type which is the heat source for the central heating system of the residence, or if the residence is not centrally heated, the energy or fuel type which constitutes the principal source of space heating.

"Program Year": The period in time starting September 1 and ending May 31 in the following year.

"Public Utility": An entity that is defined as a public utility under Section 3-105 of the Public Utilities Act [220 ILCS 5/3-105] and is subject to regulation by the Illinois Commerce Commission (ICC).

"Rental Unit": A dwelling unit occupied by a person who pays rent for the use of the dwelling unit.

"Secondary Energy Source": Energy or fuel used for other than the primary source of heat. In order to receive a secondary direct vendor payment, the secondary energy source must be an integral part of the heating system or heat-related. An example of this would be the heat-related electricity that is used to operate the controls and distribution (fan) system of a furnace.

"Separate Independent Living Quarters": Living quarters in which the household members do not live and eat with any other persons in the structure and that have:

either direct access from the outside of the building or through a common hall; and

complete kitchen facilities for the exclusive use of the occupants.

"Single-Family Dwelling Unit": A structure containing no more than one dwelling unit.

"State": The State of Illinois.

"Subgrantee": A Local Administering Agency managing an energy assistance or weatherization project that receives a grant of funds awarded under this Part from the State.

"Unit of General Purpose Local Government": Any city, county, town, village or township.

"Weatherization Materials":

Caulking and weatherstripping of doors and windows;

Furnace efficiency modifications, including, but not limited to:

replacement burners, furnaces and permanently installed space heaters (including wood/coal burning stoves), or boilers or any combination thereof;

devices for minimizing energy loss through heating systems, chimney or venting devices;

products to improve the efficient circulation of heated water or air throughout the dwelling unit (e.g., fan systems, piping, and duct work); and

electrical or mechanical furnace ignition systems which replace standing gas pilot lights;

Clock thermostats;

Ceiling, attic, wall, floor, and duct insulation;

Water heater insulation;

Storm windows, multi-glazed windows and doors, heat-absorbing or heat-reflective window and door materials; and

The following insulating or energy conserving devices or technologies:

Items to improve attic ventilation;

Vapor barriers;

Materials used as a patch to reduce infiltration through the building envelope;

Water flow controllers;

Movable insulation systems for windows;

Material to construct vestibules;

Pipe and boiler insulation;

Heat exchangers;

Thermostat control systems;

Replacement windows and doors;

Materials used for water heater modifications which will result in improved energy efficiency;

Hot water heat pumps;

Waste heat recovery devices;

Materials used for heating and cooling systems tune-ups, repairs, and modifications which will result in improved energy efficiency; and

Materials used for boiler tune-ups, repairs, and modifications which will result in improved energy efficiency.

"Weatherization Project": A project conducted in a designated geographic area which undertakes the weatherization of dwelling units that are energy inefficient.

"Winter": The period from November 1 of any year through April 30 of the following year (Section (3)(d) of the Act).

"Winter Energy Services": Home energy provided during the six-month period of November through April of the following year.

History

• Source: Section 100.30 recodified from 89 Ill. Adm. Code 109.30 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.40 Local Administering Agency Designation

a) Certain entities are eligible to apply for LAA designation under this Part as follows:

1. Any organization which was officially designated as a Community Action Agency under the applicable provisions of the Economic Opportunity Act of 1964, as amended (42 USC 2701);

2. Any non-profit private community organization determined by the Department to be capable of planning, conducting and administering the LIHEAP and IHWAP programs according to the guidelines established by the Department and in accordance with this Section; and

3. A (Unit or combination of Units) of General Purpose Local Governments of the State (as defined in Section 100.30).

b) The Department will designate LAAs in compliance with the federal standards set forth in Section 100.10, the HHS regulations (45 CFR 96) (October 1, 2017), and the DOE regulations (10 CFR 440) (January 1, 2017) for the LIHEAP and IHWAP programs under this Part.

c) Only a designated LAA may apply for grant funding from the State, pursuant to Section 100.50, to operate the LIHEAP and IHWAP programs and only in the specific county or counties approved by the Department (Service Area). If, however, the designated LAA fails to timely submit an application for grant funding from the State for a certain Program Year, the Department has the right to assign an alternate LAA to operate the LIHEAP and IHWAP programs in that LAA's Service Area for that Program Year in order to ensure continuity of services and to protect the public interest.

d) In the event that the Department commences a designation revocation proceeding against a designated LAA, or the Department temporarily suspends a designated LAA, or an LAA provides written notice to the Department stating its desire to discontinue operation of its LIHEAP and IHWAP programs in its Service Area, as set forth in Section 100.60, the Department, in its sole discretion, may assign an alternate LAA to operate the LIHEAP and IHWAP programs (that meets all requisite eligibility criteria in accordance with Section 100.40) during the pendency of the suspension or the designation revocation proceeding, or following the LAA's requested termination, as applicable, in order to ensure continuity of services in the Service Area.

History

• Source: Amended at 42 Ill. Reg. 6350, effective March 20, 2018

47 Ill. Adm. Code 100.50 Local Administering Agency Application for Funding

a) Designated LAAs will be required to meet program and fiscal requirements for operation of the LIHEAP and IHWAP programs under this Part prior to the submittal of an application for grant funding from the State. Applications will not be processed nor grants awarded prior to the Department's review of the LAA's performance in the following four areas:

1. an effective outreach referral program (evidenced by services to clients in accordance with their incidence in the census-based client population of the service area);

2. a continuing planning process and capability (evidenced by demonstrated applicant staff capability to complete federal and/or state grant applications and reporting documents containing qualitative and quantitative objectives);

3. an accounting system in accordance with current generally accepted accounting principles of the American Institute of Certified Public Accountants (AICPA), 1211 Avenue of the Americas, New York, NY 10036-8775; and

4. an effective citizen participation/community involvement program.

b) In preparing the grant application, LAAs will be required to submit the following items:

1. Application for Assistance: The Department will require the submittal of a form provided by the Department which requires the basic information needed for grant award documentation and for the Department's review purposes.

2. Annual Implementation Plan: The work program will narrate the activities as required by the Department to be undertaken utilizing the grant funds. The work program must include at a minimum such items as provisions for staff, coordination with other delivery agencies and a description of how the LAA intends to deliver its basic services.

3. Annual Budget: The LAA shall submit a grant budget by cost categories, on the budget summary form and detail sheets provided by the Department.

4. Statement of Coordination: The LAA will be required to outline its program of coordination with other agencies and programs. The statement shall include coordination mechanisms established by the LAA and cite interagency agreements or contractual arrangements used in support of coordinated service delivery.

5. Assurances and Certifications: In a form and manner provided by the Department, the LAA will be required to certify its compliance with all applicable state and federal laws and regulations as detailed in this Part dealing with the receipt and expenditure of grant funds, as provided on the grant application.

6. Additional Grant Application Submittals: These include:

A) Name, address, telephone number of the LAA responsible for administering the projects as well as signatures designating responsibility for the grants;

B) The "Notice of Grant Award" and grantee acceptance;

C) The "Method of Compensation, Fiscal Recording/Reporting Requirements";

D) The "Terms and Conditions Governing the Grant";

E) The "Scope of Work" that insures programmatic controls, such as training, staffing, outreach, and reporting; and

F) Any information that the Department deems necessary to clarify or document information provided in the application.

c) The Department will use the following standards to select certain LAAs for special demonstration projects. The weight to be given to each standard will be dependent on the nature of the project, keeping in mind the Department's goal of equally representing all areas of the State.

1. The Department will consider the LAA's experience in the particular type of energy assistance or weatherization project to be implemented.

2. The Department will consider the qualifications of the LAA's personnel as related to the particular type of energy assistance or weatherization project to be implemented.

3. The Department will evaluate the methodology proposed by the LAA for completion of the project under consideration.

4. The Department will evaluate the ability of the LAA to complete the project under consideration as evidenced by factors specified in subsections (c)(1), (2), (3), (5) and (6).

5. The Department will evaluate the LAA's timetable for completion of the project both in terms of other applicants and whether or not the timetable appears to consist of a realistic statement of goals.

6. The Department will evaluate the LAA's budget both in comparison to other applicants and to determine whether or not the proposal is a realistic assessment of the costs of the project.

History

• Source: Amended at 42 Ill. Reg. 6350, effective March 20, 2018

47 Ill. Adm. Code 100.60 Local Administering Agency Designation Suspension, Termination and Revocation

a) A designated LAA will be permitted to apply for and receive funding available from the State to operate its LIHEAP and IHWAP programs in its Service Area unless one or more of the following events occur:

1. an LAA fails to comply with the current applicable federal and State statutes, regulations and rules, grant agreement terms and conditions or Department policies and procedures governing the LIHEAP and IHWAP programs under this Part, as determined by the Department;

2. an LAA or any of its principals have:

A) made a false representation in connection with the LIHEAP and IHWAP programs under this Part, or any grant award issued by the State;

B) been convicted of or entered a plea of guilty or plea of nolo contendere to a felony or to a misdemeanor, an essential element of which is dishonesty; or

C) been convicted of fraud or other criminal behavior, either related or unrelated to the LIHEAP and IHWAP programs;

3. insolvency or potential insolvency of an LAA or, in the case of a non-governmental entity, loss of non-profit status;

4. an LAA denies the Department access to the LAA's books and records, including but not limited to financial documents;

5. an LAA is suspended or debarred from receiving contracts or grants by any governmental entity; or

6. any other event, as determined by the Department, to be in the best interest of the State.

b) Upon discovery of one or more of the events set forth in subsection (a), the Department will take the following actions, as applicable:

1. conduct a detailed review and investigation of the LAA;

2. temporarily suspend the LAA, withhold further grant payments, and prohibit the LAA from incurring additional obligations pending corrective action by the LAA or a decision by the Department to revoke the LAA's designation. The Department may allow necessary and proper costs that the LAA could not reasonably avoid during the period of suspension;

3. commence a proceeding to revoke the LAA's designation;

4. assign an alternate LAA to operate the LIHEAP and IHWAP programs (that meets all requisite eligibility criteria in accordance with Section 100.40) during the pendency of the suspension or the designation revocation proceeding. The alternate LAA will have the same rights and obligations as any other designated LAA during the temporary assignment.

c) In the event that a designated LAA fails to timely submit an application for grant funding from the State for a certain Program Year, the Department reserves the right to assign an alternate LAA to operate the LIHEAP and IHWAP programs (that meets all requisite eligibility criteria in accordance with Section 100.40) for that Program Year in order to ensure continuity of services and to protect the public interest. The alternate LAA will have the same rights and obligations as any other designated LAA during the temporary assignment.

d) The Department shall provide written notice to the LAA, sent via certified mail, return receipt requested, of the initiation of a suspension or a designation revocation proceeding. The notice will include:

1. the grounds for the suspension or proposed designation revocation;

2. a statement that all funding from the Department will be withheld during the pendency of the suspension and/or designation revocation proceeding;

3. a statement that funding from other State agencies also may be withheld during this period;

4. information regarding the alternate LAA during the pendency of the suspension or designation revocation proceeding, if applicable;

5. a reference to the applicable State law and current Department procedures and policies regarding LAA suspension and designation revocation proceedings; and

6. an opportunity for the LAA to respond to the notice.

e) Any LAA designation revocation proceeding or suspension will adhere to the applicable State law and current Department procedures and policies regarding LAA suspension and designation revocation proceedings for the LIHEAP and IHWAP programs under this Part.

f) If the Department determines that it is in the best interest of the State to revoke the designation of an LAA, the Department will designate a replacement LAA in accordance with current applicable Department procedures and policies. The replacement LAA will have the same rights and obligations as any other designated LAA.

g) When assigning an alternate or replacement LAA under this Section, the Department will give consideration to an entity that is currently designated as an LAA based on performance measures.

h) A designated LAA that desires to discontinue operation of its LIHEAP and IHWAP programs in its Service Area shall send a written communication to the Department stating the reasons for the request. If the Department approves of the LAA's request, the Department shall terminate the LAA's designation and designate a replacement LAA pursuant to this Part. Any LAA designation termination and replacement shall be conducted in a manner to ensure continuity of services in the applicable Service Area.

History

• Source: Amended at 42 Ill. Reg. 6350, effective March 20, 2018

47 Ill. Adm. Code 100.70 Administrative Requirements

For the purpose of this Part, administrative requirements specified in 47 Ill. Adm. Code 1 and as follows are applicable.

a) Budget Modification

The LAA cannot be reimbursed for costs that exceed the total program or administrative cost category amounts.

1. The LAA must, in writing, request of the Department a budget modification if expenditures exceed the approved budget.

2. If the LAA wishes to make modifications to the Grant Agreement, the LAA must:

A) Submit a formal standardized written modification request to the Department prior to expenditure of funds in a manner other than the approved budget; or

B) Exercise provisions contained in the "Program Specific Provisions" Section of the Grant Agreement.

3. The Department will approve modification requests if they are necessary to achieve program objectives; required by increases or decreases in program funding; or result in greater program cost efficiencies. If the Department approves the modification request, the LAA will be notified in writing of the change and effective date. If the Department rejects the modification, the Department will notify the LAA in writing of the reasons for denial.

b) Reporting – An expenditure summary and payment request shall be submitted to the Department on or before the tenth calendar day of each month after the first month of the program year, using the format provided by the Department.

History

• Source: Section 100.70 recodified from 89 Ill. Adm. Code 109.70 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.80 Nondiscrimination

a) Equal Employment Opportunity

1. In carrying out the program, the Grantee shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, natural origin, ancestry, age, physical or mental handicap unrelated to ability, marital status, or unfavorable discharge from military service. The Grantee shall take affirmative action to insure that applicants for employment are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, national origin, ancestry, age, physical or mental handicap unrelated to ability, marital status, or unfavorable discharge from military service. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other form of compensation; and selection for training, including apprenticeship. The Grantee shall post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. The Grantee shall state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, ancestry, age, physical or mental handicap unrelated to ability, marital status, or unfavorable discharge from military service. The Grantee shall incorporate the foregoing requirements of this subsection (a) in all of its contracts for program work.

2. The Grantee shall cause or require to be inserted in full in any contract and subcontract for work, or modification thereof, all applicable federal and state Equal Employment Opportunity provisions.

b) Discrimination – The Grantee shall refrain from unlawful discrimination in employment and will undertake affirmative action to assure quality of employment opportunity and eliminate the effects of past discrimination in accordance with the Illinois Human Rights Act [775 ILCS 5]; section 504 of the Rehabilitation Act of 1973 (29 USC 794); the Age Discrimination Act of 1975 (42 USC 6106-6107); and Title VI of the Civil Rights Act of 1964 (42 USC 2000d-2000d-7) (24 CFR 1.4 (1987)).

History

• Source: Section 100.80 recodified from 89 Ill. Adm. Code 109.80 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.90 Dispute Procedures

Applicants shall be provided with an opportunity for a fair administrative hearing when claims for energy assistance are denied or are not acted upon within prescribed timelines (see Section 100.250(d)), or if the applicant disputes the amount or type of assistance granted. LAAs shall inform each applicant of their right to the appeals process. The hearing and appeals process includes three levels of appeal: the informal conference, the state review, and the formal hearing.

a) The Informal Conference

1. This process consists of an initial informal conference held by a staff hearing officer of the LAA at which the applicant applied. This informal conference is designed to ensure that the applicant understands the reason(s) for the action taken by the LAA and to ensure that the application was processed in accordance with Section 100.250.

2. Any applicant receiving or denied energy assistance has a right to request an informal conference within thirty (30) days of receipt of a notice of a decision on the applicant's application.

3. Any applicant who has submitted a completed application but has not been notified of the application status within thirty (30) days of the date of a complete application, has a right to request an informal conference within sixty (60) days of the date the application was complete.

4. Any applicant requesting an informal conference shall be furnished the reason for the decision on the application and be allowed to review the documents leading to the decision prior to the informal conference.

5. The informal conference must:

A) be held at the application site closest to the applicant's residence or at the applicant's residence if they are confined;

B) be conducted by a LAA staff member who was not involved in the original decision (the LIHEAP coordinator may also attend);

C) be held within fifteen (15) calendar days of the receipt of request;

D) afford the applicant an opportunity to bring an interpreter and/or representative; and

E) allow the applicant to present oral and written testimony on his/her behalf.

6. The LAA will give the applicant a written statement at the end of the conference describing the result of the conference and citing the policy reasons for the decision. A copy of this report must be filed in the applicant's file.

7. In the event of a finding in support of an applicant, the LAA shall, within fifteen (15) days of the finding, process the application and notify the applicant and the home energy provider(s) in writing of the applicant's eligibility. In the case of an emergency assistance application, the LAA shall process the application and notify the applicant and the home energy provider(s) within forty-eight (48) hours. In the event of a disapproval, the LAA shall provide the applicant with a Request for State Review Form. The request must specify the LAA at which the household applied for assistance, whether the LAA has held an informal conference, and the reasons for requesting a state review.

b) State Review

A request for state review must be filed with the Department within thirty (30) days after the informal conference. If the request is timely made, the Department will appoint a state reviewing officer who will review the applicant's file and the informal conference report. A written decision will be made. The request is considered made on the day the request is received by the Department (per the date stamp on the correspondence). The Department will notify the LAA that a request for state review has been filed. The LAA must, within five (5) days of the request for state review, provide both the Department and the applicant with a full copy of the applicant's file. A state reviewing officer will review the file to determine if the application contains all information required in Section 100.250(d) and all testimony presented at the informal conference. The state reviewing officer shall ascertain if the applicant was provided with a Request for State Review Form in accordance with subsection (a)(7) and determine if the informal conference decision regarding eligibility was correct (see Section 100.250 for eligibility criteria). This determination will be made and a letter sent to the applicant and the LAA within fifteen (15) days of the request for state review. In the event of finding in support of an applicant, the LAA shall approve and process the application or modify the assistance granted, and notify the applicant and the home energy provider(s) in writing within fifteen (15) days of notification of the finding from the State. In the case of an emergency assistance application, the LAA shall process the application and notify the applicant and the home energy provider(s) within forty-eight (48) hours of notification of the finding from the State. In the event of a disapproval, the State shall provide the client with a Request for Formal Review Form. The request must specify the LAA at which the household applied for assistance, whether an informal conference has been held, if the state review has been conducted and the household notified of the decision, and the reasons for requesting a formal hearing.

c) The Formal Hearing

If not satisfied with the results of the state review, the applicant must request a formal hearing by sending a written request to the Department who will notify the LAA that the request has been made by the applicant. This request must be received by the Department within thirty (30) calendar days of the date on which the state review letter was mailed by the Department. The Department will provide the applicant with a notice of the hearing in accordance with Section 10-25 of the Illinois Administrative Procedure Act [5 ILCS 100/10-25]. The hearing will be conducted by a hearing officer, who has not participated in any earlier decision concerning this application, within thirty (30) days from the date the formal hearing request was received by the Department. The formal hearing will meet the following standards.

1. The hearing will be held at the application site closest to the applicant's residence or at the applicant's residence if they are confined.

2. The applicant will be afforded an opportunity to review his/her file.

3. The hearing will be tape-recorded.

4. The decision will be based on the record, which will comply with Section 10-35 of the Illinois Administrative Procedure Act and which will be made pursuant to the procedures set forth in Section 10-45 of the Illinois Administrative Procedure Act. The hearing officer will determine if the household is eligible in accordance with Section 100.250.

5. If requested by the applicant, the applicant will be provided interpretive and auxiliary services (e.g., transportation).

6. The applicant will have the right to:

A) be accompanied and/or represented by another;

B) present written and oral statements and other evidence in accordance with Section 10-40 of the Illinois Administrative Procedure Act;

C) bring an interpreter; and

D) present and question witnesses.

7. Within ten (10) days of the formal hearing, the state appeals review board shall send a written determination to the applicant and the LAA in accordance with Section 10-50 of the Illinois Administrative Procedure Act.

8. In the event of a finding in support of an applicant, the LAA shall, within fifteen (15) days of notification of the finding, process the application or modify the assistance granted and notify the applicant and the home energy provider(s) in writing of the applicant's eligibility. In the case of an emergency application, the LAA will process the application and notify the applicant and the home energy provider(s) within forty-eight (48) hours.

History

• Source: Section 100.90 recodified from 89 Ill. Adm. Code 109.90 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.100 Complaint Process

The Department will follow the procedures outlined in 56 Ill. Adm. Code 2605 for complaints filed by LAA's or other recipients. Procedures specified in Section 100.90 of this Part will be followed for complaints by applicants for energy assistance.

History

• Source: Section 100.100 recodified from 89 Ill. Adm. Code 109.100 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.110 Incorporation by Reference

Any incorporation by reference in this Part of the rules and regulations of any agency of the United States or of standards of a nationally recognized organization or association includes no new amendments or additions made after the date specified.

History

• Source: Section 100.110 recodified from 89 Ill. Adm. Code 109.110 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.200 Energy Assistance Program

a) Implementation

This Part institutes the energy assistance program mandated by the Energy Assistance Act. This assistance program shall be known as the "Low Income Home Energy Assistance Program" (LIHEAP).

b) Impacting Authorities

The following authorities, among others, affect the implementation or operation of LIHEAP:

1. The Low-Income Home Energy Assistance Act of 1981, which affects eligibility requirements and the use of Low Income Home Energy Assistance Block Grant funds used in LIHEAP.

2. The Public Utilities Act and the rules applicable to that Act (83 Ill. Adm. Code 280).

3. The Energy Assistance Act.

c) Eligibility

Any individual who is a resident of the State of Illinois and whose household income is not greater than 150% of the federal non-farm poverty level as established by the federal Office of Management and Budget (OMB) (or their successor in responsibility) is eligible to apply for benefits under LIHEAP. In establishing the eligibility level, the Department shall consider factors including, but not limited to, economic conditions, State and federal funding levels, and energy costs.

d) Application Initiation

Individuals may apply for assistance under LIHEAP at the LAA office serving the area in which the applicant's dwelling unit is located. A current list of LAA offices may be obtained by calling or writing any office of the Department.

History

• Source: Section 100.200 recodified from 89 Ill. Adm. Code 109.200 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.210 Allocation of Block Grant Funds

a) The Department shall allocate financial assistance for each county from sums available for any fiscal year from the Low Income Home Energy Assistance Block Grant as described in the State's annual plan to HHS.

b) The Department shall determine allocations for each county from available funds.

1. At least 50% of the funds available shall be allocated to each county based on the "Index of Need".

A) The Index of Need is comprised of five factors, which are:

i) Heating Degree Days;

ii) Fuel Cost Factor Per 100,000 BTUs;

iii) Persons in Poverty (an amount determined by the Department by equally weighing available funding, energy costs, and economic conditions, but shall not exceed 150% of the OMB Poverty Income Guidelines);

iv) Elderly in Poverty (an amount determined by the Department by equally weighing available funding, energy costs, and economic conditions, but shall not exceed 150% of OMB Poverty Income Guidelines); and

v) Disabled persons.

B) Each factor will be multiplied by an assigned weight. The formula for determining each of these factors and the weight to be assigned to these factors is as follows:

i) number of climatic heating degree days per county divided by total climatic heating degree days for State = heating degree days (5%);

ii) estimated fuel cost per 100,000 BTUs per county divided by total estimated fuel cost per 100,000 BTUs for State = fuel cost factor per 100,000 BTUs (5%);

iii) number of persons in poverty per county divided by total number of persons in poverty for State = persons in poverty (75%);

iv) number of elderly persons in poverty per county divided by total number of elderly persons in poverty for State = elderly in poverty (10%); and

v) number of disabled persons per county divided by total number of disabled persons for State = Disabled (5%).

C) The sum of weighted factors will be multiplied by the total amount allocated to the counties to determine the county's allocation of funds.

2. The remaining funds shall be held by the State for meeting those program contingencies which cannot be reasonably anticipated, (e.g., an unusually high need for energy assistance in any given county) and to meet the local agencies' administrative and/or outreach needs.

c) The Department shall increase or reduce the allocation for a county for any of the following reasons:

1. Changes in federal or state fund availability.

2. Changes in sums available for any fiscal year from the Low Income Home Energy Assistance Block Grant as described in the State's annual plan to HHS.

3. The Department determines that the level of applications, which are eligible under Section 100.250, differs from the local agency's allocation, which is determined pursuant to subsection (b), during the subgrant period for which financial assistance was awarded.

d) The Department shall make available one-third of the allocation for any county for the provision of assistance described in Section 100.220(a)(1) or (2) to eligible applicant households who are recipients of Temporary Assistance to Needy Families (TANF); General Assistance (GA); Aid to Aged, Blind, and Disabled (AABD); or who have incomes equal to or less than 40% of the OMB Poverty Guidelines.

e) The Department shall notify the designated LAAs of the county allocations for which that agency is eligible to apply. Where no agency has been designated, the county allocations will be included in a request for proposal which shall be publicly advertised in the State newspaper and in at least one local newspaper within the area to be served.

History

• Source: Section 100.210 recodified from 89 Ill. Adm. Code 109.210 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.220 Assistance Available

a) Assistance Options

All applicants eligible for assistance under LIHEAP as described in Section 100.250 are eligible to receive assistance under the following options:

1. Option 1

A) If the applicant: is not a customer of record of a home energy provider for winter energy services; and is not an applicant for winter energy services from a home energy provider; and has housing rental expenses greater than 30% of his/her household income.

B) Then the applicant shall receive one direct cash payment in an amount determined annually by the Department. Subject to applicable requirements of this Part, the applicant must provide verification of rental expenses, and attest that he/she is not a customer or applicant for winter energy services from a home energy provider,

C) The Department will apply an equal weight to each of the major items considered in setting the amount.

2. Option 2

A) If the applicant or member of the applicant's household: is the customer of record of a home energy provider for winter energy services; or has a household member who is an applicant for winter energy services from a home energy provider,

B) Then a one-time direct vendor payment will be made to the home energy providers per program year on behalf of the applicant in the amount prescribed by the Department. The amount will be established annually after consultation with the Policy Advisory Council and will be based on factors including, but not limited to, available funding, energy costs, and economic conditions. The Department will apply an equal weight to each of the major items considered in setting the amount.

3. Option 3 (Emergency Assistance):

A) If the applicant: is a customer of record of a home energy provider for winter energy services and was receiving home energy provider services but is now disconnected, then:

i) The applicant shall receive emergency assistance consisting of an amount up to the minimum amount needed to reconnect and/or establish service to the applicant, but in no case shall such assistance exceed the amount determined annually by the Department, in consultation with the Policy Advisory Council, on the basis of available funding and energy costs. Equal weight shall be given to each of the items considered in setting the amount.

ii) The applicant is subject to the emergency assistance program requirements (as provided in subsection (b)(2)).

B) If the applicant is a customer of record and homeowner, the applicant may receive benefits designed to restore heat in the event of an inoperable heating system.

b) Explanation of Benefits

1. Energy Assistance

A) Assistance under Option 1 will be limited to a one-time cash payment that will be sent directly to the applicant.

B) Assistance under Option 2 will be limited to a one-time payment that will be sent to the energy providers if the providers sign a vendor agreement with the Department in which they agree to comply with the terms and conditions of the LIHEAP or to a qualified heating contractor for repairs or replacement to the heating system.

2. Emergency Assistance Program Requirements

A) Assistance under Option 3 will be limited to the provision of energy assistance funds designed to help applicants obtain a continuous supply of heat or home energy and expedited processing. Emergency Assistance will be provided only after an applicant has actually been disconnected. Emergency Service assistance will be provided within 48 hours from the date the client application is complete (all client documentation has been submitted); 18 hours if the energy crisis is life threatening.

B) An emergency payment will not be made on behalf of an applicant unless the household makes a good-faith effort at maintaining service at the time of reconnection. A good-faith effort is defined in Section 100.30. Prior heating assistance payments received by the home energy provider will not be counted as a contribution for the good-faith effort. An applicant who has failed to make a good-faith effort will be required to provide an amount specified in the operations manual toward the amount needed for reconnection at the time of reconnection. The good faith rule may be waived in cases of extreme economic hardship. Extreme economic hardship exists when the household's source of income has been permanently terminated for at least 30 days and a new source of income has not commenced.

C) The amount of emergency assistance will be an amount up to the minimum amount needed to re-establish the applicant or restore the heating system to an operable condition. In no case will the amount of emergency energy assistance exceed the total amount owed by the applicant. The applicant may only receive assistance under Option 3 one time for the primary home energy provider and/or one time for the secondary home energy provider during the program year.

D) In order to carry out this option, the Department will utilize delegate agencies and/or LAAs to provide assistance.

History

• Source: Section 100.220 recodified from 89 Ill. Adm. Code 109.220 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.230 Applicant Assistance

a) Application and Enrollment

1. Applications for assistance shall be submitted to and processed on a full-time basis by LAAs during months specified by the Department. The dates will be set annually by the Department after consultation with the Policy Advisory Council and will be based on factors including, but not limited to, available funding, energy costs, weather and economic conditions. The Department will apply equal weight to each of the major items considered. Applicants that are elderly or disabled, and/or applicants that have been disconnected from their primary and/or secondary home energy provider, will have a priority application period designated specifically for them.

2. The LAAs shall either approve or disapprove a completed application within 30 days after its receipt and, in the event of approval, shall within the same 30 days notify the applicant and the applicant's home energy provider electronically or in writing of the applicant's eligibility. If the application is incomplete at the time of its receipt, the LAA shall notify the applicant in writing, at the time of its receipt of the application, of all the information required from the applicant to complete the application. The applicant shall submit the additional information necessary to complete the application within 15 days after the date of the notification letter. In the event an applicant fails to submit the application in a timely manner or fails to submit all information necessary to complete the application, the LAA may disapprove the application. If the LAA disapproves an application, it shall, within 30 days after receipt of the completed application, notify the applicant in writing of the disapproval and reasons for disapproval. The notification must also apprise the applicant of the dispute resolution procedures set forth in Section 100.90.

3. When the home energy provider receives written or electronic notice of a customer of record's eligibility for assistance (as described in Section 100.220), the home energy provider shall place the customer of record on the option within 30 days. During that period, the home energy provider shall not disconnect the applicant for nonpayment. If an applicant's service is disconnected during that period, service shall be restored without penalty as soon as is practicable, and in no event later than as provided in 83 Ill. Adm. Code 280.130(f).

4. A home energy provider may refuse to accept the notice of eligibility referred to above if it pertains to a person in the household who is not the customer of record or if it contains an incorrect account number. If the home energy provider does not accept the notice of an applicant's eligibility, the home energy provider must notify the applicant, the Department, and the LAA in writing within 14 days after the provider's receipt of the notice that the applicant's enrollment was rejected, the reason for the rejection and what the applicant must do prior to the home energy provider accepting the enrollment. The notification must also apprise the applicant of the availability of the dispute resolution procedures set forth in Section 100.90. The home energy provider's notice must give the applicant 14 days from the postmark date of the notification to eliminate the reason for rejection. During the 14-day period following the postmark date, the home energy provider shall not disconnect a customer of record for non-payment.

5. Each home energy provider shall inform all residential customers of record of the availability of the program provided for in this Part.

6. All written notices of discontinuance issued to residential customers of record pursuant to 83 Ill. Adm. Code 280 or the company's normal credit collection practices shall include information regarding the availability of the program provided for in this Part.

b) Payment Process

1. Eligible applicants pursuant to Option 1 (as described in Section 100.220(a)) will receive a direct cash payment for energy assistance in accordance with Appendix A. This payment will be made, in accordance with appropriate grant agreements, by either the Department or the LAA.

2. Eligible applicants pursuant to Option 2 (as described in Section 100.220(a)(2)) will receive assistance, provided on their behalf to the applicant household's home energy providers in an amount detailed in Appendix A. This payment will be made, in accordance with appropriate grant agreements, by either the Department or the LAA. The applicant's account shall be posted/credited with the payment within 30 days after the home energy provider's receipt of the payment. If the energy providers fail to sign a Vendor Agreement, then a two-party check will be sent to the applicant.

History

• Source: Section 100.230 recodified from 89 Ill. Adm. Code 109.230 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.240 Summer Energy Assistance

a) A LIHEAP Summer Energy Assistance Program may be operated by the Department only if unused heating assistance funds are available. This option will provide eligible households with assistance to help meet summer energy costs and respond to heat related conditions. The following types of benefits may be provided:

1. Direct Client Assistance (DCA) payments to home energy providers on behalf of income-eligible households (see Section 100.250) that contain an eligible member as defined by the Department;

2. The purchase of an electric fan; and

3. The purchase or repair of air conditioners or fans by a LAA for income-eligible households that have a medically necessitated need for cooling (in accordance with subsections (b) and (c)).

b) To receive air conditioner repair or an air conditioner, a household must be determined income eligible in accordance with the process described in Section 100.250. Additionally, the household must contain at least one member experiencing a medical condition that can be ameliorated by cooling.

c) The existence of the medical condition must be certified by a licensed medical practitioner. Medical persons from whom this certification can be accepted are limited to the following:

1. Any physician licensed in accordance with the Medical Practice Act of 1987 [225 ILCS 60] or licensed in an adjoining state;

2. Any registered nurse or practical nurse licensed under the Nurse Practice Act [225 ILCS 65] that is employed by a visiting nurse association or county government or health department and who has attended the applicant or a member of his/her household;

3. Public health officials who are medical persons (i.e., licensed physicians or licensed registered or licensed practical nurses acting as a representative of a physician) associated with the National Health Service, the Illinois Department of Public Health, a county health department, or a city or township health department;

4. Any physician's assistant certified under the Physician Assistant Practice Act of 1987 [225 ILCS 95] working with any attending licensed physician;

5. Any licensed registered or practical nurse working with an attending licensed physician or physician assistant; or

6. Any practitioner who provides treatment through prayer or spiritual means (e.g., Christian Scientist).

d) LAAs will take cooling assistance applications for a period determined by the Department or until summer assistance funds are depleted. In determining the length of time the local agencies will be required to take applications, the Department will equally consider factors such as the amount of funding available, weather conditions and length of time remaining in existing grants. Intake sites are to be open for a minimum of two days per week until funds have been exhausted. Application data will be entered into the automated LIHEAP reporting and tracking system by the LAA. Applications are to be retained and filed by the LAA. All reports that are available for the "heating" options will be available for the summer program option.

e) Verification, authorization, and client/vendor notification will occur within 30 days after a completed application. Payment must occur within 15 days after the notification.

f) Summer Assistance Benefit payments to electric utilities on behalf of eligible households must be used to reduce the current bill of the household. The Department will notify the LAAs of which public utilities, as defined by Section 3-105 of the Public Utilities Act, have agreed to abide by this constraint. LAAs must determine which utilities that are not public utilities will comply. In cases where the home energy provider refuses, cooling assistance payments will be made directly to the households.

g) On the date the Department notifies the LAAs that the summer option becomes operable, LAAs may take emergency service applications for clients whose electricity is not an integral part of their heating system (i.e., heat will be delivered without use of electricity).

History

• Source: Section 100.240 recodified from 89 Ill. Adm. Code 109.240 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.250 Determination of Household Eligibility

a) Household applications for assistance through program options contained in Sections 100.230 and 100.240 will be accepted by LAAs if there are sufficient funds allocated to the LAA to grant assistance through program options.

b) Eligibility requirements for Section 100.220 are for a 30-day period based on an amount equal to 150% of the OMB Poverty Income Guidelines per most recent census data. To receive assistance:

1. The customer of record must be a member of the household. A household member may apply on behalf of the customer of record.

2. A household applying for emergency service must:

A) meet income guidelines as specified in subsection (b);

B) be disconnected from their primary and/or secondary heat source; and

C) have paid their primary and/or secondary heat source, within the past 90 days, a "good faith" payment. The good faith rule as defined in Section 100.30 may be waived in cases of extreme economic hardship. Extreme economic hardship exists when the household's source of income has been permanently terminated for at least 30 days and a new source of income has not commenced.

c) Application Requirements – A client application for assistance is complete when it contains:

1. a copy of utility bills or landlord statement that energy payments are included in the rent;

2. proof of income for any household member age 18 or older;

3. for an applicant whose utility service has been disconnected and is applying for an emergency service payment, proof that the household has paid a "good faith" amount as defined in Section 100.30 toward its utility bills (e.g., a copy of the applicant's utility bills);

4. head of household information;

5. dwelling information;

6. household income information; and

7. home energy information.

d) Verification of Rental Expenses – Rental expenses may be verified by documentation in the form of: lease/rental agreements, current rent receipts, or verification letters from the applicant's landlord or authorized property manager.

e) Notification Requirements – Households will receive written notification regarding eligibility determination within 30 days after the date the client application is complete. Additionally, home energy providers (e.g., utility companies) receiving a payment on behalf of an eligible household will be notified in writing of the household's eligibility within the same 30-day period.

History

• Source: Section 100.250 recodified from 89 Ill. Adm. Code 109.250 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.400 Allocation of Funds

a) The Department shall allocate financial assistance for each county from sums tentatively transferred for any fiscal year from the Low Income Home Energy Assistance Block Grant, as described in the State's annual plan to HHS, and the State Supplemental Low-Income Energy Assistance Fund.

b) The Department shall determine allocations for each county from available funds.

1. At least 90% of the funds tentatively transferred shall be allocated to each county based on the "Index of Needs".

A) The Index of Needs is comprised of five factors:

i) Heating Degree Days;

ii) Fuel Cost Factor Per 100,000 BTUs;

iii) Persons in poverty per the most recent census data;

iv) Elderly in poverty per the most recent census data; and

v) Handicapped (or disabled) persons in poverty.

B) Each factor will be multiplied by an assigned weight. The formula for determining each of these factors and the weight to be assigned to these factors is as follows:

i) number of climatic heating degree days per county divided by total climatic heating degree days for State = heating degree days (5%);

ii) estimated fuel cost per 100,000 BTUs per county divided by total estimated fuel cost per 100,000 BTUs for State = fuel cost factor per 100,000 BTUs (5%);

iii) number of persons in poverty per county divided by total number of persons in poverty for State = persons in poverty (75%);

iv) number of elderly persons in poverty per county divided by total number of elderly persons in poverty for State = elderly poverty (10%); and

v) number of disabled persons in poverty per county divided by total number of disabled persons in poverty for State = handicapped (or disabled) in poverty (5%).

C) The sum of weighted factors will be multiplied by the total amount allocated to the counties to determine the county's allocation of funds.

2. The remaining funds, not to exceed 10%, shall be held by the State for meeting those program contingencies that cannot be reasonably anticipated (e.g., an unusually high need for furnace replacements in any given county) and to meet the local agencies' training and technical assistance needs.

c) The Department shall increase or reduce the allocation for a county for any of the following reasons:

1. Changes in federal fund availability.

2. Changes in sums tentatively transferred for any fiscal year from the Low Income Home Energy Assistance Block Grant as described in the State's annual plan to HHS.

3. The Department determines that the number of eligible applicants that are eligible under Section 100.450 differs from the local agency's allocation, which is determined pursuant to subsection (b), during the subgrant period for which financial assistance was awarded.

d) The Department's Chief of the Office of Energy Assistance shall notify the designated local agencies of the county allocations for which that agency is eligible to apply. Where no agency has been designated, the county allocations will be included in a request for proposal that shall be publicly advertised within the area to be served.

History

• Source: Section 100.400 recodified from 89 Ill. Adm. Code 109.400 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.410 Minimum Program Requirements

a) No dwelling unit may be weatherized without documentation that the household and the dwelling unit is eligible as provided in Section 100.450.

b) Priority is to be assigned, in terms of scheduling weatherization work, as follows:

1. to the elderly, the disabled, and families with small children (5 and under); and

2. households with the lowest incomes and highest utility bills.

c) The financial assistance provided under this Subpart will be used as follows:

1. by increasing the funds available for IHWAP, which will provide additional weatherization assistance identical to that provided by the DOE and the HHS, and shall be promulgated annually by the Department no later than the beginning of the IHWAP Program year, as specified in 10 CFR 440.18(c) (1995); and

2. by expanding the State's currently allowable weatherization measures and including heating system tune up, repair, and retrofit measures to increase the efficiency of the furnace or replacement of the furnace.

d) Whenever other federal, State, local or privately funded programs are available in the county to provide weatherization assistance activities specified in Section 100.420, the local administering agency shall seek to coordinate those activities with those funded by HHS. Such coordination will seek to avoid duplication of services and encourage joint funding of weatherization projects.

e) No dwelling unit may be reported to the Department as complete until a local administering agency has performed a final inspection certifying that work has been completed in an acceptable manner and in accordance with the work order issued as a result of the agency's audit/assessment. The work has been completed in an acceptable manner if there is no air infiltration or general heat waste; the attic, sidewalls, or crawl spaces have been insulated and/or ventilated; or storm windows and doors have been installed. The local administering agency is subject to suspension and/or termination of funds if it reports a dwelling unit as completed without performing a final inspection.

History

• Source: Section 100.410 recodified from 89 Ill. Adm. Code 109.410 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.420 Allowable Costs

a) The LAA may use a percentage to be determined by the Department of the total funds allocated for local agency administration. The amount will be established annually after consultation with the Policy Advisory Council (see 305 ILCS 20/5) and will be based on factors including, but not limited to, available funding and program requirements. The Department will apply an equal weight to each of the major items considered in setting the percentage.

b) The LAA may use allocated program funds to provide for liability insurance (to cover project-related personal injury and property damage) and to provide for training and technical assistance.

c) The LAA is to use the remaining funds to provide the materials, labor, and program support necessary to operate those services specified under the IHWAP.

History

• Source: Section 100.420 recodified from 89 Ill. Adm. Code 109.420 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.430 Cost Restrictions

a) The following cost restrictions apply to funds allocated to the county for IHWAP, which are based on such factors as the number of basic component activities conducted in the previous year.

1. Of those funds provided for weatherization materials, labor and related program support specified in 10 CFR 440.18(c) (1995), an amount not to exceed 25% of applied labor and materials will be allowed for program support.

2. Of those funds available to provide weatherization materials, labor, and related program support specified in 10 CFR 440.18(c), no more than $2500 (U.S. Department of Energy), $5000 (U.S. Department of Health and Human Services) and $7500 (State) may be spent on any one dwelling unit.

3. Expenditures for IHWAP may include:

A) the cost of purchase and delivery of weatherization materials;

B) labor costs to supplement wages paid to training participants and to employ labor or to engage contractors to install weatherization materials;

C) transportation of weatherization materials, tools, equipment and work crews to a storage site and to the site of weatherization work;

D) maintenance, operation, and insurance of vehicles used to transport materials and laborers;

E) maintenance of tools and equipment;

F) purchase or lease of tools, equipment and vehicles;

G) employment of on-site supervisory personnel;

H) storage of weatherization materials, tools and equipment;

I) the cost of incidental repairs if such repairs are necessary to make the installation of weatherization materials effective; and

J) the cost of liability insurance for weatherization projects for personal injury and property damage.

4. No grant funds may be used for any of the following purposes:

A) to weatherize a dwelling unit that is designated for acquisition or clearance by a federal, State or local program within 12 months from the date weatherization of the dwelling unit would be scheduled to be completed; and

B) to install or otherwise provide materials for a dwelling unit weatherized prior to October 1, 1993 with grant funds under this or other federal weatherization programs administered by HHS or DOE, unless the dwelling unit has been damaged by fire, flood or act of God and repair of the damage to weatherization materials is not paid for by insurance.

b) The following cost restrictions apply to IHWAP heating system work. Cost restrictions for the various types of service to be offered (tune-up, repair, retrofit, replacement) shall be promulgated annually by the Department no later than July of each program year.

1. Expenditures for heating system work may include the following:

A) the costs to purchase and deliver weatherization materials for heating systems, including automatic or mechanical furnace ignition devices; flue vent devices; materials for heating and cooling system tune-ups, repairs and retrofit modifications that will result in improved energy efficiency; heat exchangers; waste heat recovery devices; replacement burners, furnaces, or boilers or any combination; replacement space heaters where the space heaters were permanently installed, including wood/coal burning stoves; products to improve the efficient circulation of heated water or air throughout the dwelling unit (e.g., fan systems, piping, ductwork, etc.); decentralized domestic water heaters; and

B) the costs of material handling, such as storage, transporting, purchasing, inventory and other related costs.

2. Labor and related program support costs include:

A) the costs to install supplemental weatherization materials by a Heating, Air Conditioning and Refrigeration contractor who has been licensed by a municipality if the municipality licenses contractors in accordance with Section 11-32-1 of the Illinois Municipal Code [65 ILCS 5/11-32-1].

B) the costs of related program support, such as assessment/audits, final inspections, equipment, small tools and other local agency costs associated with providing weatherization assistance to eligible persons/dwelling units.

3. The costs of local agency liability insurance for weatherization projects for personal injury and property damage.

History

• Source: Section 100.430 recodified from 89 Ill. Adm. Code 109.430 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.440 Standards and Techniques for Weatherization

a) Only those materials that meet or exceed the standards prescribed by the Department in accordance with 10 CFR 440.Appendix A (2001) shall be purchased with funds provided under this Part. Further, where it is in the best interest of the State, the Department shall enter into cooperative purchasing agreements in which local agencies will be required to purchase products from a specified vendor in order to take advantage of a negotiated agreement on bulk purchase pricing. The Department will determine that a cooperative purchasing agreement is in the best interest of the State when equipment or materials, such as technical or specialty items, can be obtained at a lower cost.

b) The most cost-effective measures for each dwelling unit shall be determined by utilizing Department audit procedures that take into account the cost of fuel saved, the lifetime of the materials installed, the costs of the materials, and the cost of installing the materials in accordance with the Department of Energy guidelines outlined in 10 CFR 440.21, February 1, 2002, with no later amendments or editions. The priorities on weatherization materials to be installed shall result from the application of these audit procedures. Department audit procedures will indicate when heating units are to be tuned and/or repaired, retrofitted or replaced.

c) The IHWAP will not allow local agencies to switch a dwelling unit's fuel source unless they have received a written determination from the Department that the conversion would be more cost beneficial, as determined in accordance with subsection (b).

History

• Source: Section 100.440 recodified from 89 Ill. Adm. Code 109.440 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.450 Eligible Dwelling Units

A dwelling unit shall be eligible for IHWAP services if:

a) it meets the definition of separate, independent living quarters (see Section 100.30);

b) it is occupied by household members:

1. whose total income is at or below 150% of the Poverty Income Guidelines per most recent census data (67 FR 6931-6933, February 14, 2002, with no later amendments or editions);

2. who have received cash assistance payments under Title IV or XVI of the Social Security Act or under Temporary Assistance for Needy Families (89 Ill. Adm. Code 112) or Aid to the Aged, Blind or Disabled (89 Ill. Adm. Code 113) during the 12 month period preceding the determination of eligibility for weatherization assistance; or

3. who are eligible for assistance, in accordance with Section 100.250, under LIHEAP (as established by the Act);

c) it is a building containing rental units eligible for weatherization assistance under subsection (b) where:

1. the local agency has obtained the written permission of the owner or his agent;

2. at least 50% of the dwelling units in the building are eligible dwelling units or will become eligible dwelling units within 180 days under a federal, State or local government program for rehabilitating the building or making similar improvements to the building, such as programs authorized by 42 USC 1437f, or 1474;

3. the local agency has insured that rents will not be raised because of the increased value of dwelling units due solely to weatherization assistance provided; and

4. no undue or excessive enhancement shall occur to the value of the dwelling units, e.g., the weatherization will be more cost beneficial to the landlord than to the tenant.

History

• Source: Section 100.450 recodified from 89 Ill. Adm. Code 109.450 at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.APPENDIX A Liheap Payment Matrix

DIRECT VENDOR/CASH PAYMENTS

NORTHERN

2003 PAYMENT MATRIX – NORTH #1

0% - 40% Poverty Level

HOUSEHOLD SIZE

FUEL TYPE

DVP

1

2

3

4

5

6 OR MORE

Natural Gas/

Primary

$364

$422

$438

$473

$483

$ 500

Other

Secondary

$103

$161

$184

$206

$223

$ 240

TOTAL

$467

$583

$626

$679

$706

$ 740

All Electric

TOTAL

$293

$418

$460

$505

$537

$ 573

Propane

Primary

$326

$512

$536

$572

$599

$ 628

Secondary

$146

$240

$288

$332

$359

$ 395

TOTAL

$472

$752

$824

$904

$958

$1,023

Fuel Oil

Primary

$300

$416

$431

$434

$463

$ 478

Secondary

$146

$240

$288

$332

$359

$ 395

TOTAL

$446

$656

$719

$766

$822

$ 873

CASH

$130

$130

$140

$150

$160

$ 170

2003 PAYMENT MATRIX – NORTH #2

41% - 80% Poverty Level

HOUSEHOLD SIZE

FUEL TYPE

DVP

1

2

3

4

5

6 OR MORE

Natural Gas/

Primary

$302

$350

$364

$392

$401

$415

Other

Secondary

$ 85

$133

$153

$171

$185

$199

TOTAL

$387

$483

$517

$563

$586

$614

All Electric

TOTAL

$244

$347

$382

$419

$446

$475

Propane

Primary

$271

$425

$445

$475

$498

$521

Secondary

$121

$199

$239

$275

$298

$328

TOTAL

$392

$624

$684

$750

$796

$849

Fuel Oil

Primary

$249

$345

$358

$361

$384

$397

Secondary

$121

$199

$239

$275

$298

$328

TOTAL

$370

$544

$597

$636

$682

$725

CASH

$108

$108

$116

$125

$133

$141

2003 PAYMENT MATRIX – NORTH #3

81% - 125% Poverty Level

HOUSEHOLD SIZE

FUEL TYPE

DVP

1

2

3

4

5

6 OR MORE

Natural Gas/

Primary

$240

$278

$289

$312

$319

$330

Other

Secondary

$ 68

$106

$122

$136

$147

$158

TOTAL

$308

$384

$411

$448

$466

$488

All Electric

TOTAL

$194

$276

$304

$333

$354

$378

Propane

Primary

$215

$338

$354

$378

$396

$414

Secondary

$ 96

$158

$190

$219

$237

$261

TOTAL

$311

$496

$544

$597

$633

$675

Fuel Oil

Primary

$198

$274

$284

$287

$305

$316

Secondary

$ 96

$158

$190

$219

$237

$261

TOTAL

$294

$432

$474

$506

$542

$577

CASH

$ 86

$ 86

$ 92

$ 99

$106

$112

2003 PAYMENT MATRIX – NORTH #4

126% - 150% Poverty Level

HOUSEHOLD SIZE

FUEL TYPE

DVP

1

2

3

4

5

6 OR MORE

Natural Gas/

Primary

$182

$211

$219

$236

$242

$250

Other

Secondary

$ 51

$ 80

$ 92

$103

$112

$120

TOTAL

$233

$291

$311

$339

$354

$370

All Electric

TOTAL

$147

$209

$230

$252

$269

$287

Propane

Primary

$163

$256

$268

$286

$300

$314

Secondary

$ 73

$120

$144

$166

$179

$198

TOTAL

$236

$376

$412

$452

$479

$512

Fuel Oil

Primary

$150

$208

$215

$217

$231

$239

Secondary

$ 73

$120

$144

$166

$179

$198

TOTAL

$223

$328

$359

$383

$410

$437

CASH

$ 75

$ 75

$ 75

$ 75

$ 80

$ 85

DIRECT VENDOR/CASH PAYMENTS

SOUTHERN

2003 PAYMENT MATRIX – SOUTH #1

0% - 40% Poverty Level

HOUSEHOLD SIZE

FUEL TYPE

DVP

1

2

3

4

5

6 OR MORE

Natural Gas/

Primary

$380

$442

$461

$497

$509

$528

Other

Secondary

$ 89

$139

$160

$179

$194

$208

TOTAL

$469

$581

$621

$676

$703

$736

All Electric

TOTAL

$246

$354

$392

$433

$460

$493

Propane

Primary

$233

$374

$384

$393

$403

$425

Secondary

$128

$210

$254

$292

$316

$348

TOTAL

$361

$584

$638

$685

$719

$773

Fuel Oil

Primary

$253

$351

$364

$377

$390

$404

Secondary

$128

$210

$254

$292

$316

$348

TOTAL

$381

$561

$618

$669

$706

$752

CASH

$105

$110

$115

$125

$135

$140

2003 PAYMENT MATRIX – SOUTH #2

41% - 80% Poverty Level

HOUSEHOLD SIZE

FUEL TYPE

DVP

1

2

3

4

5

6 OR MORE

Natural Gas/

Primary

$316

$367

$383

$412

$422

$438

Other

Secondary

$ 74

$115

$132

$148

$161

$172

TOTAL

$390

$482

$515

$560

$583

$610

All Electric

TOTAL

$204

$294

$326

$360

$382

$409

Propane

Primary

$194

$311

$319

$326

$334

$353

Secondary

$106

$174

$211

$243

$262

$289

TOTAL

$300

$485

$530

$589

$596

$642

Fuel Oil

Primary

$210

$291

$302

$313

$324

$335

Secondary

$106

$174

$211

$243

$262

$289

TOTAL

$316

$465

$513

$556

$586

$624

CASH

$ 87

$ 91

$ 95

$104

$112

$116

2003 PAYMENT MATRIX – SOUTH #3

81% - 125% Poverty Level

HOUSEHOLD SIZE

FUEL TYPE

DVP

1

2

3

4

5

6 OR MORE

Natural Gas/

Primary

$251

$291

$305

$328

$336

$348

Other

Secondary

$ 59

$ 91

$105

$118

$128

$137

TOTAL

$310

$382

$410

$446

$464

$485

All Electric

TOTAL

$162

$234

$259

$286

$304

$325

Propane

Primary

$154

$247

$253

$259

$266

$280

Secondary

$ 84

$139

$168

$193

$209

$230

TOTAL

$238

$386

$421

$452

$475

$510

Fuel Oil

Primary

$167

$232

$240

$249

$257

$267

Secondary

$ 84

$139

$168

$193

$209

$230

TOTAL

$251

$371

$408

$442

$466

$497

CASH

$ 75

$ 75

$ 76

$ 83

$ 89

$ 92

2003 PAYMENT MATRIX – SOUTH #4

126% - 150% Poverty Level

HOUSEHOLD SIZE

FUEL TYPE

DVP

1

2

3

4

5

6 OR MORE

Natural Gas/

Primary

$190

$221

$231

$248

$254

$264

Other

Secondary

$ 44

$ 69

$ 80

$ 89

$ 97

$104

TOTAL

$234

$290

$311

$337

$351

$368

All Electric

TOTAL

$123

$177

$196

$217

$230

$246

Propane

Primary

$117

$187

$192

$197

$201

$212

Secondary

$ 64

$105

$127

$146

$158

$174

TOTAL

$181

$292

$319

$343

$359

$386

Fuel Oil

Primary

$127

$176

$182

$188

$195

$202

Secondary

$ 64

$105

$127

$146

$158

$174

TOTAL

$191

$281

$309

$334

$353

$376

CASH

$ 75

$ 75

$ 75

$ 75

$ 75

$ 75

History

• Source: Appendix A recodified from 89 Ill. Adm. Code 109.Appendix A at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.APPENDIX B Medical Certification

Please fill out this statement and return to the following address:

I certify that

suffers from a serious

health condition which can be ameliorated by cooling facilities. Illness or medical condition:

Asthma

Respiratory Allergies (requiring filtered air)

Severe obstructive lung disease

Severely debilitating stroke

Any medical condition of a non-ambulatory patient

Other – please specify:

Signature:

Name and Title/Degree:

Practice or Organization Name:

Registration No.

I hereby authorize this agency to verify that information provided by me and to contact my physician or other public health official for the purpose of securing medical certification as described above.

Name of Applicant

Signature of Applicant

Date

Social Security Number of Applicant

History

• Source: Appendix B recodified from 89 Ill. Adm. Code 109.Appendix B at 33 Ill. Reg. 9466

47 Ill. Adm. Code 100.APPENDIX C Assistance Level Chart Map

History

• Source: Appendix C recodified from 89 Ill. Adm. Code 109.Appendix C at 33 Ill. Reg. 9466

Part 105 Low-Income Household Water Assistance Program

47 Ill. Adm. Code 105.10 Low-Income Household Water Assistance Program

a) Implementation

This Part institutes the federally-funded water assistance program available to low income-eligible residents statewide. This assistance program shall be known as the federal "Low Income Household Water Assistance Program" (LIHWAP).

b) Impacting Authorities

The following authorities, among others, affect the implementation or operation of federal LIHWAP:

1. The Consolidated Appropriations Act, 2021 (P.L. 116-260);

2. American Rescue Plan Act of 2021 (P.L. 117-2); and

3. Uniform Administrative Guidance at 45 CFR Part 75 and Uniform Administrative Guidance at 2 CFR Part 200.

c) Income Eligibility

Income eligibility for federal LIHWAP is the same as federal Low-Income Home Energy Assistance Program (LIHEAP) (42 U.S.C. 8621-8630). Any individual who is a resident of the State of Illinois, meets the federal eligibility requirements, and whose household income is not greater than 150% of the federal non-farm poverty level as established by the federal Office of Management and Budget (OMB) (or its successor) or 60% of the State median income for the current State fiscal year as established by the United States Department of Health and Human Services (HHS), is eligible to receive benefits under federal LIHWAP. In establishing the assistance level for individuals, the Illinois Department of Commerce and Economic Opportunity (Department) shall consider factors including, but not limited to, economic conditions and the federal funding level.

d) Application Initiation

Individuals may apply for assistance under federal LIHWAP at the Local Administrating Agency (LAA) office serving the area in which the applicant's household is located. A joint application will be provided for federal LIHEAP and federal LIHWAP. A current list of LAA offices is maintained on the Department's website, or may be obtained by calling or writing any office of the Department.

47 Ill. Adm. Code 105.20 Allocation of Grant Funds

a) The Department shall allocate financial assistance for each county from sums available for any fiscal year from the federal LIHWAP grant as described in the State's plan to HHS.

b) The Department shall determine allocations for each county from available funds. The funds available shall be allocated to each county based on the Index of Need, which is equal to a county's number of Persons in Poverty divided by the total number of Persons in Poverty in the entire state. "Persons in Poverty" is defined as residents at or below 150% of the OMB Poverty Income Guidelines.

c) The Department shall notify the designated LAAs of the county allocations for which that agency is eligible to apply via the application process determined by the Department.

47 Ill. Adm. Code 105.30 Assistance Available

Assistance Options

All applicants that meet the eligibility requirements for federal LIHWAP as described in Section 105.10, are eligible to receive assistance under the following options:

a) Option 1 (Emergency Assistance):

1. If the eligible applicant or member of the eligible applicant's household:

A) is the customer of record of a water and/or wastewater service provider, and

B) the household is disconnected from water service or in imminent threat of being disconnected as evidenced by the submission of a disconnection notice or the equivalent;

2. Then a benefit payment will be made to the water and/or wastewater providers on behalf of the eligible applicant or member of the eligible applicant's household in the amount prescribed by the Department. The maximum amount available for the benefit payment will be established by the Department on an annual basis but shall not exceed $1,500.

b) Option 2 (Arrearage Assistance):

1. If the eligible applicant or member of the eligible applicant's household:

A) is the customer of record of a water and/or wastewater provider; and

B) the household has an arrearage or arrearages to water and/or wastewater providers equal to or exceeding $250;

2. Then a benefit payment will be made to the water and/or wastewater providers on behalf of the eligible applicant in the amount prescribed by the Department. The maximum amount available for the benefit payment will be established by the Department on an annual basis but shall not exceed $1,500.

47 Ill. Adm. Code 105.40 Applicant Assistance

a) Application and Enrollment

1. Applications for assistance shall be submitted to LAAs. Such applications shall be processed on a full-time basis by LAAs until the funds are expended.

2. The assistance will be provided to eligible applicants in the groups listed below, in the following order of priority:

A) Households with disconnected water services;

B) Households with pending disconnections of water services; and

C) Households seeking help with arrearages.

3. The LAAs shall either approve or disapprove a completed application as soon as practical but in no case longer than the timeframe established for the State Low Income Home Energy Assistance Program (see 47 Ill. Adm. Code 100.230(a)).

b) Payment Process

LAAs will make payments on behalf of eligible applicants receiving assistance directly to the eligible applicant's household water and/or wastewater service provider. This payment will be made in accordance with appropriate LAA grant agreements.

47 Ill. Adm. Code 105.50 Determination of Household Eligibility

a) LAAs will accept applications for assistance once the LAA is allocated sufficient funds to grant assistance and until grant funds are exhausted.

b) Eligibility requirements for Section 105.10 are for a 30-day period immediately preceding the application, to include the date of application, based on an amount equal to 150% of the OMB Poverty Income Guidelines or 60% of the State median income for the current State fiscal year as established by HHS per most recent census data. To receive assistance, the customer of record must be a member of the applicant's household. A household member may apply on behalf of the customer of record.

c) Application Requirements

An application for assistance is complete when it contains:

1. a copy of water and/or wastewater bills or landlord statement that water and/or wastewater payments are included in the rent;

2. proof of income for any household member age 18 or older;

3. head of household information; and

4. household income information.

d) Verification of Rental Expenses

Rental expenses may be verified by documentation in the form of:

1. lease/rental agreements;

2. current rent receipts; or

3. verification letters from the applicant's landlord or authorized property manager.

Part 110 State Administration of the Federal Community Development Block Grant Program for Small Cities

47 Ill. Adm. Code 110.10 Legislative Base

a) Federal

1. On July 31, 1981, Congress passed the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35). This Act established seven block grant programs, including the State Community Development Block Grant (CDBG) Program. These block grants replace a large number of programs previously administered by the federal government. Although the Housing and Community Development Act of 1974 provided since its inception for discretionary block grants to smaller communities, the Omnibus Budget Reconciliation Act of 1981 made a fundamental change to transfer to the states the power and decision making in awarding block grants to small communities.

2. The State Community Development Block Grant Program funds are allocated to the state pursuant to section 106(d) of Title I of the federal Housing and Community Development Act of 1974, as amended. The Act authorizes state administration of the program to units of general local governments in nonentitlement areas. Throughout this Part references are made to the provisions of 24 CFR 570. These HUD regulations were published November 9, 1992.

3. While the states must follow the statutory requirements concerning the use of block grant funds, the Secretary of HUD will give maximum feasible deference to a state's interpretation of these requirements consistent with the Secretary's obligation to enforce compliance with the intent of Congress.

4. Pursuant to 24 CFR 91, the state must submit annually to HUD a Consolidated Plan that serves as the planning document of the state and an application under any of the Community Planning and Development formula grants, including CDBG. The Consolidated Plan will include the application deadlines for the competitive funding components for the upcoming program year. A final statement and certifications are required to be submitted before March 31 during each year in which a state elects to administer the CDBG funds for its nonentitlement areas.

b) Illinois

1. On August 10, 1981, the Governor designated the Illinois Department of Commerce and Community Affairs, now known as the Illinois Department of Commerce and Economic Opportunity, as the State administrative agency for the Small Cities Community Development Block Grant Program. On March 23, 1982, the Governor officially notified the U.S. Department of Housing and Urban Development of the State's election to administer the Small Cities Program for nonentitlement communities within the State.

2. As a part of its application, with respect to the CDBG Program, the State must submit an annual State of Illinois Consolidated Plan Action Plan to HUD outlining the one year use of funds and certifying that it:

A) Engages or will engage in planning for community development activities;

B) Provides or will provide technical assistance to units of general local government in connection with community development programs; and

C) Through the public hearing requirement, has consulted with local elected officials and interested parties/citizens from among units of general local government located in nonentitlement areas of the State determining the method of distribution of CDBG funds.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.20 Purpose and Scope

The purpose of this Part is to develop State administrative rules for the administration of the Community Development Block Grant (CDBG) Program within the State of Illinois. The promulgation of clear-cut program State administrative rules for the CDBG will ensure the maximum and efficient use of funds for community and economic development programs in the State's nonentitlement areas.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.30 Definitions

"Act" shall mean section 106(d) (42 USC 5306(d)) of the Housing and Community Development Act of 1974 (42 USC 5301), as amended by section 304 of Title III of the Omnibus Budget Reconciliation Act of 1981 (PL 97-35).

"Application" shall mean a request for program funds, including the required forms and attachments.

"Application on Behalf Of" shall mean any application submitted by one eligible applicant requesting funds for one or more other eligible applicants.

"Community" shall mean any eligible applicant.

"Community Development Block Grant Program" or "CDBG Program" shall mean the State Community Development Block Grant program administered by the Department, authorized by Title I of the Housing and Community Development Act of 1974, as amended (42 USC 5301).

"Department" or "DCEO" shall mean Illinois Department of Commerce and Economic Opportunity.

"Director" shall mean the Director of the Illinois Department of Commerce and Economic Opportunity.

"Economic Development" shall mean job creation/retention and the alleviation of economic distress through the stimulation of private investment and community revitalization.

"Eligible Applicant" shall mean any incorporated municipality, township or county within the State of Illinois, except those designated as entitlement areas by the U.S. Department of Housing and Urban Development.

"Entitlement City" shall mean a city designated by the Department of Housing and Urban Development to receive an amount of funds the city is entitled to receive under the CDBG entitlement program, as determined by the formula set forth in section 106 of the Housing and Community Development Act of 1974.

"Entitlement County" shall mean a county designated by the Department of Housing and Urban Development to receive an amount of funds which the county is entitled to receive under the CDBG entitlement program, as determined by formula set forth in section 106 of the Housing and Community Development Act of 1974 (see Public Law 93-383, as amended).

"HUD" shall mean the U.S. Department of Housing and Urban Development.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.35 Incorporation by Reference

Any incorporation by reference in this Part of the state administrative rules or federal regulations of any agency of the United States or the standards of a nationally recognized organization or association includes no new amendments or additions made after the date specified.

History

• Source: Amended at 29 Ill. Reg. 10017, effective June 28, 2005

47 Ill. Adm. Code 110.40 Federal/State Program Objectives

a) In order to ensure that the State administered program complies with the Housing and Community Development Act of 1974, as amended, a CDBG assisted activity must meet one or more of the following national objectives:

1. Benefiting low and moderate-income persons;

2. Aiding in the prevention or elimination of slums and/or blight; or

3. Meeting other community development needs that pose a serious and immediate threat to the health and welfare of the community that are of recent origin or recently became urgent, generally within the previous 18 months.

b) National Objectives

1. To complement these federally mandated national objectives, the State has established the following specific objectives for the CDBG Program:

A) Strengthening community economic development through the creation of jobs, stimulation of private investment, and strengthening of the tax base;

B) Alleviation of economic distress and realizing community economic development opportunities of benefit for low- and moderate-income individuals;

C) Improvement of public infrastructure and elimination of conditions that are detrimental to health, safety, and public welfare;

D) Conservation and expansion of the State's housing stock in order to provide a decent home and a suitable living environment for persons of low- and moderate-income and persons with disabilities.

2. There are several criteria by which an activity can meet a national objective. Units of general local government should consult the Illinois Community Development Block Grant (CDBG) Grants Management Handbook that explains the three national objectives in detail, including the criteria for meeting each one, and the documentation that must be provided to comply with the HUD requirements.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.50 Eligible Applicants

a) Only units of local government may apply for funding. Eligible municipalities shall not receive funding from HUD as an entitlement city. Counties and townships that are not participating in the HUD Urban County Entitlement Program are also eligible to apply for block grant funds.

b) Because of eligibility requirements and administrative capacity, certain unincorporated areas and special districts may not qualify for participation by themselves. In these instances, general purpose units of local government will be allowed to submit applications on behalf of otherwise ineligible special districts and unincorporated areas provided the unit of general local government determines that the activity is meeting its needs in accordance with section 106(d)(2)(D) of the Housing and Community Development Act of 1974, as amended.

c) When 2 or more eligible local governments face a common problem, a joint application may be submitted under the following conditions:

1. The solution of the problem requires mutual action and is not intended for administrative convenience; and

2. The eligible local governments involved have contacted the Department for prior approval of submission of the joint application before actual application submission.

d) An Application on Behalf Of or a joint application may not be filed for an entitlement city or a city located in an entitlement county.

e) If an Application on Behalf Of or a joint application will be filed, the local governments involved must submit an executed cooperation agreement with the application for funds. The agreement shall define grantee responsibilities under a successful application.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.60 Eligible/Ineligible Projects and Activities for Cdbg Components

a) Eligible Projects and Activities

Eligible activities are detailed in 24 CFR 570.482 (2004). Listed in this subsection (a) below are program components that describe eligible projects and activities that may be funded through CDBG:

1. General Economic Development Component. Provision of financial assistance to private for-profit or not-for-profit businesses for such activities as land acquisition; public facilities and improvements in support of economic development (such as, water, sewer and utility lines); acquisition, construction and rehabilitation of commercial and industrial buildings/facilities; machinery and equipment; furnishings and fixtures; and working capital expenses.

2. Competitive Public Infrastructure Program Component. Provision of financial assistance for acquisition, construction, reconstruction, rehabilitation or installation of public facilities, and improvements (e.g., water and sewer facilities, including storm sewers, flood retention and drainage facilities).

3. Competitive Housing Rehabilitation Program Component. Provision of financial assistance in support of low- to moderate-income housing, including rehabilitation, clearance, demolition, and/or removal of privately-owned buildings and provision of site improvements such as connection of residential structures to water or sewer lines; certain types of housing modernization; temporary relocation assistance; code enforcement; and lead-based paint abatement.

4. Disaster Response Component. Provision of financial assistance includes acquisition, demolition, construction, reconstruction, rehabilitation or installation of public facilities, and improvements (e.g., water and sewer facilities, including storm sewers, flood retention and drainage facilities), and housing rehabilitation in areas affected by a Governor-declared disaster.

b) Activity Delivery

With respect to subsection (a), activity delivery costs are allowable costs for designated programs and eligible activities under the CDBG Program. Eligible costs are necessary to complete the local management process of a CDBG grant. This includes, but is not limited to, such costs as salaries, travel costs, services performed under third party contracts, including legal and audit services, environmental review, additional fidelity bonding costs, or other services required for the delivery of grant activities. Eligible costs exclude all pre-program costs, such as payment or reimbursement of application preparation fees, costs associated with conducting a local survey, etc.

c) Ineligible Projects and Activities

1. Generally, any type of activity not described or referred to in subsection(a) is considered ineligible.

2. The following is a selective list of examples of projects and activities that are generally ineligible: buildings used predominantly for the general conduct of government (e.g., city halls, courthouses, jails, police stations, etc.). However, if the Department of Natural Resources requires historic preservation renovations to a project, those renovations will be deemed eligible expenses. The following are generally ineligible: general government expenses; political activities; purchase of construction equipment; and purchase of equipment, fixtures, motor vehicles, furnishings, or other personal property not an integral structural fixture. However, CDBG funds may be used to purchase or to pay depreciation or use allowances for otherwise ineligible items when necessary, if the administration of activities was assisted with CDBG funds. The costs associated with operating and maintaining public facilities and services are generally ineligible. New housing construction is ineligible, except as provided under the last resort housing provision set forth in 49 CFR 24 (2004) or when that construction is carried out by a subgrantee pursuant to 24 CFR 570.204(a)(2) (2004); also ineligible are income payments for housing or any other purpose (e.g., income maintenance, housing allowances, down payments, mortgage subsidies, etc.). All activities as listed in 24 CFR 570.482 (2004) and section 105(a) of the Act are eligible.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.70 Grant Application Process

a) Upon request, the Department will supply local governments with an application package. Eligible applicants shall complete and submit the application in accordance with the instructions and the application schedule, which is annually established by the Department. Costs incurred in preparing the applications are not reimbursable.

b) Pursuant to 24 CFR 570.486(5), eligible applicants must conduct two public hearings, each at a different stage of the project to obtain citizen views.

1. A minimum of one public meeting must be held prior to the submission of any application to the Department. This meeting, and its specific time, location, and topics must be published at least seven days in advance in the non-legal section of a newspaper that is in general circulation within the community. Subsequent to the meetings, a resolution of support from the local governing body must be passed that authorizes the local government to apply for funds. If an eligible applicant plans to utilize grant funds as a financial assistance mechanism, discussions should be held at the public meeting to determine the planned uses of the recaptured funds.

2. Should an eligible applicant be awarded a grant, the applicant must provide documentation/evidence (i.e., newspaper clipping of notice hearing and a summary of comments presented at hearing) that one public hearing was conducted to review program performance under that grant.

c) Eligible applicants must submit a plan for minimizing displacement pursuant to section 104(d) of the Housing and Community Development Act of 1974, as amended, only if the project will result in the displacement or relocation of residents.

History

• Source: Amended at 29 Ill. Reg. 10017, effective June 28, 2005

47 Ill. Adm. Code 110.80 Funding

a) Distribution of Funds

Grant awards will be made according to the application evaluation processes described in Sections 110.91, 110.92, 110.93, 110.94, 110.95, 110.101, 110.102, 110.103 and 110.106.

b) Funding Considerations

1. Grant Ceilings. Grant ceilings for the various components listed in Section 110.60 establish the maximum grant award limits that an eligible applicant may request. Needs expressed by interested citizens and local elected officials (see Section 110.10(b)(2)(C)), the amount of annual allocation, and a review of past program component usage shall be factors in the Department's determination of the grant ceiling on an annual basis.

A) Eligible applicants may only submit one application and may only receive one grant in any one program year under competitive program components: Public Infrastructure and Housing Rehabilitation.

B) On occasion, the Department will review the technical feasibility of a project. If the review requires non-Departmental expertise (e.g., water and sewer permits), the Department will coordinate with other agencies (e.g., Environmental Protection Agency (EPA), Department of Public Health (DPH), USDA Rural Development) to review the technical feasibility of the project.

C) In determining the appropriate grant award amount, the Department shall consider the following:

i) Project Need: Project need shall be determined using standards found in Sections 110.90(b)(3); 110.91(b)(3)(A), (C), (D) and (E); 110.92(b)(3); 110.93(b)(3); 110.94(b)(3); 110.95; 110.101(b); 110.102; and 110.103(b), as applicable.

ii) Ability to Carry Out the Project: Determination of the ability to successfully complete the proposed project shall be based upon elements such as previous program performance, experience, and scope of the proposed program.

iii) Proposed Activities: A review of the proposed activities shall be based on a determination of whether the program objectives will be met through the proposed activities as set out in Sections 110.90, 110.91, 110.92, 110.93, 110.94 and 110.95.

D) The Department may withdraw, suspend or terminate grant funding based on the following:

i) If the Department approves an application but, prior to the execution of a Grant Agreement, it learns or has a reasonable belief that the project will not progress or is unlikely to be completed as originally anticipated, due to unforeseen facts and circumstances not previously known during or subsequent to the application process, it may withdraw its commitment of funds. If the Department withdraws its commitment of funds, it shall provide written notification to the applicant advising it of the withdrawal and setting forth the reasons for the withdrawal.

ii) If the Department approves an application and a Grant Agreement has been executed, the Department may only suspend or terminate the Grant Agreement in accordance with the terms and conditions set forth in the Grant Agreement or the conditions described in 47 Ill. Adm. Code 1.110.

2. Standards for Program Category Allocation

The Department shall determine the amount of funds annually allocated to carry out activities in accordance with each of the community development assistance program components. Needs expressed by interested citizens and local elected officials pursuant to Section 110.10(b)(2)(C), the amount of annual allocation, and a review of past program component usage shall be factors in determining the amount of funds annually allocated to carry out activities. The allocation of funds between program components shall be determined from the following allocation ranges:

A) Disaster Response: 1% through 20%

B) Competitive Housing Rehabilitation Program Component: 15% through 70%

C) Competitive Public Infrastructure Component: 40% through 60%

D) General Economic Development Component: 10% through 40%

E) Set-Aside for Lead-Based Paint Abatement: up to 5%

3. Environmental Reviews

Upon actual grant award, for non-economic development projects, and during or after application review of economic development projects, a technical environmental record review of project activities must be completed by the awarded community under 24 CFR 58 (1996). HUD has published Environmental Review Procedures for the Community Development Block Grant (24 CFR 58).

4. On-Site Visits

The Department's program staff may, contingent upon program resources or the need for on-site inspection, verify eligibility, conduct field visits of potential grantees under the Competitive Public Infrastructure Program and Competitive Housing Rehabilitation Program Components prior to final grant decisions.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.90 Set-Aside for Disaster Response Component

Certain types of conditions, such as natural disasters or other unique circumstances, e.g., loss of infrastructure due to construction, environmental incidents such as oil spills, ruptured public utility lines, etc., do not lend themselves well to a designated (yearly or quarterly) application cycle. In response to CPD Notice 17-06, this as-needed program is designed for communities affected by an unforeseen event resulting in a State Disaster Declaration by the Governor of the State of Illinois on an "as needed" basis. There is no application deadline for this set-aside. If no situations arise that warrant this type of assistance, the set-aside funds will be reallocated at the end of the program year.

a) Project Eligibility Criteria – For a project to be eligible for funding under this component, applicants must document the following:

1. A national objective (as defined in Section 110.40) must be met by the project.

2. At minimum, 25% of project costs will be paid from other non-Department funds. Examples of other funding sources may include USDA Rural Development, EPA or local funds. The grantee may request, in writing, that the 25% minimum leverage requirement be waived. This request must include a reasonable justification. The Department shall review each request on a case-by-case basis.

3. A serious and urgent threat to the health and safety of community residents exists, i.e., a serious deficiency exists and problems clearly attributable to the deficiency have occurred from an unforeseen event resulting in a State Disaster Declaration by the Governor of the State of Illinois.

4. A financial need for grant assistance in order to address the identified problem.

b) Application Review and Approval

1. Funds will be made available on an as needed basis through a noncompetitive process until all funds are obligated.

2. Applications shall be prepared and submitted to the Department as specified in Section 110.70.

3. Applications shall be reviewed in accordance with Section 110.103.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.91 General Economic Development Component

The general economic development component is available to assist communities to attract or expand private businesses. The program provides financial assistance in the form of a grant to private businesses that create or retain jobs primarily for low- to moderate-income workers. Public infrastructure grants may also be made to support a private business that creates or retains jobs primarily for low- to moderate-income workers. This assistance can benefit both private "for-profit" and "not-for-profit" organizations. Funds will be made available on an as needed basis on a noncompetitive process until all funds are obligated.

a) Project Eligibility Criteria – For a project to be eligible for funding under this component, applicants must document the following:

1. At minimum, 51% of those benefiting from the project will be low- to moderate-income persons (as defined in Section 110.30).

A) The benefit of job creation shall be documented in either one of two ways:

i) Obtaining and keeping on file for verification the Family Income Verification Form that includes an employee's social security number, signature and family income; or

ii) Accepting employment referrals from the Illinois Employment and Training Center.

B) The benefit of the job retention of existing employees shall be documented by completing a Family Income Verification Form for each employee. These forms must be submitted at the time of application.

2. The financial feasibility of the project and how program objectives will be met through proposed activities. Participating businesses must submit supporting financial data.

3. If a start-up project is proposed, a 20% commitment of equity included in the leveraging, unless waived by the Director for good cause shown. Good cause may include, but is not limited to, cases in which CDBG funds are used for the construction or rehabilitation of public infrastructure, when the equity requirement would work an unreasonable hardship upon the applicant, when the loan is sought by a minority enterprise, when other conditions of the financial assistance are so firmly supported that the equity requirement is not necessary, or when the need for job creation in the geographical area far exceeds the relative security offered by the 20% equity requirement.

4. For public infrastructure projects in support of economic development, when the improvements are to take place in an area that is residential in character, that the area is comprised of at least 51% low- to moderate-income persons.

b) Application Review and Approval

1. Funds will be made available on an as needed basis throughout the year.

2. Applications shall be prepared and submitted to the Department as specified in Section 110.70. Complete applications shall be reviewed and evaluated by Department staff. Applicants shall be notified of deficiencies and given the opportunity to correct the deficiencies through submission of additional documentation.

3. The evaluation of projects shall be conducted to assure compliance with 24 CFR 570.203 (2004) and shall also address the following criteria:

A) Project Need – Need for and use of program funds should be detailed.

B) Project Readiness – The applicant must demonstrate project readiness through a description of all activities. This shall include commitment from all lenders and investors, signed and dated.

C) Financial Evaluation – The company's financial statements for the past three years and two projected statements of financial condition shall be reviewed to determine: liquidity/debt coverage; ability of the company to manage debt; business trends; and projected earnings. This data shall be compared to similar data for companies in the same industry using the "RMA Annual Statement Studies" published by Risk Management Association, One Liberty Plaza, 1650 Market, Suite 2300, Philadelphia PA 19103 (1999-2000), or a comparable source if that industry is not evaluated by this source. Financial statements are not required for public facilities in support of economic development.

D) Commitment for Job Creation/Retention – Firm written assurances from the company must identify the number of jobs created/retained in a specified period of time and the specific number that shall be low- to moderate-income and the methodology to be used to document low- to moderate-income benefit. This review shall also include a determination of the numbers of jobs created/retained in relation to the amount of program funds. The investment per job shall not exceed $10,000 per job for any job that is retained and $25,000 per job for any job that is created.

E) Resource Leveraging – The ratio of other (non-Department) funds to total CDBG funds being invested in the project will be considered. The evaluation threshold is a 2:1 ratio. The CDBG investment shall not exceed a 1:1 ratio.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.92 Competitive Public Infrastructure

The competitive public infrastructure component is designed to fund public infrastructure projects that propose to alleviate a serious threat to public health and safety. Applicants must demonstrate that a serious deficiency exists with an emphasis upon helping persons of low- to moderate-income. Applications are due on an annual basis.

a) Project Eligibility Criteria – For a project to be eligible for funding under this component, applicants must document the following:

1. At minimum, 51% of those benefiting from the project will be low to moderate-income persons (as defined in Section 110.30)

2. A serious and urgent threat to the health and safety of community residents exists, i.e., a serious deficiency exists in a community public facility (or that the community lacks the facility entirely), and problems clearly attributable to the deficiency have occurred, such as serious illness, disease outbreak, or serious environmental pollution.

3. The project is ready to proceed and expend funds and the project addresses the identified problem.

b) Application Review and Approval

1. Applications will be accepted once a year on a due date established at the beginning of the program year pursuant to Section 110.10(a)(4).

2. Applications will be prepared and submitted to the Department as specified in Section 110.70.

3. Applications will be reviewed in accordance with Section 110.103.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.93 Competitive Housing Rehabilitation Component

The competitive housing rehabilitation component targets projects proposing to rehabilitate existing housing stock. The purpose is to provide decent, safe and sanitary housing in conformity with local housing codes for low- to moderate-income persons.

a) Project Eligibility Criteria: For a project to be eligible for funding under this component, applicants must document the following:

1. Program funds used in the rehabilitation of a residence will benefit 100% low- to moderate-income persons.

2. That a project plan is presented that documents selection of the area targeted for assistance.

3. The project is ready to proceed and expend funds and the project addresses the identified problem.

b) Application Review and Approval

1. Applications will be accepted once a year on a due date established at the beginning of the program year, pursuant to Section 110.10(a)(4).

2. Applications will be prepared and submitted to the Department as specified in Section 110.70.

3. Applications will be reviewed in accordance with Section 110.104.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.94 Competitive Planning Assistance Component (repealed)

History

• Source: Repealed at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.95 Non-Competitive and Accessibility Rehabilitation Services Component (repealed)

History

• Source: Repealed at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.100 Application Evaluation for Competitive Public Facilities and Competitive Housing Rehabilitation Components (repealed)

History

• Source: Repealed at 20 Ill. Reg. 7799, effective May 29, 1996

47 Ill. Adm. Code 110.101 Application Evaluation for Competitive Planning Assistance Component (repealed)

History

• Source: Repealed at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.102 Pre-Application Determination and Application Evaluation for Non-Competitive Mobility and Accessibility Rehabilitation Services (repealed)

History

• Source: Repealed at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.103 Application Evaluation for Competitive Public Infrastructure Component

a) Explanation of Application Ranking System

1. Applicants will compete in a formalized ranking system. Applications will undergo a multi-person review to determine eligibility in 3 areas: Benefit to Low- and Moderate-Income Persons, Documentation of Threat to Health and Safety, and Evidence of Project Readiness. Upon meeting the minimum eligibility thresholds, applications will compete in a formalized ranking system.

2. Applications will be ranked according to the criteria established in the Department's annual Action Plan approved by HUD. The Action Plan is annually provided for public comment for a period of 30 days. The Department will review applications for ranking and project selection according to the criteria described in this Section. The Department will then select projects for funding out of the top-ranking projects, as determined under subsection (b)(2), until all available funds are expended.

b) Criteria for Selection of Projects

1. The analysis will evaluate project need, according to its impact on program benefit and benefit to low- to moderate-income persons utilizing the ranking system contained in subsection (d).

2. Comparative Assessment of Applications

A) The Department will screen and identify top ranking CDBG applications. Projects will be ranked in categories of maximum, moderate, minimum or no rating as described in subsection (d). Maximum ratings do not guarantee that a project will receive funding. The Department will then conduct intensive evaluations, leading to the CDBG grant award decision. Department staff may conduct field visits and will analyze project characteristics, including:

i) a comparative assessment of projects – e.g., low- to moderate-income benefits, local contribution, etc.;

ii) a verification of submitted application information;

iii) a thorough analysis of the project's readiness to proceed; and

iv) a determination of the applicant's previous efforts to address its problems.

B) Actual funding levels will relate closely to the competitiveness of the proposed projects. Applications will be comparatively ranked according to the criteria described in this subsection (b) to determine the final funding levels. The Department reserves the right to negotiate the final funding figures.

c) Eligibility Thresholds

1. Benefit to Low- and Moderate-Income Persons: Applications must document that the project will benefit at least 51% low- to moderate-income persons and that, as applicable, no special assessments will be levied against residential structures owned and occupied by low- and moderate-income persons and that provisions are made to hook up these residences to water and sewer systems. Applications that do not document benefit to low- to moderate-income persons will not be considered further.

2. Documentation of Threat to Health and Safety: Applications must include documentation verifying that the project addresses a threat to health and safety. Applications that do not document threat to health and safety will not be considered further.

3. Evidence of Project Readiness: Applications must demonstrate that the project is appropriate and achievable and that all actions have been completed to ensure timely implementation of the project. Applications that do not document project readiness will not be considered further.

d) Ranking Criteria

1. Community Need: This criterion is an objective measure designed to give some priority to applicants with the highest level of need. Need may be evaluated based on one or more of the following criteria:

A) Estimates of average unemployment in Illinois, by county or municipality, if available, based upon Illinois Department of Employment Security data.

B) Percentage of people in poverty according to United States Census Bureau data.

C) Percentage of low/moderate income residents according to the Department of Housing and Urban Development Low/Moderate Income Summary Data.

D) Community's water or sewer rates in comparison to the community's median household income, according to United States Census Bureau data.

2. Urgency of Need

A) An application shall receive a maximum rating if it has fully:

i) documented that a serious deficiency exists in a community's public facility or that the community lacks the facility entirely;

ii) identified problems clearly attributable to the deficiency have occurred, such as serious illness, disease outbreak, or serious environmental pollution; and

iii) identified that the problem is existing, continual and chronic as opposed to occasional, sporadic or probable.

B) An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(2)(A).

C) An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(2)(A).

D) An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(2)(A).

3. Benefit to Low- and Moderate-Income Persons

A) A maximum rating shall be received if 71-100% of the persons benefiting are low- to moderate-income.

B) A moderate rating shall be received if 61-70% of persons benefiting are low- to moderate-income.

C) A minimum rating shall be received if 51-60% of persons benefiting are low- to moderate-income.

4. Project Readiness. This criterion is a measure of the project's readiness to proceed immediately upon notice of grant award. Ratings of moderate, minimum, and no rating will be assigned accordingly to projects lacking any or all of the items listed in subsections (d)(5)(A) through (H). In order to receive a maximum rating, applicants must address a majority of the following issues, as applicable to their project:

A) Site Control. If land is required for the proposed project (i.e., lagoon or tower site, etc.), the applicant must already own the site and provide evidence of ownership;

B) Leverage Financing. The applicant must demonstrate that all leverage funding for the project has not only been committed but will be available immediately upon grant award, including:

i) United States Department of Agriculture Rural Development Form 1940-1 has been issued to the applicant; and

ii) All issues have been resolved with the Illinois Environmental Protection Agency (i.e., facilities planning, dedicated revenue source, etc.) and the project is ready to bid;

C) Final design engineering of the proposed project has been completed;

D) Illinois Environmental Protection Agency has issued a construction permit;

E) Timely completion of previous CDBG grants (not applicable if the grantee has not previously received CDBG funding);

F) 100% or more of necessary easements have been obtained;

G) Executed agreement in place for purchase of water or treatment of wastewater; and

H) Evidence of completion of all previous phases, if the proposed project is part of a multi-phase project.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.104 Application Evaluation for Competitive Housing Rehabilitation Component

a) Explanation of Application Ranking System

1. Applicants will compete in a formalized ranking system. Applications will undergo an initial review to determine eligibility in 2 areas: Benefit to Low- and Moderate-Income Persons and Leverage Funds. Upon meeting the minimum eligibility thresholds, applications will compete in a formalized ranking system.

2. Applications will be ranked in 4 areas: Project Need, Project Impact, Evidence of Coordination of Resources, and Project Readiness. The Department will then select projects for funding out of the top-ranking projects as determined under subsection (b)(2) until all available funds are expended.

b) Criteria for Selection of Projects

1. The analysis will evaluate project need, according to its impact on program benefit and benefit to low- to moderate-income persons utilizing the ranking system contained in subsection (d).

2. Comparative Assessment of Applications

A) The Department will screen and identify top ranking CDBG applications. Projects will be ranked in categories of maximum, moderate, minimum or no rating as described in subsection (d). Maximum ratings do not guarantee that a project will receive funding. The Department will then conduct intensive evaluations, leading to the CDBG grant award decisions. Department staff may conduct field visits and will analyze project characteristics, including:

i) A comparative assessment of projects – e.g., project impact, local contribution, community need, etc.;

ii) A verification of submitted application information;

iii) A thorough analysis of the project's readiness to proceed; and

iv) A determination of the applicant's previous efforts to address its problems.

B) Actual funding levels will relate closely to the competitiveness of the proposed projects. Applications will be comparatively ranked according to the criteria described in this subsection (b) to determine the final funding levels. The Department reserves the right to negotiate the final funding figures.

c) Eligibility Thresholds

1. Benefit to Low- and Moderate-Income Persons: Applications must document that the project will benefit 100% low- to moderate-income persons. Applications which do not document benefit to low- to moderate-income persons will not be considered further.

2. Leverage Funds: Applications must provide evidence that at least 20% of non-administrative housing rehabilitation costs will be provided from non-CDBG sources, except accessibility projects, which will not be required to provide leverage.

d) Ranking Criteria

1. Project Need

A) An application shall receive a maximum rating if it has fully:

i) Demonstrated that the extent of housing deficiencies is widespread and serious and the percentage of substandard units occupied by low- to moderate-income persons is high relative to the total number of households in the area;

ii) Identified specific local conditions that have contributed or are contributing to the deterioration or lack of affordable housing;

iii) Described previous efforts to address housing problems that have not resolved the housing deficiencies, including a description of why the efforts failed to solve the problem.

B) An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(1)(A).

C) An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(1)(A).

D) An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(1)(A).

2. Project Impact

A) An application shall receive a maximum rating if it has fully:

i) Demonstrated that a substantial number of the housing units in need of rehabilitation in the identified project area will be repaired;

ii) Demonstrated that the proposed housing rehabilitation project addresses the identified needs and deficiencies and moves to resolve the problems; and

iii) Outlined how the targeted need or area is clearly distinguished from the overall housing needs in the community.

B) An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(2)(A).

C) An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(2)(A).

D) An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(2)(A).

3. Evidence of Coordination of Resources

A) An application shall receive a maximum rating if it has fully:

i) Explained the use of all available resources including a description of local efforts to revitalize the area to achieve maximum impact upon the targeted need or area;

ii) Described the extent to which the proposed project represents the most effective option for achieving maximum impact; and

iii) Provided evidence that the applicant has coordinated activities with a local social service provider regarding the identification of eligible households and housing units in need of rehabilitation to meet accessibility standards.

B) An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(3)(A).

C) An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(3)(A).

D) An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(3)(A).

4. Project Readiness

A) An application shall receive a maximum rating if it has fully:

i) Developed a preliminary list of qualified general contractors which have expressed an interest in, and are available to perform, the proposed rehabilitation activities;

ii) Demonstrated substantial homeowner interest in both loan and/or grant portions of the identified project;

iii) Documented that operational procedures and administrative structure have been established at the local level;

iv) Documented that qualifications of, and procedures for selection of, housing inspectors have been established;

v) Identified the specific types of, and priorities given to, work to be performed, including cost estimates;

vi) Established clear and measurable rehabilitation standards and proposed a reasonable implementation schedule;

vii) Included a description of the local application process that identified how the targeted population will be notified and encouraged to apply; and

viii) Developed preliminary financing plans, such as a commitment of leverage funds and a financing structure that considers residents' incomes.

B) An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(4)(A).

C) An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(4)(A).

D) An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(4)(A).

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.105 Small Business Financing Component (repealed)

History

• Source: Repealed at 20 Ill. Reg. 7799, effective May 29, 1996

47 Ill. Adm. Code 110.106 Demonstration Program: Emergency Lead-Based Paint Abatement

In order to respond to lead-based paint poisoning problems, funds will be made available on an "as needed" basis. There is no application deadline. Awards will be made to communities that are faced with an immediate threat to health and safety to children 6 and under exposed to lead-based paint. If no situations arise that warrant this type of assistance, the set-aside funds will be reallocated at the end of the program year.

a) Project Eligibility Criteria – For a project to be eligible for funding under this component, applicants must document the following:

1. 100 percent of those benefiting from the project will be low-to-moderate income persons (as defined in Section 110.30);

2. 100 percent of project costs may be paid from CDBG funds unless the project involves rental property owned by a non-low-to-moderate income person. If the rental property is occupied by a low-to-moderate income family, but is owned by a non-low-to-moderate income person, then the rental property owner must contribute at least 50 percent of the costs of the actual lead-based paint abatement;

3. One or more income eligible families living in the community have children 6 or under who have lead poisoning or are in imminent danger of lead poisoning;

4. The project is ready to proceed and expend funds; and

5. A community action agency determined by the Department to have the capacity to undertake lead-based paint abatement will be used to manage the project.

b) Application Review and Approval

1. Applicants for this program must be referred to the Department by DPH based on a finding by DPH or the local health department, if applicable, that children age 6 or under who live within the jurisdiction of the applicant have been diagnosed as having lead poisoning or are in imminent of lead poisoning.

2. Funds will be made available on an as needed basis through a non-competitive process until all funds are obligated.

3. Applications shall be prepared and submitted to the Department as specified in Section 110.70.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.110 Administrative Requirements

The administrative requirements detailed in this Section, as well as those enumerated in 47 Ill. Adm. Code 1, are applicable to any grant awarded with respect to this Part.

a) Compensation: The method of compensation shall be in accordance with the applicable State laws relative to that compensation by which the Department is governed. Payments to the grantee are subject to the receipt of electronic requests for fund transfers or expenditure summaries. The first payment for program initiation may be an advance and should be the amount necessary to meet the first month's non-administrative cost needs. Thereafter, the payments are dual purpose in that they will be sufficient to cover the non-administrative expenditures to date, as well as the cash needs of the grantee for the next 30 days. Administrative costs may be drawn in the same manner, or the grantee may draw down administrative needs in equal, quarterly increments. Each request shall be certified to the effect that the grantee has performed in conformance with the Grant Agreement and that it is entitled to receive the amount requisitioned.

b) Reporting: An electronic reporting system or an Expenditure Summary and Payment Request form shall be submitted to the Department to request cash.

c) Procurement: Units of General Local Government (UGLG) may use their own procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurement conforms to federal procurement regulations (2 CFR 200). In addition, Illinois statutes must also be considered when establishing procurement procedures. Statutes that may apply can be found at:

http://www.ilga.gov/legislation/ilcs/ilcs.asp in:

Chapter 50 – Local Government

Chapter 55 – Counties

Chapter 60 – Townships

Chapter 65 – Municipalities

Units of General Local Government should follow the stricter regulation, whether federal, State or local government, and consult the Illinois Community Development Block Grant (CDBG) Grants Management Handbook for specific steps and requirements in the process.

d) Records: CDBG records shall be maintained in accordance with 24 CFR 85, the Illinois Local Records Act [50 ILCS 205], and 24 CFR 570.490 (2004) and are subject to the Freedom of Information Act [5 ILCS 140].

e) Financial Management

1. Grantees shall comply with financial management procedures provided in OMB Circular A-87, "Cost Principles for State and Local Governments", published May 4, 1995, and standards promulgated by the American Institute of Certified Public Accountants (AICPA), Harborside Financial Center, 201 Plaza 3, Jersey City NJ 07311, June 2003, no later editions are incorporated.

2. Audits shall be conducted in accordance with the Comptroller General's Standards for Audits of Governmental Organizations, Programs, Activities, or Functions, and the General Accounting Office's Guidelines for Financial and Compliance Audits of Federally Assisted Programs available from U.S. Comptroller General Standards, U.S. General Accounting Office, 441 G Street NW, Washington DC 20548.

f) Bonding and Insurance:

1. Bonding:

A) Grantees: Grantees shall obtain a fidelity bond for each employee or official with access to project assets, accounting records, or checks. The bond (position or blanket) shall be in an amount at least to cover all CDBG funds contained in all bank accounts. The person with signature authority for the CDBG accounts must be bonded for this amount and his or her signature must appear on every check. The total bonding for each employee cannot be counted as a cumulative total. The cost of the fidelity bonds is a CDBG eligible administrative expense.

B) Grant Administrators: If the grant administrator processes payments on behalf of the grantee, the grant administrator shall obtain a fidelity bond for each employee with access to project assets, accounting records, or checks. The bond (position or blanket) shall be in the minimum amount of $750,000. At least one of the persons with signature authority for the CDBG accounts must be bonded for this amount and his or her signature must appear on every check. The cost of the fidelity bonds is a CDBG eligible administrative expense.

2. Flood Insurance: Grantees shall comply with the flood insurance purchase requirements of section 102(e) of the Flood Disaster Protection Act of 1973 (42 USC 4001).

g) Expenditure of Project Funds: No project costs may be incurred prior to authorization, and release of funds will not occur without a fully executed grant agreement. Costs may be incurred as follows:

1. CDBG administrative costs may be incurred as of the date of the grant award letter;

2. Non-CDBG project costs (leverage funds) and CDBG-funded design engineering costs may be incurred only after receiving a grant award letter and meeting environmental review requirements; and

3. CDBG-funded projects costs may be incurred only after meeting environmental review requirements and all specific grant conditions have been met.

h) Grant Agreement: When a grant has been awarded, the grantee and the Department shall enter into a Grant Agreement. The Grant Agreement shall be executed between the grantee and the Director of the Department or the Director's designee on behalf of the Department. The Grant Agreement shall contain substantive provisions, including, but not limited to the following:

1. A recitation of legal authority pursuant to which the Grant Agreement is made;

2. An identification of the scope of work that identified the work or services to be performed or conducted by the grantee;

3. An identification of the grant amount/funds;

4. The conditions and manner in which the Department shall disburse the grant funds subject, at all times, to annual funding from the federal government;

5. The grantee's irrevocable promise to satisfy the leverage requirement, if required;

6. The grantee agrees not to assign or transfer any of its rights, duties or obligations without the written consent of the Department;

7. The grantee's promise not to amend the scope of work or the budget without the Department's written consent. Failure to do so would result in a cost disallowance. The scope of work must be completed by the end date stated in the grant agreement unless a written request for an extension of time is submitted, at least, 30 days before the end date;

8. The grantee agrees that it shall expend the grant funds and any accrued interest, if allowed to retain accrued interest, only for the purposes specified in the scope of work; and

9. The grantee agrees that it shall refrain from entering into any written or oral agreement or understanding with any party that might be construed as an obligation of the State of Illinois or the Department for the payment of any funds.

History

• Source: Amended at 42 Ill. Reg. 19976, effective October 29, 2018

47 Ill. Adm. Code 110.120 Non-Discrimination

a) Equal Employment Opportunity

1. In carrying out any project under this Part, the grantee shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The grantee shall take affirmative action to insure that applicants for employment are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The grantee shall post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. The grantee shall state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. The grantee shall incorporate the foregoing requirements of this paragraph in all of its contracts for program work.

2. The grantee shall cause or require to be inserted in full in any contract and subcontract for work, or modification thereof, all applicable federal and State Equal Employment Opportunity Provisions.

b) Discrimination: The grantee shall refrain from unlawful discrimination in employment and will undertake affirmative action to assure equality of employment opportunity and eliminate the effects of past discrimination in accordance with the Illinois Human Rights Act.

History

• Source: Amended at 29 Ill. Reg. 10017, effective June 28, 2005

47 Ill. Adm. Code 110.130 Complaint Process

In the event of grantee complaint or a Department finding/determination, the grantee and the Department shall follow the procedures set forth in 56 Ill. Adm. Code 2605 (Administrative Hearing Rules).

History

• Source: Amended at 29 Ill. Reg. 10017, effective June 28, 2005

47 Ill. Adm. Code 110.210 Purpose

a) The Department is responsible for the administration and management of the CDAP. For the purpose of this program, the Department establishes grants with eligible units of local government throughout the State pursuant to Subpart A of this Part. Proceeds from those grants may be used to extend financial assistance to private for-profit or not-for-profit entities.

b) In accordance with Title I of the Housing and Community Development Act of 1974 (Act) (42 USCA 5301), the Department may permit grantees to retain the payments, including principal and interest, that may be generated from financial assistance made through the CDAP as long as those funds are deposited into a local revolving fund (RF) for economic development and the grantee has an approved recapture strategy (RF Plan or Recapture Strategy Plan).

c) The primary objective of CDAP-funded revolving funds (RF) is to enable grantees to carry out local economic development activities in a way that will expand economic opportunity, principally for low and moderate-income persons. Each RF project shall result in private sector job creation or retention. At least 51% of such jobs shall be filled or retained by persons of low and moderate-income.

d) The purpose of this Subpart is to provide rules governing and relative to the administration of local RFs funded through the CDAP.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.220 Definitions

"Administration" shall mean managing or servicing the day to day operations of CDAP-funded revolving funds. A financial intermediary may perform the day to day servicing functions of the financial assistance, as provided for in the Financial Intermediary Agreement.

"Closed CDAP Grant" shall mean a grant for which the Department has issued a "Grantee Evaluation Report" (GER) final determination letter.

"Grantee Evaluation Report" shall mean a report summarizing grantee compliance with program objectives governing the grantee's CDAP grant. The GER shall provide:

a description of citizen participation;

a description of activities completed;

an analysis of benefit to low and moderate-income persons;

an analysis of benefit to minorities, handicapped and female heads of household; and

a description of activities undertaken to affirmatively further fair housing.

"Low and Moderate-Income Persons" shall mean those individuals in a family whose income is less than 80% of the median income of the area (for non-metropolitan areas the non-metropolitan median income or county income shall apply, whichever is higher).

"Program Income", as it pertains to a revolving fund (RF), shall mean gross income earned by the grantee or its recipient directly generated from the use of CDAP funds and/or RF (grants or program income). Program income includes, but is not limited to, the following:

payments, which may include principal and interest, derived from Financial Assistance Agreements made using CDAP funds;

interest earned on CDAP funds held in a revolving fund account;

payments, which may include principal and interest, derived from Financial Assistance Agreements made using existing revolving funds.

"Revolving Fund" (RF) shall mean a separate fund (with a set of subaccounts that are independent of CDAP or other program accounts) established for the purpose of carrying out specific financial assistance activities that, in turn, generate program income to be deposited into the RF for use in carrying out activities consistent with the RF approved recapture strategy as defined in Section 110.230.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.230 Recapture Strategy Requirements

As a condition of approval for releasing CDAP funds, each grantee undertaking an RF program for local economic development shall submit for Department approval an RF Plan, also known as a "recapture strategy", pursuant to Section 110.210(b) of this Subpart. This plan shall describe the policies and procedures governing the RF and provide sufficient information to assure the Department that the RF shall be administered in conformance with this Subpart. The elements listed below shall be included in the RF Plan:

a) RF Goals and Objectives: A clear set of goals and objectives for the RF shall be developed. These goals and objectives shall serve as a basis for the development of an organizational strategy and operating plan.

b) RF Strategy: A strategy shall be developed that describes how the RF will achieve the stated goals and objectives. This strategy shall include:

1. A description of the eligible uses of the funds.

2. A description of the geographic area within which the funds will be utilized.

3. A description of the RF's targeting strategy (e.g., retention of traditional industrial base firms, start-up firms, minority and women-owned businesses). The RF's business targeting strategy shall tie closely with its economic development goals and objectives.

4. A description of how the applications will be generated from potential recipients, including how minority-owned businesses will be reached.

c) RF Management Plan: A system for effectively managing the RF shall be developed. This system shall:

1. Describe the financial assistance decision-making process, including any advisory bodies or financial assistance review committees.

2. Identify how the RF will be staffed. The staff shall have expertise in financial analysis and packaging.

3. Describe how the Financial Assistance Agreements will be serviced and monitored to hold the recipient accountable for receiving public benefit.

4. If the grantee elects to utilize one or more Financial Intermediary Agreements, it shall describe how financial intermediaries may be used to accomplish the purposes of this Section.

d) Assurances: A RF recapture strategy shall be developed that includes the following assurances:

1. No more than 10% of the annual program income of the RF shall be used for administration of the RF and such costs shall be documented.

2. Assistance provided with RF shall result in at least a 51 percent benefit to low and moderate-income persons and such benefit shall be documented.

3. On a semi-annual basis, the grantee shall submit an RF status report to the Department.

4. All changes to the recapture strategy shall be submitted to the Department for approval prior to implementation.

5. The grantee agrees to pursue all legal remedies to recover delinquent loans and/or enforce compliance with the terms of any Financial Assistance Agreement. Legal actions shall be those authorized by federal and State law, including civil debt collection actions.

6. The grantee shall assure that one job will be created or retained for every $15,000 of financial assistance provided.

7. A minimum leverage ratio of $1 non-CDAP funds to $1 CDAP revolving funds must be obtained for each project. Revolving funds may not comprise more than 50% of the financing for any project.

8. The grantee shall assure that any and all environmental reviews will be completed for each project funded and it will assure that prevailing wages are paid, if applicable.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.240 Revolving Fund Administration

a) RFs shall have an administrative structure sufficient to carry out responsibilities for the day-to-day operations of the RF.

b) If the RF administrator is not the unit of local government, a written agreement shall be executed between the grantee and its RF administrator. This agreement shall remain in effect during the entire term of the Financial Assistance Agreement. If the grantee invests in a project with a financial intermediary, and the financial intermediary serves as the administrator, the terms governing this administration shall be included in the Financial Intermediary Agreement. The minimum provisions that shall be included in either the agreement or Financial Intermediary Agreement shall include the following:

1. a statement of work (with a work description and a budget; i.e., a breakdown of all fees and costs);

2. requirements for the maintenance of records and reports;

3. requirements for the management of the RF;

4. applicability of other program requirements;

5. provisions for an annual audit of the RFs;

6. provisions for suspension and termination of the agreement; and

7. policy regarding reversion of assets at the termination of the agreement.

c) Final authority for approving any financial assistance made through the RF shall remain with the chief elected official of the unit of local government, unless formally delegated by resolution and outlined in a formal agreement pursuant to subsection (b).

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.250 Use of Revolving Funds

a) Revolving funds may be used to finance:

1. Financial assistance that shall result in job creation or retention for for-profit or not-for-profit businesses:

A) for fixed assets including land, buildings, machinery and equipment, including new construction or renovation of existing facilities;

B) to provide working capital;

C) to provide loan guarantees and interest supplements through the use of program income for RF loans;

2. Grants to the grantee for public infrastructure improvement projects when the activities will directly result in the creation and/or retention of jobs by a specifically identified for-profit or not-for-profit business which satisfies the requirements of Section 110.280 of this Subpart. The unit of local government must obtain a Participation Agreement with the benefiting business outlining the job creation and/or retention requirements as a result of this public infrastructure;

3. Activities not listed in this subsection require written approval from the Department prior to final local approval; and

4. Revolving funds may be used for CDBG-eligible activities with prior written approval from the Department, provided that the unit of local government spends the fund in its entirety and the fund ceases to be used for the purpose of business loans.

b) Revolving funds shall not be used to:

1. refinance existing private debts;

2. finance the relocation of an industry or business from one area of the State to another (exceptions require prior written approval from the Department and shall be made in those instances in which a business can demonstrate that it can no longer operate in its existing location and that jobs would be lost to the State if financing is not received);

3. finance any activities for speculative activities (i.e., commercial/retail development without lease agreements) or purposes;

4. conduct general marketing activities; or

5. prepare a CDAP application.

c) Forgiveness of loans or other financial assistance is prohibited.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.260 Requirements for Revolving Fund Projects

a) Each RF project shall create or retain at least one job for every $15,000 of RF investment of CDAP funds.

b) Job creation attributable to CDAP revolving funds shall take place within 24 months after the disbursement of funds.

c) For each RF project that results in job creation, documentation shall be obtained and maintained in the local files, pursuant to Section 110.91(a)(1)(A)(i) and (ii) of Subpart A, which verifies that at least 51% of these new employees benefiting from the project are low and moderate-income persons.

d) For each RF project that results in the retention of jobs, documentation in the form of employee income certifications shall be maintained in the local files, pursuant to Section 110.91(a)(1)(B) of Subpart A, which verifies that a minimum of 51% of the jobs retained are held by low and moderate-income persons at the time the financial assistance is made.

e) A minimum leverage ratio of $1 non-CDAP funds to $1 CDAP revolving funds shall be obtained for each RF project. Revolving funds shall not comprise more than 50% of the financing for any project.

f) All RF projects shall be conducted within the geographical jurisdiction specified in the approved RF Plan.

g) All businesses receiving or benefiting from revolving funds shall satisfy the requirements of Section 110.91(b)(3)(A), (B) and (C) of Subpart A.

h) Each project shall meet the eligibility requirements of section 105 of the Act.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.270 Administrative Costs

a) Eligible administrative costs include, but are not limited to, salaries, supplies, utilities, Financial Intermediary Agreement costs or similar expenses necessary for managing or servicing the RF portfolio and implementing the RF project. All administrative costs paid with RF shall be exclusively for RF activities.

b) Administrative costs may be paid from the grantee's own funds or from the RF.

c) Administrative costs paid from RFs shall not exceed 10% of the program income received each calendar year (e.g., loan repayments, interest earned on revolving funds).

d) Administrative costs shall be documented (e.g., timesheets, invoices, etc.).

e) Administrative costs charged to the RF shall not be used for general marketing activities or for the costs of preparing an application for a new CDAP grant from the Department.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.280 Revolving Fund Fundability Analysis

Each RF shall have a standard RF financial assistance application. The RF administrator shall conduct a review and maintain documentation for each RF application to support that minimum program requirements have been satisfied pursuant to Sections 110.250 and 110.260 of this Subpart and that fundability is consistent with the following:

a) Financial Feasibility Evaluation – The RF applicant shall submit supporting financial data which at a minimum shall include the following information:

1. A brief history of the business and past employment growth.

2. Market Information on the business' products or services and identification of existing and potential major customers and competitors.

3. Three years historical financial statements which consist of: a balance sheet, profit and loss statement and a reconciliation of net worth. This information shall cover three years, as well as the most recent 90 days. Accountant's notes or detailed notes, in those instances in which the statement is not audited, shall be included with the statement.

4. Prior three years of tax statements for those small businesses with no formal financial statements.

5. Personal financial statement of each principal (sole proprietor, partner, officer, stockholder) owning 20 percent or greater share of the outstanding stock or interest in the business, as well as a brief personal history statement for each.

6. Projected earnings report which includes a three year projected balance sheet and profit and loss statement, as well as a one year monthly cash flow statement. Base assumptions shall also be included.

7. Business plan and/or market feasibility information which addresses business products or services and identifies existing and potential major customers and competitors.

8. Financial statements of the general partners, if a business is a limited partnership. If a business is a corporate general partner, the personal and corporate financial statements of the general partner shall be submitted.

9. A list of major equipment or classes of equipment to be acquired. For acquisition of new machinery and equipment, reliable vendor cost estimates shall be provided. For used machinery and equipment acquisition, an appraisal shall be provided which demonstrates that the fair market value is in line with the purchase price.

10. A detailed explanation of the need for and specific use of working capital. If used for inventory, a list with supporting cost estimates shall be provided.

11. A list of all sources of leveraging documented by written letters of commitment. Loans from financial institutions used as leverage shall indicate approval as well as the loan amount, the specified term and rate, collateral, and conditions attendant to the loan. Equity contributions shall be documented through signed letters from the benefiting business.

12. Documentation of the legal status of the borrower and authorization to enter into the loan, e.g., Articles of Incorporation, Secretary's Certificate, Certificate of Good Standing, etc.

13. A letter verifying the number of jobs to be created and/or retained, including the number to be filled by low and moderate-income persons and the specific time period over which this will occur.

b) Determination of Need – Documentation shall be maintained by the RF administrator to verify that the RF application review procedures include criteria to determine if revolving funds are necessary. Such criteria shall consist of the following elements:

1. Evaluation of Project Costs – All costs associated with the project shall be verified prior to making a funding determination and establishing a funding level. Third party cost estimates shall be obtained to document all project costs. If a grantee does not use third-party quotations to verify cost elements, then the grantee shall conduct its own cost analysis using appropriate cost estimating manuals or services.

2. Verification of Other Funding Sources – At a minimum, the loan applicant shall show evidence, in the form of a bank commitment letter, of the level of financing that a bank will commit. This review shall also include an analysis of the private equity available to be committed to the project. All sources of funding shall be firmly committed in writing and maintained in the loan file. All units of local government with existing RFs shall utilize all available revolving funds prior to requesting funds through CDAP.

3. The grantee shall review the applications to ensure that, to the extent practicable, CDBG funds will not be used to substantially reduce the amount of non-RF financial support for the activity. To reach this determination, the grantee shall conduct a financial analysis of the project, including review of the appropriate projections of revenue, expenses, debt service and return on equity investments. The extent of the review shall be appropriate for the size and complexity of the project and use industry standards for similar projects, taking into account the unique factors of the project such as risk and location.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.290 Revolving Fund Financial Assistance Closings

Each grantee shall establish a financial assistance closing process for its RF that shall govern the negotiation and signing of the agreement and disbursement of the proceeds. This process finalizes the terms, conditions and covenants of the financial assistance.

a) The grantee shall establish a standardized financial assistance closing agenda or checklist which specifies legal and other programmatic documents required in connection with the Financial Assistance Agreement (e.g., documents and attachments which support collateral, amortization schedule, budget, project description, promissory note, finalization of hiring commitments and all outside financing sources per Section 110.280(b) of this Subpart).

b) The RF administrator shall obtain and review a letter from the recipient's legal counsel that states that the business is in compliance with all federal and State laws, as applicable, and that the company has no hidden liabilities or encumbrances.

c) Financial assistance documents may include the following:

1. A standardized loan document, including a loan agreement, promissory note and security agreement shall be developed which shall be a binding enforceable document.

2. A standardized financial assistance document shall be developed for each type of assistance utilized by the grantee.

d) Documentation shall be maintained in each financial assistance file demonstrating that compliance with all terms and conditions contained in the Financial Assistance Agreement have been met.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.300 Security

a) All RF loans from grantees to their recipients shall be secured with a mortgage, security agreement, promissory note, financing statement or other assignment of rights of the assets of assisted recipients.

b) In the event it is necessary or desirable to take actions to protect or further the interests of the RF, the grantee shall take timely actions to sell, collect, liquidate or otherwise recover loans, guarantees or other forms of financial assistance extended by the RF in accordance with the legal rights of the grantee and its administrator, other participants and the recipient.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.310 Disbursement of Revolving Funds

RF administrators shall keep records showing that the invoices or other evidence of the actual costs of the recipient's expenses were verified prior to the disbursement of RF. Grantees shall also assure that their disbursements are only for items approved under the agreement with the recipient. No RF drawdown may occur until the closing date has occurred and documentation exists to release RF to the recipient. The grantee may disburse funds to a financial intermediary that will close the Financial Assistance Agreement with the recipient for appropriate disbursement upon or after closing.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.320 Revolving Fund Monitoring

The purpose of monitoring is to assist recipients so they can successfully generate jobs for low and moderate-income persons and to safeguard the capital utilized to assure availability of funds for future financial assistance projects. This shall be accomplished through periodic and regular reviews and contact with recipients.

a) A repayment schedule, where appropriate, shall be prepared for each financial assistance project and shall be provided to the recipient at the time of closing. Procedures shall be established for notifying the recipient in advance of each payment date and following up on delinquent payments. A sufficient monitoring system shall provide for:

1. regular reporting;

2. scheduled telephone contact;

3. site visits;

4. regular financial assistance committee review of financial assistance status;

5. systematic reports and files; and

6. collection procedures.

b) Each RF grantee or administrator shall maintain a monitoring file for each Financial Assistance Agreement that includes the repayment schedule with repayment dates, if applicable, and amounts, a log of telephone calls with the date and items discussed, copies of correspondence with the recipient and progress reports.

c) The RF grantee or administrator shall designate an individual to prepare and distribute a monthly loan status report, listing all outstanding Financial Assistance Agreements and the individual payment status of each agreement in a format that shall include the recipient's name, financial assistance amount, date of agreement, payment due date, if applicable to the form of financial assistance, and the terms of the Financial Assistance Agreement. This status report shall also indicate whether recipient's payments, if applicable, are current or delinquent (i.e., late by 30 days, 60 days, etc.).

d) The grantee and the financial intermediary shall incorporate into the Financial Intermediary Agreement their respective responsibilities for monitoring the recipient and the agreement shall also establish the financial intermediary's reporting requirements to the grantee.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.330 Recordkeeping and Reporting

a) Grantees shall maintain all records of financial, programmatic and compliance activities. All documents that are associated with a financial assistance review process shall be maintained on file with the grantee.

b) All grantees shall submit semi-annual status reports to the Department. The January-June report shall be due no later than July 31 of each calendar year; the July-December report shall be due no later than January 31 of each calendar year. Failure to submit semi-annual status reports could result in delayed reimbursement of other active CDAP payments to the grantee or rejection of pending CDAP grant applications. Status reports shall include the following information:

1. Date submitted;

2. Name, title and telephone number of the person preparing the report;

3. Report period;

4. Name of the unit of local government;

5. Name of county;

6. Name of assigned Department compliance review staff;

7. For financial assistance made from revolving funds, the following:

A) Date of agreement;

B) Name of recipient;

C) Initial amount;

D) Total amount to be recaptured, broken out by principal, interest and other forms of payment;

E) Total amount recaptured to date, broken out by principal, interest and other forms of payment;

F) Status (i.e., current (yes/no) or closed);

G) Number of jobs created/retained;

H) Number of jobs created/retained for low and moderate-income persons;

I) Source and amount of other financing;

J) If payments scheduled under a Financial Assistance Agreement are not current, date of last payment;

K) A list of RF Financial Assistance Agreements in default or in bankruptcy and a full description of the current status of those Agreements, including collection efforts;

8. A copy of the amortization, royalty payment, and other program income schedules that relate to each Financial Assistance Agreement; and

9. Signature of the chief elected official for the unit of local government certifying that the information contained in the report is true and correct and is supported by documentation on file at their office.

c) Each Department-funded CDAP Financial Assistance Agreement shall contain the following:

1. Agreement number;

2. Date of Financial Assistance Agreement;

3. Initial amount;

4. Total amount to be recaptured, broken out by principal, interest and other forms of payment;

5. Total amount recaptured to date, broken out by principal, interest and other forms of payment;

6. Status (i.e., current (yes/no) or closed);

7. If payments scheduled under a Financial Assistance Agreement are not current, date of last payment;

8. A list of CDAP Financial Assistance Agreements in default or in bankruptcy and the full description of the current status of those Agreements, including collection efforts.

d) Totals for information listed in subsections (c)(5), (b)(7)(C) and (b)(7)(E) shall be included in the following computation: Total CDAP recaptured amounts less the total amount of financial assistance provided for the RF plus total RF recaptured amounts less eligible infrastructure expenditures less eligible administrative expenses plus interest earned on deposits. This formula allows the grantee to determine the total amount in its RF. This figure shall match the balance shown on the grantee's bank statement at the end of the report period. A copy of the bank statement shall be attached to the semi-annual report and submitted to the Department.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.340 Department Monitoring

a) The grantee shall be responsible for operating the RF in accordance with the terms of its CDAP grant agreements and its RF Plan.

b) The grantee shall permit any agent authorized by the Department, upon presentation of credentials, to have full access to and the right to examine any documents, papers, and records of the grantee and the RF relating to transactions of the RF.

c) The Department shall monitor RF programs using on-site visits, semi-annual status reports submitted by the grantee, disbursement transactions and other contacts with the grantee as necessary.

d) Department monitoring procedures shall concentrate on financial assistance evaluation and decision-making as well as servicing and monitoring of RF agreements. The grantee shall remain responsible for the actions, compliance and recordkeeping of its administrator. Grantee communities are responsible for establishing a system to monitor the performance of their RF administrator.

e) Pursuant to its obligations under the Act, this Part, and the applicable grant agreements, the Department will conduct a program of RF visitations for the purpose of providing technical assistance and monitoring the operations of the local RF grantees. As a result of those visits, the Department may take any of the following actions, by way of sanctions against inappropriate local RF activities or against the grantee jurisdiction:

1. issue "Findings" outlining deficiencies in the RF operations and requiring that they be corrected within a specified time;

2. the Findings may mandate the return to the RF account, from non-Block Grant sources, amounts disbursed for ineligible activities;

3. require for a specified period of time (including permanently) that an RF seek prior written approval from the Department for any specified activity. Specified activities may be limited, for instance, to include only new Financial Assistance Agreements made, or may include all RF activities. This sanction may include the requirement that all application materials for new financial assistance be forwarded for review to the Department;

4. the grantee may be deemed to be unable to continue operations of a local RF program, in which case the Department may take any of the following actions:

A) revocation of local authority to operate a CDBG RF;

B) instruct the grantee to continue to collect loan payments of existing Financial Assistance Agreements and service the current portfolio. However, no additional Financial Assistance Agreements would be allowed to be made from the portfolio. Instead, on a yearly basis the balance available in the account would be returned to the Department; and

C) instruct the grantee to turn over the cash balance and loans in the RF to the Department.

f) The grantee or RF administrator shall conduct at least one on-site monitoring visit of each RF financial assistance recipient to verify job creation and retention, low and moderate-income benefit, documentation of expenditures, and compliance with the other terms and conditions of the Financial Assistance Agreement before closing out a project and shall maintain documentation of the visit.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.350 Evaluation of Performance

a) The Department shall review the RF to determine if the grantee has administered and carried out its RF activities in compliance with the requirements and criteria outlined in Subpart B, with emphasis upon:

1. The requirements of Section 110.230 that there be an approved updated recapture strategy.

2. The requirements of Sections 110.250 and 110.270 regarding the eligible uses of revolving funds and administrative costs.

3. The requirements of Section 110.260, specifically Section 110.260(c), and Section 110.270(d) that outline the basic RF requirements, stating that, for each Financial Assistance Agreement, not less than 51% of the jobs created or retained shall benefit low and moderate-income persons.

4. The development of and adherence to sound administrative principles and procedures pursuant to the requirements of Sections 110.240, 110.280 and 110.290.

5. The requirements of Sections 110.300, 110.310, and 110.320 of the RF implement solid lending and investing practices and strict follow-up procedures. This shall be evidenced by a Financial Assistance Agreement compliance worksheet acceptable to the Department that includes information pertaining to and based upon the number of Financial Assistance Agreements made through the RF, the number of non-performing Financial Assistance Agreements, the underlying justification for the financial assistance (Section 110.280) and the documentation on file regarding follow-up, including legal action.

6. The grantee's past performance and past willingness to act on Department recommendations resulting from its periodic monitoring visits pursuant to Section 110.340.

b) With the receipt of any new economic development grant awarded under Subpart A of this Part, the Department shall evaluate the performance of an existing RF using the criteria found in subsection (a) of this Section as a condition of retaining future repayments.

History

• Source: Amended at 28 Ill. Reg. 13468, effective September 23, 2004

47 Ill. Adm. Code 110.360 Program Income Subject to the Act

a) Any program income (as defined in Section 110.220 of this Subpart) that the Department has permitted a grantee to retain and that is realized while the grantee has an open CDAP grant is subject to the requirements of the Act and 24 CFR 570.

b) Program income retained by the grantee generated from a CDAP grant award shall always be subject to the requirements of the Act and 24 CFR 570 regardless of whether the CDAP grant that generated the income is closed. For purposes of this Subpart, a closed project is defined in Section 110.220.

c) Regardless of when the program income is earned, the RF shall always be subject to the requirements of the approved recapture strategy and each beneficiary of funds through the RF shall benefit at least 51% low and moderate-income persons.

History

• Source: Amended at 38 Ill. Reg. 21323, effective October 30, 2014

Part 120 State Administration of the Federal Community Services Block Grant Program

47 Ill. Adm. Code 120.10 Legislative Base

a) Federal

1. On July 31, 1981, Congress passed the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35). This Act established 7 block grant programs, including the Community Services Block Grant. These block grants replace a large number of programs previously administered by the Federal Government. The Omnibus Budget Reconciliation Act also transferred primary responsibility for the administration of the block grant programs to the states and conferred substantial discretion on the states as to use of the block grant funds.

2. The Community Services Block Grant (CSBG) Act (Act) was enacted as Subtitle B of Title VI of the Omnibus Budget Reconciliation Act (Sections 671-683) and replaced the following programs formerly administered by the Community Services Administration under the Economic Opportunity Act of 1964 (42 USC 2701 et seq.):

A) Community Action/Local Initiative

B) Senior Opportunities and Services

C) Community Food and Nutrition

3. The Omnibus Budget Reconciliation Act authorized to be appropriated $389,375,000 for fiscal year 1982 and such sums as may be determined by Congress for the succeeding fiscal years to carry out the provisions of that Act.

4. States were eligible to receive funds under the Community Services Block Grant on October 1, 1981.

b) State

1. On September 9, 1981, the Governor officially requested the Secretary of the U. S. Department of Health and Human Services to delegate to the State responsibility for administering the Community Services Block Grant Program in Illinois. At this time, he also designated the Illinois Department of Commerce and Community Affairs as the agency to administer the program for the State. On September 29, 1981, the Department of Commerce and Community Affairs submitted the application document consisting of the assurances and plan required under Section 675 of the law, and the pre-expenditure report for fiscal year 1982 as required by Section 1742(a).

2. The State must hold at least one legislative hearing every three years in conjunction with the development of the State Plan (42 USC 99087(a)(3)).

3. As part of its application, the State certified that it agreed to use funds available under the Community Services Block Grant:

A) to support activities that are designed to assist low-income families and individuals, including families and individuals receiving assistance under Part A of Title IV of the Social Security Act (42 USC 601 et seq.), homeless families and individuals, migrant or seasonal farmworkers, and elderly low-income individuals and families, and a description of how such activities will enable the families and individuals:

i) to remove obstacles and solve problems that block the achievement of self-sufficiency (including self-sufficiency for families and individuals who are attempting to transition off a State program carried out under Part A of Title IV of the Social Security Act);

ii) to secure and retain meaningful employment;

iii) to attain an adequate education, with particular attention toward improving literacy skills of the low-income families in the communities involved, which may include carrying out family literacy initiatives;

iv) to make better use of available income;

v) to obtain and maintain adequate housing and a suitable living environment;

vi) to obtain emergency assistance through loans, grants, or other means to meet immediate and urgent family and individual needs; and

vii) to achieve greater participation in the affairs of the communities involved, including the development of public and private grassroots partnerships with local law enforcement agencies, local housing authorities, private foundations, and other public and private partners to: document best practices based on successful grassroots intervention in urban areas, to develop methodologies for widespread replication; and strengthen and improve relationships with local law enforcement agencies, which may include participation in activities such as neighborhood or community policing efforts;

B) to address the needs of youth in low-income communities through youth development programs that support the primary role of the family, give priority to the prevention of youth problems and crime, and promote increased community coordination and collaboration in meeting the needs of youth, and support development and expansion of innovative community-based youth development programs that have demonstrated success in preventing or reducing youth crime, such as:

i) programs for the establishment of violence-free zones that would involve youth development and intervention youth mediation, youth mentoring, life skills training, job creation, and entrepreneurship programs; and

ii) after-school child care programs;

C) to make more effective use of, and to coordinate with, other programs related to the purposes of the federal statute (including State welfare reform efforts) (42 USC 9908(b)(1)(A)-(C));

D) to provide on an emergency basis for the provision of such supplies and services, nutritious foodstuffs, and related services, as may be necessary to counteract conditions of starvation and malnutrition among the poor;

E) to coordinate and establish linkages between governmental and other social services programs in order to assure the effective delivery of such services to low-income individuals; and

F) to encourage the use of private sector entities of the community in efforts to ameliorate poverty in the community.

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.20 Purpose and Scope

The purpose of this Part is to develop regulations and guidelines relative to requirements for the administration of the Community Services Block Grant Program within the State of Illinois. The promulgation of clear-cut program guidelines for the Community Services Block Grant Program will ensure the maximum and efficient use of funds for the anti-poverty effort within the State.

History

• Source: Amended at 10 Ill. Reg. 8666, effective May 13, 1986

47 Ill. Adm. Code 120.30 Definitions

“Act” means the federal Community Service Block Grant Act (42 USC 9901).

"Administering Board" – a tripartite, community based administering board shall be established when a local government or combination of governments is the grantee. All related policies and decisions adopted and implemented by the governmental body shall be based upon recommendations of the administering board. This board shall be established in accordance with Section 120.70(b) of this Part as required in Section 676B(b) of the Act (42 USC 9910(b)).

"Community" – The geographic area served by the Grantee and may be a county, a city, or multi-county unit.

"Community Action Agency (CAA)" – A governmental or not-for-profit agency established to carry out anti-poverty activities and possessing a unique governing or administering board structure as outlined in Section 676B(a) and (b) of the Act (42 USC 9910(a) and (b)).

"Department" – The Illinois Department of Commerce and Community Affairs.

"Designating Official" – Chief elected official of the political subdivision encompassed by the CAA. If a multi-jurisdictional CAA, the designating officials shall be the highest elected official from each of the member political subdivisions.

"Eligible Entity" – Any organization that was officially recognized as a Community Action Agency under the provisions of Section 210 of the Economic Opportunity Act of 1964 or recognized by the Governor or his duly authorized representative under the provisions of the Illinois Economic Opportunity Act and Sections 673 and 676A of the Act (42 USC 9902(1) and 9909).

"Equipment" – Nonexpendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.

"Grant Document" – Community Services Block Grant contract documents between the Department and the Grantee for a specific program period that details the responsibility of each party.

"Grantee" – The local organization administering the Community Services Block Grant in a specified geographic area.

"Program Income" – Earnings by the grantee realized from grant supported activities.

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.40 Allocation

a) General Allocation – Under the conditions of the Community Services Block Grant, the State disbursed, for fiscal year 1982 only, 90 percent of the funds allotted thereto for purposes described in Section 120.10 of this Part to eligible entities as defined in this Part; to disburse for fiscal year 1983, and for each subsequent fiscal year, not less than 90 percent of the funds allotted to the State in grants to eligible entities as defined in Sections 673 and 675C of the Act (42 USC 9902 and 9907) and in Section 120.60 and to expend not more than 5 percent of its allotment for administrative expenses at the State level.

b) Grantee Allocation for Calendar Year 1982 – The State disbursed 90 percent of the CSBG program funds to existing Community Action Agencies by a formula based on the average of two amounts: one calculated on the basis of the previous federal fiscal year 1981 Community Services Administration funding and the other amount based on the Grantee's jurisdictional share of the State's poverty population according to the most recent decennial census.

c) Grantee Allocation for Calendar Year 1983 and Subsequent Fiscal Years – The State will allocate 90 percent of the CSBG program funds to eligible entities who collectively represent all of Illinois' 102 counties and the City of Chicago. Ninety percent of this allocation will be based upon the Grantee's jurisdictional share of the State's poverty population. The remaining ten percent will be similarly allocated, however, in such a manner as to best enhance the CSBG program objectives, and will include consideration of agency performance evaluations and State program priorities.

d) CSBG Discretionary Funds – The 5% non-earmarked or discretionary funds will be used to fund various types of low-income assistance projects. This includes but is not limited to the following:

1. provide training and technical assistance to those entities in need of such training and assistance;

2. coordinating State-operated programs and services, and at the option of the State, locally-operated programs and services, targeted to low-income children and families with services provided by eligible entities and other organizations funded under the federal statute, including detailing appropriate employees of State or local agencies to entities funded under the federal statute to ensure increased access to services provided by such State or local agencies;

3. supporting statewide coordination and communication among eligible entities;

4. analyzing the distribution of funds made available under the federal statute within the State to determine if such funds have been targeted to the areas of greatest need;

5. supporting asset-building programs for low-income individuals, such as programs supporting individual development accounts;

6. supporting innovative programs and activities conducted by community action agencies or other neighborhood-based organizations to eliminate poverty, promote self-sufficiency, and promote community revitalization; and

7. supporting other activities, consistent with the purposes of the federal statute (42 USC 9907(b)(1)(A)-(G)).

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.50 Grant Application Requirements

a) Preapplication Requirements

1. Applicants for "90% CSBG funding" as indicated in Section 120.40 will be required to meet certain requirements prior to submitting an application. These requirements are:

A) a properly structured and functioning tripartite board as indicated in Section 120.70;

B) an undelegated (to any other corporate entity) basic central administrative capacity to receive, hold, expend or transfer and account for federal and State assistance funds, to procure facilities, goods and services, to enforce delegation agreements and procurement contracts and to accept, use and account for contributions from non-federal sources;

C) an effective outreach and referral program;

D) a continuing planning process and capability;

E) a centralized fiscal management system; and

F) an effective citizen participation/community involvement program.

2. Applications will not be processed nor grants awarded prior to the Department's review of the applicant's compliance in these five areas.

b) Application Requirements

In preparing its application for funding assistance under the CSBG program, the grant applicant is required to submit the following items:

1. Community Action Plan: With its submission of an application for funding under the CSBG program, the applicant must submit a Community Action Plan which includes information identified in subsections (b)(1)(A) through (G). Subsequent to the Department's receipt of the Community Action Plan, a letter will be transmitted acknowledging receipt and prescribing corrective action for any inadequacies in the plan.

A) Community Action Plan Summary: This section is submitted annually and should summarize the entire Community Action Plan (CAP) and describe how CSBG funds are used to support the operations of the agency beyond the specific programs provided. Its purpose is to describe the agencywide or CSBG-specific process used to develop the Plan, how the Board, client population and the community were involved in the process, and type of data collected and provide narrative of the needs identified.

B) Needs Assessment: Community Action Agencies (CAAs) must conduct a community-wide needs assessment, including food and nutrition needs, of the low-income population. On an annual basis, the results of the survey, changes, and trends are to be submitted to the Department. Triennially, grantees must compile and analyze data such as demographics, family types, school dropout rates, availability of status of low-income housing stock, youth and domestic violence, and transportation availability and provide a narrative of the needs identified.

C) Service Delivery System: The Community Action Plan should identify the service delivery in the CAA service area that is targeted toward low-income citizens. It should also identify the accessibility and effectiveness of that system in meeting the needs of low-income clients. This component is to be submitted with the triennial comprehensive CAP and updated annually if there are significant changes in the service delivery system.

D) Linkages: The CAP must contain a description of how the agency reaches out to its client community and how it provides information and referral services, case management and follow-up to ensure comprehensive services to its low-income population. This component is to be submitted with the triennial comprehensive CAP and be updated annually if the process changes.

E) Coordination: This section describes how CSBG funded services are coordinated with other resources (internal and external), how the coordination is accomplished (both formal and informal), and identify any local groups the agency participates in that enhances coordination. This section is submitted with the triennial comprehensive CAP and updated annually if there are significant changes in coordination.

F) Community and Neighborhood-Based Initiatives: This section is a requirement that should describe how the agency will use funds to support community and neighborhood-based initiatives, which may include fatherhood initiatives, or other initiatives with the goal of strengthening families and encouraging effective parenting. This section should be submitted with the triennial comprehensive CAP and updated annually if there are significant changes in the initiatives.

G) Youth Programming: This Section is a new requirement that should describe how the agency will address the needs of youth in low-income communities through youth development programs that support the primary role of family, give priority to the prevention of youth problems and crime and promote increased community coordination and collaboration in meeting the needs of youth. This Section should be submitted with the triennial comprehensive CAP and updated annually if there are significant changes in the programming and coordination.

H) Outcome: This Section describes the outcome measures to be used to evaluate the success of the applicant in promoting self-sufficiency, family stability and community revitalization. This Section is to be addressed annually.

2. Affirmative Action Plan: The applicant agency must submit an affirmative action plan with its annual application for assistance. The affirmative action plan may follow such format as designed by the applicant, but must include information required by the Department.

3. Annual Work Plan: The work program will narrate the objectives and activities proposed to be undertaken with grant funds. The work program will detail specific annual CSBG goals, objectives that include performance and outcome measures, the activities proposed to meet each objective, and the costs to be incurred in carrying out the activities (including non-CSBG costs).

4. Annual Budget: The applicant shall submit a grant budget by cost categories and line items on budget forms provided by the Department.

5. Cost Allocation Plan: The Department requires grantees who do not have a negotiated indirect cost rate under the jurisdiction of a federal cognizant agency to submit an annual cost allocation plan either for a calendar year or in conjunction with the Grantee’s corporate year.

6. Assurances and Certifications: The applicant will be required to assure compliance with cost and accounting standards of the Office of Management and Budget in addition to certifying its compliance with all applicable State and federal laws and regulations dealing with the receipt and expenditure of grant monies.

c) Application Schedule

At least 30 days before the beginning of its funding year: applicants must submit the Community Action Plan, Affirmative Action Plan, Annual Work Program, Annual Grant Budget, Board information, corporate status documentation and bylaws to the Department.

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.55 Grantee Termination or Reduction in Funding

For the purpose of this Part, Section 676 (Assurance 13) and 678C of the Act (42 USC 9908(13) and 9915), administrative requirements of 47 Ill. Adm. Code 1.110, and the provisions of this Section are applicable.

a) Any Community Action Agency (CAA) shall not have its funding reduced or terminated and shall be awarded continuing CSBG program administering responsibilities in its established jurisdiction unless one or more of the following shall occur:

1. written communication to the Department stating its desire to discontinue operation of the program;

2. material failure by the CAA to comply with Sections 673, 675, 676 and 678 of the Act (42 USC 9902, 9904, 9908 and 9912) and 45 CFR 96; and

3. Failure to comply with provisions of the grant agreement and the provisions of this Part.

Examples of material failure and failure to comply include, but are not limited to, fraud, disallowance of costs that could render the CAA insolvent, denial of access to records of grant-related transactions, false reporting, serving ineligible clients, not meeting State-mandated service priorities and disregard for timeliness and accuracy in the submittal of grant required documents.

b) Upon discovery of one of the conditions noted in subsection (a), the Department will take the following action:

1. For reduction in funding, other than due to allocation changes, the Department will notify the CAA in writing of its initiation of the reduction, stating the reason, the amount and the process, including corrective action provisions when applicable, and appeal provisions.

2. For termination of funding, the Department will provide notice to the CAA of the deficiency causing the initiation of termination proceedings, require the agency to correct the deficiency, and offer training and technical assistance to the agency to assist in correcting the deficiency. The notice will also advise the CAA of its right to a hearing on the matter in accordance with Section 678C of the Act (42 USC 9915) and this Part. If the Department is concerned with potential audit disallowances, it will advise the CAA that in order to receive continued CSBG funding throughout the termination process, it must agree to submit to a Department appointed official as a reviewer of all CSBG-related expenditures. The only CSBG costs that will be approved by the reviewer are those that are allowable under this Part. In the event that the CAA does not agree to the Department’s review of expenditures, notice of funding suspension pending termination will be provided to the CAA and simultaneously to the Secretary of the U.S. Department of Health and Human Services. The Department will also advise the CAA of its right to seek direct funding from the U.S. Department of Health and Human Services.

c) The hearing shall be conducted in accordance with the Department’s administrative hearing rules found at 56 Ill. Adm. Code 2605.

d) The Director of the Department will review the hearing officer's recommendation and will base his/her decision on findings of fact and conclusions of laws that substantiate grant termination pursuant to Section 120.55(a). The Department will notify the CAA of the Department's final determination.

e) Secretary's Review

If the Department's decision is to terminate funding to the CAA, the Department shall also, with its notice to the CAA, advise the CAA of the provisions for review of the termination proceedings by the Secretary of the Federal Department of Health and Human Services pursuant to Section 678C of the Act (42 USC 9915).

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.60 Grantee Selection

a) In areas of the State where the grantee's CSBG funding has been terminated in accordance with Section 120.55, the Department will initiate a process to select a successor agency in accordance with Sections 673 and 676 of the Act (42 USC 9902 and 9908). The grantee selection process will be initiated in a timely manner (process to select successor agency as defined in this Section shall not exceed 120 days) so as not to cause undue program delays or interruptions.

1. The following are eligible for CSBG 90% funding:

A) Any organization which was officially recognized as a Community Action agency (CAA) under the provisions of Section 210 of the Economic Opportunity Act of 1964 as amended, unless such organization lost its recognition as a result of failure to comply with the Act.

B) Any organization officially recognized as a CAA by the Governor, or his duly authorized representative, under the provisions of this Part and in accordance with the Illinois Economic Opportunity Act. Organizations eligible for State CAA recognition include:

i) Any non-profit private community organization serving a jurisdiction of at least 100,000 population, designated by the governments of the jurisdiction, determined to be capable of planning, conducting and administering a community services program under criteria described in Section 120.50 and having a Board which meets the provisions outlined in Section 120.70.

ii) Any city within the State with a population in excess of 100,000 or a county or group of contiguous counties with a minimum population base of 100,000. The governmental unit must be capable of planning, conducting and administering a community services program under criteria described in Section 120.50 and must have an Administering Board in accordance with Section 120.70. (The 100,000 population base referenced in subsections (a)(1)(B)(i) and (ii) is waived for CAAs designated and recognized prior to this amendatory rulemaking.)

2. Notification and Special Solicitation

A) The Department shall notify, in writing, each contiguous existing CSBG eligible entity and others within reasonable proximity (corporate headquarters of the eligible entity is within 50 miles of the boundary of the area to be served), that the area is presently unserved by the CSBG program, and the Department is seeking a successor agency. In its notification, the Department shall advise the agency to request, if interested, an application package in order to apply for CSBG service provision in the area to be served. The agency shall have 10 days from date of notice to request the application package. The requests shall be directed to the Manager of the Division of Economic Opportunity.

B) The Department will allow the requesting agency 45 days from the date of mailing the application package, to complete the application and submit three copies to the Department. The Department will adhere to this 45 day period, unless the agency which requested the application package communicates to the Department its lack of interest in applying.

C) The Department will respond in writing indicating acceptance or rejection of any application from an existing eligible entity within 10 days after receipt of the application.

D) If the special solicitation period for the existing eligible entities produces no interest or no acceptable service delivery applications (applications did not meet the criteria specified in Sections 120.50 and 120.60(a)(3)), the Department will solicit applications from organizations within the service delivery areas as specified in subsections (a)(1)(B)(i) and (ii) of this Section.

3. Application Contents

In addition to the requirements found in Section 120.50, the application for CSBG service delivery shall include the following:

A) The applicant must demonstrate the support of the public, private and client sectors of the population in the service delivery area (e.g., results of public hearings, letters of support).

B) The applicant must obtain the formal designation (documented resolution) or intent to designate from the principal governing bodies in the service delivery area.

C) The application must include detailed information on how the required community action agency board will be constituted (see Section 120.70). (For existing eligible entities applying for the new service delivery area, this information must specify how the representatives of the new area will become a part of the of the applicant's existing CSBG administering/governing board.)

D) The application must demonstrate how service delivery will be made available to all geographic areas of the service delivery area and how all elements of the area's eligible population will be reached.

E) The applicant agency must supply the following information that describes its base and purpose:

i) statement of the mission of the agency;

ii) organizational chart of the agency; and

iii) written assurances that the applicant agency is a legally established entity with authority to operate in the service area for which the application is being submitted.

F) The applicant agency must supply the following information that describes agency experience:

i) a history;

ii) a description of past experience (if any) in providing services to the proposed target group (i.e., impoverished population); and

iii) a description of services currently delivered by the agency that are related or complementary to this program.

G) The applicant agency must provide the following information regarding its Equal Employment Opportunity/Affirmative Action Policies:

i) written documentation which indicates compliance with equal opportunity and affirmative action regulations (Affirmative Action Plan, see Section 120.50(b)(2)); and

ii) the applicant must supply a written statement as to whether the applicant has been party to any proceedings or litigation with regard to equal employment opportunity or affirmative action investigations or complaints conducted by or filed with the Illinois Department of Human Rights or the U.S. Equal Employment Opportunity Commission. If so, a description of the nature of the investigation or complaint and the case resolution or anticipated date of resolution if such case is pending.

4. Application Format

The format for the application will be in accordance with Section 120.50. Forms will be provided by the Department and will be a part of the application package provided to the applicant.

5. Evaluation of Applications

A) Applications must meet all the requirements of Sections 120.50 and 120.60(a)(3) to be placed in consideration for funding.

B) The decision process will include an evaluation of the following agency attributes:

i) ability to conduct multiple programs, with a variety of staff members and funding sources;

ii) have traditionally served impoverished populations in their area (e.g., low-income minorities, youth, elderly, etc.);

iii) have coordinated their programs with other area antipoverty programs;

iv) have included the recipients of their services in agency decision-making (see Section 120.70);

v) have the support of the local governments of the counties that shall be evidenced through formal resolutions, letters of endorsement;

vi) can demonstrate that they have effectively provided those services to their clients that are specified by the agency's mission (e.g., agency performance records);

vii) provide the highest ratio between the amount of grant funds to be used for direct services and the amount to be used for administrative expenses (i.e., project low administrative costs);

viii) propose multiple programs which emphasize the priorities of the Department (see Section 120.110);

ix) address specific local needs (e.g., job creation, housing, education);

x) have well-defined outcome measures that can be monitored and used to evaluate the success in promoting self-sufficiency, family stability, and community revitalization;

xi) utilize CSBG funding to leverage other funds and services that will benefit the poor in the community; and

xii) propose coordination and form partnerships with other low-income residents of the communities, including religious organizations.

C) Applications must address one or more of the program priorities described in Section 120.110, with the highest priority being placed on economic development programs which create jobs.

D) The Department will give special consideration, in its selection, to agencies with prior experience in operating similar or other Department funded programs and with documented records of compliance with rules, regulations, and grant conditions relating to their program operation.

E) The Department will conduct and give special consideration to the results of a public hearing in which competing agencies are provided the opportunity to present their case for selection to the public in the area to be served by the program.

F) The Department will consult with and take into account the recommendations of the principal governing bodies in the service delivery area.

G) The final decision will be based upon the weight of the facts and recommendations found in subsections (a)(5)(A)-(F). The most effective, efficient and well coordinated program delivery system available will be selected.

b) Interim Service Provision

When the CSBG funding of an eligible entity is suspended, pending termination (in accordance with Section 120.55) and expected to undergo federal review, appeals, and/or litigation, the Department will, within 30 days after its decision to terminate funding, initiate the following steps to establish an interim provider.

1. First preference for interim service provision will be given to a fiscal/operating agreement with the Illinois Community Action Association (ICAA). The Department will select another interim service mechanism only if the ICAA declines or if agreement cannot be reached on the interim services contract.

2. Establish the services for an interim period through a fiscal/operating agreement with:

A) a contiguous Community Action Agency, or

B) contracted services of a local public or not-for-profit agency with experience in human service delivery (e.g., Head Start Program, Food Commodity Program, and Women, Infants, Children (WIC) Program), or

C) directly provide the services.

c) Discretionary Funding Eligibility

CSBG discretionary funds may be awarded to entities other than those listed in this Part when it is determined by the Department to be in the best interest of the CSBG program and consistent with the Governor's CSBG assurances and Section 120.40 of this Part.

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.70 Required Board Structure

a) Grantee Board Requirement

1. Each Grantee participating in the "90% funding" category of the Community Services Block Grant Program is required to establish a broadly representative Board of Directors as outlined under section 211(a) of the Economic Opportunity Act of 1964, as amended, and as required in Section 676B of the Act (42 USC 9910).

2. When a private non-profit corporation or a separate public agency is the Grantee, the Board of Directors is a Governing Board with full corporate powers and authority. When a local government or combination of governments is the Grantee, it shall operate the program through an Administering Board with powers and responsibilities delegated to it by the local governments.

b) Composition of the Board

1. The Grantee must certify that its governing or administering board will be constituted so as to assure that:

A) ⅓ of the members of the board are elected public officials, currently holding office, or their representatives, except if the number of elected officials reasonably available and willing to serve is less than ⅓ of the membership of the board, membership on the board of appointive public officials may be counted in meeting the ⅓ requirement; public officials shall be appointed by and serve at the pleasure of the designating officials;

B) not fewer than ⅓ of the members are persons chosen in accordance with democratic selection procedures adequate to assure that these members are representative of low-income individuals and families (see Section 120.120 of this Part) in the neighborhood served;

C) each representative of low-income individuals and families selected to represent a specific neighborhood within a community under subsection (b)(1)(B) resides in the neighborhood represented by the member; and

D) the remainder of the members are officials or members of business, industry, labor, religious, law enforcement, education, or other major groups and interests in the community served (42 USC 9910(a)(2)(B)-(C)).

2. The board shall have at least 15 and no more than 51 members. It shall meet at least 4 times a year and maintain official meeting records.

3. Tenure for board representatives described in subsections (b)(1)(B) through (D) shall be at the discretion of the local entity.

4. If a Grantee board is determined by the State, to be improperly seated, the State will prescribe necessary remedial action. The notice of finding and required corrective action shall be provided the Grantee in writing. The Grantee shall have 30 days from notice to bring the board into compliance with this Section. Failure by the Grantee to fully respond to the corrective action demand will result in grant termination procedures as specified in Section 120.55 of this Part.

5. The board shall establish procedures under which a low-income individual, community organization, or religious organization, or representative of low-income individuals that considers its organization, or low-income individuals, to be inadequately represented on the board (or other mechanism) of the eligible entity to petition for adequate representation (42 USC 9908(b)(10)).

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.80 Administrative Requirements

For the purpose of this Part, administrative requirements specified in 47 Ill. Adm. Code 1 and this Section are applicable.

a) Compensation – The Grantee cannot be reimbursed for costs which exceed the total approved budget. If the Grantee believes its operation for the grant period will exceed a budgeted line item or cost category, it shall request approval of the Department in writing and give justification for the requested variation prior to exceeding any approved budget line item or cost category. However, Program Support and Client Assistance cost categories and all inclusive line items may vary up to 20% from the approved budget amount. In no event shall the Administration cost category be increased without prior written approval from the Department and the Special Category may only be increased. The Department will grant approval to modify budgeted amounts when the modification is necessary to achieve program objectives.

b) Carry-over

1. Unexpended Funds – CSBG fund balance from the previous fiscal year will be, subject to written approval of the Department, carried into the Grantee’s succeeding fiscal year CSBG program. The carry-over funds will not reduce the succeeding fiscal year allocation, but the carry-over amount should not exceed 20% of the agency’s annual CSBG allocation and the succeeding year’s work program must reflect additional planned program achievements with reasonable probability of accomplishing those planned achievements so as to eliminate future substantive unexpended balances.

2. Limitation Waiver – CAAs may request the Department to waive the 20% limitation when unforeseen circumstances, such as a project not materializing, high staff turnover or other similar reasonable causes contributed to an excess carry-over. If the CAA has no reasonable excuse for the excess carryover, the Department will allow the CAA to reprogram the total carry-over amount, including excess, for one succeeding year. If the CAA violates the 20% limitation the second succeeding year, without a valid, reasonable excuse, the Department will deobligate the excess funds and redistribute them to CAAs, through either a competitive, pilot program solicitation or formula allocation process.

3. Economic Development Requirement (Section 120.110(b)(1)) Carry-over Exception – CAAs are considered by the Department to be not in compliance with their grant agreement when during the grant period they spend less then 50% of their required 10% earmark for job creating economic development (Budget Category “D” funds). In this case, the entire remaining Category “D” balance will be excluded from allowable carry-over and will be deobligated by the Department. CAAs that spend at least 50%, but less than the earmarked amount, will be required to place that carry-over portion into Category “D” of the subsequent grant agreement.

c) Reporting

1. Monthly Reports – An expenditure report shall be submitted to the Department at the time of each cash request, but no less frequently than the 10th calendar day of each month after the first month of the grant period. The report shall be in a format established by the Department and shall contain such financial information required by the Department.

2. Quarterly Reports – A Quarterly Program Report, prepared in a form and manner prescribed by the Department, shall be submitted to the Department by the 30th day following the end of each calendar quarter. The report shall include, but not be limited to, the name of the work program, the estimated number of individuals to be served by the program, and the number of individuals actually served by the program.

3. The Grantee shall submit other programmatic reports as may be required by the Department.

d) Subcontracts and Subgrants – The Grantee’s services, duties and responsibilities under CSBG shall not be subcontracted or subgranted by the Grantee without prior written approval of the Department. Any subcontracts or subgrants shall be subject to and conform with all applicable State and federal laws and the terms and conditions of Department grant agreements.

e) Publication, Reproduction and Use of Material – Any publication produced as a result of a CSBG grant shall include in its title page the following citation: "This project was conducted with funds provided by the Illinois Department of Commerce and Community Affairs and does not necessarily represent in whole or in part the viewpoint of the Illinois Department of Commerce and Community Affairs."

f) Assurances – The State and Grantees must comply, as applicable, with the provisions of section 676(b)(1) through (13) of the Act (42 USC 9908(b)(1)-(13)).

g) Monitoring – In order to determine whether grantees meet the performance goals, administrative standards and financial requirements established by the State, the Department shall conduct the following reviews of grantees:

1. a full onsite review at least once every 3 years;

2. an onsite review of each newly designated grantee during or immediately after the completion of the first year of funding; and

3. follow up reviews including prompt return visits to grantees that fail to meet the goals, standards and requirements established by the Department (42 USC 9914(a)).

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.90 Nondiscrimination

a) Equal Employment Opportunity

1. In carrying out the program, the Grantee shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, ancestry, age, physical or mental disability unrelated to ability, marital status, or unfavorable discharge from military service. The Grantee shall take affirmative action to insure that applicants for employment are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, national origin, ancestry, age, physical or mental disability unrelated to ability, marital status, or unfavorable discharge from military service. Such action shall include, but not be limited to, the following: recruitment, advertisement, application, interview, medical inquiry, employment, rates of pay or other compensation; promotion, training, layoff, benefits, and privileges of employment. The Grantee shall post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. The Grantee shall state that all qualified applicants shall receive consideration for employment without regard to race, color, religion, sex, national origin, ancestry, age, physical or mental disability unrelated to ability, marital status, or unfavorable discharge from military service. The Grantee shall incorporate the foregoing requirements of this subsection (a) in all of its contracts for program work.

2. The Grantee shall cause or require to be inserted in full in any contract and subcontract for work, or modification thereof, all applicable federal and State Equal Employment Opportunity Provisions.

b) Discrimination – The Grantee shall refrain from unlawful discrimination in employment and shall undertake affirmative action to assure equality of employment opportunity and eliminate the effects of past discrimination in accordance with the Illinois Human Rights Act [775 ILCS 5]. The Grantee shall also adhere to the nondiscrimination provisions of rules issued by the Illinois Department of Human Rights entitled "Procedures Applicable to All Agencies" (44 Ill. Adm. Code 750. Appendix A); Section 504 of the Rehabilitation Act of 1973 (29 USC. 794); the Age Discrimination Act of 1975 (42 USC 6106-6107); Title VI of the Civil Rights Act of 1964 (24 CFR Part I) as amended in 1991; Title IX of the Education Amendments of 1972 (20 USC 1134); Section 677(a) of the Act; Executive Order 11246 (30 FR 12319, September 24, 1965) as amended by Executive Order 11375 (32 FR 14303, October 13, 1967); and Title VIII of the Civil Rights Act of 1968 (42 USC 3601).

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.100 Complaint Process

In the event of an Applicant, Grantee, or CSBG program eligible client complaint, the Department will follow the procedures outlined in the 56 Ill. Adm. 2605 with the exception of complaints relating to funding termination of Community Action Agencies. Those complaints and appeals will follow the process described at Section 120.55 of this Part which is in accordance with the federal Community Services Block Grant Act.

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.110 Program Types-Description

a) General Program Purposes – The Grantee will use the Community Services Block Grant available through the State of Illinois for purposes as described under Section 676 of the Act (42 USC 9908).

b) Program Priorities – The Department's priorities parallel those of the Act, and fall into the following categories:

1. Economic Development – Reflecting the importance of a community's economic viability for the poor, the Department has placed its highest CSBG priority on job creating economic development programs which result in the employment and self-sufficiency of low-income persons. Each CAA designs and operates an individualized economic development program. At least 10 percent of each CAA's annual CSBG funding is allocated for economic development/job creation activities. Most CAAs operate a loan program through which below market rate loans are made for business expansion and start-up which results in the hiring of low-income persons. Various other job-creating activities are undertaken, including self-employment training.

2. Education – Recognizing the importance of education in breaking the cycle of poverty, priority is given to education programs which are designed to increase the capability of the poor to function productively in society. A broad spectrum of educational assistance is provided through the CSBG program. Specific examples include: workplace orientation, vocational skills training, family planning education, cultural opportunities for disadvantaged children, energy conservation education, post-secondary education scholarships, GED assistance for high school dropouts, adult and youth literacy training and nutrition education for single parents and the elderly.

3. Income Management – Counseling and instructing low income individuals and families in the management of their income is an acceptable program activity. This could take the form of addressing consumer education issues, assistance in preparation of federal and State income tax reports, and the provision of workshops on income savings measures. Many CAAs offer programs to encourage better use of available income. A majority of this assistance is in the form of family budget counseling. Information also is provided through workshops or brochures on such topics as financial management, credit, income taxes and Social Security.

4. Housing – The primary housing activities include aid to renters seeking a residence, landlord/tenant rights education and arbitration, information about purchasing/financing a home, packaging housing and housing rehabilitation loans and providing for minor energy efficiency or health and safety related home repair. These activities may be linked with other housing related assistance in the community, such as the Energy Assistance and Weatherization programs.

5. Emergency Assistance – Recognizing that crisis situations (some life threatening) frequently occur within the low income population, priority is given to programs that intervene for purposes of alleviating the crisis situation. Most CAAs maintain clothes closets and food pantries, many of them in conjunction with other community groups and local churches. Some agencies provide redeemable vouchers or grants to clients that enable them to meet immediate and urgent family needs such as health services, nutritious food, housing, employment-related assistance, day care, medical services and transportation.

6. Nutrition – Poor nutrition and/or lack of proper diet are often synonymous with the effects of poverty. Activities designed to increase eligible clients' awareness of proper diet and food preparation is a concern to the total community. CSBG funding is a primary resource for leveraging and providing nutritional assistance. Typical programs include: federal surplus food distribution, community gardening projects, food banks, senior citizen and youth feeding projects, Christmas food packages and assistance in accessing food stamps, WIC and other nutrition-related programs. These activities may include the storing and distribution of surplus United States Department of Agriculture (USDA) agricultural commodities; preparation and service of hot meals; food baskets; and programs designed to prevent malnutrition.

7. Linkages – CSBG funding regularly supports extensive outreach, information and referral services, transportation services, youth recreation and self-sufficiency programs for low-income citizens.

8. Self-Sufficiency – Many CAAs provide for comprehensive family case management programs that promote, empower and nurture family members toward self-sufficiency.

9. Health – CAAs provide many health related activities in the form of transportation to medical services, medical/dental screening, immunization, drug and alcohol abuse prevention and other services which promote good health.

10. Community Involvement – CAAs conduct programs to encourage and facilitate low-income clients to achieve greater participation in the affairs of their communities, including the development of local partnerships with law enforcement agencies, schools, housing authorities and private sector businesses, clubs and other community organizations.

11. Youth Development Programs – CAAs conduct programs that support the primary role of the family in youth development and the prevention of youth problems and youth crime. Additionally, programs such as after school child care and linking grade school students with senior mentors and tutors are targeted to preteen youth.

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.115 Csbg Loan Programs

a) CSBG Revolving Loan

1. CSBG funds are loaned through Grantees to an Illinois business in a separate but companion agreement to a conventional loan.

2. The CSBG loan represents no more than 49% of the total loan package (combined borrowing and equity).

3. The conventional loan is obtained from a licensed Illinois lending institution.

4. The benefiting local government and/or other public resources may be used in the project.

5. The CSBG loan term may not exceed 10 years but may be for a shorter term at the discretion of the Grantee.

6. CSBG Loan interest rate (Fixed-Flexible option)

A) When CSBG grant funds are used, the loan shall have a fixed interest rate of no more than Prime plus 4% (“Prime” as used in this subsection (a)(6) is the National Prime Interest Rate as published in the Wall Street Journal on the date the parties agree to the loan provisions).

B) When recaptured funds are used from a previous CSBG loan, the loan shall have a fixed rate of no more than Prime plus 4%.

7. The CSBG financing must be committed simultaneously or prior to the closing of other financing.

b) Hiring and Job Retention

1. Establishing a Pre-Loan Base Number of Employees – The Grantee shall have the right to review the borrower's employment records at the time of the loan closing to establish the pre-loan employment level in order to assure that no personnel cuts were made by the business in anticipation of the pending loan and its hiring requirements.

2. Hiring Requirements

A) Businesses accepting CSBG loan funds must hire at least one new full-time equivalency (minimum 37½ hour work week, averaged annually) CSBG eligible (in accordance with Section 120.120) employee for each $20,000 or any portion thereof of CSBG monies borrowed.

Example:

Minimum

$1-$20,000

1 Job

$20,001-$40,000

2 Jobs

$40,001-$60,000

3 Jobs

B) The Department will allow, based on presentation of written verifiable jobs (to be created) salary data submitted as part of its loan application, the Grantee to set the amount loaned per job at 75% of the entry level salary (which may include non-required benefits) for each job. (For example: an entry level salary of $50,000 would warrant lending of $37,500; a $60,000 entry salary would warrant lending of $45,000; a $10,000 entry salary would warrant lending of $7,500.) The Department will, upon request, consider the inclusion of fringe benefits (e.g., health insurance) in the salary calculation. (Any combination of subsections (b)(2)(A) and (B) is allowed.

C) If part-time employment is involved in the created jobs (under either subsection (b)(2)(A) or (B)), the full-time equivalency shall be no more than two employees making up one 37½ hour work week.

D) A hiring schedule must be a part of each loan agreement. The required hiring must be completed within the first 24 months of the loan, with at least 50% of the new employees hired in the first 12 month period. (For purposes of this hiring timeframe, the loan is considered consummated the date the borrower first receives the loan funds.)

E) The job positions for CSBG eligible clients created by the loan must be retained and filled by an eligible client for at least 24 months from the date the job was first created. Grantees should attempt to retain the availability of the loan-created jobs for CSBG eligible clients over the full loan term by maintaining professional contact with the business and tracking the jobs. Grantees, through their individual loan agreements, may negotiate more restrictive hiring requirements than stated in this subsection (b)(2).

c) Loan Fund Use

CSBG funds loaned may only be used to purchase machinery, equipment or inventory or to provide working capital. CSBG loans may not be used to purchase or improve real property (per Section 120.130 of this Part). This real property restriction does not apply to loans made with "Recaptured Loan Funds" (as described in subsection (i) of this Section).

d) Loan Security

Provisions (collateral) shall be made for first position on loan security. If first position is impossible because of the primary lender's claims, the Grantee should negotiate shared position with the private lender. Subordinate position for loan security should be the CSBG lender's last resort. Loan agreements shall contain precise listings and assignment of collateral established as security for the loan.

e) Loan Contract Provisions

Each Grantee's loan contract with a borrower shall clearly, and in detail, specify the following:

1. Employment Plan (consisting of mechanism to assure GSBG client eligibility, timeframes, job descriptions);

2. Payment Schedule;

3. Interest Rate Charged;

4. Late Payment Penalty Provision (optional);

5. Default Provisions.

A) Events of Default:

i) Payment Default: the Department shall consider a loan to be in default when payment arrearage reaches 90 days. Grantees may place more restrictive payment arrearage provisions in their loan contracts.

ii) Hiring Default: a loan shall be considered in default when the hiring provisions specified in this Part and in the loan agreement have not been met.

B) Default Remedies:

i) Payment Default: the loan will be called or renegotiated (loan renegotiation approval must be requested of the Department and will be approved when the Grantee's written request states that the renegotiation is the only practical means of loan recovery and/or will prevent bankruptcy and/or will prevent a loss of jobs to the local area).

ii) Hiring Default: an interest acceleration clause shall be a part of each loan contract. At a minimum the clause shall provide that after notice by the Grantee to the borrower that the hiring provisions have not been met, the interest rate for the loan will increase by 5 percentage points. Such increased rate shall remain in effect until hiring deficiencies have been corrected or the loan is called. (The Department will allow a one-time waiver per loan to the interest acceleration provision when the Grantee, in writing, shows that such acceleration will cause borrower bankruptcy and further loss of jobs and submits a proposed renegotiated hiring schedule that meets the CSBG job creation and hiring requirements through no more than a 24 month extension.) The Department will allow other equally punitive hiring noncompliance interdictions in grantees' loan contracts in lieu of the interest acceleration penalty. Such other interdictions may include (but are not limited to) fines, partial loan recall and pre-scheduled interim balloon payments;

6. Loan Security Provision (The Grantee shall perfect the loan security. For example: hold title to vehicles; secure a mortgage on pledged real property; require Uniform Commercial Code (U.C.C.) [810 ILCS 5] filing for pledged equipment, fixtures and inventory.);

7. Collateral Description;

8. Prepayment Provisions (optional);

9. Hiring Schedule;

10. Use of Loan (Machinery, Working Capital, Equipment);

11. Hiring Noncompliance Penalty;

12. Other documentation necessary to assure compliance (e.g., hiring reports);

13. Primary lender – amount; and

14. Wetland Certification Statement [20 ILCS 830].

f) Loan Payment Provisions

1. The interest rate for a recaptured principal or Category “D” CSBG loan shall have a fixed rate not to exceed Prime plus 4% (“Prime” as used in this Section is the National Prime Interest Rate as published in the Wall Street Journal on the date the parties agree to the loan provisions). Interest for loans made with repaid principal from previous CSBG loans may not exceed 7.5%.

2. Payment Schedules

A) Payments shall include principal and interest calculated in accordance with standard loan tables.

B) Loan payments shall not be deferred, unless written permission is given by the Department.

C) Grantees, through their individual loan agreements, shall impose a late payment penalty of not less than 5% of any monthly installment not received from the borrower within 15 days after the installment is due.

g) Micro-Loan Provisions

The Department has established, within the CSBG Loan Program, a Micro-Loan Program. This program is designed to enable Grantees to assist entrepreneurs in establishing and expanding business ventures. It provides for up to 100% CSBG lending, makes less demand for collateral and gives lending discretion to Grantees. To operate a CSBG Micro-Loan Program, a Grantee must have "preferred lender" status, approved loan criteria and an approved lending process.

1. Preferred Lender

To obtain preferred lender status, the Grantee must establish and maintain a loan review committee, with a minimum of 3 members who represent the financial and economic development professions and should include the legal profession. In lieu of legal profession membership, the Grantee must include in their micro-loan procedures a provision for legal review of loans. The committee may be attached to the Grantee's CSBG Board. The Department will, upon receipt of documentation, formally recognize preferred lender status.

2. Micro-Loan Criteria

A) Businesses eligible for micro-loans may be a proprietorship, partnership or corporation with no more than 5 employees. If proprietors, eligible borrowers must own all business assets; if partners or corporations, eligible borrowers must own more than 50% of the business assets.

B) Eligible borrowers must agree to create and fill a minimum of one job for a CSBG eligible client for the micro-loan lending. The job creation may include the borrower if he/she is CSBG eligible and will gain full-time employment through the borrowing.

C) The business must be located in the CSBG jurisdiction of the Grantee, and the borrowers must demonstrate that they cannot access the funds from other sources.

D) Maximum lending is $20,000 and may be entirely CSBG funded.

E) Recaptured principal will be used for all micro lending. (Exceptions to this provision must be requested in writing and approved in writing by the Department.)

F) The interest rate may not exceed Prime plus 4% and may be set lower at the discretion of the Grantee.

G) Lenders shall make every attempt to fully collateralize the micro-loan and the collateral should be secured.

H) The term of the loan may not exceed 10 years. The term of the loan should not exceed the life of the loan collateral.

I) A hiring schedule must be a part of each micro-loan agreement. The required hiring must be completed within the first 12 months of the loan.

J) Funds loaned may be used to purchase machinery, equipment and inventory, to provide working capital and to purchase or improve real property.

3. Micro-Loan Forms and Procedures

The Grantee must establish and maintain DCCA approved loan application forms, loan agreements, loan applicant requirements and screening process, loan review process and loan monitoring procedures.

4. Micro-Loan Administration

A) Since the Grantee must be a "preferred lender" in order to participate in the program, final decisions for lending are at the Grantee level.

B) Recaptured principal disbursed for micro-loans must be so noted in accounting records at the time of fund transfer.

C) Monitoring will be conducted by the Grantee.

D) Reporting will be on the CSBG Quarterly Loan Program Status Report (Hiring and Financial), and the lending will be included in Recaptured Loans on the Reconciliation Form.

E) The file for a micro-loan shall consist of:

i) the application;

ii) committee approval;

iii) the loan agreement/contract;

iv) amortization schedule;

v) hiring schedule;

vi) monitoring information; and

vii) CSBG Loan Project Fact Sheet.

F) The micro-loan repaid principal must be maintained in the same account as all other CSBG Loan Program repaid principal.

h) Loan Approval Process for Loans Under Current Grants

1. All Grantee CSBG funded loans must be submitted to the Department for approval. The Department's review and determination to approve or disapprove the loan will be given in writing within 20 working days after receipt of a complete set of the loan documents. (Loans submitted for approval after November 15 run the risk of not being processed by the December 31 cut-off due to insufficient time to complete the review. Loans approved after the December 31 date will be obligated against new program funds effective January 1.)

2. The loan application documents to be submitted, and upon which the decision of the Department will be based, consist of:

A) The loan agreement containing all provisions in compliance with this Part.

B) Application documents:

i) History of the Company – a brief history of the business and past employment growth.

ii) Market Information – information on the company's products or services and identification of existing and potential major customers and competitors.

iii) Corporate Financial Statements – historical corporate financial statements for the past three years and interim statements dated no more than 90 days prior to application including: Profit and Loss Statements, Balance Sheets, Cash Flow Statements, and Disclosure of Contingent Liabilities.

iv) Three Year Projections – three year projections of the Profit and Loss Statement and Balance Sheet and a one year Monthly Cash Flow Projection.

v) Description of Inventory – a list of inventory to be purchased using CSBG funds.

vi) Description of Machinery and Equipment (if applicable) – major equipment or classes of equipment to be acquired with the CSBG loan funds, including model and serial numbers where possible; for acquisition of new machinery and equipment, attachments of reliable vendor cost estimates; for moving and installation costs, attachments of written estimates; for used machinery and equipment acquisition, an independent appraisal demonstrating that the fair market value is in line with the purchase price.

vii) Description of Working Capital (if applicable) – a detailed explanation of the need for and use of funds.

viii) Company Management – a listing of those people that are responsible for the management of the company, their positions, and percentages of ownership.

ix) Principals Resumes – a resume of each principal.

x) Personal Financial Statement – a personal financial statements for each principal owning more than 20% of the company.

xi) Letters of Commitment – commitment letters documenting all sources of leveraging; loans from financial institutions must have language indicating the loan amount, the specified term and interest, collateral, conditions attendant to the loan, and the fact that the loan is approved; any commitment to purchase a revenue bond must have an executed inducement resolution and the rates, terms, and conditions of approval by the buyer.

3. Financial Evaluation Component – The applicant's financial statements, including annual balance sheets and profit and loss statements for the past three years as well as the most recent 90 days; a three year projected balance sheet and profit and loss statement as well as a one year monthly cash flow statement will be reviewed through a standard credit analysis (as prescribed in the Business Credit Analysis Textbook, 1985, published by the National Development Council) that will determine the: liquidity and debt coverage for the project; ability of the company to manage debt; business trends and projected earnings. This data will be compared to similar data for companies in the same industry using "Robert Morris Associates Annual Statement Studies" (1990) if such industry is evaluated by this source. This standard credit analysis will determine the financial stability of the company. Determination of the loan approval will also be based on compliance with Section 9-4(a), (d), (e), and (f) of the Small Business Development Act [30 ILCS 750/9-4].

i) Loan Approval Process for Recaptured Loan Funds

1. All Grantee loans using repaid principal from previous CSBG loans (recaptured loan funds) must be submitted to the Department for approval.

2. The Grantee may, at its option, request the Department to review the complete loan application. When this request occurs, the documents upon which the Department will judge its approval or disapproval and the process for this determination will be in accordance with subsection (g) of this Section.

3. If the Grantee chooses to conduct its own loan review, the loan document to be submitted and upon which the decision of the Department will be based is the "Pre-Loan Closing Form" which includes the following information:

A) Grantee Agency name, address and date of submittal;

B) Name and address of borrowing business;

C) Loan amount;

D) Source of funds;

E) Loan period;

F) Interest rate;

G) Hiring schedule;

H) Loan use;

I) Collateral description and position;

J) Primary lender, amount, and term; and

K) Signature of submitting officials.

4. The approval or disapproval of the Department will be based on the loan period, interest rate, hiring schedule, loan use, collateral description and position, and primary lender amount being in compliance with this Part. A letter, with the Department's determination and signature, will be returned to the Grantee within 10 working days after receipt of a completed Pre-Loan Closing Form. (Loans submitted after November 15 run the risk of not being processed by the December 31 cut-off due to insufficient time to complete the review. Recaptured loans approved after the December 31 date will not prevent the declaration of "lapsed principal" and the demand for its return.)

j) Processing a Micro-Loan

1. All micro-loans are approved at the Grantee level.

2. Once the funds have been disbursed, a CSBG Loan Project Fact Sheet must be submitted to the Department. This will be the mechanism for advising the Department that action has taken place.

k) Loan Fund Recovery/Held Principal Limits/Disposition/Reversionary Right

1. Recovery

The repaid loan principal is considered by the Department to be a Community Services Block Grant-related asset, held in trust by the Grantee. The Grantee must place the repaid loan principal in a corporate revolving loan account to continue business assistance efforts in compliance with this Part. This continuation requirement shall be perpetually binding on the Grantee, its successors and assignees until such time as the Department formally negotiates with the agency other CSBG related uses for the recovered loan principal. The interest earned on the CSBG supported business loans is not required to be a part of the perpetuation of the loan program nor subject to the provisions of the Illinois Grant Funds Recovery Act [30 ILCS 705] and may be used for any corporate purpose.

2. Held Principal Limits

Recaptured principal amounts will be reported quarterly to the Department. The Grantee shall actively pursue new business start up or expansion loan opportunities for the recaptured principal and maintain a written record of such efforts, which the Department may review, upon request. The grantee is allowed to hold the greater of $20,000 or 20% of the total repaid principal in its CSBG loan program portfolio. In its review of 4th quarter loan reports, the Department will determine if the grantee is holding excess repaid principal (as of the end of the calendar year), excluding any balloon loan payments, and declare the excess “lapsed principal”. Additionally, the Department will impose a penalty on Grantees that do not reduce their repaid principal, through lending or approved wavered use, by at least 25% over a two-year period. At the end of the second year and each subsequent two-year period in which the 25% reduction is not met, the Department will declare the balance of the 25% as lapsed principal. However, the Department will allow the Grantee to maintain the “floor” level ($20,000) repaid principal without lapse declaration. The Department will require, by written notice, lapsed principal to be reduced to these stated limits through a grant fund transfer.

3. Disposition

The Grantee may not sell, transfer or in any way dispose of the CSBG funded loans without DCCA's written approval.

4. Reversionary Right

If Grantee funding terminates (as specified in Section 120.55 of this Part) the Grantee's repaid principal loan fund balance and all current loans shall revert to the Department for transfer to the successor (Section 120.60 of this Part) agency.

5. Loan Settlement

In the event of a loan settlement due to bankruptcy or other closing, the cash settlement shall be applied 100% to principal after expenses are paid. Expenses are defined as unplanned costs incurred as a result of the closing/bankruptcy (i.e., storage or attorney) and are not covered by the CSBG grant or earned interest.

l) Reporting/Recordkeeping/Monitoring

1. The Grantee is required to submit two reports to the Department for tracking purposes.

A) The CSBG Loan Project Fact Sheet is to be submitted immediately following the closing of the loan (loan agreement signed and funds disbursed to the borrowing business). If the loan agreement is amended (i.e., changing the term or interest rate), a revised CSBG Loan Project Fact Sheet shall be submitted.

B) Quarterly CSBG Loan Status Report (6 parts) – This 6 part report (on forms provided by the Department) is to be submitted as part of the CSBG Quarterly Report, due the 30th calendar day following the end of each calendar quarter. The report must include all loan projects that have been closed (loan agreement signed and funds disbursed to business) since the inception of the CSBG Loan Program.

2. Records – The Grantee is required to maintain a CSBG Loan Program file with separate sections for each loan. Each loan file shall contain the loan agreement that encompasses all elements specified in this Section, all correspondence relating to the loan, copies of all forms submitted to the Department, verification of loan payback and monitoring, and, if the loan is in default, documentation of efforts made to return the loan to compliance or to call the loan.

3. Monitoring

A) The Grantee agency is responsible for monitoring the following provisions of each CSBG loan (including loans made with repaid loan principal):

i) hiring schedule compliance, including CSBG eligibility verification;

ii) replacement of employees;

iii) use of loan monies

iv) loan repayment; and

v) Wetland Act compliance.

B) The Department's program monitoring and annual auditing will include verification of the Grantee's report on the status of each consummated loan.

m) Carry-over of Loan Program Funds – At least 50% of the grantee’s earmarked (in the grant agreement) loan program funds must be obligated, with a Department approval letter, by December 31 of the grant year. Obligated funds must be disbursed for loans no later than January 31 of the succeeding grant year. The remaining 50% or less of the earmarked loan funds shall be carried over to the succeeding year’s grant, through modification, and placed with the earmarked loan funds in the grant agreement. Any Grantee who has not obligated or disbursed at least 50% of its earmarked loan program funds by the respective December or January 31 cutoff dates shall have the remaining balance deobligated by the Department. All CSBG Grantee funding deobligated by the Department shall be returned to CAAs through a competitive or formula distribution process.

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.120 Eligibility Requirements

Client eligibility for the Illinois Community Services Block Grant Program is limited to the 3 listed categories.

a) Clients served must be “low-income” which is at or below 125% of the poverty line as determined annually and published in the Federal Register by the U.S. Department of Health and Human Services (HHS). CAAs may set more restrictive eligibility provisions (i.e., majority, at least 51% of clients served must be at or below 100% of HHS’ poverty level with the remainder of the clients served at 125% of the poverty line). Client income may be determined by actual annual income or a projection of income based on the prior 90 days (whichever is most beneficial to the client).

At client intake: disregard CSBG scholarship funds, training stipends and other student financial aid when determining family income.

Ongoing/long-term programs: clients eligible at intake and enrolled in a CAA Family and Community Development program may remain eligible for up to five years or until they reach 185% of the poverty line as long as they are progressing in the program and there is at least quarterly client contact. Clients eligible at intake and enrolled in other multi-year programs may remain eligible for up to two years or until they reach 185% of the poverty line as long as they are progressing in the program. The CAA must assess and document the income each year for the participants in the multi-year programs; however, original eligibility prevails until the thresholds and conditions described in this subsection are reached.

b) Extreme emergency assistance may be provided to individuals and families who are victims of natural or manmade disasters without regard to income eligibility. This category is included to allow CAAs to quickly respond to sudden events that cause swift and temporary poverty. This category includes victims of fire, floods, tornadoes and other disasters. Special written authorization from DCCA must be obtained if clients in this category will exceed 10% of the total CSBG clients served in a grant period.

c) Each CAA is given discretion to calculate income for selected clients net of extreme expenses in areas such as medical, housing, child care and transportation and to waive income restrictions for clients who have experienced a substantial loss of income through an employment or family related crisis. These discretional provisions fall under the same limitation that is in place for victims of natural or manmade disasters. Special written authorization from DCCA must be obtained if clients in this category and the preceding category (Section 120.120(a)(2)) will exceed 10% of the total CSBG clients served in a grant period.

History

• Source: Amended at 27 Ill. Reg. 7986, effective April 28, 2003

47 Ill. Adm. Code 120.130 Limitations on Use of Csbg Funds

CSBG funds shall not be used by the State or its Grantees for the purchase or improvement of land or the purchase, construction, or permanent improvement (other than low-cost residential weatherization or other energy-related home repairs) of any building or other facility. The U.S. Department of Health and Human Services may waive this limitation upon the State's request for such a waiver if the request describes extraordinary circumstances to justify the purchase of land or the construction of facilities (or the making of permanent improvements) and that permitting the waiver will contribute to the State's ability to carry out the purposes of this Act.

History

• Source: Amended at 20 Ill. Reg. 4611, effective February 28, 1996

47 Ill. Adm. Code 120.140 Incorporation by Reference

Any incorporation by reference in this Part of the rules and regulations of any agency of the United States or of standards of a nationally recognized organization or association includes no new amendments or editions after the date specified.

History

• Source: Added at 11 Ill. Reg. 7937, effective April 20, 1987

Part 160 Emergency Shelter Grants Program

47 Ill. Adm. Code 160.10 Purpose

The purpose of the Emergency Shelter Grants Program is to provide assistance for homeless and near-homeless individuals through local not-for-profit organizations, thus affording emergency relief from human deprivation.

History

• Source: Amended at 18 Ill. Reg. 5163, effective March 21, 1994

47 Ill. Adm. Code 160.20 Definitions

For the purposes of this Part, definitions provided in the U.S. Department of Housing and Urban Development (HUD) Emergency Shelter Grants Program rules (24 CFR 575.3 (1987)) are applicable.

47 Ill. Adm. Code 160.30 Program Requirements

a) Eligible Grantees. Any unit of general local government may apply for funding on behalf of any private, not-for-profit organization providing services to the homeless, or a not-for-profit organization may apply directly for funds.

b) Eligible activities. Emergency shelter grant amounts may be used for one or more of the following activities relating to emergency shelter for the homeless:

1. Renovation, rehabilitation, or conversion of buildings (as defined in 24 CFR 575.3 (1987)) for use as emergency shelters for the homeless. Reimbursement under these activities shall not exceed the cost to erect a comparable new building.

2. Provision of essential services, including (but not limited to) services concerned with employment, health, substance abuse, education, or food. Grant amounts provided to a unit of general local government or not-for-profit organization may be used to provide an essential service only if:

A) The service is a new service or a quantifiable increase in the level of a service above that which the unit of general local government provided during the twelve (12) calendar months immediately before it received the grant amounts; and

B) Not more than thirty (30) percent of the grant amounts is used for these services.

3. Payment of maintenance, operation (including insurance, utilities, furnishings and food).

4. Homelessness prevention activities, such as short-term subsidies to defray rent and utility arrearage for families that have received eviction or utility termination notices, security deposits or first month's rent, or other innovative programs and activities designed to prevent homelessness. Not more than thirty (30) percent of the grant amounts is used for these services.

c) Ineligible activities. Emergency shelter grant amounts may not be used for activities other than those authorized under subsection (b). For example, grant amounts may not be used for:

1. Acquisition of an emergency shelter for the homeless;

2. Rehabilitation services, such as preparation of work specifications, loan processing or inspections; or

3. Improvement of buildings owned by religious organizations unless the conditions of 24 CFR 575.21(b)(2)(i) through (viii) are met.

d) Matching Funds. Each applicant must supplement its emergency shelter grant request or demonstrate an attempt to supplement with an equal amount of funds from other sources. In-kind contributions will be considered, including, for example, the value of any donated material or building; the value of any lease on a building; any salary paid to staff in carrying out the program; and the time and services of volunteers. (The value of that time is to be determined at a rate of $5.00 per hour.) The necessary amount of matching funds must only be provided after the date of grant award; however, letters of commitment which document matching contributions must be submitted with the application.

e) Support Services and Referral Linkages. Homeless individuals must have access to assistance in obtaining support services. This includes permanent housing, medical and mental health treatment, counseling and similar services essential to achieve independent living. A referral system must be demonstrated to be in place, providing for services and aid (whether or not these services are to be provided with grant funds) and assuring a coordinated approach to serving the homeless.

Source: Amended at 18 Ill. Reg. 5163, effective March 21, 1994)

47 Ill. Adm. Code 160.40 Shelter Categories

Applicants may propose to provide shelter assistance within one of the following shelter categories:

a) Emergency Shelters (limited) which provide bed space and food, one night at a time, and do not provide supportive services.

b) Emergency Shelters (programmatic) which provide bed space and food for one night or more and some supportive services.

c) Transitional Shelters which provide temporary residence, food and some supportive services, not to exceed 120 consecutive days. The shelter accommodates three or more persons who are not related to the applicants or owner by blood or marriage.

Source: Amended at 18 Ill. Reg. 5163, effective March 21, 1994)

47 Ill. Adm. Code 160.50 Notice of Fund Availability

The Department of Commerce and Community Affairs (Department) shall release on an annual basis request for proposals (RFPs) for the purpose of soliciting formal applications from eligible local governments and not-for-profit organizations. Applicants shall submit completed packages in accordance with a schedule annually established by the Department. An original and two copies should be submitted to the Housing Assistance Division.

History

• Source: Amended at 18 Ill. Reg. 5163, effective March 21, 1994

47 Ill. Adm. Code 160.60 Application Requirements

An application must include the following information:

a) Project Summary – A description of the proposed project and the purpose for the funding request. The summary should include a brief history of the not-for-profit organization's experience in providing services to the homeless. It must also identify the types of clients to be served, the type of services to be provided, and how those services will address the needs of the homeless.

b) Needs Statement – A statement which describes the need for the proposed project. The statement should include an estimate, if available, of the number of homeless persons in need of assistance in the area and the estimated number to be served by the proposed project. Area services available to the homeless must be identified and an explanation provided as to how the proposed project would complement existing services or provide services that are currently unavailable.

c) Project Activity Description – A description of activities to be performed under the project, the amount and source of funding for each activity, and a schedule for the implementation of those activities (include beginning and ending dates). If rehabilitation is identified as an activity, the type of work to be done must be detailed and estimates of cost must be attached. Also tasks necessary to achieve expected results must be detailed (e.g., building or zoning permits).

d) Project Costs – A breakdown of all project costs by source of funding for eligible activities.

e) Application Documentation – The following documentation must accompany an application:

1. If funds are to be used for major rehabilitation or conversion of a building, certification that the building will remain a shelter for a period not less than ten years.

2. If funds are to be used for eligible activities specified in 24 CFR 575.21(a)(1) and (3) (1987), certification that the building will be maintained as a shelter for not less than three years.

3. Letters documenting the shelter facility has been inspected and meets the state and local requirements or standards relating to health and safety or copies of waivers of such requirements from the responsible agency.

4. A letter of transmittal and certification of local government approval.

5. Certification that any building improvements accomplished with grant funds do not affect historic property or jeopardize an endangered species.

6. Certification that any building improvements accomplished with grant funds will not be made to buildings located in an area identified as having special flood hazards in accordance with HUD Emergency Shelter Grants Program rules (24 CFR 575.33(b)(4)(i)(B) (1987)).

7. Letters of support and/or agreements with social service agencies.

8. Certification by the local government that its proposed project will be administered in compliance with the requirements of HUD Emergency Shelter Grants Program rules (24 CFR 575.59 (1987)).

History

• Source: Amended at 18 Ill. Reg. 5163, effective March 21, 1994

47 Ill. Adm. Code 160.70 Selection for Funding

a) The Department shall screen applications to determine that all requirements of the application package have been addressed. Completed applications will be reviewed and evaluated by Department staff to determine which applicants:

1. demonstrate the greatest need for funds in their

A) estimate of the number of homeless in the area and the number of homeless to be served by grant funds,

B) description of the unmet needs of the homeless in the area, and

C) description of the relationship of the proposed activities to the identified needs;

2. propose projects that best meet the objectives of the program and the demonstrated needs of the area's homeless;

3. indicate a successful history of the not-for-profit organization in providing services to the homeless; and

4. have the ability to utilize funds immediately.

b) Preference in selection will be given to projects which complement and support homeless activities being carried out locally and which demonstrate that a system for coordinating these activities and other services is being used.

c) Local governments and not-for-profit organizations will be notified in writing as to availability of funds and application due date. Funds will be awarded on a competitive basis using the criteria specified in subsections (a) and (b) until all available funds are expended.

d) The Department reserves the right to deny application funding when submitted applications involve eligible units of government and/or not-for-profit organizatons with serious unresolved audit or monitoring findings related to performance capacity, and/or who consistently fail to comply with program requirements. Examples include, but are not limited to:

1. untimely submittal of progress reports;

2. untimely expenditures of ESGP funds;

3. co-mingling of ESGP funds with other funds; and

4. untimely submittal of other requested documentation.

History

• Source: Amended at 18 Ill. Reg. 5163, effective March 21, 1994

47 Ill. Adm. Code 160.80 Administrative Requirements

a) Progress Reports – Progress reports may be required by the Department. These reports will outline the obligation and expenditure of funds under the shelter grants program. The Department reserves the right to request additional information to further clarify or document activities as may be necessary.

b) Financial Management Standards – The grantee is accountable for all funds received under this program. The grantee must maintain accountability over all funds, equipment, property and other assets under the grant as required by the Department. Records shall be kept which detail the expenditures of grant funds and accurately document such expenditures.

c) Monitoring – The Department will monitor each homeless shelter grant funded under this program periodically throughout the fiscal year. The project will be evaluated for compliance with the terms and conditions of the grant document.

d) Audits – The grantee shall be responsible for having an annual financial and compliance audit performed in accordance with 24 CFR Part 44. The audit of all appropriate project records will be performed by an independent public accountant, certified and licensed by the authority of the State of Illinois and selected by the Department in conjunction with and upon receiving advice from the grantee. The grant audit must be conducted in accordance with the Comptroller General's Standards for Audits of Governmental Organizations, Programs, Activities, or Functions. The grantee may secure an independent audit of its Emergency Shelter Grants Program grant in the same manner as it secures its regular audits. Audits must be performed in accordance with the Single Audit Act of 1984 and OMB Circular A-128, if applicable, provided it follows the requirements of OMB Circular A-102, Attachment O, which provides for maximum open and free competition. This audit should be conducted as part of the grantee's annual audit as is generally required by State law. The Grantee shall contact, in writing, the Department's Office of Audits when the project is completed and advise the Department that the project is ready for audit, providing the name of the audit firm selected. Notification shall be addressed to:

Office of Audits

Department of Commerce and Community Affairs

620 East Adams Street, 2nd Floor

Springfield, Illinois 62701

The Department reserves the right to conduct special audits, at any time during normal working hours, of funds expended under this agreement.

e) Special Conditions and Terms – Successful applicants, prior to the release of funds, must submit documentation to substantiate that assertions made in the application are met. The Department reserves the right to establish the amount of the grant award. Grant-related expenses may be incurred only after all grant conditions have been met and the grant award document executed.

f) Memorandum of Agreement – If the grantee is a local government, it will enter into an agreement with the not-for-profit organization undertaking the proposed project activities. This agreement will govern project activities and the release of funds.

g) For the purposes of this Part, additional administrative provisions specified in 47 Ill. Adm. Code 1.110 and those found in HUD Emergency Shelter Grants Program rules (24 CFR 575.59, 575.61, 575.63, 575.65, 575.67, and 575.69 (1987)) are applicable.

History

• Source: Amended at 18 Ill. Reg. 5163, effective March 21, 1994

47 Ill. Adm. Code 160.90 Incorporation by Reference

Any incorporation by reference in this Part of the rules and regulations of any agency of the United States or of standards of a nationally recognized organization or association includes no new amendments or editions made after the date specified.

Chapter II Illinois Housing Development Authority

Part 260 Homeowner Mortgage Revenue Bond Program

47 Ill. Adm. Code 260.101 Authority

These Rules are authorized by and made pursuant to Sections 7.19 and 7.23 of the Illinois Housing Development Act [20 ILCS 3805/7.19 and 7.23] and shall govern the Illinois Housing Development Authority's single family mortgage purchase program (the "Program") funded by its Homeowner Mortgage Revenue Bonds.

47 Ill. Adm. Code 260.102 Purposes and Objectives

These Rules are established to accomplish the general purposes of the Illinois Housing Development Act and in particular the purchasing and making of loans in accordance with the Program to achieve the following objectives: the provision of funds to finance, at interest rates below those otherwise available, residential loans for low and moderate income persons and families; the provision of housing to alleviate the shortage of adequate housing in the State of Illinois for such persons and families that are residents of the State of Illinois; the effective participation by mortgage lenders in the Program, while restricting their financial return to what is necessary to induce such participation; and the advancement of leasehold and cooperative housing corporations for the purpose of preserving affordability and increasing access to housing.

History

• Source: Amended at 48 Ill. Reg. 14631, effective September 26, 2024

47 Ill. Adm. Code 260.103 Definitions

As used in this Part, the following words or terms mean:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Assistant Director": The Assistant Executive Director of the Authority.

"Authority": The Illinois Housing Development Authority.

"Bonds": The Homeowner Mortgage Revenue Bonds issued by the Authority pursuant to the Act from time to time to finance the Program.

"Code": The Internal Revenue Code of 1986 (26 U.S.C.), as amended and supplemented, and the regulations promulgated by the Treasury Department (26 CFR).

"Deputy Director": The Deputy Executive Director of the Authority.

"Director": The Executive Director of the Authority.

"Eligible Borrower": A person:

who is or will be a resident of the State within 60 days after the closing of his or her purchase of a Qualified Dwelling;

whose Household Income does not exceed the Maximum Income;

who intends to use the Qualified Dwelling being financed by a Mortgage Loan as his or her permanent residence within 60 days after the closing of the Mortgage Loan;

who occupies or intends to occupy as a single household the Qualified Dwelling purchased or being purchased as a permanent residence; and

who at no time during the 3-year period ending on the date of closing of the Mortgage Loan had a present ownership interest in his or her principal residence.

An Eligible Borrower who purchases a Targeted Area Residence or a Qualified Rehabilitation Residence, or who qualifies under any other provision of the Code, is exempt from the 3-year requirement of this definition. For purposes of this definition, the Eligible Borrower's interest in the Qualified Dwelling financed under this Program shall not be taken into account.

A residence that is used as an investment property or a recreational home, or that is primarily intended to be used in a trade or business (including, without limitation, any residence of which more than 15% of the total area is reasonably expected to be used primarily in a trade or business), does not satisfy the requirements of this paragraph.

"FHA": The Federal Housing Administration.

"FHLMC": The Federal Home Loan Mortgage Corporation.

"FmHA": The Farmer's Home Administration.

"FNMA": The Federal National Mortgage Association.

"Household Income": The total annualized gross income of the Eligible Borrowers, and any other person who is expected to live in the Qualified Dwelling and be secondarily liable on the Note, all persons residing or intending to reside as a single household in a Qualified Dwelling, from whatever source derived and before taxes or withholdings; provided that if a married person takes title to the Qualified Dwelling individually the income of the spouse shall also be included.

"Lender": A State-chartered bank, national banking association, mortgage banking association or institution, credit union, or State or federal savings and loan association:

that is licensed, qualified and in good standing to do business in the State;

that is qualified to originate and/or sell mortgages to FNMA, FHLMC, and/or approved by FHA to originate loans (this requirement may be waived by the Director after determination that the assets of the Lender exceed $500,000, that the percentage of mortgage delinquencies in the Lender's single family portfolio do not exceed 2.15 times the Statewide average as determined by the last quarterly pronouncement by the United States Federal Home Loan Bank Board and that the Lender has an asset-to-liability ratio of at least 1.01:1);

the deposits of which are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration, or which deposits its funds in Illinois financial institutions whose deposits are insured by the Federal Deposit Insurance Corporation; and

whose Lender Application has been accepted by the Director, Deputy Director, Assistant Director or Managing Director based upon the satisfaction of the requirements of the Series Program under which the Lender has submitted the Lender Application and a determination of financial suitability after consideration of the net assets, lending capacity, and experience of the potential Lender over the past 12 months in residential mortgage lending. The Authority may also be a Lender.

"Lender Application": A prospective Lender's application to sell Mortgage Loans to the Authority or participate in the Authority's Programs pursuant to the terms of a Mortgage Purchase Agreement and other Series Program documents.

"Managing Director": A Managing Director of the Authority.

"Maximum Income": Unless otherwise permitted by the Code, 115% of the median family income of either the metropolitan statistical area or primary metropolitan statistical area in which the Qualified Dwelling is located or the State, whichever is greater, as determined by the Internal Revenue Service.

"Members": The Members of the Authority.

"Mortgage": The mortgage, or other instrument in the nature of a mortgage, creating a first lien on an interest in a Qualified Dwelling, together with all supplements, modifications or amendments to it.

"Mortgage Loan": A loan made by a Lender to an Eligible Borrower for the purchase of a Qualified Dwelling and secured by a Mortgage on the Qualified Dwelling. No Mortgage Loan shall be a replacement or refinancing of an existing mortgage loan except in the case of a Qualified Rehabilitation Loan or other temporary loans, as permitted by section 143 of the Code.

"Mortgage Purchase Agreement": The agreement, including any amendments or supplements to the agreement, between the Authority and a Lender pursuant to which the Authority or its designee agrees to purchase Mortgage Loans from the Lender on the terms and conditions set forth in the agreement and that establishes the requirements for Mortgage Loans to be purchased by the Authority or its designee, or otherwise allows participation in the Authority's Programs.

"Net Proceeds": With respect to the proceeds of each series of Bonds, all moneys made available by the Authority for the purchase of Mortgage Loans.

"Notice of Acceptance": The Authority's notice to a Lender accepting its Lender Application.

"This Part": This Part 260 (47 Ill. Adm. Code 260).

"Prepayment": Any moneys, however derived, that are received or recovered by the Authority from any payment of, or with respect to, principal on any Mortgage Loan prior to scheduled payments of principal required under that Mortgage Loan.

"Private Mortgage Insurance": Insurance coverage paid for by the Eligible Borrower that insures the Authority against losses with respect to defaults on a Mortgage Loan according to the terms of the insurance policy. The Authority may provide Private Mortgage Insurance or its equivalent.

"Programs": The Authority's single family mortgage purchase programs that are funded with proceeds of Bonds issued after the date of the adoption of the Resolution, or any other source of funds available to the Authority.

"Property Value": The lesser of the purchase price or the appraised value of the Qualified Dwelling at the time of the origination of the Mortgage Loan secured by that Qualified Dwelling.

"Qualified Dwelling": A fee simple, leasehold or cooperative share interest in real property:

that is located in the State;

upon which there is located a structure or structures designed for residential use;

that is a single family residence; a condominium unit meeting the requirements of the Mortgage Purchase Agreement; a one-, two-, three- or four-unit structure meeting the requirements of the Code; or factory-made housing that is permanently fixed to real property;

of which not more than 15% of the total area is reasonably expected to be used primarily in a trade or business; and

that can reasonably be expected to become the principal residence of the Eligible Borrower within a reasonable time after financing is provided. For purposes of this paragraph, a "reasonable time after financing is provided" shall be deemed to be a period within 60 days after closing of the Mortgage Loan. This period may be extended if the Authority determines that undue hardship to the Eligible Borrower or Lender or an unreasonable result will otherwise occur.

"Qualified Rehabilitation Loan": A Mortgage Loan for the purchase of a Qualified Rehabilitation Residence. An Eligible Borrower for a Qualified Rehabilitation Loan must be the first resident of the Qualified Rehabilitation Residence after the completion of the rehabilitation.

"Qualified Rehabilitation Residence": A qualified Dwelling for which there has been a qualified rehabilitation, as defined in section 143 of the Code.

"Resolution": The Authority's Homeowner Mortgage Revenue Bonds General Resolution setting forth the general terms and conditions under which the Authority may issue, deliver and sell Bonds.

"Rules": The rules of the Authority, as amended and supplemented from time to time (generally 47 Ill. Adm. Code Chapter II).

"Series Program": A mortgage purchase program authorized by a Series Resolution to become a part of the Program.

"Series Resolution": A resolution issued pursuant to the Resolution authorizing the Authority to conduct a Series Program and to issue Bonds to provide financing of Mortgage Loans under the Series Program.

"Servicer": A Lender, or its designated Servicer, that has been approved by the Director, Deputy Director or Assistant Director as a Servicer and that has executed a Servicing Agreement with the Authority. The Authority may also be a Servicer. A designated Servicer other than the Authority must:

be a State-chartered bank, national banking association, mortgage banking association or institution, credit union, State or federal savings and loan association or mortgage servicing company;

be qualified to do business in the State;

be qualified to service mortgages sold to the Authority or its designee, FNMA and/or FHLMC, or insured by FHA, unless this requirement is waived by the Director based upon a determination of financial suitability made by the Director after consideration of the net assets, servicing capacity, and experience of the potential Servicer over the past 12 months in residential mortgage servicing; and

have deposits insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration, or deposit its funds in Illinois financial institutions whose deposits are insured by the Federal Deposit Insurance Corporation.

"Servicing Agreement": The agreement between a Servicer and the Authority (except when the Authority is the Servicer) that sets forth the terms and conditions for the servicing of Mortgage Loans purchased by the Authority or its designee.

"Staff": The Director, Deputy Director, Assistant Director, any Managing Directors and employees of the Authority.

"State": The State of Illinois.

"Supplemental Mortgage Coverage": The coverage, if required by a Series Resolution, whether in the form of insurance, a letter of credit, a guarantee, pledged funds or other forms of coverage, of losses incurred from Mortgage Loan defaults under that Series Program. Supplemental Mortgage Coverage may supplement other mortgage insurance and may include any insurance or reserve fund funded by the Authority.

"VA": The United States Department of Veterans Affairs.

History

• Source: Amended at 48 Ill. Reg. 14631, effective September 26, 2024

47 Ill. Adm. Code 260.104 Borrowing by the Authority

To the extent allowed by State or federal law and the Act, the Authority may borrow funds with which to purchase Mortgage Loans or securities, or to facilitate the origination of Mortgage Loans under the Programs.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.105 Compliance with Federal Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal law, including, without limit, Section 143 of the Code.

47 Ill. Adm. Code 260.106 Standards

In administering the Program, the Authority and the Staff, in those instances permitting the exercise of discretion, shall consider, in addition to the criteria specifically set forth in this Part, the following factors:

a) the purpose of the Program;

b) the financial condition and previous lending experience of potential and participating Lenders and Servicers;

c) the Authority's ability to purchase or redeem the Bonds and to comply with the requirements of the Resolution and applicable Series Resolutions;

d) the financial integrity of the Program;

e) the desirability of achieving a reasonable geographic distribution of Net Proceeds throughout the State; and

f) the standards of the prudent lender or investor.

47 Ill. Adm. Code 260.107 Forms for the Program

The Staff may prepare, use, supplement and amend forms, agreements and other documentation as may be necessary to implement the Programs, as may be prescribed by the Director, Deputy Director, Assistant Director or Managing Director.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.108 Fees and Charges of the Authority

The Authority may establish charges, premiums and penalties as it may deem necessary to administer the Programs after consideration of such factors as, but not limited to, financing requirements of the Programs, preferences of bond rating agencies, earnings and arbitrage limitations established by federal or State law and other financial factors relevant to the Programs.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.109 Waiver (repealed)

History

• Source: Repealed at 22 Ill. Reg. 3851, effective February 4, 1998

47 Ill. Adm. Code 260.110 Amendment

This Part may be amended or repealed by the Members from time to time in accordance with the Illinois Administrative Procedure Act and in a manner as they may determine consistent with the Act, the purposes of the Programs and other applicable provisions of law. This Part shall not constitute or create any contractual rights.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.111 Severability

If any clause, sentence, subsection, Section or Subpart of this Part shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, subsection, Section, and Subpart thereof as to which such judgment is rendered.

47 Ill. Adm. Code 260.112 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 260.113 Titles and Captions

Titles and captions of Subparts, Sections, and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 260.114 Calendar Days

Days shall mean calendar days. Due dates falling on a Saturday, Sunday or legal State or federal holiday shall be deemed to fall on the next calendar day that is not Saturday, Sunday, or a legal State or federal holiday.

47 Ill. Adm. Code 260.201 Invitations to Participate in the Programs

From time to time the Authority may send application materials to potential Lenders inviting them to submit to the Authority Lender Applications to participate in the Authority's Programs. Lenders wishing to participate in such Programs shall execute and return to the Authority the following documents: the Lender Application, the Mortgage Purchase Agreement (if not already executed), and the Servicing Agreement (if applicable and if not already executed). The Lender Application shall contain, but not be limited to, the following:

a) The unconditional agreement of the prospective Lender, effective upon acceptance of the Lender Application by the Authority, to sell to the Authority or its designee Mortgage Loans that comply with the terms of the Lender Application, the Mortgage Purchase Agreement, the Notice of Acceptance and the requirements of the Programs;

b) Provision for the prospective Lender to furnish financial and other information as the Authority may reasonably require;

c) A pro forma copy of any letter of credit or pledge of deposits or assets the Authority may require as security for the Lender's performance of its obligations under the Series Program.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.202 Security for Allocation of Net Proceeds (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.203 Allocation of Net Proceeds for Purchase of Mortgage Loans (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.204 Notice of Acceptance

By Notice of Acceptance, the Authority or its designee may commit itself, subject to the conditions set forth in the Lender Application and the Mortgage Purchase Agreement, to purchase Mortgage Loans, as offered by a potential Lender, or to allow the Lender's participation in the Authority's Programs. Immediately after the Authority has issued its Notice of Acceptance to the Lender, the Authority shall execute a Mortgage Purchase Agreement (if not previously executed) with the Lender. Upon receipt of the Notice of Acceptance, the Lender shall be obligated to originate Mortgage Loans in accordance with the terms of the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.205 Commitments for Mortgage Loans

Upon receipt of the Notice of Acceptance, the Lender shall issue commitments to Eligible Borrowers to make Mortgage Loans. The Lender may continue to issue firm commitments for the period set forth in the Notice of Acceptance. Any Mortgage Loans to be purchased by the Authority or its designee shall be purchased by the Authority or its designee by the date indicated in the Notice of Acceptance.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.301 Homebuilder Invitations (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.302 Reservation of Funds for Construction of Qualified Dwellings (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.303 Notice of Reservation of Funds (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.304 Real Estate Purchase Contracts (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.305 Transfer of Reserved Funds (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.401 Mortgage Loans

Each Mortgage Loan to be purchased under the Programs shall comply with the terms of the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement, and shall specifically comply with the following requirements, among others:

a) The original principal amount of each Mortgage Loan shall fall below the maximum price limits as set by the Authority from time to time. Each Mortgage Loan that has a loan-to-Property Value ratio in excess of 80% at the time of origination shall:

1. be insured by a private mortgage insurer licensed to do business in the State and qualified to insure single family mortgages purchased by the FHLMC, FNMA or successor federal agencies to the extent, if any, required, so that the uninsured portion of the Mortgage Loan shall not exceed 67% of the Property Value; or

2. be subject to insurance or guaranty by the FHA or the VA or any other agency or instrumentality of the United States of America having similar powers to insure or guarantee mortgage loans.

b) Each Mortgage Loan, if required by the Authority, shall be subject to Supplemental Mortgage Coverage.

c) Each Mortgage Loan to be purchased by the Authority or its designee shall be secured by a Mortgage on a Qualified Dwelling and shall also meet the applicable terms and conditions set forth in this Part, the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement. Lenders shall sell to the Authority or its designee, and the Authority or its designee shall purchase, only Mortgage Loans made to Eligible Borrowers.

d) Each Mortgage securing a Mortgage Loan to be purchased by the Authority shall:

1. be executed on a form approved by the Authority;

2. be a valid first mortgage lien on a Qualified Dwelling;

3. be consistent with Illinois law; and

4. conform with the requirements prescribed by the Authority and any applicable insurer.

e) Each Mortgage Loan to be purchased by the Authority or its designee shall be assumable and assignable, unless otherwise required by Section 103 of the Code, any other applicable sections of the Code or any other applicable State or federal law as may be enacted from time to time, and shall contain a provision giving the Authority or its designee the right to accelerate the maturity of the Mortgage Loan upon sale or lease of the Qualified Dwelling, unless otherwise allowed or required by applicable State or federal law.

f) The purchase price of each Qualified Dwelling that is the subject of a Mortgage Loan to be purchased by the Authority or its designee under the Programs shall fall below the maximum price limits set by the Authority from time to time.

g) The Authority or its designee shall not be required to purchase any Mortgage Loan if, on the date of purchase, the obligor of the Mortgage Loan is delinquent in the payment of any installment of principal, interest or other amounts due under the terms of the Mortgage Loan.

h) The Authority or its designee may foreclose Mortgages held as security for Mortgage Loans purchased under this Part that are in default according to their terms, or reassign the Mortgages to the Lender in accordance with the terms of the Mortgage Purchase Agreement. The Authority or its designee may take title in its name upon foreclosure and to subsequently convey title to the property to any purchaser of the property.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.402 Yield on Mortgage Loans

In no event shall the yield on Mortgage Loans sold to the Authority or its designee exceed the maximum permitted by application of the provisions of section 143 of the Code.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.403 Terms and Conditions of the Purchase of Mortgage Loans

a) The Authority or its designee shall purchase Mortgage Loans on the terms and conditions and in the manner prescribed in the Mortgage Purchase Agreement. The Mortgage Purchase Agreement shall contain such warranties of the Lender in connection with the Mortgage Loans to be sold under the Mortgage Purchase Agreement as the Authority or its designee shall require. These warrantees shall include, but are not limited to, the following:

1. The mortgagor is an Eligible Borrower;

2. The purchase price of the Qualified Dwelling subject to the Mortgage Loan does not exceed any maximum purchase price limitations established by the Authority;

3. The Mortgage Loan is evidenced by a properly executed promissory note made payable or assigned to the order of the Lender, endorsed by the Lender to the Authority or its designee and secured by a Mortgage on the Qualified Dwelling; both the note and the Mortgage are the legal, valid and binding obligations of the makers and mortgagors and are enforceable in accordance with their terms, unless enforcement is limited by laws affecting the enforcement of creditors' rights generally, if all parties to each Mortgage Loan had full legal capacity to execute all Mortgage Loan documents at the time of execution;

4. The Mortgage, the Uniform Commercial Code Form 1 and Form 2 financing statements, if any, and any other document required to be filed in a public office to perfect the mortgage lien against third parties have been duly and timely filed, registered or recorded by the Lender in the proper public office in order to give constructive notice of them to all subsequent purchasers or encumbrancers;

5. The Lender, being the sole owner and holder of the Mortgage Loan, has full right to sell and assign the Mortgage Loan to the Authority or its designee and that assignment conveys a good and marketable mortgagee's title to the Authority or its designee free and clear of all liens and encumbrances and subject only to real property taxes and assessments not yet due and encumbrances customarily accepted in accordance with applicable title standards and disclosed to the Authority or its designee prior to purchase of the Mortgage Loan;

6. The Mortgage creates a valid and existing first mortgage lien on the Qualified Dwelling to secure the Mortgage Loan, unless otherwise authorized by the Authority or its designee; the term "first mortgage lien" means classes of first liens commonly given to secure loans on real estate under the laws of the State;

7. The Lender has not modified in any respect and has not satisfied, canceled, subordinated or compromised in whole or in part the Mortgage Loan indebtedness, and has not released the mortgaged property in whole or in part from the lien of the indebtedness evidenced by the note and secured by the Mortgage; and the terms, covenants and conditions of the note evidencing the Mortgage Loan and the Mortgage securing the Mortgage Loan shall not have been waived, altered or modified in any respect that would materially affect the validity or enforceability of the Mortgage Loan or the security of the lien of the Mortgage;

8. The real property securing the Mortgage Loan is a Qualified Dwelling;

9. The Qualified Dwelling is covered by a valid and existing policy of homeowner's property and casualty insurance meeting the requirements of the Authority or its designee;

10. The Lender has complied as follows:

A) as to each FHA-insured Mortgage Loan, with the National Housing Act (12 USC 1701 et seq.) as amended and supplemented, all rules and regulations issued under the National Housing Act and all administrative publications. The FHA insurance shall be in full force and effect and, upon purchase by the Authority or its designee of the Mortgage Loan, shall inure to the benefit of the Authority or its designee;

B) as to each Mortgage Loan guaranteed by the VA or FmHA, with the Servicemen's Readjustment Act (38 USC 1803 et seq.), the Consolidated Farm and Rural Development Act (7 USC 1921 et seq.), Title V of the Housing Act of 1949 (42 USC 1471-1482) or other applicable federal law, as amended and supplemented, all rules and regulations issued under those laws and all administrative publications. Any such guaranty shall be in full force and effect and, upon purchase by the Authority or its designee of the Mortgage Loan, shall inure to the benefit of the Authority or its designee; and

C) as to each Mortgage Loan insured by a private mortgage insurance company, with all rules and requirements of that company. Any such insurance shall be in full force and effect and, upon purchase by the Authority or its designee of the Mortgage Loan, shall inure to the benefit of the Authority or its designee;

11. The Mortgage Loan is covered by a fully paid mortgagee's title insurance policy in such form as the Authority or its designee may require and under which the Authority or its designee is a loss payee; and

12. To the best of Lender's information, knowledge and belief, no condition exists that would prohibit the purchase of the Mortgage Loan by the Authority or its designee under all applicable rules, regulations and contractual provisions.

b) The Mortgage Purchase Agreement shall provide that the Authority shall have the right to require the Lender to repurchase Mortgage Loans sold to the Authority or its designee by the Lender if the Director, Deputy Director, Assistant Director or Managing Director determines that the Lender has failed to comply with the requirements of either this Part or its contracts and agreements with the Authority under the Program.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.404 Prepayment

The Authority shall apply any Prepayment it receives as follows:

a) to the purchase of additional Mortgage Loans in accordance with the requirements of the Program;

b) to the purchase or redemption of Bonds, subject in each case to the requirements of the Series Resolutions relating to the issuance of its Bonds; or

c) for other corporate purposes of the Authority, to the extent permitted by the Resolution.

47 Ill. Adm. Code 260.405 Targeted Area Residences

The Authority or its designee shall comply with the requirements of section 143 of the Code in connection with the purchase of Mortgage Loans on targeted area residences.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.406 Supplemental Mortgage Coverage

If required by the applicable Series Resolution, the Authority shall obtain Supplemental Mortgage Coverage for a Series Program in an amount not less than that percentage of the original aggregate principal amount of the Mortgage Loans authorized by such Series Resolution. Such Supplemental Mortgage Coverage shall insure the Authority against losses arising from an event of default under any Mortgage Loan covered by the policy in an amount equal to the unpaid principal balance of, and accrued interest on, the Mortgage Loan and customary fees and expenses paid by the Authority to preserve and protect the mortgaged premises and to foreclose or otherwise dispose of such premises, such as real estate taxes, hazard and private insurance premiums and foreclosure expenses, less the amount received by the Authority under any other insurance policy on the Mortgage Loan or from disposition of such premises or substantially similar benefits.

47 Ill. Adm. Code 260.407 Special Hazard Insurance (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.501 Restrictions on Return Realized by Lenders

The Authority shall establish the maximum income that may be realized by any Lender and by any agent of any Lender from Mortgage Loans, including any fees, premiums, bonuses and points charged by the Lender or the Lender's agent in connection with the making of Mortgage Loans. The maximum income shall be set at such amounts as the Authority finds reasonably necessary to induce participation in the Programs by Lenders in order to accomplish the purposes of the Act, or to ensure compliance with arbitrage and income limitations of section 143 of the Code.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.502 Servicing of Mortgage Loans

The Authority shall cause all Mortgage Loans purchased by the Authority to be serviced by a Servicer pursuant to the Servicing Agreement. The Servicer may be the Authority, the Lender from which the Mortgage Loans are purchased, or any other party approved by the Authority.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.503 Purchase of Authority Bonds (repealed)

History

• Source: Repealed at 33 Ill. Reg. 7295, effective May 22, 2009

47 Ill. Adm. Code 260.504 Equal Opportunity Lending

In making Mortgage Loans, the Lender shall not deny such Mortgage Loans to any person or persons or discriminate against such person or persons in fixing the amount, interest rate, duration, or other terms and conditions of such loans on account of race, color, religion, age, sex, marital status, family status, handicap, ancestry, national origin or unfavorable military discharge; and shall otherwise be subject to all State and federal requirements with respect to non-discrimination in lending including, without limitation, Title VI of the U.S. Civil Rights Act of 1964 (42 U.S.C. Section 2000 et seq.), Title VIII of the U.S. Civil Rights Act of 1968 (42 U.S.C. Section 3604 et seq.), as amended by the Housing and Community Development Act of 1974 (42 U.S.C. Section 5301 et seq.), the Equal Credit Opportunity Act (15 U.S.C. Sections 1691-1691F), the Fair Credit Reporting Act (15 U.S.C. Sections 1681-1681t), the Fair Housing Act (42 U.S.C. 3601-20), the Illinois Human Rights Act [775 ILCS 5] and Section 13 of the Act.

47 Ill. Adm. Code 260.505 Inspection of Books and Records

Upon prior written notice, the Authority may inspect, examine, and copy the books and records of each Lender for the purpose of determining compliance with the Act and all contracts and agreements between the Authority and such Lender relating to the Program.

47 Ill. Adm. Code 260.506 Termination

The Authority or designee shall retain the right to terminate its obligation to purchase Mortgage Loans associated with any particular issue of Bonds under the Programs, subject to applicable State law and to its existing contractual obligations, including contractual obligations arising under a Lender Application, a Notice of Reservation of Funds, a Notice of Acceptance, a Mortgage Purchase Agreement and a Servicing Agreement.

History

• Source: Amended at 33 Ill. Reg. 7295, effective May 22, 2009

Part 300 Homeownership Mortgage Loan Program

47 Ill. Adm. Code 300.101 Authority

This Part is authorized by and made pursuant to Sections 7.19 and 7.23 of the Illinois Housing Development Act [20 ILCS 3805/7.19 and 7.23] and shall govern the Illinois Housing Development Authority's homeownership mortgage loan program (the "Program") funded by its Bonds and from other sources of funds available to the Authority.

47 Ill. Adm. Code 300.102 Purposes and Objectives

This Part is established to accomplish the general purpose of the Illinois Housing Development Act and in particular the origination, making and purchasing of residential loans in accordance with the Program to achieve the following objectives: the provision of funds to finance, at affordable interest rates and/or other terms more favorable than those otherwise available, residential loans for Low and Moderate Income Persons and families; the provision of housing to alleviate the shortage of adequate housing in the State of Illinois for persons and families that are residents of the State of Illinois; the effective participation by mortgage lenders in the Program; and the advancement of leasehold and cooperative housing corporations for the purpose of preserving affordability and increasing access to housing.

History

• Source: Amended at 48 Ill. Reg. 14642, effective September 26, 2024

47 Ill. Adm. Code 300.103 Definitions

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Assistant Director": The Assistant Executive Director of the Authority.

"Authority": The Illinois Housing Development Authority.

"Bonds": The Bonds issued by the Authority pursuant to the Act from time to time under any resolution of the Authority or indenture pursuant to which Authority Bonds may be issued to finance or refinance Mortgage Loans under the Program, as amended or supplemented.

"Code": The Internal Revenue Code of 1986 (26 U.S.C.), as amended and supplemented, and the regulations promulgated by the Treasury Department from time to time under that statute (26 CFR). References to a section of the Code include all regulations promulgated by the Treasury Department under that section.

"Deputy Director": The Deputy Executive Director of the Authority.

"Director": The Executive Director of the Authority.

"Eligible Borrower": A person:

who is or will be a resident of the State within the later of 60 days after the closing of the purchase of a Qualified Dwelling and, in the case of a Qualified Dwelling upon which residential structures are to be substantially renovated or constructed by the Eligible Borrower following its purchase, within 60 days after the substantial completion of renovation or construction, but in any event within 270 days after the closing of the purchase of the Qualified Dwelling, and whose Household Income does not exceed the Maximum Income;

who occupies, or intends to occupy, as a single household the Qualified Dwelling being financed or refinanced by a Mortgage Loan as his or her permanent residence within 60 days after the later of the closing of the Mortgage Loan and, in the case of a Qualified Dwelling upon which residential structures are to be substantially renovated or constructed by the Eligible Borrower following its purchase, within 60 days after the substantial completion of renovation or construction, but in any event within 270 days after the closing of the Mortgage Loan.

The foregoing time periods may be extended in particular instances if the Authority determines that undue hardship to the Eligible Borrower or an unreasonable result will otherwise occur.

"FHA": The Federal Housing Administration.

"FHLMC": The Federal Home Loan Mortgage Corporation.

"FNMA": The Federal National Mortgage Association.

"GNMA": The Government National Mortgage Association.

"Household Income": The total annualized gross income of the Eligible Borrowers and any person who is expected to:

live in the Qualified Dwelling; and

be liable, or secondarily liable, on the Note, all persons residing or intending to reside as a single household in a Qualified Dwelling, from whatever source derived and before taxes or withholdings, provided that if a married person takes title to the Qualified Dwelling individually, the income of the spouse shall also be included.

"Insured": A Mortgage Loan that is insured by Private Mortgage Insurance, by insurance provided by FHA, VA or USDA, or by insurance under a comparable government insurance program approved by the Members by resolution and acceptable to GNMA, FNMA or FHLMC, as applicable.

"Lender": A bank, trust company, savings bank, savings and loan association, credit union, national banking association, mortgage banking association, federal savings and loan association or federal credit unit maintaining an office in the State, any insurance company, or any other entity or organization that makes or acquires loans secured by real property:

that is licensed, qualified and in good standing to do business in the State;

that meets the conditions and requirements of the applicable Mortgage Purchase Agreement and that meets the requirements of the applicable insurer, if any, and FNMA, FHLMC or GNMA, as and to the extent applicable, as issuer and/or guarantor of Mortgage-Backed Securities; and

that is approved by the Director, Deputy Director or Managing Director in writing, with notice of approval to be provided to the Members within a reasonable period of time. Approval of any Lender may be withdrawn at any time by the Director, Deputy Director or Managing Director in writing, with notice of the withdrawal to be provided to the Members within a reasonable period of time.

"Lender Application": A prospective Lender's application to sell Mortgage Loans to the Authority or participate in the Program pursuant to the terms of a Mortgage Purchase Agreement and other Program documents.

"Low and Moderate Income Persons": Families and persons whose income does not exceed the Maximum Income and who cannot afford to pay, or qualify for a mortgage loan to finance or refinance, the amounts at which private enterprise, without assisted mortgage financing, is providing a substantial supply of decent, safe and sanitary housing.

"Managing Director" means the Managing Director or Director, as the case may be, of the Authority's Homeownership Programs Department.

"Maximum Income": Unless otherwise permitted or required by the Code, 140% of the median family income of either the metropolitan statistical area or primary metropolitan statistical area in which the Qualified Dwelling is located or the State, whichever is greater, as determined by the Internal Revenue Service.

"Members": The Members of the Authority.

"Mortgage": The Mortgage, or other instrument in the nature of a Mortgage, creating a first lien on an interest in a Qualified Dwelling, together with all supplements, modifications or amendments to it.

"Mortgage Loan": A loan made by a Lender to an Eligible Borrower for the purchase of a Qualified Dwelling and secured by a Mortgage on the Qualified Dwelling.

"Mortgage Purchase Agreement": The agreement, including any amendments or supplements to the agreement, between the Authority and a Lender pursuant to which the Authority or its designee agrees to purchase Mortgage Loans from the Lender on the terms and conditions set forth in the agreement and that establishes the requirements for Mortgage Loans to be purchased by the Authority or its designee, or otherwise allows participation in the Program.

"Mortgage-Backed Security": A single pool, guaranteed mortgage pass-through security issued and guaranteed by FNMA, a single pool, guaranteed mortgage pass-through certificate issued and guaranteed by FHLMC, or a mortgage pass-through certificate guaranteed by GNMA pursuant to its mortgage-backed securities program under section 306(g) and related provisions of the National Housing Act of 1934 (12 U.S.C. 1701), as amended, or any similar successor statutory authority.

"Note": The promissory note evidencing a Mortgage Loan and secured by a Mortgage on a Qualified Dwelling with respect to which assisted Mortgage financing is provided by the Authority under the Program.

"Notice of Acceptance": The Authority's notice to a Lender accepting its Lender Application.

"Prepayments": Any moneys, however derived, that are received or recovered by the Authority from any payment of, or with respect to, principal on any Mortgage Loan or Mortgage-Backed Security prior to scheduled payments of principal required under that Mortgage Loan or Mortgage-Backed Security.

"Private Mortgage Insurance": Insurance coverage paid for by the Eligible Borrower that insures against losses with respect to defaults on a Mortgage Loan according to the terms of the insurance policy. The insurer and the terms of the insurance policy must be approved by FNMA or FHMLC or by the Director, Deputy Director or Managing Director in writing.

"Program": The Authority's Homeownership Mortgage Loan Program under which the Authority provides assisted Mortgage financing to Low and Moderate Income Persons to finance or refinance their purchase of Qualified Dwellings, funded with proceeds of Bonds or any other source of funds available to the Authority.

"Program Funds": All moneys made available by the Authority for the purchase of Mortgage Loans under the Program, from whatever source derived.

"Property Value": The lesser of the purchase price or the appraised value of the Qualified Dwelling at the time of the origination of the Mortgage Loan secured by that Qualified Dwelling.

"Qualified Dwelling": A fee simple, leasehold or cooperative share interest in real property:

that is located in the State;

upon which there is located a structure or structures designed for residential use or, if the real property is unimproved, upon which construction of that structure or structures for residential use has begun or will commence within 60 days after the closing of the Eligible Borrower's purchase of the property and can reasonably be expected to be completed within 270 days after the closing of the Eligible Borrower's purchase of the property;

that is a single family residence; a condominium; a one-, two-, three- or four-unit residential structure one unit of which is occupied by the owner of the structure; or factory-made housing that is permanently fixed to real property;

of which not more than 15% of the total area is reasonably expected to be used primarily in a trade or business; and

that is, at the time financing or refinancing is provided, the principal residence of the Eligible Borrower or can reasonably be expected to become the principal residence of the Eligible Borrower within a reasonable time after financing or refinancing is provided. For purposes of this definition, a "reasonable time after financing or refinancing is provided" shall be deemed to be a period within 60 days after the later of the closing of the Mortgage Loan and, in the case of a Qualified Dwelling upon which residential structures are to be substantially renovated or constructed by the Eligible Borrower following its purchase, within 60 days after the substantial completion of renovation or construction but in any event within 270 days after the closing of the Mortgage Loan. The foregoing time periods may be extended by the Authority if the Authority determines that undue hardship to the Eligible Borrower or an unreasonable result will otherwise occur.

Not included in this definition is a residence that is:

used as an investment property;

a recreational home; or

primarily intended to be used in a trade or business, including, without limitation, any residence of which more than 15% of the total area is reasonably expected to be used primarily in a trade or business.

"Rules": The rules of the Authority, as amended and supplemented from time to time (generally 47 Ill. Adm. Code Chapter II).

"Servicer": A Lender, acting in the capacity of a Mortgage loan servicer, a financial institution, a Mortgage banking organization, a Mortgage servicing company, or a state agency or local government unit organized under the laws of any state or territory of the United States of America or the District of Columbia, that is qualified to service Insured Mortgage Loans, is acceptable to GNMA, FNMA or FHLMC, as applicable, has been approved by the Director, Deputy Director or Assistant Director as a Servicer, and has executed a Servicing Agreement with the Authority. The Authority may also be a Servicer.

"Servicing Agreement": The agreement between a Servicer and the Authority (except when the Authority is the Servicer) that sets forth the terms and conditions for the servicing of Mortgage Loans purchased by the Authority or its designee. The term "Servicing Agreement" includes a master agreement pursuant to which the Servicer services Mortgage Loans originated by more than one Lender.

"Staff": The Director, Deputy Director, Assistant Director, and employees of the Authority.

"State": The State of Illinois.

"Tax-exempt": With respect to Bonds the interest on which the Authority intends to be tax-exempt, the status of interest paid and received on such Bonds as not includible in the gross income of their owners under the Code for federal income tax purposes, with such general exceptions as may be provided from time to time in the Code (for example and without limitation, the alternate minimum tax applicable to individuals or corporations or the "branch profits tax" imposed on certain corporations).

"This Part": 47 Ill. Adm. Code 300.

"USDA": The United States Department of Agriculture, Rural Housing Service, or any successor agency under the Section 502 Guaranteed Rural Housing Loan Program or any similar replacement program.

"VA": The United States Department of Veterans Affairs.

History

• Source: Amended at 50 Ill. Reg. 8571, effective June 4, 2026

Chapter II Illinois Housing Development Authority

Part 300 Homeownership Mortgage Loan Program

47 Ill. Adm. Code 300.104 Borrowing by the Authority

To the extent allowed by State or federal law and the Act, the Authority may borrow funds with which to purchase Mortgage Loans, Mortgage-Backed Securities or other securities, or to facilitate the origination of Mortgage Loans under the Programs.

47 Ill. Adm. Code 300.105 Compliance with Federal Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal law, including, without limit, section 143 of the Code to the extent applicable.

47 Ill. Adm. Code 300.106 Standards

In administering the Program, the Authority and the Staff, in those instances permitting the exercise of discretion, shall consider, in addition to the criteria specifically set forth in this Part,

the following factors:

a) the purpose of the Program;

b) the financial condition and previous lending experience of potential and participating Lenders and Servicers;

c) to the extent the Program is financed through the issuance of Bonds, the Authority's ability to purchase or redeem the Bonds or to retire Bonds at their maturity and to comply with the requirements of any applicable resolution or indenture of the Authority and applicable State and federal law;

d) the financial integrity of the Program;

e) the desirability of achieving a reasonable geographic distribution of Program Funds throughout the State; and

f) the standards of the prudent lender or investor.

47 Ill. Adm. Code 300.107 Forms for the Program

The Staff may prepare, use, supplement and amend forms, agreements and other documentation as may be necessary to implement the Program, as may be prescribed by the Director, Deputy Director or Assistant Director.

47 Ill. Adm. Code 300.108 Fees and Charges of the Authority

The Authority may establish charges, premiums and penalties as it may deem necessary to administer the Program after consideration of such factors as, but not limited to, financing requirements of the Program, preferences of bond rating agencies, earnings and arbitrage limitations established by federal or State law, to the extent applicable, and other financial factors relevant to the Program.

47 Ill. Adm. Code 300.109 Amendment

This Part may be amended or repealed by the Members from time to time in accordance with the Illinois Administrative Procedure Act and in a manner as they may determine consistent with the Act, the purposes of the Program and other applicable provisions of State and federal law. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 300.110 Severability

If any clause, sentence, subsection, Section or Subpart of this Part shall be adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, subsection, Section, and Subpart of this Part to which the judgment is rendered.

47 Ill. Adm. Code 300.111 Gender and Number

All terms expressed in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 300.112 Titles and Captions

Titles and captions of Subparts, Sections, and subsections are used for convenience of reference and are not a part of the text.

47 Ill. Adm. Code 300.113 Calendar Days

Days shall mean calendar days. Due dates falling on a Saturday, Sunday or legal State or federal holiday shall be deemed to fall on the next calendar day that is not Saturday, Sunday, or a legal State or federal holiday.

47 Ill. Adm. Code 300.201 Invitations to Participate in the Programs

From time to time the Authority may send application materials to potential Lenders inviting them to submit to the Authority Lender Applications to participate in the Program. Lenders wishing to participate in the Program shall execute and return to the Authority: the Lender Application and the Mortgage Purchase Agreement (if not already executed). The Lender Application shall contain, but not be limited to, the following:

a) The unconditional agreement of the prospective Lender, effective upon acceptance of the Lender Application by the Authority, to sell to the Authority or its designee Mortgage Loans that comply with the terms of the Lender Application, the Mortgage Purchase Agreement, the Notice of Acceptance and the requirements of the Program;

b) Provision for the prospective Lender to furnish financial and other information as the Authority may reasonably require; and

c) A pro forma copy of any 1etter of credit or pledge of deposits or assets the Authority may require as security for the Lender's performance of its obligations under the Program.

47 Ill. Adm. Code 300.202 Notice of Acceptance

By Notice of Acceptance, the Authority or its designee may commit itself, subject to the conditions set forth in the Lender Application and the Mortgage Purchase Agreement, to purchase Mortgage Loans, as offered by a potential Lender, or to allow the Lender's participation in the Authority's Program. Immediately after the Authority has issued its Notice of Acceptance to the Lender, the Authority shall execute a Mortgage Purchase Agreement (if not previously executed) with the Lender. Upon receipt of the Notice of Acceptance, the Lender shall be obligated to originate Mortgage Loans in accordance with the terms of the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement.

47 Ill. Adm. Code 300.203 Commitments for Mortgage Loans

Upon receipt of the Notice of Acceptance, the Lender shall issue commitments to Eligible Borrowers to make Mortgage Loans. The Lender may continue to issue firm commitments for the period set forth in the Notice of Acceptance. Any Mortgage Loans to be purchased by the Authority or its designee shall be purchased by the Authority or its designee by the date indicated in the Notice of Acceptance.

47 Ill. Adm. Code 300.301 Mortgage Loans

Each Mortgage Loan to be purchased under the Program shall comply with the terms of the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement, and shall specifically comply with the following requirements, among others:

a) The original principal amount of each Mortgage Loan shall not exceed the maximum loan amount set by the Authority from time to time. The loan-to-Property Value ratio for each Mortgage Loan shall not exceed the maximum loan-to-Property Value ratio set by the Authority from time to time.

b) Each Mortgage Loan shall be Insured, unless, and only to the extent that, FNMA, FHLMC or GNMA, as issuer and/or guarantor of Mortgage-Backed Securities, do not require that particular Mortgage Loans be insured to be included in pools of Mortgage Loans underlying Mortgage-Backed Securities issued and/or guaranteed by FNMA, FHLMC or GNMA.

c) Each Mortgage Loan to be purchased by the Authority or its designee shall be secured by a Mortgage on a Qualified Dwelling and shall also meet the applicable terms and conditions set forth in this Part, the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement. Lenders shall sell to the Authority or its designee, and the Authority or its designee shall purchase, only Mortgage Loans made to Eligible Borrowers.

d) Each Mortgage securing a Mortgage Loan to be purchased by the Authority or its designee shall:

1. be executed on a form approved by the Authority or its designee;

2. be a valid first Mortgage lien on a Qualified Dwelling;

3. have a term not exceeding 40 years;

4. be consistent with Illinois law; and

5. conform with the requirements prescribed by the Authority and any applicable insurer.

e) Each Mortgage Loan to be purchased by the Authority or its designee shall be assumable and assignable, unless otherwise required by Section 103 of the Code, any other applicable sections of the Code or any other applicable State or federal law as may be enacted from time to time, and shall contain a provision giving the Authority or its designee the right to accelerate the maturity of the Mortgage Loan upon sale or lease of the Qualified Dwelling, unless otherwise allowed or required by applicable State or federal law.

f) The Authority or its designee shall not be required to purchase any Mortgage Loan if, on the date of purchase, the obligor of the Mortgage Loan is delinquent in the payment of any installment of principal, interest or other amounts due under the terms of the Mortgage Loan.

g) The Authority or its designee may foreclose Mortgages held as security for Mortgage Loans purchased under this Part that are in default according to their terms, or reassign the Mortgages to the Lender in accordance with the terms of the Mortgage Purchase Agreement. The Authority or its designee may take title to the property in its name upon foreclosure and to subsequently convey title to the property to any purchaser of the property.

47 Ill. Adm. Code 300.302 Yield on Certain Mortgage Loans

In no event shall the yield on Mortgage Loans financed or refinanced from the proceeds of Bonds that are Tax-Exempt and sold to the Authority or its designee exceed the maximum permitted by application of the provisions of section 143 of the Code.

47 Ill. Adm. Code 300.303 Terms and Conditions of the Purchase of Mortgage Loans

a) The Authority or its designee shall purchase Mortgage Loans on the terms and conditions and in the manner prescribed in the Mortgage Purchase Agreement. The Mortgage Purchase Agreement shall contain such warranties of the Lender in connection with the Mortgage Loans to be sold under the Mortgage Purchase Agreement as the Authority or its designee shall require. These warranties shall include, but are not limited to, the following:

1. The mortgagor is an Eligible Borrower;

2. The original principal amount of the Mortgage Loan does not exceed any maximum loan amount established by the Authority;

3. The Mortgage Loan is evidenced by a properly executed Note made payable or assigned to the order of the Lender, endorsed by the Lender to the Authority or its designee and secured by a Mortgage on the Qualified Dwelling; both the Note and the Mortgage are the legal, valid and binding obligations of the makers and mortgagors and are enforceable in accordance with their terms, unless enforcement is limited by laws affecting the enforcement of creditors' rights generally, if all parties to each Mortgage Loan had full legal capacity to execute all Mortgage Loan documents at the time of execution;

4. The Mortgage, the Uniform Commercial Code Form 1 and Form 2 financing statements, if any, and any other document required to be filed in a public office to perfect the mortgage lien against third parties have been duly and timely filed, registered or recorded by the Lender in the proper public office in order to give constructive notice of them to all subsequent purchasers or encumbrancers;

5. The Lender is the sole owner and holder of the Mortgage Loan, has full right to sell and assign the Mortgage Loan to the Authority or its designee, and that assignment conveys a good and marketable mortgagee's title to the Authority or its designee free and clear of all liens and encumbrances and subject only to real property taxes and assessments not yet due and encumbrances customarily accepted in accordance with applicable title standards and disclosed to the Authority or its designee prior to purchase of the Mortgage Loan;

6. The Mortgage creates a valid and existing first Mortgage lien on the Qualified Dwelling to secure the Mortgage Loan, unless otherwise authorized by the Authority or its designee; the term "first Mortgage lien" means classes of first liens commonly given to secure loans on real estate under the laws of the State;

7. The Lender has not modified in any respect and has not satisfied, canceled, subordinated or compromised in whole or in part the Mortgage Loan indebtedness, and has not released the mortgaged property in whole or in part from the lien of the indebtedness evidenced by the Note and secured by the Mortgage; and the terms, covenants and conditions of the Note evidencing the Mortgage Loan and the Mortgage securing the Mortgage Loan shall not have been waived, altered or modified in any respect that would materially affect the validity or enforceability of the Note or the Mortgage Loan or the security of the lien of the Mortgage;

8. The real property securing the Mortgage Loan is a Qualified Dwelling;

9. The Qualified Dwelling is covered by a valid and existing policy of homeowner's property and casualty insurance meeting the requirements of the Authority or its designee;

10. The Lender has complied with the rules and requirements of the applicable insurance program, so that the Mortgage Loans to be purchased are Insured and the insurance is in full force and effect and inures to the benefit of the Authority or its designee;

11. The Mortgage Loan is covered by a fully paid mortgagee's title insurance policy in such form as the Authority or its designee may require and under which the Authority or its designee is a loss payee; and

12. To the best of Lender's information, knowledge and belief, no condition exists that would prohibit the purchase of the Mortgage Loan by the Authority or its designee under all applicable rules, regulations and contractual provisions.

b) The Mortgage Purchase Agreement shall provide that the Authority shall have the right to require the Lender to repurchase Mortgage Loans sold to the Authority or its designee by the Lender if the Director, Deputy Director or Assistant Director determines that the Lender has failed to comply with the requirements of either this Part or its contracts and agreements with the Authority under the Program.

c) The Authority may provide assistance with closing costs or a down payment to the Eligible Borrower under any such Mortgage Loan. Assistance with closing costs and assistance with a down payment shall be in such maximum amounts and under such terms as have been approved by the Members from time to time by resolution.

Chapter II Illinois Housing Development Authority

Part 300 Homeownership Mortgage Loan Program

47 Ill. Adm. Code 300.304 Prepayments

The Authority shall apply any Prepayments it receives with respect to Mortgage Loans as follows:

a) to the purchase of additional Mortgage Loans in accordance with the requirements of the Program;

b) in the case of Prepayments with respect to any Mortgage Loan financed in whole or in part from the proceeds of Bonds, to the extent the Prepayments are allocable to proceeds of Bonds, to the purchase or redemption of Bonds, subject in each case to the requirements of the applicable resolution or indenture of the Authority pursuant to which the funds were provided to purchase the Mortgage Loan with respect to which the Prepayment was received; or

c) for other corporate purposes of the Authority, to the extent permitted by the applicable resolution or indenture of the Authority pursuant to which the funds were provided to purchase the Mortgage Loan with respect to which the Prepayment was received.

47 Ill. Adm. Code 300.305 Targeted Area Residences

To the extent that Mortgages or Mortgage-Backed Securities are purchased from proceeds of Bonds that are Tax-Exempt, the Authority or its designee shall comply with the requirements of section 143 of the Code in connection with the purchase of Mortgage Loans on targeted area residences or the financing of such Mortgage Loans through the purchase of Mortgage-Backed Securities.

47 Ill. Adm. Code 300.401 Purchase of Mortgage-Backed Securities

The Authority may purchase Mortgage-Backed Securities from time to time from proceeds of Bonds, as an investment of funds in the Authority's Administrative Fund or other Authority Funds and accounts, as a temporary investment of funds held by a trustee under any resolution or indenture of the Authority pursuant to which Bonds have been issued, or from other funds of the Authority legally available for the purpose, in all cases to the extent permitted by applicable State and federal law and, if applicable, the terms of any applicable resolution or indenture of the Authority, for the purpose of providing assisted mortgage financing or refinancing for Low and Moderate Income Persons under the Program. Mortgage Loans pooled in connection with the issuance and purchase by the Authority of any Mortgage-Backed Security shall meet the criteria for Mortgage Loans in Sections 300.301 and 300.303. The Authority may provide assistance with closing costs or a down payment to the Eligible Borrower under any such Mortgage Loan as provided in Section 300.303(c).

47 Ill. Adm. Code 300.402 Sale of Mortgage-Backed Securities

In order to provide assisted mortgage financing or refinancing or Mortgage Loans for Low and Moderate Income Persons under the Program, the Authority may sell Mortgage-Backed Securities held by the Authority or may direct a trustee under a resolution or indenture of the Authority pursuant to which Bonds have been issued that is holding Mortgage-Backed Securities as a temporary investment of funds held by the trustee under the resolution or ordinance, subject to applicable limitations under State or federal law or the applicable resolution or indenture of the Authority. Proceeds of sale of Mortgage-Backed Securities originally purchased from Authority funds shall be used for lawful Authority purposes, including, without limitation, providing further assisted mortgage financing or refinancing of Mortgage Loans for Low and Moderate Income Persons under the Program and originally purchased as a temporary investment of funds held by a trustee under a resolution or indenture of the Authority pursuant to which Bonds have been issued shall be applied as provided in the resolution or indenture. In connection with the sale, the Authority may enter into documentation necessary to effect the sale.

47 Ill. Adm. Code 300.403 Yield on Certain Mortgage-Backed Securities

In no event shall the yield on Mortgage-Backed Securities purchased from the proceeds of Bonds that are Tax-Exempt exceed the maximum permitted by application of section 143 of the Code.

47 Ill. Adm. Code 300.404 Prepayments

The Authority shall apply any Prepayments it receives with respect to a Mortgage-Backed Security as follows:

a) to the extent the Mortgage-Backed Security was originally purchased from Authority funds for any lawful Authority purposes, including, without limitation, providing further assisted mortgage financing or refinancing of Mortgage Loans for Low and Moderate Income Persons under the Program; and

b) to the extent the Mortgage-Backed Security was originally purchased as a temporary investment of funds held by a trustee under a resolution or indenture of the Authority pursuant to which Bonds have been issued, as provided in the resolution or indenture.

47 Ill. Adm. Code 300.501 Restrictions on Compensation of Lenders

The Authority shall, by resolution of the Members adopted from time to time, establish the maximum compensation that may be realized by any Lender and by any agent of any Lender from Mortgage Loans, including any fees, premiums, bonuses and points charged by the Lender or the Lender's agent in connection with the making of Mortgage Loans. The maximum compensation shall be set at such amounts as the Authority finds reasonably necessary to induce participation in the Programs by Lenders in order to accomplish the purposes of the Act or, to the extent applicable, to ensure compliance with arbitrage and income limitations of section 143 of the Code.

47 Ill. Adm. Code 300.502 Servicing of Mortgage Loans

The Authority shall cause all Mortgage Loans purchased by the Authority or its designee to be serviced by a Servicer pursuant to the Servicing Agreement.

47 Ill. Adm. Code 300.503 Equal Opportunity Lending

In making Mortgage Loans, the Lender shall not deny a Mortgage Loan to any person or persons or discriminate against the person or persons in fixing the amount, interest rate, duration, or other terms and conditions of the loans on account of race, color, religion, age, sex, marital status, family status, handicap, ancestry, national origin or unfavorable military discharge. The Lender shall be subject to all State and federal requirements with respect to non-discrimination in lending including, without limitation, Title VI of the U.S. Civil Rights Act of 1964 (42 USC 2000 et seq.), Title VIII of the U.S. Civil Rights Act of 1968 (42 USC 3604 et seq.), as amended by the Housing and Community Development Act of 1974 (42 USC 5301 et seq.), the Equal Credit Opportunity Act (15 USC 1691-1691F), the Fair Credit Reporting Act (15 USC 1681-1681t), the Fair Housing Act (42 USC 3601-20), the Illinois Human Rights Act [775 ILCS 5] and Section 13 of the Act.

47 Ill. Adm. Code 300.504 Inspection of Books and Records

Upon prior written notice, the Authority may inspect, examine and copy the books and records of each Lender for the purpose of determining compliance with the Act and all contracts and agreements between the Authority and the Lender relating to the Program.

47 Ill. Adm. Code 300.505 Termination

The Authority or designee shall retain the right to terminate its obligation to purchase Mortgage Loans under the Program, subject to applicable State law and to its existing contractual obligations, including contractual obligations arising under a Lender Application, a Notice of Reservation of Funds, a Notice of Acceptance, a Mortgage Purchase Agreement, or a Servicing Agreement.

Part 302 Homeowner Assistance Fund Programs

47 Ill. Adm. Code 302.101 Authority

This Part implements Section 3206 [Homeowner Assistance Fund] of the American Rescue Plan Act of 2021, Pub. L. 117-2 enacted in March 2021 and is authorized by Section 7.19 of the Illinois Housing Development Act [20 ILCS 3805/7.19].

47 Ill. Adm. Code 302.102 Purpose and Objectives

The purpose of the Homeowner Assistance Fund programs is to use moneys to provide assistance to eligible homeowners to mitigate financial hardships associated with the COVID-19 pandemic by preventing homeowner mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services, and displacement; and to provide housing stability services.

47 Ill. Adm. Code 302.103 Definitions

The following definitions apply to terms used in this Part:

“American Rescue Plan Act”: The American Rescue Plan Act of 2021, P.L. 117-2 (March 11, 2021).

“Annual Income”: The definition established by the U.S. Department of Housing and Urban Development in 24 CFR 5.609.

“Applicant” or “program applicant”: Any Homeowner that has submitted an application, individually or jointly, to receive HAF funds.

“Area Median Income”: The area median income, adjusted for household size, as established by the U.S. Department of Housing and Urban Development.

“Authority”: The Illinois Housing Development Authority.

“Coverage Period”: The portion of a HAF program Eligibility Period applicable to an Eligible Homeowner.

“COVID-19”: Coronavirus Disease 2019, as referenced in the State Gubernatorial Disaster Proclamations.

“DIA”: An area of the State disproportionately impacted, based primarily on positive COVID-19 cases per capita and demographic calculations performed by the Department of Commerce and Economic Opportunity and the Governor’s Office of Management and Budget. DIAs are captured via zip code.

“Eligible Homeowner”: A Homeowner receiving or approved to receive HAF grant funds through an Eligible Servicer.

“Eligible Servicer”: A mortgage lender/servicer, manufactured/mobile home lender/park (lot fees), county treasurer or local taxing authority, condominium/co-op/homeowners’ association that is due payments from an Eligible Homeowner.

“Eligibility Period”: An Eligible Homeowner may receive up to the Maximum Grant Amount in HAF assistance for a hardship that occurred after January 21, 2020 as a result of COVID-19 and ending on the date that funds are first disbursed (plus an additional three months in prospective monthly payments if necessary to ensure housing stability, subject to the availability of funds and so long as any additional payments do not result in exceeding the Maximum Grant Amount).

“Eligible Uses”: As identified in Section 302.202 hereof, and as may be expanded or supplemented in future HAF programs permitted to be established by the Authority.

“HAF Grant”: A grant funded by American Rescue Plan Act for Eligible Homeowners.

“HAF”: Homeowner Assistance Fund as established by the American Rescue Plan Act.

“Home”: A single family attached or detached property, a one to four unit property where the owner is living as their primary residence, a manufactured home permanently affixed to real property and taxed as real estate, a mobile home permanently placed on a lot in a mobile home park/lot, a condominium unit, or a cooperative apartment.

“Homeowner”: a natural person (not LLP, LP, LLC or similar structure) or a living trust or other similar ownership structure created for estate planning purposes; so long as the Home is occupied as the natural person’s primary residence.

“Housing Stability Service” or “HSS”: Case management and other services related to the COVID-19 outbreak, which services do not have to be related to the COVID-19 outbreak, as defined by the Secretary, including those that enable eligible households to maintain or obtain housing. Such services may include, but are not limited to, delinquency, default, foreclosure, post-foreclosure eviction of a homeowner or the loss of utility or home energy services, housing counseling, fair housing counseling, case management related to housing stability, housing related services for survivors of domestic abuse or human trafficking, legal services or attorney’s fees related to eviction or foreclosure proceedings and maintaining housing stability, and specialized services for individuals with disabilities or seniors that supports their ability to access or maintain housing, subject to the terms of the agreement executed by the HSS Provider and the Authority.

“HSS Education and Intake”: (a) Conduct regularly scheduled webinars for program applicants on next steps after application is submitted; what will occur if they are approved; what will occur if they are not eligible; an overview of loss mitigation; an overview of the foreclosure process; and connection to pro bono legal and mediation resources. (b) Assist homeowners that may need help with the program application virtually, over the phone, or in-person. (c) Follow up with clients post application should they need case management or referral services.

“HSS Equipment”: Costs incurred to bolster the organization’s mobile and technology network in order to perform the services, i.e. the purchase of computer workstations, laptops, tablets, headsets related to performance of services by the HSS.

“HSS Marketing and Outreach”: Perform outreach services and disseminate information about the HAF program throughout the applicant’s coverage area.

“HSS Provider”: A recipient of funds from the Authority to provide HSS.

“HSS Sub-Award”: An award of funds from the Authority to an HSS Provider.

“GATA”: The Grant Accountability and Transparency Act [30 ILCS 708].

“GATU”: The Grant Accountability and Transparency Unit within the Illinois Governor's Office of Management and Budget.

“Guidance”: Guidance, including, but not limited to, “frequently asked questions” released by the U.S. Department of the Treasury or the Secretary in connection with the American Rescue Plan Act.

“Maximum Grant Amount”: Up to $60,000 per Eligible Homeowner household.

“Secretary”: The Secretary of the U.S. Department of the Treasury.

“Socially Disadvantaged individuals”: individuals are those whose ability to purchase or own a home has been impaired due to diminished access to credit on reasonable terms as compared to others in comparable economic circumstances, based on disparities in homeownership rates in the Authority’s jurisdiction as documented by the U.S. Census. The impairment must stem from circumstances beyond their control. Indicators of impairment under this definition may include being a (1) member of a group that has been subjected to racial or ethnic prejudice or cultural bias within American society, (2) resident of a majority-minority Census tract; (3) individual with limited English proficiency; (4) resident of a U.S. territory, Indian reservation, or Hawaiian Home Land, or (5) individual who lives in a persistent-poverty county, meaning any county that has had 20% or more of its population living in poverty over the past 30 years as measured by the three most recent decennial censuses. In addition, an individual may be determined to be a socially disadvantaged individual in accordance with a process developed by the Authority for determining whether a homeowner is a socially disadvantaged individual in accordance with applicable law, which may reasonably rely on self-attestations

History

• Source: Amended at 47 Ill. Reg. 5362, effective March 28, 2023

47 Ill. Adm. Code 302.104 Compliance with Federal and State Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable law, including but not limited to the Uniform Guidance.

47 Ill. Adm. Code 302.105 Applications, Forms and Procedures

a) The Authority may prepare, use, prescribe, supplement and amend forms, including application forms as may be necessary to implement any HAF program.

b) The Authority may accept applications for any HAF program in one or more rounds of funding.

c) Nothing in this Part shall be construed as precluding the Authority from capping or setting a limit on the amount of HAF program payments made on behalf of any single Eligible Homeowner.

47 Ill. Adm. Code 302.106 Fees and Charges

The Authority will not charge an application fee for any HAF Grants.

47 Ill. Adm. Code 302.107 Authority Administrative Expenses

The Authority is entitled to administrative expenses incurred with respect to the administration of HAF funds. An amount not to exceed 15 percent of the total HAF allocation to the Authority may be used for administrative costs attributable to providing financial assistance and housing stability services to Eligible Homeowners.

47 Ill. Adm. Code 302.108 Amendment

This Part may be supplemented, amended or repealed by the Authority from time to time and in a manner consistent with the Illinois Administrative Procedure Act [5 ILCS 100], this Part and other applicable laws. This Part does not constitute or create any contractual rights.

47 Ill. Adm. Code 302.109 Severability

If any clause, sentence, paragraph, subsection, Section or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section or Subpart to which the judgment is rendered.

47 Ill. Adm. Code 302.110 Non-Discrimination

a) Unless necessary to comply with applicable federal or State law, the Authority shall not require any type of documentation relating to any household member's immigration status.

b) Eligible Homeowners, Eligible Servicers and HSS Providers shall comply with the applicable provisions of the Illinois Human Rights Act [775 ILCS 5] and the regulations promulgated under that Act, the federal Fair Housing Act (42 U.S.C. 3601), Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), the Illinois Environmental Barriers Act [410 ILCS 25], the Illinois Accessibility Code (71 Ill. Adm. Code 400), and all other applicable State and federal law concerning discrimination and fair housing.

47 Ill. Adm. Code 302.111 Record Retention

Eligible Homeowners, Eligible Servicers and HSS Providers shall maintain copies of any records in their possession in connection with HAF for at least five years from the date of the grant.

47 Ill. Adm. Code 302.112 Monitoring

The Authority has the right to monitor all records of Eligible Homeowners, Eligible Servicers and HSS Providers relating to an award of funds under any HAF Program. Eligible Homeowners, Eligible Servicers and HSS Providers shall make all records relating to any HAF program available for inspection by the Authority upon the Authority's request.

47 Ill. Adm. Code 302.113 Federal Legislation

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with the American Rescue Plan Act. To the extent that this Part conflicts with federal law, federal law shall control and prevail.

47 Ill. Adm. Code 302.114 Gatu

Unless different provisions are required by law or an exception is granted by GATU:

a) HAF payments are considered to be federal financial assistance subject to the Single Audit Act (31 U.S.C. 7501-7507) and the related provisions of the Uniform Guidance, 2 CFR 200.303 regarding internal controls, 200.330 through 200.332 regarding subrecipient monitoring and management, and subpart F regarding audit requirements.

b) HAF payments are subject to the following requirements in the Uniform Guidance (2 CFR 200): 2 CFR 200.303 regarding internal controls, 2 CFR 200.330 through 200.332 regarding subrecipient monitoring and management, and subpart F regarding audit requirements.

c) The CFDA number assigned to the HAF is 21.027.

d) HAF payments to subrecipients, including HSS Providers, count toward the threshold of the Single Audit Act and 2 CFR 200, subpart F re: audit requirements. Subrecipients are subject to a single audit or program specific audit pursuant to 2 CFR 200.501(a) when the subrecipients spend $750,000 or more in federal awards during their fiscal year.

e) Amounts paid from the HAF are subject to the restrictions outlined in the Guidance and set forth in the American Rescue Plan Act.

47 Ill. Adm. Code 302.115 Accessibility and Transparency

a) The Authority shall make publicly accessible by publishing on its website any important information, including, but not limited to, the following:

1. application forms;

2. the program eligibility requirements as set out in Section 302.201;

3. the Authority’s procedures and processes for administering the applicable program as set out in Section 302.204;

4. the Authority’s procedures and communication methods for notifying program applicants of defective or deficient applications due to incompletion, errors, missing information, or any other impediment as set out in Section 302.205; and

5. the Authority’s procedures and methods for applicants to remedy defective or deficient applications due to incompletion, errors, missing information, or any other impediment as set out in Section 302.205.

b) The Authority shall ensure that important program information, including the application and all marketing materials, is language accessible by publishing to its website the same in both English and Spanish. To the extent administratively feasible, the Authority will make efforts to provide certain program information, such as frequently asked questions and responses, in other languages.

47 Ill. Adm. Code 302.116 Required Notifications and Correspondence

The Authority shall ensure it communicates clearly with an applicant about the application determination process, including acceptance, status of a pending application, and any reason for denying an application.

a) The Authority shall provide notice to an applicant upon finding that a submitted application is defective or should otherwise be considered ineligible, denied, or rejected.

b) The notice from the Authority shall explain the reason why an applicant's submitted application is defective or should otherwise be considered ineligible, denied, or rejected.

c) The notice shall contain the necessary information, process, accepted method, and deadline for the applicant to remedy any defective or deficient application as set out in Section 302.205, provided that remedy is possible.

d) All notice and correspondence required to be provided by the Authority shall be given promptly and without unnecessary delay to any applicant.

47 Ill. Adm. Code 302.117 Recapture

HAF Grants, including HSS grants, are subject to recapture in the event of default, such as fraud on behalf of an Eligible Homeowner, Eligible Servicer or HSS Provider, failure to comply with this Part or any other applicable law or regulation.

47 Ill. Adm. Code 302.201 Borrower Eligibility/Prioritization

a) To be eligible for assistance under HAF program, Eligible Homeowners must have annual income equal to or less than 150% of the Area Median Income. The Authority plans to use HUD’s definition of “annual income” in 24 CFR 5.609 or use adjusted gross income as defined for purposes of reporting on Internal Revenue Service (IRS) Form 1040 series for individual federal annual income tax purposes, as applicable and as permitted by the U.S. Department of the Treasury.

b) Not less than 60% of HAF funds available to the Authority will be used for qualified expenses that assist Eligible Homeowners having incomes equal to or less than 100% of the Area Median Income or equal to or less than 100% of the median income for the United States, whichever is greater. Any amount not made available to Eligible Homeowners that meet this income-targeting requirement must be prioritized for assistance to Socially Disadvantaged individuals, with funds remaining after such prioritization being made available for other Eligible Homeowners.

c) For an applicant to be eligible to receive a HAF Grant, the Homeowner must qualify as an Eligible Homeowner.

d) The Authority shall not disqualify an otherwise Eligible Homeowner from any HAF Program funding based on previous application for or receipt of other similar federal assistance for periods that are different than the Eligibility Period.

47 Ill. Adm. Code 302.202 Eligible Uses

The Authority will establish a system that provides assistance to Eligible Homeowners that may include any or all of the following Eligible Uses:

a) mortgage payment assistance;

b) financial assistance to allow a homeowner to reinstate a mortgage or to pay other housing-related costs related to a period of forbearance, delinquency, or default;

c) mortgage principal reduction, including with respect to a second mortgage provided by a nonprofit or government entity;

d) facilitating mortgage interest rate reductions;

e) payment assistance for:

1. homeowner’s utilities, including electric, gas, home energy (including firewood and home heating oil), water, and wastewater;

2. homeowner’s internet service, including broadband internet access service;

3. homeowner’s insurance, flood insurance, and mortgage insurance;

4. homeowner’s association fees or liens, condominium association fees, or common charges, and similar costs payable under a unit occupancy agreement by a resident member/shareholder in a cooperative housing development; and

5. down payment assistance loans provided by nonprofit or government entities;

f) payment assistance for delinquent property taxes to prevent homeowner tax foreclosures;

g) measures to prevent homeowner displacement, such as home repairs to maintain the habitability of a home, including the reasonable addition of habitable space to alleviate overcrowding, or assistance to enable households to receive clear title to their properties;

h) counseling or educational efforts by housing counseling agencies approved by HUD or a tribal government, or legal services, targeted to households eligible to be served with funding from the HAF related to foreclosure prevention or displacement, in an aggregate amount up to 5% of the funding from the HAF received by the Authority;

i) reimbursement of funds expended the Authority during the Eligibility Period beginning on January 21, 2020, and ending on the date that the first funds are disbursed by the Authority under the HAF, for a qualified expense (other than any qualified expense paid directly or indirectly by another federal funding source, or any qualified expenses described in subsections (f), (g), (h), or (j)); and

j) planning, community engagement, needs assessment, and administrative expenses related to the Authority’s disbursement of HAF funds for qualified expenses, in an aggregate amount not to exceed 15% of the funding from the HAF received by the Authority.

47 Ill. Adm. Code 302.203 Maximum Grant Amount

Disbursements to Eligible Servicers may include up to three prospective monthly payments if funds are available and the total funding amount does not exceed Maximum Grant Amount.

47 Ill. Adm. Code 302.204 Administration of Program

The Authority will establish procedures to administer the HAF program, including application process and review that will include the following:

a) applications will be taken via an online application platform; processing staff will review files for program eligibility through applicant attestations, applicant provided documents and servicer provided mortgage information;

b) application controls and due diligence will include:

1. verification of applicant attestations, review of application documentation to ensure eligibility, verification of data provided by Servicers and approval, denial or escalation of application files as appropriate; and

2. review of application records and uploaded documents to validate compliance with the Authority’s procedures (as identified in this Part); and

c) Authority staff will onboard Eligible Servicers, exchange Applicant mortgage or other relevant information, and initiate payments to Eligible Servicers.

47 Ill. Adm. Code 302.205 Procedures for Deficient Applications

The Authority will establish procedures to notify Applicants who submit defective or deficient applications that will include the following:

a) Applicants will be notified via email of any information needed to complete an application or remedy a deficiency in their application;

b) Applicants will be provided an initial cure period of 14 days and, if necessary, a second cure period of an additional 7 days;

c) After being notified of a deficiency, Applicants will be able to go back into the online application portal to provide any missing information; and

d) Upon final determination of approval or denial, Applicants will be notified via email.

47 Ill. Adm. Code 302.301 Foreclosure Moratorium

a) Prior to receiving HAF Grants on behalf of an Eligible Homeowner, Eligible Servicers must agree they will forgo any right to commence or continue a foreclosure action, or other similar legal action, including but not limited to breach of contract, against an Eligible Homeowner, for non-payment of mortgage or other eligible fees, during the longer of:

1. the Eligible Homeowner's program Eligibility Period; or

2. the date of any foreclosure moratorium established by State or federal law.

b) This Section is not intended to limit an Eligible Servicer’s right to pursue action based on other legally permissible reasons unrelated to the payment of mortgage, fees or other financial charges.

47 Ill. Adm. Code 302.302 Distribution of Grants

a) HAF Grants made by the Authority may cover all or any portion of the Eligibility Period.

b) When making HAF Grant payments to an Eligible Servicer on behalf of an Eligible Homeowner, the Authority must include a statement indicating which Eligible Homeowner the grant payment is being made on behalf of.

c) The Authority shall make reasonable efforts to obtain the cooperation of Eligible Servicers to accept HAF payments.

47 Ill. Adm. Code 302.401 Purpose

Subject to the terms of the agreement executed by the HSS Provider and the Authority, HSS Sub-Awards allocated to an HSS Provider are for the provision of HSS outreach and intake services, as described in this Part, and the purchase of HSS equipment.

47 Ill. Adm. Code 302.402 Request for Proposals/Applications

The Authority may issue one or more requests for proposals for applications for an HSS Sub-Award from prospective HSS Providers.

47 Ill. Adm. Code 302.403 Hss Provider Eligibility.

HSS Providers may be HUD approved counseling agencies, community or faith-based organizations, non-profit organizations, including legal assistance groups, and such other community organizations that specialize in housing or community outreach and engagement.

and such other organizations to the extent permitted by applicable law.

47 Ill. Adm. Code 302.404 Eligible Uses of an Hss Sub-Award

Funds from an HSS Sub-Award may be used for the following:

a) HSS Marketing and Outreach;

b) HSS Education and Intake; or

c) HSS Equipment.

47 Ill. Adm. Code 302.405 Application Requirements

Each application for an HSS Sub-Award shall include the information required by the Authority to promote efficient program administration and quality of performance

47 Ill. Adm. Code 302.406 Distribution of Hss Provider Sub-Awards

Once approved for an HSS Sub-Award, HSS Providers will be eligible to receive an initial disbursement in an amount established by the Authority. An accounting of expenses will be required to demonstrate use of the HSS Sub-Awards provided in the initial disbursement. Additional HSS Sub-Awards disbursements will be made pursuant to the submission and approval of one or more reports required for compliance with Federal and State legislation and regulations, including without limitation the Uniform Guidance and any further Guidance.

Part 310 Multifamily Rental Housing Mortgage Loan Program

47 Ill. Adm. Code 310.101 Authority

The Rules in this Part are authorized by and made pursuant to Sections 7.2, 7.19, 7.24b, 7.24e, 8, 9, 10, 11, 12 and 14 of the Act and shall govern the Program.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.102 Purpose and Objectives

The Rules in this Part are established to accomplish the general purposes of the Act and in particular the making of Mortgage Loans for the construction or rehabilitation of multifamily rental housing in accordance with the Program.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.103 Definitions

As used in this Part, the following words or terms mean:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Application": An application for a Mortgage Loan for a proposed Development.

"Authority": The Illinois Housing Development Authority.

"Bonds": Bonds issued by the Authority from time to time to finance the Program.

"Chairman": The Chairman of the Authority.

"Clearinghouse": A State, regional, or metropolitan agency designated by the Governor of the State or the Authority or established by State statute to provide notice to appropriate State and local agencies of proposed Developments and to review such Developments.

"Code": The Internal Revenue Code of 1986 (26 USC), as amended from time to time, and the regulations promulgated thereunder.

"Commercial Tenant": Any entity leasing commercial facilities in a Development.

"Conduit Bonds": Bonds issued by the Authority for which another party assumes the risk of default, including but not limited to a default arising out of a default on the Mortgage Loan financed with the proceeds of the Bonds.

"Conduit Loan": A Mortgage Loan or other similar financing arrangement made with the proceeds of Conduit Bonds.

"Cost Certification Cutoff Date": The last day of the month in which the Construction Completion Date falls.

"Cost of Development": The costs of the acquisition and the construction or rehabilitation of a Development, including the design architect's fees; engineering fees; the supervisory architect's fees; legal and accounting fees; marketing and consulting fees; land costs; interest and financing charges to be paid during construction; the Authority's origination fee; application fees paid to other lenders; funding of reserves for real estate and other taxes; funding of reserves for replacement and other reserves; title and recording fees; financial contingency and construction contingency; a developer's fee; costs associated with the issuance of Bonds; relocation costs; the cost of landscaping and off-site improvements; carrying charges; and any other costs approved by the Authority, whether or not such costs have been paid in cash or provided in a form other than cash. For an existing Development that is being refinanced or being acquired, the cost of development shall be the appraised value of the Development, as determined on or after the date of the Application for refinancing, and the costs of rehabilitation.

"Cumulative Distribution": A Distribution of Surplus Cash and/or Residual Receipts representing all or part of a Distribution unpaid but cumulated by an Owner in a prior fiscal year.

"Current Distribution": A Distribution of Surplus Cash and/or Residual Receipts representing all or part of a Distribution earned in a current fiscal year.

"Deputy Director": The Deputy Executive Director of the Authority.

"Development": The Real Estate, together with all buildings and other improvements constructed on it, and the equipment, and personal property appurtenant to the Real Estate.

"Development Funds": All cash, rent subsidies, gross Development income, bank accounts, certificates of deposit, trust funds, reserves, escrows, accounts receivable, and other such assets of a Development.

"Director": The Executive Director of the Authority.

"Distribution": Any withdrawal or taking of cash from Surplus Cash and/or Residual Receipts, including segregation of cash for subsequent withdrawal, for payment to or on behalf of an Owner pursuant to the Authority's written authorization of the Distribution.

"Eligible Mortgagor": Any Limited-Profit Entity or Nonprofit Corporation or any Illinois land trust the beneficiary of which is a Limited-Profit Entity or Nonprofit Corporation, but only if the Mortgagor's ownership of the Development (including any partnership interest or stock ownership interest in the Mortgagor), or the beneficiary's interest in an Illinois land trust (including the ownership of any partnership interest or stock ownership interest in the beneficiary), shall not cause any Tax-exempt Bonds used to finance the Development to become taxable for federal income tax purposes. The organizational documents of the Mortgagor or beneficiary referred to in Section 310.303 of this Part shall at all times be in compliance with the requirements of Section 310.303.

"Equity": The difference between the amount of a Mortgage Loan and all other loans and grants for the Development and the total Cost of Development, except as otherwise provided for in Section 310.403(f).

"FAF Funds": Funds received from HUD pursuant to certain refunding agreements between the Authority and HUD as authorized by the Stewart B. McKinney Homeless Assistance Act of 1988, which provided for the sharing of savings resulting from the reduction of HUD subsidies provided to certain Developments financed under the Program.

"Final Closing Date": The date on which the Authority makes the final distribution of the proceeds of a Mortgage Loan.

"HOME Program": The Home Investment Partnerships Program for the State of Illinois established pursuant to Title II of the National Affordable Housing Act of 1990 (42 USC 12701), as amended from time to time, and the regulations promulgated under that Act.

"HUD": the United States Department of Housing and Urban Development.

"Initial Closing Date": The date on which the Authority determines that funds for a Mortgage Loan may be disbursed for the construction or rehabilitation of the Development.

"Limited-Profit Entity": Any individual, joint venture, partnership, limited partnership, limited liability company, trust, or corporation organized or existing under the laws of the State of Illinois or authorized to do business in the State and having either articles of incorporation, articles of organization or comparable documents of organization or a written agreement with the Authority that, in addition to meeting other requirements of law, meets the requirements of Section 7.2(k) of the Act.

"Low Income": An income adjusted for family size that is less than or equal to 80% of the Median Income.

"Median Income": The median income of the county or the metropolitan statistical area, as applicable, in which the Development is located, adjusted for family size. The median income is determined from time to time by HUD for purposes of Section 8 of the United States Housing Act of 1937 (42 USC 1437a).

"Members": The Members of the Authority.

"Moderate Income": An income adjusted for family size that is less than or equal to 120% of the Median Income.

"Mortgage": The mortgage or other instrument in the nature of a mortgage, together with any supplements, amendments or modifications, executed as security for a Mortgage Loan.

"Mortgage Loan": A loan under the Program from the Authority to a Mortgagor to be used for the acquisition, construction or rehabilitation and permanent financing of a Development or the refinancing of a Mortgage Loan that provided financing for an existing Development.

"Mortgage Note": The document executed as evidence of a Mortgagor's indebtedness under a Mortgage Loan and any supplements, modifications or amendments.

"Mortgagor": The Limited-Profit Entity, Nonprofit Corporation, or Trustee holding title to a Development.

"Nonprofit Corporation": A not-for-profit corporation incorporated pursuant to the provisions of the Illinois General Not-for-Profit Corporation Act of 1986 [805 ILCS 105] or the State Housing Act [310 ILCS 5] and having articles of incorporation that, in addition to meeting other requirements of law, meet the requirements of Section 7.2(m) of the Act.

"Notes": Notes issued by the Authority from time to time to finance Mortgage Loans under the Program.

"Owner": The Limited-Profit Entity or Nonprofit Corporation holding title to Real Estate or a Development or, when the Real Estate or the Development is held in a Trust, the Limited-Profit Entity or Nonprofit Corporation owning the beneficial interest in the Trust. Under no circumstances shall "owner" mean the Authority or a Trustee.

"Program": The Authority's multifamily rental housing mortgage loan program, including, without limitation, Mortgage Loans made under the HOME Program, Risk Sharing Loans, loans made with FAF Funds and Mortgage Loans insured by HUD (other than Risk Sharing Loans), Ambac Assurance Corporation or any other entity that insures mortgage loans.

"Real Estate": The real property upon which a multifamily housing development is to be or has been constructed.

"Regulatory Agreement": The regulatory agreement or other instrument in the nature of a regulatory agreement, together with any supplements, amendments or modifications, governing a Mortgage Loan or a Conduit Loan. The agreement shall, among other things, establish the income and rental restrictions on the Development and the method of determining the permissible Distribution to the Owner.

"Reserve Fund for Replacements": The account that the owner of a Development must establish to provide a source of funds for capital repairs or improvements for the Development.

"Residual Receipts": That part of Development income remaining at the end of an annual fiscal year after the deduction of the amount of all Distributions.

"Risk Sharing Loans": Mortgage Loans insured by HUD under the Housing Finance Agency Risk-Sharing Program for Insured Affordable Multifamily Project Loans, as authorized by Section 542(c) of the Housing and Community Development Act of 1992 (42 USC 3535(d)) and the regulations promulgated under that Act.

"Rules": The Rules and Regulations of the Authority as supplemented and amended from time to time, including, without limitation, the Rules in this Part.

"Staff": The Director, the Deputy Director and the employees of the Authority.

"State": The State of Illinois.

"Surplus Cash": That part of gross Development income remaining at the end of a fiscal year after Development Funds, if applicable, have been disbursed in accordance with the priorities established in the Regulatory Agreement for the Development.

"Tax-exempt Bonds": Bonds issued under the provisions of the Code, the interest on which is not taxable to the holders of the Bonds.

"Tenant": A person or family leasing a dwelling unit in a Development.

"Tenant Selection Plan": The tenant selection plan approved by the Authority for a Development that sets forth the criteria and procedures for selecting Tenants for a Development.

"Trust": An Illinois land trust of which an Owner is the sole beneficiary and that holds legal title to a Development.

"Trustee": The trustee of an Illinois land trust holding legal title to a Development, the beneficiary of which is a Limited-Profit Entity or a Nonprofit Corporation.

"Very Low Income": An income adjusted for family size that is less than or equal to 50% of the Median Income.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.104 Borrowing by the Authority

To the extent allowed by applicable federal law and the Act, the Authority may borrow funds with which to make Mortgage Loans under the Program.

47 Ill. Adm. Code 310.105 Compliance with Federal Law

Notwithstanding anything herein to the contrary, this Part shall be construed in conformity and compliance with applicable federal law, including, without limitation, the Code and the federal regulations governing the HOME Program and Risk Sharing Loans.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.106 Standards

In administering the Program, the Authority, the Chairman, the Director, and the Staff shall in the exercise of discretion consider, in addition to the criteria specifically set forth in this Part, the purposes of the Program to provide decent, safe, and sanitary multifamily rental housing; the requirements of applicable State and federal law; the financial condition and previous experience of potential and participating developers; the Authority's ability to purchase or redeem any Bonds and to comply with the requirements of the resolutions authorizing any Bonds; the Authority's ability to comply with the terms and provisions of any Notes; the financial integrity of the Program; the housing needs of the State; architectural and construction quality; the preservation of the value of the Development as security for a Mortgage Loan; the ability of the Owner to repay a Mortgage Loan out of gross Development income; the potential prepayment of a Mortgage Loan; the desirability of achieving a reasonable geographic distribution of Developments throughout the State; the standards and practices of a prudent lender; the requirements of local housing codes and zoning laws; specific standards set forth in Authority agreements and documents; or any other factors relevant under the circumstances.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.107 Forms and Procedures for the Program

The staff may prepare, use, supplement and amend such forms, agreements and other documents and such procedures as may be necessary to implement the Program, all as may be prescribed by the Director.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.108 Fees and Charges of the Authority

In connection with the Program, the Authority may establish and collect such fees and charges as may be necessary. Such fees and charges may be used by the Authority for its general corporate purposes, including costs of administering the Program.

47 Ill. Adm. Code 310.109 Waiver (repealed)

History

• Source: Repealed at 22 Ill. Reg. 3854, effective February 4, 1998

47 Ill. Adm. Code 310.110 Amendment

This Part may be supplemented, amended or repealed by the Members from time to time and in such manner as they may determine consistent with the Rules, the Act and other applicable provisions of law. This Part shall not constitute or create any contractual rights.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.111 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section or Subpart thereof as to which such judgement is rendered.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.112 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 310.113 Titles and Captions

Titles and captions of Subparts, Sections and subsections are used for convenience and reference and are not a part of the text.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.114 Calendar Days

Days shall mean calendar days. Days falling on a Saturday, Sunday or legal State or federal holiday shall be deemed to fall on the next calendar day that is not Saturday, Sunday or a legal State or federal holiday.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.201 Applicability and Purpose of Notification

a) Purpose

This Subpart is established to provide for notification to certain persons and agencies pursuant to Section 7.24b of the Act that a developer proposes to construct or rehabilitate a Development in their district, county or municipality.

b) Compliance

A developer's Application shall not be deemed to be complete until the provisions of this Subpart have been complied with. A developer's failure to comply with the provisions of this Subpart shall relieve the Authority of all obligations to provide a Mortgage Loan for the proposed Development.

c) Developer's Acts

In responding to comments, attending hearings, or undertaking any other activities pursuant to this Subpart, a developer shall not hold itself out to represent the Authority and shall not take or suffer any act that would incur any obligation on behalf of the Authority.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.202 Notification by Authority

a) Notice of Development

When the Authority accepts an Application for a Mortgage Loan for a proposed Development, the Authority shall give written notice of the proposed Development to the following persons and agencies:

1. the chairman of the county board of the county in which the Development is proposed to be located;

2. the mayor or other chief executive of the municipality (means cities, villages and incorporated towns), if any, in which the Development is proposed to be located;

3. in municipalities with a population of more than 1,500,000 persons, the alderman of the ward in which the Development is proposed to be located;

4. appropriate Clearinghouses; and

5. each member of the General Assembly from the legislative district in which the Development is proposed to be located.

b) Forms

Notice under this Section shall be made on Authority forms.

c) Contents

The notice shall set forth the name and address of the proposed Development; the name, address and telephone number of the developer; the estimated amount of the proposed Mortgage Loans; the total number of units; the total number of units for Low Income and Very Low Income Tenants; the type of Development (for example, elderly, family or mentally or physically disabled); and any other information the Authority deems relevant.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.203 Comments and Responses

a) Comments

The persons and agencies receiving notice of a proposed Development pursuant to Section 310.202 shall have 30 days from the date of mailing of the notice to submit written comments to the developer or the Authority.

b) Developer's Response

The developer shall respond in writing to all comments in connection with the proposed Development received under this Section.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.204 Submissions to the Authority

a) Documents

The developer shall submit to the Authority the following documents in connection with the proposed Development:

1. a copy of every written comment and a written summary of every oral comment received pursuant to Section 310.203(a);

2. a copy of every response made pursuant to Section 310.203(b);

3. a history of conferences, hearings and other activities undertaken in relation to comments on the proposed Development;

4. a brief summary of what the developer has done in response to comments; and

5. a certification that the information provided under this Section is accurate and complete.

b) Information

Sufficient information shall be provided under this Section to enable the Authority to determine whether comments received pursuant to Section 310.203 have been adequately considered and responded to.

c) Denial

The Authority may deny a developer's Application for, among other reasons, failure to comply with the conditions of this Subpart. The denial shall be in writing and shall state the reasons for the denial. If the Authority determines that it must cease processing an Application, the Authority will inform the developer in writing of the conditions necessary for continued processing and the time period in which the conditions must be met.

d) Assistance of Authority

The Developer shall have the responsibility to seek the assistance of the Authority, if needed, in addressing comments received pursuant to Section 310.203.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.205 Hearings

The developer shall provide written notice to the Authority of any public or adjudicatory hearing that may be held in connection with the proposed Development. The developer shall mail the notice to the Authority within 2 days after receiving notice or otherwise becoming aware of the hearing. It shall be the developer's responsibility to prepare for and attend the hearings and to respond to any inquiry made at or in connection with the hearings regarding the proposed Development.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.206 Notice of Issuance of Conditional Commitment Letter (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.301 Eligible Mortgagors

The Authority may make Mortgage Loans under the Program to Eligible Mortgagors. The Owner of the Development shall at all times be an Eligible Mortgagor. If the Authority learns that an Owner is not an Eligible Mortgagor, then the Authority shall take the action, if any, specified in the Mortgage Loan documents.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.302 Land Trusts

Whenever Real Estate or a Development is held in an Illinois land trust, the agreement creating the Trust and establishing the respective rights, powers, and duties of the Trustee and Owner shall be in a format approved by the Authority. The format shall be approved if it meets the legal requirement necessary to create a valid Illinois land trust. Any trust agreement shall not be amended or revoked without the prior written approval of the Authority. Upon either the request of the Owner or the Authority, the Trustee shall furnish the Authority with copies of the trust agreement and all records in its possession relating to the trust agreement, the Real Estate and the Development.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.303 Organizational Documents

The organizational documents of a joint venture, partnership, limited partnership, limited liability company or corporation shall contain provisions to qualify and maintain the Owner as a Limited-Profit Entity or Nonprofit Corporation, as defined in the Act and this Part, and to insure that the Owner and each person or entity that has an ownership interest in the Owner are required to comply with the Act and this Part and shall not cause the underlying Bonds used to finance the Development, if any, to become taxable for federal income tax purposes. The Owner may, upon the approval of the Authority, meet the requirements of this Section by entering into an agreement with the Authority rather than incorporating the necessary provisions in its organizational documents. The provisions of the documents of organization or agreement, as required by this Section, shall not be amended without prior written Authority approval. Amendment of the provisions of the documents or agreement shall be allowed so long as the Authority determines that the amendments comply with Section 310.106 of this Part and this Section.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.304 Books and Records

The books and records of the Development shall be prepared and maintained in accordance with Authority requirements and shall be subject to inspection, examination and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires for the purpose of determining compliance with the Rules, the Act and all contracts and agreements relating to the Program. The books and records of the Owner, if separate from the books and records of the Development, shall be prepared and maintained in accordance with Authority requirements and shall be subject to inspection, examination and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.305 Audits

The Development and the offices, architectural plans and specifications, apparatuses, books and records, contracts, documents and other papers relating to the development shall at all times be maintained in reasonable condition for proper audit and shall be subject to inspection, examination and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires. All audits, certifications and financial reports that the Owner is required by contract with the Authority to allow, undertake or prepare shall be made by an independent certified public accountant acceptable to the Authority.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.306 Annual Financial Report

Within 90 days after the end of a Development's fiscal year, the Owner shall be required to furnish the Authority with a complete annual financial report based upon the books and records of the Development and the Owner, prepared in accordance with Authority requirements, and certified by the Owner and an independent certified public accountant acceptable to the Authority.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.307 Furnishing Information

The Owner shall furnish such reports, projections, certifications, analyses and tax returns as required by applicable federal or State statutes, regulations or subsidy or assistance programs or by the Authority and shall furnish specific answers to the Authority's questions about the Owner's income, assets, liabilities and contracts and about the administration, operation, maintenance, occupancy, financial soundness and physical condition of the Development.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.308 Purchase of Authority Bonds and Notes

No Owner, including any "related person," as defined in Section 103(b)(6)(C) of the Internal Revenue Code of 1954 as amended from time to time, shall pursuant to any arrangement, formal or informal, direct or indirect, agree to purchase the Bonds, Notes, or other obligations of the Authority in an amount related to the aggregate principal amount of the Mortgage Loan to be made to the Owner or such related person.

47 Ill. Adm. Code 310.309 Standards for Approval of Conveyance and Amendment of Documents

In determining whether to approve and/or impose restrictions on the conveyance, assignment, leasing, mortgaging, pledging or other transfer of all or any part of the Development, or any partnership interest, stock ownership interest or member interest in the Owner of a Development, or the beneficial interest in, and power of direction over, the Trust, or any partnership interest, stock ownership interest or member interest in the beneficiary of a Trust, and in determining whether to approve amendments to the documents of organization of an Owner under Section 310.303 of this Part, the Authority shall grant approval, with any necessary restrictions, if the Authority determines that the proposed action will not have an adverse impact upon the financial stability or the economic viability of the Development or the tax-exempt status of the Bonds, if any.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.401 Maximum Mortgage Loan Amount

a) Establishing Amount. The maximum Mortgage Loan amount available to an Owner that is a Limited-Profit Entity is 90% of the Cost of Development, as determined and approved by the Authority in its sole discretion. The maximum Mortgage Loan amount available to an Owner that is a Nonprofit Corporation is 100% of the Cost of Development, as determined by the Authority in its sole discretion.

b) Mortgage Loan Increase. After the Authority has made a Mortgage Loan for a Development, nothing contained in this Section shall prohibit the Authority from increasing the amount of the Mortgage Loan in excess of the limitations specified in Section 310.401 of this Part if the Authority, in its sole discretion, determines that the increase is necessary to maintain the financial stability or economic viability of the Development. In deciding whether to approve a Mortgage Loan increase, the Authority shall consider the physical condition of the Development, the value of the Development as security for the Mortgage Loan, the Authority's ability to provide the Mortgage Loan increase, the ability of the Owner to repay the Mortgage Loan out of gross Development income, the financial status of the Development, and any other relevant factors.

c) Refinancing Mortgage Loans in Foreclosure or Default. Nothing contained in this Section shall prohibit the Authority from settling defaults under any existing Mortgage Loan or restructuring a defaulted Mortgage Loan pursuant to settlement terms that the Authority deems appropriate, including making a new Mortgage Loan to pay all or a portion of the amounts due and owing under the defaulted Mortgage Loan and any costs, fees and expenses of the Authority in connection with the defaulted Mortgage Loan and the restructuring of the Mortgage Loan. Any new Mortgage Loan that is made in settlement and/or restructuring of a defaulted Mortgage Loan may be in an amount that exceeds the amount due and owing under the defaulted Mortgage Loan, and shall include only such amounts as the Authority deems necessary and appropriate for the financial rehabilitation of the Development and to mitigate any loss to the Authority, including, without limitation, the following: the costs of redeeming any Bonds issued to finance the defaulted Mortgage Loan, including any premium payable in connection with the redemption; the costs of issuance of any Bonds issued to finance a new Mortgage Loan; the costs of audits of the Development or the debt service payments on the defaulted Mortgage Loan; the costs of appraisals of the Development and assessments of the physical condition of the Development, including, without limitation, environmental studies required by the Authority or any third party in connection with the settlement; the costs of repair, maintenance or improvement of the Development; legal and accounting fees and expenses (including the fees and expenses of counsel to the Authority) to the Authority relating to the exercise of remedies by the Authority under the defaulted Mortgage Loan; the Authority's work-out fees, or other charges made by the Authority against the Development; defaulted debt service payments, delinquency payments and other amounts due and owing under the defaulted Mortgage Loan; title insurance premiums and recording fees; and the Authority's administrative expenses relating to the defaulted Mortgage Loan.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.402 Term of Mortgage Loans

The maximum term of a Mortgage Loan to be made by the Authority shall not exceed 65 years and may be shorter at the sole discretion of the Authority. In determining the term of a Mortgage Loan, the Authority shall take into account its ability to pay when due the principal (including any sinking fund installments) and interest on any Bonds or Notes, its ability to purchase or redeem any Bonds and to comply with the requirements of the resolutions authorizing any Bonds, its ability to comply with the terms and provisions of any Notes, the feasibility of the proposed Development, the financial integrity of the Program, the requirements of applicable State and federal law, and any other relevant factors.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.403 Equity and Distributions

a) Right to Distributions. As provided in the Act, an Owner shall have the right, commencing on the Initial Closing Date, to make annual Distributions in an amount not to exceed 6% of its Equity in a Development, except as otherwise provided pursuant to Sections 310.801 through 310.805, except that, if a Distribution cannot be made as provided in subsections (b) and (c) of this Section, an Owner may cumulate the right to make a Distribution. An Owner's right to a Distribution shall begin to cumulate on the Initial Closing Date. In any partial fiscal year in which an Owner is entitled to make a Distribution, the amount of a Distribution shall be calculated pro rata based on the number of days since the closing of the Mortgage Loan.

b) Source of Distributions. An Owner may make Current and Cumulative Distributions out of Surplus Cash and/or Residual Receipts. If Surplus Cash or Residual Receipts are unavailable in a given fiscal year, an Owner shall make no Current Distribution, but the right to make a Distribution shall cumulate. If Surplus Cash and/or Residual Receipts are insufficient in a given fiscal year to make a Distribution in an amount equal to 6%, or as otherwise permitted in Sections 310.801 through 310.805, of an Owner's Equity in a Development, an Owner may distribute all available Surplus Cash and/or Residual Receipts and cumulate the right to make the rest of the Distribution in future years when and if Surplus Cash and/or Residual Receipts are available.

c) Timing of Distributions. No Distribution shall be made until after the Final Closing Date. Even if Surplus Cash and/or Residual Receipts are available, the initial and all subsequent Distributions, including Cumulative Distributions, may be made only after the Authority has approved the Development's annual financial report (see Section 310.306); the Development has an approved Development budget for the next fiscal year; the Owner has complied with all outstanding notices of requirements for proper maintenance and operation of the Development; the Owner has cured any defaults or breaches of applicable Rules, contracts and agreements; and the Authority has issued its written authorization of the Distribution.

d) Amount of Equity. As required by the Act, the Authority shall establish an Owner's Equity in a Development on or after the Final Closing Date. In no event shall the amount of the Equity be calculated to include any grants or other funds not originating with the Owner. Once established by the Authority, the amount of an Owner's Equity shall remain constant so long as the Mortgage Note and Mortgage are outstanding on the Development, unless adjusted by resolution of the Members based on the criteria set forth in subsection (e).

e) Increase in Amount of Equity

1. If an Owner agrees either to preserve the existing income and rental restrictions of a Development for a period not less than five years (starting from the later of the date on which the owner acquires the right to prepay its Mortgage Loan or the date on which the increase in Equity is granted) or create an equivalent number of additional units of housing with similar income and rental restrictions, the Authority, by resolution of its Members, may increase Owner's Equity to an amount not to exceed the difference between the unpaid balance of the Mortgage Loan and the Development's appraised value at the time of the request by the Owner for an Equity increase. The appraisal shall be based on the Development's highest and best use and be conducted by an appraiser acceptable to the Authority. For purposes of the increase in Owner's Equity, the Development's appraised value may be updated by the Owner no more frequently than every five years after an increase is granted under this subsection (e) and the amount of Owner's Equity may be adjusted to reflect the updated appraisal. The cost of the appraisal shall not be a Development expense.

2. It shall be a condition of the Authority increasing Owner's Equity that:

A) the Authority give its prior written consent to any increase in the rental charges for the Development; and

B) the Authority determine, in its sole discretion, that:

i) the Reserve Fund for Replacements for the Development is sufficient to pay the costs set forth in Section 310.405 for the five years (starting from the later of the date on which the owner acquires the right to prepay its Mortgage Loan or the date on which the increase in Equity is granted), as determined by a physical needs assessment performed by a company acceptable to the Authority; the cost of such physical needs assessment shall not be a Development expense; and

ii) the amount needed to complete any deferred maintenance on the Development is less than one year's funding requirement for the Reserve Fund for Replacements.

3. The Authority shall require the Owner to execute an agreement evidencing the increase in Equity and containing the Owner's agreement either to preserve the existing income and rental restrictions of the Development as affordable for low and moderate income for a period not less than five years (starting from the later of the date on which the owner acquires the right to prepay its Mortgage Loan or the date on which the increase in Equity is granted) or create an equivalent number of additional units of housing with similar income and rental restrictions.

4. Any increase in Owner's Equity approved pursuant to this Section shall conform to any relevant federal statutes, rules or regulations.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.404 Development Funds and Property

All Development Funds received by an Owner or its agent shall be deposited to and maintained, as the Authority directs, in appropriate accounts with the Authority, or in a federally insured bank or savings and loan association or other financial institution located and qualified to do business in Illinois and whose deposits are insured by the federal government, or in other fiduciaries acceptable to the Authority. The Authority shall, in the Regulatory Agreement for the Development, establish priorities for the disbursement and use of Development Funds, including the funding of reserves and escrows, and require that the Owner have personal liability for Development Funds or Development property that comes into its hands or the hands of its agents that the Owner is not entitled to retain or has disbursed or used in violation of Authority requirements. In establishing these priorities, the Owner and Authority shall take into account the purposes of the Program, the financial stability of the Development, the physical condition of the Development, the value of the Development as security for the Mortgage Loan, and other relevant factors. It shall be a violation of the Rules for the Owner or its agent to disburse, use or retain Development Funds or Development property other than in accordance with the requirements or priorities established pursuant to this Section and set forth in the Regulatory Agreement or other Mortgage Loan documents.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.405 Reserve Fund for Replacements

The Owner of a Development shall set aside out of gross Development income and shall deposit with the Authority such sums as the Authority shall specify, or that applicable federal statutes, regulations, or agreements require to be deposited to the Reserve Fund for Replacements. No proceeds of the Reserve Fund for Replacements may be withdrawn, disbursed, or applied without written Authority approval. The sums set aside, together with any income earned, shall be used to pay the costs of replacing structural elements and mechanical equipment of the Development and for such other Development expenses as the Authority in its sole discretion may approve. In determining the amounts to be set aside or deposited to the Reserve Fund for Replacements, the Authority shall consider the nature and condition of any structural elements or mechanical equipment that may have to be replaced, the estimated useful life of any such structural elements or mechanical equipment, the estimated cost of replacements, applicable federal requirements, construction costs, potential gross Development income, and any other relevant factors. In determining whether to approve disbursements from the Reserve Fund for Replacements, the Authority shall consider the benefit to the Development of the proposed disbursement, the amount to be disbursed, the amount on deposit in the Reserve Fund for Replacements, whether the Owner is delinquent in making deposits to the Reserve Fund for Replacements or is otherwise delinquent in making payments or deposits under the Mortgage Loan documents, other uses for which the Reserve Fund for Replacements is likely to be needed, and any other relevant factors.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.406 Other Reserve Funds

The Authority may require the Owner or developer of a Development to deposit with the Authority, on the Initial Closing Date or on the Final Closing Date of a Mortgage Loan, funds for such other reserves as the Authority deems to be necessary to provide adequate security for the Mortgage Loan. The reserves may include, without limitation, tax and insurance reserves, debt service reserves and operating deficit reserves.

History

• Source: Added at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.407 Assignment or Sale of Mortgage Loan

If the Authority assigns or sells a Mortgage Loan, Section 8.1 of the Act, which requires that the owner of a Development give notice to the tenants of its intent to prepay the Mortgage Loan on the Development at least nine months in advance of the prepayment, as well as give them an opportunity to form an organization to purchase the Development, shall cease to apply to the Mortgage Loan as of the date of the sale or assignment of the Mortgage Loan.

History

• Source: Added at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.501 Design and Construction Standards

Developments financed by Mortgage Loans under the Program shall be designed and constructed or rehabilitated to conform with applicable federal, State, and local statutes, regulations, ordinances, standards, and codes, with industry practices in Illinois, and, except for Developments financed with the proceeds of Conduit Bonds, with the requirements of applicable Authority Rules, contracts, agreements, guides, and other documents.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.601 Marketing and Management

a) Responsibility. It shall be the responsibility of the Owner to provide for the marketing and management of the Development in a manner satisfactory to the Authority so as to promote the purposes of the Program and the financial stability of the Development and to preserve the value of the Authority's security interest in the Development.

b) All marketing and management contracts shall be evidenced on forms acceptable to the Authority pursuant to Section 310.602.

History

• Source: Amended at 10 Ill. Reg. 13987, effective August 11, 1986

47 Ill. Adm. Code 310.602 Marketing and Management Plans

a) Approval. Before the Authority makes a Mortgage Loan other than a Conduit Loan and at other times required by the Authority, the Owner shall submit for the Authority's approval a marketing plan and a management plan for the Development. In deciding whether to approve the marketing plan and the management plan, the Authority shall consider the purposes of the Program, the provisions of the Tenant Selection Plan, and any other relevant matters.

b) Compliance. The marketing plan and the management plan shall comply with all applicable federal and State statutes and regulations and with the terms and conditions of all applicable contracts and agreements providing for federal subsidies or assistance relating to the Development.

c) Contents of Marketing Plan. The marketing plan shall set forth the policies and procedures to be used by the marketing agent in marketing the Development and shall address the qualifications of the marketing agent; the nature of the market to be served by the Development; the dates of availability of occupiable units by type and location; the dates of availability and locations of Development facilities essential to the marketing campaign, including any model units, rental office or community building; the promotion of the Development, including the use of mass media, public relations, brochures, signs, equipment and furnishings for model units and the rental office, and marketing staff; the intended mix of family, elderly and disabled Tenants; where appropriate, the intended Tenant income mix and method of achieving such a mix; the method of processing prospective tenants; the criteria upon which applications of prospective Tenants are to be approved or disapproved; preference for occupancy in the Development for persons and families displaced by urban renewal, slum clearance, other governmental action or natural disaster; rent schedules; and any other relevant matters.

d) Contents of Management Plan. The management plan shall set forth the policies and procedures to be used by the managing agent in operating the Development and shall address the qualifications of the managing agent; procedures for recruiting and supervising management personnel; physical maintenance of the Development; procedures for tenant selection; preference for occupancy in the Development for persons and families displaced by urban renewal, slum clearance, other governmental action or natural disaster; tenant/landlord relations; eviction procedures; marketing; financial reporting; books and records of the Development; the intended mix of family, elderly and disabled Tenants; where appropriate, the intended Tenant income mix and method of achieving such a mix; the method of processing prospective Tenants; the criteria upon which applications of prospective Tenants are to be approved or disapproved; and any other relevant matters.

e) Owner's Responsibility. The Owner shall be responsible for ensuring the marketing agent's and the managing agent's compliance with all applicable ordinances, regulations, statutes, Rules, agreements and requirements.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.603 Maintenance

The Owner shall maintain the Development, including without limitation the dwelling units, commercial facilities and grounds and equipment related to the Development, in a decent, safe and sanitary condition, in a tenantable and rentable state of repair, and in compliance with applicable federal, State and local statutes, regulations, ordinances, standards and codes.

History

• Source: Amended at 16 Ill. Reg. 10248, effective June 16, 1992

47 Ill. Adm. Code 310.604 Cost of Services

The Owner shall not pay more for administrative, operating and maintenance expenses than is reasonable given the location and size of the Development, the level of administration, operation and maintenance required by the applicable Rules, the requirements of the Regulatory Agreement or other Mortgage Loan documents, the requirements of the marketing plan, management plan, and Tenant Selection Plan, the uniqueness or quality of available services or supplies, the presence of an emergency or other time constraint, the creditworthiness of suppliers and contractors and any other relevant factors. The Owner shall solicit bids for certain contracts in accordance with Authority agreements.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.701 Tenant Selection Plan

a) Approval. Before making a conditional commitment for a Mortgage Loan under the Program, the Authority shall approve a Tenant Selection Plan submitted by the Owner that shall set forth the income limits for Tenants of the Development. In approving the Tenant Selection Plan, the Authority shall consider whether the selection procedures will be equitable, considering the size and circumstances of the Tenant family; promote a heterogeneous mix of income levels to the extent appropriate; maintain the financial stability of the Development; and comply with the Rules, agreements and requirements.

b) Compliance. The Tenant Selection Plan shall comply with all applicable State and federal statutes and regulations, with the terms and conditions of all applicable contracts and agreements providing for federal subsidies or assistance relating to the Development, and with the affirmative fair housing marketing plan approved by the Authority for the Development.

c) Requirement for Developments for which a Conditional Commitment Letter Has Been Issued on or after August 9, 1984. With respect to Developments for which a conditional commitment letter has been issued on or after August 9, 1984, the Tenant Selection Plan submitted by the Owner and approved by the Authority shall specify how many units in the Development shall be held available to persons and families of Very Low, Low or Moderate Income and set forth the rental charges for those units. In determining the number of units that shall be held available for rentals, the Authority shall require that the number of dwelling units reserved for persons and families of Very Low, Low and Moderate Income in each Development shall not be less than the number required by applicable federal and State law.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.702 Income and Rental Limits

a) General. A person's or family's initial occupancy of a unit held available for rental to persons and families of Very Low, Low or Moderate Income shall be limited to persons and families initially meeting the income limits set forth in Section 310.103. If a person or family meeting income requirements at the time of initial occupancy subsequently fails to continue to meet those requirements, that failure shall not constitute non-compliance by that Tenant.

b) Income Limits

1. For all Developments financed by the Authority before January 1, 1987, that proportion of the units (20%, or 15% in certain targeted areas) as is required by the Treasury Regulations under Section 103(b) of the United States Internal Revenue Code of 1954 (26 USC 103(b)) shall be reserved for Low Income Tenants.

2. For Developments that have not or will not receive subsidies from HUD or mortgage insurance through the Federal Housing Administration, a minimum of 20% of the units shall be reserved for Low Income Tenants.

3. For Developments that are financed with the proceeds of Tax-exempt Bonds after January 1, 1987, either 20% of the units must be reserved for Very Low Income Tenants or 40% of the units must be reserved for Low Income Tenants whose income is no greater than 60% of the Median Income.

c) Rental Limits. Rents for units in Developments shall not exceed 30% of the maximum income permitted for a Very Low or Low Income Tenant in the Development, as applicable, unless otherwise required by applicable federal and State law.

d) Certification. The Owner shall obtain from each prospective Tenant intending to occupy a unit held available for rental to persons and families of Very Low, Low or Moderate Income a certification of income that shall be submitted by letter to the Authority from the Owner.

e) In determining the number of units in a Development that shall be held available for rental to Very Low, Low and Moderate Income Tenants, the Authority shall require that the number of units be not less than the number required by applicable federal and State law.

g) The Owner of each Development shall enter into a Regulatory Agreement with the Authority setting forth, among other things, the income and rental restrictions governing the Development.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.703 Commercial Facilities

a) Facilities. The Owner shall rent commercial facilities, if any, only to such Commercial Tenants, at rentals and for purposes that have been approved by the Authority. In approving commercial facilities and Commercial Tenants, the Authority shall consider the Tenant Selection Plan, the marketing plan, the management plan, the nature of the prospective business, the credit history of the prospective Commercial Tenant, the benefit of the prospective business to Tenants of the Development, the prospective Commercial Tenant's ability to comply with applicable licensing and zoning requirements, the purposes of the Program, and any other relevant matters.

b) Compliance. The Owner shall be responsible for ensuring the Commercial Tenant's compliance with all applicable ordinances, zoning codes, licensing requirements, regulations, statutes and Rules, and agreements.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.801 Statutory Authorization

Pursuant to Section 8 of the Act, the Authority is required to establish the Owner's Equity on each Mortgage Loan provided to a Limited-Profit Entity at the time of final Mortgage disbursement. The Act provides that the maximum rate of return on Owner's Equity shall be 6% unless the Authority, pursuant to this Part, establishes criteria by which a higher rate is established. It is the purpose of this Subpart to set the criteria by which a rate of return higher than 6% will be established.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.802 Developments Eligible for Increased Rate of Return

a) Subject to applicable federal law, any Development for which the Authority has issued a conditional commitment letter effective on or after August 9, 1984 is eligible for the establishment of an alternate basic rate of return in excess of 6% if, either:

1. the Director or, in his or her absence, the Deputy Director determines it to be necessary in order to attract private enterprise to construct, rehabilitate, operate and maintain housing for Very Low, Low and Moderate Income persons. The standard or test for determining whether a higher rate of return is necessary is that, but for the higher rate of return, private enterprise would be unable to acquire, construct, rehabilitate, operate and maintain housing for Very Low, Low and Moderate Income persons. In making this determination, the Director or, in his or her absence, the Deputy Director shall consider but not be limited to the competing market interest rates, the alternative lending sources, financial projections based upon anticipated rents, debt service, utilities, taxes and other expenses and the comparative severity of the housing needs; or

2. the Authority determines, pursuant to resolution of its Members, that an increase in the basic rate of return is necessary to preserve the Development as affordable for persons or families of Very Low, Low and Moderate Income or that the increase provides for the creation of additional units of housing affordable to persons or families of Very Low, Low and Moderate Income in the State. It shall be a condition to an increase in the basic rate of return pursuant to this subsection (a)(2) that:

A) the Authority give its prior written consent to any increase in the rental charges for the Development; and

B) the Authority determine, in its sole discretion, that:

i) the Reserve Fund for Replacements is sufficient to pay the costs set forth in Section 310.405 for the subsequent five years; and

ii) the amount needed to complete any deferred maintenance on the Development is less than one year's funding requirement for the Reserve Fund for Replacements.

b) If the Authority makes a determination pursuant to subsection (a)(2), then, prior to the Authority increasing the basic rate of return, the Authority shall require that the Owner execute an agreement evidencing the increase in the basic rate of return and containing the Owner's agreement either to preserve the Development as affordable for persons or families of Very Low, Low and Moderate Income for a period not less than five years (starting from the later of the date on which the owner acquires the right to prepay its Mortgage Loan or the date on which the increase in Equity is granted) or increase the number of units affordable to persons or families of Very Low, Low and Moderate Income.

c) Any increase in the basic rate of return approved pursuant to this Section shall conform to any relevant federal statutes, rules or regulations.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.803 Retroactive Adjustments

a) Developments for which the Authority has issued a conditional commitment letter effective prior to August 9, 1984 are not eligible for an alternate basic rate of return in excess of 6%, unless:

1. the Development is a troubled Development as determined by the Director or, in his or her absence, the Deputy Director. A "troubled Development" for purposes of this Section is one for which a delinquency of more than 60 days exists for replacement reserve, tax and insurance reserve, or principal or interest payments and/or an alternate basic rate of return is necessary, as determined by the Director or, in his or her absence, the Deputy Director, to encourage a new Owner to acquire the Development, or to encourage an existing Owner to invest monies into the Development, or to assist an existing Owner to meet its financial obligations. In regard to the delinquencies, it shall be established to the satisfaction of the Director or, in his or her absence, the Deputy Director, that the increase in the rate of return is essential for the Development to meet these delinquency obligations. The standard to be applied shall be that but for the increased rate of return the Development would not be able to make these past due payments current. In making the determination whether one or more delinquencies exist, the Director or, in his or her absence, the Deputy Director shall consider, but not be limited to, an examination of all books and records the Authority has in regard to the delinquencies as well as all documentation submitted by or on behalf of the Development, and anticipated rents, debt service, utilities, taxes and other expenses of the Development; or

2. the Authority determines, pursuant to resolution of its Members, that an increase in the basic rate of return is necessary to preserve the Development as affordable for persons or families of Very Low, Low and Moderate Income or that the increase provides for the creation of additional units of housing affordable to persons or families of Very Low, Low and Moderate Income in the Development or otherwise in the State. It shall be a condition to an increase in the basic rate of return pursuant to this subsection (a)(2) that:

A) the Authority give its prior written consent to any increase in the rental charges of the Development; and

B) the Authority determine, in its sole discretion, that:

i) the Reserve Fund for Replacements is sufficient to pay the costs set forth in Section 310.405 for the subsequent five years; and

ii) the amount needed to complete any deferred maintenance on the Development is less than one year's funding requirement for the Reserve Fund for Replacements.

b) In regard to an alternate basic rate of return to encourage a new Owner to acquire the Development, it shall be established to the satisfaction of the Director or, in his or her absence, the Deputy Director that, but for the increase in the rate of return, a new Owner could not be found to acquire the Development. In making this determination, the Director or, in his or her absence, the Deputy Director shall consider but not be limited to competing market interest rates, alternative lending sources, financial projections based upon anticipated rents, debt service, utilities, taxes and other expenses and the comparative severity of the housing needs.

c) If the Authority makes the determination pursuant to subsection (a)(2), the Authority, prior to increasing the basic rate of return pursuant to subsection (a)(2), shall require that the Owner execute an agreement evidencing the increase in the rate of return and containing the Owner's agreement either to preserve the Development as affordable for persons or families of Very Low, Low and Moderate Income for a period not less than five years (starting from the later of the date on which the owner acquires the right to prepay its Mortgage Loan or the date on which the increase in rate of return is granted) or to increase the number of units affordable to persons or families of Very Low, Low and Moderate Income.

d) Any increase in the basic rate of return approved pursuant to this Section shall conform to any relevant federal statutes, rules or regulations.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.804 Calculation of Alternate Basic Rate of Return

a) For Developments that are eligible for an alternate basic rate of return in excess of 6%, pursuant to Section 310.802(a)(1) or 310.803(a)(1), the Authority may establish an alternate basic rate of return in an amount not to exceed, except as provided in Section 310.805, 200% of the yield paid on 30-year Government National Mortgage Association (GNMA) mortgage certificates as of the date of the issuance of the conditional commitment letter or, if a conditional commitment letter is not issued, a loan agreement for that Development. In order for an alternate basic rate of return higher than 6% to be approved, it shall be established to the satisfaction of the Director or, in his or her absence, the Deputy Director that, but for increase in the rate of return, private enterprise would not be attracted to acquire, construct, rehabilitate, operate and maintain the Development. The Authority will establish an alternate basic rate of return if the Director or, in his or her absence, the Deputy Director determines and certifies that, but for a higher rate of return, private enterprise would not acquire, construct, rehabilitate, operate and maintain housing for Very Low, Low and Moderate Income persons. In making the determination and certification whether an alternate basic rate of return will be approved and in determining and certifying the amount of the rate increase, the Director or, in his or her absence, the Deputy Director shall consider, but not be limited to, the competing market interest rates, alternative lending sources, financial projections based upon anticipated rents, debt service, taxes, utilities and other expenses and the comparative severity of the housing needs. The Chief Fiscal Officer of the Authority shall certify to the GNMA rate as of the date of the conditional commitment letter or the loan agreement, if a conditional commitment letter is not issued, for the Development, and the rate shall be fixed at that level.

b) For Developments that are eligible for an alternate basic rate of return in excess of 6% pursuant to Section 310.802(a)(2) or 310.803(a)(2), the Authority may establish an annual alternate basic rate of return that shall not exceed, except as provided for in Section 310.805, 200% of the yield paid on 30-year GNMA mortgage certificates as of December 1 of the year for which the alternate basic rate of return is to be applied. The Chief Fiscal Officer of the Authority shall certify to the GNMA rate as of December 1 of the year for which the alternate basic rate of return is to be applied and the rate shall be fixed at that level.

c) Any increase in the basic rate of return approved pursuant to this Section shall conform with any relevant federal statutes, rules or regulations.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.805 Risk Premium for Special Needs

In addition to the increase to the alternate basic rate of return established pursuant to Sections 310.802 and 310.803, the Authority, through its Director or, in his or her absence, the Deputy Director may establish additional incentives in the form of additional return on equity in excess of the alternate basic rate of return if the criteria specified in subsections (a), (b) and (c) are met and if it is determined that the alternate basic rate of return is necessary. The additional return will be limited to one additional percentage point of return on Owner's Equity to be paid for each of the following factors:

a) For each additional 5% Low Income Tenant occupancy above the limits set forth in Section 142 (b)(4) of the Code;

b) Provision of housing for a special housing need, such as elderly facilities, handicapped facilities, or other qualified special needs, as specified in the Act, approved by the Director or, in his or her absence, the Deputy Director;

c) Location of the Development within a specially designated Targeted Area (as defined by the U.S. Department of the Treasury under Section 6a.103A-2(b)(5) of the Treasury Regulations issued under section 142(b)(4) of the Code (26 CFR 6a.103A-2(b)(5)) and 47 Ill. Adm. Code 220.103 or within a State of Illinois Enterprise Zone established pursuant to 20 ILCS 655.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.806 Increases in the Basic Rate of Return

The Basic Rate of Return shall not be increased or decreased during the term of the Mortgage Loan, except as provided in Sections 310.802 through Section 310.805 of this Part.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.901 Statutory Authorization

Pursuant to Section 7.24e of the Act, the Authority is required to establish rules governing minimum energy efficiency standards in Developments financed by the Authority. It is the purpose of this Subpart to set forth those minimum energy standards. After July 1, 1986, no Mortgage Loan shall be made by the Authority for the construction of a Development unless the Authority determines that the plans and specifications for the proposed Development are in compliance with the minimum energy efficiency standards set forth in this Part. Subject to Section 310.903, the same standards apply to both new and rehabilitated Developments.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.902 Definitions (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.903 Incorporation of National Standards

All Developments shall be constructed or rehabilitated in compliance with the energy efficiency standards set forth in the International Energy Efficiency Code published in 2006 by the International Code Council, 4051 Flossmoor Road, Country Club Hills IL 60478. This Section does not include any later amendments, revisions or additions to the International Energy Efficiency Code. These energy efficiency standards are also published in the Authority's Architectural and Construction Guidelines.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.904 Thermal Requirements (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.905 Air Infiltration Requirements (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.906 Doors, Windows and Glass (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.907 Mechanical Work (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.908 Insulation (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.909 Mechanical Work Insulation (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.910 Electrical Work (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.911 Energy Audit Analysis

a) If a proposed Development is a rehabilitation project, the Authority may require that an energy audit be performed and the results be provided to the Authority showing heat loss-gain analysis of building without energy conservation measures; projected savings for proposed energy conservation measures; and life-cycle cost analysis of the proposed heating and cooling system and energy source showing they are the most cost-effective considering front-end capital investment and operating costs over their life time. This life-cycle analysis shall utilize: useful equipment life, operating and maintenance costs, inflation and fuel escalation factors.

b) A heat load analysis and cooling load analysis shall be performed and the results shall be provided to the Authority showing the savings and cost projections for the Development. Both the energy audit and analysis shall show that the selected heating system, cooling system and energy source are the most cost effective, from the point of view of front-end capital investment and operating cost over its lifetime.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.912 Rehabilitation Guidelines (repealed)

History

• Source: Repealed at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.913 Rehabilitation Waiver

The Authority shall waive compliance with the minimum energy efficiency standards for a rehabilitation Development if:

a) The Owner and/or developer submits a cost benefit analysis that demonstrates that compliance with minimum energy efficiency standards would increase the costs of the rehabilitation of the Development to the extent that it would be impossible for the Development to meet the costs of debt service and operating expenses while providing housing for Very Low, Low and Moderate Income Tenants, and the Director or, in his or her absence, the Deputy Director certifies that there is a serious shortage of decent, safe and sanitary housing available to persons of Very Low, Low and Moderate Income in that community and that, but for the waiver of compliance, the property would not be rehabilitated; or

b) The minimum energy efficiency standards are in conflict with the energy efficiency requirements, rules, regulations, practices or procedures of any federal, State or local governmental entity through which a grant, loan, subsidy, insurance, underwriting or guarantee is provided for the rehabilitation of a development by any such entity; or

c) The minimum energy efficiency standards are in conflict with any federal, State or local law, code or ordinance; or

d) The Development does not meet the specific energy efficiency standards incorporated in Section 310.903, but a licensed consulting architect, retained by the Authority, certifies to the Authority that the Development meets standards that are functionally equivalent to the specific energy efficiency standards of this Subpart.

History

• Source: Amended at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.1001 Conduit Bonds

From time to time, the Authority may issue Conduit Bonds to obtain financing for a Conduit Loan for a Development. This Subpart governs the making of Conduit Loans.

History

• Source: Added at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.1002 Applications

Applicants for a Conduit Loan must apply to the Authority in the same manner as all other applicants for Mortgage Loans, and must adhere to the notification requirements of Subpart B.

History

• Source: Added at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.1003 Eligible Mortgagor

The recipient of a Conduit Loan must be an Eligible Mortgagor.

History

• Source: Added at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.1004 Regulatory Agreement

Each recipient of a Conduit Loan shall enter into a Regulatory Agreement with the Authority.

History

• Source: Added at 31 Ill. Reg. 4392, effective February 28, 2007

47 Ill. Adm. Code 310.1005 Applicable Rules

All provisions of this Part shall apply to Conduit Loans, except the following: Section 310.404, Section 310.405, Section 310.601 and Section 310.602.

History

• Source: Added at 31 Ill. Reg. 4392, effective February 28, 2007

Part 340 Loans to Lending Institutions

47 Ill. Adm. Code 340.101 Statutory Authorization

Pursuant to Section 7.24 of the Illinois Housing Development Act (Ill. Rev. Stat. 1985, ch. 67½, pars. 307.24) (the "Act"), the Authority is required to establish rules for the making of loans to Lending Institutions. The purpose of this Part is to comply with that requirement.

47 Ill. Adm. Code 340.102 Purpose and Objectives

This Part is being established to accomplish the general purposes of the Act and in particular the making of loans to Lending Institutions or the purchasing of loans from Lending Institutions for the purpose of stimulating the construction, acquisition, improvement or rehabilitation of Dwelling Units, Community Facilities and Housing Related Commercial Facilities for the benefit of Low or Moderate Income Persons or Families in accordance with the Program. This Part does not apply to either the Authority's Single Family Mortgage Purchase Program (47 Ill. Adm. Code 220 and 250) or the Multifamily Rental Housing Mortgage Loan Program (47 Ill. Adm. Code 310).

47 Ill. Adm. Code 340.103 Definitions

As used in this Part, the following words or terms mean:

"Act": The Illinois Housing Development Act (Ill. Rev. Stat. 1985, ch. 67½, pars. 301 et seq.), as amended.

"Authority": The Illinois Housing Development Authority.

"Commercial Facilities": The land, buildings, improvements, equipment and all ancillary facilities for use for offices; stores; retirement homes; hotels; financial institutions; service, health care, social education, recreation or research establishments; or any other commercial purpose.

"Community Facilities": The land, buildings, improvements and equipment for land development, for health, welfare, recreational, social, educational and commercial activities, and for public and municipal services.

"Days": Days shall mean calendar days. Due dates falling on a Saturday, Sunday, or legal State or federal holiday shall be deemed to fall on the next calendar day that is not a Saturday, Sunday, or a legal State or federal holiday.

"Development": A specific work or improvement undertaken to provide Dwelling Units, including the construction, acquisition, improvement or rehabilitation of lands and buildings, including Community Facilities or Housing Related Commercial Facilities, under the Act.

"Director": The Director of the Authority.

"Dwelling Unit": A house, apartment or single room occupied or to be occupied as a place of residence.

"Housing Related Commercial Facilities": Commercial facilities which are or will be related to a development. Commercial facilities are related to a development if they are, in the sole judgment of the authority, located in the same geographical area, accessible to the development and are:

Necessary or desirable in order to complement the development, enhance the quality of life and provide services and/or employment for residents of that area in which the development is located; or

Commercial facilities in which rent revenues are used to provide funds for paying costs of construction, acquisition, rehabilitation, operation, maintenance, or of debt service on the development or housing related commercial facilities; or

Necessary or desirable in order to make the development successful, for example, facilities that eliminate or prevent slum or blighted conditions, or to preserve historic structures, provided that the facilities are not inconsistent with the development.

"Lending Institution": Any Bank, Trust Company, Savings Bank, Savings and Loan Association, Credit Union, National Banking Association, Mortgage Banking Association, Federal Savings and Loan Association or Federal Credit Unit maintaining an office in the State, any insurance company or any other entity or organization which makes or acquires loans secured by real property and is authorized to do business in the state and maintains an office in the state.

"Loan Recipient": The individual, corporation, partnership, land trust or other entity to which a Lending Institution proposes to make or makes a loan under the Program and which will use such loan funds for the construction, acquisition, improvement or rehabilitation of a Dwelling Unit or Units, Community Facilities, or Housing Related Commercial Facilities for the benefit of Low or Moderate Income Persons or Families.

"Members": The Members of the Authority.

"Part": This Part 340.

"Persons or Families of Low or Moderate Income": Persons or families whose income does not exceed 160% of the median family income, as established by the United States Department of Housing and Urban Development, for either a metropolitan statistical area, a primary metropolitan statistical area or each county in non-metropolitan statistical areas, as shown on Table A ("Income Limits").

"Program": The Authority's Loans to Lending Institutions Program.

"Staff": The Director and Deputy Director and employees of the Authority.

"State": The State of Illinois.

47 Ill. Adm. Code 340.104 Forms for the Program

The Staff shall prepare, use, supplement, and amend such forms, agreements, and other documents as shall be necessary to implement the Program, all as prescribed by the Director.

47 Ill. Adm. Code 340.105 Equal Opportunity Lending

In making loans under the Program, a Lending Institution shall not deny a loan to any person or persons or discriminate against any person or persons in fixing the amount, duration, or other terms and conditions of such loans on account of race, color, religion, age, sex, marital status, handicap, or national origin, and shall otherwise be subject to all State and federal requirements with respect to nondiscrimination in lending including, without limitation, Titles VI of the U.S. Civil Rights Act of 1964 (42 U.S.C. 2000 et seq.); Title VIII of the U.S. Civil Rights Act of 1968 (42 U.S.C. 3604 et seq.), as amended by the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.); the Equal Credit Opportunity Act (15 U.S.C. 1691-1691F); the Fair Credit Reporting Act (15 U.S.C. 1681-1681T) and Section 13 of the Act.

47 Ill. Adm. Code 340.106 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section, or Subpart thereof as to which such judgment is rendered.

47 Ill. Adm. Code 340.107 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 340.201 Loans to Lending Institutions

The Authority may participate with, purchase loans from or make loans to Lending Institutions for the purpose of those institutions lending such funds, either directly or indirectly, for the construction, acquisition, improvement or rehabilitation of:

a) Dwelling Units owned or to be owned by Persons or Families of Low or Moderate Income;

b) Dwelling Units occupied or to be occupied by Persons or Families of Low or Moderate Income;

c) Community Facilities; or

d) Housing Related Commercial Facilities.

47 Ill. Adm. Code 340.202 Eligible Developments

a) All Developments consisting of single or multifamily Dwelling Units, or Community Facilities or Housing Related Commercial Facilities shall be eligible for construction, acquisition, improvement or rehabilitation loans. If the Development consists of Dwelling Units, at least 50% of the Dwelling Units must be:

1. Owned or to be owned by Persons or Families of Low or Moderate Income or

2. Occupied or to be occupied by Persons or Families of Low or Moderate Income.

b) A person or family shall only be required to meet the requirements of being a Low or Moderate Income Person or Family, under the Act and this Part, at the time of the initial purchase or occupation of the Dwelling Unit or Development.

47 Ill. Adm. Code 340.203 Lending Institution Approval

a) Lending Institutions shall make a written proposal, with supporting documents, to the Director, containing information determined by the Director to be necessary for Lending Institution approval.

b) In determining whether to approve a Lending institution for participation in the Program, the Authority shall consider, but shall not be limited to, the following criteria:

1. The financial stability and integrity of the Lending Institution, as indicated by, but not limited to, the Lending Institution's financial resources, business obligations, other financial obligations, and financial soundness;

2. Previous experience of the Lending Institution in the construction, acquisition, improvement or rehabilitation of developments of a size, scope and expense similar to the Development to be financed under this Program;

3. The economic viability of the Lending Institution's proposal, as determined by the Authority with an economic, financial and business analysis;

4. The need for decent, safe and sanitary housing, in accordance with locally approved building codes, for Persons or Families of Low or Moderate Income, Community Facilities and Housing Related Commercial Facilities, in the area proposed to be served by the Lending Institution's proposal, as determined by the Authority, based on census data, social surveys, published data, or on-site inspections.

c) Each Lending Institution shall certify to the Authority the Lending Institution's compliance with the Act and this Part at the time of the disbursement of the loan.

47 Ill. Adm. Code 340.204 Lending Institution's Loan Approval Process

It shall be the obligation of the Lending Institution to:

a) Approve or reject each application for a construction, acquisition, improvement or rehabilitation loan, as provided in Section 340.205;

b) Determine the amount of money to be loaned to each Loan Recipient. The Lending Institution shall base the amount of the loan on a review of the following costs, which shall be submitted on a loan application, and compared to the costs of similar construction, acquisition, improvement or rehabilitation developments in the area. The cost items are: design architect's fees; supervisory architect's fees; legal, accounting and other organizational fees; survey and appraisal fees; marketing costs; consulting and purchasing agent fees; construction interest, insurance costs; real estate and other taxes; title and recording fees; construction costs; financial contingency and construction contingency costs; relocation costs; off-site improvements; land costs; carrying charges; and other costs directly related to the construction of the Development;

c) Act upon a loan application in writing by either issuing or declining to issue a loan commitment within 120 days of receipt of all loan data; provided, however, this period may be extended for a definite period of time upon the mutual written consent of the parties;

d) Make all disbursements no later than 3 years after the issuance of a loan commitment to a Loan Recipient, provided the Loan Recipient has complied with all requirements set forth in the loan commitment. The Authority shall make its determination of the Lending Institution's compliance, taking into consideration circumstances beyond the control of the Lending Institution, including, but not limited to, strikes, lockouts, fires, and natural disasters.

e) Charge an interest rate not exceeding the yield paid on 30 year Government National Mortgage Association (GNMA) mortgage certificates as of the date of the adoption of the resolution by the Authority's Members for funding of that particular loan to the Lending Institution. However, if the Authority issues its bonds or notes to finance the loan to the Lending Institution, the effective interest cost to the Authority, plus the Authority's fees and charges, shall be the interest charged by the Authority to the Lending Institution; and

f) Require each Loan Recipient to execute and deliver a note and such documents as shall be necessary to secure and evidence the transaction, including, but not limited to, a mortgage, assignment of mortgage, security agreement, financing statement, collateral assignment of beneficial interest in a land trust, or by delivery of an irrevocable commercial letter of credit, or other instrument acceptable to the Authority securing payment of the note executed by the Loan Recipient, in an aggregate amount not less than 100% of the outstanding principal balance of the loan, which shall be retained until the loan is paid off.

47 Ill. Adm. Code 340.205 Loan Approval

A Loan Recipient must make application, in writing, submitting such information as is necessary for review by the Lending Institution. In determining whether to approve or reject a loan for such Loan Recipient, the Lending Institution, while exercising the standards and practices of a prudent lender, shall consider, but not be limited to, the following information:

a) the financial resources, financial statements, credit history, employment history, business experience, and credit worthiness of the Loan Recipient;

b) the type, scope, size and cost of the proposed new construction, acquisition, improvement or rehabilitation of the Development;

c) the requirements of State and federal laws applicable to Lending Institutions, as defined in the Act;

d) the applicability of local housing codes and zoning laws;

e) the Loan Recipient's past record and experience in successfully completing developments of a similar type, scope, size and cost;

f) whether the fair market value of the proposed Development as improved meets or exceeds the amount of the loan; and

g) the ability of the proposed Development to generate sufficient revenue to pay operation, maintenance and debt service costs, and other expenses directly related to the Development.

47 Ill. Adm. Code 340.206 Termination of Loan Disbursements

a) If the Authority is the sole source of funds for the Program, excluding origination and servicing fees, the Authority shall declare a default and thereafter terminate loan disbursements and accelerate the note executed by the Loan institution, if any, 30 days after the Authority gives the Lending Institution written notice of the default, if it is determined by the Authority that the Lending Institution is not complying with the Act, or this Part, or the terms of the documents executed in connection with the loan to the Lending Institution or with State or federal laws applicable to the Lending Institution, as defined in this Act. If the Lending Institution cures, or enters into an agreement with the Authority to cure, the default within 30 days after the Authority's written notice of the default, the loan shall be reinstated and the default status terminated; however, if the Lending Institution is misappropriating loan proceeds, the Authority shall terminate loan disbursements and accelerate the note executed by the Lending Institution, if any, and ban further participation by the Lending Institution in the Program. No act of non-feasance or malfeasance by a Lending Institution shall cause the acceleration of a note executed by a Loan Recipient under this Program.

b) If the Authority participates in the Program with funds from other participants, excluding origination and servicing fees, the agreement between the participants shall control as to the right to terminate loan disbursements and the right to accelerate the note executed by the Lending Institution, if the Lending Institution is misusing loan proceeds or is not complying with the Act, or this Part, or the terms of the documents executed in connection with the loan to the Lending Institution or State and federal laws applicable to Lending Institutions, as defined in the Act.

47 Ill. Adm. Code 340.207 Reports to the Authority

Each Lending Institution shall provide a written report to the Authority not less frequently than annually, prepared in accordance with the accounting standards of the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (AICPA) (June 1984). This incorporation includes no subsequent amendments to these standards. Each report shall include, but not be limited to, the following information:

a) The name and address of each Loan Recipient from the Lending Institution made under the Program;

b) The amount of each loan made by the Lending Institution under the Program;

c) The status of each loan made by the Lending Institution under the Program;

d) The outstanding principal balance of the loan made by the Authority to the Lending institution under the Program; and

e) In the event the information provided is incomplete, of insufficient detail, includes discrepancies and conflicts in information, or needs further clarification, such additional information as shall be required by the Authority to ensure compliance with the Act, this Part, the terms of the documents executed in connection with the loan from the Authority to the Lending Institution, and all State and federal laws applicable to Lending Institutions, as defined in this Act, shall be supplied to the Authority.

47 Ill. Adm. Code 340.208 Inspection of Books and Records

Upon prior written notice, the Authority may inspect, examine, and copy the books and records of each Lending Institution for the purpose of determining compliance with this Part, the Act, and all contracts and agreements between the Authority and such Lending Institution relating to the Program.

47 Ill. Adm. Code 340.209 Contractual Rights

This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 340.210 Fees and Charges of the Authority

In connection with the Program, the Authority may establish and collect fees and charges. Such fees and charges may be used by the Authority for its general corporate purposes, including costs of administering the Program.

47 Ill. Adm. Code 340.TABLE A Income Limits

Persons or families of low or moderate income shall be persons or families whose annual income does not exceed the following limits:

County

Income Limit for Person or Family

Adams

$40,480

Alexander

32,320

Bond

42,400

Brown

32,160

Bureau

44,960

Calhoun

36,000

Carroll

45,280

Cass

44,800

Christian

44,800

Clark

41,280

Clay

33,600

Coles

46,560

Crawford

43,360

Cumberland

40,480

DeKalb

52,160

DeWitt

50,560

Douglas

49,760

Edgar

40,640

Edwards

41,280

Effingham

45,760

Fayette

36,800

Ford

48,480

Franklin

37,760

Fulton

42,240

Gallatin

35,840

Greene

35,040

Hamilton

37,280

Hancock

40,160

Hardin

30,080

Henderson

41,440

Iroquois

45,920

Jackson

40,640

Jasper

39,360

Jefferson

44,640

JoDaviess

47,520

Johnson

36,160

Knox

45,280

LaSalle

52,320

Lawrence

38,400

County

Income Limit for Person or Family

Lee

44,000

Livingston

53,280

Logan

46,560

McDonough

41,120

Macoupin

44,480

Marion

40,320

Marshall

46,560

Mason

43,840

Massac

39,680

Mercer

47,040

Montgomery

43,040

Morgan

44,960

Moultrie

46,720

Ogle

52,160

Perry

48,320

Piatt

51,680

Pike

32,640

Pope

34,720

Pulaski

29,440

Putnam

50,560

Randolph

50,080

Richland

39,840

Saline

38,880

Schulyer

36,320

Scott

38,720

Shelby

43,840

Stark

43,840

Stephenson

50,080

Union

37,760

Vermilion

46,400

Wabash

49,440

Warren

43,200

Washington

45,440

Wayne

40,000

White

41,760

Whiteside

47,040

Williamson

40,480

Metropolitan Statistical Area (MSA) or Primary Metropolitan Statistical Area (PMSA)

Income Limit for Person or Family

Aurora-Elgin PMSA (Kane and Kendall Counties)

59,040

Metropolitan Statistical Area (MSA) or Primary Metropolitan Statistical Area (PMSA)

Income Limit for Person or Family

Bloomington-Normal MSA (McLean County)

55,840

Champaign-Urbana-Rantoul MSA (Champaign County)

51,200

Chicago PMSA (Cook, DuPage, and McHenry Counties

58,880

Davenport-Rock Island-Moline MSA (Rock Island and Henry Counties)

49,920

Decatur MSA (Macon County)

51,360

Joliet PMSA (Grundy and Will Counties)

59,200

Kankakee MSA (Kankakee County)

44,000

Lake County PMSA (Lake County)

69,440

Peoria MSA (Peoria, Tazewell, and Woodford Counties)

52,000

Rockford MSA (Winnebago and Boone Counties)

51,840

St. Louis MSA (Madison, St. Clair, Monroe, Clinton, and Jersey Counties)

54,080

Springfield MSA (Sangamon and Menard Counties)

50,880

Part 350 Low-Income Housing Tax Credit Allocation

47 Ill. Adm. Code 350.101 Purpose and Objectives

This Part is being established to set forth the standards for the Allocation of low-income housing tax credits by the Illinois Housing Development Authority as State Housing Credit Agency for the State pursuant to Section 307.24 of the Illinois Housing Development Act and Section 42 of the Internal Revenue Code (26 U.S.C., Section 42) in connection with the acquisition, construction and rehabilitation of low-income housing.

History

• Source: Amended at 21 Ill. Reg. 9012, effective June 26, 1997

47 Ill. Adm. Code 350.102 Definitions

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Allocation": The award of Tax Credits to a Project pursuant to Section 42.

"Applicable Fraction": The lower of the unit fraction or the floor space fraction. The unit fraction is the number of Low-Income housing units divided by the total number of units in the Project. The floor space fraction is the square footage of the Low-Income housing units divided by the Project's total square footage.

"Application": An application to the Authority submitted by a Sponsor, for Tax Credits for a Project, including required supporting documentation.

"Authority": The Illinois Housing Development Authority.

"Authority Housing Credit Ceiling": The portion of the State Housing Credit Ceiling available for Allocation by the Authority.

"Compliance Period": The period during which the Project is obligated to comply with the occupancy restrictions (both income and rent) of Section 42.

"Credit Period": The period of 10 years beginning with the year in which the Project is placed in service or, at the election of the Sponsor, the succeeding year.

"Governor": The Governor of the State of Illinois.

"Internal Revenue Code": The Internal Revenue Code of 1986 (26 U.S.C. Section 1 et seq.) and the U.S. Treasury regulations promulgated under it, all as they may be amended from time to time.

"Low-Income": A household income that is less than or equal to 60% of the median income for the area in which a Project is located, as determined by the United Stated Department of Housing and Urban Development.

"Part": This Part 350.

"Project": The qualified building or buildings (as defined in Section 42) that are the subject of an Application.

"Qualified Allocation Plan": The Authority's qualified Allocation Plan required under Section 42.

"Reservation": The Authority's conditional Reservation of Tax Credits for a Project.

"Section 42": Section 42 of the Internal Revenue Code and the regulations and revenue rulings promulgated under it, all as they may be amended from time to time.

"Sponsor": An entity applying for or receiving Tax Credits for a Project pursuant to this Part.

"State": The State of Illinois.

"State Housing Credit Agency": The Authority.

"State Housing Credit Ceiling": The amount of Tax Credits available for Allocation in the State for any calendar year, as provided in Section 42.

"Tax Credits": Federal Low-Income housing tax credits, as authorized by Section 42.

History

• Source: Amended at 50 Ill. Reg. 8582, effective June 4, 2026

Chapter II Illinois Housing Development Authority

Part 350 Low-Income Housing Tax Credit Allocation

47 Ill. Adm. Code 350.103 Compliance with Federal Law

Notwithstanding anything herein to the contrary, this Part shall be construed in conformity and compliance with the Internal Revenue Code. To the extent that this Part conflicts with the Internal Revenue Code, the Internal Revenue Code shall control and prevail.

47 Ill. Adm. Code 350.104 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section, or Subpart thereof as to which such judgment is rendered.

History

• Source: Amended at 21 Ill. Reg. 9012, effective June 26, 1997

47 Ill. Adm. Code 350.201 Authority to Issue Tax Credits

For any calendar year, the Authority may allocate Tax Credits in an amount not to exceed the Authority Housing Credit Ceiling.

History

• Source: Amended at 21 Ill. Reg. 9012, effective June 26, 1997

47 Ill. Adm. Code 350.202 Allocation Pursuant to Qualified Allocation Plan

The Authority shall allocate Tax Credits only pursuant to and in compliance with the Qualified Allocation Plan.

History

• Source: Amended at 21 Ill. Reg. 9012, effective June 26, 1997

47 Ill. Adm. Code 350.203 Application Process

A Sponsor may apply for an Allocation by submitting an Application on forms prescribed by the Authority per the current Qualified Allocation Plan setting forth, at a minimum, the following information:

a) The name and location of the proposed Project;

b) The name, address and telephone number of the Sponsor, owner, attorney, architect, contractor and consultant;

c) A history of the Sponsor's experience in developing housing, and Low-Income housing in particular;

d) A complete description of the proposed Project, including but not limited to the number and type of units and a projected rent schedule, and identifying any proposed tenant populations with special housing needs;

e) The amount and status of the proposed financing for the Project, including a certification from the Sponsor certifying the amount of all federal, State and local subsidies which apply, or which the Sponsor expects to apply, with respect to the Project.

f) Percentage of Low-Income units, and the amount of floor space of such units, to be included in the Project;

g) The estimated total cost of the proposed Project, including the cost of land acquisition, the cost of construction, architects' fees, attorneys' fees, title insurance and all other costs associated with the Project;

h) Dates of the Project's expected construction start and placement into service;

i) The amount of Tax Credits requested;

j) A certification from the Sponsor certifying to the Authority that all information contained in the Application and all accompanying information is true and accurate to the best of the Sponsor's knowledge; and

k) Any additional documentation of the information provided in the Application which the staff of the Authority may require in order to confirm the information in the Application, e.g., financing commitment, legal description of the Project, etc.

History

• Source: Amended at 50 Ill. Reg. 8582, effective June 4, 2026

Chapter II Illinois Housing Development Authority

Part 350 Low-Income Housing Tax Credit Allocation

47 Ill. Adm. Code 350.204 Notice of Application

The Authority shall send notice of each Application received to the chief executive officer (or the equivalent) of the local jurisdiction within which the Project is to be located. The official shall have 30 days from the date of notification in which to comment on the Project.

History

• Source: Amended at 21 Ill. Reg. 9012, effective June 26, 1997

47 Ill. Adm. Code 350.205 Authority Review

The Authority shall review each complete Application and approve or reject it. The Authority's review of an Application shall include, but not be limited to, the following criteria:

a) Section 42 Requirements. The ability of the Project to meet the requirements of Section 42 and other applicable sections of the Internal Revenue Code throughout the Compliance Period;

b) Financial Feasibility. The financial feasibility of the Project, taking into consideration the existing Low-Income housing in the area in which the Project will be located, the area's Low-Income housing needs, as determined by the Authority, the cost of the Project, the projected income of the Project, and all sources of financing for the Project, including owner's equity;

c) Sponsor's Ability. The ability of the Sponsor to successfully construct the Project and place it in service, taking into consideration the Sponsor's schedule submitted with the Application, the Sponsor's experience in the development and rehabilitation of housing, and the size and scope of the Project;

d) Evidence of site control for the Project, satisfactory to the Authority;

e) Location. The geographical location of the Project in relation to other Projects for which the Authority has allocated Tax Credits for the calendar year. The Authority will not approve Projects located in a constitutional home rule unit (as defined in the Internal Revenue Code) that has its own Tax Credit program unless:

1. the Sponsor has applied for housing assistance from the Authority or another State agency; or

2. the constitutional home rule unit has already reserved all of its Tax Credits; or

3. the constitutional home rule unit has requested the Authority to consider an application for a project located within the boundaries of the constitutional home rule unit;

f) Housing Stock. The ability of the Project to increase the quality and quantity of housing stock and redevelop blighted areas or to prevent the occurrence of slum conditions;

g) Involuntary Displacement. For rehabilitation Projects, the Sponsor must minimize involuntary displacement of current Low-Income tenants, taking into consideration the safety of the tenants during rehabilitation and the scope and nature of the proposed rehabilitation;

h) Government Support. Assistance or financial support from federal, State, or local governmental units;

i) Non-Profit Participation. Material participation of a qualified nonprofit organization in the development and operation of the Project, as provided in Section 42;

j) Special Needs Populations. The availability and accessibility of the Project for the disabled or other special needs populations, as required by federal and State law;

k) Tax Credit Dollar Amount. The amount of Tax Credits necessary to make the Project economically feasible, as determined by the Authority;

l) Compliance Period. Whether the Compliance Period of the Project exceeds the minimum requirements of Section 42;

m) Lower Income Tenants. The ability of the Project to serve tenants with incomes less than the maximum Low-Income for the area in which the Project will be located, as determined by the Authority in evaluating the Project's proposed rent schedule;

n) Public Housing Waiting Lists. The availability of the Project to Low-Income households who have applied for public housing and whose name is on a waiting list maintained by a public housing authority, as certified by the Sponsor in the application; and

o) Preservation. The ability of the Sponsor to continue to provide Low-Income housing for housing developments currently eligible to be converted to market rate housing. The Sponsor shall provide written evidence of the development's eligibility for conversion and the development's economic feasibility in the event of such conversion.

History

• Source: Amended at 50 Ill. Reg. 8582, effective June 4, 2026

47 Ill. Adm. Code 350.206 Allocation Amount - Project Feasibility

The Authority shall not allocate Tax Credits to a Project in an amount greater than the amount the Authority determines is necessary for the financial feasibility of the Project and its viability as a qualified Low-Income housing project throughout the Credit Period. In making this determination, the Authority shall consider the sources and uses of funds and the total amount of financing for the Project:

a) The date of the Reservation of the Tax Credits for the Project; and

b) The date the Project is placed in service.

History

• Source: Amended at 50 Ill. Reg. 8582, effective June 4, 2026

47 Ill. Adm. Code 350.207 Approval or Rejection

a) Upon completion of its review of an Application, the Authority shall notify the Sponsor in writing of its approval or rejection of the Application, considering the availability of Tax Credits; the need for Low-Income housing throughout the State, as determined by the Authority, based on census data, social surveys, published data, or on-site inspections; the geographic distribution of Tax Credits throughout the State; the information contained in the Application; comments received pursuant to Section 350.204; and any other criteria set forth in the Qualified Allocation Plan.

b) Upon the approval of a Project, the Authority shall issue a Reservation Letter conditionally reserving Tax Credits for the Project.

c) The conditional Reservation Letter shall set forth the terms and conditions upon which the Tax Credits will be allocated to the Project, including, but not limited to:

1. Full compliance by both the Sponsor and the proposed Project with Section 42 and other applicable sections of the Internal Revenue Code;

2. Certification from the Sponsor certifying to the Authority that the Sponsor and the Project are in full compliance with Section 42 and other applicable sections of the Internal Revenue Code and will continue to be in such compliance for such time as required by the Internal Revenue Code;

3. Certification from the Sponsor that there will be no change in the Sponsor, the Sponsor's organizational structure or the structure of the Project without the prior written approval of the Authority.

4. Execution of an Extended Use Agreement pursuant to Section 305.208 of this Part.

History

• Source: Amended at 50 Ill. Reg. 8582, effective June 4, 2026

47 Ill. Adm. Code 350.208 Extended Use Agreement

The Sponsor and the Authority shall enter into an Extended Use Agreement before the Authority allocates Tax Credits to the Project. Pursuant to such Extended Use Agreement, the Sponsor and its successors and assigns shall be required to meet the Applicable Fraction of Low-Income occupancy requirements of Section 42 for a period of at least fifteen (15) years beyond the Compliance Period. The Extended Use Agreement shall contain any language necessary to comply with the requirements of Section 42(h)(6) and shall be recorded in the office of the Recorder of Deeds in the county where the Project is located as a restrictive covenant on the real estate on which the Project is located.

History

• Source: Amended at 50 Ill. Reg. 8582, effective June 4, 2026

Chapter II Illinois Housing Development Authority

Part 350 Low-Income Housing Tax Credit Allocation

47 Ill. Adm. Code 350.209 Project Certification

As of the date the Project is placed in service, the Sponsor shall certify to the Authority as to all amounts of federal, State and local subsidies which apply, or which the Sponsor expects to apply, with respect to the Project. The Sponsor shall further certify as to the Sponsor's and the Project's compliance with Section 42 and other applicable sections of the Internal Revenue Code and shall provide to the Authority any documentation submitted to the Internal Revenue Service which establishes compliance with the requirements of Section 42 and other applicable sections of the Internal Revenue Code.

History

• Source: Amended at 21 Ill. Reg. 9012, effective June 26, 1997

47 Ill. Adm. Code 350.210 Tax Credit Allocation

After acceptance of Sponsor's Application and receipt by the Authority of all requested documentation, in a format acceptable to the Authority, which establishes to the satisfaction of the Authority that the Sponsor and the Project are in compliance with all the requirements of Section 42 and other applicable sections of the Internal Revenue Code, the Authority shall allocate Tax Credits to the Project and send Form 8609 to the Internal Revenue Service notifying it of the Allocation of Tax Credits for the Project.

History

• Source: Amended at 21 Ill. Reg. 9012, effective June 26, 1997

47 Ill. Adm. Code 350.211 Reservation of Tax Credits for Year Other Than Current Calendar Year

The Authority may approve a Sponsor's Application for a calendar year subsequent to the year of the Application, thereby reserving the Tax Credits from the Authority Housing Credit Ceiling for the subsequent year, if the Project meets the requirements of this Part. Such approval shall be contingent upon the availability of the Authority Housing Credit Ceiling for the subsequent year.

47 Ill. Adm. Code 350.212 Revocation of Reservations

The Authority reserves the right to revoke Reservations if a Sponsor fails to place the Project in service in the calendar year for which the Tax Credits have been reserved, or fails to meet the requirements for a carryover Allocation, as set forth in Section 42, or if the Project would otherwise not comply with Section 42 and other applicable sections of the Internal Revenue Code or with this Part.

History

• Source: Amended at 21 Ill. Reg. 9012, effective June 26, 1997

47 Ill. Adm. Code 350.213 Compliance Monitoring

The Authority shall monitor the Project for compliance with Section 42. If the Authority discovers that a Project which has received an Allocation is not in compliance with Section 42, the Authority shall notify the Internal Revenue Service of that noncompliance as required. This compliance monitoring will be effective for all Projects regardless of the date of Allocation. The Authority shall charge the Sponsor an administrative fee not to exceed the greater of $100 per year or $7.50 per unit per year for administrative costs incurred by the Authority in monitoring compliance. This fee will be in addition to the fees set forth in Section 350.214 of this Part.

History

• Source: Amended at 50 Ill. Reg. 8582, effective June 4, 2026

47 Ill. Adm. Code 350.214 Fees

The Sponsor shall pay the following non-refundable fees in connection with its Application for tax credits:

a) A Preliminary Project Assessment fee in the amount of $750 for a Sponsor applying as a non-profit project.

b) A Preliminary Project Assessment fee in the amount of $1,500 for a Sponsor applying as a for-profit project.

c) An application fee in the amount of $1,500 for a Sponsor applying as a non-profit project.

d) An application fee in the amount of $2,500 for a Sponsor applying as a for-profit project.

e) A reservation fee of 1% of the 10-year credit amount (4% and 9%), due upon the issuance of a letter from the Authority to the Sponsor conditionally reserving tax credits in a specific amount for the project.

f) $1,000 for issuance of an amended Form 8609 to the Internal Revenue Service.

g) If a subsidy layering review is conducted, a fee of $1,000.

History

• Source: Amended at 50 Ill. Reg. 8582, effective June 4, 2026

Chapter II Illinois Housing Development Authority

Part 350 Low-Income Housing Tax Credit Allocation

47 Ill. Adm. Code 350.215 Carryover Allocations

If a Sponsor is unable to place its Project in service in the year in which it receives a Reservation, it may apply to the Authority for a carryover Allocation reserving the Tax Credits for the Project for two additional years, subject to the requirements of Section 42. If the Authority determines that the Project has met the carryover Allocation requirements of Section 42, the Authority shall issue a carryover Allocation Letter carrying over the Reservation for two additional years.

History

• Source: Added at 21 Ill. Reg. 9012, effective June 26, 1997

Part 355 Illinois Affordable Housing Tax Credit Program

47 Ill. Adm. Code 355.101 Authority

This Part is established to set forth the standards for the allocation of Affordable Housing Tax Credits by the Illinois Housing Development Authority under Section 7.28 of the Illinois Housing Development Act [20 ILCS 3805/7.28] in connection with the acquisition, construction, rehabilitation and financing of, or the provision of financing assistance for, affordable housing.

47 Ill. Adm. Code 355.102 Purpose and Objectives

This Part is established to accomplish the purposes of Section 7.28 of the Illinois Housing Development Act and Section 214 of the Illinois Income Tax Act [35 ILCS 5/214], and in particular the awarding of Affordable Housing Tax Credits.

History

• Source: Amended at 27 Ill. Reg. 14310, effective August 21, 2003

47 Ill. Adm. Code 355.103 Definitions

As used in this Part, the following words or terms mean:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Affordable Housing Project": A housing project that is either:

a rental project in which at least 25% of the Units that have rents (including tenant-paid heat) that do not exceed, on a monthly basis, 30% of the gross monthly income of a Household earning the maximum income for a Low-Income Household in the geographical area in which the Affordable Housing Project is located and that are occupied by persons and families who qualify as Low-Income Households; or

a Unit for sale to Low-Income Households and who will pay no more than 30% of their gross household income for mortgage principal, interest, property taxes, and property insurance upon the purchase of the Unit.

An Agency may consider a Project to be a rental project even when a tenant does not pay rent if a rental subsidy is received by the Project or tenant.

"Affordable Housing Restrictions": The income and occupancy restrictions for an Affordable Housing Project or an Employer-Assisted Housing Project required by Section 7.28 and this Part, or those set forth in the Application for the Affordable Housing Project or the Employer-Assisted Housing Project, whichever are more stringent.

"Affordable Housing Tax Credits": Affordable Housing Tax Credits, as authorized by Section 7.28 of the Act and Section 214 of the Illinois Income Tax Act [35 ILCS 5/214].

"Affordable Housing Tax Credit Ceiling": The aggregate amount of Affordable Housing Tax Credits available for Allocation in a State fiscal year.

"Agency": The Authority, the City of Chicago or any other municipality that may subsequently be designated by law as an agency for the Allocation of Affordable Housing Tax Credits.

"Agency Affordable Housing Tax Credit Ceiling": That portion of the Affordable Housing Tax Credit Ceiling that is available for Allocation by an Agency. That amount is 24.5% of the Affordable Housing Tax Credit Ceiling for the City of Chicago, and 75.5% of the Affordable Housing Tax Credit Ceiling for the Authority.

"Agency Head": The Executive Director of the Authority or the Housing Commissioner of the City of Chicago.

"Allocation": An award by an Agency of Affordable Housing Tax Credits in connection with a Project.

"Applicant": The Sponsor (and any other affiliated entities) applying for an Allocation.

"Application": An application to an Agency for a Reservation and an Allocation submitted by an Applicant, including the required supporting documentation.

"Authority": The Illinois Housing Development Authority.

"Certificate": The certificate issued by an Agency evidencing an Allocation. The Certificate shall be issued and delivered to the Donor unless otherwise directed by the Donor pursuant to Section 309 of this Part and shall state the effective date of the Allocation.

"Compliance Period": The period during which a Project is obligated to comply with the Affordable Housing Restrictions, as set forth in the Application. The Compliance Period for an Affordable Housing Project shall be a minimum of 10 years from the date of the issuance of the certificate of occupancy from the municipality in which the Affordable Housing Project is located (or the like, as acceptable to the Agency in its discretion, for Affordable Housing Projects that are rehabilitated and when the municipality does not re-issue a certificate of occupancy). The Compliance Period for a Single Family Project or an Employer-Assisted Housing Project in which a Sponsor provides construction subsidies, down payment and closing cost assistance or homeownership counseling to Low-Income Households or, for Employer-Assisted Housing Projects, Moderate-Income Households purchasing a Single Family Residence shall be 5 years from the date of the closing of the purchase of the Single Family Residence. The Compliance Period in connection with the purchase of a Single Family Residence may be reduced as provided in Section 355.404 of this Part.

"Donation": Money, securities, real property, or personal property that is provided without consideration to a Sponsor and that is used for:

costs associated with purchasing, rehabilitating, constructing, or providing or obtaining financing for an Affordable Housing Project, including fees for attorneys, architects, accountants, surveyors and appraisers;

Technical Assistance; or

General Operating Support of the Sponsor; or

an Employer-Assisted Housing Project.

"Donor": An individual or entity, other than the Federal government, the State government, any local municipality or any agency, board commission, corporation or authority of the Federal government, the State government or any local government, except as provided in Section 355.311 of this Part, making a Donation. For purposes of this definition and related provisions of this Part, any school district within the State of Illinois will not be deemed to be a local municipality or agency, board, commission, corporation or authority or the Federal government, the State government or any local government.

"Employer-Assisted Housing Project": A project that involves Donations made to a Sponsor that are used for down payment and closing cost assistance, reduced-interest mortgages, mortgage guarantee programs, rental subsidies, or individual development account savings plans that are:

provided by the Sponsor to the employers' employees to assist them to secure housing near the employer's work place; and

restricted to housing near such work place; and

restricted to employees who qualify as Moderate-Income Households.

"General Operating Support": Any cost incurred by a Sponsor, directly or indirectly, in connection with an Affordable Housing Project or an Employer-Assisted Housing Project. Such costs may include a proportionate amount of the general overhead expenses of the Sponsor.

"Gross Household Income": The total annualized income of a Household from whatever source derived and before taxes or withholdings.

"Household": A single person, family or unrelated persons living together.

"Initial Closing Date": The date by which the Agency has determined that the Sponsor and the Project have met all legal requirements of the Program. As applicable to Projects, an Agency may consider whether the Sponsor and the Project have satisfied the requirements of any other funding sources for the Project.

"Low-Income Household": A Household whose adjusted income is less than or equal to 60% of the median income of the geographical area of the Household's prospective residence, adjusted for family size, as such adjusted income and median income for the geographical area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 USC 1437).

"Material Participation": An individual or entity that provides personal services to tenants or prospective tenants of a Multifamily Housing Project or rental Single Family Project, or professional services to a Multifamily Housing Project, on a regular, continuous, and substantial basis for more than 300 hours during each year during the Compliance Period. The requirement for Material Participation, as established in Sections 355.206 and 355.310 of this Part, will be satisfied if the Sponsor is the owner, or holds a controlling interest in the entity that is the owner, of the Project; or is the managing general partner, or holds a controlling interest in the entity that is the managing general partner, of a limited partnership that is the owner of the Project; or is the managing member, or holds a controlling interest in the entity that is the managing member, of the limited liability company that is the owner of the Project.

"Members": The Members of the Authority.

"Moderate-Income Household": A Household whose adjusted income is less than 120% of the median income of the geographical area of the Household's Employer-Assisted Housing Project, adjusted for family size, as such adjusted income and median income for the geographical area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 USC 1437).

"Multifamily Housing Project": An Affordable Housing Project comprised of one or more buildings (other than Single Family Residences) containing an aggregate of five or more rental Units.

"Program": The Illinois Affordable Housing Tax Credit Program.

"Project": An Affordable Housing Project, Employer-Assisted Housing Project, or Technical Assistance.

"Recapture Agreement": The Recapture Agreement to be recorded against a Single Family Residence in connection with a Very Low-Income, Low-Income or, for Employer-Assisted Housing Projects, Moderate-Income Household's purchase of the Single Family Residence.

"Regulatory Agreement": The Illinois Affordable Housing Tax Credit Regulatory Agreement to be recorded against rental Affordable Housing Projects and Employer-Assisted Housing Projects, as applicable.

"Reservation": An Agency's conditional reservation of Affordable Housing Tax Credits for a Sponsor, as may be amended from time to time. A Reservation shall be valid for a period no longer than 12 months from the date of the Reservation Letter unless extended pursuant to Section 355.205(d) of this Part.

"Reservation Letter": The letter from an Agency to a Sponsor conditionally reserving Affordable Housing Tax Credits.

"Section 7.28": Section 7.28 of the Act.

"Single Family Project": An Affordable Housing Project consisting of:

the construction of Single Family Residences; or

the rehabilitation of a 2, 3, or 4 Unit building; upon completion of rehabilitation, the Units are sold or rented; or

the rehabilitation of Single Family Residences, which are then sold or rented; or

the rehabilitation of buildings containing more than 4 Units; upon completion of rehabilitation, the Units are sold as condominiums; or

the financing of Single Family Residences using junior mortgages with a below market interest rate; or

construction subsidies to lower the purchase price of Single Family Residences; or

down payment and closing cost assistance.

"Single Family Residence": A house, condominium, townhouse or other residence used for occupancy by a single Household as its primary residence.

"Sponsor": A not-for-profit organization that is:

organized under the laws of this State or any other state and:

for an Affordable Housing Project, has as one of its purposes the development of affordable housing; or

for an Employer-Assisted Housing Project or Technical Assistance, has as one of its purposes either the development of affordable housing or home ownership education; or

organized for the purpose of constructing or rehabilitating affordable housing Units and has been issued a ruling from the Internal Revenue Service of the United States Department of the Treasury that the organization is exempt from income taxation under provisions of the Internal Revenue Code; or

an organization designated as a community development corporation by the United States Government under Title VII of the Economic Opportunity Act of 1964; or

a limited liability company that has a not-for-profit organization as its sole member.

"State": The State of Illinois.

"Technical Assistance": Any cost incurred by a Sponsor for:

planning for a Project; or

assistance with an Application; or

homeownership counseling services provided to prospective purchasers of a Single Family Residence in connection with a Single Family Project or an Employer-Assisted Housing Project.

"Unit": A housing unit contained in an Affordable Housing Project, a Multifamily Housing Project, a Single Family Project, or a Single Family Residence; housing units intended as dormitories, hotels, or transitional or temporary housing do not qualify as Units.

"Very Low-Income Household": A Household whose adjusted income is less than or equal to 50% of the median income of the geographical area of the Household's prospective residence, adjusted for family size, as such adjusted income and median income for the geographical area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 USC 1437).

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.104 Compliance with Federal Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal law.

47 Ill. Adm. Code 355.105 Forms and Procedures for the Program

An Agency may prepare, use, supplement, and amend forms, agreements, and other documents and procedures as may be necessary to implement the Program, all as may be prescribed by the Agency Head.

47 Ill. Adm. Code 355.106 Fees and Charges

In connection with an Application, an Agency may collect a fee from the Applicant in an amount not to exceed $2,500, payable when the Application is submitted. In connection with a Reservation, an Agency may collect a fee from the Applicant in an amount not to exceed 5% of the Reservation, payable by the due date specified in the Reservation Letter. The Agency may assess a modification fee for changes in the Sponsor or owner, the name of the Sponsor or owner or the characteristics of a Project, such as unit type, distribution or population to be served in an amount not to exceed $1,500, payable when the request for a modification is submitted. An Agency may assess a fee in connection with an extension of time to obtain a Donation, in accordance with Section 355.205 of this Part, in an amount not to exceed $1,500, payable when the request for an extension is submitted. An Agency may assess a fee in connection with a request to increase the amount of the Affordable Housing Tax Credits in an amount not to exceed $1,500, payable when the request for an extension is submitted, plus an amount not to exceed 5% of the Reservation associated with the increase in the amount of Affordable Housing Tax Credits, payable by the due date specified in the Reservation Letter. An Agency may assess an annual compliance fee in amounts not to exceed: $125 for Projects containing one to 10 affordable Units per year; $250 for Projects containing 11 to 19 affordable Units per year; and $20 per affordable Unit per year for Projects containing 20 or more affordable Units per year. All compliance fees are payable as determined by the Agency. Applicants and Sponsors shall pay an Agency in advance for expenses related to any third party studies, including but not limited to appraisals, in connection with an Application for Affordable Housing Tax Credits.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.107 Amendment

This Part may be supplemented, amended, or repealed by the Members from time to time and in such manner as they may determine consistent with this Part, the Act, including but not limited to Section 7.28 of the Act, Section 214 of the Illinois Income Tax Act [35 ILCS 5/214] and other applicable provisions of law. This Part shall not constitute or create any contractual rights.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.108 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair, or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section, or Subpart as to which that judgment is rendered.

47 Ill. Adm. Code 355.109 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 355.110 Titles and Captions

Titles and captions of Subparts, Sections, and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 355.201 Authority to Allocate Affordable Housing Tax Credits

For any State fiscal year, an Agency may reserve and/or allocate Affordable Housing Tax Credits in an amount not to exceed the Agency Affordable Housing Tax Credit Ceiling. Any Affordable Housing Tax Credits in the Agency Affordable Housing Tax Credit Ceiling that are not reserved or allocated during that State fiscal year shall expire and shall not be reserved or allocated in any succeeding State fiscal year.

47 Ill. Adm. Code 355.202 Transfer of Agency Affordable Housing Tax Credit Ceiling

After March 1 of a State fiscal year, an Agency may transfer all or a portion of its Agency Affordable Housing Tax Credit Ceiling for that State fiscal year to another Agency.

47 Ill. Adm. Code 355.203 Application Process

A Sponsor may apply for an Allocation by submitting an Application on forms prescribed by an Agency that may require the following information:

a) The name and location of the proposed Project;

b) The name, address and telephone number of the Sponsor and the proposed owners of the Project, and, if known and applicable, the attorney, accountant, architect, general contractor and consultant for the Project;

c) A copy of the Sponsor's current Articles of Incorporation, certified by the Secretary of State or equivalent official of the state of incorporation;

d) A history of the Sponsor's experience in developing affordable housing;

e) A complete description of the proposed Project, including but not limited to the site, the number and type of Units or Single Family Residences and, if applicable, a rent schedule for the Project, and identifying any proposed tenant or homeownership populations with special housing needs;

f) The amount of the proposed financing for the Project, including letters of interest or commitments from prospective lenders;

g) The type of, amount of and nature of the Donation or proposed or anticipated Donation, including the legal and financial interests of the Sponsor, seller, buyer and developer entities in the Donation transaction and a description of the flow of funds into the Project, including any financing provided by the Sponsor, if applicable;

h) For a Multifamily Housing Project or a rental Single Family Project, the percentage of Units to be reserved for Low-Income Households and Very Low-Income Households;

i) The estimated total cost of the proposed Project, including, as applicable, the cost of land acquisition, the cost of construction, the amount of projected reserves, architects' fees, attorneys' fees, accountant's fees, surveyor's fees, title insurance and all other costs associated with the Project;

j) A schedule for the proposed Project showing the anticipated Initial Closing Date and the anticipated date of completion;

k) The amount of General Operating Support requested, if any, and the purposes for which it will be used;

l) The amount of Technical Assistance requested, if any, and the purposes for which it will be used;

m) The amount of Affordable Housing Tax Credits requested;

n) A certification from the Sponsor to the Agency that all information contained in the Application and all accompanying information is true, accurate, and complete, to the best of the Sponsor's knowledge;

o) If a Donation has occurred, a notarized affidavit from the Donor acknowledging the Donation to the Sponsor or such other documentation evidencing the Donor's knowledge of the making of a Donation and eligibility for receipt of a Certificate, as determined acceptable by an Agency in its discretion; and

p) Any additional documentation that the Agency may require in order to confirm the information in the Application, including but not limited to a legal description of the Project.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.204 Agency Review

The Agency shall review each complete Application and approve or reject it. The Agency's review of an Application shall include, but not be limited to, the following criteria (where applicable):

a) Section 7.28 Requirements. The ability of the Project to meet the requirements of Section 7.28 and this Part throughout the Compliance Period;

b) Financial Feasibility. The financial feasibility of the Project, taking into consideration the existing housing for Very-Low Income Households, Low-Income Households and, for Employer-Assisted Housing Projects, Moderate-Income Households in the geographical area in which the Project will be located, the cost of the Project, the projected income and operating expense of the Project, and all sources of financing for the Project, including owner's equity;

c) Sponsor's Ability. The ability of the Sponsor to successfully construct the Affordable Housing Project and place it in service, taking into consideration the construction or other schedule submitted with the Application, the Sponsor's experience in the development, construction and/or rehabilitation of housing, and the size and scope of the Affordable Housing Project; or the ability of the Sponsor to provide the Technical Assistance; or the ability of the Sponsor to implement the Employer-Assisted Housing Project;

d) Site Control. Evidence of site control, satisfactory to the Agency, for the Affordable Housing Project, which shall include, but not be limited to, a purchase contract, an option to purchase, or a letter of intent from a prospective Donor of real property or from a governmental agency;

e) Donations. The amount of the Donation and the nature of the Donation transaction; or the amount of the proposed or anticipated Donation and the Sponsor's plan for obtaining the proposed or anticipated Donation;

f) Location. The need for housing for Very Low-Income, Low-Income and, for Employer-Assisted Housing Projects, Moderate-Income Households in the geographical area in which the Project will be located, based on census data, social surveys, published data, or on-site inspections and the location of other Projects for which the Agency has allocated or reserved Affordable Housing Tax Credits;

g) Housing Stock. The likelihood that the Project will increase the quality and quantity of housing stock and redevelop blighted areas or prevent the occurrence of slum conditions;

h) Preservation. The likelihood that the Project will preserve housing projects in danger of being lost as affordable housing stock;

i) Involuntary Displacement. For Multifamily Housing Projects or rental Single Family Projects involving rehabilitation, the Sponsor must minimize involuntary displacement of current tenants who are Low-Income and Very Low-Income Households, taking into consideration their safety during rehabilitation and the scope and nature of the proposed rehabilitation;

j) Special Needs Populations. The availability and accessibility of the Project for special needs populations, including, but not limited to, homeless or displaced individuals, persons with physical, mental or developmental disabilities, persons with alcohol or substance abuse problems, and persons with AIDS and related diseases;

k) Compliance Period. Whether the Compliance Period of the Project exceeds the minimum requirements of Section 7.28;

l) Lower Income Households. The ability of the Project to serve Households with incomes less than the maximum income for Very Low-Income, Low-Income or, for Employer-Assisted Housing Projects, Moderate-Income Households for the geographical area in which the Project will be located.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.205 Approval or Rejection by Agency

a) Upon an Agency's completion of its review of an Application, the Agency shall notify the Sponsor in writing of its approval or rejection of the Application.

b) Upon the approval of an Application, the Agency shall issue a Reservation Letter conditionally reserving Affordable Housing Tax Credits. The amount of the Affordable Housing Tax Credits reserved shall be 50% of the amount of the approved amount of the Donation or the actual Donation, whichever is less.

c) The Reservation Letter shall set forth the terms and conditions upon which the Affordable Housing Tax Credits will be allocated to the Project, including, but not limited to:

1. Certification from the Sponsor to the Agency that the Sponsor and the Project is or will be in full compliance with the requirements of Section 7.28 and this Part and will continue to be in compliance during the Compliance Period;

2. Certification from the Sponsor to the Agency that there will be no material change in the Sponsor, the Sponsor's ownership structure, the ownership structure of the Affordable Housing Project, or the structure of the Project without the prior written approval of the Agency; and

3. If applicable, execution of either a Regulatory Agreement, as required by Section 355.207 of this Part, or one or more Recapture Agreements, as required by Section 355.404 of this Part.

d) The Sponsor shall have 12 months from the date of the Reservation Letter to obtain a Donation. However, Affordable Housing Projects and Employer-Assisted Housing Projects may submit a written request for an extension of an additional 12 months as approved by the Agency in the Agency's discretion; provided, however, that the Sponsor shall pay the fee for the extension as set forth in Section 355.106 of this Part. If the extension is not granted, the Sponsor may re-apply for the Affordable Housing Tax Credits or the Affordable Housing Tax Credits may be reserved or allocated to other Projects. For Technical Assistance, the Sponsor shall have 12 months from the date of the Reservation Letter to obtain a Donation.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.206 Sponsor Participation

For a Multifamily Housing Project or a rental Single Family Project, the Sponsor must have a Material Participation in the development and operation of the Multifamily Housing Project or rental Single Family Project throughout the Compliance Period.

History

• Source: Amended at 31 Ill. Reg. 5797, effective March 30, 2007

47 Ill. Adm. Code 355.207 Regulatory Agreement for Rental Projects

The Sponsor and the owner of each Affordable Housing Project that involves the rental of housing Units shall enter into a Regulatory Agreement with the allocating Agency before the Agency makes an Allocation in connection with that Affordable Housing Project. Under the Regulatory Agreement, the owner of the Affordable Housing Project shall be required to adhere to the Affordable Housing Restrictions for a period equal to the Compliance Period, and agree not to transfer the ownership, or materially change the ownership structure of the owner of the Affordable Housing Project, without the prior written approval of the Agency. The Regulatory Agreement shall be recorded in the Office of the Recorder of Deeds in the county where the Affordable Housing Project is located as a restrictive covenant on the Affordable Housing Project. The Regulatory Agreement shall cease to apply in the event of a foreclosure, transfer of title by deed in lieu of foreclosure or similar event, unless the allocating Agency determines that such foreclosure, transfer of title by deed-in-lieu of foreclosure or similar event has occurred pursuant to an arrangement between the owner of the Affordable Housing Project and any lenders or any other party, a purpose of which is to terminate the occupancy restrictions set forth in the Regulatory Agreement.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.208 Project Documentation and Certification

On or before the Initial Closing Date of a Project, the Sponsor shall provide to the Agency the following documentation:

a) a certification of the amount of the Donation, a notarized affidavit from each Donor acknowledging the Donation to the Sponsor or such other documentation evidencing the Donor's knowledge of the making of a Donation and eligibility for receipt of a Certificate as determined acceptable by an Agency in its discretion, and documentation as the Agency shall require under Sections 355.304, 355.305, 355.306 and 355.307 of this Part to substantiate the facts set forth in the certification;

b) the name and address of the Sponsor;

c) the total number of Units or Single Family Residences, as applicable, in the Project;

d) the number of Units or Single Family Residences, as applicable, in the Project to be occupied by Very Low-Income, Low-Income and, for Employer-Assisted Housing Projects, Moderate-Income Households;

e) the type of Households to be served (such as elderly or special needs);

f) for Multifamily Housing Projects, the number of bedrooms in each Unit; and

g) the amount of Affordable Housing Tax Credits allocated for General Operating Support and Technical Assistance, and the uses of such General Operating Support and Technical Assistance.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.209 Affordable Housing Tax Credit Allocation

a) An Agency shall make Allocations:

1. for Affordable Housing Projects, after the Agency has received documentation, in a format acceptable to the Agency, that establishes to the satisfaction of the Agency that the Sponsor and the Affordable Housing Project are in compliance with all of the requirements of Section 7.28 of the Act and this Part; the date of the Allocation shall be the date of the Initial Closing.

2. for Technical Assistance and Employer-Assisted Housing Projects, after the Agency has received documentation, in a format acceptable to the Agency, that establishes to the satisfaction of the Agency that the Sponsor is in compliance with all of the requirements of Section 7.28 and this Part and has the ability to provide the Technical Assistance or to implement the Employer-Assisted Housing Project, as applicable; the date of the Allocation shall be the date of the satisfaction of these requirements.

b) The effective date of the Allocation shall be the date set forth in the Reservation Letter to the Sponsor, or the date of the Allocation at the election of the Sponsor. No Allocation shall be made with an effective date earlier than the effective date of Section 7.28. The Agency shall submit forms as the Illinois Department of Revenue may require to notify the Department of the Allocation for the Affordable Housing Project.

History

• Source: Amended at 31 Ill. Reg. 5797, effective March 30, 2007

47 Ill. Adm. Code 355.210 Recapture of Affordable Housing Tax Credits

Except in the case of fraud committed by a Donor, there shall be no recapture of Affordable Housing Tax Credits after Allocation.

History

• Source: Amended at 27 Ill. Reg. 14310, effective August 21, 2003

47 Ill. Adm. Code 355.211 Rescission of Reservation of Affordable Housing Tax Credits

An Agency may rescind a Reservation of Affordable Housing Tax Credits if a Sponsor that has received a Reservation is unable to obtain a Donation within the time periods set forth in Section 355.205(d) of this Part or if the Sponsor has not complied with the terms and conditions of the Reservation Letter. In such a case, an Agency may reserve to other Projects any Affordable Housing Tax Credits that have been rescinded; provided however, that the Affordable Housing Tax Credits must be reserved during the State fiscal year in which the Affordable Housing Tax Credits were originally reserved.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.301 Acceptable Types of Donations

Donations may only be made in the form of cash, securities, real property or personal property. Provision of services of any kind shall not constitute a Donation. Upon receipt of a Donation, a Sponsor shall notify the allocating Agency and provide to the Agency documentation evidencing both the Donation and its value, which must be determinable as of the date of the Donation. Documentation evidencing the Donation shall include a notarized affidavit from each Donor acknowledging the Donation to the Sponsor or such other documentation evidencing the Donor's knowledge of the making of a Donation and eligibility for receipt of a Certificate, as determined acceptable by an Agency in its discretion.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.302 Aggregation of Donations

Subject to Section 355.303, a Sponsor may aggregate a number of Donations into a single Donation in connection with an Allocation. For Employer-Assisted Housing Projects, a Sponsor may aggregate a number of Donations from multiple employers into a single source of funds for use in assisting eligible employees secure housing near their work place. Each Donor shall receive a Certificate evidencing the Donor's share of the aggregate Allocation.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.303 Minimum Donation Amount

Except in the case of the transfer of a portion of a Certificate as set forth in Section 355.309 of this Part, the minimum amount of a Donation shall be $10,000. Individual Donations in an aggregated Donation, including Donations for which the Affordable Housing Tax Credits are transferred as permitted under Section 355.309 of this Part, may be less than $10,000; however, the aggregated Donation must be at least $10,000.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.304 Cash

The amount of a cash Donation shall be evidenced by a copy of the check or cashier's check from the Donor, evidence of a wire-transfer of funds by the Donor, or such other evidence of the provision of cash by the Donor that may be satisfactory to the allocating Agency.

History

• Source: Amended at 27 Ill. Reg. 14310, effective August 21, 2003

47 Ill. Adm. Code 355.305 Securities

Donations of stocks, bonds or other securities shall be documented by the certificate transferring ownership of the security to the Sponsor or a certificate evidencing the transfer of the beneficial interest in the security to the Sponsor; the amount of the Donation shall be the market value of the security at the close of the market on the day of the transfer.

History

• Source: Amended at 27 Ill. Reg. 14310, effective August 21, 2003

47 Ill. Adm. Code 355.306 Real Property

Donations of real property be: the fee simple interest in such real property; the beneficial interest of a land trust if a land trust holds title to such real property; a ground lease with a minimum term of 50 years leasing the real property to the Sponsor; or a sale of the fee simple interest on real property at a discount ("Discounted Sale"). Donations of a fee simple interest in real property shall be evidenced by a copy of the recorded deed conveying the fee simple title of the real property to the Sponsor and a title search or equivalent documentation showing that the Donor held fee simple title to the real property as of the date of the transfer. A Donation of a ground lease shall be evidenced by a copy of the ground lease under which the real property is leased. A Donation of real property held in a land trust shall be evidenced by the document transferring the beneficial interest in the land trust to the Sponsor and a copy of the land trust agreement, certified by the land trustee, showing that the Sponsor is the sole beneficiary of the land trust. The value of the real property or the leasehold interest in a ground lease shall be determined on or within 6 months prior to the date of the Donation by a current independent appraisal done by a State-licensed appraiser, as approved by the Agency, based on the market value of the real property as it is currently zoned and in its then current condition and use and subject to any existing economic encumbrances (unless an economic encumbrance is expiring, has expired, or would otherwise terminate upon transfer of the property). The appraisal may be ordered by the Agency or the Sponsor and shall be completed at the Sponsor's expense. The appraiser must be an Agency-approved appraiser. An Agency may, in its discretion, have another appraisal done by a State-licensed appraiser, as approved by the Agency, and at the expense of the Sponsor with payment required in advance; in such a case, the value shall be the lesser of the two appraisals. In a Discounted Sale, the Agency must be provided with a copy of the contract of sale and the settlement statement, and the Agency may order an appraisal of the real property at the expense of the Sponsor. The amount of Donation shall be the difference between the appraised value of the real property and the sale price. No appraisal shall be provided to the Applicant or Sponsor, unless the Applicant or Sponsor has reimbursed the Agency for the expense of the appraisal.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.307 Personal Property

A Donation of personal property, such as construction or other materials and equipment sold in the ordinary course of business, shall be valued at the lesser of its fair market value or its cost to the Donor, and may include costs incurred in making the transfer, such as delivery costs, but excluding sales tax. For personal property such as art, antique furniture, coin collections or jewelry, the value may be established by an appraisal done by a qualified appraiser approved by the Agency. In the case of personal property, an Agency may, in its discretion, have another appraisal done by a qualified appraiser approved by the Agency; in such a case, the value of the property shall be the lesser of the two appraisals.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.308 Limitation on Donations

Funds used by a prospective Donor to acquire an ownership interest in an Affordable Housing Project shall not qualify as a Donation. Donations may not take place prior to 3 years before the Initial Closing Date unless otherwise approved by the allocating Agency in the Agency's discretion.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.309 Transfer of Affordable Housing Tax Credits

A Donor that has received a Certificate may transfer all or a portion of the Affordable Housing Tax Credits represented by this Certificate to the purchaser of land that has been designated solely for Affordable Housing Projects in accordance with the Act and this Part or to another Donor who has also made a Donation in accordance with the Act and this Part. Any taxpayer claiming credit pursuant to this Section must do so in accordance with Section 214 of the Illinois Income Tax Act [35 ILCS 5/214]. An individual or entity receiving a transfer of Affordable Housing Tax Credits in an amount less than $100,000 must make a Donation, in accordance with the Act and this Part, of at least 10% of the amount of the transferred Affordable Housing Tax Credits. An individual or entity receiving a transfer of Affordable Housing Tax Credits in an amount equal to or greater than $100,000 must make a minimum Donation, in accordance with the Act and this Part, of $10,000. The Certificate shall indicate the name of the original Donor and the name of the entity to which the Certificate is transferred. Absent a notarized letter of direction from the original Donor, an Agency shall not deliver a Certificate nor all or a portion of the Affordable Housing Tax Credits represented by the Certificate to an individual or entity other than the original Donor.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.310 Material Participation of Sponsor

No transfer of cash, securities, real property or personal property to a Sponsor shall be a Donation unless the Sponsor is committed to Material Participation in the Multifamily Housing Project or rental Single Family Project for the full term of the Compliance Period.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.311 Donations from State and Local Governments

Sponsors may accept Donations from the State government, local municipalities and agencies, boards, commissions, corporations or authorities of State governments and municipalities in the form of the following:

a) money, provided that the money does not come directly or indirectly from any Federal source or any State program providing funding either related to affordable housing or services provided in connection with affordable housing; and further provided that the money does not have to be repaid with funds from the operation of the Project;

b) the value of waived permit fees or other customary charges, such as water and sewer permit fees, hook up charges or impact fees, when the waiver is made in a manner that achieves a reduction in the cost of construction of an Affordable Housing Project or an Employer-Assisted Housing Project;

c) real property, as described in Section 355.306 of this Part; and

d) loans made at a below-market interest rate. The value of the Donation shall be the present value, as of the date of the Donation, of the difference of the market rate interest that would be paid over the term of the loan and the actual interest to be paid over the term of the loan.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.401 Single Family Project Requirements

An Agency may make Allocations for Single Family Projects. In each Single Family Project, other than Employer Assisted Housing Projects, all of the units or Single Family Residences shall be sold or rented to Low-Income Households.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.402 Down Payment and Closing Cost Assistance (repealed)

History

• Source: Repealed at 27 Ill. Reg. 14310, effective August 21, 2003

47 Ill. Adm. Code 355.403 Employer-Assisted Housing Projects

An Agency may make Allocations for Employer-Assisted Housing Projects. $2,000,000 of the Affordable Housing Tax Credit Ceiling for a State fiscal year shall be reserved for Employer-Assisted Housing Projects. Of this ceiling, 24.5% shall be available for allocation by the City of Chicago and 75.5% shall be available for allocation by the Authority. If those funds are not reserved for Employer-Assisted Housing Projects by March 31 of that State fiscal year, the funds shall be available for Reservation and Allocation for Affordable Housing Projects, Technical Assistance or General Operating Support.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.404 Recapture Agreement

Each Household receiving assistance or a subsidy under a Single Family Project or Employer-Assisted Housing Project in connection with the purchase of a Single Family Residence shall execute a Recapture Agreement for the benefit of the Sponsor. The Recapture Agreement shall be recorded in the Office of the Recorder of Deeds in the county in which the Single Family Residence is located as a restrictive covenant on the Single Family Residence. The Recapture Agreement shall provide that, if the Single Family Residence is transferred during the term of the Compliance Period, other than by will, inheritance or a transfer by law to a joint tenant owner, the Household shall repay to the Sponsor a pro-rated portion of any funds provided as a grant or subsidy toward the purchase of the Single Family Residence. In cases of hardship to a Very Low-Income, Low-Income or, for Employer-Assisted Housing Projects, Moderate-Income Household, such as serious illness or loss of employment, an Agency may reduce the Compliance Period.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.405 Multifamily Housing Projects

An Agency may make Allocations for Multifamily Housing Projects that involve the construction or rehabilitation of multifamily rental housing buildings.

47 Ill. Adm. Code 355.406 Set-Aside for Technical Assistance and General Operating Support

$1,000,000 of the Affordable Housing Tax Credit Ceiling for a State fiscal year shall be reserved for Technical Assistance and General Operating Support. Of this ceiling, 24.5% shall be available for allocation by the City of Chicago and 75.5% shall be available for allocation by the Authority. If these funds are not reserved for Technical Assistance or General Operating Support by March 31 of that State fiscal year, the funds shall be available for Reservation and Allocation for any type of Affordable Housing Projects or Employer-Assisted Housing Projects.

History

• Source: Amended at 31 Ill. Reg. 5797, effective March 30, 2007

47 Ill. Adm. Code 355.407 Limitations on Amount of Technical Assistance and General Operating Support

No Affordable Housing Project shall receive Affordable Housing Tax Credits for Technical Assistance and General Operating Support for the Sponsor of the Affordable Housing Project in an amount greater than 10% of the Allocation for the Affordable Housing Project.

47 Ill. Adm. Code 355.408 Technical Assistance – Home Ownership Counseling

An Agency may allocate Affordable Housing Tax Credits for Technical Assistance for Donations to entities that provide home ownership counseling services. The Allocations may be in connection with the purchase of a Single Family Residence or an Employer-Assisted Housing Project; however, all Allocations for Technical Assistance in connection with a particular Affordable Housing Project shall be pursuant to Section 355.407 of this Part. All such home ownership counseling services shall be provided to Households that qualify as Low-Income Households or, in the case of Employer-Assisted Housing Projects, Moderate-Income Households as of the date of the provision of the services.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.501 Compliance Monitoring

The allocating Agency will annually monitor the compliance of each Project.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.502 Monitoring Fees

An Agency may assess an annual fee for compliance monitoring of Projects. If an Agency decides to charge such a fee, the amount of such fee shall be established on July 1 of the year in which such decision is made. An Agency may redetermine the amount of its compliance monitoring fee as of each July 1. The Agency shall determine the amount of the fee, or the amount of the redetermined fee, based on the cost to the Agency of compliance monitoring of Projects for the previous State fiscal year.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.503 Books and Records

The books and records of each Sponsor and each Project shall be subject to inspection, examination and copying by the allocating Agency and its authorized representatives or agents at such times as the allocating Agency reasonably requires for the purpose of determining whether the Sponsor and the Project are in compliance with Section 7.28 and this Part.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.504 Furnishing Information

Each Sponsor shall furnish such information and operating reports as the allocating Agency shall require in connection with the monitoring of the Sponsor and the Sponsor's Project for compliance with Section 7.28 and this Part.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

47 Ill. Adm. Code 355.601 Agency Reports

Each Agency shall submit quarterly reports to the Authority setting forth the Agency's activities under the Program for that quarter. The report shall include the following information:

a) the amount of Affordable Housing Tax Credits reserved or allocated since the date of the last report;

b) the name and address of each Sponsor;

c) For each Affordable Housing Project:

1. the amount of Affordable Housing Tax Credits reserved or allocated;

2. the total number of Units or Single Family Residences in the Affordable Housing Project;

3. the number of Units or Single Family Residences to be occupied by Low-Income and Very Low-Income Households;

4. the type of Households to be served (such as elderly or special needs); and

5. for Multifamily Housing Projects, the number of bedrooms in each Unit;

d) For each Affordable Housing Project, the amount of Affordable Housing Tax Credits reserved or allocated for General Operating Support and Technical Assistance, and the Sponsor's use of that General Operating Support and Technical Assistance;

e) In connection with Technical Assistance for home ownership counseling services, the amount of Affordable Housing Tax Credits reserved or allocated and the number of Low-Income, Very Low-Income and, for Employer-Assisted Housing Projects, Moderate-Income Households receiving counseling; and

f) In connection with an Employer-Assisted Housing Project, the amount of Affordable Housing Tax Credits reserved or allocated and the number of Very Low-Income, Low-Income and Moderate-Income Households that received assistance.

History

• Source: Amended at 34 Ill. Reg. 15822, effective September 28, 2010

Part 360 Affordable Housing Program

47 Ill. Adm. Code 360.101 Authority

This Part is authorized by and made pursuant to the Illinois Affordable Housing Act [310 ILCS 65] and shall govern the Program.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.102 Purpose and Objectives

This Part is established to accomplish the general purposes of the Affordable Housing Act and in particular the making of grants, mortgages or other loans to acquire, construct, rehabilitate, develop, operate, insure and retain affordable Single-Family Housing and Multifamily Housing for Low-Income Households and Very Low-Income Households.

History

• Source: Amended at 15 Ill. Reg. 17088, effective November 19, 1991

47 Ill. Adm. Code 360.103 Definitions

As used in this Part, the following words or terms mean:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Advisory Commission": The Affordable Housing Advisory Commission.

"Affordable Housing": Residential housing that, so long as the same is occupied by Low-Income Households or Very Low-Income Households, requires payment of monthly housing costs, including utilities other than telephone, of no more than 30% of the maximum allowable income as stated for such households as set forth in Section 360.904(b)(1) and (2) of this Part.

"Affordable Housing Act": The Illinois Affordable Housing Act [310 ILCS 65].

"Affordable Housing Bond Program Rules": 47 Ill. Adm. Code 365.

"Affordable Housing Program Trust Fund Bonds or Notes": The bonds or notes issued by the Authority under the Act to further the purposes of the Affordable Housing Act.

"Applicant": The person or entity applying for an allocation of monies from the Trust Fund. An individual applying for funds to acquire, rehabilitate, construct or finance a Single-Family Development that is or would be owned or occupied by such individual may not be an Applicant.

"Authority": The Illinois Housing Development Authority.

"Clearinghouse": The person in the Office of the Governor designated by the Governor to provide notice to appropriate State and local agencies of proposed Developments or Single-Family Developments.

"Development": A Multi-family Housing project consisting of the Real Estate, together with all improvements, buildings, equipment, and personal property appurtenant thereto.

"Director": The Director of the Authority.

"Grant": A grant from the Authority to a Recipient to be used in connection with a Development or Single-Family Development.

"Loan": A loan from the Authority to a Recipient to be used in connection with a Development or Single-Family Development.

"Low-Income Household": A single person, family or unrelated persons living together whose adjusted income is more than 50%, but less than 80%, of the median income of the area of residence, adjusted for family size, as such adjusted income and median income for the area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 USC 1437).

"Members": The Members of the Authority.

"Multi-family Housing": A building or buildings providing housing to 5 or more households.

"Note": The document executed as evidence of a Borrower's indebtness under a Loan and any supplements thereto and modifications or amendments thereof.

"Part": This Part 360.

"Participant Selection Plan": The participant selection plan approved by the Authority for a Single-Family Development.

"Program": The Illinois Affordable Housing Program.

"Real Estate": The real property upon which a Development or Single-Family Development is to be or has been constructed.

"Recipient": An individual, proprietorship, partnership, for-profit corporation, not-for-profit corporation, unit of local government, the Illinois Housing Development Authority, or the entity that holds legal title to the Development or Single-Family Development, or when the Development is held in a Trust, the entity owning the beneficial interest in a Trust that receives Trust Fund Monies from the Authority.

"Rules": The rules and regulations of the Authority as supplemented and amended from time to time.

"Single-Family Development": A Single-Family Housing project consisting of the Real Estate, together with all improvements, buildings, equipment, and personal property appurtenant thereto.

"Single-Family Housing": A building containing one to 4 dwelling units, including a mobile home as defined in subsection (b) of Section 3 of the Mobile Home Landlord and Tenant Rights Act [765 ILCS 745/3].

"Staff": The Director and the employees of the Authority.

"State": The State of Illinois.

"Tenant": The person, family or unrelated persons leasing a Single-Family Development or a dwelling unit in a Development.

"Tenant Selection Plan": The tenant selection plan approved by the Authority for a Development.

"Trust": The Illinois land trust which holds legal title to a Development or Single-Family Development.

"Trustee": The trustee of a Trust holding legal title to a Development.

"Trust Fund": The Illinois Affordable Housing Trust Fund.

"Trust Fund Monies": All monies, deposits, revenues, income, interest, dividends, receipts, taxes, proceeds and other amounts or funds deposited or to be deposited in the Trust Fund pursuant to Section 5(b) of the Affordable Housing Act and any proceeds, investments or increases thereof.

"Utility Allowance": The cost of utilities, except telephone, based on reasonable consumption of these utilities.

"Very Low-Income Household": A single person, family or unrelated persons living together whose adjusted income is not more than 50% of the median income of the area of residence, adjusted for family size, as such adjusted income and median income for the area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 USC 1437).

History

• Source: Amended at 25 Ill. Reg. 12621, effective September 20, 2001

47 Ill. Adm. Code 360.104 Borrowing by the Authority

To the extent allowed by the Act and the Affordable Housing Act, the Authority may borrow funds in connection with the Program.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.105 Compliance with Federal Law

Notwithstanding anything herein to the contrary, this Part shall be construed in conformity and compliance with applicable Federal law.

47 Ill. Adm. Code 360.106 Standards - Criteria

In administering the Program, the Authority and the Staff shall, in the exercise of discretion, consider, in addition to the criteria specifically set forth in this Part;

a) the purposes of the Program to provide affordable, decent, safe and sanitary housing, whether through the making of a Loan, a Grant or the use of Trust Fund Monies pursuant to Sections 8(b), (c), (d) and 9 of the Act;

b) the requirements of applicable State and Federal law;

c) the financial condition and previous experience of the Applicant;

d) local government and community support for the Development or Single-Family Development;

e) suitability of the location of the Development or Single-Family Development;

f) cost efficiency;

g) energy efficiency;

h) affordability to Low-Income Households and Very Low-Income Households;

i) amount of Trust Fund Monies requested per unit;

j) term of the Loan and other sources of financing;

k) secured position of the Loan;

l) equity contribution of Applicant;

m) amount and appropriateness of non-construction costs; and

n) results of site and market study, or rental analysis, if applicable.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.107 Forms and Procedures for the Program

The Staff may prepare, use, supplement, and amend such forms, agreements, and other documents and such procedures as may be necessary to implement the Program, all as may be prescribed by the Director.

47 Ill. Adm. Code 360.108 Fees and Charges of the Authority

In connection with the Program, the Authority may establish and collect such fees and charges as may be necessary. Such fees and charges shall be deposited in the Trust Fund.

47 Ill. Adm. Code 360.109 Waiver (repealed)

History

• Source: Repealed at 22 Ill. Reg. 4321, effective February 4, 1998

47 Ill. Adm. Code 360.110 Amendment

This Part may be supplemented, amended, or repealed by the Members, after consultation with the Advisory Commission, from time to time and in such manner as they may determine consistent with this Part, the Act, the Affordable Housing Act and other applicable provisions of law. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 360.111 Severability

If any clause, sentence, paragraph, subsection, section, or subpart of this Part be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, subsection, section, or subpart thereof as to which such judgment is rendered.

47 Ill. Adm. Code 360.112 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 360.113 Titles and Captions

Titles and captions of subparts, sections, and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 360.114 Calendar Days

Days shall mean calendar days. Due dates falling on a Saturday, Sunday, or a legal State or Federal holiday shall be deemed to fall on the next calendar day that is not a Saturday, Sunday, or a legal State or Federal holiday.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.201 Recipients

Only entities that are Recipients are eligible to receive funds under the Program.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.202 Beneficiaries

Funds from the Trust Fund may be expended for the benefit of Low Income Households and Very Low Income Households. The majority of funds appropriated by the Illinois General Assembly to the Trust Fund for each fiscal year shall be expended for the benefit of Very Low-Income Households.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.203 Permitted Uses of Trust Fund Monies

Trust Fund Monies may be used for the following purposes:

a) to make secured, unsecured or deferred repayment Loans;

b) to make zero percent or low interest Loans;

c) to make Grants, payments or subsidies for the acquisition, construction, rehabilitation, development, operation, insurance or retention of Developments or Single-Family Developments or to pay predevelopment expenses;

d) to purchase mortgage participation certificates representing an undivided interest in specified, first-lien conventional residential Illinois mortgages which are underwritten, insured, guaranteed or purchased by the Federal Home Loan Mortgage Corporation;

e) to be used in investments which reduce the risk associated with fluctuations in interest rates or the market price of investments or any other investments which are lawful for other fiduciaries in the State to make;

f) to provide assistance for Developments which are occupied partly by Low-Income Households and Very-Low Income Households and partly by households not qualifying as Low-Income Households and Very Low-Income Households;

g) to purchase first and second mortgages;

h) to make Grants for the provision of technical assistance, outreach and building of an Applicant's capacity to develop Affordable Housing;

i) to pay fees of the Program Administrator not to exceed the amount appropriated by the General Assembly each fiscal year in connection with the operation of the Program; and

j) to be held, pledged, applied or dedicated pursuant to Sections 8(b), (c), (d) and 9 of the Affordable Housing Act in connection with Affordable Housing Program Trust Fund Bonds or Notes issued pursuant to the Act. Trust Fund Monies used pursuant to this subsection 360.203(j) shall be governed by the Affordable Housing Bond Program Rules.

History

• Source: Amended at 23 Ill. Reg. 3692, effective March 15, 1999

47 Ill. Adm. Code 360.204 Market Rate Developments

Pursuant to Section 10(d) of the Affordable Housing Act the Authority may provide assistance for Developments which are to be occupied partly by Low-Income Households or Very Low-Income Households provided that the number of units to be occupied by Low-Income Households or Very-Low Income Households shall be acceptable to the Authority, in its sole discretion, and shall be in compliance with any Federal law and the regulations promulgated thereunder, if applicable.

History

• Source: Added at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.301 Application

Applicants seeking monies from the Trust Fund shall submit to the Authority a completed application form prescribed by the Authority together with a nonrefundable application fee. The application fee for for-profit Applicants shall be $500. The application fee for all other Applicants shall be $250.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.302 Form

The Authority shall develop an application form to be used by all Applicants.

History

• Source: Amended at 15 Ill. Reg. 17088, effective November 19, 1991

47 Ill. Adm. Code 360.303 Review

Upon receipt of a completed application the Staff shall determine whether the application meets the eligibility requirements of Subpart B of this Part; and, whether all other requirements of this Part and the Affordable Housing Act are met. If the Staff determines that the application fails to meet any of these requirements, the Authority shall notify the Applicant in writing within sixty days after receipt of the application by the Authority.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.304 Initial Contact

If the Authority determines that the application meets the requirements of this Part and the Affordable Housing Act, the Staff shall contact the Applicant to discuss what additional information, if any, is required in order to allow Staff to make a recommendation on the application to the Advisory Commission.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.305 Site and Market Study/Rental Analysis

The Authority may conduct a site and market study when the Applicant seeks funds for new construction. The Authority shall conduct a site and market study or rental analysis when the Applicant's proposed rent structure is not in conformity with the rental market rates known to the Authority within a one half mile radius of the Development.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.306 Feasibility Determination (repealed)

History

• Source: Repealed at 15 Ill. Reg. 17088, effective November 19, 1991

47 Ill. Adm. Code 360.307 Staff Recommendation

After reviewing the application, the Staff shall prepare a recommendation for presentation to the Advisory Commission. The Staff shall inform the Advisory Commission, as to each application, whether an application is being recommended for funding, not recommended for funding or rejected due to being ineligible for funding.

History

• Source: Amended at 15 Ill. Reg. 17088, effective November 19, 1991

47 Ill. Adm. Code 360.308 Advisory Commission

The Staff will present its recommendation on each application to the Advisory Commission, together with a summary of the application and any other information provided by Staff in response to the Advisory Commission's requests.

History

• Source: Amended at 15 Ill. Reg. 17088, effective November 19, 1991

47 Ill. Adm. Code 360.309 Authority Determination

The Staff shall present all positive recommendations for funding of the Advisory Commission to the Members. Monies from the Trust Fund can only be allocated pursuant to resolution by the Members.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.310 Conditional Commitment

After approval of an application by the Members, the Staff shall prepare and deliver to the Applicant a conditional commitment which contains the Authority's commitment to allocate Trust Fund Monies conditioned upon the Applicants meeting the requirements of the conditional commitment and the availability of monies in the Trust Fund. The conditional commitment shall expire, if unfunded, within one year from the date of issuance.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.401 Notification by Authority

a) Notice of Allocation

Prior to the presentation of an application to the Members, the Authority shall give written notice of the proposed allocation to the following persons and agencies:

1. the chairman of the county board of the county in which the proposed Development or Single-Family Development is to be located;

2. the mayor or other chief executive of the municipality, if any, in which the proposed Development or Single-Family Development is to be located;

3. the appropriate Clearinghouses; and

4. each member of the General Assembly from the legislative district in which the proposed Development or Single-Family Development is to be located.

If the application does not request Trust Fund Monies for a specific Development or Single-Family Development, the notice will be sent based on the location of the Applicant.

b) Forms

Notice under this Section shall be made on forms prepared by the Authority.

c) Contents

The notice shall set forth the name and address of the Applicant; the estimated amount of the proposed allocation; if applicable, the name and address of the proposed Development or Single-Family Development; type of any subsidies; the total number of units; and the type of Development or Single-Family Development (for example, elderly, family, or handicapped).

d) The notification required by this Section shall be satisfied if another governmental entity provides public notice of an application in a manner acceptable to the Authority.

History

• Source: Amended at 23 Ill. Reg. 3692, effective March 15, 1999

47 Ill. Adm. Code 360.402 Comments and Responses

a) Comments

The persons and agencies receiving notice pursuant to Section 360.401 shall have 30 days from the date of mailing to submit written comments to the Applicant.

b) Applicant's Response

The Applicant shall respond in writing to all comments received under this Section, as well as to any other written comments received by the Applicant, and shall provide copies of all comments and responses to the Authority.

c) The Members shall consider all comments received pursuant to this Section when making their determination.

47 Ill. Adm. Code 360.501 Eligible Applicants (repealed)

History

• Source: Repealed at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.502 Land Trusts

Whenever title to the Real Estate is held in an Illinois land trust, the agreement creating the Trust and establishing the respective rights, powers, and duties of the Trustee and Recipient shall be in a format approved by the Authority. The Authority shall approve such format only if it meets the legal requirement necessary to create a valid Illinois land trust.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.503 Books and Records

The books and records of the Development and the Recipient shall be subject to inspection, examination, and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires for the purpose of determining compliance with the Rules, the Act, the Affordable Housing Act and all contracts and agreements relating to the Program.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.504 Audits

The architectural plans and specifications, apparatuses, devices, books and records, contracts, documents, and other papers relating thereto of the Development or Single-Family Development shall at all times be maintained in reasonable condition for proper audit and shall be subject to inspection, examination, and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires. All audits, certifications, and financial reports which the Recipient is required by contract with the Authority to allow, undertake, or prepare shall be made by an independent certified public accountant acceptable to the Authority.

History

• Source: Amended at 15 Ill. Reg. 17088, effective November 19, 1991

47 Ill. Adm. Code 360.505 Annual Financial Report

The Recipient shall furnish the Authority with a complete annual financial report based upon the books and records of the Development and the Recipient, prepared in accordance with Authority requirements, and certified by the Recipient. If the allocation is made to a Recipient to be disbursed or used for more than one Development or Single-family Development, the Authority shall require the Recipient to submit a complete annual financial report prepared in accordance with Authority requirements.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.506 Furnishing Information

The Recipient shall furnish such reports, projections, certifications, analyses, budget, operating report and tax returns as required by applicable Federal, State or local statutes, regulations, or subsidy or assistance programs or by the Authority, and shall furnish specific answers to the Authority's questions about the Recipient's income, assets, liabilities, and contracts and, if applicable, about the administration, operation, maintenance, occupancy, financial soundness, and physical condition of the Development or Single-Family Development.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.507 Standards for Approval of Conveyance

In determining whether to approve and/or impose restrictions on the conveyance, assignment, leasing, mortgaging, pledging or other transfer of the Development or Single-Family Development, and the beneficial interest in and power of direction over the Trust, or any partnership interest or stock ownership interest in the beneficiary of the Trust, the Authority shall grant such approval, with any necessary restrictions, only if the Authority determines that such action will not have an adverse impact upon the financial stability of the Development or Single-Family Development.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.601 Maximum Loan Amount and Priority

Loans shall not exceed $1,250,000 for each Recipient. Priority shall be given to those applications which propose the lowest per unit total cost, lowest monthly housing expense, and longest affordability restrictions.

History

• Source: Amended at 23 Ill. Reg. 8819, effective July 26, 1999

47 Ill. Adm. Code 360.602 Maximum Grant Amount

Grants by a Recipient to a Very Low-Income Household shall not exceed $5,000. Grants by a Recipient to a Low-Income Household shall not exceed 3,000. Grants to organizations or corporations shall not exceed $750,000. Grants are not available to for-profit entities. All other provisions of this Part apply to Grants made by the Authority.

History

• Source: Amended at 23 Ill. Reg. 8819, effective July 26, 1999

47 Ill. Adm. Code 360.603 Increase Above Maximum Loan or Grant Amount

Nothing contained in this Section shall prohibit the Authority from increasing the amount of a Loan or Grant above the limitations specified herein if the Authority, in its sole discretion, determines that such increase is necessary to meet the purposes of the Affordable Housing Act. In deciding whether to approve a Loan or Grant increase, the Authority shall consider the physical condition of the Development or Single-Family Development, the value of the Development or Single-Family Development as security for the Loan, if applicable, the Authority's ability to provide such Loan or Grant increase, the ability of the Recipient to repay the Loan and Loan increase out of gross income of the Development or Single-Family Development, the financial status of the Development or Single-Family Development and any other relevant factors.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.604 Amortization

The maximum amortization period of a Loan to be made by the Authority under this Program shall not exceed 40 years and may be shorter at the sole discretion of the Authority.

History

• Source: Amended at 25 Ill. Reg. 2416, effective January 24, 2001

47 Ill. Adm. Code 360.605 Recapture of Assistance

Within each set of Loan documents the Authority shall establish requirements regarding use, occupancy and rent levels as required by the Act and this Part. Such requirements shall provide that if the Recipient violates any of these requirements, such violation shall be deemed a default under the Loan documents.

History

• Source: Amended at 15 Ill. Reg. 17088, effective November 19, 1991

47 Ill. Adm. Code 360.606 Prepayment of Loan

The Authority may prohibit the prepayment of a Loan for a Development if the Authority determines that such prepayment will result in:

a) the rents charged at the Development exceeding the limits set forth in Section 360.904(b) of this Part at the time of the prepayment;

b) the Development being converted to condominiums or cooperatives; or

c) a conflict with the Authority's goal of providing affordable housing.

The Authority may allow the prepayment of a Loan for a Development if the Authority determines that the prepayment is in the best interest of the community in which the Development is located.

History

• Source: Amended at 25 Ill. Reg. 12621, effective September 20, 2001

47 Ill. Adm. Code 360.701 Design and Construction Standards

Developments or Single-Family Developments financed by Loans under the Program shall be designed and constructed or rehabilitated to conform with applicable Federal, State, and local statutes, regulations, ordinances, standards, and codes, with industry practices in Illinois, and with the requirements of applicable Authority Rules, contracts, agreements, guides, and other documents.

History

• Source: Amended at 15 Ill. Reg. 17088, effective November 19, 1991

47 Ill. Adm. Code 360.801 Marketing and Management

a) It shall be the responsibility of the Recipient to provide for the marketing and management of the Development or Single-Family Development in a manner satisfactory to the Authority so as to promote the purposes of the Program and the financial stability of the Development or Single-Family Development and to preserve the value of the Authority's security interest in the Development or Single-Family Development.

b) All marketing and management plans shall be acceptable to the Authority pursuant to Section 360.802.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.802 Marketing and Management Plans

a) Approval. Before the Authority makes a Loan or Grant under the Program or at such other time as required by the Authority, the Authority may require the Applicant to submit for the Authority's approval plans for the marketing and management of the Development or Single-Family Development. In deciding whether to approve such plans, the Authority shall consider: the purposes of the Program; the provisions of the Tenant Selection Plan or Participant Selection Plan; any applicable Federal and State statutes and regulations; and any other relevant matters.

b) Contents of Marketing Plan. The marketing plan shall set forth: the policies and procedures to be used in marketing; shall address the qualifications of the marketing agent; the nature of the market; the dates of availability of occupiable units by type and location; the dates of availability and locations of facilities essential to the marketing campaign, including model units, the rental office, and the community building; compliance with all Federal, State and local fair housing requirements; and the promotion of the Development or Single-Family Development, including the use of mass media, public relations, brochures, signs, equipment and furnishings for model units and the rental office, and marketing staff.

c) Contents of Management Plan. The management plan shall set forth the policies and procedures to be used in the management of the Development and shall, if applicable, address the qualifications of the managing agent, procedures for recruiting and supervising management personnel, and physical maintenance of the Development.

d) Responsibility. The Recipient shall be responsible for ensuring the marketing agent's and the managing agent's compliance with all applicable Federal, State and local ordinances, regulations, statutes, and Authority Rules, agreements, and requirements.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.803 Maintenance

The Recipient shall maintain the Development or Single-Family Development, or cause the Development or Single-Family Development to be maintained, including without limitation, the dwelling units, commercial facilities, and grounds and equipment related to the Development or Single-Family Development, in a decent, safe, and sanitary condition, in a tenantable and rentable state of repair, and in compliance with applicable Federal, State, and local statutes, regulations, ordinances, standards and codes.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.804 Cost of Service

The Recipient shall not pay more for administrative, operating, and maintenance expenses than is reasonable given the location and size of the Development or Single-Family Development, the level of administration, operation, and maintenance required by the applicable Authority Rules and agreements, the requirements of the marketing plan, management plan, Participant Selection Plan, Tenant Selection Plan, the uniqueness or quality of available services or supplies, the presence of an emergency or other time constraint, the creditworthiness of suppliers and contractors, and any other relevant factors.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.901 Displacement

Recipients shall not cause the permanent displacement of any Tenants in a Development or Single-Family Development that receives Trust Fund Monies for rehabilitation except as provided in Section 360.903 of this Part.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.902 Relocation Plan

a) Approval. Before the Authority makes a Loan or Grant under the Program or at such other time as required by the Authority, the Authority may require the Applicant to submit, for the Authority's approval, a plan for the temporary relocation or permanent displacement of Tenants. In deciding whether to approve such plans, the Authority shall consider: the purposes of the Program; the provisions of the Tenant Selection Plan or Participant Selection Plan; any applicable Federal and State statutes and regulations; and any other relevant matters.

b) Benefits Provided For in the Relocation Plan. The benefits provided for in the relocation plan shall be available only to lawful residential Tenants (not owner-occupants or businesses) who are temporarily relocated or permanently displaced following submission of the Applicant's application for Trust Fund Monies or Applicant's control of the site, whichever comes later. The benefits provided for under the relocation plan shall not be available to Tenants if: the Tenant commences occupancy after the Applicant's application for Trust Fund Monies or Applicant's control of the site, whichever comes later, provided such Tenant receives written notice of the impending rehabilitation and possible relocation or displacement prior to executing the lease; the Tenant has his/her tenancy terminated for violations of the terms and conditions of the lease, a violation of applicable Federal, State or local law, or other good cause; the Tenant is rejected for continued occupancy by the Recipient for reasons stated in the Tenant Selection Plan or Participant Selection Plan; the Tenant moves from the Development or Single-Family Development of his/her own accord or moves from the Development or Single-Family Development after receiving written notice of the impending rehabilitation; or other good cause exists to deny benefits as determined by the Authority. However, Tenants who are rejected by Recipient for continued occupancy in the Development or Single-Family Development for reasons concerning family size restrictions or inability to afford rent levels charged after rehabilitation shall be eligible for permanent displacement benefits under the relocation plan.

c) Contents of the Relocation Plan. The relocation plan shall set forth the policies and procedures to be used by the Applicant in temporarily relocating or permanently displacing Tenants including, but not limited to: provisions detailing the responsibilities of the Authority, the Applicant and, if applicable, its managing agent; the basic actions to be taken in the relocation program; the acceptance and rejection criteria for determining eligibility for temporary relocation and permanent displacement benefits; the information to be provided to Tenants regarding the relocation program; provisions providing for determining Tenants' relocation needs; a description of relocation benefits; and, provisions detailing the implementation of the relocation plan, including a timetable for activities under the plan.

d) Enforcement of Relocation Plan. The Recipient is responsible for assuring that all the relocation requirements are met. The Authority, except in those cases where another governmental agency has a regulatory requirement to do so, will monitor the relocation activities to determine compliance with the requirements of this Section. To enforce the provisions of this Section, the Authority may take whatever action is available under this Subpart I or the Loan or Grant documents, including the withholding of any Trust Fund Monies due Recipient.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.903 Tenant Selection Plan and Participant Selection Plan

Before making a Loan, Grant or any other allocation under the Program, the Authority shall approve, where applicable, a Tenant Selection Plan or Participant Selection Plan submitted by the Applicant and setting forth the income limits for Tenants. In approving the Tenant Selection Plan or Participant Selection Plan, the Authority shall: consider whether the selection procedures will be equitable considering the family size and circumstances of the Tenant; maintain the financial stability of the Development or Single-Family Development; meet the requirements of Section 360.905 of this Part; and comply with the Authority's Rules.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.904 Income and Housing Expense Limits

a) A Tenant's initial occupancy of a unit held available for rental to Low-Income Households and Very Low-Income Households shall be limited to persons and families initially meeting the income limits set forth in subsection (b) below. If a Tenant meeting income requirements at the time of initial occupancy subsequently fails to continue to meet such requirements, that failure shall not constitute non-compliance by that Tenant.

b) Determination of Income Limits

1. For all units in a Development, or a Single-Family Development, reserved for Low-Income Households, the income limits shall be equal to 80% of the median family income with adjustments for family size, for the area in which the Development or Single-Family Development is located, as such median income is determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437). The median income of the area of residence shall be attached to each application provided by the Authority and additionally shall be available upon request.

2. For all units in a Development, or a Single-Family Development, reserved for Very Low-Income Households, the income limits shall be equal to 50% of the median family income with adjustments for family size, for the area in which the Development or Single-Family Development is located, as such median income is determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437). The median income of the area of residence shall be attached to each application provided by the Authority and additionally shall be available upon request.

3. The Recipient shall obtain from each prospective Tenant intending to occupy a unit in a Development, or a Single-Family Development, reserved for Low-Income Households and Very Low-Income Households, and on an annual basis thereafter, a certification of income. The Recipient shall submit such certification to the Authority by mail.

c) Determination of Housing Expense Limits

1. For all units in a Development, or a Single-Family Development, reserved for Low-Income Households, Tenant(s) shall not incur, including a Utility Allowance, monthly housing expenses in excess of 30% of the maximum allowable income as set forth in subsection (b)(1) above. The amount allocated for the Utility Allowance shall be proposed by the Applicant and approved by the Authority.

2. For all units in a Development, or a Single-Family Development, reserved for Very Low-Income Households, Tenant(s) shall not incur, including a Utility Allowance, monthly housing expense in excess of 30% of the maximum allowable income as set forth in subsection (b)(2) above. The amount allocated for the Utility Allowance shall be proposed by the Applicant and approved by the Authority.

3. The Recipient shall submit on an annual basis the rent schedule for the Development reflecting the actual rents being charged at the Development.

4. No person or family shall be required to vacate or move from a unit in a Development or Single-Family Development reserved for Low-Income Households or Very Low-Income Households due to an increase in income exceeding the income limitations contained in this Subpart I. The Recipient may increase the rent for such units, for so long as the person or family's income exceeds such limits, to an amount not to exceed the fair market rent as determined by the Authority, determined by a market study of comparable rental units within a one half mile radius of the Development.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.905 Non-Discrimination

Recipients shall not refuse to accept Tenants for occupancy solely because the Tenant receives governmental rental assistance, nor based on a prospective Tenant's race, national origin, ancestry, religion, creed, sex, age, familial or marital status, disability, or unfavorable military discharge.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.1001 Standards

All Developments receiving assistance from the Trust Fund for construction and rehabilitation shall comply with the provisions of 47 Ill. Adm. Code 310. Subpart I.

47 Ill. Adm. Code 360.1101 Environmental Assessment

Prior to the making of a Loan or Grant under the Program, the Authority may require the Applicant to conduct or authorize the Authority to cause to be conducted on the Applicant's behalf a Phase I environmental assessment review, certified to the Authority, of the proposed Development undertaken by an environmental consultant approved in advance by the Authority. The Authority may, at its election, commission such assessment. The environmental assessment shall, at a minimum, consist of a review of historic activities on the Real Estate and current conditions of the Real Estate which identify potential violations of applicable environmental laws. If the results of the Phase I environmental assessment disclose the presence of any hazardous substance as described at Section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. 9601(14)), or any other adverse environmental conditions, as determined by the Authority, then the Authority may deny the application or the funding of the Loan or Grant. The Authority may elect, as a condition to further review of the application or to the making of the Loan or Grant, as the case may be, that the Applicant shall conduct or authorize the Authority to conduct on the Applicant's behalf a Phase II comprehensive environmental assessment certified to the Authority by an environmental consultant approved in advance by the Authority. This Phase II assessment may consist of sampling, lab analysis and an estimate of the magnitude of environmental problems, as well as costs involved in site cleanup. The Applicant shall pay the costs of all such assessments, and the costs may, at the sole discretion of the Authority, be payable out of Loan or Grant proceeds.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

47 Ill. Adm. Code 360.1102 Other Laws

All Developments receiving assistance from the Trust Fund for construction and rehabilitation shall comply with the provisions of the Environmental Barriers Act [410 ILCS 25], the Illinois Accessibility Code (71 Ill. Adm. Code 400), the Americans with Disabilities Act (42 U.S.C. 12101 et seq.), Executive Order for the Reduction of Earthquake Hazards (Executive Order 90-2), the Historic Preservation Act [20 ILCS 3410], and all other local, State and Federal laws, as applicable.

History

• Source: Amended at 18 Ill. Reg. 8663, effective May 25, 1994

Part 365 Affordable Housing Bond Program

47 Ill. Adm. Code 365.101 Authority

This Part is authorized by and implemented pursuant to the Illinois Housing Development Act [20 ILCS 3805] and the Illinois Affordable Housing Act [310 ILCS 65] and shall govern the Program.

47 Ill. Adm. Code 365.102 Purpose and Objectives

This Part is established to accomplish the general purposes of the Act and the Affordable Housing Act and in particular the making of mortgages or other loans from the proceeds of Bonds or Notes to be issued by the Authority pursuant to the Act to acquire, construct, preserve, improve, renovate, rehabilitate, maintain, finance, refinance and assist Affordable Housing, including, without limitation, Financially Troubled Developments.

47 Ill. Adm. Code 365.103 Definitions

As used in this Part, words and phrases defined in the Act shall have the meanings ascribed to them therein. In addition, the following words or terms mean:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Advisory Commission": The Illinois Affordable Housing Advisory Commission, established by and acting pursuant to Section 6(a) of the Affordable Housing Act.

"Affordable Housing": Residential housing that, so long as the same is fully or partially occupied by Low-Income Households or Very Low-Income Households, requires payments of monthly housing costs, including charges to such households for heat, electricity and water, of no more than 30% of the maximum allowable income as stated for such households as set forth in Section 365.1204(b)(1) and (2) of this Part.

"Affordable Housing Act": The Illinois Affordable Housing Act [310 ILCS 65].

"Applicant": The person or entity applying for a Loan from the Program.

"Application": An application for a Loan.

"Assistant Director": The Assistant Director of the Authority.

"Authority": The Illinois Housing Development Authority.

"Bonds": The bonds issued by the Authority pursuant to the Act from time to time to finance the Program, including bonds issued from time to time to replace or refund Bonds or Notes previously issued.

"BSPRA": The builders'/sponsors' profit and risk allowance, if any, given to an Owner against the Equity requirements for a Loan. BSPRA shall not exceed an amount equal to ten percent (10%) of the total estimated replacement cost of the Development.

"Chairman": The Chairman of the Authority.

"Clearinghouse": The person in the Office of the Governor designated by the Governor of the State to provide notice to appropriate State and local agencies of proposed Developments.

"Commercial Tenant": Any entity leasing commercial facilities in a Development.

"Construction Completion Date": The date that construction or rehabilitation of a Development is substantially completed, as determined in writing by the Authority.

"Cost Certification Cutoff Date": The last day of the month in which the Construction Completion Date falls.

"Cumulation Date": The date from which an Owner's right to make Distributions shall begin cumulating, which date shall be the Initial Closing Date.

"Cumulative Distribution": A Distribution of Surplus Cash and/or Residual Receipts representing all or part of a Distribution unpaid but cumulated by an Owner in a prior fiscal year.

"Current Distribution": A Distribution of Surplus Cash and/or Residual Receipts representing all or part of a Distribution earned by an Owner in a current fiscal year.

"Deputy Director": The Deputy Director of the Authority.

"Development": A multi-family housing project made up of five or more units consisting of the Real Estate, together with all improvements, buildings, equipment, and personal property appurtenant thereto.

"Development Funds": All cash, rent subsidies, gross Development income, bank accounts, certificates of deposit, trust funds, reserves, escrows, accounts receivable, and other such assets of a Development, excluding security deposits which, pursuant to contract, an Owner may be required to return to a Tenant.

"Director": The Director of the Authority.

"Distribution": Any withdrawal or taking of Surplus Cash and/or Residual Receipts, including segregation of amounts of Surplus Cash and/or Residual Receipts for subsequent withdrawal, for payment to or on behalf of an Owner pursuant to the Authority's written authorization of such Distribution or any transfer of Development property to or on behalf of an Owner.

"Eligible Mortgagor": Any Limited-Profit Entity or Nonprofit Corporation, or any Illinois land trust the sole beneficiary of which is a Limited-Profit Entity or Nonprofit Corporation, but only if such Eligible Mortgagor's ownership of the Development (including any partnership interest or stock ownership interest in such Mortgagor), or such beneficiary's interest in such Illinois land trust (including the ownership of any partnership interest or stock ownership interest in such beneficiary), shall not cause any tax-exempt Bonds, if any, used to finance the Development to become taxable for federal income tax purposes and the organizational documents of such Mortgagor or such beneficiary referred to in Section 365.502 of this Part at all times are in compliance with (or such Mortgagor or beneficiary has executed a written agreement meeting) the requirements of Section 365.502 of this Part.

"Equity": The amount of funds provided by Owner for a Development, including an allowance for BSPRA, as determined by the Authority in its sole discretion.

"Final Closing Date": The date on which the Authority issues its final closing memorandum.

"Financially Troubled Development": A Development financed by a Loan from the Program which subsequently fails to meet its Mortgage obligations.

"Initial Closing Date": The date on which the Authority issues its initial closing memorandum.

"Limited-Profit Entity": Any individual, joint venture, partnership, limited partnership, trust or corporation organized or existing under the laws of the State or authorized to do business in the State (including, without limitation, a limited liability company) and having articles of incorporation or comparable documents of organization (or a written agreement with the Authority) which, in addition to meeting other requirements of law, meets the requirements of Section 2(k) of the Act.

"Loan": The loan financed through the Program made by the Authority to a Mortgagor to be used in connection with a Development.

"Low-Income Household": A single person, family or unrelated persons living together whose adjusted income is more than 50%, but less than 80%, of the median income of the area of residence, adjusted for family size, as such adjusted income and median income for the area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437).

"Members": The Members of the Authority.

"Mortgage": The mortgage, or other instrument in the nature of a mortgage, and all other security documents encumbering a Development, together with supplements thereto and modifications or amendments thereof.

"Mortgage Note": The document executed as evidence of a Mortgagor's indebtedness under a Loan secured by a Mortgage, and any supplements thereto and modifications or amendments thereof.

"Mortgagor": The Limited-Profit Entity, Nonprofit Corporation or Trustee for either entity, holding title to a Development who has executed and delivered to the Authority a Mortgage.

"Nonprofit Corporation": A not-for-profit corporation incorporated pursuant to the provisions of the Illinois General Not-for-Profit Corporation Act of 1986 [805 ILCS 105] or the State Housing Act [310 ILCS 5] and having articles of incorporation or a written agreement with the Authority which, in addition to meeting other requirements of law, meet the requirements of Section 2(m) of the Act.

"Notes": The notes issued by the Authority pursuant to the Act from time to time to finance the Program.

"Owner": The Limited-Profit Entity or Nonprofit Corporation holding title to Real Estate or a Development or, when such Real Estate or the Development is held in an Illinois land trust, the Limited-Profit Entity or Nonprofit Corporation owning the entire beneficial interest in a Trust. Under no circumstances shall Owner mean the Authority or a Trustee.

"Part": This Part 365.

"Program": The Illinois Affordable Housing Bond Program.

"Real Estate": The real property upon which a Development is to be or has been constructed.

"Residual Receipts": Any Surplus Cash remaining as of the end of an annual fiscal period after the deduction of the amount of any repayment of any subordinate loans, if any, evidenced by a note to be repaid from Surplus Cash and all Distributions from Surplus Cash.

"Resolution": Any resolution or indenture adopted by the Authority pursuant to the Act authorizing the issuance of Bonds or Notes and setting forth the general terms and conditions under which the Authority may issue, deliver and sell Bonds and Notes, as amended and supplemented from time to time.

"Rules": The rules and regulations of the Authority as amended from time to time.

"Series Resolutions": The series resolutions adopted by the Authority from time to time pursuant to the Act and the Resolution authorizing the issuance of a series of Bonds or Notes.

"Staff": The Director, Deputy Director, Assistant Director and the other employees of the Authority.

"State": The State of Illinois.

"Surplus Cash": That part of Development income, calculated on an accrual basis of accounting remaining as of the end of a fiscal year after deductions for expenses, reserves, escrows and other similar items have been made in accordance with priorities established by the Authority in writing.

"Tenant": The person, family or unrelated persons leasing a dwelling unit in a Development.

"Tenant Selection Plan": The tenant selection plan approved by the Authority for a Development.

"Trust": The Illinois land trust (if any) which holds legal title to a Development.

"Trustee": The trustee of a Trust.

"Trust Fund": The Illinois Affordable Housing Trust Fund.

"Trust Fund Moneys": All moneys, deposits, revenues, income, interest, dividends, receipts, taxes, proceeds and other amounts or funds deposited or to be deposited in the Trust Fund pursuant to Section 5 of the Affordable Housing Act and any proceeds, investments or increase thereof.

"Utility Allowance": The cost of electricity, heat and water based on reasonable consumption of these utilities.

"Very Low-Income Household": A single person, family or unrelated persons living together whose adjusted income is not more than 50% of the median income of the area of residence, adjusted for family size, as such adjusted income and median income for the area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437).

47 Ill. Adm. Code 365.104 Borrowing by the Authority

To the extent allowed by the Act, and in the manner determined by the Authority, the Authority may borrow funds with which to make Loans or incur other obligations under the Program.

47 Ill. Adm. Code 365.105 Compliance with Law

Notwithstanding anything herein to the contrary, this Part shall be construed in conformity and compliance with applicable Federal law. Whenever reference is made in this Part to applicable law, statute, rule or regulation, the same shall be construed to mean the law, statute, rule or regulation in effect at the time of reference.

47 Ill. Adm. Code 365.106 Standards

In administering the Program, the Authority, the Chairman and the Staff shall, in the exercise of discretion, consider, in addition to the criteria specifically set forth: the purposes of the Program to provide decent, safe, and sanitary multi-family rental housing; the requirements of applicable State and Federal law; the financial condition and previous experience of the Applicant and potential and participating Owners; the Authority's ability to purchase or redeem any Notes or Bonds and to comply with the requirements of the Resolution and the applicable Series Resolutions authorizing any Notes or Bonds; the Authority's ability to comply with the terms and provisions of any Notes or Bonds; the financial integrity of the Program; the housing needs of the State; architectural and construction quality; preservation of the value of the Development as security for a Loan; the ability of the Owner to repay a Loan out of Development income; the desirability of achieving a reasonable geographic distribution of Developments throughout the State; the number of units reserved for Low-Income Households and Very Low-Income Households; the heterogenous mix of Tenants; the standards and practices of a prudent lender; the requirements of local housing codes and zoning laws; specific standards set forth in Authority agreements and documents; or any other factors relevant under the circumstances. The Authority shall give preferential consideration to Developments which will be newly constructed or substantially rehabilitated. Except as permitted in Section 365.601(c), the Authority shall not refinance any existing Development unless, in connection with the making of such Loan, the Development shall be transferred to an Owner who is not affiliated with a prior Owner.

47 Ill. Adm. Code 365.107 Authority Determinations

Whenever, pursuant to this Part, a determination, election or approval may be made by the Authority, such determination, election or approval unless otherwise expressly stated herein shall be at the Authority's sole discretion.

47 Ill. Adm. Code 365.108 Forms and Procedures for the Program

The Staff may prepare, use, supplement and amend such forms, agreements and other documents and such procedures as it may determine to be necessary or desirable for the purposes of implementing the Program, all as may be prescribed by the Director, or, in the Director's absence, the Deputy Director or Assistant Director.

47 Ill. Adm. Code 365.109 Fees and Charges of the Authority

In connection with the Program, the Authority may establish and collect such fees and charges as may be established by the Authority from time to time. Such fees and charges may be paid from the proceeds of Notes or Bonds issued by the Authority. Such fees and charges may be used by the Authority for its general corporate purposes, including costs of administering the Program. Such fees and charges may be waived at the Authority's election, may vary from Development to Development, and may vary from time to time. In making such an election, the Authority may consider the Authority's costs in underwriting the proposed Development, costs of administering the Program, the financial condition of the Development, and other factors the Authority deems relevant.

47 Ill. Adm. Code 365.110 Waiver (repealed)

History

• Source: Repealed at 22 Ill. Reg. 3846, effective February 4, 1998

47 Ill. Adm. Code 365.111 Amendment

This Part may be supplemented, amended, or repealed by the Members, from time to time and in such manner as the Members may determine. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 365.112 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder hereof, but shall be confined in its operation to the clause, sentence, subsection, Section, or Subpart hereof to which such judgment is rendered.

47 Ill. Adm. Code 365.113 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 365.114 Titles and Captions

Titles and captions of Subparts, Sections, and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 365.115 Calendar Days

Days shall mean calendar days. Due dates falling on a Saturday, Sunday, or legal State or Federal holiday shall be deemed to fall on the next calendar day that is not a Saturday, Sunday, or a legal State or Federal holiday.

47 Ill. Adm. Code 365.201 Eligible Activities

a) Any Trust Fund Moneys transferred to the Authority pursuant to Section 8(b) of the Affordable Housing Act, or otherwise obtained, paid to or held by or for the Authority, or pledged pursuant to a resolution of the Authority, for the Bonds or Notes under the Act, and all proceeds, payments and receipts from investments or use of such moneys, including any residual or additional funds or moneys generated or obtained in connection with any of the foregoing, may be held, pledged, applied or dedicated by the Authority as follows:

1. as required by the terms of any pledge of or Resolution of the Authority authorized under the Affordable Housing Act in connection with Bonds or Notes issued pursuant to the Act;

2. to or for:

A) costs of issuance and administration and the payments of any principal, interest, premium or other amounts or expenses incurred or accrued in connection with Bonds or Notes, including rate protection contracts and credit support arrangements pertaining thereto;

B) the Authority's expenses and servicing, administration and origination fees and charges in connection with any Loans, Mortgages, or Developments funded or financed or expected to be funded or financed, in whole or in part, from the issuance of Bonds or Notes, provided that such expenses, fees and charges are obligations, whether recourse or nonrecourse, and whether financed with or paid from the proceeds of Bonds or Notes, of the Owner, Mortgagors or other users;

3. to or for costs of issuance and administration and the payments of principal, interest, premium, Loan fees, and other amounts or other obligations of the Authority, including rate protection contracts and credit support arrangements pertaining thereto, for loans, commercial paper or other notes or bonds issued by the Authority pursuant to the Act, provided that the proceeds of such loans, commercial paper or other notes or bonds are paid or expended in connection with, or refund or repay, loans, commercial paper or other notes or bonds issued or made in connection with bridge loans or loans for the construction, renovation, redevelopment, restructuring, reorganization of Affordable Housing and related expenses, including development costs, technical assistance, or other amounts to construct, preserve, improve, renovate, rehabilitate, refinance, or assist Affordable Housing, including a Financially Troubled Development, permanent or other financing for which has been funded or financed or is expected to be funded or financed in whole or in part by the Authority through the issuance of or use of proceeds from Bonds or Notes;

4. to or for direct expenditures or reimbursement for Development costs, technical assistance, or other amounts to construct, preserve, improve, renovate, rehabilitate, refinance, or assist Affordable Housing, including Financially Troubled Developments, permanent or other financing which has been funded or financed or is expected to be funded or financed in whole or in part by the Authority through the issuance of or use of proceeds from Bonds or Notes; and

5. for deposit into any residual, sinking, reserve or revolving fund or pool established by the Authority, whether or not pledged to secure Affordable Housing Program Bonds or Notes, to support or be utilized for the issuance, redemption, or payment of the principal, interest, premium or other amounts payable on or with respect to any existing, additional or future Bonds or Notes, or to or for any other expenditure authorized by the Act or the Affordable Housing Act.

b) All or a portion of the Trust Fund Moneys on deposit or to be deposited in the Trust Fund not already certified for transfer or transferred to the Authority pursuant to the Affordable Housing Act may be used to secure the repayment of Bonds or Notes or otherwise to supplement or support Affordable Housing funded or financed or intended to be funded or financed, in whole or in part, by Bonds or Notes.

47 Ill. Adm. Code 365.202 Market Rate Developments

Pursuant to Section 10(d) of the Affordable Housing Act and to Sections 4 and 12 of the Act, the Authority may make Loans for Developments which are to be occupied partly by Low-Income Households or Very Low-Income Households provided that the number of units to be occupied by Low-Income Households or Very-Low Income Households shall be acceptable to the Authority in its sole discretion, and shall be in compliance with any Federal law and the regulations promulgated thereunder, if applicable. A minimum of 10% of the units in any Development must be set aside for Very Low-Income Households. A minimum of 20% of the units in any Development must be set aside for Very Low-Income and Low-Income Households; provided, however, that the majority of moneys appropriated to the Trust Fund in any given year, including moneys transferred and certified for transfer in such year for the purposes and uses specified in Sections 8(c) and 9 of the Affordable Housing Act will be used for Affordable Housing for Very Low-Income Households.

47 Ill. Adm. Code 365.203 Eligible Mortgagors Who May Receive Loans

The recipients of Loans funded by the proceeds of Bonds or Notes are required at all times to be Eligible Mortgagors.

47 Ill. Adm. Code 365.204 Land Trusts

Whenever title to the Real Estate is held in an Illinois land trust, the agreement creating the Trust and establishing the respective rights, powers, and duties of the Trustee and Owner shall be in a format approved by the Authority. The beneficial interest of such land trust shall be collaterally assigned to the Authority as additional security for the Loan.

47 Ill. Adm. Code 365.301 Application

Applicants shall submit Applications on forms provided by the Authority.

47 Ill. Adm. Code 365.302 Site and Market Study

The Authority shall conduct or cause to be conducted at the Applicant's expense a site study and a market study when an Applicant seeks a Loan. The provisions of this Section shall not relieve the Owner of its responsibility to provide a marketing and management plan as provided in Section 365.1101 of this Part.

47 Ill. Adm. Code 365.303 Staff Recommendation to the Advisory Commission

After initial review, the Staff shall prepare and present to the Advisory Commission a report concerning those Applications that the Staff recommends should be approved. The Staff shall inform the Advisory Commission, as to each Application, whether such Application is being recommended for funding, not recommended for funding or rejected due to being ineligible for funding.

47 Ill. Adm. Code 365.304 Authority Determination

The Staff shall present to the Members all positive recommendations for Loans under the Program along with the recommendations therefor from the Advisory Commission. The proceeds of Bonds or Notes used to make Loans can only be allocated to Loans for Developments approved by resolution of the Members for funding with such proceeds.

47 Ill. Adm. Code 365.305 Conditional Commitment

After approval of an Application by the Members, the Staff shall prepare and deliver to the Applicant a conditional commitment that commits the Authority to make a Loan expressly conditioned upon and subject to the Applicant's meeting all of the requirements of the conditional commitment and the availability of funds from the Program. If the conditional commitment expires prior to the consummation of the Loan, the Authority shall have no obligation to make such Loan. The Applicant shall forfeit all fees paid to the Authority and the Applicant shall be liable for any fees or charges then due and owing to the Authority.

47 Ill. Adm. Code 365.401 Applicability and Purpose of Notification

a) Purpose

The purpose of this Subpart is to set forth requirements for notifying certain persons and agencies when an Applicant proposes to acquire, construct, rehabilitate, finance, or refinance a Development in their district, county or municipality.

b) Applicability

The provisions of this Subpart shall apply only to Developments subject to this Part.

c) Compliance and Proof of Compliance

An Application shall not be deemed to be complete until the Applicant has complied with the provisions of this Subpart applicable to it and has submitted to the Authority evidence of such compliance satisfactory to the Authority. An Applicant's failure to comply with this Subpart shall relieve the Authority of all obligations regarding the Development.

d) Applicant Does Not Represent Authority

In responding to comments, attending hearings or undertaking any other activities pursuant to this Subpart, an Applicant shall not hold itself out as representing the Authority and shall not take or suffer any action which would incur any obligation on behalf of the Authority.

47 Ill. Adm. Code 365.402 Notification by Authority

a) Notice of Development

Before the Staff submits to the Members the Staff's recommendation that the Authority should issue a conditional commitment to make a Loan to fund a Development, the Authority shall give written notice of the proposed Development to the following persons and agencies:

1. the chairman of the county board of the county in which the Development is located or is proposed to be located;

2. the mayor or other chief executive of the municipalities, if any, in which the Development is located or is proposed to be located;

3. in municipalities with a population of more than 1,500,000 persons, the alderman of the ward in which the Development is located or is proposed to be located and the Planning Commission;

4. appropriate Clearinghouses; and

5. each member of the General Assembly from the legislative district in which the Development is located or is proposed to be located.

b) Forms

Notice under this Section shall be given on Authority forms.

c) Contents

The notice shall set forth the name and address of the proposed Development; the name, address and telephone number of the Applicant; the estimated amount of the Loan; the type of any other assistance of any other governmental body proposed to be sought by the Applicant; the total number of units; the total number of any assisted units; the type of Development (for example, elderly, family or handicapped); and any other information that the Authority deems relevant.

47 Ill. Adm. Code 365.403 Comments and Responses

a) Comments

The persons and agencies receiving notice of a proposed Development pursuant to Section 365.402 of this Part shall have 30 days from the date of mailing to submit written comments to the Applicant.

b) Applicant's Responses

The Applicant shall respond in writing to all comments received under this Subpart, with a copy thereof to the Authority.

47 Ill. Adm. Code 365.404 Compilation of Comments and Responses

a) Documents

The Applicant shall submit to the Authority the following documents within ten (10) days after expiration of the notice period described in Section 365.403(a) of this Part:

1. a copy of every written comment pursuant to Section 365.403 of this Part and a written summary of any oral comment received;

2. a copy of every response made pursuant to Section 365.403 of this Part;

3. a history of conferences, hearings and other activities undertaken in relation to comments on the proposed Development;

4. a brief summary of the Applicant's actions in response to comments; and

5. a certification from the Applicant that the information provided under this Section is accurate and complete.

b) Information

The Applicant shall provide sufficient information under this Section to enable the Authority to determine whether the Applicant has adequately considered and responded to comments received pursuant to Section 365.403 of this Part.

c) Denial

The Authority may at any time deny an Applicant's Application for, among other reasons, failure to comply with the provisions of this Subpart. Such denial shall be in writing and shall set forth the conditions, if any, that must be met for the Authority to continue to consider the Application.

d) Assistance of Authority

It shall be the Applicant's responsibility to seek the assistance of the Authority, if needed, in addressing comments received pursuant to this Section.

47 Ill. Adm. Code 365.405 Hearings

The Applicant shall provide written notice to the Authority of any public meeting or adjudicatory hearing which may be held in connection with the proposed Development. The Applicant shall mail such notice to the Authority within 2 days after receiving notice or otherwise becoming aware of such hearing. It shall be the Applicant's responsibility to prepare for and attend such hearings and to respond to any inquiry made at or in connection with such hearings regarding the proposed Development.

47 Ill. Adm. Code 365.501 Eligible Mortgagors

The Authority may make Loans under the Program to Eligible Mortgagors. The Owner of a Development shall at all times be an Eligible Mortgagor. If the Authority learns that an Owner is not or has ceased to be an Eligible Mortgagor, then the Authority may take any action which the Mortgage or the Mortgage Note entitle or permit the Authority to take in the case of a failure to make timely payment of principal or interest on the Loan, including but not limited to declaration of default and pursuit of remedies.

47 Ill. Adm. Code 365.502 Organizational Documents

To qualify and maintain the Owner as a Limited-Profit Entity or Nonprofit Corporation as defined in the Act and this Part, to qualify and maintain the Trustee or the Owner, as the case may be, as Eligible Mortgagors as defined in this Part, and to ensure that the Owner, and each person or entity which has an ownership interest in the Owner and/or Trustee, are required to comply with the Act and this Part and shall not cause the interest on the Bonds or Notes used to finance the Development, which was excludable from Federal income tax, if any, to become taxable for Federal tax purposes, such Owner shall either provide in its organizational documents or execute a written agreement with the Authority, that such owner shall at all times be a Limited-Profit Entity or Nonprofit Corporation and that the Authority shall have the rights and remedies to enforce such provisions of such entities' organizational documents or written agreement as are provided in the Act. The provisions of such documents of organization as are required by this Section shall not be amended without prior written Authority approval. Any such written agreement acceptable to the Authority, and duly authorized by an Owner, shall satisfy the requirements of this Section.

47 Ill. Adm. Code 365.503 Books and Records

The books and records of the Development and the Owner shall be prepared and maintained in accordance with Authority requirements and shall be subject to inspection, examination, and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires for the purpose of determining compliance with the Rules, the Act, the Affordable Housing Act and all contracts and agreements relating to the Program. The books and records of the Owner, if separate from the books and records of the Development, shall likewise and to the same extent be subject to inspection, examination, and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires.

47 Ill. Adm. Code 365.504 Audits

Any Development offices, architectural plans and specifications, apparatuses, devices, books and records, contracts, documents, and other papers relating thereto of the Development and the Owner shall at all times be maintained in reasonable condition for proper audit and shall be subject to inspection, examination, and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires. All audits, certifications, and financial reports that the Owner is required by contract with the Authority to allow, undertake, or prepare shall be made by and certified to the Authority by an independent certified public accountant acceptable to the Authority.

47 Ill. Adm. Code 365.505 Annual Financial Report

Within the time period prescribed by the Authority after the end of the Development's fiscal year, the Owner shall provide to the Authority a complete annual financial report based upon the books and records of the Development and the Owner, prepared in accordance with Authority requirements, and certified to the Authority by the Owner and an independent certified public accountant acceptable to the Authority.

47 Ill. Adm. Code 365.506 Furnishing Information

The Owner shall furnish such reports, projections, certifications, analyses, budgets, operating reports and tax returns as are required by the Authority or by applicable Federal or State statutes, regulations or subsidy or assistance programs, and shall furnish specific answers to the Authority's questions about the Owner's income, assets, liabilities, and contracts and, if applicable, about the administration, operation, maintenance, occupancy, financial soundness, and physical condition of the Development.

47 Ill. Adm. Code 365.507 Standards for Approval of Conveyance

In determining whether to approve and/or impose restrictions on the conveyance, assignment, leasing, mortgaging, pledging or other transfer of the Development, and the beneficial interest in and power of direction over the Trust, or any partnership interest or stock ownership interest or other ownership interest in the beneficiary of the Trust, the Authority shall grant such approval, with any necessary restrictions, only if the Authority determines in its discretion that such action will not have an adverse effect upon the financial stability of the Development, the status or ratings of the Bonds or Notes that are providing all or any part of the financing for such Development, or the ability to repay such Bonds or Notes or the likely value of the Development as security for the Loan.

47 Ill. Adm. Code 365.508 Purchase of Authority Bonds and Notes

No Owner, including any "related person," as defined in Section 147 of the Internal Revenue Code of 1986, 26 I.R.C. 147 (1992), as amended from time to time, shall pursuant to any arrangement, formal or informal, direct or indirect, agree to purchase any Bonds, Notes or other obligations of the Authority, the interest on which is excludable from Federal income tax, in an amount related to the aggregate principal amount of the Loan to be made to the Owner or such related person.

47 Ill. Adm. Code 365.601 Maximum Loan Amount for Developments

a) Establishing Amount. The maximum Loan amount shall be an amount which can be repaid out of the Development's expected net operating income after deductions for operating expenses, reserves and escrows, as determined by the Authority in its sole discretion, and without taking into account any income from any Commercial Tenant, based upon a debt service coverage ratio of not less than 1.10 to 1.0 or such higher amount as may be required by the Resolution or applicable Series Resolution.

b) The Owner shall invest as Equity in the Development an amount no less than 10% of the total estimated replacement cost of the Development or 10% of the total cost of the Development, as those costs may be determined and approved by the Authority in its sole discretion, whichever cost is less. The Authority may, in its discretion, require the Owner to invest Equity in an amount greater than the minimum amount required pursuant to this Section. In calculating the total estimated replacement cost of the Development, the Authority shall consider: the design architect's fees; the supervisory architect's fees; legal, accounting and other organizational fees; marketing, consulting and purchasing agent fees; construction interest; the Authority's service and Development fees; real estate and other taxes; title and recording fees; financial contingency and construction contingency; the development cost escrow, if any; BSPRA; relocation costs; off-site improvements; land costs; carrying charges; and any other costs approved by the Authority. In calculating the total cost of the Development, the Authority shall consider trade payments to contractors and subcontractors, general overhead, bond premiums, insurance, builder's profit (if any), change orders, discounts, rebates and any other costs approved by the Authority.

c) Troubled Affordable Housing. The Authority may, at the Authority's election, restructure Loans made from the proceeds of Bonds or Notes under the Program that the Authority determines, in its sole discretion, are in jeopardy of not being repaid or that have been made to Developments in jeopardy of not being completed. In any such restructuring, the Authority may, subject to any covenants contained in the Resolution or applicable Series Resolution, reduce the principal amount of or interest rate on the Loan upon such terms and conditions as the Authority may determine in its sole discretion. In making such election to restructure a Loan, the Authority shall consider whether the financial strength of the Program would be enhanced more by restructuring the Loan than by pursuing and enforcing the Authority's rights and remedies under the Mortgage and the Mortgage Note.

47 Ill. Adm. Code 365.602 Maturity of Loans

The maximum maturity of a Loan to be made by the Authority for permanent financing of multi-family rental housing under this Program shall not exceed 40 years and may be shorter at the sole discretion of the Authority. In determining the term of a Loan, the Authority shall take into account its:

a) ability to pay when due the principal (including any sinking fund installments) and interest on any Bonds or Notes;

b) ability to purchase or redeem any Bonds and to comply with the requirements of the Resolution and Series Resolution authorizing any Bonds;

c) ability to comply with the terms and provisions of any Notes;

d) the feasibility of the proposed Development;

e) the financial integrity of the Program;

f) the requirements of applicable State and Federal law; and

g) any other relevant factors.

47 Ill. Adm. Code 365.603 Recapture of Assistance

Within each set of Loan documents the Authority shall establish requirements regarding use, occupancy and rent levels as required by the Act, the Affordable Housing Act and this Part. If the Owner violates any of the provisions of the agreement or agreements containing such requirements, such violation shall be deemed a default under the Loan documents whether or not expressly so stated therein.

47 Ill. Adm. Code 365.604 Prepayment of Loan

The Authority may prohibit the prepayment of a Loan when, in the Authority's determination, such prepayment will diminish the supply of Affordable Housing as contemplated by the Act and the Affordable Housing Act, or when the Bonds or Notes issued to provide the Loan prohibit prepayment of the Bonds or Notes.

47 Ill. Adm. Code 365.701 Statutory Authorization Establishing Rate of Return

Pursuant to Section 8 of the Act, the Authority is required to establish Equity at the time of final disbursement of Loan proceeds. It is the purpose of this Subpart to set the criteria by which a permitted rate of return will be established.

47 Ill. Adm. Code 365.702 Equity and Distributions

a) Right to Distributions. An Owner may have the right, commencing as provided in subsection (b) below, to make annual Distributions following the completion of a Development's fiscal year in an amount not to exceed a sum equal to the product of the Equity in the Development multiplied by a factor equal to two hundred percent (200%) of the yield paid on 30-year GNMA mortgage certificates, or such lesser sum as the Authority may determine, set and fixed as of the date of the conditional commitment letter to the Development. The Chief Financial Officer of the Authority shall certify to the GNMA rate as of such date. If a Distribution cannot be made as provided in subsections (c) and (d) below, an Owner may cumulate the right to make a Distribution. In any partial fiscal year following the Cumulation Date, the amount of a Distribution shall be cumulated pro rata. If GNMA mortgage certificates cease to be issued for 30-year terms, the annual Distributions shall be calculated based on the yield paid on the instrument most nearly comparable in character and credit to such GNMA mortgage certificate, as determined by the Authority.

b) Cumulation Date. An Owner's right to a Distribution shall begin to cumulate on the Initial Closing Date.

c) Source of Distributions. An Owner may make Current and Cumulative Distributions only out of Surplus Cash and/or Residual Receipts. If Surplus Cash or Residual Receipts are unavailable in a given fiscal year, an Owner shall make no Current Distribution, but the right to make such Distribution shall cumulate. If Surplus Cash and/or Residual Receipts are insufficient in a given fiscal year to make the approved Distribution for the Development, an Owner may distribute all available Surplus Cash and/or Residual Receipts and cumulate the right to make the remainder of the Distribution in future years when and if Surplus Cash and/or Residual Receipts are available.

d) Timing of Distributions. No Distribution shall be made until after the Final Closing Date. Even if Surplus Cash and/or Residual Receipts are available, the initial and all subsequent Distributions, including Cumulative Distributions, may be made only after: the Authority has approved the Development's annual financial report (pursuant to Section 365.505 of this Part); the Development has an approved Development budget for the next fiscal year; the Owner has complied with all outstanding notices of requirements for proper maintenance and operation of the Development; the Owner has cured any defaults or breaches of applicable Authority Rules, contracts and agreements; and the Authority has issued its written authorization of such Distribution.

e) Amount of Equity. As required by the Act, the Authority shall establish Equity in a Development at the time of making the final Loan advance. In no event shall the amount of such Equity be calculated to include any grants or other funds not originating with the Owner. Any Equity in a Development arising out of the sale or purchase of Low-Income Housing tax credits (including bona fide notes which are not in default executed by tax credit purchasers in favor of an Owner) shall be deemed to constitute funds originating with the Owner. Once established by the Authority, the amount of an Owner's Equity shall remain constant so long as the Mortgage Note and Mortgage are outstanding on the Development; provided however, the Authority shall reduce the Equity amount by any amount which is not timely invested in the Development.

47 Ill. Adm. Code 365.703 Development Funds and Property

All Development Funds received by an Owner or its agent shall be deposited to and maintained, as the Authority directs, in appropriate accounts with the Authority, or in a Federally insured bank or savings and loan association or other financial institution located and qualified to do business in Illinois and whose deposits are insured by the Federal government. The Authority shall by contract with the Owner establish priorities for the disbursement and use of Development Funds, including the funding of reserves and escrows, and shall require that the Owner have personal liability for Development Funds or Development property that come into its hands or the hands of its agents that by contract with the Authority the Owner is not entitled to retain or has disbursed or used in violation of Authority requirements, together with the costs and expenses of the Authority in redressing the violation. In establishing such priorities, the Owner and Authority shall take into account the purposes of the Program, the financial stability of the Development, the physical condition of the Development, the value of the Development as security for the Loan, and other relevant factors. It shall be a violation of the Rules for the Owner or its agent to disburse, use or retain Development Funds or Development property other than in accordance with the requirements or priorities established pursuant to this Section and set forth in Authority contracts with the Owner or other documents.

47 Ill. Adm. Code 365.704 Reserve Fund for Replacements

The Owner of a Development shall set aside out of gross Development income and shall deposit with the Authority such sums as the Authority shall specify or applicable Federal statutes, regulations, or agreements required to be deposited in an account to be titled the Reserve Fund for Replacements. No proceeds of the Reserve Fund for Replacements may be withdrawn, disbursed, or applied without written Authority approval. The sums set aside, together with any income earned thereon, shall be used to pay the costs of replacing structural elements and mechanical equipment of the Development and for such other Development expenses as the Authority in its sole discretion may approve. In determining the amounts to be set aside or deposited to the Reserve Fund for Replacements, the Authority shall consider the nature and condition of any structural elements or mechanical equipment which may have to be replaced, the estimated useful life of any such structural elements or mechanical equipment, the estimated cost of replacements, applicable Federal requirements, construction costs, and potential gross Development income. In connection with any requested disbursements from the Reserve Fund for Replacements, the Authority shall consider the benefit to the Development of the proposed disbursement, the amount to be disbursed, the amount on deposit in the Reserve Fund for Replacements, whether the Owner is delinquent in making deposits to the Reserve Fund for Replacements or is otherwise delinquent in making payments or deposits under the Loan documents, other uses for which the Reserve Fund for Replacements is likely to be needed, and any other relevant factors.

47 Ill. Adm. Code 365.801 Design and Construction Standards

Developments financed by Loans under the Program shall be designed and constructed or rehabilitated to conform with applicable Federal, State, and local statutes, regulations, ordinances, standards, and codes, with industry practices in Illinois, and with the requirements of applicable Authority Rules and guides.

47 Ill. Adm. Code 365.901 Standards

All Developments receiving assistance from the Program for construction and rehabilitation shall comply with the provisions of 47 Ill. Adm. Code 310. Subpart I. Any waiver of such provisions shall be made in accordance with Section 310.913 of this Part.

47 Ill. Adm. Code 365.1001 Environmental Assessment

Prior to the making of a Loan under the Program, the Authority shall require the Applicant to conduct or authorize the Authority to cause to be conducted on the Applicant's behalf a Phase I environmental assessment review, certified to the Authority, of the proposed Development undertaken by an environmental consultant approved in advance by the Authority. The Authority may, at its election, commission such assessment. The environmental assessment shall, at a minimum, consist of a review of historic activities on the Real Estate and current conditions of the Real Estate which identify potential violations of applicable environmental laws. If the results of the Phase I environmental assessment disclose the presence of any hazardous substance as described at Section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. 9601(14)), or any other adverse environmental conditions, as determined by the Authority, then the Authority may deny the Application or the funding of the Loan. The Authority may elect, as a condition to further review of the Application or to the making of the Loan, as the case may be, that the Applicant shall conduct or authorize the Authority to conduct on the Applicant's behalf a Phase II comprehensive environmental assessment certified to the Authority by an environmental consultant approved in advance by the Authority. This Phase II assessment may consist of sampling, lab analysis and an estimate of the magnitude of environmental problems, as well as costs involved in site cleanup. The Applicant shall pay the costs of all such assessments, and the costs may, at the sole discretion of the Authority, be payable out of Loan proceeds.

47 Ill. Adm. Code 365.1002 Other Laws

All Developments receiving Loans from the Program for construction or rehabilitation shall comply with the provisions of the Environmental Barriers Act [410 ILCS 25], the Illinois Accessibility Code (71 Ill. Adm. Code 400), the Americans with Disabilities Act (42 USC 12101 et seq.), Executive Order for the Reduction of Earthquake Hazards (Executive Order 90-2), the Historic Preservation Act [20 ILCS 3410] and all other applicable Federal, State or local laws.

47 Ill. Adm. Code 365.1101 Marketing and Management

a) It shall be the responsibility of the Owner to provide for the marketing and management of the Development in a manner and by a party satisfactory to the Authority so as to promote the purposes of the Program and the financial stability of the Development and to preserve the value of the Authority's security interest in the Development.

b) All marketing and management plans and management agreements shall be acceptable to the Authority. Such plans and agreements shall conform to any applicable conditions providing for Federal assistance (if any) relating to the Development.

47 Ill. Adm. Code 365.1102 Marketing and Management Plans

a) Approval. Before the Authority makes a Loan under the Program and at such other times as may be required by the Authority, the Authority may require the Applicant to submit for the Authority's approval plans for the marketing and management of the Development. In deciding whether to approve such plans, the Authority may consider: the purposes of the Program; the provisions of the Tenant Selection Plan, as applicable; applicable Federal and State statutes and regulations; and any other matters it determines to be relevant.

b) Contents of Marketing Plan. The marketing plan shall set forth the policies and procedures to be used in marketing and shall address: the qualifications of the marketing agent; the nature of the market to be served by the Development; the dates of availability of units by type and location; the dates of availability and locations of facilities essential to the marketing campaign, including model units, the rental office, and any community building; the provisions for compliance with all fair housing requirements; the promotion of the Development, including the use of mass media, public relations, brochures, signs, equipment and furnishings for model units and the rental office; and marketing staff. The marketing plan shall also set forth: the intended mix of family, elderly and handicapped Tenants; where appropriate, the intended Tenant income mix and method of achieving such a mix (including number of units); the method of processing the applications of prospective Tenants; the criteria upon which prospective Tenants' applications for occupancy are to be approved or disapproved; preference for occupancy in the Development for persons and families displaced by urban renewal, slum clearance, other governmental action or natural disaster; rent schedules; and any other relevant matters.

c) Contents of Management Plan. The Management Plan shall set forth the policies and procedure to be used by the managing agent in operating the Development and shall address: the qualifications of the managing agent; procedures for evaluating management personnel; physical maintenance of the Development; procedures for tenant selection; preference for occupancy in the Development for persons and families displaced by urban renewal, slum clearance, other governmental action or natural disaster; tenant/landlord relations; eviction procedures; marketing; financial reporting; books and records of the Development; the intended mix of family, elderly and handicapped Tenants; where appropriate, the intended Tenant income mix and method of achieving such a mix (including number of units); the method of processing prospective Tenants; the criteria upon which prospective Tenants' applications for occupancy are to be approved or disapproved; the managing agent's compensation; and any other relevant matters.

d) Responsibility. The Owner shall be responsible for ensuring both the marketing agent's and the managing agent's compliance with all applicable ordinances, regulations, statutes, and applicable Rules, agreements and requirements.

47 Ill. Adm. Code 365.1103 Maintenance

The Owner shall maintain the Development, including, without limitation, the dwelling units, commercial facilities, and grounds and equipment related to the Development, in a decent, safe, and sanitary condition, in a tenantable and rentable state of repair, and in compliance with applicable leases and with Federal, State, and local statutes, regulations, ordinances, standards and codes.

47 Ill. Adm. Code 365.1104 Cost of Service

The Owner shall not pay more for administrative, management, operating, and maintenance expenses than is reasonable given the location and size of the Development, the level of administration, operation, and maintenance required by the applicable Authority Rules and agreements, the requirements of the marketing plan, management plan and Tenant Selection Plan, the uniqueness or quality of available services or supplies, the presence of an emergency or other time constraint, the credit worthiness of suppliers and contractors, and any other relevant factors. The Owner shall solicit bids for administrative, operation and maintenance services if the Authority shall so require.

47 Ill. Adm. Code 365.1201 Displacement

Owners shall not cause the permanent displacement of any Tenants in a Development that receives a Loan for rehabilitation except as provided in Section 365.1202 of this Part. Pursuant to Section 10(g) of the Affordable Housing Act, Relocation Plans must comply with Section 507 of the Federal Housing and Community Development Act of 1987.

47 Ill. Adm. Code 365.1202 Relocation Plan

a) Approval. Before the Authority makes a Loan for rehabilitation of a Development under the Program and at such other time as shall be required by the Authority, the Authority shall require the Applicant to submit, for the Authority's approval, a plan for the temporary relocation or permanent displacement of Tenants whose dwelling units will be rendered uninhabitable by any renovation. In deciding whether to approve such plans, the Authority shall consider: the purposes of the Program; the provisions of the Tenant Selection Plan; any applicable Federal and State statutes and regulations; and any other relevant matters.

b) Benefits Provided For in the Relocation Plan. The benefits provided for under the relocation plan shall be available only to lawful residential Tenants (not owner-occupants or businesses) who are temporarily relocated or permanently displaced following submission of the Applicant's application for a Loan or the Applicant's control of the site, whichever comes later. The benefits provided for under the relocation plan shall not be available to Tenant if: the Tenant's income is eighty percent (80%) or more of the median family income, adjusted for family size; the Tenant commences occupancy after the later of Applicant's application for a Loan has been submitted to the Authority or the Applicant has obtained site control, provided such Tenant receives written notice of the impending rehabilitation and possible relocation or displacement prior to executing the lease; the Tenant has his/her tenancy terminated for violations of the terms and conditions of the lease, a violation of applicable Federal, State or local law, or other good cause; the Tenant is rejected for continued occupancy by the Applicant for reasons stated in the Tenant Selection Plan, except as provided below; the Tenant moves from the Development of his/her own accord; or other good cause exists to deny benefits as determined by the Authority. However, Tenants who are rejected by an Applicant for continued occupancy in the Development for reasons concerning family size restrictions or inability to afford rent levels charged after rehabilitation shall be eligible for permanent displacement benefits under the relocation plan.

c) Contents of the Relocation Plan. The relocation plan shall set forth the policies and procedures to be used by the Applicant in temporarily relocating or permanently displacing Tenants including, but not limited to: provisions detailing the responsibilities of the Applicant and, if applicable, its managing agent; the basic actions to be taken in the relocation program; the acceptance and rejection criteria for determining eligibility for temporary relocation and permanent displacement benefits; the information to be provided to Tenants regarding the relocation program; provisions for determining Tenants' relocation needs; a description of relocation benefits; and provisions detailing the implementation of the relocation plan, including a timetable for activities under the plan.

d) Enforcement of Relocation Plan. The Owner is responsible for assuring that all the relocation requirements are met. The Authority, except in those cases where another governmental agency has a regulatory requirement to do so, will monitor the relocation activities to determine compliance with the requirements of this Section. The Authority may take whatever action is available to it under this Subpart or on the occurrence of a default under the Loan documents for violation of the Relocation Plan whether expressly stated therein or not.

47 Ill. Adm. Code 365.1203 Tenant Selection Plan

Before making a Loan under the Program, the Authority shall approve, where applicable, a Tenant Selection Plan submitted by the Applicant and setting forth the income limits for Tenants. In approving the Tenant Selection Plan, the Authority shall consider whether the selection procedures: will be equitable considering the family size and circumstances of the Tenant; promote a heterogeneous mix of income levels to the extent appropriate; maintain the financial stability of the Development; and comply with the Authority's Rules. All housing financed by and all assistance from the Program shall be available to all eligible persons regardless of race, national origin, ancestry, religion, creed, sex, age, familial or marital status, disability, or unfavorable military discharge.

47 Ill. Adm. Code 365.1204 Income and Rent Limits

a) A Tenant's initial occupancy of a unit held available for rental to Low-Income Households and Very Low-Income Households shall be limited to persons and families initially meeting the income limits set forth in subsection (b) below. If a Tenant meeting income requirements at the time of initial occupancy subsequently fails to continue to meet such requirements, that failure shall not constitute non-compliance by that Tenant.

b) Determination of Income Limits

1. For all units reserved for Low-Income Households, the income limits shall be equal to 80% of the median family income with adjustments for family size, for the area in which the Development is located, as such median income is determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437). The median income of the area of residence shall be attached to each application provided by the Authority and additionally shall be available upon request.

2. For all units reserved for Very Low-Income Households, the income limits shall be equal to 50% of the median family income with adjustments for family size, for the area in which the Development is located, as such median income is determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437). The median income of the area of residence shall be attached to each application provided by the Authority and additionally shall be available upon request.

3. The Owner shall obtain from each prospective Tenant intending to occupy a unit held available for rental to Low-Income Households and Very Low-Income Households and on an annual basis thereafter a certification of income. The Owner shall verify each such certification in a manner approved by the Authority. The Owner shall submit each certification and verification thereof to the Authority by mail.

c) Determination of Rent Limits

1. Subject to subsection (c)(4) below, for all units reserved for Low-Income Households, Tenants occupying such units shall not be charged, including a Utility Allowance, rent in excess of thirty percent (30%) of the maximum allowable income as set forth in subsection (b)(1) above. The amount allocated for the Utility Allowance shall be determined by the Owner and approved by the Authority.

2. For all units reserved for Very Low-Income Households, Tenants occupying such units shall not be charged, including a Utility Allowance, rent in excess of thirty percent (30%) of the maximum allowable income as set forth in subsection (b)(2) above. The amount allocated for the Utility Allowance shall be determined by the Owner and approved by the Authority.

3. The Owner shall submit to the Authority for the Authority's approval on an annual basis the rent schedule for the Development. Rents shall not be increased without the Authority's consent.

4. No Tenant shall be required to vacate or move from a unit reserved for Low-Income Households or Very Low-Income Households due to an increase in income exceeding the income limitations contained in this Subpart. The Owner may increase the rent for such units, for so long as the Tenant's income exceeds such limits, to an amount not to exceed the fair market rent as approved by the Authority. The Authority shall have the right to charge and collect rental surcharges on any unit leased by a Tenant who initially qualified as a Very Low-Income Household or Low-Income Household, but whose income thereafter exceeded such income limitations.

d) For units not reserved for Low-Income Households or Very Low - Income Households, the Owner may charge fair market rents, as determined by the Authority.

47 Ill. Adm. Code 365.1205 Commercial Facilities

a) Facilities. The Owner shall rent commercial facilities, if any, only to such Commercial Tenants, at such rental and for such purposes as have been approved by the Authority. In no event shall the space occupied by Commercial Tenants in the aggregate exceed five percent (5%) of the total square footage of the improvements in the Development (excluding land). In approving commercial facilities and Commercial Tenants, the Authority shall consider the Tenant Selection Plan, the Marketing Plan, the Management Plan, the nature of the prospective business, the credit history of the prospective Commercial Tenant, the benefit of the prospective business to Tenants of the Development, the prospective Commercial Tenant's ability to comply with applicable licensing and zoning requirements, the purposes of the Program and any other relevant matters.

b) Compliance. The Owner shall be responsible for ensuring the Commercial Tenant's compliance with all applicable ordinances, zoning codes, licensing requirements, regulations, statutes and Authority Rules and agreements.

Part 366 Affordable Housing Bond Program – Single Family

47 Ill. Adm. Code 366.101 Authority

These rules are authorized by and made pursuant to the Illinois Housing Development Act (the "Act") [20 ILCS 3805], the Illinois Affordable Housing Act [310 ILCS 65] (the "Affordable Housing Act") and Public Act 88-0093 and shall govern Program.

47 Ill. Adm. Code 366.102 Purposes and Objectives

These rules are established to accomplish the general purposes of the Act and the Affordable Housing Act, and in particular the purchasing and making of loans in accordance with the Illinois Housing Development Authority's Affordable Housing Trust Fund Bond Program to achieve the following objectives: the provision of funds to finance, at interest rates below those otherwise available, residential mortgage loans for low and very low income persons and families, and the provision of housing to alleviate the shortage of adequate housing in the State for such persons and families that are residents of the State.

47 Ill. Adm. Code 366.103 Definitions

As used in this Part, the following words or terms mean:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Advisory Commission": The Illinois Affordable Housing Advisory Commission, established by and pursuant to Section 6(a) of the Affordable Housing Act.

"Affordable Housing Act": The Illinois Affordable Housing Act [310 ILCS 65].

"Assistant Director": The Assistant Director of the Authority.

"Authority": The Illinois Housing Development Authority.

"Bonds": The bonds issued by the Authority from time to time pursuant to the Act and a Resolution to finance the Program, including bonds issued from time to time to replace or refund Bonds or Notes previously issued.

"Commitment Fee": The fee that the Authority may require a prospective HomeBuilder to pay to the Authority at the time it submits its HomeBuilder Participation Agreement to the Authority for acceptance.

"Deputy Director": The Deputy Director of the Authority.

"Director": The Director of the Authority.

"Eligible Borrower": A person applying for a Loan in connection with the purchase of a Qualified Dwelling:

who is or will be a resident of the State within sixty (60) days after the closing of the Loan;

whose Household Income does not exceed the maximum Household Income for Low Income Households or Very Low Income Households, as applicable, for the area in which the Qualified Dwelling is located;

who intends to use the Qualified Dwelling being financed by the Loan as his or her permanent residence within sixty (60) days after the closing of the Loan, or in the case of a Loan for the purchase and rehabilitation of a Qualified Dwelling, within one hundred eighty (180) days of the closing of such Loan. A residence that is used as investment property or a recreational home, or that is primarily intended to be used in a trade or business (including, without limitation, any residence of which more than five percent (5%) of the total area is reasonably expected to be used primarily in a trade or business) does not satisfy the requirements of this subparagraph; and if applicable, meets the requirements of the FHA, RECD or USVA.

"FHA": The Federal Housing Administration.

"FHLMC": The Federal Home Loan Mortgage Corporation.

"FNMA": The Federal National Mortgage Association.

"HomeBuilder": An individual or entity approved by the Authority and that:

for the 12-month period preceding the date of its HomeBuilder Participation Agreement for participation in a Series Program had insurance coverage for product liability, worker's compensation and builder's risk; and

had constructed at least two buildings in that same preceding 12-month period or, in the alternative, had constructed at least four buildings in the 24-month period preceding the date of its HomeBuilder Participation Agreement for participation in a Series Program. An individual or entity that, for purposes of the Program, contracts with another individual or entity that is a HomeBuilder shall be considered a HomeBuilder.

"HomeBuilder Participation Agreement": The agreement between the Authority and a HomeBuilder pursuant to which the HomeBuilder agrees to construct new Qualified Dwellings for purchase by Eligible Borrowers, and the Authority agrees to purchase Loans financing such newly constructed Qualified Dwellings, under the terms and conditions set forth in such agreement.

"Household Income": The total annualized gross income of all persons residing or intending to reside as a single household in a Qualified Dwelling, from whatever source derived and before taxes or withholdings.

"Lender": A State-chartered bank, national banking association, mortgage banking association or institution, credit union, or State or federal savings and loan association:

that is located and qualified to do business in the State;

that is qualified to sell mortgages to FNMA and/or FHLMC (this requirement may be waived by the Director after determination that the assets of the lender exceed $500,000, that the percentage of mortgage delinquencies in the lender's single family portfolio do not exceed 2.15 times the Statewide average, as determined by the last quarterly pronouncement by the United States Federal Home Loan Bank Board, and that the lender has an asset-to-liability ratio of at least 1.01/1);

whose deposits are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration, or that deposits its funds in State financial institutions whose deposits are insured by the Federal Deposit Insurance Corporation;

whose Lender Application under a Series Program has been accepted by the Director based upon the satisfaction of the requirements of that Series Program and a determination of financial suitability after consideration of the net assets, lending capacity, and experience of the lender over the past twelve (12) months in residential mortgage lending; and

if applicable, has been approved by the FHA, RECD or USVA, as the case may be. The Authority may also be a Lender.

"Lender Application": A prospective Lender's application under a Series Program to sell Loans to the Authority pursuant to the terms of a Mortgage Purchase Agreement and other Series Program documents.

"Loan": A Loan made by a Lender to an Eligible Borrower for the purchase, or the purchase and rehabilitation, of a Qualified Dwelling that is secured by a Mortgage on such Qualified Dwelling.

"Low-Income Household": A single person, family or unrelated persons living together whose adjusted income is more than 50%, but less than 80%, of the median income of the area of residence, adjusted for family size, as such adjusted income and median income for the area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United State Housing Act of 1937 (42 U.S.C. 1437).

"Members": The Members of the Authority.

"Mortgage": The mortgage, or other instrument in the nature of a mortgage, creating a first mortgage lien on a fee interest in real estate, together with all supplements, modifications or amendments to it.

"Mortgage Purchase Agreement": The agreement between a Lender and the Authority that sets forth the general requirements for, and the general terms and conditions under which the Authority will purchase, Loans.

"Net Proceeds": With respect to the proceeds of each series of Bonds, all moneys made available by the Authority for the purchase of Loans.

"Notes": The notes issued by the Authority pursuant to the Act and a Resolution from time to time to finance the Program.

"Notice of Acceptance": The Authority's notice to a Lender accepting its Lender Application.

"Notice of Reservation of Funds": The Authority's notice to a HomeBuilder (1) accepting its Homebuilder Participation Agreement and (2) setting forth the amount of the HomeBuilder's Reservation.

"Part": This Part 366.

"Pool Insurance": The policy or policies of insurance insuring the Authority's exposure for loss in connection with defaults on Loans purchased by the Authority under a Series Program. The Authority may provide Pool Insurance or its equivalent.

"Pool Insurer": The insurer that the Authority selects pursuant to bid to provide Pool Insurance, or reinsurance for Pool Insurance, for a Series Program. The Authority may be a Pool Insurer.

"Private Mortgage Insurance": Insurance coverage paid for by the Eligible Borrower that insures the Authority against losses with respect to defaults on a Loan according to the terms of the insurance policy.

"Program": The Illinois Affordable Housing Bond Program.

"Property Value": The lesser of the purchase price and the appraised value of the Qualified Dwelling at the time of the origination of the Loan secured by such Qualified Dwelling; or in the case of a Loan for the purchase and rehabilitation of a Qualified Dwelling, the lesser of the purchase price and 110% of the appraised value of the Qualified Dwelling after the completion of rehabilitation.

"Qualified Dwelling": A fee simple interest in a single family residence:

that is located in the State;

upon which there is located a structure or structures designed for residential use;

that is a single family residence; a one-, two-, three- or four-unit structure; or factory-made housing that is permanently fixed to real property;

of which not more than five percent (5%) of the total area is reasonably expected to be used primarily in a trade or business; and

if applicable, meets the requirements of the FHA, RECD or USVA, as the case may be.

Qualified Dwelling does not include stock or any other ownership interest in a cooperative housing corporation or organization or factory-made housing not permanently fixed to real property.

"RECD": The United States Department of Agriculture, Rural Economic and Community Development.

"Reservation": The amount of funds reserved to a HomeBuilder in a Series Program pursuant to a HomeBuilder Participation Agreement and a Notice of Reservation of Funds.

"Resolution": Any Resolution or indenture adopted by the Authority pursuant to the Act authorizing the issuance of Bonds or Notes and setting forth the general terms and conditions under which the Authority may issue, deliver and sell Bonds and Notes, as amended and supplemented from time to time.

"Rules": The rules of the Authority, as amended and supplemented from time to time.

"Series Program": A mortgage purchase program authorized by a Resolution to become a part of the Program.

"Servicer": A Lender, or its designated servicer, that has been approved by the Director, Deputy Director or Assistant Director as a Servicer and that has executed a Servicing Agreement with the Authority. A designated servicer must be a State-chartered bank, national banking association, mortgage banking association or institution, credit union, or State or federal savings and loan association:

that is located and qualified to do business in the State;

that is qualified to sell mortgages to FNMA and/or FHLMC, unless such requirement is waived by the Director based upon a determination of financial suitability made by the Director after consideration of the net assets, servicing capacity, and experience of the potential Servicer over the past 12 months in residential mortgage servicing;

the deposits of which are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration, or that deposits its funds in State financial institutions whose deposits are insured by the Federal Deposit Insurance Corporation; and

if applicable, has been approved by the FHA, RECD and/or the USVA.

The Authority may also be a Servicer.

"Servicing Agreement": The agreement between a Servicer and the Authority that sets forth the general terms and conditions for the servicing of Loans purchased by the Authority.

"Single Family Program": A program under which the Authority purchases Loans on Qualified Dwellings.

"Special Hazard Insurance": Insurance that provides protection with respect to loss on properties acquired upon foreclosure of a defaulted Loan by reason of damage to properties caused by certain hazards (including earthquakes, and to a limited extent, tidal waves and related water damage) not insured against under a standard hazard insurance policy required to be obtained by each Eligible Borrower, or a flood insurance policy if the property is in a federally designated flood area. The Authority may provide Special Hazard Insurance or its equivalent.

"Staff": The Director, Deputy Director, Assistant Director and the other employees of the Authority.

"State": The State of Illinois.

"USVA": The United States Department of Veterans' Affairs.

"Very Low-Income Household": A single person, family or unrelated persons living together whose adjusted income is not more than 50% of the median income of the area of residence, adjusted for family size, as such adjusted income and median income for the area are determined from time to time by the United States Department of Housing and Urban Development for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437).

47 Ill. Adm. Code 366.104 Borrowing by the Authority

To the extent allowed by State law, the Act and the Affordable Housing Act, the Authority may borrow funds with which to purchase Loans or incur other obligations under the Program.

47 Ill. Adm. Code 366.105 Standards

In administering the Program, the Authority and the Staff, in those instances permitting the exercise of discretion, shall consider, in addition to the criteria specifically set forth in this Part, the following factors:

a) the purpose of the Program;

b) the financial condition and previous experience of potential and participating Lenders, Servicers and HomeBuilders;

c) the Authority's ability to purchase or redeem the Bonds and to comply with the requirements of any Resolution;

d) the financial integrity of the Program;

e) the desirability of achieving a reasonable geographic distribution of Net Proceeds throughout the State; and

f) the standards of the prudent lender or investor.

47 Ill. Adm. Code 366.106 Forms and Procedures for the Program

The Staff may prepare, use, supplement, and amend such forms, agreements, and other documentation and such procedures as may be necessary to implement the Program, all as may be prescribed by the Director, or, in the Director's absence, the Deputy Director or Assistant Director.

47 Ill. Adm. Code 366.107 Fees and Charges of the Authority

The Authority may establish and collect a Commitment Fee from each HomeBuilder executing a HomeBuilder Participation Agreement in an amount not to exceed three percent (3%) of such HomeBuilder's Reservation. The Authority shall return any Commitment Fee to any HomeBuilder with which it does not enter into a HomeBuilder Participation Agreement.

47 Ill. Adm. Code 366.108 Waiver

By Resolution, the Members may authorize the waiver or variance of particular provisions of this Part to conform to changes in the requirements of applicable State law. Upon the adoption of such a Resolution, the Authority shall submit a rulemaking that reflects such requirements of State law as expeditiously as possible.

47 Ill. Adm. Code 366.109 Amendment

This Part may be supplemented, amended, or repealed by the Members from time to time in accordance with the Illinois Administrative Procedure Act and in such manner as they may determine, consistent with the Rules, the Act, the Affordable Housing Act, the purposes of the Program and other applicable provisions of State law. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 366.110 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section, or Subpart to which such judgment is rendered.

47 Ill. Adm. Code 366.111 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 366.112 Titles and Captions

Titles and captions of Subparts, Sections, and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 366.113 Calendar Days

Days shall mean calendar days. Due dates falling on a Saturday, Sunday or legal State or federal holiday shall be deemed to fall on the next calendar day that is not a Saturday, Sunday, or legal State or federal holiday.

47 Ill. Adm. Code 366.201 Establishment of Single Family Program

From time to time, the Authority may establish a Single Family Program. Any such Single Family Program may contain provisions for the purchase of Loans on Qualified Dwellings to be constructed by HomeBuilders selected pursuant to Subpart D of this Part.

47 Ill. Adm. Code 366.202 Staff Recommendation to the Advisory Commission

For each proposed Single Family Program, the Staff shall prepare and present to the Advisory Commission a report for the Advisory Commission's recommendation.

47 Ill. Adm. Code 366.203 Authority Determination

The Staff shall present to the Members all recommendations from the Advisory Commission for Single Family Programs. The Authority may use the proceeds of Bonds or Notes for the purchase of Loans under a Single Family Program only upon approval of such Single Family Program by Resolution of the Members.

47 Ill. Adm. Code 366.301 Invitations to Sell Loans

Upon approval of a Single Family Program by the Members, the Authority may send application materials to potential Lenders inviting them to submit to the Authority applications to participate in a Series Program. Lenders wishing to participate in such Series Program shall execute and return to the Authority the following documents: the Lender Application, the Mortgage Purchase Agreement (if not already executed) and the Servicing Agreement (if applicable and if not already executed). In addition, the Lender Application shall contain the following:

a) The agreement of the prospective Lender, effective upon acceptance of the Lender Application by the Authority, to sell to the Authority Loans that comply with the terms of the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement;

b) The date by which the Lender Application must be submitted to the Authority;

c) Provision for the prospective Lender to furnish such financial and other information as the Authority may reasonably require; and

d) A statement of the maximum amount of fees and charges the Lender may charge a prospective Eligible Borrower in connection with a Loan.

47 Ill. Adm. Code 366.302 Notice of Acceptance

The Authority, by Notice of Acceptance, may commit itself, subject to the conditions set forth in the Lender Application and the Mortgage Purchase Agreement, to purchase Loans, as offered by a potential Lender in its Lender Application. Immediately after the Authority has issued its Notice of Acceptance to the Lender, the Authority shall execute a Mortgage Purchase Agreement (if not previously executed) with such Lender. Upon receipt of the Notice of Acceptance, the Lender shall be eligible to originate and sell to the Authority Loans in accordance with the terms of the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement. The obligation of the Authority to purchase any Loan shall be subject to the issuance and sale of Bonds by the date set forth in the Lender Application in an amount sufficient to permit such purchase.

47 Ill. Adm. Code 366.303 Commitments for Loans

Upon the date indicated on the Notice of Acceptance, the Lender may begin to issue commitments to Eligible Borrowers to make Loans. The Lender may continue to issue firm commitments for the period set forth in the Notice of Acceptance. All Loans shall be closed by the date indicated in the Notice of Acceptance.

47 Ill. Adm. Code 366.401 Homebuilder Invitations

Upon approval by the Members of a Single Family Program containing provisions for the purchase of Loans on Qualified Dwellings to be constructed by HomeBuilders, the Authority may send application materials to potential HomeBuilders inviting them to submit to the Authority requests to participate in a Series Program. Such requests shall state the amount of the HomeBuilder's requested Reservation. HomeBuilders wishing to participate in such Series Program shall execute and return to the Authority the HomeBuilder Participation Agreement. The HomeBuilder Participation Agreement shall contain among other things, the following:

a) The unconditional agreement of the prospective HomeBuilder, effective upon execution of the HomeBuilder Participation Agreement by the Authority, to construct Qualified Dwellings for sale to Eligible Borrowers that comply with the terms of the Notice of Reservation of Funds and the HomeBuilder Participation Agreement;

b) Provision for the prospective HomeBuilder to provide such information about the HomeBuilder's construction activities during the period of 24 months prior to the date of the HomeBuilder Participation Agreement and such other information as the Authority may reasonably require; and

c) A statement of the amount of any required Commitment Fee.

47 Ill. Adm. Code 366.402 Reservation of Funds for Construction of Qualified Dwellings

The Authority may make Reservations for prospective HomeBuilders from which the Authority has received timely HomeBuilder Participation Agreements and Commitment Fees (if required). In making such Reservations, the Authority shall consider with respect to each such prospective HomeBuilder the number of residential homes and other structures constructed by the HomeBuilder in the State within the 24 month period prior to the date of its HomeBuilder Participation Agreement; the Reservations requested by all prospective HomeBuilders for the Series Program; and the participation of the HomeBuilder in the Authority's previous Series Programs. Reservations shall be conclusive, subject to the adjustments permitted in Section 366.405 of this Part.

47 Ill. Adm. Code 366.403 Notice of Reservation of Funds

The Authority may commit itself by Notice of Reservation of Funds, subject to the terms and conditions set forth in the HomeBuilder Participation Agreement, to make a Reservation for a prospective HomeBuilder for the construction of Qualified Dwellings for Eligible Borrowers under a Series Program. Contemporaneously with the issuance of the Notice of Reservation of Funds to the HomeBuilder, the Authority shall execute the HomeBuilder Participation Agreement with that HomeBuilder. The amount of the Reservation for the HomeBuilder shall not exceed, and may be less than, such HomeBuilder's requested Reservation. Upon receipt of the Notice of Reservation of Funds, the HomeBuilder shall be obligated to construct Qualified Dwellings in accordance with the terms of the HomeBuilder Participation Agreement. The Reservation to the HomeBuilder shall be subject to the issuance and sale of Bonds by the date set forth in the HomeBuilder Participation Agreement in an amount sufficient to permit such Reservation.

47 Ill. Adm. Code 366.404 Real Estate Purchase Contracts

Upon receipt of the Notice of Reservation of Funds, the HomeBuilder shall construct Qualified Dwellings for sale to Eligible Borrowers. The HomeBuilder shall enter into standard residential purchase contracts with prospective Eligible Borrowers and refer such Eligible Borrowers to Lenders participating in the Series Program to obtain Loans in connection with the purchase of Qualified Dwellings. All Qualified Dwellings shall be constructed and sold to Eligible Borrowers by the date indicated in the HomeBuilder Participation Agreement.

47 Ill. Adm. Code 366.405 Transfer of Reserved Funds

If a HomeBuilder fails or is unable to construct and sell Qualified Dwellings in the amount of its Reservation on the terms and conditions, and within the time period, set forth in the HomeBuilder Participation Agreement, the Authority may, at the request of the HomeBuilder, reallocate all or a part of the unused portion of the HomeBuilder's Reservation to other HomeBuilders or to other projects within the Series Program in which the HomeBuilder is participating; redeem all or part of the Bonds issued with respect to such unused portion of the Reservation, but only if permitted by the Series Resolution authorizing the issuance of the Bonds; or undertake a combination of the above.

47 Ill. Adm. Code 366.501 Loans

Each Loan to be purchased under the Program shall comply with the terms of the Lender Application, the HomeBuilder Participation Agreement (if applicable), the Notice of Acceptance, and the Mortgage Purchase Agreement and shall specifically comply with the following requirements:

a) The original principal amount of each Loan, unless such Loan is the subject of insurance or guaranty by the FHA, RECD or the USVA, shall not exceed 97% of the Property Value. If such Loan is the subject of insurance or guaranty by the FHA, RECD or USVA, the principal amount of the Loan shall not exceed the amount approved by such agency. Each Loan that has a Loan-to-Property Value ratio in excess of 80% at the time of origination shall:

1. be insured by a private mortgage insurer licensed to do business in the State and qualified to insure single family mortgages purchased by the FHLMC or successor federal agency to the extent, if any, required, so that the uninsured portion of such Loan shall not exceed 72% of the Property Value; or

2. be subject to insurance or guaranty by the FHA or USVA or any other agency or instrumentality of the United States of America having similar powers to insure or guarantee mortgage loans.

b) Each Loan to be purchased by the Authority shall be secured by a Mortgage on a Qualified Dwelling and shall also meet the applicable terms and conditions set forth in the HomeBuilder Participation Agreement (if applicable), the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement. Lenders shall sell to the Authority, and the Authority shall purchase, only Loans made to Eligible Borrowers.

c) Each Mortgage securing a Loan to be purchased by the Authority shall:

1. be executed on a form approved by the Authority;

2. be a valid first mortgage lien on a Qualified Dwelling;

3. be consistent with Illinois law; and

4. conform with the requirements prescribed by the Authority and any applicable insurer.

d) Each Loan to be purchased by the Authority shall be non-assumable and non-assignable, unless otherwise required by applicable State or federal law, and shall contain a provision giving the Authority the right to accelerate the maturity of the Loan upon sale or lease of the Qualified Dwelling.

e) The Authority shall not purchase any Loan if, on the date of purchase, the obligor of the Loan is delinquent in the payment of any installment of principal, interest or other amounts due under the terms of such Loan.

f) The Authority may foreclose Mortgages held as security for Loans purchased under this Part that are in default according to their terms, or reassign such Mortgages to the Lender in accordance with the terms of the Mortgage Purchase Agreement. The Authority may take title in its name upon foreclosure and subsequently convey title to such property to any qualified insurer of the mortgage or any bona fide purchaser of the property.

47 Ill. Adm. Code 366.502 Terms and Conditions of the Purchase of Loans

a) The Authority shall purchase Loans on the terms and conditions and in the manner prescribed in the Mortgage Purchase Agreement. The Mortgage Purchase Agreement shall contain such warranties of the Lender in connection with the Loans to be sold thereunder as the Authority shall require, and shall include, among others, the following warranties:

1. The mortgagor is an Eligible Borrower;

2. The Loan is evidenced by a properly executed promissory note made payable or assigned to the order of the Lender, endorsed by the Lender to the Authority and is secured by a Mortgage on the Qualified Dwelling; both the note and the Mortgage are the legal, valid, and binding obligations of their makers and mortgagors and are enforceable in accordance with their terms, except only as such enforcement may be limited by laws affecting the enforcement of creditors' rights generally; and all parties to each Loan had full legal capacity to execute all Loan documents at the time of execution;

3. The Mortgage and any other document required to be filed in a public office to perfect the mortgage lien against third parties have been duly and timely filed, registered, or recorded by the Lender in the proper public office in order to give constructive notice of such mortgage lien to all subsequent purchasers or encumbrancers;

4. The Lender, as the sole owner and holder of the Loan, has full right to sell and assign the Loan to the Authority and such assignment conveys a good and marketable mortgagee's title to the Authority free and clear of all liens and encumbrances and subject only to real property taxes and assessments not yet due and encumbrances customarily accepted in accordance with applicable title standards and disclosed to the Authority prior to purchase of the Loan;

5. The Mortgage creates a valid and existing first mortgage lien on the Qualified Dwelling to secure the Loan, subject to easements and other matters affecting title generally acceptable to lenders making mortgage loans in the State;

6. The Lender has not modified in any respect and has not satisfied, canceled, subordinated, or compromised in whole or in part the Loan indebtedness and has not released the mortgaged property in whole or in part from the lien of the indebtedness evidenced by the note and secured by the Mortgage, and the terms, covenants, and conditions of the note evidencing the Loan and the Mortgage securing the Loan have not been waived, altered, or modified in any respect that would materially affect the validity or enforceability of the Loan or the security of the lien of the Mortgage;

7. The real property securing the Loan is a Qualified Dwelling;

8. The Qualified Dwelling is covered by a valid and existing policy of hazard insurance meeting the requirements of the Authority;

9. The Lender has complied as follows:

A) as to each FHA-insured Loan, with the National Housing Act, 12 U.S.C. Section 1701 et seq., as amended and supplemented, all rules and regulations issued thereunder and all administrative publications. The FHA insurance shall be in full force and effect and, upon purchase by the Authority of the Loan, shall inure to the benefit of the Authority;

B) as to each Loan guaranteed by the USVA or RECD, with the Servicemen's Readjustment Act, 38 U.S.C. Section 1803 et seq., the Consolidated Farm and Rural Development Act, 7 U.S.C. Section 1921 et seq., Title V of the Housing Act of 1949, 42 U.S.C. Sections 1471-1482, or other applicable federal law as amended and supplemented, all rules and regulations issued thereunder and all administrative publications. Any such guaranty shall be in full force and effect and, upon purchase by the Authority of the Loan, shall inure to the benefit of the Authority; and

C) as to each Loan insured by a private mortgage insurance company, with all rules and requirements of such company. Any such insurance shall be in full force and effect and, upon purchase by the Authority of the Loan, shall inure to the benefit of the Authority;

10. The Loan is covered by a fully paid mortgagee's title insurance policy in such form as the Authority may require; and

11. To the best of Lender's information, knowledge and belief, no condition exists that would prohibit the purchase of the Loan by the Authority under all applicable rules, regulations and contractual provisions.

b) The Mortgage Purchase Agreement shall provide that the Authority shall have the right to require the Lender to repurchase Loans sold to the Authority by the Lender if the Director, Deputy Director or Assistant Director determines that the Lender has failed to comply with the requirements of either this Part or its contracts and agreements with the Authority under the Program.

47 Ill. Adm. Code 366.503 Mortgage Pool Insurance

If required by the applicable Series Resolution, the Authority shall obtain Pool Insurance for each Series Program in an amount not less than that percentage of the original aggregate principal amount of the Loans authorized by such Series Resolution. Such Pool Insurance shall insure the Authority against losses arising from an event of default under any Loan covered by the policy in an amount equal to the unpaid principal balance of, and accrued interest on, the Loan and customary fees and expenses paid by the Authority to preserve and protect the mortgaged premises and to foreclose or otherwise dispose of such premises, such as real estate taxes, hazard and private insurance premiums and foreclosure expenses, less the amount received by the Authority under any other insurance policy on the Loan or from disposition of such premises or substantially similar benefits.

47 Ill. Adm. Code 366.504 Special Hazard Insurance

If required by the applicable Series Resolution, the Authority shall obtain Special Hazard Insurance for such Series Program in the amount required by such Series Resolution.

47 Ill. Adm. Code 366.601 Servicing of Loans

The Authority shall cause all Loans purchased by the Authority to be serviced by a Servicer pursuant to the Servicing Agreement.

47 Ill. Adm. Code 366.602 Equal Opportunity Lending

In making Loans, the Lender shall not deny such Loans to any person or persons or discriminate against such person or persons in fixing the amount, interest rate, duration, or other terms and conditions of such Loans on account of race, color, religion, age, sex, marital status, familial status, handicap, ancestry, national origin, or unfavorable military discharge; and shall otherwise be subject to all State and federal requirements with respect to non-discrimination in lending.

47 Ill. Adm. Code 366.603 Inspection of Books and Records

Upon prior written notice, the Authority may inspect, examine, and copy the books and records of each Lender for the purpose of determining compliance with the Authority's Rules, the Act, the Affordable Housing Act and all contracts and agreements between the Authority and such Lender relating to the Program.

47 Ill. Adm. Code 366.604 Termination

The Authority shall retain the right to establish procedures for the termination of its obligation to purchase Loans associated with any particular issue of Bonds under the Program, subject to applicable State law and to its existing contractual obligations, including contractual obligations arising under a HomeBuilder Participation Agreement, a Lender Application, a Notice of Acceptance, a Mortgage Purchase Agreement and a Servicing Agreement.

Part 368 Accessible Housing Demonstration Grant Program

47 Ill. Adm. Code 368.101 Authority

This Part is authorized by and made pursuant to the Accessible Housing Demonstration Grant Program Act [310 ILCS 95], which shall govern the Program.

47 Ill. Adm. Code 368.102 Purposes and Objectives

This Part is established to accomplish the purposes of the Accessible Housing Demonstration Grant Program Act and in particular to make grants to Qualified Builders to encourage the building of Single Family Residences that are accessible to the disabled.

47 Ill. Adm. Code 368.103 Definitions

As used in this Part, the following words or terms shall have the meanings assigned to them.

"Accessibility Standards": The standards for the construction of a Spec Home, which shall include the following:

The Spec Home shall have at least one no-step exterior entrance with a 36-inch-wide entrance door to allow for wheelchair access into the Spec Home.

All interior passage doors in the Spec Home shall allow at least 32 inches of clearance in width.

No electrical outlet in the Spec Home shall be lower than 15 inches from the finished floor and no light switch in the Spec Home shall be higher than 48 inches from the finished floor. All environmental controls, including, but not limited to, heating and air-conditioning controls in the home must be in accessible locations.

In each bathroom or equivalent room, the toilet, bathtub, shower stall, or shower seat shall be reinforced in a manner that will allow the installation of grab bars around those fixtures.

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Applicant": A homebuilder applying for a Grant under the Program.

"Application": A homebuilder's written request for a Grant, including the required information and attachments.

"Application Form": The form to be used by all Applicants in submitting an Application.

"Architect's Final Certificate": The certificate prepared by an architect of a Qualified Builder stating that a Spec Home, as constructed, meets the Accessibility Standards.

"Architect's Initial Certificate": The certificate prepared by an architect of an Applicant or a Qualified Builder stating that the Plans and Specifications for a proposed Spec Home incorporate the Accessibility Standards.

"Authority": The Illinois Housing Development Authority.

"Building Permit": The building permit for a Spec Home, if required, issued by the jurisdiction in which the Spec Home is to be constructed.

"Director": The Executive Director of the Authority.

"Final Certification Affidavit": The affidavit signed by the building inspector certifying that the Accessibility Standards have been incorporated into the Spec Home.

"Grant": A grant from the Authority to a Qualified Builder in connection with the construction of one or more Spec Homes under the Program. No Grant shall exceed $5,000 for each Spec Home.

"Grant Agreement": The agreement between the Authority and a Qualified Builder setting forth the terms and conditions under which the Authority will provide a Grant to the Qualified Builder.

"Program": The Accessible Housing Demonstration Grant Program.

"Qualified Builder": A homebuilder that:

has had insurance coverage for product liability, builder's risk and worker's compensation for the 12-months prior to the date of its Application; and

demonstrates that it has constructed either at least two buildings in the 12-month period prior to the date of its Application, or four buildings in the 24-month period prior to the date of its Application.

"Request for Disbursement": A Qualified Builder's request for a disbursement of Grant funds upon the completion of construction of a Spec Home.

"Single Family Residence": A detached home, a condominium, a town home or other residence designed to be occupied by a single individual or household. A two-, three- or four-flat is not a Single Family Residence.

"Spec Home": A Single Family Residence satisfying the Accessibility Standards constructed by a Qualified Builder for sale on the open market and not built for a specific individual or family for immediate occupancy.

"Staff": The Executive Director and the employees of the Authority.

47 Ill. Adm. Code 368.104 Standards and Criteria

In considering applications for Grants, the Authority and the Staff shall, in the exercise of discretion, consider, in addition to the requirements of Section 368.203:

a) The size, number and type of the proposed Spec Homes;

b) The location of the Spec Homes;

c) The projected completion dates of the Spec Homes;

d) The experience of the Applicant;

e) The amount of the Grant requested; and

f) The per unit cost differential for meeting each of the Accessibility Standards.

47 Ill. Adm. Code 368.105 Forms and Procedures for the Program

The Staff may prepare, use, supplement, and amend such forms, agreements, and other documents and such procedures as may be necessary to implement the Program, all as may be prescribed by the Executive Director.

47 Ill. Adm. Code 368.106 Amendment

This Part may be supplemented, amended, or repealed by the Authority from time to time and in such manner as they may determine consistent with this Part, the Act, the Accessible Housing Demonstration Grant Program Act, the Illinois Administrative Procedure Act and other applicable provisions of law. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 368.107 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section, or Subpart as to which such judgment is rendered.

47 Ill. Adm. Code 368.108 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 368.109 Titles and Captions

Titles and captions or Subparts, Sections, and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 368.201 Forms

The Authority shall develop an Application Form, a Grant Agreement, and any other forms that it may deem necessary for the conduct of the Program.

47 Ill. Adm. Code 368.202 Application

Applicants seeking a Grant under the Program shall submit to the Authority a completed Application Form together with all required documentation.

47 Ill. Adm. Code 368.203 Accompanying Documentation

For each Spec Home that an Applicant proposes to construct under the Program, the Applicant shall include:

a) an Architect's Initial Certificate; and

b) a Building Permit, if required by the jurisdiction in which the Spec Home is to be constructed.

47 Ill. Adm. Code 368.204 Review

Within 10 business days after the receipt of an Application, the Staff shall determine whether such Application meets the eligibility requirements of Sections 368.104 and 368.203. If the Staff determines that the Application meets such requirements, it shall notify the Applicant within five business days after such determination. If the Staff determines that the Application fails to meet any of these requirements, the Authority shall notify the Applicant in writing within 10 business days after such determination; the Applicant shall have 10 business days to correct any deficiencies in its Application.

47 Ill. Adm. Code 368.205 Grant Agreement

Upon the approval of an Application, the Authority and the Applicant shall enter into a Grant Agreement. Upon entering the agreement, the Qualified Builder will have up to one year to complete the construction of the Spec Home.

47 Ill. Adm. Code 368.206 Monitoring of Program by the Authority

Upon reasonable notice, the Qualified Builder shall allow the Authority to inspect the Spec Homes until one year after the date of the Grant Agreement.

47 Ill. Adm. Code 368.301 Application for Disbursement of Grant Proceeds

Upon the completion of a Spec Home, the Qualified Builder shall submit a Request for Disbursement to the Authority. Such request shall include an Architect's Final Certificate and, if required by the jurisdiction in which the Spec Home has been constructed, a certificate of occupancy from that jurisdiction.

47 Ill. Adm. Code 368.302 Review

Within 10 business days after the receipt of a Request for Disbursement, the Staff shall determine whether such request meets the requirements of Section 368.301. If such requirements have been met, the Authority shall disburse Grant proceeds in the requested amount to the Qualified Builder within 45 days after receipt of the Final Certification Affidavit. If the Staff determines that the Request for Disbursement does not meet such requirements, the Authority shall notify the Qualified Builder in writing within 10 business days, stating the reasons why the Request for Disbursement was denied; the Qualified Builder shall have 10 business days to correct any deficiencies in its Request for Disbursement.

Part 369 Covid-19 Affordable Housing Grant Program

47 Ill. Adm. Code 369.101 Purpose and Objectives

The Rules in this Part are established to accomplish the general purposes of the Act, and in particular the making of grants in connection with the construction or rehabilitation of qualified multifamily rental housing developments in accordance with the Program that receive LIHTC allocations from the Authority. The grant funds will help developers to overcome increased construction costs related to the COVID-19 pandemic-created supply shortages (in lumber and other materials) and to jump-start a housing recovery in the State in the wake of the pandemic. These funds will also incentivize and attract private equity and private lending and will allow the State to more fully use and draw down unused federal resources for affordable housing.

47 Ill. Adm. Code 369.102 Definitions

As used in this Part, the following words or terms mean:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Affordable Housing Grant Act": The Illinois COVID-19 Affordable Housing Grant Program Act [310 ILCS 126].

"Allocation": An allocation of low-income housing tax credits by the Authority.

"Application": An application to the Authority for an Allocation submitted by a recipient or an owner of a Qualified Development, including any required supporting documentation.

"Authority": The Illinois Housing Development Authority.

"Chairman": The Chairman of the Authority.

"Code": The Internal Revenue Code of 1986 (Title 26 United States Code) and the regulations promulgated thereunder.

"Compliance Period": A period of 15 years after construction of a Qualified Development as further defined in Section 42 of the Code.

"Development": The real estate, together with all buildings and other improvements constructed on it, and the equipment, and personal property appurtenant to the real estate.

"Director": The Executive Director of the Authority.

"Disproportionately Impacted Area": a census tract or comparable geographic area that meets at least one of the following criteria, as determined by the Department of Commerce and Economic Opportunity:

the area has a poverty rate of at least 20% according to the latest federal decennial census;

75% or more of the children in the area participate in the federal free lunch program according to reported statistics from the State Board of Education;

at least 20% of the households in the area receive assistance under the Supplemental Nutrition Assistance Program; or

the area has an average unemployment rate, as determined by the Department of Employment Security, that is more than 120% of the national unemployment average, as determined by the United States Department of Labor, for a period of at least 2 consecutive calendar years preceding the date of the application for an Allocation or Grant. [310 ILCS 126/10]

"Grant": A grant made to an Owner or Nonprofit Corporation that is part of the ownership structure in connection with a Qualified Development to assist in the financial feasibility of a Qualified Development.

"Low Income Housing Tax Credit" or "LIHTC": the federal low-income housing tax credit provided by 26 U.S.C. 42, including federal low-income tax credits issued pursuant to 26 U.S.C. 42(h)(3) and 26 U.S.C. 42(h)(4).

"Median Income": The median income of the county or the metropolitan statistical area, as applicable, in which the Development is located, adjusted for family size. The median income is determined from time to time by the United States Department of Housing and Urban Development (HUD) for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437a).

"Members": The Members of the Authority.

"Nonprofit Corporation": A not-for-profit corporation incorporated pursuant to the provisions of the Illinois General Not-for-Profit Corporation Act of 1986 [805 ILCS 105] or the State Housing Act [310 ILCS 5] and having articles of incorporation which, in addition to meeting other requirements of law, meet the requirements of Section 2(m) of the Act.

"Opportunity Area": Communities with low poverty, high access to jobs and low concentrations of existing affordable rental housing as determined and published by IHDA.

"Owner": Either (i) a limited liability company, partnership, or entity that holds legal title to the Qualified Development or when the Qualified Development is held in a trust, the entity owning the beneficial interest in the trust; or (ii) a Nonprofit Corporation that has an interest in the general partner or managing member of a limited partnership or limited liability company that owns the Qualified Development. Under no circumstances shall "owner" mean the Authority or a Trustee.

"Prioritization Areas": As set out in Section 369.302.

"Program": The Authority's COVID-19 Affordable Housing Grant Program created pursuant to and in accordance with the Affordable Housing Grant Act.

"QAP": The Authority's Qualified Allocation Plan, as required by Section 42 of the Code.

"Qualified Development": A qualified low-income housing project, as that term is defined in Section 42 of the Code, that is located in the State and is determined to be eligible for an Allocation. [310 ILCS 126/10] A Qualified Development must have received or simultaneously receive an Allocation to be eligible to apply for a Grant under the Affordable Housing Grant Act.

"Real Estate": The real property upon which a multifamily housing development is to be or has been constructed or rehabilitated.

"Regulatory Agreement": The regulatory agreement or other instrument in the nature of an agreement imposing continuing affordable housing restrictions, together with any supplements, amendments or modifications, governing a Grant.

"Related Requirements": Any Authority compliance or documentation requirements imposed as a result of allocation of LIHTC to a Qualified Development, as more specifically set out in Section 369.304.

"Rules": The Authority's administrative rules (47 Ill. Adm. Code 260 through 395).

"Staff": The Director, the Deputy Executive Director and the employees of the Authority.

"State": The State of Illinois.

"Total Development Costs": The total of all hard and soft construction/rehabilitation costs in connection with a Qualified Development.

"Trust": A trust that holds legal title to a Qualified Development, the sole beneficiary of which is an Owner.

"Trustee": The trustee of a trust holding legal title to a Qualified Development.

47 Ill. Adm. Code 369.103 Compliance with Federal Law

Notwithstanding anything herein to the contrary, this Part shall be construed in conformity and compliance with applicable federal law, including, without limitation, Section 42 of the Code.

47 Ill. Adm. Code 369.104 Standards

In administering the Program, the Authority, the Chairman, the Director, and the Staff shall consider, in addition to the criteria specifically set forth in this Part (particularly in Subparts B and C), the following: the purposes of the Program to provide decent, safe, and sanitary multifamily rental housing; the requirements of applicable State and federal law; the financial condition and previous experience of potential and participating developers; the financial integrity of the Program; the housing needs of the State; the desirability of achieving a reasonable geographic distribution of Qualified Developments throughout the State; and specific standards for the LIHTC program set forth in the QAP and the references embedded therein (found at https://www.ihda.org/developers/qap/).

47 Ill. Adm. Code 369.105 Procedures, Fees and Charges

In connection with the Program, the Authority will establish forms, agreements, documents and procedures that may be used by the Authority for its general corporate purposes, including costs of administering the Program, to the extent permitted under and as contemplated by the Affordable Housing Grant Act and any enacting rules and regulations. The Authority intends to functionally administer the Grants together with the administration and compliance requirements for any LIHTC Allocation by the Authority. LIHTC requirements can be found in 47 Ill. Adm. Code 350.

47 Ill. Adm. Code 369.106 Amendment

This Part may be supplemented, amended or repealed in accordance with the Illinois Administrative Procedure Act [5 ILCS 100], by the Members from time to time and in such manner as they may determine consistent with the Rules, the Act and other applicable provisions of law. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 369.107 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section or Subpart thereof as to which such judgement is rendered.

47 Ill. Adm. Code 369.201 Applications

a) Eligibility. An Owner of a Qualified Development is eligible to apply for a Grant only if it has received or is simultaneously receiving an Allocation.

b) Process. An Owner of a Qualified Development may submit an application for a Grant as part of its application for a 9% LIHTC competitive Allocation or a 4% LIHTC rolling Allocation. In the application, the Owner must include the reason for its application and certification (in form and content prescribed by the Authority) that the Qualified Development is eligible for a Grant under the provisions of the Affordable Housing Grant Act due to a funding gap in its financing structure. Authority Staff shall consider each application in terms of the certified eligibility criteria as evidenced by a certification submitted by an Owner attesting to the applicable Prioritization Areas creating a need for a Grant and the need to make a Qualified Development financially feasible (as set out more specifically in Subpart C). In the event that a funding gap is not identified at the time of LIHTC Allocation, an Owner may make an application after Allocation, under the same terms and subject to the same review as applications received as part of the Owner's original Allocation application.

47 Ill. Adm. Code 369.301 Maximum Grant Amount

a) Establishing Amount. The maximum grant amount available for any Qualified Development shall be 35% of Total Development Costs.

b) Grant Increase. After the Authority has made a Grant for a Qualified Development, nothing contained in this Section shall prohibit the Authority from increasing the amount of the Grant in excess of the limitations specified in subsection (a) if the owner applies for additional funds and the Authority, in its sole discretion, determines that the increase is necessary to maintain the financial stability or economic viability of the Qualified Development. In deciding whether to approve a Grant increase, the Authority shall consider, among other things, increases in construction costs before or during construction/rehabilitation, the physical condition of the Qualified Development, the value of the Qualified Development, the financial status of the Qualified Development, and any other relevant factors under the Affordable Housing Grant Act.

47 Ill. Adm. Code 369.302 Prioritization Efforts

a) The Authority shall make best efforts to prioritize applications for proposed Qualified Developments as follows:

1. developments that are located within a census tract that was disproportionately affected by the COVID-19 pandemic based on the number of positive COVID-19 cases;

2. developments during construction involving contracts with certified disadvantaged business enterprises and certified underrepresented business enterprises owned by minorities, women, veterans, LGBTQIA persons, and persons with disabilities;

3. developments involving project labor agreements with local building trades; and

4. developments involving contracts or subcontracts with a registered apprenticeship program or pre-apprenticeship program.

b) The Authority shall balance the approval of grants between those located within a Disproportionately Impacted Area and those located in Opportunity Areas. [310 ILCS 126/25]

47 Ill. Adm. Code 369.303 Regulatory Agreement Required

The Owner of a Qualified Development that receives a Grant shall enter into a Regulatory Agreement with the Authority. Because eligibility for grants is dependent on LIHTC eligibility, the owner of a Qualified development will be required to adhere to all affordable housing restrictions applicable to the LIHTC allocation for the Qualified Development (and described in the Authority's QAP at https://www.ihda.org/developers/qap/) for a period equal to the Compliance Period, and to agree not to transfer the ownership or materially change the ownership structure of the Owner without the prior written approval of the Authority. The Regulatory Agreement shall be recorded in the office of the recorder of deeds in the county where the Qualified Development is located as a restrictive covenant on the Qualified Development.

47 Ill. Adm. Code 369.304 Related Requirements

Any award of a Grant shall be subject to the Related Requirements and any applicable requirements of the Act; which include:

a) Restrictions:

1. Income-eligible households: Maximum AMI of 50% or 60%, or Average AMI of 60% with range between 20% and 80%, as owner elects.

2. Affordable rents: 30% of target income.

3. Target population: Must be available to general public; restrictions on full-time students, but no citizenship requirement.

4. Leasing requirements: Not to be used for temporary housing; lease must be for at least 6 months.

5. Physical condition: Must be maintained to HUD's Uniform Physical Condition Standards (24 CFR 5 (2022))

6. Annual income recertification required: Not for 100% affordable projects; mixed income projects only.

7. Fixed or floating units: Floating units must maintain applicable percentage as measured by unit or square footage.

b) Monitoring:

1. Physical Inspection: Triennial, using the sample size required by HUD's Real Estate Assessment Center (REAC) (see table to paragraph (c)(2)(iii), 26 CFR 1.42-5 (2022)).

2. Tenant File Review: Triennial, using the sample size required by HUD's Real Estate Assessment Center (REAC) (see table to paragraph (c)(2)(iii), 26 CFR 1.42-5 (2022)).

3. Record keeping review.

4. Annual Owner's Certification review.

c) Owner's Reporting:

1. Annual Owner's Certification.

2. Annual Tenant Income Certification.

3. Affirmative Fair Housing Marketing Plan.

4. Tenant Selection Plan.

Part 371 National Affordable Housing Act (home) Program

47 Ill. Adm. Code 371.10 Statement of Authority

The Illinois Housing Development Authority (Authority) has been designated the program administrator of the HOME Investment Partnerships Program (HOME Program) in Illinois, established pursuant to Title II of the National Affordable Housing Act of 1990, 42 U.S.C. 12701 et seq., as amended (HOME Act). This Part is created to govern the HOME Program. This Part is authorized by, and made pursuant to, the Comprehensive Housing Affordability Strategy of the State of Illinois and the Illinois Housing Development Act [20 ILCS 3805].

47 Ill. Adm. Code 371.20 Incorporation by Reference

The federal regulations promulgated under the HOME Act, 24 CFR Part 92 (HOME Regulations) (October 16, 1996) are hereby incorporated by reference. The full text of the HOME Regulations can be obtained from the Department of Housing and Urban Development, 451 7th St., SW, Washington, DC 20410.

47 Ill. Adm. Code 371.30 Definitions

"Applicant": A person or entity applying for an allocation of funds from the Program.

"Authority": The Illinois Housing Development Authority.

"Clearinghouse": A State, regional or metropolitan agency designated by the Governor or the Authority, or established by State law, to review and provide notice to appropriate State and local agencies of proposed housing projects.

"Federal HOME Act": Title II of the National Affordable Housing Act of 1990 (P.L. 101-165).

"Governor": The Governor of Illinois.

"Members": The Members of the Authority.

"Part": This Part 371.

"Program": The program established by the State pursuant to the Federal HOME Act and administered by the Authority in accordance with the provisions of this Part through which Federal HOME Program funds allocated to the State will be reallocated to eligible Recipients.

"Project": Site or sites, together with any building (including a manufactured housing unit), or buildings located on the sites(s) that are under common ownership, management, and financing and are to be assisted with Program funds as a single undertaking under this Part. Project includes all the activities associated with the site and building. For tenant-based rental assistance, Project means assistance to one or more families.

"Recipient": An individual or entity that receives Program funds for or on behalf of a Project from the Authority pursuant to a Commitment.

"State": The State of Illinois.

History

• Source: Added at 23 Ill. Reg. 3952, effective March 22, 1999

47 Ill. Adm. Code 371.40 Notification by Authority

a) Notice of Allocation. Prior to the presentation of an application to the Members, the Authority shall give written notice of the proposed allocation of Program funds to the following persons and agencies:

1. The chairman of the county board of the county in which the Project is proposed to be located;

2. The mayor or other chief executive of the municipality in which the Project is proposed to be located;

3. In municipalities with a population of more than 1.5 million, the alderman of the ward in which the Project is proposed to be located;

4. Appropriate Clearinghouses;

5. The United States Department of Housing and Urban Development;

6. Rural Housing Service, an agency within the United States Department of Agriculture; and

7. Each member of the General Assembly from the legislative district in which the Project is proposed to be located.

b) Forms. Notice under this Section shall be made on forms prepared by the Authority.

c) Contents. The notice shall set forth the name and address of the Applicant; the estimated amount of the proposed allocation; if applicable, the name and address of the proposed Project; the type of any proposed subsidies; the total number of units; and the type of Project (e.g., elderly, family, or handicapped).

d) If the application does not request Program funds for a specific Project, the notice of allocation will be sent to the appropriate persons and agencies based on the address of the Applicant.

History

• Source: Added at 23 Ill. Reg. 3952, effective March 22, 1999

47 Ill. Adm. Code 371.50 Comments and Responses

a) Comments. The persons and agencies receiving notice pursuant to this Section shall have 30 days from the date of mailing to submit written comments to the Authority and the Applicant.

b) Applicant's Response. The Applicant shall respond in writing to all comments received under Section 371.40 of this Part, as well as to any other written comments received by the Applicant, and shall provide copies of all comments and responses to the Authority.

c) Consideration of Comments. The Members shall consider all comments received pursuant to Section 371.40 of this Part when making their determination.

History

• Source: Added at 23 Ill. Reg. 3952, effective March 22, 1999

Part 375 Notice Procedures Under the Federally Assisted Housing Preservation Act

47 Ill. Adm. Code 375.101 Authority

This Part is authorized by and adopted pursuant to Section 7.19 of the Illinois Housing Development Act [20 ILCS 3805/7.19] and the Federally Assisted Housing Preservation Act [310 ILCS 60] and shall govern the provision of notices required by the Federally Assisted Housing Preservation Act.

47 Ill. Adm. Code 375.102 Purposes and Objectives

This Part is established to implement the notice requirements under the Federally Assisted Housing Preservation Act. The purpose of this Part is to create a uniform procedure for producing and delivering notices under the Federally Assisted Housing Preservation Act.

47 Ill. Adm. Code 375.103 Definitions

As used in this Part, the following words or terms mean:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Affected Public Entities": The mayor of the city or village in which the Assisted Housing Development is located or, if the Assisted Housing Development is located in an unincorporated area, the chairperson of the county board; the public housing authority in whose jurisdiction the Assisted Housing Development is located, if any; the local director of the federal housing agency that has insured, provided financing for or provided subsidies for the Assisted Housing Development; and IHDA.

"Affordability Restrictions": The limits on rents that owners may charge for occupancy of a rental unit in Assisted Housing and the limits on tenant income for persons or families seeking to qualify as tenants in Assisted Housing.

"Assisted Housing" or "Assisted Housing Development": A rental housing development, or mixed use development that includes rental housing, that receives government assistance under any of the following programs:

New construction, substantial rehabilitation, moderate rehabilitation, property disposition and loan management set-aside programs, or any other program providing project-based rental assistance under Section 8 of the United States Housing Act of 1937, as amended (42 USC 1437).

The Below-Market-Interest-Rate Program under Section 221(d)(3) of the National Housing Act (12 USC 1701).

Section 236 of the National Housing Act (12 USC 1715z-1).

Section 202 of the National Housing Act (12 USC 1701q).

Programs for rent supplement assistance under Section 101 of the Housing and Urban Development Act of 1965, as amended (12 USC 1701s).

Programs under Section 514 or 515 of the Housing Act of 1949 (12 USC 1441 and 14 USC 1485).

Section 42 of the Internal Revenue Code (26 USC 42).

"IHDA": The Illinois Housing Development Authority.

"Members": The members of IHDA.

"Notice": The notice that an owner of an Assisted Housing Development must provide if that owner intends to sell or otherwise dispose of the Assisted Housing Development, complete a prepayment, or complete a termination of affordability restrictions.

"Owner": The person, partnership or corporation that holds title to an Assisted Housing Development.

"Prepayment": The payment in full or refinancing of the federally insured or federally held mortgage indebtedness prior to its original maturity date, or the voluntary cancellation of mortgage insurance, on an Assisted Housing Development under Section 221(d)(3), 236 or 202 of the National Housing Act that would have the effect of removing affordability restrictions applicable to the Assisted Housing Development under the programs described in those Sections.

"Preservation Act": Federally Assisted Housing Preservation Act [310 ILCS 60].

"Property": A property or development that contains Assisted Housing.

"Tenant": The tenant, subtenant, lessee, sublessee or other person entitled to possession, occupancy or benefits of a rental unit within an Assisted Housing Development.

"Termination": The:

expiration or early termination of an Assisted Housing Development's participation in a federal subsidy program for Assisted Housing under Section 8 of the United States Housing Act of 1937.

expiration or early termination of an Assisted Housing Development's affordability restrictions described in Section 42(g) of the Internal Revenue Code, when that event results in an increase in tenant rents, a change in the form of subsidy from project-based to tenant-based, or a change in use of the Assisted Housing Development to a use other than rental housing.

47 Ill. Adm. Code 375.104 Amendment

This Part may be amended or repealed by the members from time to time in accordance with the Illinois Administrative Procedure Act and in such manner as the members may determine consistent with the Act, the purposes of the Preservation Act, and other applicable provisions of law. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 375.105 Severability

If any clause, sentence, subsection, Section or Subpart of this Part shall be adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, subsection, Section and Subpart to which the judgment is rendered.

47 Ill. Adm. Code 375.106 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 375.201 Content of Notice of Intent to Terminate Subsidy

For owners required to provide notice to tenants of an Assisted Housing Development and to affected public entities under the Preservation Act, the notice shall include the following information:

a) the address of each building included in the property;

b) the number of occupied units in the property on the date of the notice;

c) a description of the property, including the number of units, commercial space, garage, etc.;

d) the date on which the owner intends to sell or otherwise dispose of the property, complete prepayment or complete a termination of affordability restrictions at the property;

e) a detailed description of the affordability restrictions presently in place at the property;

f) the name, address and contact information for the owner of the property; and

g) a statement notifying the tenant that he/she has certain rights under the Preservation Act.

47 Ill. Adm. Code 375.202 Form of Notice

Where a provision of the Preservation Act requires that notice be given to the tenants of an Assisted Housing Development and to affected public entities, the format of the notice shall be as specified in Appendix A.

47 Ill. Adm. Code 375.APPENDIX A Notice of Intent to Terminate Subsidy

Where a provision of the Preservation Act requires that notice be given to the tenants of an assisted housing development and to affected public entities, the format of the notice shall be as follows:

NOTICE OF INTENT TO TERMINATE SUBSIDY

Name of Property:

Address of Each Building Included in Property:

Owner:

Property Description:

Number of Occupied Units:

Anticipated Date of Sale or Other Action:

Affordability Restrictions:

Owner/Contact Information:

THIS IS NOT AN EVICTION NOTICE. It is a notice to advise all tenants in the property identified above that one of the following actions with respect to the above property will take place on the date referenced above:

(i) the sale or other disposition of the property;

(ii) the prepayment or refinancing of a federally insured or federally held mortgage secured by the property;

(iii) the termination of the property's participation in a federal subsidy program for assisted housing.

One or all of these actions may have the effect of terminating the affordability restrictions noted above.

This notice is to advise you that the Federally Assisted Housing Preservation Act [310 ILCS 60] gives you certain rights. Tenants living on the property may form a tenants association and negotiate with the owner to purchase the property, subject to certain restrictions. Tenants may also enter into an agreement with a not-for-profit corporation or other entity to represent them in negotiations with the owner. If the negotiations are successful, the tenants association can buy the property. A more detailed discussion of the provisions of the law is attached to this notice as Exhibit A.

If you have any questions with regard to this notice, please contact the following individual at the number listed:

---

---

---

Dated: __________________________________

47 Ill. Adm. Code 375.EXHIBIT A Delivery of Notice to Tenants and Affected Public Entities

a) Where a provision of the Preservation Act requires that notice be given to tenants of the Assisted Housing Development and affected public entities, the requirements may be met by transmitting the notice described in subsection (b) by one of the following methods:

1. delivering the notice, by certified mail or registered mail, return receipt requested, postmarked at least 12 months prior to the anticipated date of the action covered by the notice, to the following public persons or entities:

A) the mayor of the city or village in which the Assisted Housing Development is located or, if in an unincorporated area, the chairperson of the county board;

B) the public housing agency in whose jurisdiction the Assisted Housing Development is located, if any;

C) the Executive Director of IHDA; and

D) the federal agency providing mortgage loan insurance, subsidies or financing for the property, if any;

2. delivering the notice to all affected tenants by certified or registered mail, return receipt requested, postmarked at least 12 months prior to the anticipated date of the covered action;

3. posting, at least 12 months prior to the anticipated date of the covered action, a copy of the notice in a readily accessible location within each affected building; and

4. publication of the notice in a newspaper for the locality in which the property is located.

b) The text of the notice shall read as follows:

NOTICE TO TENANTS AND AFFECTED PUBLIC ENTITIES

The federally Assisted Housing Preservation Act (the Act) affects rental housing developments that have received subsidies from the federal government under various federal housing programs. Generally, these programs limit the amount of rent that owners can charge tenants. The Act refers to these limits as "affordability restrictions."

The Act requires owners of these developments to give tenants notice at least 12 months in advance of any of the following events:

· The sale or other disposition of the development, which has the effect of removing the affordability restrictions on the development;

· The prepayment of the existing mortgage, on the development, or the termination of the mortgage insurance on the mortgage, if either of those actions would result in removing the affordability restrictions on the development; or

· The termination of the development's participation in the federal program. One example is the termination of rental subsidies under the so-called Section 8 program.

You have received this notice because the owner of your development may take one of these actions. The Act gives tenants in your development certain rights:

· You and the other tenants have the right to form a tenants association for the purpose of buying the development.

· Within 60 days from the date of the owner's notice, you must notify the owner that you have formed an association and the names of the individuals who represent the association.

· The owner will then have 60 days to present the association or its representative with a bona fide offer to sell the development. The association then has 90 days to notify the owner whether it intends to buy the development.

· If the association is interested in buying the development, it has 90 additional days to present the owner with a purchase contract and negotiate the final sales price. Once the sales price is agreed to, the sale must close within 90 days.

Part 378 Federal Emergency Rental Assistance Programs

47 Ill. Adm. Code 378.101 Authority

This Part implements the COVID-19 Federal Emergency Rental Assistance Program Act (P.A.102-0005) and is authorized by Section 7.19 of the Illinois Housing Development Act [20 ILCS 3805/7.19].

47 Ill. Adm. Code 378.102 Purpose and Objectives

The purpose of the ERA1 and ERA2 emergency rental assistance programs is to use moneys to provide emergency rental assistance for eligible households, and to provide housing stability services.

47 Ill. Adm. Code 378.103 Definitions

The following definitions apply to terms used in this Part:

"Administering State agency": An agency or department of the State that will disburse funds and administer all or a portion of ERA1 or ERA2 funds.

"American Rescue Plan Act": The American Rescue Plan Act of 2021, P.L. 117-2 (March 11, 2021).

"Annual Income": The definition established by the U.S. Department of Housing and Urban Development in 24 CFR 5.609, or the definition established by the Internal Revenue Service in 26 U.S.C. 62 for "Adjusted Gross Income", as selected by an Applicant or CBRAP Applicant.

"Applicant" or "program applicant": Any person or, in the case of a landlord or lessor, entity, who is obligated to pay rent on a residential dwelling, or lessee or landlord or lessor that has submitted an application, individually or jointly, to receive ERA1 or ERA2 funds. An applicant must apply for assistance via a web-based application portal accessible at http://www.illinoishousinghelp.org/.

"Area Median Income": The area median income, adjusted for household size, as established by the U.S. Department of Housing and Urban Development.

"Authority": The Illinois Housing Development Authority, in its capacity as an Administering State Agency of ERA1 and ERA2 funded programs.

"Categorical Eligibility": An applicant deemed to be an eligible household as a result of the household income having been verified to be at or below 80 percent of the area median income in connection with another local, state, or federal government assistance program, provided the Authority receives a determination letter from the government agency that verified the applicant's household income.

"CBRAP": the Court-Based Rental Assistance Program, an ERA2-funded program administered by the Authority, which provides emergency rental assistance to eligible litigants in eviction court.

"CBRAP Applicant": Any person or, in the case of a landlord or lessor, entity, who is obligated to pay rent on a residential dwelling, or lessee or landlord or lessor that has submitted an application, individually or jointly, to receive ERA2 funds through CBRAP.

"Consolidated Appropriations Act": The Consolidated Appropriations Act, 2021 P.L. No. 116-260 (Dec. 27, 2020).

"Coverage Period": The portion of an ERA1 or ERA2 program eligibility period applicable to an eligible household.

"COVID-19": Coronavirus Disease 2019, as referenced in the State Gubernatorial Disaster Proclamations.

"DCEO": The ERA1 eligible grantee pursuant to the Consolidated Appropriations Act.

"Eligible Landlord": An owner, or authorized management agent, of one or more units receiving or approved to receive ERA1 or ERA2 grant funds on behalf of an eligible household.

"ERA1": An emergency rental assistance program established by Section 501 of Division N of the Consolidated Appropriations Act, 2021, P.L.116-260 (Dec. 27, 2020).

"ERA1 Award Terms": The terms and conditions set forth in OMB Approved No.: 1505-0266 as executed by DCEO in connection with the receipt of funds under the Consolidated Appropriations Act.

"ERA1 Eligible Household": To be eligible, a household must be obligated to pay rent on a residential dwelling and the Authority must determine that:

one or more individuals within the household has qualified for unemployment benefits or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship due, directly or indirectly, to the COVID-19 outbreak;

one or more individuals within the household can demonstrate a risk of experiencing homelessness or housing instability; and

the household has a household income at or below 80% of area median income.

"ERA1 Eligibility Period": An eligible household may receive up to twelve months of ERA1 assistance (plus an additional three months if necessary to ensure housing stability for the household, subject to the availability of funds).

"ERA1 Grant": A grant funded under ERA1 providing emergency rental assistance funds for an eligible household. The Authority will review applications for an ERA1 Grant on a first-come, first-served basis. The Authority does not guarantee funding of any ERA1 Grant.

"ERA1 Grant Agreement": Any agreement between DCEO and the Authority with respect to the administration of a portion of the funds granted to DCEO pursuant to the Consolidated Appropriations Act and further granted to the Authority.

"ERA2": An emergency rental assistance program established by section 3201 of the American Rescue Plan Act of 2021, P.L. No. 117-2 (March 11, 2021).

"ERA2 Award Terms": The terms and conditions set forth in OMB Approved No.: 1505-0270 as executed by IEMA in connection with the receipt of ERA2 funds under the American Rescue Plan Act.

"ERA2 Eligible Household": To be eligible, a household must be obligated to pay rent on a residential dwelling and the Authority must determine that:

one or more individuals within the household has qualified for unemployment benefits or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship during or due, directly or indirectly, to the coronavirus outbreak;

one or more individuals within the household can demonstrate a risk of experiencing homelessness or housing instability; and

the household is a low-income family (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).

"ERA2 Eligibility Period": The maximum period of time covered by an ERA2 grant, not to exceed the time parameters set forth in any applicable law. The aggregate amount of financial assistance an eligible household may receive under ERA2, when combined with financial assistance under ERA1, must not exceed 18 months.

"ERA2 Grant": A grant funded under ERA2 providing emergency rental assistance funds for an eligible household. The Authority will review applications for an ERA2 Grant on a first-come, first-served basis. The Authority does not guarantee funding of any ERA2 Grant. The aggregate amount of financial assistance an eligible household may receive under ERA2, when combined with financial assistance under ERA1, must not exceed $25,000.

"ERA2 Grant Agreement": Any agreement between IEMA and the Authority with respect to the administration of a portion of the funds granted to IEMA pursuant to the American Rescue Plan and further granted to the Authority.

"Housing Stability Service" or "HSS": Case management and other services related to the COVID-19 outbreak, except with respect to ERA2, which services do not have to be related to the COVID-19 outbreak, as defined by the Secretary, including those that enable eligible households to maintain or obtain housing. Such services may include housing counseling, fair housing counseling, case management related to housing stability, housing related services for survivors of domestic abuse or human trafficking, legal services or attorney's fees related to eviction proceedings and maintaining housing stability, and specialized services for individuals with disabilities or seniors that supports their ability to access or maintain housing, subject to the terms of the agreement executed by the HSS Provider and the Authority.

"HSS Sub-Award": An award of funds from the Authority to an HSS Provider.

"HSS Provider": A recipient of funds from the Authority to provide HSS.

"GATA": The Grant Accountability and Transparency Act [30 ILCS 708].

"GATU": The Grant Accountability and Transparency Unit within the Illinois Governor's Office of Management and Budget.

"Guidance": Guidance, including, but not limited to, "frequently asked questions" released by the U.S. Department of the Treasury or the Secretary in connection with the Consolidated Appropriations Act and, or the American Rescue Plan Act.

"IEMA": The ERA2 eligible grantee pursuant to the American Rescue Plan Act.

"IL ERA Act": The Illinois COVID-19 Federal Emergency Rental Assistance Program Act (P.A. 102-0005).

"Lease": A legal agreement between at least two parties in connection with the occupancy of a residential dwelling unit by someone other than the owner.

"Management Agent": A company or individual authorized, pursuant to a Property Management Agreement, to lease units and collect rent on behalf of an owner.

"Owner": A company or individual that holds fee title to the property where the unit is located and occupied by an eligible household.

"Property Management Agreement": A written document that describes the relationship between the owner and management agent. At a minimum, the agreement will reference the address of the eligible household's property and that the management agent may lease and collect rent on behalf of the owner.

"Secretary": The Secretary of the U.S. Department of the Treasury.

"Uniform Guidance": The abbreviated title for Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), which supersedes OMB Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133, and the guidance in Circular A-50.

History

• Source: Amended at 47 Ill. Reg. 15915, effective October 30, 2023

47 Ill. Adm. Code 378.104 Compliance with Federal and State Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable law, including but not limited to the ERA1 award terms, any ERA1 Grant Agreement, the ERA2 award terms, any ERA2 Grant Agreement and the Uniform Guidance.

47 Ill. Adm. Code 378.105 Applications, Forms and Procedures

a) The Authority should, to the extent possible, implement ERA2 consistently with ERA1.

b) The Authority may prepare, use, prescribe, supplement and amend forms, including application forms, agreements and other documents and procedures as may be necessary to implement any ERA1 or ERA2 program.

c) The Authority may accept applications for any ERA1 or ERA2 program in one or more rounds of funding.

d) The Authority must provide grants covered by the IL ERA Act in an amount based on stated need rather than a flat or fixed amount. An eligible household's stated need may include, but is not limited to, the amount of arrears owed to a landlord, or future rental payments based on monthly rent. Nothing in this Part shall be construed as precluding the Authority from capping or setting a limit on the amount of ERA1 or ERA2 emergency rental payments made on behalf of any single eligible household.

e) The Authority will accept applications, from time-to-time, in one or more rounds of funding, via a web-based application portal, as follows:

1. The Authority will offer applications, commenced by landlords and completed by tenants or, commenced by tenants and completed by landlords.

2. In the event a landlord refuses to accept a direct payment, or fails to cooperate with an application for assistance, grants covered by the IL ERA Act will be made directly to eligible households.

3. The application will request the information necessary to determine whether an applicant meets the eligibility criteria. Application questions will focus on the following: identity verification, address verification, income verification, employment status, lease and rent information, rental property ownership information. Demographic information will be requested but will not be required.

47 Ill. Adm. Code 378.106 Fees and Charges

The Authority will not charge an application fee for any ERA1 or ERA2 grants.

47 Ill. Adm. Code 378.107 Authority Administrative Expenses

a) The Authority is entitled to reimbursement from DCEO for administrative expenses incurred with respect to the administration of ERA1 funds. Under ERA1, not more than 10 percent of the amount paid to an eligible grantee may be used for administrative costs attributable to providing financial assistance and housing stability services to eligible households.

b) The Authority is entitled to reimbursement from IEMA for administrative expenses incurred with respect to the administration of ERA2 funds. Under ERA2, not more than 15 percent of the amount paid to an eligible grantee may be used for administrative costs attributable to providing financial assistance, housing stability services, and other affordable rental housing and eviction prevention activities.

47 Ill. Adm. Code 378.108 Amendment

This Part may be supplemented, amended or repealed by the Authority from time to time and in a manner consistent with the Illinois Administrative Procedure Act [5 ILCS 100], this Part and other applicable laws. This Part does not constitute or create any contractual rights.

47 Ill. Adm. Code 378.109 Severability

If any clause, sentence, paragraph, subsection, Section or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section or Subpart to which the judgment is rendered.

47 Ill. Adm. Code 378.110 Non-Discrimination

a) Unless necessary to comply with applicable federal or State law, the Authority will not require any type of documentation relating to any household member's immigration status.

b) Eligible landlords and HSS Providers shall comply with the applicable provisions of the Illinois Human Rights Act [775 ILCS 5] and the regulations promulgated under that Act, the federal Fair Housing Act (42 USC 3601), Section 504 of the Rehabilitation Act of 1973 (29 USC 794), the Illinois Environmental Barriers Act [410 ILCS 25], the Illinois Accessibility Code (71 Ill. Adm. Code 400), and all other applicable State and federal law concerning discrimination and fair housing.

47 Ill. Adm. Code 378.111 Record Retention

Eligible households, eligible landlords and HSS Providers shall maintain copies of any records in their possession in connection with ERA1 and ERA2 for at least five years from the date of the grant.

47 Ill. Adm. Code 378.112 Monitoring

The Authority has the right to monitor all records of eligible households, eligible landlords and HSS Providers relating to an award of funds under ERA1 and ERA2. Eligible households, eligible landlords and HSS Providers shall make all records relating to ERA1 and ERA2 available for inspection by the Authority upon the Authority's request.

47 Ill. Adm. Code 378.113 Federal Legislation

Notwithstanding anything herein to the contrary, this Part shall be construed in conformity and compliance with the Consolidated Appropriations Act and the American Rescue Plan Act. To the extent that this Part conflicts with federal law, federal law shall control and prevail.

47 Ill. Adm. Code 378.114 Prioritization

a) The Authority will establish a system for ERA1 and ERA 2 programs that prioritizes assistance to eligible households with incomes less than 50% of the area median income and to eligible households with one or more members that have been unemployed for at least 90 days.

b) The Authority will make best efforts to give further prioritization to programs covered by the IL ERA Act to an eligible household:

1. located within a disproportionately impacted area based on positive COVID-19 cases;

2. that has a documented history of housing instability or homelessness based on a past due rent notice or eviction notice, or if those items are not immediately available, a self-attestation; or

3. that has a significant amount of rental arrears, such as a minimum of 50% of their monthly rent.

47 Ill. Adm. Code 378.115 Accessibility and Transparency

a) In addition to federal requirements, with respect to any program covered by the IL ERA Act, the Authority will make publicly accessible by publishing on its website any important information, including, but not limited to, the following:

1. application forms for households and landlords, including any joint application forms;

2. program eligibility requirements;

3. the Authority's procedures and processes for administering the applicable program;

4. the Authority's procedures and communication methods for notifying program applicants of defective applications due to incompletion, errors, missing information, or any other impediment;

5. the Authority's procedures and methods for applicants to remedy defective applications due to incompletion, errors, missing information, or any other impediment; and

6. any other important program information critical to applicants, including renters and landlords relating to the application requirements and process, eligibility determination, and disbursement of payment.

b) The Authority will ensure that important program information, including the application and all marketing materials, is language accessible by publishing to its website the same in both English and Spanish. To the extent administratively feasible, the Authority will make efforts to provide certain program information, such as frequently asked questions and responses, in other languages.

47 Ill. Adm. Code 378.116 Required Notifications and Correspondence

With respect to any program covered by the IL ERA Act, the Authority shall ensure it communicates clearly with an applicant about the application determination process, including acceptance, status of a pending application, and any reason for denying an application.

a) The Authority will provide notice to an applicant upon finding that a submitted application is defective or should otherwise be considered ineligible, denied, or rejected. Applications lacking information necessary to determine whether an applicant meets the eligibility criteria will be considered ineligible and denied, or rejected. This would include applications whereby the Authority is unable to perform identity verification, address verification, income verification, employment status, lease and rent information, or rental property ownership information.

b) The notice from the Authority will explain the reason why an applicant's submitted application is defective or should otherwise be considered ineligible, denied, or rejected.

c) The notice will contain the necessary information, process, accepted method, and deadline for the applicant to remedy any defective or deficient application, provided that remedy is possible.

d) All notice and correspondence required to be provided by the Authority will be given promptly and without unnecessary delay to any applicant.

47 Ill. Adm. Code 378.117 Recapture

ERA1 and ERA2 grants, including HSS Grants, are subject to recapture in the event of default, such as fraud on behalf of an eligible household, eligible landlord, or HSS Provider, failure to comply with this Part, any other applicable law, or failure to meet any obligations under any program document. The Authority will provide a notice of recapture and demand for repayment to the applicable party in writing that specifies the reason or reasons for the recapture. If the recipient wishes to appeal the demand for repayment, the recipient must notify the Authority in writing within thirty days after receipt. The Authority will review information provided by the recipient and will, if sufficient documentation is provided, reverse the demand for repayment.

47 Ill. Adm. Code 378.201 Household Eligibility

a) For an applicant to be eligible to receive an ERA1 or ERA2 grant, the occupants of the residential dwelling unit must qualify as an ERA1 or ERA2 eligible household, respectively. The Authority is permitted to verify income based on categorical eligibility.

b) The Authority will not disqualify an eligible household from any program covered by the IL ERA Act based on previous application for or receipt of other similar federal assistance for periods that are different than that for which the program assistance is being provided.

c) For a CBRAP applicant to be eligible to receive an ERA2 grant pursuant to CBRAP, the applicant must be an ERA2 eligible household and:

1. The CBRAP Applicant must have an eviction court summons; and

2. The ERA2 Eligible Household must be behind on its rent for at least 30 days.

d) When the Authority makes a grant directly to an eligible household, the direct payment will not exceed 3 months of future rent.

History

• Source: Amended at 47 Ill. Reg. 15915, effective October 30, 2023

47 Ill. Adm. Code 378.301 Landlord Eligibility

Prior to receiving ERA1 or ERA2 grant funds on behalf of an eligible household, landlords must:

a) Provide any documentation and information reasonably required by the Authority, including, but not limited to, a copy of the lease (if available), evidence of ownership and verification of address, a W-9, and a property management agreement (if acting as an agent on behalf of an owner).

b) Execute documentation evidencing their agreement to comply with the terms and conditions of all program documents and all applicable laws, including, but not limited to, the Consolidated Appropriations Act, the American Rescue Plan Act, the IL ERA Act, the Illinois Housing Development Act, the Guidance, and this Part.

47 Ill. Adm. Code 378.302 Waiver of Fees, Fines and Charges

Prior to receiving ERA1 or ERA2 grant funds on behalf of an eligible household, and in order to become an eligible landlord, landlords must agree to waive all late fees accrued by the eligible household during the grant coverage period, as well as all fines or other charges and may not charge holdover rent during the grant coverage period.

47 Ill. Adm. Code 378.303 Leases

a) Unless necessary to comply with applicable federal or State law, the Authority will not require a fully executed written lease to participate in any ERA1 or ERA2 program.

b) Prior to receiving ERA1 or ERA2 grants funds on behalf of an eligible household, landlords must agree they will not terminate the lease of an eligible household until the end of the program coverage period, or the expiration of the program eligibility period, whichever comes first.

c) In the event an eligible household is residing in a unit with an expired lease, occupancy status may be viewed by the Authority as month-to-month, on the same terms and conditions as the most recently expired lease.

47 Ill. Adm. Code 378.304 Eviction Moratorium

a) Prior to receiving ERA1 or ERA2 grants funds on behalf of an eligible household, landlords must agree they will forgo any right to commence or continue an eviction action, or other legal action, including but not limited to breach of contract, against an eligible household, for non-payment of rent or other fees, during the longer of:

1. the eligible household's program coverage period; or

2. the date of any eviction moratorium established by State or federal law, including, but not limited to, any order issued by the Centers for Disease Control and Prevention or the Governor.

b) This Section is not intended to limit an eligible landlord's right to evict a tenant for legally permissible reasons unrelated to the payment of rent, fees or other financial charges.

47 Ill. Adm. Code 378.305 Distribution of Grants

a) ERA1 grants made by the Authority may cover all or any portion of the ERA1 eligibility period.

b) ERA2 grants made by the Authority may cover all or any portion of the ERA2 eligibility period.

c) When making ERA1 or ERA2 grant payments to an eligible landlord on behalf of an eligible household, the Authority must include information sufficient to allow the recipient of the payment to identify the applicable eligible household.

d) If the landlord does not agree to accept an ERA1 grant payment from the Authority after the Authority has made contact with the landlord, then the Authority may make such payments directly to the eligible household for the purpose of the eligible household making payments to the landlord. The Authority shall make reasonable efforts to obtain the cooperation of landlords to accept ERA1 payments.

1. Outreach will be considered complete if:

A) a request for participation is sent in writing, by mail, to the landlord, and the addressee does not respond to the request within 7 calendar days after mailing (unless such time period is modified by applicable law); or

B) the Authority, or an authorized representative of the Authority, including but not limited to an HSS Provider, has made at least three attempts by phone, text, or e-mail over a 5 calendar-day period to request the landlord's participation (unless such time period is modified by applicable law); or

C) a landlord confirms in writing that the landlord does not wish to participate.

2. The final outreach attempt or notice to the landlord must be documented.

e) In the event the outreach does not result in the landlord's participation in the applicable program, the Authority will provide an alternative mechanism to provide ERA1 assistance directly to eligible households with approved applications.

f) In administering any ERA2 funded programs, the Authority may choose to seek the cooperation of landlords before providing assistance directly to tenants. In doing so, the Authority will follow the provisions of this Section.

47 Ill. Adm. Code 378.401 Purpose

Subject to the terms of the agreement executed by the HSS Provider and the Authority, HSS Sub-Awards allocated to an HSS Provider are for the provision of HSS outreach and intake services, as described in this Part, and the purchase of HSS equipment.

47 Ill. Adm. Code 378.402 Request for Proposals

The Authority may issue one or more requests for proposals for applications for an HSS Sub-Award from prospective HSS Providers.

47 Ill. Adm. Code 378.403 Hss Provider Eligibility

HSS Providers may be HUD approved counseling agencies, community or faith based organizations, non-profit organizations, including legal assistance groups, and such other community organizations that specialize in housing or community outreach and engagement and such other organizations to the extent permitted by applicable law.

47 Ill. Adm. Code 378.404 Eligible Uses on an Hss Sub-Award

a) HSS outreach, which includes:

1. Disseminating information about ERA1 and ERA2 throughout the provider's coverage area;

2. erforming outreach services within the provider's coverage area to inform as many people as possible about ERA1 and ERA2 programs in languages needed in the coverage area; and

3. Identifying other available housing resources for clients.

b) HSS intake, which includes:

1. Assisting Illinois residents, including landlords and tenants, with the initial ERA1 or ERA2 program application process virtually, over the phone, or in-person;

2. Providing assistance to applicants after submittal of an ERA1 or ERA2 program application, including case management and referral services;

3. Following up with applicants after the submittal of an ERA1 or ERA2 program application, including case management and referral services;

4. Provide intentional outreach and intake assistance to landlords of 2-4 unit buildings who may face technology and/or language barriers; and

5. Assisting applicants who have applied for funds from an ERA1 or ERA2 program, but whose landlords have been unresponsive, including engaging in any specific landlord outreach steps required by applicable law.

c) Purchasing HSS equipment to bolster a provider's mobile and technology network in order to perform the HSS outreach and intake services.

47 Ill. Adm. Code 378.405 Application Requirements

Each application for an HSS Sub-Award under the request for applications shall include the information required by the Authority to promote efficient program administration and quality of performance. Applicants will be required to indicate how many staff members they anticipate dedicating to the program, the geographical area they intent to serve, the general demographic makeup of the clients the applicant typically serves, a description of all the services the applicant currently offers, the number of clients served on an annual basis and the applicant's previous experience with COVID-19 rental assistance programs.

47 Ill. Adm. Code 378.406 Maximum Hss Provider Sub-Awards

The maximum HSS Sub-Award available to HSS Providers may vary based on the eligible activities the HSS Provider is approved to undertake.

47 Ill. Adm. Code 378.407 Distribution of Hss Provider Sub-Awards

Once approved for an HSS Sub-Award, HSS Providers will be eligible to receive an initial disbursement in an amount equal to less than 100% of the grant, in an amount established by the Authority. An accounting of expenses will be required to demonstrate use of the HSS Sub-Awards provided in the initial disbursement. Additional HSS Sub-Awards disbursements will be made pursuant to the submission and approval of one or more reports acceptable to the Authority.

Part 380 Rental Housing Support Program

47 Ill. Adm. Code 380.101 Authority

The Illinois Housing Development Authority (Authority) is the designated administrator for the Rental Housing Support Program (RHS Program) in Illinois, which was established by the Rental Housing Support Program Act (RHS Program Act) [310 ILCS 105], effective July 5, 2005. This Part is authorized by Section 7.19 of the Illinois Housing Development Act [20 ILCS 3805/7.19] and Section 10 of the RHS Program Act.

47 Ill. Adm. Code 380.102 Purpose and Objectives

The purpose of the RHS Program is to help localities address the need for decent, affordable, permanent rental housing. Under the RHS Program, the Agency shall make grants to Local Administering Agencies to provide subsidies to Landlords that will make housing units affordable to Extremely Low- and Severely Low-Income Households and to Developers to provide long-term operating support for Projects that will make housing units affordable to Extremely Low- and Severely Low-Income Households.

47 Ill. Adm. Code 380.103 Definitions

The following terms used in this Part shall have the following definitions:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Agency": The Illinois Housing Development Authority or a Municipality.

"Allocation": An award of funds from the RHS Program to an LAA or a Developer.

"Annual Adjustment Factor": The figure published annually by HUD to determine rent increases for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437).

"Annual Income": All amounts, monetary or not, received or anticipated to be received, from a source outside the Household, by or on behalf of the head, spouse or co-head of the Household, or any other Household member over the age of 18, during the 12-month period following admission or the date of the most recent recertification of the Household income. There is no asset limitation for participation in the RHS Program. However, the definition of annual income includes net income from assets. The determination of Annual Income shall be made as provided in the HUD regulations governing section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437) and 24 CFR 5.609(b) and (c) (2021), provided that imputed income (as described in 24 CFR 5.609(b)(3)) from the Household's assets shall not be included. Examples of and instructions for applying these requirements shall be included in the applicable Agency's Program Guide.

"Annual Receipts" means revenue derived from the RHS Program State surcharge from July 1 through June 30 on deposit in the Rental Housing Support Program Fund that is appropriated each year for distribution by the Authority for the RHS Program.

"Applicant": An entity or an individual (as a Developer) making an Application for an Allocation.

"Application": The Application form and attachments that an Applicant must submit when applying for an Allocation under the RHS Program.

"Authority": The Illinois Housing Development Authority.

"Commitment": A contract executed by an Agency and an LAA or a Developer under which the Agency agrees to provide an Allocation. Each Commitment shall contain a provision to the effect that the Agency shall not be obligated to provide funds under the Commitment if the Agency has not received adequate funds from the Annual Receipts or a Fund Distribution, as applicable.

"Coordinating Local Administering Agency": A local administering agency that provides technical and administrative assistance to localities that do not possess the capacity to administer an Allocation.

"Developer": The owner of a Project that has applied for or has been approved for an Allocation under the LTOS Program.

"Extremely Low-Income Household": A Household whose Annual Income is less than or equal to 30% of the Median Income.

"Fiscal Year": The fiscal year of the State.

"Fund Distribution": A distribution of funds from the Annual Receipts for a Fiscal Year to a Geographic Area.

"Geographic Areas": The City of Chicago, Suburban Areas, Small Metropolitan Areas, and Rural Areas.

"Household": A single person, family or unrelated persons living together.

"Housing Quality Standards": HUD Section 8 inspection standards for Units established by 24 CFR 982.401 (2021).

"HUD": The U.S. Department of Housing and Urban Development.

"Income Range": A range of Annual Incomes set forth in Section 380.305 that is used to determine the Tenant Contribution for Tenants.

"Landlord": An owner of one or more Units receiving or approved to receive Rental Assistance through an LAA. An LAA or subsidiary of an LAA may be a Landlord; provided, however, that the LAA must disclose its intention to be a Landlord, or appoint a subsidiary to be a Landlord, in its Application.

"LAA": A local administering agency meeting the eligibility requirements set forth in Section 380.402 and designated by an Agency that receives an Allocation to provide Rental Assistance.

"LTOS Program": The long-term operating support program established under the RHS Program, to be used exclusively to provide long-term operating support to Developers of Projects that provide Units newly available to Extremely Low-Income Households and Severely Low-Income Households.

"Maximum Rent": The maximum rent for a Unit, which shall be the greater of:

the Maximum Rent established under the federal Low Income Housing Tax Credit Program for a Unit rented by a Tenant with an Annual Income less than or equal to 60% of the Median Income; or

120% of HUD's fair market rent for the area in which the Unit is located.

"Median Income": The Median Income of the area in which the Unit is located, adjusted for family size, as the adjusted income and Median Income for the area are determined from time to time by HUD for purposes of Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437).

"Members": The members of the Authority.

"Municipality": A municipality with a population greater than 2,000,000.

"Municipality Program Guide": The guidelines published by a Municipality for Allocations made by the Municipality. Each Municipality Program Guide shall explain the RHS Program and provide additional information about various RHS Program requirements.

"Permanent Supportive Housing": A Project with a preference or restriction for people who need supportive services to access and maintain affordable housing; are experiencing, or are at risk of, homelessness; are living with disabilities; or are experiencing, or are at risk of, institutionalization. The housing should be permanent (not time-limited, not transitional), affordable (typically rent-subsidized or otherwise targeted to an extremely-low-income Tenant who makes 30% of the Median Income or below), and independent (Tenant holds the lease with normal rights and responsibilities). Services should be flexible (responsive to Tenants' needs and desires), voluntary (participation in supportive services is not a condition of tenancy), and sustainable (the focus of services is on maintaining housing stability and good health).

"Plan for Services": The plan through which each prospective LAA will provide information to Tenants on how to gain access to education, training, and other supportive services and that sets forth the procedures for identifying and referring prospective Tenants to Landlords. LAAs designated by a Municipality shall prepare a Plan for Services and, if a Municipality does not designate an LAA, the Municipality shall prepare a Plan for Services.

"Program Guide": The guidelines published by the Authority explaining the RHS Program and providing additional information about various RHS Program requirements.

"Project": A building or group of buildings that are financed under a common plan of financing.

"Reconciliation": The determination of the difference between the amount of Rental Assistance paid to Landlords or Developers and the amount of Rental Assistance the Landlords or the Developers were entitled to receive.

"Rental Assistance": The amount paid to a Landlord or a Developer as a subsidy for a Unit approved for assistance under the RHS Program.

"Rental Assistance Rider": The rider to be attached to each Tenant's lease that describes the RHS Program; requires the Tenant to provide a certification of its Annual Income; notifies the Tenant that the Tenant must report changes in its Annual Income to the LAA or Developer, as applicable, when they occur and on each occasion that the Tenant's lease is to be renewed; and informs the Tenant that increases in Annual Income may result in an increase in the Tenant Contribution. The Rental Assistance Rider shall be included in the Program Guide or the Municipality's Program Guide, as applicable.

"Reserve Fund": The fund established either by the Authority or by a Municipality directly or through its LAA to provide a source of funds if the Annual Receipts are not sufficient to provide adequate funding for existing Commitments.

"RFP": A request for proposals by an Agency soliciting Applications from LAAs or Developers.

"RHS Program Act": The Rental Housing Support Program Act [310 ILCS 105].

"RHS Program": The Rental Housing Support Program authorized by the RHS Program Act.

"Rural Area": All areas of the State not specifically included in any other Geographic Area.

"Service Area": The geographic boundaries of the area to be served by an LAA.

"Severely Low-Income Household": A Household whose Annual Income is less than or equal to 15% of the Median Income.

"Small Metropolitan Areas": The Geographic Areas that include the municipalities of Bloomington-Normal, Champaign-Urbana, Decatur, DeKalb, Moline, Pekin, Peoria, Rantoul, Rockford, Rock Island and Springfield, and the counties of Madison and St. Clair.

"Special Needs Households": Households that are homeless or imminently at risk of becoming homeless; that are, or are imminently at risk of, living in institutional settings because of the unavailability of suitable housing; or that have one or more members with disabilities, including but not limited to physical disabilities, developmental disabilities, mental illness or HIV/AIDS.

"Suburban Areas": The Geographic Areas that include the counties of Cook (excluding Chicago), DuPage, Kane, Lake, McHenry, and Will.

"State": The State of Illinois.

"State Median Income": The State Median Income published by the U.S. Census Bureau in the most current decennial census.

"Tenant": A Household occupying a Unit.

"Tenant Bill of Rights": Information LAAs and Developers are required to provide to Tenants concerning how to contact the LAA; local Landlord-Tenant laws and procedures; the housing rights of persons with disabilities; how to contact the local agency or agencies administering local Landlord-Tenant laws and procedures or protecting or promoting these housing rights of persons with disabilities; eligibility requirements for participating in the RHS Program; and the rights and responsibilities of prospective Tenants before occupancy of a Unit.

"Tenant Contribution": The portion of the monthly rent for a Unit to be paid by the Tenant, which shall be one-twelfth of approximately 30% of the median of the Income Range in which the Tenant's Annual Income falls, adjusted for Unit size.

"Tenant Income Certification": The form:

prescribed by the Authority; and

to be used by Landlords and Developers in determining and reporting a Tenant's Annual Income to an LAA or an Agency, as applicable.

"Tenant Selection Plan": The written plan prepared by a Landlord or a Developer and approved by the LAA or an Agency, as applicable, that governs the selection of Tenants for a Unit.

"Transitional Contribution": The Tenant Contribution for Tenants whose income has exceeded the income limit for Extremely Low-Income Households.

"Unit": A rental housing Unit receiving Rental Assistance through an Allocation. A Unit may be a single-family dwelling or a Unit in a multifamily dwelling. Housing Units intended as transitional or temporary housing do not qualify as Units.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.104 Compliance with Federal and State Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal and State law.

47 Ill. Adm. Code 380.105 Forms and Procedures for the Program

The Authority may prepare, use, supplement, and amend such forms, agreements, and other documents and such procedures as may be necessary to implement the RHS Program. Except as otherwise permitted in this Part or by the Authority in writing, all Agencies must use the forms prepared by the Authority.

47 Ill. Adm. Code 380.106 Application Fee

An Agency may charge an Application fee not to exceed $500 in connection with its Application, as set forth in the Program Guide or Municipality Program Guide, as applicable.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.107 Program Operating Fees

Allocations to LAAs, including any LAA designated by a Municipality, shall include an amount to be paid to the LAA for the LAA's operating expenses in connection with the administration of the Allocation, including, but not limited to, the staff salaries and benefits of LAA employees for time spent performing duties associated with the Allocation, including Unit inspections; participation in Tenant referrals and determination of Tenant eligibility; negotiation with prospective Landlords regarding participation in the RHS Program; technical assistance; auditing and bookkeeping expenses; the LAA's use of equipment in operating under the RHS Program (such as cars, copiers, paper used in preparing required documentation, etc.); and costs for office space and utilities incurred in operating under the RHS Program. The amount of funds for an LAA's operating expenses shall not exceed 10% of the amount of an Allocation that is less than or equal to $500,000 and 7% of the annual amount of an Allocation that is greater than $500,000.

47 Ill. Adm. Code 380.108 Authority Administrative Expenses

When funding for administrative expenses has not been separately appropriated, the Authority shall be entitled to deduct from the Annual Receipts, before any distribution of funds under the RHS Program, an amount not to exceed 7% of the Annual Receipts for expenses associated with the administration of the RHS Program, including, without limitation, expenses for staff salaries and benefits for time spent on design and administration of the RHS Program; training and marketing expenses incurred in performing outreach activities and providing technical assistance to LAAs; the use of the Authority's equipment for RHS Program purposes; the cost of office space and utilities incurred in connection with the RHS Program; and any other expenses incurred in the administration of the RHS Program; provided, that only administrative expenses specifically related to the RHS Program within a Municipality may be deducted from the Annual Receipts required by law to be distributed to Municipalities. The Authority shall maintain a detailed accounting of all administrative expenses, which shall be available to the applicable Agency, LAAs or the public for review.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.109 Amendment

This Part may be supplemented, amended, or repealed by the Members from time to time and in a manner consistent with the Illinois Administrative Procedures Act [5 ILCS 100], this Part, the Act, the RHS Program Act, and other applicable laws. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 380.110 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair, or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section, or Subpart as to which the judgment is rendered.

47 Ill. Adm. Code 380.111 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 380.112 Non-Discrimination

Landlords, LAAs and Developers shall comply with the applicable provisions of the Illinois Human Rights Act [775 ILCS 5] and the regulations promulgated under that Act, the Fair Housing Act (42 USC 3601), Section 504 of the Rehabilitation Act of 1973 (29 USC 794), the Illinois Environmental Barriers Act [410 ILCS 25], the Illinois Accessibility Code (71 Ill. Adm. Code 400), and all other applicable State and federal law concerning discrimination and fair housing.

47 Ill. Adm. Code 380.113 Titles and Captions

Titles and captions of Subparts, Sections, and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 380.201 Distribution of Annual Receipts

The Authority shall distribute funds from Annual Receipts in accordance with the following priorities:

a) To the Authority for its administrative fee.

b) To Municipalities.

1. Each Municipality must use at least 10% of its Fund Distribution for an LTOS Program.

2. Each Municipality shall distribute the balance of its Fund Distribution to its Reserve Fund and one or more designated non-profit organizations that meet the requirements for an LAA and that will serve as an LAA for the Municipality.

c) To fund the Authority's Reserve Fund, as provided in Section 380.205.

d) After distributing the amounts listed in subsections (a), (b) and (c), the Authority shall use at least 10% of the remaining amount of the Annual Receipts for an LTOS Program, which the Authority shall allocate through a competitive Application process, as described in Subpart F, for Projects to be located outside the Municipalities.

e) The balance of the Annual Receipts shall be distributed to Suburban Areas, Small Metropolitan Areas and Rural Areas.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.202 Fund Distributions to Geographic Areas

a) The Authority shall make Fund Distributions to Geographic Areas on a proportional basis using data from the most recent decennial census performed by the U.S. Census Bureau. Each Geographic Area's proportionate share shall be the fraction having a numerator equal to the number of all Households in that Geographic Area having an Annual Income less than 50% of the State Median Income (as determined by the U.S. Department of Housing and Urban Development, based on U.S. Census data) for a Household of four and paying more than 30% of their Annual Income for rent, and a denominator equal to the number of all Households in the State having an Annual Income less than 50% of the State Median Income for a Household of four and paying more than 30% of their Annual Income for rent.

b) The proportionate Fund Distributions for the Geographic Areas shall be redetermined when data from a new decennial U.S. Census becomes available. The Authority may use funds in the Reserve Fund to alleviate hardships arising out of reductions in the proportionate amount of Fund Distributions that would otherwise result in reductions in the amount of Rental Assistance for existing Tenants.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.203 Long-Term Operating Support (ltos) Program

Each Agency shall establish a competitive Application process for providing long-term operating support to Projects providing Units newly available to Extremely Low-Income Households and Severely Low-Income Households within its jurisdiction. Each Agency shall administer the funds for its LTOS Program in a manner consistent with criteria established in Subpart F, but Municipalities may include additional preferences and requirements set forth in writing in the Municipality's Application form, as long as those preferences and requirements are consistent with applicable federal, State and local law.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.204 Rural Area Set-Aside

The Authority may award up to 20% of the Fund Distribution for Rural Areas to a single LAA, to be used for Rental Assistance within a designed portion of the Rural Area within which localities desire to support a number of Units too small to justify the establishment of a Rental Assistance program for such localities, as determined by the LAA and approved by the Authority. With the approval of the Authority, the designated LAA under the Rural Area set-aside may subcontract administrative tasks, such as inspection of Units, to local agencies. The Authority may award more than 20% of the Fund Distribution for Rural Areas to a single Coordinating Local Administering Agency that provides technical and administrative assistance to localities that do not possess the capacity to administer an Allocation, as determined by the Coordinating Local Administering Agency and approved by the Authority.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.205 Reserve Fund

a) Each Agency shall establish a Reserve Fund in an interest-bearing account from the Annual Receipts or Fund Distribution, as applicable, to offset decreases in funding caused by periodic fluctuation in Annual Receipts, to maintain continuity in funding when Commitments expire, and to phase out Rental Assistance lost by a shift in any Geographic Area's proportionate Fund Distribution as a result of a new decennial census. Municipalities may delegate the responsibility to establish a Reserve Fund to their designated LAAs.

b) The amount to fund the Reserve Fund for the Authority shall be a maximum of 5% of the amount of each year's Annual Receipts after subtracting the Authority's administrative fee and the Fund Distributions to Municipalities. The amount of each Municipality's Reserve Fund shall be a maximum of 5% of the Municipality's Fund Distribution. Each Reserve Fund shall also include income derived from investing funds in the Reserve Fund and funds received from LAAs that did not use the entire amount of their Allocations.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.301 Tenant Eligibility; Required Percentage of Severely Low-Income Tenants

Eligible Tenants shall be either Extremely Low-Income Households or Severely Low-Income Households; provided, however, that a Household that is already receiving or will receive Rental Assistance under a federal program shall not be eligible to be a Tenant. At least 50% of the Units for which an LAA or a Developer receives Rental Assistance shall be reserved for Severely Low-Income Households unless the LAA or the Developer is able to demonstrate that there are an insufficient number of Severely Low-Income Households currently residing in the Service Area defined in the Application or the area in which the Project is located, as applicable, who are qualified to become Tenants. The LAA or the Developer must show that it has made extensive, but unsuccessful outreach efforts, including contacting non-profit corporations serving the homeless, disabled, and senior citizens in the Service Area or the area in which the Project is located; contacting public housing authorities with jurisdiction in the Service Area or the area in which the Project is located; and otherwise publicizing the availability of these Units at appropriate locations within and surrounding the Service Area or the area in which the Project is located, such as through advertising in local newspapers, or meetings with community groups. The Applicant must submit this evidence to the Agency with its Application.

47 Ill. Adm. Code 380.302 Outreach Requirements

The LAA or the Developer must document that it has made extensive efforts to publicize the availability of Units under the RHS Program, including contacting non-profit corporations serving the homeless, the disabled and senior citizens in the Service Area or the area in which the Project is located; public housing authorities with jurisdiction in the Service Area or the area in which the Project is located; and otherwise publicizing the availability of these Units at appropriate locations within and surrounding the Service Area or the area in which the Project is located, such as by advertising in local newspapers, or through meetings with community groups. The Applicant must submit this evidence to the Agency with its Application and with the report required under Section 380.410.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.303 Income Certifications

Each prospective Tenant must provide an Income Certification to the Landlord when applying to occupy a Unit and each time thereafter that the Tenant applies to renew the lease for the Unit.

47 Ill. Adm. Code 380.304 Training Programs

The Authority shall periodically provide training programs convenient to potential Applicants. The training shall include a program overview, a description of the requirements for both an LAA and a Developer, and a thorough review of the Program Guide and, if applicable, the RFP process. The Authority shall provide reasonable notice of all training programs on its website and by any other means the Authority deems appropriate.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.305 Tenant Rent Contribution

The LAA or Developer must annually establish for each Unit the amount of the Tenant Contribution. Each Tenant's Tenant Contribution shall be a fixed amount and must be based on the size of the Unit and the Tenant's Income Range as set forth in this Section. A Tenant's Tenant Contribution may increase when the Tenant's lease is renewed, if the Tenant's Annual Income increases, or the Authority's Income Range changes.

Monthly Tenant Contribution By Bedroom Type:

Annual Income Range: 0 br. 1 br. 2 br. 3 br. 4 br. 5 br.

$0

$0

$0

$0

$0

$0

$0

$1-$4,999

$26

$29

$31

$33

$35

$36

$5,000 − $9,999

$104

$117

$125

$133

$142

$146

$10,000 − $14,999

$208

$233

$250

$267

$283

$292

$15,000 − $19,999

$313

$350

$375

$400

$425

$438

$20,000 − $24,000

$417

$467

$500

$533

$567

$583

$25,000 − $29,999

$521

$583

$625

$667

$708

$729

$30,000 − $35,000

$625

$700

$750

$800

$850

$875

Tenants reporting no income will not make a Tenant Contribution for a period of 12 months from the date of income loss. After this period ends, Tenants will begin paying a minimum Tenant Contribution based on the unit size in the $1-$4,999 Income Range.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.306 Amount of Rental Assistance, Rent, and Maximum Rent

a) The amount of the Rental Assistance for each Unit shall be the difference between the amount of the rent for the Unit and the Tenant Contribution. The amount of Rental Assistance for the Unit shall be established by the LAA and the Landlord, or the Agency and the Developer, as applicable.

b) Rents for a Unit must be comparable to those of similar size and condition in the market area in which the Unit is located with similar amenities. These comparable rents must be consistent with rent levels provided in the Application.

c) Rents shall not exceed Maximum Rents established for the area, as determined annually by the Authority, unless the rents throughout the local community are at such levels that, if the Maximum Rent is used, it is highly unlikely that there will be Units available for inclusion in the RHS Program. If an LAA requests an increase in rents to a level greater that the Maximum Rent, the LAA must document these circumstances to the satisfaction of the applicable Agency before the Agency will approve the request.

47 Ill. Adm. Code 380.307 Rent Increases

Upon request from an LAA or a Developer, Agencies may allow an annual increase in the rent for Units, not to exceed the existing rent multiplied by the most recent Annual Adjustment Factor, except as otherwise permitted by Section 380.306(c). Rent increases shall be subject to the availability of funds in Annual Receipts. In making this determination, the Agency shall review comparable rents in the market area, operating expenses of the building in which the Unit is located, and any other information the Agency deems relevant. Any rent increase shall not increase the Tenant Contribution. If approved, rent increases shall take effect either at the time the lease for the Unit is renewed or, if a lease is not renewed, in the first month Rental Assistance is subsequently provided for a new Tenant for the Unit.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.308 Over-Income Tenants

Upon receipt of a Tenant Income Certification, the Landlord, with the direction and supervision of the LAA, shall verify the Annual Income of each Tenant prior to the renewal of the Tenant's lease. If the Annual Income of a Tenant exceeds 35% of the Median Income because of an increase in the Tenant's Annual Income, Rental Assistance shall be terminated no later than 12 months after the date of that increase. If the increase occurs during the term of an existing lease, the Tenant shall be required to report the increase to the Landlord and the existing lease shall be extended for the period of time necessary to allow the Tenant the full 12 months of Rental Assistance. The Transitional Contribution during this period shall be the Tenant's Tenant Contribution prior to such increase, plus one-half of the difference between the Tenant Contribution and the current rent for the Unit. If a Tenant's Annual Income initially is within the Severely Low-Income Household limit, and increases above that limit, but is still within the Extremely Low-Income Household limit, the LAA shall take all reasonable efforts to ensure that an additional Unit is reserved for a Severely Low-Income Household, if necessary to comply with Section 380.301.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.309 Appeals

a) All disputes between Landlord and Tenant or prospective Tenant concerning Annual Income or other eligibility requirements shall be initially resolved by the LAA providing Rental Assistance to the Landlord.

b) If the LAA is unable to resolve the dispute, any of the parties involved may take an appeal to the applicable Agency. In the event of an appeal, all parties shall submit a written statement of their position and all relevant documentation to the applicable Agency. The Agency shall make a final decision based on the documentation submitted.

c) For LTOS Programs, all disputes between a Developer and a Tenant or prospective Tenant concerning Annual Income or other eligibility requirements shall be resolved by the funding Agency, based on written statements of positions and submission of relevant documentation by the Developer and the Tenant.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.310 Rental Preferences for Tenants with Special Needs

An LAA or a Developer may include in its Application a pledge to use its best efforts to make Units under its Allocation available to Special Needs Households. Notwithstanding the fact that an LAA or a Developer has included such a pledge in its Application, LAAs must require Landlords to rent, and Developers must rent, available Units to the first eligible Tenant, regardless of whether the prospective Tenant is a Special Needs Household. An LAA, a Landlord or a Developer shall not require a Tenant to have a diagnosis of a particular illness or the presence of a specific disability as a condition of eligibility for a Unit unless that diagnosis or disability is required by another funding source for the Unit or the Project.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.311 Tenant Bill of Rights

Each LAA must provide each Landlord that is to receive Rental Assistance payments with a Tenant Bill of Rights, and shall require each Landlord to provide each Tenant with the Tenant Bill of Rights. Each Developer must provide all Tenants in its Project with a Tenant Bill of Rights.

47 Ill. Adm. Code 380.312 Tenant Selection Plan

Landlords and Developers must submit to the funding LAA or Agency, as applicable, a Tenant Selection Plan acceptable to the LAA or Agency. All Tenant Selection Plans shall be made available to the general public for inspection.

47 Ill. Adm. Code 380.401 Request for Proposals

From time to time, the Authority shall issue an RFP for Applications from prospective LAAs. The RFP shall include a copy of the Program Guide and an Application form. The period for submitting a response to the initial RFP shall be at least nine months. For each subsequent RFP, the Authority shall allow a minimum of three months to submit a response to the RFP. Each Municipality shall designate an LAA that meets the requirements of this Part relating to LAAs; however, Municipalities are not required to issue RFPs for selecting an LAA. Municipalities may designate an LAA according to procedures set forth in the Municipality Program Guide.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.402 Eligibility

LAAs may be local governmental bodies, including Municipalities, counties, and townships in unincorporated areas of the State; local housing authorities organized under the Illinois Housing Authorities Act [310 ILCS 10]; or non-profit organizations registered and in good standing with the Illinois Secretary of State and the Illinois Attorney General.

47 Ill. Adm. Code 380.403 Application Requirements

Each Application to be an LAA shall include the information required by this Section and, in the case of the Authority, any additional information the Authority may require to promote efficient program administration and quality of performance, provided that those requirements are included in the Authority's RFP and are consistent with this Section.

a) Unit Types: Each Application shall include, but not be limited to, two, three, and four-bedroom Units among those Units proposed for Rental Assistance. Each Applicant shall determine and document the need for and availability of two, three, and four-bedroom Units in its proposed Service Area. The Authority may adjust the number of these larger Units if the information in the Application indicates a greater or lesser need for specific Unit types. All LAAs must make a good faith effort to comply with the final determination of the number of two-, three-, and four-bedroom Units to receive Rental Assistance in the Service Area.

b) Maximum Number of Units:

1. For buildings containing more than 10 Units, the number of Units proposed to receive Rental Assistance from the RHS Program shall not exceed 50% of the Units in the building. For buildings containing 10 Units or fewer, there shall be no restriction on the number of Units proposed to receive Rental Assistance from the RHS Program.

2. For buildings containing 20 or more Permanent Supportive Housing Units, the number of Units proposed to receive Rental Assistance for RHS shall be 100% of the Units in the building.

c) Rents: Each Application shall include a schedule of rents for the proposed Units, the proposed Tenant Contribution, and a fair market analysis. To meet the requirements of the fair market analysis, LAAs shall include a sampling of rents at several properties throughout the service area. Proposed schedules of rents should be comparable to rents provided in the fair market analysis.

d) Required Outreach: As provided in Section 380.302, each Applicant must demonstrate that it has made extensive efforts to establish working relationships with organizations serving populations in need of Rental Assistance, including, without limitation, local non-profit organizations and other entities serving the homeless, disabled, and senior citizens in the Service Area; public housing authorities with jurisdiction in the Service Area; and other organizations within the Service Area having experience in working with Extremely Low-Income Households and Severely Low-Income Households.

e) Each Applicant must include in its Application a plan for selecting Landlords to participate in the RHS Program.

f) Preference in Making Allocations: Applications that pledge to make efforts to offer proposed Units to Special Needs Households, including persons now or imminently at risk of being required to live in institutional settings due to unavailability of suitable housing, shall receive the highest priority for an Allocation. Applications seeking this preference shall include executed written agreements with special needs service providers to refer eligible Households and a pledge to create and maintain procedures for referring the Special Needs Households. Applications shall not include a requirement that a Unit must be occupied by a Tenant having a diagnosis of a particular illness or the presence of a specific disability as a prerequisite for eligibility.

g) Plan for Services: Each applicant shall provide its Plan for Services, which shall include a plan for advertising and making available information about the RHS Program to Landlords in its Service Area, a plan for providing information to Tenants on how to gain access to education, training, and other supportive services, and procedures for advertising available Units, and for identifying and referring prospective Tenants to Landlords for those Units.

h) Financial Procedures: Each Application shall describe in detail the procedures for managing and disbursing the funds to be received through the requested Allocation and for making Reconciliations.

i) Monitoring Landlords: Each LAA shall describe in detail how it proposes to monitor the performance of Landlords, including, at a minimum, the LAA's procedures for conducting physical inspections of Units, how the LAA will monitor and assist with the Landlord's procedures for verifying the Annual Income of Tenants and the Landlord's adherence to its Tenant Selection Plan.

j) Readiness to Proceed: The Authority may give preference to Applicants who demonstrate a readiness to proceed, should they receive an Allocation. Readiness to proceed may be shown by a list of Households that have been pre-qualified to be Tenants, letters of intent from Landlords who own rental Units, or other factors, provided that the other factors are listed in the RFP. Letters of intent should include a certification from the Landlord that the Landlord is the owner of the rental Unit; the address of, the proposed rent for, and the number of bedrooms in, the Unit; a statement as to whether the Unit is accessible to disabled individuals or is adaptable so that it can be made accessible to disabled individuals; a statement that the Landlord will make the Unit available to eligible Households when funding is made available under the RHS Program; the signature of the owner; an executed acknowledgment by an authorized signatory of the Applicant; and other information as the Authority may require in the RFP.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.404 Service Area for Multiple Geographic Areas

If an Applicant designates a Service Area that includes areas in more than one Geographic Area, the Applicant must submit a separate Application for that portion of the proposed Service Area in each Geographic Area; provided, however, that for such Applications, if the Authority charges an Application Fee, the Authority may charge only one Application fee.

47 Ill. Adm. Code 380.405 Qualification Requirements

a) Applicants to be an LAA must be financially viable, as determined through the Agency's review of the Applicant's audited financial statements for the two most recent years. If the Applicant is an entity formed as a non-profit corporation wholly-owned or controlled by another entity solely for the purpose of applying for and administering Rental Assistance programs, audited financial statements of the parent company shall be submitted to satisfy this requirement.

b) Applicants must demonstrate that they have the experience and knowledge necessary to administer an Allocation by documenting: their experience in verifying Tenant income eligibility and other aspects of administering Rental Assistance programs; their existing relationships with local Landlords; their capability to evaluate properties to determine whether the properties satisfy Housing Quality Standards; their ability to monitor procedures of Landlords in satisfying RHS Program requirements; their experience and performance in administering grants or other funds from outside sources; the extent and nature of their established relationships with service providers serving the homeless, disabled, or senior citizens in the Applicant's proposed Service Area; and any other factors established by the Authority and published in the RFP.

c) Applicants may form partnerships with more experienced entities in order to satisfy the requirements of this Section. In such a case, all partners shall execute, and will be jointly responsible for compliance with, the terms of the Commitment.

d) This Section shall not apply to Municipalities.

47 Ill. Adm. Code 380.406 Administration of Allocations

a) Commitment: Each LAA shall enter into a Commitment with the Agency that is providing its Allocation. The Allocation may be less than the amount requested in the Application. The term of Commitments may be one, two or three years, subject to the availability of funds from Annual Receipts or a Fund Distribution, and may be renewed.

b) Record Retention: Each LAA shall maintain records in connection with all Units receiving Rental Assistance under the LAA's Commitment for five years after the date of termination of the Commitment.

c) Agency Monitoring: Each Agency shall have the right to monitor all records of LAAs relating to the administration of the Allocation granted by the Agency. Each Agency may perform its own physical inspection of Units in addition to the physical inspections that the LAA is required to perform. Each LAA shall make all records relating to its Commitment available for inspection by the funding Agency upon the Agency's request. The required documentation may include a copy of the LAA's response to the RFP, if applicable; all physical inspection records; occupancy records for all Units; a description of all outreach efforts made by the LAA; records of payments or Rental Assistance to Landlords and Reconciliation payments made to the Agency; copies of contracts with Landlords, the Agency and, where applicable, sub-contractors; documentation of the LAA's administrative expenses; and any other documentation required by the Agency.

d) Tenant Income Certifications: Each LAA shall obtain, maintain, and forward to the Agency copies of annual Tenant Income Certifications for all Tenants benefiting from Rental Assistance from the LAA.

e) Landlord Procedures: Each LAA shall be responsible for monitoring the Landlord's compliance with its Tenant Selection Plan and the Landlord's performance under any agreement between the LAA and the Landlord.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.407 Inspection Requirements

Before releasing Rental Assistance funds for a Unit, the LAA or its agent shall inspect the Unit and the common areas and grounds of the building in which the Unit is located, and shall certify that the Unit and the common areas and grounds of the building comply with Housing Quality Standards. LAAs shall also inspect all Units, together with the common areas and grounds of the Unit's building, at least bi-annually. In other years, LAAs shall inspect a sampling of Units to visually observe the physical condition of the Units, including appliances, doors, locks, smoke detectors, and other health and safety items. In other years, if a Landlord receives Rental Assistance for fewer than three Units, the LAA shall perform a visual inspection of all Units; but if a Landlord is receiving Rental Assistance for three or more Units, the LAA may inspect a sample of these Units in each building in which the Units are located, but no fewer than three Units in each building. An Agency may decide to conduct inspections of Units itself, in the manner set forth in this Section. If an LAA or an Agency determines that one or more Units do not satisfy the Housing Quality Standards, it shall give the Landlord of the Unit or Units a period not to exceed 30 days in which to correct the deficiencies discovered in the inspection. However, if the deficiency is in an occupied Unit and poses a serious threat to the health and safety of the Tenant, the deficiency must be corrected within 72 hours.

a) Examples of conditions that are considered to pose a serious threat to the health and safety of the Tenant include, but are not limited to, the following:

1. detection of propane, natural gas or methane gas;

2. exposed electrical wires or open electrical panels;

3. water leaks on or near electrical equipment;

4. blocked emergency or fire exits;

5. unusable fire escapes;

6. blocked egress or ladders;

7. any carbon monoxide hazard connected with, but not limited to, gas or oil-fired units and missing or misaligned chimneys; and

8. any other conditions the Agency finds to be a health or safety threat.

b) If the deficiency is not corrected within the 72-hour period, or the 30-day period if the LAA determines that the deficiencies are serious enough to merit relocation, the LAA shall use its best efforts to find a replacement Unit for the Tenant. If a replacement Unit is found, the lease for the deficient Unit shall be terminated and the Tenant shall be relocated to the replacement Unit and shall enter into a new lease.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.408 Selection of Landlords

a) An LAA shall select Landlords to participate in the RHS Program in accordance with its plan for selecting Landlords.

b) An LAA may select as a Landlord a fully- or partially-owned subsidiary of the LAA only if it provides for an independent third party acceptable to the Authority to perform the inspection of Units required under Section 380.407, at its own cost. If the LAA acts as a Landlord, it must supply to the Authority the certifications required by Sections 380.501, 380.502 and 380.504.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.409 Contracts with Landlords

LAAs shall enter into a payment contract with each Landlord for all Units for which the Landlord has been approved to receive Rental Housing Assistance. The contract shall provide that the LAA will make quarterly Rental Assistance payments to Landlords in advance. The contract shall identify the Landlord and LAA; have a term not less than one year and not greater than three years; identify the Units to receive Rental Assistance by address and Unit type; set forth the rent to be charged for each Unit, which shall not be greater than the Maximum Rent unless otherwise approved by the Authority pursuant to Section 380.306(c); and require that the Landlord abide by the requirements of the RHS Program. The contract shall also provide that the Landlord is responsible for determining the family size, obtaining Tenant Income Certifications, and reporting this information to the LAA. The Landlord, with the direction and supervision of the LAA, shall verify the Tenant's income and assets. The Landlord shall not reveal any information in connection with the prospective Tenant's Annual Income except to the LAA, the applicable Agency or as otherwise required by law.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.410 Reporting Requirements

a) At the end of each quarter of the term of its Commitment, each LAA shall prepare and provide to its Landlords a certification form that contains the following information:

1. a list of all Units that are receiving Rental Assistance;

2. the date of payment of Rental Assistance;

3. the amount of Rental Assistance;

4. the months for which Rental Assistance was paid; and

5. such other information as the Agency may require.

b) The Landlord shall sign and return the certification form to the LAA within the number of days specified in the form. If a Landlord disputes any of the information contained in the certification form, the Landlord shall set forth in writing the details of the information that it believes is erroneous and return the form to the LAA within the time specified in the form. If a dispute between the Landlord and the LAA cannot be resolved, the LAA shall provide notice to the Agency and the Agency will contact the LAA and the Landlord for an explanation of the dispute. Each party shall provide documentation to justify their argument. The Agency will review the documentation and notify both parties of its determination.

c) Once a Landlord has signed and returned the certification form, the LAA shall forward the certification form to the Agency.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.411 Reconciliations

Each LAA shall perform a Reconciliation every quarter during the term of its Commitment and, if the Reconciliation indicates that the LAA has received funds exceeding of the amount required for Rental Assistance payments, the LAA shall return all excess funds to its funding Agency within 30 days. However, an LAA created by a Municipality must use the excess funds to provide Rental Assistance for additional Units. The funding Agency may reduce the amount of subsequent quarterly payments to the LAA under the Commitment to offset Reconciliation amounts owing to, but not forwarded to, the Agency.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.412 Funding of Allocations

During the term of each Commitment with an LAA, the Agencies shall provide funds to LAAs in quarterly installments. An Agency shall increase the amount of an LAA's Allocation if the Agency has approved an annual rent increase for occupied Units, provided that the rent for each Unit, including the Rental Assistance, does not exceed the Maximum Rent for each Unit and funding is available from the Annual Receipts.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.413 Revocation/Non-Renewal of Commitments

a) LAAs may apply for a renewal of their Commitments, which shall be granted at the discretion of the applicable Agency, subject to the restrictions set forth in this Section. Agencies shall review the performance of each LAA at the end of the LAA's Commitment term. Agencies shall only renew the Commitments of those LAAs that have satisfactorily performed their obligations under their Commitments, as determined by the Agency. The performance review shall include, without limitation, the LAA's compliance with requirements for Tenant eligibility, Tenant Contribution, and rent charged for the Units; the number of two-, three-, and four-bedroom Units included among the Units receiving Rental Assistance; the adequacy, frequency, and sufficiency of inspections of Units; the proper and timely submission of quarterly landlord certifications and Reconciliations; the LAA's compliance with its Plan for Services and its outreach plan, including outreach activities conducted by the LAA within and around the LAA's Service Area; the LAA's compliance with its selection plan for Landlords; the implementation of the LAA's pledge to offer Rental Assistance for Units for Special Needs Households, if applicable; the LAA's responsiveness in addressing concerns about the LAA's performance under its Commitment; and proper documentation of the LAA's operating expenses and other program requirements.

b) If an LAA does not wish to renew its Commitment or the Agency does not renew the Commitment of an LAA, the Agency shall seek another LAA to provide Rental Assistance for Units receiving Rental Assistance under the un-renewed Commitment. The Agency may offer a temporary Commitment to an LAA working in the same Service Area, and if the substitute LAA's performance is satisfactory, may extend the temporary Commitment for a period not to exceed three years. If the Agency is unable to find a replacement LAA, the Agency shall give 90 days' notice to the Tenants and Landlords of its intention to terminate Rental Assistance for the Units, and shall reallocate the Rental Assistance funds for these Units.

c) If an LAA does not perform in accordance with the provisions of its Commitment with an Agency, as determined upon review by the Agency, the Agency may revoke the Commitment before its expiration. In determining whether a Developer has adequately performed under its Commitment, the Agency shall review the performance factors outlined in subsection (a).

d) Before the revocation/non-renewal, the Agency shall inform the LAA in writing of the reasons for the revocation/non-renewal. The written notification of revocation/non-renewal shall also indicate that the LAA will have 30 days to submit a written appeal to the Agency. The LAA's appeal shall be addressed to the Agency and shall include a written statement of the LAA's position, including, without limitation, responses to any allegations of poor performance, along with all relevant supporting documentation. The Agency will review and make a final decision as to the revocation/non-renewal of the Commitment within 30 days after receiving the written appeal. Commitments not renewed due to lack of funding are not subject to appeal.

e) If the Agency decides to revoke or not renew a Commitment, a final Reconciliation shall be performed and any amount due to the Agency by the LAA shall be paid within 10 days. If the LAA fails to pay that amount to the Agency, the Agency may exercise any remedies available to it at law or in equity to recover that amount from the LAA.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.414 Leases

Landlords shall enter into a written lease with each Tenant that shall have a term of no less than 12 months and that shall contain a Rental Assistance Rider. The LAA shall review each lease and certify to the applicable Agency that the leases do not violate any provision of State or local law or this Part. The lease shall indicate which party is responsible for paying the utilities. Landlords shall provide each Tenant and the LAA with a copy of the lease.

47 Ill. Adm. Code 380.415 Requirements for Laas Designated by Municipalities

LAAs designated by Municipalities must comply with Sections 380.301, 380.303, 380.305, 380.306, 380.307, 380.308, 380.309, 380.310, 380.311, 380.401, 380.406, 380.407, 380.408, 380.409, 380.410 and 380.414 and Subpart F of this Part and the RHS Program Act.

47 Ill. Adm. Code 380.416 Reporting Requirements for Municipalities

Within 120 days after the close of each Fiscal Year, each Municipality shall provide a report to the Authority documenting the use of funds from its Fund Disbursement. The report shall include a list of all Units receiving the benefits of Rental Housing Assistance, the addresses of the Units, the number of bedrooms in each Unit, the income level of the Tenants in each Unit, the outreach efforts made by the Municipality or its designated LAA in connection with Special Needs Households, the compliance of the Municipality or its designated LAA in connection with Special Needs Households, the compliance of the Municipality or its designated LAA with the Plan for Services of the Municipality of its designated LAA and such other information as the Authority may require to ascertain the effectiveness of the operation of the RHS Program.

47 Ill. Adm. Code 380.501 Income Eligibility and Verification

Upon receipt of a Tenant Income Certification, the Landlord, with the direction and supervision of the LAA, shall verify the Annual Income of each prospective Tenant before occupancy of a Unit and then before lease renewal, using the Tenant Income Certification form prescribed by the Agency. All Household income and assets shall be verified following this Part.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.502 Record Submission and Retention

a) Landlords shall maintain monthly records of the Tenant Contribution and Rental Assistance payments received for each Unit, including Unit vacancies. Landlords shall submit copies of these records to the LAA at least quarterly unless the contract between the Landlord and the LAA requires more frequent submittals. Landlords shall also submit the quarterly certification forms described in Section 380.410.

b) Copies of all records described in this Section shall be retained by Landlords for the term of the lease plus three years from the date of termination of the lease.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.503 Lead-Based Paint

All Units eligible for Rental Assistance payments must be free of lead-based paint hazards. For Units in buildings constructed prior to January 1, 1978, Landlords must certify to the LAA and the Agency that they have visually inspected the Unit for lead-based paint hazards and, if such hazards have been found, have performed remediation, abatement, or encapsulation, in conformance with federal and State law. For buildings constructed on or after January 1, 1978, Landlords shall certify, using the form prescribed by the Agency to the LAA, that the buildings or Units contain no lead-based paint.

47 Ill. Adm. Code 380.504 Housing Quality Standards

Landlords must maintain each Unit in compliance with the Housing Quality Standards.

47 Ill. Adm. Code 380.505 Compliance with Federal, State and Local Law

Landlords must certify to the LAA, in the form provided by the Agency, that the lease for each Unit receiving Rental Assistance does not violate federal, State or local law or this Part.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.506 Eviction

Landlords shall have the right to evict Tenants from Units for good cause, as permitted under State and local law.

47 Ill. Adm. Code 380.507 Reconciliations

Landlords shall make Reconciliations to their funding LAAs quarterly.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.508 Property Insurance

Landlords shall maintain the required State minimum level of property insurance for all buildings that contain a Unit receiving Rental Assistance.

History

• Source: Added at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.601 Allocations

Agencies shall reserve at least 10% of each year's Annual Receipts or Fund Distribution, as applicable, for LTOS Allocations. Agencies are not required to spend those funds in the year reserved, but may combine these funds with the reserved amounts from past or subsequent years. A Municipality may delegate its responsibilities as an agency under this Subpart F to establish and administer an LTOS Program to its designated LAA.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.602 Allocations Only for New Units

Grants under an LTOS Program will only be available for Projects involving housing Units newly created for Extremely Low-Income Households or Severely Low-Income Households.

47 Ill. Adm. Code 380.603 Application Procedures

a) From time to time, Agencies shall accept Applications from prospective Developers for funding under the LTOS Program in a manner described in the Program Guide or the Municipality Program Guide, as applicable.

b) The Authority shall prescribe forms and consider Applications for funding under the LTOS Program for Units to be located outside the Municipalities. Municipalities shall prescribe forms and consider Applications for funding under the LTOS Program for Units to be located within the Municipalities. All Applications must satisfy the applicable requirements of this Part.

47 Ill. Adm. Code 380.604 Developer Qualifications

To be eligible to receive funding under an LTOS Program, a Developer must be financially viable, as determined by the applicable Agency at the time of its Application. In making this determination, the applicable Agency shall review, among other things, the Developer's audited financial statements for the most recent year or, if it does not have an audited financial statement, its federal income tax return for the most recent year. Developers must also demonstrate to the satisfaction of the Agency experience in or capacity for the operation and management of affordable housing developments, including housing developments that serve Extremely Low-Income Households and Severely Low-Income Households.

47 Ill. Adm. Code 380.605 Application Requirements

a) Applicants shall specify the number of Units for which they are requesting an Allocation. For Projects containing more than 25 Units, the number of Units proposed to receive Rental Assistance shall not exceed 30% of the Units in the Project. For Projects containing 25 Units or fewer, there shall be no restriction on the number of Units proposed to receive Rental Assistance. For Projects containing more than 25 Permanent Supportive Housing Units, the number of Units proposed to receive Rental Assistance shall be 100% of the Units in the Project.

b) Developers shall specify in their Applications how vacancies in Units will be advertised and shall include in their Application provisions for outreach to local homeless shelters, organizations that work with Special Needs Households, and others interested in affordable housing.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.606 Agency Review

The Agency shall review each complete Application and approve or reject it. The Agency's review of an Application may include, but is not limited to, the following criteria:

a) the availability of funds under the RHS Program that have been reserved for the LTOS Program;

b) the increase of the geographic diversity of Projects funded under the LTOS Program;

c) the level of local government and community support for the proposed Project;

d) the suitability of the Project site;

e) cost per Unit of the Project, including soft costs (non-construction costs);

f) the need for funding for the Project;

g) the affordability of the Units to Extremely Low-Income Households and Severely Low-Income Households;

h) the amount of LTOS Program funds requested;

i) the number of Units to be available for Special Needs Households;

j) the proposed term of the Allocation, which shall not exceed 30 years from the date of completion, construction or rehabilitation;

k) the site and market study for the Project; and

l) the Developer's Plan for Services.

47 Ill. Adm. Code 380.607 Waiver

An Agency may waive any LTOS Program requirements only when special circumstances exist and in furtherance of the purpose of the LTOS Program to increase the supply of affordable rental housing, as permitted by the RHS Program Act.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.608 Commitments

a) Upon the approval of a Project under the LTOS Program, the Agency shall enter into a Commitment with the Developer. The term of the Commitment may be for a maximum of 15 years, provided, however, that Agencies may provide long-term financing to Developers for a period not to exceed 30 years. The Commitment shall also be subject to the Agency's annual review of the Developer's performance under the Commitment and may be revoked in the event of clearly unsatisfactory performance. Except in the case of long-term financing, the Commitment shall contain a provision that continued funding of the Allocation shall be conditioned on receipt of sufficient Annual Receipts for the RHS Program.

b) Except in the case of long-term financing, during the term of each Commitment the Agency shall provide regular funding for Units in the Project, but not more frequently than in quarterly installments each year.

c) Except in the case of long-term financing, the Agency shall provide increased funding if the Agency has approved an annual rent increase for occupied Units in accordance with Section 380.307, provided that the rent for each Unit, including the funds for Rental Assistance, does not exceed the Maximum Rent for each Unit, except as provided in Section 308.306(c), and funding is available from the Annual Receipts.

d) The Developer will be required to enter into a regulatory agreement with the applicable Agency pursuant to which, among other requirements, it will agree to rent a set number of Units to Households who meet the income qualifications for the RHS Program.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.609 Income Eligibility and Verification

Developers shall verify the Annual Income of each prospective Tenant prior to occupancy of a Unit and thereafter prior to lease renewal, using the Tenant Income Certification form prescribed by the Agency. Developers shall verify all Household income and assets, as required in this Part and the Program Guide or the Municipality Program Guide, as applicable. Developers shall maintain records in connection with all Units receiving Rental Assistance under their Commitments for five years after the date of termination of the Commitment.

47 Ill. Adm. Code 380.610 Over-Income Tenants

a) Developers must verify the Annual Income of each Tenant before the renewal of the Tenant's lease. If the Annual Income of a Tenant exceeds 35% of the Median Income because of an increase in the Tenant's Annual Income, Rental Assistance shall be terminated no later than 12 months after the date of that increase. If the increase occurs during the term of an existing lease, the Tenant shall be required to report the increase to the Developer and the existing lease shall be extended for the period of time necessary to allow the Tenant the full 12 months of Rental Assistance. The Transitional Contribution during this period shall be the Tenant's Tenant Contribution before that increase, plus one-half of the difference between the Tenant Contribution and the current rent for the Unit.

b) If a Tenant's Annual Income initially is within the Severely Low-Income Household limit, and increases above that limit but is still within the Extremely Low-Income Household limit, the Developer shall take all reasonable efforts to ensure that an additional Unit is reserved for a Severely Low-Income Household, if necessary to comply with Section 380.301.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.611 Leases

Developers must enter into a written lease with each Tenant having a term of no less than 12 months. The lease shall contain a Rental Assistance Rider. The lease shall indicate which party is responsible for paying the utilities. Developers shall provide each Tenant and the funding Agency with a copy of the lease.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.612 Evictions

Developers shall have the right to evict Tenants from Units for good cause, as permitted under State and local law.

47 Ill. Adm. Code 380.613 Housing Quality Standards

a) Before the initial occupancy of a Project, the applicable Agency shall inspect the Project to determine whether the Project satisfies the Housing Quality Standards. If the Project does not satisfy the Housing Quality Standards, the Agency shall not provide an Allocation for the Project until all deficiencies have been removed to the satisfaction of the Agency.

b) During the period in which the Developer is receiving funding under the LTOS Program or, in the case of long-term financing, during the term of that long-term financing, the Project must continue to meet the Housing Quality Standards. Agencies shall make annual inspections of the Units in each Project, as provided in Section 380.407.

c) If an Agency determines that one or more Units do not satisfy the Housing Quality Standards, it shall give the Developer a period not to exceed 30 days in which to correct the deficiencies discovered in the inspection. However, if the deficiency is in an occupied Unit and poses a serious threat to the health and safety of the Tenant, the deficiency must be corrected within 72 hours. Examples of conditions that are considered to pose a serious threat to the health and safety of the Tenant include, but are not limited to, the following:

1. detection of propane, natural gas or methane gas;

2. exposed electrical wires or open electrical panels;

3. water leaks on or near electrical equipment;

4. blocked emergency or fire exits;

5. unusable fire escapes;

6. blocked egress or ladders;

7. any carbon monoxide hazard connected with, but not limited to, gas or oil-fired units or missing or misaligned chimneys; and

8. any other conditions the Agency finds to be a health or safety threat.

d) If the deficiency is not corrected within the 72-hour period, or the 30-day period if the Developer determines that the deficiencies are serious enough to merit relocation, the Developer shall use its best efforts to find a replacement Unit for the Tenant. If a replacement Unit is found, the lease for the deficient Unit shall be terminated and the Tenant shall be relocated to the replacement Unit and shall enter into a new lease.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.614 Lead-Based Paint

All Projects involving rehabilitation must be free of lead-based paint hazards. For all buildings constructed prior to January 1, 1978, Developers shall certify to the Agency that they have visually inspected the building for lead-based paint hazards and, if such hazards have been found, have performed remediation, abatement, or encapsulation, in conformance with federal and State law. For buildings constructed on or after January 1, 1978, Developers shall certify, using the form prescribed by the Agency, that the building contains no lead-based paint.

47 Ill. Adm. Code 380.615 Reconciliations

Each Developer shall, every quarter during the term of its Commitment, perform a Reconciliation and, if the Reconciliation indicates that the Developer has received funds exceeding the amount required for Rental Assistance payments, the Developer shall return all excess funds to its funding Agency within 30 days. The funding Agency may reduce the amount of subsequent quarterly payments to the Developer under the Commitment to offset Reconciliation amounts owing to, but not forwarded to, the Agency.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.616 Reporting Requirements

Each Developer shall provide reports to its funding Agency, on forms provided by the Agency, at the end of each quarter of the term of its Commitment. The report shall identify each Unit that is receiving Rental Assistance and shall state the amount of Rental Assistance received from the Agency for each Unit; the Tenant Contribution for each Unit; any vacancies, including the rent of each vacant Unit; and any other information required by the Agency. The Developer shall provide all new and updated Tenant Income Certifications along with its report.

History

• Source: Amended at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.617 Property Insurance

Developers shall maintain the recognized State minimum level of property insurance for all buildings that contain a Unit receiving Rental Assistance.

History

• Source: Former Section 380.617 renumbered to Section 380.618; new Section 380.617 added at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.618 Agency Monitoring

Each Agency shall have the right to monitor all records of Developers relating to the administration of Allocations granted by the Agency. Every developer must make all records relating to its Commitment available for inspection by the funding Agency upon the Agency's request. The records for review may include, without limitation, a copy of the Developer's response to the RFP, if applicable; all physical inspection records; occupancy records for all Units; a description of all outreach efforts; Reconciliation payments to the Agency; and any other documentation required by the Agency.

History

• Source: Former Section 380.617 renumbered to Section 380.619; former Section 380.617 renumbered to Section 380.618 at 46 Ill. Reg. 12608, effective July 7, 2022

47 Ill. Adm. Code 380.619 Revocation/Non-Renewal of Commitments

a) If a Developer does not perform in accordance with the provisions of its Commitment with an Agency, as determined upon review by the Agency, the Agency shall revoke the Commitment before its expiration, or determine not to renew the Commitment. In determining whether a Developer has adequately performed under its Commitment, the Agency may review, without limitation, the Developer's compliance with Authority requirements for Tenant eligibility, Tenant Contribution, and rent charged for the Units; the compliance of the Project with the Housing Quality Standards; responsiveness to the Agency, including, without limitation, all reporting requirements; the Developer's compliance with the Project's Tenant Selection Plan; and outreach activities conducted by the Developer within and surrounding the area in which the Project is located, where applicable. In the case of long-term financing, if the Developer does not perform in accordance with the requirements of the regulatory agreement with the Agency required under Section 380.608(d), the Agency shall have the right to recapture all or part of the Rental Assistance for the Project if the Developer is unable to correct any material violations of the regulatory agreement within a reasonable period of time.

b) Prior to the revocation or non-renewal, the Agency shall inform the Developer in writing of the reasons for the revocation/non-renewal. The written notification of revocation/non-renewal shall also indicate that the Developer will have 30 days to submit a written appeal to the Agency. The Developer's appeal shall be addressed to the Agency and shall include a written statement of the Developer's position, including, without limitation, responses to any allegations of poor performance, along with all relevant supporting documentation. The Agency shall review and make a final decision as to the revocation/non-renewal of the Commitment within 30 days after receiving the written appeal.

c) If the Agency decides to revoke or not renew a Commitment, a final Reconciliation shall be performed and any amount due to the Agency by the Developer shall be paid within 10 days. If the Developer fails to pay that amount to the Agency, the Agency shall have the right to exercise any remedies available to it at law or in equity to recover the amount from the Developer.

History

• Source: Section 380.619 renumbered from Section 380.618 and amended at 46 Ill. Reg. 12608, effective July 7, 2022

Part 381 Abandoned Residential Property Municipality Relief Program

47 Ill. Adm. Code 381.101 Authority

The Illinois Housing Development Authority is the designated administrator for the Abandoned Residential Property Municipality Relief Program in Illinois, which was established by Section 7.31 of the Illinois Housing Development Act [20 ILCS 3805/7.31].

47 Ill. Adm. Code 381.102 Purpose and Objectives

The purpose of the Program is to use moneys appropriated from the Abandoned Residential Property Municipality Relief Fund, and any other funds appropriated for this purpose, to make grants to municipalities and counties to assist with costs incurred by the municipality or county for the securing and maintenance of Abandoned Residential Property as defined in Section 381.202. Under the Program, the Authority will make grants to the municipalities and counties for Eligible Uses as set forth in Section 381.203.

47 Ill. Adm. Code 381.103 Definitions

The following definitions apply to terms used in this Part:

"Abandoned Residential Property": Shall have the meaning set forth in Section 381.202

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Applicant": A municipality or county making an Application for a Grant.

"Application": An application to the Authority on the Authority's form for a Grant completed by a prospective Applicant.

"Appropriation": The annual appropriation of funds, from the Abandoned Residential Property Municipality Relief Fund to the Illinois Department of Revenue for the Authority, by the Illinois General Assembly for the Program and any other funds appropriated for this purpose.

"Attorney General": The Attorney General of the State of Illinois.

"Auditor General": The Auditor General of the State of Illinois.

"Authority": The Illinois Housing Development Authority.

"City": The City of Chicago.

"Collar Counties": The counties of DuPage, Kane, Lake, McHenry and Will in Illinois.

"Commitment": A contract executed by the Authority and the Applicant under which the Authority agrees to make a Grant to the Applicant. Each Commitment shall contain a provision to the effect that the Authority shall not be obligated to provide funds under the Commitment if the Authority has not received sufficient funds from an Appropriation.

"Eligible Uses": Shall have the meaning set forth in Section 381.203.

"Fund": The Abandoned Residential Property Municipality Relief Fund created in the State treasury for the collection of certain fees as set forth in Section 15-1504.1 of the Illinois Code of Civil Procedure [735 ILCS 5/15-1504.1] paid by a plaintiff at the time of a filing of a foreclosure complaint in connection with residential real estate.

"Grant": The portion of the Appropriation granted by the Authority to an Applicant for Eligible Uses under the Program.

"Pests": Undesirable arthropods (including certain insects, spiders, mites, ticks and related organisms), wood infesting organisms, rats, mice and other obnoxious undesirable animals, but does not include a feral cat, a "companion animal" as that term is defined in the Humane Care for Animals Act [510 ILCS 70], "animals" as that term is defined in the Illinois Diseased Animals Act [510 ILCS 50], or animals protected by the Wildlife Code [520 ILCS 5].

"Program": The Abandoned Residential Property Municipality Relief Program authorized by Section 7.31 of the Act.

"Rehabilitation": The rehabilitation of an Abandoned Residential Property that is strictly limited in scope to address exterior building safety concerns such as repairing of the roof, windows, doors, masonry or walkway of an Abandoned Residential Property.

"State": The State of Illinois.

47 Ill. Adm. Code 381.104 Compliance with Federal and State Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal and State law.

47 Ill. Adm. Code 381.105 Forms and Procedures for the Program

The Authority may prepare, use, prescribe, supplement and amend forms, agreements and other documents and procedures as may be necessary to implement the Program.

47 Ill. Adm. Code 381.106 Fees and Charges

The Authority may not charge an application fee for the Program.

47 Ill. Adm. Code 381.107 Authority Administrative Expenses

Subject to approval of the Department of Revenue, the Authority shall be entitled to deduct from each Appropriation, subject to the annual receipt of funds, prior to making any Grants, an amount not to exceed 4% of each Appropriation for expenses associated with the administration of the Program, including, without limitation, expenses for staff salaries and benefits for time spent on design and administration of the Program; expenses incurred in performing outreach activities and providing technical assistance to the Applicants; the use of the Authority's equipment for Program purposes; the cost of office space and utilities incurred in connection with the Program; and any other expenses incurred in the administration of the Program. The Authority shall maintain a detailed accounting of its administrative expenses, using the generally accepted accounting principles (GAAP) of the Financial Standards Board of the American Institute of Certified Public Accountants as contained in the publication entitled AICPA Professional Standards, 1211 Avenue of the Americas, New York NY 10036-8775 (June 2012, no later editions are incorporated). These records shall be available to the public for review.

History

• Source: Amended at 38 Ill. Reg. 6678, effective March 10, 2014

47 Ill. Adm. Code 381.108 Amendment

This Part may be supplemented amended or repealed by the Authority from time to time and in a manner consistent with the Illinois Administrative Procedure Act [5 ILCS 100], this Part, the Act, and other applicable laws. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 381.109 Severability

If any clause, sentence, paragraph, subsection, Section or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section or Subpart to which the judgment is rendered.

47 Ill. Adm. Code 381.110 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number, as the context may require.

47 Ill. Adm. Code 381.111 Non-Discrimination

The Applicants shall comply with the applicable provisions of the Illinois Human Rights Act [775 ILCS 5] and the regulations promulgated under that Act, the federal Fair Housing Act (42 USC 3601), Section 504 of the Rehabilitation Act of 1973 (29 USC 794), the Illinois Environmental Barriers Act [410 ILCS 25], the Illinois Accessibility Code (71 Ill. Adm. Code 400), and all other applicable State and federal law concerning discrimination and fair housing.

47 Ill. Adm. Code 381.112 Titles and Captions

Titles and captions of Subparts, Sections and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 381.201 Grants to Municipalities and Counties

a) Distribution of Funds

Subject to the annual receipt of funds, the Authority shall first deduct the funds it requires to meet its administrative expenses as described in Section 381.107. It shall distribute the remainder of the funds among the 4 geographic set-asides as described in section (b).

b) Geographic Set-Asides

1. After distributing the amount necessary for the purposes of subsection (a), the Authority shall make Grants to municipalities and counties for use in connection with Abandoned Residential Property. The Applicants shall be divided into 4 geographic set-aside categories with the money divided as follows:

A) 30% of the moneys in the Fund that have been appropriated, subject to the annual receipt of funds, shall be used to make Grants to municipalities in the County of Cook (other than the City) and to the County of Cook.

B) 25% of the moneys in the Fund that have been appropriated, subject to the annual receipt of funds, shall be used to make Grants to the City of Chicago.

C) 30% of the moneys in the Fund that have been appropriated, subject to the annual receipt of funds, shall be used to make Grants to the municipalities in the Collar Counties and to the Collar Counties.

D) 15% of the moneys in the Fund that have been appropriated, subject to the annual receipt of funds, shall be used to make Grants to municipalities in the State (other than the municipalities in the County of Cook and the Collar Counties), and to the other counties in the State (other than the County of Cook and the Collar Counties).

2. When the jurisdiction of a municipality is included within more than one of the geographic set-asides set forth in subsection (b)(1), the Authority may elect to fully fund the Application from one of the relevant geographic areas.

3. Grants distributed to the municipalities and counties under subsection (b)(1)(D) shall be based on areas of greatest need within these counties, which shall be determined, to the extent practicable, proportionately on the amount of fees paid to the respective clerks of the courts within these counties, and on any other factors that the Authority deems appropriate [20 ILCS 3805/7.31(b)(4)]. The Authority will meet the statutory requirement to provide funding to areas of greatest need within this 96-county set-aside primarily through subsection (c)(1)(A) (Need). Instances in which it is impracticable to base Grant awards proportionately on the amount of fees paid to the respective clerks of the court include, but are not limited to: when no application is received within the county; when no application received in the county meets the minimum application requirements; when funding is unavailable due to inadequate receipts; and when the amount collected by a county is less than the cost to administer the Grant. Additionally, proportionate share funding may be impracticable when there are extraordinary circumstances warranting a larger Grant amount than the fees that have been remitted by that county. Extraordinary circumstances include such situation as: when an Applicant demonstrates exemplary capacity, need and impact; when there has been a natural disaster, a significant loss of employment, or other event generating extreme need within a county; and as demonstrated in the materials provided by the Applicant.

c) Application Ranking

1. The Authority will rank Applications against other Applications in the same geographic set-aside category based on the criteria in subsections (c)(1)(A) through (E):

A) Need

Applicants should clearly demonstrate need within the jurisdiction. This demonstration may include, but is not limited to, the fees paid to the clerks of the court in the county, along with historical information on the financial burden that maintaining and demolishing abandoned residential properties has imposed on the Applicant. For the geographic set-aside referenced in subsection (b)(1)(D), and when the Treasurer provides regular and reliable data to the Authority on receipts for each county, the Authority will consider the amount remitted from the clerk of the court in the Applicant's county, along with information provided by the Applicant, to determine which Applications demonstrate the greatest need for the Grant and therefore will receive the highest score.

B) Capacity

Applicants should clearly demonstrate capacity to undertake the proposed activities. This demonstration may include, without limitation, evidence that the Applicant has administered similar grant programs.

C) Impact

Applicants should clearly demonstrate that the Grant will have a strong positive impact, whether upon the entire jurisdiction or an identified portion of the jurisdiction.

D) Budget and Cost Reasonableness

Applicants should provide an estimated budget and demonstrate a systematic, thorough and well-documented approach to ensuring that costs are reasonable, including any costs associated with third party vendors.

E) Readiness to Proceed

Applicants should clearly demonstrate a thorough, detailed and reasonable work plan for the expeditious completion of proposed reimbursable activities.

2. The Authority will equally weigh these criteria unless adjustment is necessary to further program requirements or legislative findings. In the event the Authority seeks to revise the weighting of these criteria, the Authority will propose amendments to this Part.

History

• Source: Amended at 38 Ill. Reg. 6678, effective March 10, 2014

47 Ill. Adm. Code 381.202 Abandoned Residential Property

Abandoned Residential Property shall mean residential real estate that:

a) Either:

1. Is not occupied by any mortgagor or lawful occupant as a principal residence; or

2. Contains an incomplete structure if the real estate is zoned for residential development, when the structure is empty or otherwise uninhabited and is in need of maintenance, repair or securing; and

b) With respect to which, either:

1. Two or more of the following conditions are shown to exist:

A) Construction was initiated on the property and was discontinued prior to completion, leaving a building unsuitable for occupancy, and no construction has taken place in 6 months;

B) Multiple windows on the property are boarded up, closed off or smashed through, broken off or unhinged, or multiple window panes are broken and unrepaired;

C) Doors on the property are smashed through, broken off, unhinged or continuously unlocked;

D) The property has been stripped of copper or other materials, or interior fixtures to the property have been removed;

E) Gas, electrical or water services to the entire property have been terminated;

F) One or more written statements of the mortgagor or the mortgagor's personal representative or assigns, including documents of conveyance, indicate a clear intent to abandon the property;

G) Law enforcement officials have received at least one report of trespassing or vandalism or other illegal acts being committed at the property in the last 6 months;

H) The property has been declared unfit for occupancy and ordered to remain vacant and unoccupied under an order issued by a municipal or county authority or a court of competent jurisdiction;

I) The local police, fire or code enforcement authority has requested the owner or other interested or authorized party to secure or winterize the property due to the local authority declaring the property to be an imminent danger to the health, safety and welfare of the public;

J) The property is open and unprotected and in reasonable danger of significant damage due to exposure to the elements, vandalism or freezing; or

K) Other evidence indicates a clear intent to abandon the property; or

2. The real estate is zoned for residential development and is a vacant lot that is in need of maintenance, repair and securing.

History

• Source: Amended at 38 Ill. Reg. 6678, effective March 10, 2014

47 Ill. Adm. Code 381.203 Eligible Uses of Grant Funds

Eligible Uses of Grant Funds by Municipalities and Counties

Municipalities and counties shall use Grant funds in connection with Abandoned Residential Property as follows:

a) cutting of neglected weeds or grass;

b) trimming of trees or bushes and removal of nuisance bushes and trees;

c) extermination of Pests or prevention of the ingress of Pests;

d) removal of garbage, debris and graffiti;

e) boarding up, closing off or locking windows or entrances or otherwise making the interior of a building inaccessible to the general public;

f) surrounding part or all of an Abandoned Residential Property's underlying parcel with a fence or wall or otherwise making part or all of the Abandoned Residential Property's underlying parcel inaccessible to the general public;

g) demolition of Abandoned Residential Property;

h) rehabilitation of Abandoned Residential Property.

47 Ill. Adm. Code 381.204 Application Cycle

The Authority will supply interested Applicants with an Application. Applications under the Program will be accepted periodically until the Appropriation is disbursed.

47 Ill. Adm. Code 381.205 Application Requirements

Each Application shall include the information required by this Section and any additional information the Authority may require to promote the efficient administration of the Program.

a) Qualifications. Each Applicant shall document qualifications to complete the Program activities. These qualifications shall without limitation include the following:

1. The applicant is a county or municipality;

2. The Applicant has the experience or expertise to manage the activities listed in Section 381.203 for which grant funds will be utilized;

3. The Applicant has demonstrated its capacity for effective fiscal management. This is typically proven through a third-party audit; and

4. The Applicant is willing and able to abide by all program requirements.

b) Applicant's Capacity. Each Applicant shall document its capacity to administer Program funds for Eligible Uses.

c) Activities to be Undertaken. Each Applicant shall list which Eligible Uses are to be undertaken with Program funds, including, without limitation, those activities outlined in Section 381.203.

d) Time for Expending. Each Applicant shall include a budget and timeline schedule for performing the Eligible Uses of Program funds outlined in the Application.

History

• Source: Amended at 38 Ill. Reg. 6678, effective March 10, 2014

47 Ill. Adm. Code 381.206 Review of Applications

a) Application Screening. The Authority will review all Applications to confirm that all elements of the Application package have been addressed. Applicants will be notified of deficiencies in Applications and will be given the opportunity to correct non-material deficiencies. Non-material deficiencies are non-significant deficiencies that, by their existence, do not impact the Applicant's ability to meet the requirement of Section 381.205 and of this Section. Completed Applications will be reviewed and evaluated by Authority staff in accordance with subsections (b) through (e) of this Section.

b) Basic Eligibility Evaluation. Each Application will be reviewed to assure that the Applicant is a municipality or county.

c) Willingness to Perform. The Applicant must commit to remain ready, willing and able to expend Program funds for Eligible Uses in a timely manner.

d) Costs. The Applicant must demonstrate that the costs identified in the Application are Eligible Uses under Section 381.203.

e) Capacity. The Applicant must demonstrate that the proposed activities identified in the Application can be accomplished.

47 Ill. Adm. Code 381.207 Grant Administration

a) Commitment. If awarded Grant funds, a municipality or county shall enter into a Commitment with the Authority. The Grant may be less than the amount requested in the Application. The term of Commitment shall not exceed 2 years, subject to the availability of funds from an Appropriation.

b) Record Retention. Each municipality and county shall maintain records in connection with the Grant under the Commitment for 5 years after the date of termination of the Commitment.

c) Monitoring. The Authority, the Auditor General and the Attorney General shall have the right to monitor all municipality and county books and records relating to the Grant and the Program. Each municipality and county shall make all records relating to its Grant and the Program available for inspection, examination and copying by the Authority, the Auditor General and the Attorney General upon reasonable prior notice, as the Authority, the Auditor General or the Attorney General may reasonably require. The required documentation may include, but is in no way limited to, a copy of the municipality's or county's Application to the Authority; all records relating to the Eligible Uses of Grant funds under the Program, as set forth in Section 381.203; and any other documentation required by the Authority, the Auditor General and the Attorney General.

47 Ill. Adm. Code 381.208 Funding of Grants

Subject to the terms of the Commitment with the Authority and the related documents evidencing the grant, the Authority will provide funds to the awarded municipalities and counties when the Appropriation is made available and as set forth in Sections 381.201 and 203.

47 Ill. Adm. Code 381.209 Reporting Requirements

Each awarded municipality and county shall provide reports to the Authority, on forms provided by the Authority, at the end of each quarter of the term of its Commitment. The municipality or county shall identify, at a minimum, evidence and back-up documentation of expenses for Eligible Uses, including, but not limited to, receipts, ledgers, invoices, before and after pictures, addresses or geographic coordinates, number of abandoned residential properties served, and any other information requested by the Authority.

Part 385 Foreclosure Prevention Program

47 Ill. Adm. Code 385.101 Authority

The Illinois Housing Development Authority is the designated administrator for the Foreclosure Prevention Program in Illinois, which was established by Section 7.30 of the Illinois Housing Development Act [20 ILCS 3805/7.30], effective October 1, 2010. This Part is authorized by Section 7.19 of the Illinois Housing Development Act [20 ILCS 3805/7.19] and Section 7.30(a) of the Illinois Housing Development Act [20 ILSC 3805/7.30(a)].

47 Ill. Adm. Code 385.102 Purpose and Objectives

The purpose of the Program is to use moneys appropriated from the Foreclosure Prevention Program Fund, and any other funds appropriated for this purpose, to support housing counseling and foreclosure prevention outreach. Under the Program, the Authority will make grants to the Counseling Agencies and the Community-Based Organizations for Eligible Uses, and will make distributions to the City for Eligible Uses.

47 Ill. Adm. Code 385.103 Definitions

The following terms used in this Part shall have the following definitions:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Administering Agency" or "Administering Agencies": The Community-Based Organizations and the Counseling Agencies.

"Agency" or "Agencies": The Authority or the City.

"Applicant": A prospective Administering Agency making an Application for a Grant.

"Application": An application to an Agency on the Agency's form for a Grant completed by a prospective Administering Agency.

"Appropriation": The annual Appropriation of funds from the Foreclosure Prevention Fund, to the Illinois Department of Revenue for the Authority, by the Illinois General Assembly for the Program and any other funds appropriated for this purpose.

"Attorney General": The Attorney General of the State.

"Auditor General": The Auditor General of the State.

"Authority": The Illinois Housing Development Authority.

"City": The City of Chicago.

"Commitment": A contract executed by an Agency and an Administering Agency under which the Agency agrees to make a Grant to the Administering Agency. Each Commitment shall contain a provision to the effect that the Authority shall not be obligated to provide funds under the Commitment if the Authority has not received sufficient funds from an Appropriation.

"Community-Based Organization": A not-for-profit entity that provides educational and financial information to residents of a community through in-person contact. A Community-Based Organization does not include a not-for-profit corporation or other entity or person that provides legal representation or advice in a civil proceeding or court-sponsored mediation services, or a governmental agency.

"Computer and Equipment Expenses": Computer and equipment costs incurred by an Administering Agency or the City, as applicable, in connection with the administration of the Grant.

"Counseling Agencies": Shall have the meaning set forth in Section 385.302.

"Eligible Uses": Shall have the meaning set forth in Section 385.303.

"Foreclosure Prevention Fund": Fund created in the State treasury for the collection of a fee of $50 paid by a plaintiff at the time of a filing of a foreclosure complaint in connection with residential real estate.

"Foreclosure Prevention Outreach Program": A program developed by a Community-Based Organization that includes in-person contact with residents to provide pre-purchase and post-purchase home ownership counseling and education about the foreclosure process and the options of a mortgagor in a foreclosure proceeding, as well as programs developed by the Authority or Community-Based Organization in conjunction with a State or federally chartered financial institution.

"General Operational Expenses": Operational costs incurred by an Administering Agency or the City in connection with the administration of the Grant.

"Grant": The portion of the Appropriation granted by an Agency to the Administering Agencies for Eligible Uses under the Program.

"Housing Counseling": In-person counseling provided by a counselor employed by a Counseling Agency to all homeowners, or documented telephone counseling if a hardship would be imposed on one or more homeowners. A hardship shall exist in instances in which the homeowner is confined to his or her home due to medical condition, as verified in writing by a physician, or the homeowner resides 50 miles or more from the nearest approved Counseling Agency. In instances of telephone counseling, the homeowner must supply all necessary documents to the counselor at least 72 hours prior to the scheduled telephone counseling session.

"HUD": The U.S. Department of Housing and Urban Development.

"Program": The Foreclosure Prevention Program authorized by Section 7.30 of the Act.

"State": The State of Illinois.

"Statewide Activities": Shall have the meaning set forth in Section 385.303(c).

"Technical Assistance": Costs incurred by an Administering Agency or the City, as applicable, for:

planning for Foreclosure Prevention Outreach Program or Housing Counseling; or

assistance with an Application.

47 Ill. Adm. Code 385.104 Compliance with Federal and State Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal and State law.

47 Ill. Adm. Code 385.105 Forms and Procedures for the Program

The Authority may prepare, use, prescribe, supplement, and amend such forms, agreements, and other documents and procedures as may be necessary to implement the Program. With respect to the distribution of 25% of funds from annual Appropriations to the City, the City may prepare, use, prescribe, supplement, and amend such forms, agreements, and other documents and procedures as may be necessary to implement the Program.

47 Ill. Adm. Code 385.106 Fees and Charges

An Agency shall not charge an application fee for the Program.

47 Ill. Adm. Code 385.107 Authority Administrative Expenses

The Authority shall be entitled to deduct from each Appropriation, prior to any distribution of funds under the Program and prior to making any Grants, an amount not to exceed 8% of each Appropriation for expenses associated with the administration of the Program, including, without limitation, expenses for staff salaries and benefits for time spent on design and administration of the Program; expenses incurred in performing outreach activities and providing technical assistance to the Administering Agencies; the use of the Authority's equipment for Program purposes; the cost of office space and utilities incurred in connection with the Program; and any other expenses incurred in the administration of the Program. The Authority shall maintain a detailed accounting of its administrative expenses, which shall be available to the public for review. Notwithstanding the 8% cap on Authority deductions, in the event neither a Counseling Agency nor a Community-Based Organization is able to administer all or a portion of the Statewide Activities, the Authority may oversee and implement the Statewide Activities directly and shall be entitled to a dollar for dollar reimbursement from the Foreclosure Prevention Fund of any costs and expenses incurred in connection with the administration of all or any portion of the Statewide Activities exclusive of the 8% cap.

47 Ill. Adm. Code 385.108 Amendment

This Part may be supplemented, amended, or repealed by the Authority from time to time and in a manner consistent with the Illinois Administrative Procedure Act [5 ILCS 100], this Part, the Act, and other applicable laws. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 385.109 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair, or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section, or Subpart to which the judgment is rendered.

47 Ill. Adm. Code 385.110 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 385.111 Non-Discrimination

The Administering Agencies and the City shall comply with the applicable provisions of the Illinois Human Rights Act [775 ILCS 5] and the regulations promulgated under that Act, the Fair Housing Act (42 USC 3601), Section 504 of the Rehabilitation Act of 1973 (29 USC 794), the Illinois Environmental Barriers Act [410 ILCS 25], the Illinois Accessibility Code (71 Ill. Adm. Code 400), and all other applicable State and federal law concerning discrimination and fair housing.

47 Ill. Adm. Code 385.112 Titles and Captions

Titles and captions of Subparts, Sections, and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 385.201 Grants to Administering Agencies

The Authority shall distribute funds from annual Appropriations in accordance with the following priorities:

a) To the Authority for its administrative expenses.

b) After distributing the amount listed in subsection (a), but subject to Section 385.202, the Authority shall make Grants as follows:

1. 25% of the moneys remaining in the Foreclosure Prevention Fund that have been appropriated shall be used to make Grants to the Counseling Agencies that provide for Housing Counseling located outside the City.

2. 25% of the moneys remaining in the Foreclosure Prevention Fund that have been appropriated shall be used to make Grants to the Community-Based Organizations located outside of the City for Foreclosure Prevention Outreach Programs.

3. 25% of the moneys remaining in the Foreclosure Prevention Fund that have been appropriated shall be used to make Grants to the Community-Based Organizations located within the City for Foreclosure Prevention Outreach Programs.

47 Ill. Adm. Code 385.202 Distribution of Funds to the City of Chicago

After distributing the amount listed in Section 385.201(a) of this Part, the Authority shall distribute 25% of the moneys remaining in the Foreclosure Prevention Fund that have been appropriated to the City.

a) City Administrative Expenses. The City shall be entitled to deduct from each distribution from the Authority, prior to making any Grants to the Counseling Agencies or support of foreclosure prevention programs administered by the City, an amount not to exceed 8% of the distribution from the Authority for General Operational Expenses, Computer and Equipment Expenses, and Technical Assistance associated with the administration of the Program, including, without limitation, expenses for staff salaries and benefits for time spent on design and administration of the Program; expenses incurred in performing outreach activities and providing technical assistance to the Counseling Agencies; the use of the City's equipment for Program purposes; the cost of office space and utilities incurred in connection with the Program; and any other expenses incurred in the administration of the Program. The City shall maintain a detailed accounting of its administrative expenses, which shall be available to the public for review.

b) Eligible City Activities. Eligible activities by the City under the Program are as follows:

1. making Grants to the Counseling Agencies located within the City for Housing Counseling; and

2. supporting, subject to Section 385.303(b), foreclosure prevention counseling programs administered by the City.

47 Ill. Adm. Code 385.301 Community-Based Organizations Eligibility

a) The Community-Based Organizations are generally eligible to submit an Application for funding if they provide:

1. pre-purchase and post-purchase home ownership counseling;

2. education about the foreclosure process and the options of a homeowner in a foreclosure proceeding; and

3. foreclosure prevention programs in conjunction with the Authority or a State or federally chartered financial institution.

b) The Community-Based Organizations must agree to the terms and conditions of the Program in order to be eligible.

47 Ill. Adm. Code 385.302 Counseling Agencies Eligibility

The Counseling Agencies are generally eligible to submit an Application for funding if they have been certified as a housing counseling agency by HUD. The Counseling Agencies are eligible for funding if they are certified prior to their application for funding under the Program and committed to participation in the Program. The Counseling Agencies must agree to the terms and conditions of the Program in order to be eligible.

47 Ill. Adm. Code 385.303 Eligible Uses of Grant Funds

a) Eligible Uses of Grant Funds by the Administering Agencies.

1. Eligible uses of Grant funds by the Administering Agencies under the Program shall be:

A) Computer and Equipment Expenses;

B) General Operational Expenses;

C) pre-purchase Housing Counseling;

D) post-purchase Housing Counseling;

E) foreclosure education;

F) foreclosure prevention outreach programs in conjunction with the Authority or a State or federally chartered financial institution;

G) counselor training;

H) training of an Administering Agency's employees;

I) capacity building that increases an Administering Agency's capacity to provide Foreclosure Prevention Outreach Programs and Housing Counseling;

J) Technical Assistance;

K) advertising and marketing of the Program, and any other housing counseling activity as may be approved by the Authority.

2. No Administering Agency shall receive Grant funds for Computer and Equipment Expenses, General Operational Expenses and Technical Assistance in an amount greater than 10% of the Grant funds granted to an Administering Agency during the term of the Administering Agency's Grant.

b) Eligible Uses of Grant Funds by the City. Eligible uses of Grant funds supporting foreclosure prevention programs administered by the City under the Program shall be:

1. pre-purchase home ownership counseling;

2. post-purchase home ownership counseling;

3. foreclosure education;

4. foreclosure prevention outreach programs in conjunction with the Authority or a State or federally chartered financial institution; and

5. counselor training.

c) Eligible Uses for Statewide Activities. Eligible uses of Grant funds supporting Statewide Activities shall include, but shall not be limited to:

1. organizing regional homeownership, Housing Counseling and foreclosure prevention outreach fairs and events, including the promotion of these events;

2. the creation and dissemination of radio and print advertising;

3. the creation and dissemination of posters, flyers and information materials;

4. establishing and operating a toll-free helpline to connect residents of the State;

5. the creation and use of internet resources; and

6. any other similar activities approved by the Authority that are deemed necessary to help ensure the success of the Program on a statewide basis.

47 Ill. Adm. Code 385.304 Application Cycle

An Agency will supply interested Applicants with an Application. Applications under the Program will be accepted periodically until the Appropriation is disbursed.

47 Ill. Adm. Code 385.305 Application Requirements

Each Application shall include the information required by this Section, provided that those requirements are included in the Application to be completed by the Administering Agency, and any additional information the Agency may require to promote efficient Program administration and quality of performance. The Authority reserves the right to bifurcate its Applications as needed in connection with the different components of the Program.

a) Qualifications. Each Applicant shall document qualifications to complete the Program activities, including, with respect to a Counseling Agency, evidence that it is a HUD certified housing counseling agency.

b) Number of Foreclosures. Each Applicant shall document the number of foreclosures filed, present employment data and any known future job layoffs in the Administering Agency's service area.

c) Applicant's Capacity. Each Applicant shall document its capacity and prior experiences to administer Housing Counseling and Foreclosure Prevention Outreach Programs.

d) Capacity Building. Each Applicant shall document how capacity will be expanded to meet the need for Housing Counseling and Foreclosure Prevention Outreach Programs in response to subsection (b).

e) Activities to be Undertaken. Each Applicant shall list which Eligible Uses are to be undertaken with Program funds, including without limitation those activities outlined in Section 385.303 and under the rest of this Part.

f) Time for Expending. Each Applicant shall include a budget and timeline schedule for performing the eligible activities outlined in the Application.

g) Marketing and Outreach Capacity. Each Applicant shall document its capacity and prior experiences to the sole satisfaction of the Authority to undertake and administer all or a portion of the Statewide Activities as set forth in the applicable Application.

47 Ill. Adm. Code 385.306 Review of Applications

a) Application Screening. An Agency shall screen all Applications to confirm that all elements of the Application package have been addressed. Applicants may be notified of deficiencies in Applications and may, at the option of the Agency, be given the opportunity to correct those deficiencies. Completed Applications will be reviewed and evaluated by Agency staff in accordance with criteria in subsections (b) through (e).

b) Basic Eligibility Evaluation. Each Application will be reviewed to assure compliance with Sections 385.301 and 385.302.

c) Willingness to Perform. The Administering Agency must commit to remain ready, willing and able to perform Foreclosure Prevention Outreach Programs, Housing Counseling and Statewide Activities as applicable throughout the Grant term.

d) Costs. The Administering Agency must demonstrate that the costs identified in the Application are eligible Program costs under Section 385.303.

e) Capacity. The Applicant must demonstrate that the proposed activities identified in the Application can be accomplished.

47 Ill. Adm. Code 385.307 Grant Administration

a) Commitment. Each Administering Agency shall enter into a Commitment with the Agency that is making its Grant; the Grant may be less than the amount requested in the Application. The term of Commitment shall be up to one year, subject to the availability of funds from an Appropriation, and may be renewed for one additional year at the discretion of the Agency.

b) Record Retention. Each Administering Agency shall maintain records in connection with the Grant under the Administering Agency's Commitment for five years after the date of termination of the Commitment.

c) Monitoring. An Agency, the Auditor General and the Attorney General shall have the right to monitor all Administering Agency books and records relating to the implementation of the Program by an Agency. Each Administering Agency shall make all records relating to its Grant available for inspection, examination and copying by an Agency, the Auditor General and the Attorney General upon reasonable prior notice, as an Agency, the Auditor General or the Attorney General may reasonably require. The required documentation may include, but is in no way limited to a copy of the Administering Agency's Application to an Agency; all records relating to the eligible uses of Grant funds under the Program as set forth in Section 385.303; and any other documentation required by an Agency, the Auditor General and the Attorney General.

47 Ill. Adm. Code 385.308 Funding of Grants

Subject to the terms of the applicable Commitment with an Administering Agency and the related documents evidencing the Grant, an Agency shall provide funds to the Administering Agencies when the Appropriation is made available and as set forth in Section 385.303.

47 Ill. Adm. Code 385.309 Reporting Requirements

a) Administering Agency. Each Administering Agency shall provide reports to the Agency that made the Grant, on forms provided by the Authority, at the end of each quarter of the term of its Commitment. The Administering Agency shall identify, at a minimum, the number of households that attended pre-purchase home ownership counseling, post-purchase home ownership counseling, foreclosure education, and foreclosure prevention outreach programs; the number of existing counselors who attended training; the number of Administering Agencies who attended training; the number of new counselors hired to increase an Administering Agency's capacity; the expenditures incurred for Technical Assistance; and the expenditures incurred for Computer and Equipment Expenses and General Operational Expenses. In the event an Administering Agency administers all or a portion of the Statewide Activities, the Administering Agency shall identify, at a minimum, the costs and expenses incurred in connection with the administration of the Statewide Activity.

b) City. If the City uses the Grant proceeds to support foreclosure prevention counseling programs administered by the City, the City shall provide quarterly reports to the Authority. The City shall identify, at a minimum, the number of households that attended pre-purchase home ownership counseling, post-purchase home ownership counseling, foreclosure education, and Foreclosure Prevention Outreach Programs; the number of existing counselors who attended training; the number of City's employees who attended training; the number of new counselors hired to increase the City's capacity; the expenditures incurred for Technical Assistance; and the expenditures incurred for Computer and Equipment Expenses and General Operational Expenses.

c) Authority. In the event the Authority administers all or a portion of the Statewide Activities, the Authority shall maintain a detailed accounting of its costs and expenses in connection with the administration of Statewide Activity, which shall be available to the public for review.

Part 386 Foreclosure Prevention Program Graduated Fund

47 Ill. Adm. Code 386.101 Authority

The Illinois Housing Development Authority is the designated administrator for the Foreclosure Prevention Program Graduated Fund in Illinois, which was established by Section 7.30(b-1) of the Illinois Housing Development Act, effective October 1, 2010.

47 Ill. Adm. Code 386.102 Purpose and Objectives

The purpose of the Program is to use moneys appropriated from the Foreclosure Prevention Program Graduated Fund, and any other funds appropriated for this purpose, to support housing counseling. Under the Program, the Authority will make grants to the Counseling Agencies for Eligible Uses.

47 Ill. Adm. Code 386.103 Definitions

The following terms used in this Part shall have the following definitions:

"Act": The Illinois Housing Development Act [20 ILCS 3805].

"Applicant": A prospective Counseling Agency making an Application for a Grant.

"Application": An application to the Authority on the Authority's form for a Grant completed by a prospective Counseling Agency.

"Appropriation": The annual Appropriation of funds for the program by the Illinois General Assembly from the Foreclosure Prevention Graduated Fund to the Illinois Department of Revenue for the Authority, including any other funds appropriated for this purpose.

"Attorney General": The Illinois Attorney General.

"Auditor General": The Illinois Auditor General.

"Authority": The Illinois Housing Development Authority.

"City": The City of Chicago.

"Commitment": A contract executed by the Authority and a Counseling Agency under which the Authority agrees to make a Grant to the Counseling Agency. Each Commitment shall contain a provision to the effect that the Authority shall not be obligated to provide funds under the Commitment if the Authority has not received sufficient funds from an Appropriation.

"Computer and Equipment Expenses": Computer and equipment costs incurred by a Counseling Agency in connection with the administration of the Grant.

"Counseling Agencies": A housing counseling agency approved by HUD (Section 7.30(b-5) of the Act).

"Eligible Uses": Shall have the meaning set forth in Section 386.302.

"Foreclosure Prevention Graduated Fund" or "Fund": A fund created in the State Treasury for the collection of certain fees as set forth in Section 15-1504.1 of the Illinois Code of Civil Procedure [735 ILCS 5/15-1504.1] paid by a plaintiff at the time of a filing of a foreclosure complaint in connection with residential real estate.

"General Operational Expenses": Operational costs incurred by a Counseling Agency in connection with the administration of the Grant.

"Grant": The portion of the Appropriation granted by the Authority to the Counseling Agencies for Eligible Uses under the Program.

"Approved Housing Counseling": In-person counseling provided by a counselor employed by a Counseling Agency to all borrowers, or documented telephone counseling if a hardship would be imposed on one or more borrowers. A hardship shall exist in instances in which the borrower is confined to his or her home due to medical condition, as verified in writing by a physician, or the borrower resides 50 miles or more from the nearest Counseling Agency. In instances of telephone counseling, the borrowers must supply all necessary documents to the counselor at least 72 hours prior to the scheduled telephone counseling session. (Section 7.30(b-5) of the Act)

"HUD": The U.S. Department of Housing and Urban Development.

"Program": The Foreclosure Prevention Graduated Program authorized by Section 7.30(b-1) of the Act.

"State": The State of Illinois.

"Technical Assistance": Counseling Agencies activities involving:

planning for Housing Counseling; or

assistance with an Application.

47 Ill. Adm. Code 386.104 Compliance with Federal and State Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal and State law.

47 Ill. Adm. Code 386.105 Forms and Procedures for the Program

The Authority may prepare, use, prescribe, supplement and amend such forms, agreements and other documents and procedures as may be necessary to implement the Program.

47 Ill. Adm. Code 386.106 Fees and Charges

The Authority will not charge an application fee for the Program.

47 Ill. Adm. Code 386.107 Authority Administrative Expenses

The Authority is entitled to deduct from each Appropriation, prior to any distribution of funds under the Program and prior to making any Grants, an amount not to exceed 4% of each Appropriation for expenses associated with the administration of the Program, including, without limitation, expenses for staff salaries and benefits for time spent on design and administration of the Program; expenses incurred in performing outreach activities and providing Technical Assistance to the Counseling Agencies; the use of the Authority's equipment for Program purposes; the cost of office space and utilities incurred in connection with the Program; and any other expenses incurred in the administration of the Program. The Authority shall maintain a detailed accounting of its administrative expenses, which shall be available to the public for review.

47 Ill. Adm. Code 386.108 Amendment

This Part may be supplemented, amended or repealed by the Authority from time to time and in a manner consistent with the Illinois Administrative Procedure Act [5 ILCS 100], this Part, the Act and other applicable laws. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 386.109 Severability

If any clause, sentence, paragraph, subsection, Section or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section or Subpart to which the judgment is rendered.

47 Ill. Adm. Code 386.110 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 386.111 Non-Discrimination

The Counseling Agencies shall comply with the applicable provisions of the Illinois Human Rights Act [775 ILCS 5] and the regulations promulgated under that Act, the Fair Housing Act (42 USC 3601), Section 504 of the Rehabilitation Act of 1973 (29 USC 794), the Illinois Environmental Barriers Act [410 ILCS 25], the Illinois Accessibility Code (71 Ill. Adm. Code 400), and all other applicable State and federal law concerning discrimination and fair housing.

47 Ill. Adm. Code 386.112 Titles and Captions

Titles and captions of Subparts, Sections and subsections are used for convenience and reference and are not a part of the text

47 Ill. Adm. Code 386.201 Priority of Distributions

The Authority shall distribute funds from annual Appropriations in accordance with the following priorities:

a) To the Authority for its administrative expenses.

b) After distributing the amount listed in subsection (a), the Authority shall make Grants from the moneys remaining in the Fund that have been appropriated as follows:

1. 30% shall be used to make Grants for Approved Housing Counseling in Cook County outside of the City of Chicago;

2. 25% shall be used to make Grants for Approved Housing Counseling in the City of Chicago;

3. 30% shall be used to make Grants for Approved Housing Counseling in DuPage, Kane, Lake, McHenry and Will Counties; and

4. 15% shall be used to make Grants for Approved Housing Counseling in Illinois in counties other than Cook, DuPage, Kane, Lake, McHenry and Will Counties, provided that grants to provide Approved Housing Counseling to borrowers residing within these counties shall be based, to the extent practicable:

A) proportionately on the amount of fees paid to the respective clerks of the courts within these counties; and

B) on any other factors that the Authority deems appropriate. (Section 7.30(b-1) of the Act)

47 Ill. Adm. Code 386.301 Counseling Agencies Eligibility

The Counseling Agencies are generally eligible to submit an Application for funding if they have been certified as a housing counseling agency by HUD. The Counseling Agencies are eligible for funding if they are certified prior to their application for funding under the Program and committed to participation in the Program. The Counseling Agencies must agree to the terms and conditions of the Program in order to be eligible.

47 Ill. Adm. Code 386.302 Eligible Uses of Grant Funds

a) Eligible Uses of Grant funds by the Counseling Agencies under the Program shall be:

1. Computer and Equipment Expenses;

2. General Operational Expenses;

3. Housing Counseling;

4. training of a Counseling Agency's employees;

5. capacity building that increases a Counseling Agency's capacity to provide Housing Counseling;

6. Technical Assistance; and

7. advertising and marketing of the Program, and any other housing counseling activity as may be approved by the Authority.

b) No Counseling Agency shall receive Grant funds for Computer and Equipment Expenses, General Operational Expenses and Technical Assistance Expenses in an amount greater than 10% of the Grant funds granted to the Counseling Agency during the term of the Counseling Agency's Grant.

47 Ill. Adm. Code 386.303 Application Cycle

The Authority will supply interested Applicants with an Application. Application forms under the Program are expected to be released annually based on funding available.

47 Ill. Adm. Code 386.304 Application Requirements

Each Application shall include the information required by this Section to be completed by the Applicant and any additional information the Authority may require to promote efficient Program administration and quality of performance.

a) Qualifications. Each Applicant shall document qualifications to complete the Program activities, including evidence that a Counseling Agency is a HUD certified housing counseling agency.

b) Counseling Data. Each Applicant shall document the statistics in its area relevant to the types of Approved Housing Counseling offered (i.e., number of foreclosures filed, increase or decrease in homebuying, rental properties available, etc.).

c) Applicant's Capacity. Each Applicant shall document its capacity to administer, and prior experience in administering, Approved Housing Counseling.

d) Capacity Building. Each Applicant shall document how capacity will be expanded to meet the need for Housing Counseling in response to subsection (b).

e) Activities to be Undertaken. Each Applicant shall list which Eligible Uses are to be undertaken with Program funds, including without limitation those activities outlined in Section 386.302 and the rest of this Part.

f) Time for Expending. Each Applicant shall include a budget and schedule for performing the eligible activities outlined in the Application.

47 Ill. Adm. Code 386.305 Review of Applications

a) Application Screening. The Authority shall screen all Applications to confirm that all elements of the Application package have been addressed. Applicants may be notified of deficiencies in Applications and may, at the option of the Authority, be given the opportunity to correct those deficiencies. Completed Applications will be reviewed and evaluated by the Authority staff in accordance with criteria in subsections (b) through (e).

b) Basic Eligibility Evaluation. Each Application will be reviewed to assure compliance with Sections 386.301 and 386.302.

c) Willingness to Perform. The Applicant must commit to remain ready, willing and able to perform Approved Housing Counseling as applicable throughout the Grant term.

d) Costs. The Applicant must demonstrate that the costs identified in the Application are Approved Housing Counseling.

e) Capacity. The Applicant must demonstrate that the proposed activities identified in the Application can be accomplished.

47 Ill. Adm. Code 386.306 Grant Administration

a) Commitment. Each Counseling Agency shall enter into a Commitment with the Authority; the Grant may be less than the amount requested in the Application. The term of Commitment shall be up to one year, subject to the availability of funds from an Appropriation, and may be renewed for one additional year at the discretion of the Authority.

b) Record Retention. Each Counseling Agency shall maintain records in connection with the Grant under the Counseling Agency's Commitment for five years after the date of termination of the Commitment.

c) Monitoring. The Authority, the Auditor General and the Attorney General shall have the right to monitor all Counseling Agency books and records relating to the implementation of the Program. Each Counseling Agency shall make all records relating to its Grant available for inspection, examination and copying by the Authority, the Auditor General or the Attorney General upon reasonable prior notice, as the Authority, the Auditor General or the Attorney General may reasonably require. The required documentation may include, but is in no way limited to, a copy of the Counseling Agency's Application to the Authority; all records relating to the eligible uses of Grant funds under the Program as set forth in Section 386.302; and any other documentation required by the Authority, the Auditor General or the Attorney General.

47 Ill. Adm. Code 386.307 Funding of Grants

Subject to the terms of the applicable Commitment with a Counseling Agency and the related documents evidencing the Grant, the Authority shall provide funds to the Counseling Agencies when the Appropriation is made available and as set forth in Section 386.302.

47 Ill. Adm. Code 386.308 Reporting Requirements

Each Counseling Agency shall provide reports to the Authority, on forms provided by the Authority, at the end of each quarter of the term of its Commitment. The Counseling Agency shall identify, at a minimum, the number of households that received Approved Housing Counseling; the number of Counseling Agency staff who attended training; the number of new counselors/staff hired to increase a Counseling Agency's capacity; the expenditures incurred for Technical Assistance, Computer and Equipment Expenses, General Operational Expenses, and any other expenses incurred by the Counseling Agency related to the Program.

Part 390 Predatory Lending Database Program

47 Ill. Adm. Code 390.101 Authority

This Part is established to set forth the standards for the distribution of funds by the Illinois Housing Development Authority under Section 80 of the Residential Real Property Disclosure Act [765 ILCS 77/80] for the purpose of making Grants to HUD-certified counseling agencies participating in the Predatory Lending Database Program to assist with implementation and development of that Program. The Illinois Housing Development Authority is the designated administrator for the Predatory Lending Database in Illinois, which was established by the Residential Real Property Disclosure Act, effective July 1, 2008.

47 Ill. Adm. Code 390.102 Purpose and Objectives

This Part is established to accomplish the purposes of Section 80 of the Residential Real Property Disclosure Act, and in particular the awarding of Predatory Lending Database Grant Program grants.

47 Ill. Adm. Code 390.103 Definitions

As used in this Part, the following words or terms mean:

"Act": Residential Real Property Disclosure Act [765 ILCS 77].

"Agency" or "Agencies": HUD-certified housing counseling agencies selected for participation in the Program.

"Appropriation": The annual Appropriation of funds to the Illinois Department of Revenue for the Authority by the Illinois General Assembly for the Program.

"Authority": The Illinois Housing Development Authority.

"Application": The application for a grant completed by an Agency.

"Commitment": A contract executed by the Authority and an Agency under which the Authority agrees to provide funding to the Agency under the Program. Each Commitment shall contain a provision to the effect that the Authority shall not be obligated to provide funds under the Commitment if the Authority has not received sufficient funds from an Appropriation.

"Department": The Illinois Department of Financial and Professional Regulation.

"File Review": The interview performed by the Agency pursuant to Section 70 of the Act.

"Grant": A portion of the Appropriation distributed to an Agency to administer the Program.

"HUD-certified Counseling" or "Counseling": In-person counseling provided by a counselor employed by a HUD-certified housing counseling agency to all borrowers, or documented telephone counseling when a hardship would be imposed on one or more borrowers. A hardship shall exist in instances in which the borrower is confined to his or her home due to medical conditions, as verified in writing by a physician, or the borrower resides 50 miles or more from the nearest participating HUD-certified housing counseling agency. In instances of telephone counseling, the borrower must supply all necessary documents to the counselor at least 72 hours prior to the scheduled telephone counseling session.

"Initial Distribution": The first portion of the Grant distributed to an Agency as a lump sum.

"Maintenance Distribution": The second portion of the Grant distributed to an Agency quarterly.

"Members": The members of the Authority.

"Pilot Program": The predatory lending database pilot program established by PA 94-280, effective January 1, 2006, and as expanded by PA 96-856, effective July 1, 2010.

"Program": The Predatory Lending Database Grant Program administered by the Department of Financial and Professional Regulation.

History

• Source: Amended at 34 Ill. Reg. 15850, effective September 28, 2010

47 Ill. Adm. Code 390.104 Compliance with Federal Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal law.

47 Ill. Adm. Code 390.105 Forms and Procedures for the Program

The Authority may prepare, use, supplement and amend forms, agreements and other documents and procedures as may be necessary to implement the Program, all as may be prescribed by the Authority.

47 Ill. Adm. Code 390.106 Fees and Charges

The Authority will charge no application fee for this Program.

47 Ill. Adm. Code 390.107 Authority Administrative Expenses

The Authority shall be entitled to deduct an amount not to exceed 3% of the Appropriation from each Appropriation for expenses associated with the administration of the Program, including, without limitation, expenses for staff salaries and benefits for time spent on design and administration of the Program; expenses incurred in performing outreach activities and providing technical assistance to Agencies; the use of the Authority's equipment for Program purposes; the cost of office space and utilities incurred in connection with the Program; and any other expenses incurred in the administration of the Program.

47 Ill. Adm. Code 390.108 Amendment

This Part may be supplemented, amended or repealed by the Members from time to time and in such manner as they may determine consistent with this Part, the Act, including but not limited to Section 80, and other applicable provisions of law. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 390.109 Severability

If any clause, sentence, paragraph, subsection, Section or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section or Subpart as to which that judgment is rendered.

47 Ill. Adm. Code 390.110 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 390.111 Titles and Captions

Titles and captions of Subparts, Sections and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 390.201 Distribution of Appropriated Funds

The Authority will distribute grants to Agencies providing housing counseling services within the geographic boundaries of Cook County, Kane County, Peoria County, and Will County. Grant awards to Agencies under the Program will be based on the Agency's current capacity, qualifications, proposed geographic service area, experience performing File Reviews under the Pilot Program, when applicable, and other requirements outlined in Section 390.304 of this Part and the Application. Agencies need not have performed File Reviews prior to application in order to qualify for a Grant.

History

• Source: Amended at 34 Ill. Reg. 15850, effective September 28, 2010

47 Ill. Adm. Code 390.202 Staged Distribution

Each Agency approved by the Authority under the Program will receive a Grant for a term of up to two years. Each Grant will be distributed in two stages. The Initial Distribution will be a lump sum, determined by the Authority in accordance with Section 390.201 of this Part, to be used to increase the Agency's capacity, as determined by the Authority in conjunction with the Agency. The Maintenance Distribution will be a smaller amount distributed quarterly through the term of the grant, and will be based on the Agency's performance under the grant and continued willingness to perform File Reviews.

47 Ill. Adm. Code 390.301 Agency Eligibility

Agencies are eligible for funding if they have been certified as a housing counseling agency by the U.S. Department of Housing and Urban Development as set forth in the U.S. Department of Housing and Urban Development Housing Counseling Program Handbook 7610.1, Rev-4, (published October 21, 2004, U.S. Department of Housing and Urban Development, 451 7th Street, S.W., Washington DC 20410, no subsequent amendments or editions included). Agencies must also have been certified prior to their application for Program funding, commit to participation in the Program and agree to the terms and conditions of the Program in order to be eligible.

47 Ill. Adm. Code 390.302 Eligible Grant Activities

Without limitation, computer and equipment purchases, staff salaries and benefits, office space, utility bills, marketing materials, training, and other activities that support carrying out duties under the Predatory Lending Database Program outlined in Section 80 of the Residential Real Property Disclosure Act are eligible for funding under this Program.

47 Ill. Adm. Code 390.303 Application Cycle

The Authority will supply interested qualified applicants with an Application upon request. Applications under this Program will be accepted periodically until the Appropriation is disbursed as outlined in Section 390.202.

47 Ill. Adm. Code 390.304 Application Requirements

Each Application for Program funds shall include the information required by this Section and any additional information the Authority may require to promote efficient program administration and quality of performance, provided that those requirements are included in the Application to be completed by the Agency.

a) Qualifications: Each Applicant shall document qualifications to complete the Program activities, including without limitation documentation as a HUD-certified housing counseling agency.

b) Number of File Reviews: If applicable, each Applicant shall determine and document the number of File Reviews completed for the Predatory Lending Database prior to Application, including any File Reviews performed prior to July 1, 2008.

c) Documentation of Need: Each Applicant shall determine the projected need for File Reviews for the fiscal year for which grants are requested.

d) Capacity: Each Applicant will document how capacity shall be expanded to meet the need described in subsection (b) of this Section.

e) Activities to be Undertaken: Each Application shall list activities to be undertaken with Program funds, including without limitation those activities outlined under this Part and the Act.

f) Time for Expending: Each Application shall include a budget and timeline schedule for performing the activities outlined in the Application.

47 Ill. Adm. Code 390.305 Review of Applications

a) Application Screening. The Authority shall screen all Applications to determine that all elements of the Application package have been addressed. Applicants will be notified of deficiencies in Applications and given the opportunity to correct those deficiencies. Complete Applications will be reviewed and evaluated by Authority staff in accordance with criteria listed in subsections (b) through (e) of this Section. This review and evaluation process will be completed within 30 working days after the due date for Applications.

b) Basic Eligibility Evaluation. Each Application will be reviewed to assure compliance with the Act and this Part.

c) Willingness to Perform. The Agency must commit to remain ready, willing and able to perform File Reviews throughout the period of the Commitment.

d) Costs. The Agency must demonstrate that the costs identified in the Application are eligible Program costs under the Act and this Part.

e) Program Objectives and Methodology. The Applicant must demonstrate that the activities undertaken under the Program can be accomplished, in that:

1. activities are measurable and will benefit the purposes of the Program as described in the Act and this Part; and

2. proposed activities logically address the problems or opportunities identified in the Application.

47 Ill. Adm. Code 390.306 Grant Administration

a) Commitment: Each Agency shall enter into a Commitment with the Authority; the Grant may be less than the amount requested in the Application. The term of Commitments may be up to two years, subject to the availability of funds from an Appropriation, and may be renewed if Appropriation is made available and the agency performs satisfactorily under the first Grant.

b) Record Retention: Each Agency shall maintain records in connection with administration of the Program, including all records required by the U.S. Department of Housing and Urban Development as part of its continuing compliance with requirements for Agencies. Records shall be retained for five years after the date of termination of the Commitment.

c) Agency Monitoring: The Authority shall have the right to monitor all Agency records relating to the administration of the grant by the Authority. Each Agency shall make all records relating to its Commitment available for inspection by the Authority upon the Authority's request. The required documentation may include a copy of the Agency's Application to the Authority; all records relating to training, equipment purchases, staff salaries and benefits, and other activities undertaken with Program funds; documentation of activities performed under the Program; and any other documentation required by the Authority.

47 Ill. Adm. Code 390.307 Funding of Grants

During the term of each Commitment with an Agency, the Authority shall provide funds to Agencies when Appropriation is made available and as outlined in Sections 390.202 and 390.302.

47 Ill. Adm. Code 390.308 Reporting Requirements for Agencies

Each Agency shall provide reports to the Authority, on forms provided by the Authority, at the end of each quarter of the term of its Commitment. The report shall identify, at a minimum, certification that the Agency was available to complete File Reviews, the number of File Reviews referred and performed, expenditures incurred and amounts expended for each purchase or expense.

47 Ill. Adm. Code 390.309 Books and Records

The books and records of each Agency and each Affordable Housing Project shall be subject to inspection, examination and copying by the Authority and its authorized representatives or agents at such times as the Authority reasonably requires for the purpose of determining whether the Agency is in compliance with the Act and this Part.

Part 395 State Housing Appeals Board

47 Ill. Adm. Code 395.101 Authority

IHDA is designated as the agency responsible for adopting rules and regulations needed to carry out the Board's responsibilities under the Act. This Part is authorized by Section 60 of the Act and Section 7.19 of the IHDA Act.

47 Ill. Adm. Code 395.102 Purpose and Objectives

The purpose of the Act and this Part is to carry out the Board's responsibilities under the Act and to provide direction to Local Governments and Affordable Housing Developers.

47 Ill. Adm. Code 395.103 Definitions

The following terms used in this Part shall have the following definitions:

"Act": The Affordable Housing Planning and Appeal Act [310 ILCS 67].

"Affordable housing": Housing that has a value or cost or rental amount that is within the means of a household that may occupy moderate-income housing or low-income housing.

In the case of owner-occupied dwelling units, affordable housing means housing in which mortgage, amortization, taxes, insurance and condominium or association fees, if any, constitute no more than 30% of the gross annual household income for a household of the size that may occupy the dwelling unit.

In the case of dwelling units for rent, affordable housing means housing for which the rent and utilities constitute no more than 30% of the gross annual household income for a household of the size that may occupy the dwelling unit. In the case of dwelling units for rent, the costs of any required parking, maintenance or landlord-imposed fees are to be included in the calculation of affordable housing if available from the U.S. Census Bureau.

"Affordable housing developer": A nonprofit entity, limited equity cooperative or public agency, or private individual, firm, corporation, or other entity seeking to build an Affordable housing development.

"Affordable housing development": Any housing that is subsidized by the federal or State government, or any housing in which at least 20% of the dwelling units are subject to covenants or restrictions that require the dwelling units to be sold or rented at prices that preserve them as affordable housing for a period of at least 15 years, in the case of owner-occupied housing, and at least 30 years, in the case of rental housing. [310 ILCS 67/15]

"Affordable housing plan": A plan approved by a non-exempt local government as set forth in Section 25 of the Act and submitted to IHDA for review and subsequent approval.

"Appellant": Any of the following parties:

The affordable housing developer of the proposed affordable housing development;

A person who would be eligible to apply for residency in the proposed affordable housing development; or

A housing organization whose geographic focus area includes the municipality, or county if in an unincorporated area, where the proposed affordable housing development is located. [310 ILCS 67/30]

"Approving authority": The governing body of the local government.

"Area median household income": The median household income adjusted for family size for applicable income limit areas as determined annually by HUD under Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437). [310 ILCS 67/15]

"Board": The State Housing Appeals Board.

"Chairperson": The Chairperson of the Board.

"Contumacious Conduct": A willful disobedience of the Board's order.

"Days": Calendar days. Due dates under this Part falling on a Saturday, Sunday or a legal State or federal holiday shall be deemed to fall on the next calendar day that is not a Saturday, Sunday or a legal State or federal holiday.

"Development": Any building, construction, renovation or excavation, or any material change in any structure or land, or change in the use of a structure or land, that results in a net increase in the number of dwelling units in a structure or on a parcel of land by more than one dwelling unit.

"Dwelling unit": Real property located within the State upon which there is located a structure or structures that are a single family home, a condominium or a multi-unit residential structure that is the principal residence of the household that resides in the unit.

"Exempt local government": Any local government in which at least 10% of its total year-round housing units are affordable housing, as determined by IHDA pursuant to Section 20 of the Act, or any municipality with a population under 1,000.

"Household": The person or persons occupying a Dwelling Unit.

"Housing Organization": A trade or industry group engaged in construction or management of housing units, or a nonprofit organization whose mission includes providing or advocating for increased access to housing for low- and moderate-income households.

"HUD": The United States Department of Housing and Urban Development.

"IHDA": The Illinois Housing Development Authority.

"IHDA Act": The Illinois Housing Development Act [20 ILCS 3805].

"IHDA Chairman": The chairman of IHDA.

"Local Government": A county or a municipality, including home rule units and counties and municipalities other than home rule units, as described in Article VII of the Constitution of the State of Illinois.

"Low-Income Housing": Housing that is affordable, according to HUD, for either home ownership or rental and that is occupied, reserved or marketed for occupancy by Households with a gross household income that does not exceed 50% of the Area Median Household Income.

"Member": A member of the State Housing Appeals Board.

"Moderate-Income Housing": Housing that is affordable, according to HUD, for either home ownership or rental, and that is occupied, reserved or marketed for occupancy by Households with a gross household income that is greater than 50%, but does not exceed 80%, of the Area Median Household Income.

"Non-Appealable Local Government Requirements": All essential requirements that protect the public health and safety, including any local building, electrical, fire or plumbing code requirements or those requirements that are critical to the protection or preservation of the environment. [310 ILCS 67/15] Zoning, density and bulk restrictions may count as Non-Appealable Local Government Requirements if the Board finds that they qualify under the Act's definition of Non-Appealable Local Government Requirements.

"Non-Exempt Local Governments": All local governments that do not meet the definition of Exempt Local Governments.

"Offices of IHDA": 111 E. Wacker, Suite 1000, Chicago, Illinois 60601.

"Public Building": Any building or portion thereof owned or leased by a Public Body. [5 ILCS 120/2.01]

"Public Body": All legislative, executive, administrative or advisory bodies of the State, counties, townships, cities, villages, incorporated towns, school districts, and all other municipal corporations, boards, bureaus, committees or commissions of the State, and any subsidiary bodies of any of the foregoing, including, but not limited to, committees and subcommittees supported in whole or in part by tax revenue, or that expend tax revenue, except the General Assembly and committees or commissions of the General Assembly. [5 ILCS 120/1.02]

"State": The State of Illinois.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

Chapter II Illinois Housing Development Authority

Part 395 State Housing Appeals Board

47 Ill. Adm. Code 395.104 Compliance with Federal and State Law

Notwithstanding anything in this Part to the contrary, this Part shall be construed in conformity and compliance with applicable federal and State law.

47 Ill. Adm. Code 395.105 Forms and Procedures for the Program

IHDA may prepare, use, supplement and amend forms, agreements and other documents and procedures as may be necessary to implement the duties of the Board, all as may be prescribed by IHDA.

47 Ill. Adm. Code 395.106 Fees and Charges

The Authority shall not charge the Board any fees or other charges for services it provides to the Board. The Members shall be reimbursed by the State for all reasonable expenses actually and necessarily incurred in the performance of their official duties. In the making of reimbursements to the Members, the State may use funds from the Illinois Affordable Housing Trust Fund, pursuant to the Illinois Affordable Housing Act [310 ILCS 65], or such other funds as the State may determine.

History

• Source: Amended at 43 Ill. Reg. 11314, effective September 26, 2019

47 Ill. Adm. Code 395.107 Amendment

This Part may be supplemented, amended or repealed by IHDA from time to time and in a manner consistent with the Illinois Administrative Procedure Act [5 ILCS 100], this Part, the Act and other applicable laws. This Part shall not constitute or create any contractual rights.

47 Ill. Adm. Code 395.108 Severability

If any clause, sentence, paragraph, subsection, Section, or Subpart of this Part is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair or invalidate the remainder of this Part, but shall be confined in its operation to the clause, sentence, paragraph, subsection, Section or Subpart to which the judgment is rendered.

47 Ill. Adm. Code 395.109 Gender and Number

All terms used in any one gender or number shall be construed to include any other gender or number as the context may require.

47 Ill. Adm. Code 395.110 Titles and Captions

Titles and captions of Subparts, Sections and subsections are used for convenience and reference and are not a part of the text.

47 Ill. Adm. Code 395.201 Jurisdiction

The Board shall have jurisdiction to hear and render decisions regarding appeals filed by Affordable Housing Developers in connection with applications for Affordable Housing Developments when Approving Authorities have either denied the applications or approved the applications with conditions that, in the opinion of the Affordable Housing Developer, may render the Affordable Housing Developments infeasible. In connection with appeals filed by Affordable Housing Developers, the Board shall also have jurisdiction to hear and render decisions affecting the exempt or non-exempt status of Local Governments under the Act.

47 Ill. Adm. Code 395.202 Organization of the Board

The duties of the Board are governed by the Act and this Part. The Board shall consist of seven Members appointed by the Governor.

a) Chairperson: A retired Illinois circuit judge, retired Illinois appellate judge, a current or retired administrative law judge or a practicing or retired attorney with experience in the area of land use law or related field who is a Member. [310 ILCS 67/50]

b) Other Members: Other Members, who are appointed from time to time by the Governor, are as follows:

1. Four Members selected from the following categories:

A) County or municipal zoning board of appeals members;

B) County or municipal planning board members;

C) A mayor or municipal council or board member; and

D) A county board member.

2. An Affordable Housing Developer; and

3. An affordable housing advocate.

c) Ex Officio Member: The IHDA Chairman, ex officio, shall serve as a non-voting Member.

d) At least 2 of the appointments under subsection (b) shall be from Non-Exempt Local Governments.

e) Beginning January 1, 2024, initial terms of four Members designated by the Governor shall be for two years and initial terms of three Members designated by the Governor shall be for one year. Thereafter, Members shall be appointed for two years. After a Member's term expires, the Member shall continue to serve until a successor is appointed. There shall be no limit to the number of terms an appointee may serve. The terms of Members serving before January 1, 2024 expire on January 1, 2024.

f) A Member shall receive no compensation for his or her services; however, Members shall be reimbursed by the State for all reasonable travel and administrative expenses actually and necessarily incurred in the performance of the Member's official duties.

g) The Board shall hear all petitions for review filed under the Act and shall conduct hearings in accordance with this Part.

h) The principal office of the Board shall be the Offices of IHDA with office hours that are coterminous with the office hours of IHDA. IHDA shall provide space, clerical assistance and other assistance that the Board may require. [310 ILCS 67/50]

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

47 Ill. Adm. Code 395.203 Meetings of the Members

a) Compliance with Open Meetings Act: All meetings of the Board shall be in compliance with the Illinois Open Meetings Act [5 ILCS 120].

b) Regular Meetings: The regular meetings of the Board shall be held at the Offices of IHDA when there are appeals, other applicable context, or other business to come before the Board, at least annually, with the specific date for the annual meeting to be set no later than January 1 of each calendar year. The Board may hold a regular meeting simultaneously at the Offices of IHDA and one or more other locations in a Public Building through an interactive video conference if public notice and public access are provided for all meeting locations. Members physically present in those locations shall count towards determining a quorum. [5 ILCS 120/2.01]

c) Rescheduled Meetings: A regular meeting of the Board may be rescheduled as determined by the Chairperson, in which event notice of the rescheduled meeting shall be given in accordance with the Open Meetings Act.

d) Special Meetings: Special meetings of the Board may be called at any time by the Chairperson or upon request of any two Members of the Board. Public notice of the special meeting, except a meeting held in the event of a bona fide emergency, or of any rescheduled regular meeting described in subsection (c), or of a reconvened meeting shall be given at least 48 hours before the meeting. Notice of the special meeting, and the agenda for the meeting, shall be posted at the Offices of IHDA and on IHDA's website. [5 ILCS 120/2.02]

e) Emergency Meetings: Emergency meetings of the Board may be called at any time by the Chairperson or upon request of any two Members of the Board. Public notice of the emergency meeting shall be given as soon as practicable, but in any event, prior to the holding of the meeting.

f) Notice of Meetings: The Board, through IHDA, shall publish a schedule of its regular meetings by January 1 of each calendar year listing the dates, times and places of the meetings, if any. The schedule shall be posted at the Offices of IHDA and on IHDA's website. No notice of regular meetings, as provided for in subsection (b) need be given to any Member. Notice in writing of all special, emergency and rescheduled meetings shall be delivered personally or via electronic mail, or shall be mailed to each Member at the Member's business or home address. If mailed, the notice shall be deemed to be delivered when deposited in the United States mail in a sealed envelope addressed to the Member, with postage prepaid. Any Member may waive notice of a special, emergency or rescheduled meeting and attendance at the meeting shall constitute a waiver of notice of the meeting except when a Member attends for the express purpose of objecting to the meeting because the meeting was not lawfully called or convened.

g) Quorum: A majority of the appointed Members of the Board shall constitute a quorum. A quorum must be physically present at any meeting of the Board. A Member attending a meeting via video conference as provided for in subsection (b) will be considered physically present for the purposes of determining a quorum and voting. The affirmative vote of a majority of the appointed Members shall be necessary for any action taken by or in the name of the Board at any meeting. If less than a quorum is present at a meeting, a majority of the Members present may adjourn the meeting from time to time. No vacancy in the membership of the Board shall impair the right of a quorum to exercise all of the rights and perform all of the duties of the Board.

h) Attendance By Means Other Than Physical Presence:

1. If a quorum is physically present at a meeting of the Board, a Member may attend the meeting via audio or video conference only if the Member cannot attend because of:

A) personal illness or disability;

B) employment purposes or other business of the Board;

C) a family or other emergency; or

D) unexpected childcare obligations. (5 ILCS 120/7).

2. The Member must notify the Chairperson of the Member's intention to attend the meeting via audio or video conference at least 48 hours before the meeting unless impracticable. A Member cannot attend more than one regularly scheduled meeting of the Board for that calendar year via audio or video conference unless the Member presents a document from the Member's physician attesting to the Member's inability to physically attend a meeting or meetings. If one or more Members attend via audio or video conference, the Board, through IHDA, shall issue a written notice at the meeting stating the names of the Members present by audio or video conference, the electronic means that the Members will use to attend the meeting, and the location of the speakerphone or monitor receiving and transmitting the communications from the Members present by audio or video conference. The Member must then identify himself or herself by name and be recognized by the Chairperson or other presiding officer before communicating. The minutes of the meeting shall reflect which Members were physically present and which Members were present via video or audio conference.

i) Records: A full and complete record shall be kept of all Board proceedings. IHDA shall be the official custodian of the records. Oral proceedings shall be recorded electronically, stenographically or by other means that will adequately ensure the preservation of the testimony or oral proceedings and shall be transcribed on the request of any party to a case. Transcription costs, if any, shall be borne by the party requesting the transcript. Other records shall consist of the following:

1. all pleadings, including all notices and responses to those pleadings, and all motions and ruling;

2. a transcript of the hearing, if any;

3. all evidence received;

4. a statement of matters officially noticed;

5. any offers of proof, objections and rulings on that proof;

6. any proposed findings and exceptions;

7. any decision, opinion or report of the Board;

8. all staff memoranda or data submitted to the Board by IHDA in connection with the consideration of a case before the Board; and

9. Any prohibited ex parte communications. [5 ILCS 100/10-35(a)]

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

Chapter II Illinois Housing Development Authority

Part 395 State Housing Appeals Board

47 Ill. Adm. Code 395.204 Conduct of the Board

a) Authority: The Board shall have all the powers necessary and appropriate to conduct a full, fair and impartial hearing, including, but not limited to, the following:

1. to administer oaths and affirmations;

2. to rule upon offers of proof and receive relevant evidence;

3. to issue subpoenas;

4. to provide for discovery and to determine its scope;

5. to regulate the course of the hearing and the conduct of the parties and their counsel;

6. to consider and rule upon procedural requests;

7. to require or hold conferences for the settlement or simplification of the issues;

8. to examine witnesses, direct witnesses to testify, limit the number of times a witness may testify, limit repetitive or cumulative testimony, and set reasonable limits on the amount of time a witness may testify;

9. to ensure that the hearing is conducted in a full, fair and impartial manner, that order is maintained, and that unnecessary delay is avoided in the disposition of the hearing;

10. to dismiss appeals in accordance with the Act; and

11. to affirm, reverse or modify the conditions of or add conditions to a decision of an Approving Authority.

b) Disqualification of Members of the Board: No person who is a Member of the Board shall engage in practice before the Board in any respect. No person who has been a Member of the Board shall, for one year after termination of membership on the Board, engage in practice before the Board in any respect. No person who has been a Member of the Board shall engage in any practice before the Board in connection with any case or proceeding that was pending during that person's membership with the Board. No Member of the Board shall participate in any hearing or other proceeding before the Board regarding an Affordable Housing Development in which that Member has a direct or indirect financial interest.

c) Ex Parte Communications:

1. Except in the disposition of matters that the Board is authorized to entertain or dispose of on an ex parte basis, the Board and IHDA staff shall not, with respect to any pending or contested appeal, communicate directly or indirectly in connection with any issue of fact before the Board, with any party or the representative of any party, except upon notice and an opportunity for all parties to participate.

2. An ex parte communication received by any member of the Board or any employee or member of IHDA pertaining to a pending appeal shall be made a part of the record of the pending appeal, including all written communications, all written responses to the communications, and a memorandum stating the substance of all oral communications and all responses made and the identity of each person from whom the ex parte communication was received.

3. Ex Parte communications prohibited by the Illinois Administrative Procedure Act [5 ILCS 100] shall not form the basis of any decision of the Board.

4. Communications regarding matters of practice and procedure, such as the status of appeals, filing requirements, form letters, scheduling of hearings, format of pleadings, number of copies required, manner of service, and the like are not considered ex parte communications under this Part.

d) Contumacious Conduct: Contumacious Conduct at any hearing before the Board shall be grounds for exclusion from the hearing. If a witness or a party fails to appear or refuses to answer a question after being directed to do so or refuses to obey an order to provide or permit discovery, the Board may issue orders with regard to the failure to appear or the refusal as are just and appropriate, including, but not limited to, excluding the testimony of witnesses, entering an order of default, entering an order that certain facts are deemed admitted for purposes of the proceeding, or entering an order denying the application or complaint of a party.

History

• Source: Amended at 43 Ill. Reg. 11314, effective September 26, 2019

47 Ill. Adm. Code 395.301 Service of Documents

All initial pleadings and all documents in connection with any hearing before the Board under this Subpart shall be served by the party filing the document on the Board, the Approving Authority, the appellant and all other parties to the proceedings. Service of any document upon any party may be made personally, by certified or registered mail with return receipt signed by the person or their registered agent, or by private delivery service. If service is made by United States mail, service shall be presumed complete 3 days after mailing, if proof of service shows the document was properly addressed. This presumption may be overcome by the addressee with evidence establishing that the document was not delivered or delivered at a later date. A party's failure to accept or claim a document served by mail shall not be grounds for overcoming the presumption. Proof of service shall be made by affidavit of the person making personal service that includes the name and address of the party served and the date and manner of service, or by a properly executed registered or certified mail receipt.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

Chapter II Illinois Housing Development Authority

Part 395 State Housing Appeals Board

47 Ill. Adm. Code 395.302 Computation of Time

All petitions, evidence, motions and other written correspondence sent by United States mail to the Board shall be considered filed with the Board as of the postmark date in accordance with the Illinois Statute on Statutes [5 ILCS 70/1.25]. Petitions, evidence, motions and all other written correspondence sent to the Board by a delivery service other than the United States mail shall be considered as filed with the Board on the date sent as indicated on the tracking label.

47 Ill. Adm. Code 395.303 Parties

a) Substitution of the Parties: The Board may, on motion, at any time in the course of any proceeding, permit a substitution of parties as justice or convenience may require.

b) Intervention: The Board may allow any person or persons showing that they may be substantially and specifically affected by the proceedings to intervene as a party in the whole or in any portion of the proceedings. The Board may allow any other interested person to participate by presentation of argument orally or in writing or for any other limited purpose, as the Board may order. The Board shall not allow a person to intervene if his or her interests are substantially similar to those of any party and no showing is made that one or more of the parties will not diligently represent those interests. Being a resident, land owner or taxpayer of a Local Government, with no other showing of an issue that is not being adequately addressed by one of the parties, shall not be sufficient to sustain intervention.

47 Ill. Adm. Code 395.304 Consolidation, Severance and Joinder

Any person entitled to participate in proceedings subject to the Board's jurisdiction may appear as follows:

a) A natural person may appear on his or her own behalf or by an attorney who is licensed and registered to practice in the State.

b) A corporation may appear through any officer, employee or representative or by an attorney who is licensed and registered to practice in the State.

c) Any other person, including Local Governments, Approving Authorities, the State and all of its political subdivisions, may appear through any officer, employee or representative, or by an attorney who is licensed and registered to practice in the State.

1. Attorneys not licensed and registered to practice in the State may request to appear on a particular matter by filing a motion with the Board.

2. An attorney appearing in a representative capacity shall file a separate written notice of appearance with the Board, together with proof of service and notice of filing on all parties.

3. An attorney who has appeared in a representative capacity and who wishes to withdraw from that representation shall file a notice of withdrawal with the Board, together with proof of service and notice of filing on all parties.

47 Ill. Adm. Code 395.305 Initial Pleadings by Appellants

Appellants must submit written initial pleadings to the Board and must serve written initial pleadings on the Approving Authority and all other parties within 45 days after the decision of an Approving Authority to deny an application for an Affordable Housing Development. In the case of Local Governments that are determined by IHDA under Section 20 of the Act to be a Non-Exempt Local Government for the first time based on the recalculation of the United States Census Bureau data after January 1, 2024, no Appellant shall appeal to the Board until 6 months after the Local Government has been notified of its non-exempt status. [310 ILCS 67/30] An initial pleading may be submitted to the Board electronically by submitting an email to legalnotices@ihda.org. An initial pleading shall contain the following:

a) a clear and concise statement of the prior proceedings before all Approving Authorities, including the date of notice of the decision the appellant is appealing;

b) a clear and concise statement of the appellant's objections to the Approving Authority's decision, indicating why the appellant believes the application to develop Affordable Housing was unfairly denied, which may include an appeal of IHDA's determination of the exempt status of the Local Government as set forth in Section 395.401, or what conditions, if any, were imposed that the appellant believes were unreasonable;

c) a clear and concise statement setting forth the relief sought;

d) the complete name and address of the appellant for the purpose of service of papers in connection with the appeal;

e) the name and address of the attorney or attorneys representing the appellant, if any; and

f) a complete copy of the application for the Affordable Housing Development, as it was submitted to the Approving Authority, including sufficient information to determine whether the proposal that is the subject of the appeal is Affordable Housing.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

47 Ill. Adm. Code 395.306 Notice of Appeal

a) Within 5 days after the Board has received the initial pleading filed by the appellant, the Board shall send a notice of appeal and a courtesy copy of the initial pleading to the Approving Authority identified in the initial pleading.

b) Upon receipt, the Approving Authority shall post the notice of appeal in the Approving Authority's office and on the Approving Authority's website. The Approving Authority shall continue to post the notice of appeal for a period of not less than 10 days. If the Approving Authority fails or neglects to post the notice of appeal in the Approving Authority's office or on the Approving Authority's website, the appeal shall proceed and shall not be impaired.

c) A notice of appeal shall include the following:

1. the time, place and nature of the appeal;

2. the legal authority and jurisdiction under which the hearing is to be held;

3. a reference to the particular Section of the Act involved;

4. the consequences of a failure to respond and the official file or other reference number; and

5. the name and mailing address of the Board and all parties.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

47 Ill. Adm. Code 395.307 Dismissal before Hearing

a) Within 10 days after receipt of the notice of appeal from the Board, the Approving Authority may file a motion to dismiss the appeal under the following circumstances:

1. pursuant to Section 20(c) of the Act, the Local Government was determined to be exempt pursuant to Section 20 of the Act in the year in which the appeal was filed. If applicable, the Local Government shall address any allegations by the appellant, pursuant to Section 395.401, that the determination the Local Government is exempt from the Act is incorrect; or

2. pursuant to Section 30(d) of the Act, the Local Government adopted an Affordable Housing Plan, submitted that plan to IHDA within the required time frame, and submitted documentation to IHDA that evidences the Local Government met its goal pursuant to Section 25(b)(vi) of the Act; or

3. pursuant to Section 30(e) of the Act, the denial is based upon non-appealable local government requirements.

b) A motion to dismiss before a hearing shall include the following:

1. a statement explaining why the appeal should be dismissed; and

2. if appropriate, any documents or material supporting the claim.

c) On the same day that the Approving Authority files a motion to dismiss with the Board, the Approving Authority shall serve a complete copy of the motion to dismiss on the Affordable Housing Developer and any other parties at the address or addresses specified in the initial pleading.

d) If the Approving Authority files a motion to dismiss prior to the hearing, the Affordable Housing Developer may file a rebuttal within 10 days after the filing of the motion to dismiss, rebutting any of the claims made in the Approving Authority's motion to dismiss.

e) The Board shall decide the appellant's rebuttal on the merits. If the Board determines that the appellant has successfully rebutted the claims made in the Approving Authority's motion to dismiss, the Board shall deny the motion to dismiss and the issues raised in the motion to dismiss and the response shall be questions of fact to be resolved as part of the appeals process; otherwise, the Board may dismiss the appeal and, if dismissed, the Approving Authority shall not be required to file a reply.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

47 Ill. Adm. Code 395.308 Reply to the Initial Pleading by Approving Authority

a) If an appeal is not dismissed before the hearing pursuant to Section 395.307, within 15 days after the Board's decision to deny the motion to dismiss, the Approving Authority shall file a reply to the initial pleading with the Board and shall provide a copy of the reply to the initial pleading to the appellant and all other parties. If no motion to dismiss is filed, the Approving Authority shall file a reply to the initial pleading with the Board and shall provide a copy of the reply to the initial pleading to the appellant and all other parties within 15 days after the notice of appeal.

b) The reply to the initial pleading shall include the following:

1. a statement explaining why the application that is the subject of the appeal was denied or conditions were applied, which may include an appeal of IHDA's determination of the non-exempt status of the Local Government under the Act as set forth in Section 395.401. If the Approving Authority denied an application or imposed conditions because it concluded that the Affordable Housing Developer did not comply with all Non-Appealable Local Government Requirements, the reply to the initial pleading must specify the requirements that justify the denial or the imposition of changes;

2. a record of the vote on the Affordable Housing Developer's application that is the subject of the appeal; and

3. any findings of fact related to the application; and

4. a statement clarifying which local, State, or federal law, if any, the Local Government relied upon as a basis for denying, or applying conditions to the application that is the subject of the appeal.

c) The failure to file a reply to the initial pleading shall be deemed a general denial of matters asserted in the initial pleading and a waiver of all affirmative defenses.

d) A party may participate in the hearing without forfeiting any jurisdictional objection, if the objection is made within 15 days after receipt of the notice of appeal. Any party may file a response to the objection within 15 days after service.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

47 Ill. Adm. Code 395.309 Prehearing Conferences, Settlement Conferences, Subpoenas and Depositions

a) Pre-hearing Conferences: The Board may, on its own motion or on motion of any other party to the appeal, set a pre-hearing conference. The Board's decision whether to conduct a pre-hearing conference will be based on the complexity of the appeal, the issues in controversy and the potential for settlement. The Board shall issue a pre-hearing conference order setting forth the matters agreed to and rulings as to disputed matters. The order shall be served concurrently upon all parties and the Board shall control the subsequent course of the proceedings. The purpose of the pre-hearing conference shall be to:

1. ascertain the positions of the parties;

2. promote the narrowing of witnesses;

3. allow for the admissions of fact and stipulation of evidence;

4. exchange witness lists;

5. aid in the simplification of the evidence and disposition of the proceedings; or

6. reach a compromise settlement agreeable to the parties.

b) Settlement Conferences: At any stage of the appeal and at its direction, the Board may order a settlement conference and require the participation of the parties. Within 15 Days after the beginning of a settlement conference, the parties shall inform the Board in writing whether a settlement was reached. Settlement conferences need not be recorded.

c) Subpoenas: At any stage of the appeal and at its direction, the Board may issue subpoenas requiring the attendance and the giving of testimony by witnesses, or the production of books, papers, records, accounts, memoranda or other materials relevant to the appeal. Subpoenas may be issued either upon the Board's own motion or upon the written request of any party with a showing of the relevancy of the request to the issues in the hearing. In cases in which the Board receives a request for a subpoena, the Board shall grant or deny the request, either in writing or on the record. If any party fails or neglects to appear or testify or produce books, papers and records pursuant to the issuance of a subpoena by the Board, the Board may request the assistance of the Attorney General to invoke the aid of the circuit court within the jurisdiction in which the hearing is being held to request that the party be ordered to appear before the Board to testify or produce the requested evidence.

1. Service: The movant shall serve the subpoena on the other party or witness if the movant's request for a subpoena is granted. Service of a subpoena must be completed 10 Days before the date of the required appearance or production. The movant shall be responsible for payment of the witness fees for attendance, subsistence and mileage at the time the subpoena is served. Witnesses appearing at a hearing pursuant to subpoena are entitled to the same fees and mileage as are allowed witnesses in civil cases in the courts of the State, pursuant to Section 4.3 of the Circuit Court Act [705 ILCS 35/4.3]. The movant must tender all fees with the subpoena. A witness appearing at the request of the Board shall submit the subpoena with a voucher when claiming reimbursement.

2. Modification: The Board, upon motion made before the time initially specified in the subpoena for compliance, may quash or modify the subpoena if it is unreasonable, oppressive or irrelevant. The Board shall rule upon motions to quash or modify material requested in the subpoena, or denying, limiting or conditioning the production of information when necessary to prevent undue delay, undue expense, harassment or oppression, or to protect materials from disclosure. If the request for a subpoena is denied or modified, the Board shall proceed to conduct the hearing and the reasons for denying or modifying the request shall be made part of the record.

d) Depositions: Discovery depositions and evidence depositions may be taken of a witness or a party only upon order of the Board, either at its own initiative or upon motion of a party. The Board shall rule on such motions at its discretion. In taking such a deposition, the procedures in Illinois Supreme Court Rules (S.Ct. Rules 201 through 230) shall be followed, except as modified by order of the Board. Discovery depositions shall not be allowed into evidence in any matter before the Board.

e) Stipulations: At the discretion of the Board, the parties may, by stipulation in writing filed with the Board at any stage of the proceeding, or orally made at the hearing, agree upon any pertinent facts in the proceeding. In making its findings, the Board need not be bound to any such stipulation.

47 Ill. Adm. Code 395.310 Conduct of Hearings

a) Hearings may begin within 45 days after the initial pleading is filed, unless the Board determines that a settlement conference is underway and is likely to resolve the matters in dispute to the satisfaction of both parties.

b) The appellant shall present its case first, followed by questions from the Board.

c) The Approving Authority shall present its case second, followed by questions from the Board.

d) In the event that a Local Government's exempt or non-exempt status under the Act is appealed and the issue has not been disposed of by motion of either of the parties, then, pursuant to Section 395.401, IHDA shall produce all written guidance and any other relevant materials regarding the Local Government's exempt or non-exempt status for the Board's review.

e) With respect to Non-Appealable Local Government Requirements, if there is disagreement between the Approving Authority and the appellant as to whether a particular requirement is a Non-Appealable Local Government Requirement, the Board may make that determination based on whether the specific requirement in question meets the statutory definition of Non-Appealable Local Government Requirements.

f) Both parties shall be permitted to cross-examine witnesses; however, the scope of any such cross-examination shall be limited to the scope of the direct examination.

g) Both parties shall be permitted to make closing statements; closing statements shall not include facts not previously introduced.

h) The Board, upon motion of any Member or on the motion of a party, may amend a complaint to conform to the evidence presented in the hearing or to include uncharged allegations supported by the evidence at any time prior to the issuance of the Board's decision and order.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

Chapter II Illinois Housing Development Authority

Part 395 State Housing Appeals Board

47 Ill. Adm. Code 395.311 Motions

a) Motions shall be made in writing, unless made during the hearing, at which time the motions may be made orally, on the record. All motions shall set forth the relief or order sought and the legal authority for the action requested. If made in writing, at least 2 copies of all motions shall be filed with the Board, and at least one copy shall be served on each additional party to the hearing.

b) Within 10 Days, or other period as the Board may require, after service of a written motion or other document, a party may file a response to the motion. The response may include affidavits or other evidence.

c) A written brief may be filed with a motion or a response to a motion, stating the arguments and authorities relied upon. The brief shall be no longer than 15 pages in length unless, prior to the filing date, leave is granted by the Board to file a brief greater than 15 pages in length.

d) The Board may allow oral arguments to be heard on a motion.

e) The Board shall rule upon all motions, except that it shall have no authority to dismiss or decide an appeal on the merits without granting all parties to the proceeding a right to be heard and to establish a record.

f) The Board will dispose of motions by written order and on notice to all parties.

g) Unless otherwise ordered, the filing of an answer or motion shall not stay the proceeding or extend the time for the performance of any act.

h) A party has a right to file an emergency motion setting forth why an emergency exists and the Board may deny the emergency motion solely on the basis that the motion did not demonstrate that an emergency exists or the Board may grant or deny the motion on other grounds.

47 Ill. Adm. Code 395.312 Postponement or Continuance of Hearing

Postponement or continuances of hearings shall be granted by order of the Board for good cause shown in writing. Good cause shall be the inability to attend the hearing at the date and time set by the Board for a cause beyond the control of the party, such as the unavoidable absence of a party, his or her attorney or material witness, or the serious illness or death of a witness or party. The Board shall re-set the hearing for a continued case unless the parties request that the Board decide the appeal based on the evidence in the record without a formal hearing. Notwithstanding any continuance, the Board shall issue, whenever possible, a final decision within 120 days after the Initial Pleading is filed. The Board may extend the time by which it will render a decision when circumstances outside the Board's control make it infeasible for the Board to render a decision within 120 days.

History

• Source: Amended at 38 Ill. Reg. 3596, effective January 21, 2014

47 Ill. Adm. Code 395.313 Evidence

a) A party shall be entitled to present its case by testimonial or documentary evidence, to submit rebuttal evidence, and to conduct cross-examination as may be required for a full and fair disclosure of facts. [5 ILCS 100/10-40(b)] Testimonial evidence shall be taken only on oath or affirmation. Any cross-examination shall be limited to the scope of the direct examination.

b) The rules of evidence and privilege that apply in civil cases in Illinois circuit courts shall be followed. However, evidence not admissible under those rules may be admitted (unless precluded by statute) if it is of a type commonly relied upon by reasonably prudent men in the conduct of their affairs. [5 ILCS 100/10-40(a)]

c) The Chairperson shall have the discretion to determine whether evidence being offered is reliable and whether the evidence should be admitted. The Chairperson may exclude evidence that is irrelevant, immaterial or unduly repetitious. (See 5 ILCS 100/10-40(a).)

d) Subject to the requirements of this Subpart, when a hearing will be expedited and the interest of the parties will not be prejudiced, the Chairperson may allow evidence to be received in written form. [5 ILCS 100/10-40(a)]

e) If a party objects to the admission or rejection of any evidence or to the limitation to the scope of any examination or cross-examination, or to the failure to limit that scope, that party shall state briefly the grounds for the objection. Rulings on all objections shall appear in the record.

f) Official Notice: Official notice may be taken of any material fact not appearing in evidence in the record if the circuit courts of this State could take judicial notice of the fact. In addition, notice may be taken of generally recognized technical or scientific facts within the Board's specialized knowledge. Parties shall be notified either before or during the hearing of the material noticed, including any memoranda or data prepared by IHDA staff, and the parties shall be afforded an opportunity to contest the facts noticed. The experience, technical competence and specialized knowledge of the Board and IHDA may be utilized in the evaluation of the evidence. [5 ILCS 100/10-40(c)]

g) Types of Evidence: The Board shall hear evidence only as to matters actually in dispute. Factual areas in which evidence may be heard if it is relevant to issues in dispute include, but are not limited to, the following:

1. Health, safety and the environment;

A) structural soundness of the proposed buildings;

B) adequacy of sewage arrangements;

C) adequacy of water drainage arrangements;

D) adequacy of fire protection;

E) adequacy of the Affordable Housing Developer's proposed arrangements for dealing with traffic circulation within the site, and feasibility of arrangements that could be made by the Local Government for dealing with traffic generated by the proposed housing on adjacent streets;

F) proximity of the proposed site to airports, industrial activities or other activities that may affect the health and safety of the occupants of the proposed housing;

2. Site and building design;

A) height, bulk and placement of the proposed housing;

B) physical characteristics of the proposed housing;

C) height, bulk and placement of surrounding structures and improvements;

D) physical characteristics of the surrounding land;

E) adequacy of parking arrangements;

F) adequacy of open areas, including outdoor recreational areas, proposed within the building site;

3. Open space;

A) availability of existing open spaces in the Local Government;

B) current and projected utilization of existing open spaces and consequent need, if any, for additional open spaces, by the Local Government's population, including occupants of the proposed housing;

C) relationship of the proposed site to any Local Government open space or outdoor recreation plan officially adopted by the applicable corporate authorities of the Local Government, and to any official actions to preserve open spaces taken with respect to the proposed site by the Local Government prior to the date of the Affordable Housing Developer's initial submission; the inclusion of the proposed site in the open space or outdoor recreation plan shall create a presumption that the site is needed to preserve open spaces unless the appellant produces evidence to the contrary;

D) relationship of the proposed site to any regional open space plan prepared by the applicable regional planning agency;

E) current use of the proposed site and of land adjacent to the proposed site;

F) inventory of site suitable for use as open spaces, and available for acquisition or other legal restriction as open spaces, in the Local Government, provided that the Board shall admit no evidence of any open space plan adopted only by the local conservation commission or other local body but not officially adopted by the planning board/commission;

4. Municipal planning;

A) a Local Government's master plan, comprehensive plan or community development plan; and

B) the results of the Local Government's efforts to implement those plans;

5. The uniform application, or lack thereof, of any impact fees, building permit fees and any other local fees.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

47 Ill. Adm. Code 395.314 Appellant's Burden of Proof

a) Denial: Pursuant to Section 30(c) of the Act, in the case of a denial of an Affordable Housing Developer's application, the appellant bears the burden of demonstrating that the Approving Authority unfairly denied approval of the Affordable Housing Development. To meet this burden, the appellant must prove that it is an Affordable Housing Developer and has proposed an Affordable Housing Development, or is a person who would be eligible to apply for residency in the proposed Affordable Housing Development, or is a housing organization whose geographic focus area includes the municipality, or county if in an unincorporated area, where the proposed Affordable Development is located. In addition, the appellant shall demonstrate that:

1. the proposed Affordable Housing Development complies with all Non-Appealable Local Government Requirements and all relevant federal and State statutes and regulations. The appellant must prove these elements with respect to only those aspects of the project that are in dispute; or

2. Non-Appealable Local Government Requirements or federal or State statutes or regulations have been applied differently to proposals that do not include Affordable Housing; or

3. the Approving Authority has a pattern of denying applications to develop Affordable Housing; or

4. the Approving Authority changed the zoning of an area regarding a specific Affordable Housing Development that, but for the change in zoning, is otherwise able to proceed, or has a pattern of changing zoning of an area in regards to Affordable Housing Developments that, but for the change in zoning, are otherwise able to proceed; or

5. the Approving Authority unreasonably or intentionally delayed its decision regarding a specific Affordable Housing Development that, but for the lack of timely decision by the Approving Authority, is otherwise able to proceed, or has a pattern of unreasonably or intentionally delaying its decisions on applications for Affordable Housing Developments that, but for the lack of timely decisions of the Approving Authority, are otherwise able to proceed; or

6. IHDA's determination that the Local Government is exempt from the Act is incorrect based on the counting protocols set forth in Section 20 of the Act; or

7. the denial of the application for the Affordable Housing Development was unfair because it otherwise inhibits the construction of Affordable Housing.

b) Approval with Conditions: Pursuant to Section 30(c) of the Act, in the case of an approval with conditions, the appellant bears the burden of demonstrating that the Approving Authority imposed unreasonable conditions on the proposed Affordable Housing Development. To meet this burden, the Affordable Housing Developer must prove the developer is an Affordable Housing Developer that has proposed an Affordable Housing Development. The appellant shall also demonstrate:

1. the Approving Authority has generally not imposed unreasonable conditions on similar developments; or

2. the conditions are not necessary to further the asserted Approving Authority interest; or

3. less costly conditions can be imposed on the proposed Affordable Housing Development that sufficiently address the asserted Approving Authority's interest.

c) The failure of a Local Government to submit an Affordable Housing Plan as set forth in Section 25 of the Act shall not prevent an appellant from filing an appeal with the Board. The Board may take into consideration the failure to submit an Affordable Housing Plan in connection with any appeal before the Board.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

Chapter II Illinois Housing Development Authority

Part 395 State Housing Appeals Board

47 Ill. Adm. Code 395.315 Standard of Proof

The standard of proof for any hearing conducted under this Part shall be the preponderance of the evidence.

47 Ill. Adm. Code 395.316 Decision

a) The Board shall render a written decision within 120 Days after the Initial Pleading is filed. Notwithstanding the foregoing, the Board may extend the time by which it will render a decision when circumstances outside the Board's control make it infeasible for the Board to render a decision within 120 Days. The written decision shall state the Board's findings of fact and conclusions of law. Findings of fact shall be based exclusively on the evidence presented and on matters officially noticed.

b) The Board shall dismiss the appeal during or after the hearing if, based on all relevant evidence presented, it concludes that:

1. the Local Government was an Exempt Local Government in the year in which the appeal was filed;

2. the Local Government has adopted an Affordable Housing Plan, has submitted that plan to IHDA within the required time-frame under the Act, and has submitted documentation to IHDA that evidences the Local Government has met its goal to provide Affordable Housing as required by the Act; or

3. the Approving Authority denied the Affordable Housing based upon Non-Appealable Local Government Requirements.

c) In the case of a denial, if the Board finds that the Affordable Housing Developer has met its burden of proof pursuant to Section 395.314(a), the Board shall vacate the decision of the Approving Authority and shall direct the Approving Authority to issue the appropriate permits to the Affordable Housing Developer.

d) In the case of conditions imposed by the Approving Authority, if the Board finds that the Affordable Housing Developer has met its burden of proof pursuant to Section 395.314(b):

1. the Board shall direct the Approving Authority to remove any such condition; or

2. if the Board finds that the conditions are unreasonable but can be modified to reasonably protect the health, safety, environmental design, open space, and other local concerns, the Board shall direct the Approving Authority to so modify the conditions.

History

• Source: Amended at 43 Ill. Reg. 11314, effective September 26, 2019

47 Ill. Adm. Code 395.317 Enforcement

a) The Board shall immediately notify the parties of its decision by delivering the decision at the hearing, or by certified or registered mail with return receipt signed by the person or the person's registered agent, or by private delivery service.

b) In cases in which the appellant has met its burden of proof as set forth in Section 395.314, the Approving Authority shall carry out the decision and order of the Board within 30 days after the Board's decision. However, if the Approving Authority can demonstrate that a longer time period is necessary, the Board shall consider a longer time period to carry out the decision of the Board so long as the Approving Authority began to carry out the Board's decision within the initial 30 day period.

c) The decision and order of the Board are binding on all parties. The Board can interpret or clarify its decision or order for the purposes of resolving any procedural ambiguities or disputes that may arise.

d) If the Approving Authority does not carry out the decision and order of the Board within the time limits prescribed in Section 395.317(b), the Board may seek representation by the Attorney General's office, pursuant to the Attorney General Act [15 ILCS 205], and may file a complaint in the circuit court for the district in which the Approving Authority subject to the appeal is located.

e) If the Approving Authority does not carry out the decision and order of the Board within the time limits prescribed in Section 395.317(b), the appellant may seek legal representation and file a complaint in the circuit court for the district in which the Approving Authority subject to the appeal is located.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

Chapter II Illinois Housing Development Authority

Part 395 State Housing Appeals Board

47 Ill. Adm. Code 395.318 Motions to Reconsider the Board's Decision

The affected party may file a motion to reconsider with the Board within 14 Days after the Board's decision. The Board shall issue its final decision within 14 Days after the receipt of the motion to reconsider.

47 Ill. Adm. Code 395.319 Appeals of the Board's Decision

The final decision and order of the Board, after all motions to reconsider have been exhausted, may be appealed by the party affected by the decision by bringing an action for review in the appellate court for the district in which the Local Government subject to the appeal is located. The appellate court shall apply the "clearly erroneous" standard when reviewing these appeals. An appeal of a final ruling of the Board shall be filed within 35 days after the Board's decision and in all respects shall be in accordance with Section 3-113 of the Administrative Review Law [735 ILCS 5/3-113].

History

• Source: Amended at 43 Ill. Reg. 11314, effective September 26, 2019

47 Ill. Adm. Code 395.401 Exempt Status

a) Appeals of IHDA's determination of a local government's exempt status. In connection with an appeal under Subpart C, a Local Government or an appellant may appeal IHDA's determination of the Local Government's exempt or non-exempt status under the Act to the extent that the appealing party can demonstrate that IHDA's determination was not made in accordance with the counting protocols set forth in Section 20 of the Act. The parties shall introduce evidence to support their positions consistent with the requirements of Subpart C. IHDA shall produce and any other relevant materials regarding the Local Government's exempt or non-exempt status for the Board's review. The Board shall review the evidence provided by the parties and by IHDA and shall issue its decision on the matter in connection with the appeal filed under Subpart C. The Board may decide the matter during motion practice before the Board or during the hearing.

b) Notice to the Attorney General. By January 31 of the third year of the current affordable housing plan cycle, IHDA shall notify the Attorney General of all non-compliant local governments each year of that cycle.

History

• Source: Amended at 50 Ill. Reg. 1085, effective January 8, 2026

Chapter V Illinois Community Development Finance Corporation

Part 700 By-Laws

47 Ill. Adm. Code 700.100 Legislation Controlling

These By-Laws, the powers of the Corporation and of its Directors, Stockholders, and all matters concerning the conduct and regulation of the business of the Corporation shall be subject to the provisions of 315 ILCS 15.

47 Ill. Adm. Code 700.110 Location of Principal and Other Offices of the Corporation

The location of the principal office of the Corporation shall be in Chicago, Illinois. The Corporation may have offices within the State of Illinois at such other places as shall be determined from time to time by the Board of Directors.

47 Ill. Adm. Code 700.200 General Powers, Election of Directors, Term of Office, Qualifications and Vacancies

All corporate powers of the Corporation shall be exercised by the Board of Directors, as provided for in the Act. The Board of Directors shall have the responsibility and authority to appoint all necessary Board Committees and Officer Committees to provide for prudent management and oversight of the Corporation. Each Director shall hold office until their successors are appointed, as provided for in the Act.

47 Ill. Adm. Code 700.205 Chairman and Vice Chairman

The Board of Directors shall elect one of its Board members as Vice-Chairman of the Board. At all meetings of the Board of Directors, the Chairman of the Board, or his designee, shall preside or, in the absence of the Chairman and his designee, the Vice Chairman of the Board shall preside.

47 Ill. Adm. Code 700.207 Meetings

Meetings of the Board of Directors shall be held at such place within the State of Illinois as may from time to time be fixed by resolution of the Board or as may be specified in the call of any meeting, subject to the Open Meetings Act [5 ILCS 120]. Regular meetings of the Board of directors shall be held at such times as may from time to time be fixed by resolution of the Board, and special meetings may be held at any time upon the call of any three Directors or of the Chairman by oral, facsimile, or written notice duly served on or sent or mailed to each Director not less than two days before such meeting. The notice of any meeting need not specify the purpose thereof. A meeting of the Board may be held without notice immediately after the annual meeting of Members and stockholders at the same place at which such meeting was held.

47 Ill. Adm. Code 700.209 Quorum and Voting

a) A majority of the Directors then holding such office shall constitute a quorum for the transaction of any business. Directors may participate in any meeting through the use of a conference telephone or similar communications equipment by means of which all persons participating can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. At any meeting of the Board of Directors, if there is less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained.

b) When a quorum is present at any meeting of the Board of Directors, the vote of a majority of the voting Directors then holding such office shall be the act of the Board and shall decide any question properly brought before such meeting. Each voting Director shall have one vote in all such decisions.

47 Ill. Adm. Code 700.211 Resignation of Directors

Any Director may resign at any time by giving written notice of such resignation, either to the Board of Directors, the President or the Secretary-Treasurer of the Corporation. Unless otherwise specified therein, such resignation shall take effect upon receipt thereof by the Board of Directors or by such Officer.

47 Ill. Adm. Code 700.213 Committees

In its discretion, the Board of Directors may appoint an Executive Committee and one or more other committees, which, to the extent of the authority conferred by the resolutions appointing them, may exercise any of the powers of the Board of Directors, including the power to authorize the seal of the Corporation to be affixed to all papers which may require it. In its discretion, the Board of Directors may appoint one or more Officer Committees which the Board deems necessary or appropriate for the prudent management and oversight of the Corporation, which, to the extent of the authority conferred by the resolutions appointing them, shall have and may exercise any of the powers of the Board of Directors. Unless the Board of Directors provides otherwise in the resolutions appointing any such committee, a committee of two members may act only by unanimous vote of such members, any such committee composed of more than two members may act by the vote of a majority of its members, and any such committee may fix the time and place of its meetings. The Board of Directors must ratify any action of any committee. The Board of Directors shall have power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.

47 Ill. Adm. Code 700.220 Officers

The Officers of the Corporation shall be a President and such other Officers as may be appointed in accordance with the provisions of Section 700.221 of this Part. Any two offices but not more than two, may be held by the same person.

47 Ill. Adm. Code 700.221 Election, Term of Office, and Qualifications

Each Officer specifically designated in Section 700.220 of this Part shall be elected by the Board of Directors, and shall hold his office until his successor is elected and qualified or until his death or until he shall resign or shall have been removed in the manner provided in Section 700.223 of this Part.

47 Ill. Adm. Code 700.222 Subordinate Officers

The Board of Directors from time to time may appoint or authorize the President to appoint, other Officers or Agents which of whom shall hold office for such period, have such authority and perform such duties as are provided in these By-Laws or as the Board of Directors (or the President in the case of Officers and Agents appointed by him) from time to time may determine. The President may appoint any such subordinate Officers or Agents, fix their term of office, and prescribe their respective authorities and duties.

47 Ill. Adm. Code 700.223 Removal

Any Officer may be removed at any time either with or without cause by the vote of a majority of the total number of Directors then in office, and any Officer or Agent appointed by the President may be removed at any time by the President with or without cause.

47 Ill. Adm. Code 700.224 Resignation of Officers

Any Officer may resign at any time by giving written notice of such resignation to the Board of Directors or to the President of the Corporation. Unless otherwise specified therein, such resignation shall take effect upon receipt thereof by the Board of Directors or by the President.

47 Ill. Adm. Code 700.225 Vacancies

A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled for the unexpired portion of the term in the manner prescribed by the By-Laws for the regular election to such office.

47 Ill. Adm. Code 700.226 Chairman of the Board

The Chairman of the Board shall preside at all meetings of the Board and shall perform such other duties as shall be assigned from time to time by the Board.

47 Ill. Adm. Code 700.227 The President

The President shall be the Chief Executive Officer of the Corporation, and, subject to the control of the Board of directors, shall have general charge of the business, affairs, and property of the Corporation, and control over its Officers. The President shall do and perform all such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors. The Officers of the Corporation shall be responsible to the President for the proper and faithful discharge of their several duties, and shall make such reports to him as he may from time to time require.

47 Ill. Adm. Code 700.228 The Secretary-Treasurer

The Secretary-Treasurer shall:

a) Keep a certified copy of the Articles and these By-Laws with marginal references to all amendments thereof;

b) Keep the minutes of the meetings of the Stockholders and the Board of Directors, and cause the same to be recorded in the book provided for that purpose;

c) Prepare, or cause to be prepared, and maintain any list of Stockholders;

d) See that all notices are duly given in accordance with the provisions of these By-Laws or as required by statute;

e) Be custodian of the records of the Corporation and the Board of Directors and of the seal of the Corporation; see that the seal is affixed to any and all stock certificates prior to their issuance and to all documents the execution of which on behalf of the Corporation under its seal shall have been duly authorized, and attest the seal when so affixed;

f) See that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed;

g) Have supervision over the funds including the borrowing thereof, the securities, receipts and disbursements of the Corporation;

h) Cause all moneys and other valuable effects to be deposited in the name and to the credit of the Corporation, in such banks or trust companies or with such bankers or other depositories as shall be selected by a majority vote of the Board of Directors, exclusive of any Director who is an Officer or Director of the depository so designated;

i) Cause the funds of the Corporation to be disbursed by checks or drafts upon the authorized depositories of the Corporation;

j) Cause to be taken and preserved proper vouchers for all moneys disbursed;

k) Cause to be kept correct books of the account of all the business and transactions of the Corporation;

l) Render to the President or the Board of Directors, whenever requested, an account of the financial condition of the Corporation and of his transactions as Treasurer;

m) Be empowered, from time to time, to require from the Officers or Agents of the Corporation reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation; and

n) In general, perform all duties and have all powers incident to the office of Secretary-Treasurer and perform such other duties and have such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors or by the President. At the request of the Secretary-Treasurer, or in his absence or disability, a duly appointed Assistant Secretary-Treasurer, shall perform any of the duties of the Secretary-Treasurer and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the Secretary-Treasurer. Except where by law the signature of the Secretary-Treasurer is required, any duly appointed Assistant Secretary-Treasurers shall possess the same power as the Secretary-Treasurer to sign all certificates, contracts, obligations, and other instruments of the Corporation.

47 Ill. Adm. Code 700.250 Execution of Instruments Generally

All documents, instruments or writing of any nature shall be signed, executed, verified, acknowledged and delivered by such Officers, Agents or Employees of the Corporation, or any one of them, and in such manner, as from time to time may be determined by the Board of Directors.

47 Ill. Adm. Code 700.252 Checks, Drafts, Etc.

All notes, drafts, acceptances, checks, endorsements, and all evidences of indebtedness of the Corporation whatsoever, shall be signed by such Officers, Agents or Employees of the Corporation or any one of them, and in such manner, as from time to time may be determined by the Board of Directors. Endorsements for deposit to the credit of the Corporation in any of its duly authorized depositories shall be made in such manner as the Board of Directors from time to time may determine.

47 Ill. Adm. Code 700.260 Intercompany Dealings

The Corporation shall not, however, make loans directly or indirectly to any Director or Officer of the Corporation or to any firm or corporation in which such Director or Officer, or any member of the immediate family of any such Director or Officer owns in excess of a ten percent interest, or otherwise controls, directly or indirectly. Any Director or Officer knowingly approving any loan in violation of this section shall be personally liable, for the amount thereof and such approval shall be presumed unless the dissent of such Director or Officer is noted upon the records of the Corporation.

47 Ill. Adm. Code 700.265 Seal

The Seal of the Corporation shall, subject to alteration by the Board of Directors, consist of a flat-faced circular die with the words "Illinois Community Development Finance Corporation," cut or engraved thereon. In lieu of the corporate seal, when so authorized by the Board of Directors, a facsimile of such corporate seal may be impressed or affixed or reproduced.

47 Ill. Adm. Code 700.270 Reliance on Records and Reports

Each Director, Officer, or Member of any committee designated by, or by authority of the Board of Directors shall, in the performance of his duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation or upon reports made to the Corporation by any official of the Corporation or by an independent certified public accountant or by an appraiser selected with reasonable care by the Board of Directors or by any such committee.

47 Ill. Adm. Code 700.275 Amendments

The By-Laws of the Corporation (subject to the provisions of the Illinois Administrative Procedure Act [5 ILCS 100]) may be amended, added to or repealed at any meeting of the Board of Directors provided that notice of the proposed change is given in the notice of the meeting and provided further that if any By-Law regulating an impending election of Directors is adopted or amended or repealed by the Board of Directors, there shall be set forth in the notice of the next meeting for the election of Directors the By-Law so adopted or amended or repealed together with a concise statement of the changes made.

47 Ill. Adm. Code 700.280 Indemnification of Directors, Officers, and Employees

Each Director, Officer, and Employee of the Corporation (and his heirs, executors, and administrators) shall be indemnified by the Corporation against any costs, expenses (including attorneys' fees), and liabilities reasonably incurred by or imposed upon him in connection with any action, suit or proceeding, or any appeal therein, to which he may be made a party by reason of his being, or having been, a Director, Officer, or Employee of the Corporation, or of any other corporation which he serves or has served as Director, Officer, or Employee at the request of the Corporation (whether or not he continues to be a Director, Officer, or Employee of the Corporation or such other corporation at the time such action, suit or proceeding is brought), except with respect to matters as to which he shall be finally adjudged in such action, suit or proceeding to be liable for willful, intentional or bad-faith misconduct in the performance of his duties as such Director, Officer, or Employee. Each such person shall be indemnified by the Corporation, to the extent permitted by law,

a) against any costs and expenses (including attorney's fees) reasonably incurred in connection with any such action, suit or proceeding with any such action, suit or proceeding with which he shall be threatened, and

b) against any reasonable amounts he shall pay in settlement of any such action, suit or proceeding, or by the settlement, as to which the Corporation is advised by counsel that in the opinion of counsel such Director, Officer, or Employee would not, in the absence of such settlement, have been held liable for willful, intentional or bad-faith misconduct in the performance of his duties as a Director, Officer, or Employee. The word "Director" as used in this Part shall be deemed to include a Director performing duties as a member of the Executive Committee or other committee of the Board of Directors.