the displacing agency for a section 215 loan. If deficiencies were described in the notification, the displacing agency, in consultation with HUD, shall work with the prospective loan applicant to correct the deficiencies, if possible. The formal application shall include & housing plan, which as a minimum specifies how, when and where the housing will be provided, what insured program(s) (see § 43.36(a)) will be utilized, the prices at which the housing will be rented or sold to the families to be displaced, the arrangements for housing management and social services, as appropriate, the environmental suitability of the location (s), if known, of the proposed housing, and the arrangements for maintaining rent levels appropriate for the persons to be rehoused. § 43.33 Approval of Federal agency.

In the case of a federally assisted project, the head of the Federal agency providing the assistance to the project causing displacement shall establish procedures either (1) to require his approval prior to processing the section 215 loan applicant pursuant to § 43.34 below, or (2) withhold such approval until after the amount of the principal and interest. if any, of the loan has been determined according to § 43.34 (b) and (c).

§ 43.34 Processing the loan application. When in the case of a federally assisted project, the displacing agency has received approval of the Federal agency providing the financial assistance, and in the case of a Federal project the head of the Federal agency determines that a section 215 loan application is appropriate, the application should be processed as follows:

(a) The total amount of the costs necessary to cover the preliminary expenses (see § 43.30) shall be computed. Each individual item of expense should be examined. HUD will provide the displacing agency with advice on the reasonableness of the applicant's proposed expenses for planning and obtaining federally insured mortgage financing, including an indication of expenses, if any, which may not be reimbursed from mortgage proceeds, and its approximation of the total amount required.

(b) The displacing agency shall then calculate the amount of the loan which shall not exceed 80 percent of the necessary expenses.

(c) In the case of a limited dividend sponsor, the interest rate of the dollar amount calculated under paragraph (b) of this section shall be determined in accordance with § 43.31(b). (No interest shall be charged on loans to nonprofit organizations.)

(d) A loan contract shall be prepared by the displacing agency, which shall be signed by the sponsor and the displacing agency. (See § 43.31.)

§ 43.35 Review by head of Federal

agency.

If at any time the applicant's proposal is rejected by the displacing agency, the prospective applicant may have the plan reviewed by the head of the Federal agency which has the authority for final approval. In making this review, the head of the Federal agency shall consult HUD if the rejection of the applicant's proposal was based on HUD-FHA standards for housing sponsors.

§ 43.36 Housing programs for which section 215 loans generally may be utilized.

(a) The following are examples of housing programs (which include rental, single-family homeownership, cooperative and condominium) for which section 215 loans generally may be utilized. Except as otherwise indicated, the programs listed below are authorized by the National Housing Act, as amended (12 U.S.C. 1701 et seq.).

(1) Section 203(b) homes and 203 (1) homes in outlying areas.

(2) Section 207 rental housing. (3) Section 213 cooperative housing. (4) Section 220 rental housing in urban renewal areas, homes in urban renewal areas.

(5) Section 234 condominium. (6) Section 236 rental and cooperative housing for lower income families.

(7) Section 515 of the Housing Act of 1949, as amended.

(8) Section 235 interest subsidies for housing for sale to lower income families.

(9) Section 221(d) (2) mortgage insurance for housing for low- and moderateincome families.

(10) Section 221(d) (4) mortgage insurance for rental housing.

(11) Section 221(d) (3) market rate mortgage insurance with rent supplements.

(12) Housing developed under section 206 of the Uniform Relocation Assist

ance and Real Property Acquisition Policies Act of 1970 where such housing involves a federally insured mortgage.

§ 43.37 Aggregate housing under jointly financed programs.

Where several agencies are administering programs resulting in residential displacement, opportunities shall be sought out for the joint planning and development of housing through aggregating section 215 loan funds to plan for the provision of federally insured replacement housing for all such programs. Where project funds from more than one displacing agency are to be aggregated for this purpose, they may be apportioned among such agencies according to the expected occupancy of such housing by persons displaced by each project. § 43.38 Conformity with the Act and other statutes, policies, and procedures.

(a) Civil rights and other Acts and executive orders. The administration of section 215 loans shall be in conformity with the provisions of section 1 of the Civil Rights Act of 1866 (42 U.S.C. 1982), Title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, the National Environmental Policy Act of 1969, and Executive Orders 11063 and 11246, as amended, and regulations pursuant thereto.

(b) Title VI assurance. Title VI of the Civil Rights Act of 1964 provides that no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity receiving Federal financial assistance. Every contract for a loan under section 215 and every application for such a loan shall, as a condition of its approval and the extension of any assistance, contain or be accompanied by an appropriate assurance, as specified by the head of the Federal agency providing funds for the loan, that the housing and preliminary planning and other activity assisted will be operated and administered in compliance with all requirements imposed by title VI and the title VI implementing regulations of the Federal agency.

(c) Affirmative marketing. Housing produced with the assistance of a section 215 loan shall be marketed on a nondiscriminatory basis to affirmatively pro

mote equal housing opportunity as prescribed in Affirmative Fair Housing Marketing Regulations, Part 200 of this title, 37 F.R. 75 (Jan. 5, 1972), effective February 25, 1972, and as further prescribed in Circular 8000.4, issued by the Department of Housing and Urban Development pursuant to the Affirmative Fair Housing Marketing Regulations. An assurance of compliance with this affirmative marketing requirement must be submitted by each loan applicant, and incorporated in the contract. Among the applications resulting from both affirmative marketing efforts and referrals from the displacing agency, those from persons displaced by the project providing the loan funds must be given preference.

(d) Project selection. Housing planned with a section 215 loan must meet all requirements normally applicable to a federally insured mortgage, and in the case of a section 236, or a section 235 (i) project or a project involving Federal rent supplements must be acceptable under HUD's Project Selection Criteria contained in Part 200 of this title, Subpart N (37 F.R. 203, Jan. 7, 1972).

(e) Location. A site may not be approved if it is occupied by persons or business concerns who would have to be displaced unless the head of the Federal agency determines that other sites or locations are not available. In any event no site may be approved if those to be displaced would not be eligible for relocation assistance and payments under the Act. Based on the nature of each of its programs, each Federal agency must determine whether the use of project funds for planning replacement housing makes the Act applicable to displacement caused by the development of such housing.

Effective date. This regulation shall be effective upon publication in the FEDERAL REGISTER (7-25-72).

GEORGE ROMNEY, Secretary of Housing and Urban Development.

APPENDIX I

GUIDE FORM OF LOAN CONTRACT AND TRUST

AGREEMENT

(Relocation Seed Money Loans)

This Loan Contract and Trust Agreement made and entered into this day of 197 by and between the (enter name of (1) Federal agency if loan is made under a

organized and existing under and by virtue of the laws of the State of having its principal offices at

(herein called Sponsor). WHEREAS, the Sponsor intends to develop a housing project and to make or cause to be made an application to the Farmers Home Administration or HUD for a commitment to insure a loan under the provisions of section ------ of (enter citation to appropriate statutory provision under which application for federally insured mortgage will be made), and the regulations issued pursuant thereto, and

WHEREAS, the Sponsor has applied for a loan in accordance with section 215 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (herein called Relocation Seed Money Loan) which application has been submitted to the Agency and the

(enter name of Federal Department or Agency if loan is made under a federally assisted project) for approval, which application is incorporated in and made a part of this agreement.

NOW THEREFORE, the parties mutually agree as follows:

1. The Sponsor has commenced planning a housing project identified as: (Herein called Project) and hereby represents that It possesses sufficient financial and/or other resources, combined with the advance to be made by the Agency, to complete successfully the processing preliminary to disbursement of mortgage proceeds to finance construction or rehabilitation of the project. The Sponsor convenants that it shall use its best efforts to meet the requirements of the

(enter Secretary of Housing and Urban Development or Farmers Home Administrator, as appropriate) to obtain a commitment for insurance under

(enter citation to appropriate statutory provision under which application for federally insured mortgage will be made) and the relevant regulations. The Sponsor further convenants that it shall file an application for such commitment within 9 months following the date of approval of the relocation seed money loan, unless the

(enter title of head of Federal Department or Agency administering the project or federally assisted project under which loan is made) determines that an extension of such 9 months period is justified.

2. Upon approval of the application for the relocation seed money loan the Agency will deliver to the Sponsor a check for the first disbursement. Delivery of this check shall constitute the Agency's acceptance of the terms of this agreement and both parties shall thereafter be fully bound by the terms of this agreement and application. The advance or advances to be made by the Agency

pursuant to this agreement shall total 3. The Sponsor certifies that it has spent (if any) for the expenses listed in the application and that it will contribute representing percent (not less than 20 percent) of the estimated cost of planning the project, as its share, and further agrees that this contribution and all funds received hereunder from the Agency shall be held in trust by the Sponsor and shall be deposited in a trust account, separate from all other accounts in a bank whose deposits are insured by the Federal Deposit Insurance Corporation. Where the Agency's advance is made in a series of staged payments, the Sponsor may make its contribution on the same basis. The Sponsor agrees to certify on the receipt for each advance that it has spent, incurred expenses for, or deposited in the trust account an amount equal to percent (not less than 20 percent of the expenditures to date and estimated to be made in the next month for planning this project). Sponsor's expenditures and funds in the trust account shall be used only for the purposes stated herein and unexpended funds shall be returned to the Agency as beneficiary of the trust for appropriate adjustment. Any member of the sponsoring organization receiving funds from the trust account in violation of this agreement shall hold such funds in trust for the Agency.

4. Funds in the trust account shall be expended only for the purposes set forth in the application and in the amounts specified therein, unless such other or additional expenditure shall be approved in advance by the Agency in writing. The Sponsor expressely covenants to exercise its best efforts to obtain all services at the least possible expense. The Sponsor agrees to maintain and keep complete records of all disbursements from the trust account for a period of 3 years after the last disbursement under this agreement. The Sponsor shall make such records available upon request to the Agency, Federal auditors, and the Comptroller General of the United States for audit and inspection.

15. The Sponsor promises to repay to the Agency the full amount of the advance made in accordance with this agreement together with interest at the rate of percent per annum. Interest on each disbursement shall be computed on a daily basis from the date of receipt by the Sponsor.

15a. Principal and interest, where applicable, shall be payable in full at the time of the first disbursement of the mortgage proceeds. Where any portion of the funds disbursed from the trust account is not authorized by (enter HUD or Farmers Home Administration, as appro

1 (The references in paragraphs 5, 5a, and 5b regarding interest are applicable only to loans made to a limited dividend sponsor as determined by the Secretary.)

HUD or Farmers Home Administration as

appropriate) commitment expires before mortgage proceeds are disbursed, the entire amount shall be due and payable on that date. In any event the entire amount shall be due and payable not more than 2 years from the date of the first disbursement under this agreement unless extended by the Agency in writing.

15b. In the event this contract is for the development of a project of individual sales type homes, principal, and where applicable, interest shall be payable in full, in installments as the mortgage proceeds on the individual homes are disbursed. The amount of the installment payments will be prorated in accordance with the number of individual houses in the project for which (enter HUD or Farmers Home Administration as appropriate) issues mortgage insurance commitments. In any event, the entire amount of principal and, where applicable, interest, shall be due 2 years from the date of the first installment under this agreement unless extended by the Agency in writing.

--

26. The Agency agrees to waive repayment of any expended portion of the loan that it determines cannot be included in the mortgage proceeds or recovered from the sale of real property acquired with loan funds, provided that the Sponsor submits a full and complete accounting, satisfactory to the Agency, of all funds expended, including funds disbursed from the trust account together with the Sponsor's certification that all sums were in payment of expenditures listed in the application and approved by the Agency. Any unexpended funds in the trust account shall be transferred to the Agency for appropriate adjustment. The Agency will not cancel repayment of that portion of the loan which is determined to be in excess of percent (enter percentage specific in section 3 above) of the total expenditures certified to by the Sponsor and approved by the Agency.

----

27. In the event the Sponsor is unable to obtain a federally insured mortgage, the Agency agrees to waive repayment of the loan, provided the Sponsor has complied with all the foregoing requirements of this agreement, has diligently tried to obtain a federally insured mortgage, and submits a full and complete accounting satisfactory to the Agency of all funds expended, including funds disbursed from the trust account together with the Sponsor's certification that all sums were in payment of expenditures listed in the application and approved by

(Paragraphs 6 and 7 are not applicable to loans made to a limited dividend sponsor as determined by the Secretary.)

the Agency: Provided, That (subject to section 6 above) repayment shall not be waived if the Sponsor shall obtain mortgage financing from some source not insured by

(enter HUD or Farmers Home Administration as appropriate) for this or a similar project on the same site. Any unexpended funds in the trust acount shall be returned to the Agency for appropriate adjustment. The Agency will not cancel repayment of that portion of the loan which is determined to be in excess of percent (enter percentage specified in section 3 above) of the total expenditures certified to by the Sponsor and approved by the Agency.

8. Special conditions:

a. Compliance with title VI of the Civil Rights Act of 1964. The sponsor agrees to comply with all requirements imposed by title VI of the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat. 241), the statement assuring compliance with that title executed as part of the loan application which is hereby incorporated and made a part of this contract and the applicable regulations implementing that title issued by..

(enter name of Federal Department or agency administering Federal project or federally assisted project).

b. Compliance with equal employment opportunity requirements. The Sponsor agrees to comply with the provisions of Executive Order 11246 and the regulations of the Secretary of Labor at 41 CFR Chapter 60, and to incorporate or cause to be incorporated into any contract for construction work or modification thereof, as defined in the regulations of the Secretary of Labor at 41 CFR Chapter 60, which is paid for in whole or in part with funds obtained from the Federal Government or borrowed on the credit of the Federal Government pursuant to a grant, contract, loan, insurance, or guarantee, or undertaken pursuant to any Federal program involving such grant, contract, loan, insurance, or guarantee, the following equal opportunity clause:

The Sponsor hereby agrees that it will incorporate or cause to be incorporated into any contract for construction work or modification thereof, as defined in the regulations of the Secretary of Labor at 41 CFR Chapter 60, which is paid for in whole or in part with funds obtained from the Federal Government or borrowed on the credit of the Federal Government pursuant to a grant, contract, loan, insurance, or guarantee, or undertaken pursuant to any Federal program involving such grant, contract, loan, insurance, or guarantee, the following equal opportunity clause:

During the performance of this contract, the contractor agrees as follows:

(1) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The contractor will take affirmative action to insure that appllcants 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, advertising, layoff, or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of the nondiscrimination clause.

(2) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin.

(3) The contractor will send to each labor union or representative of workers with which he has a collective-bargaining agreement or other contract or understanding, a notice to be provided by the Contract Compliance Officer advising the said labor union or workers' representatives of the contractor's commitment under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

(4) The contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.

(5) The contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the Department and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

(6) In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor or as otherwise provided by law.

(7) The contractor will include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (7) 'n every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the Depart

ment may direct as a means of enforcing such provisions, including sanctions for noncompliance: Provided, however, That in the event a contractor becomes involved in or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the Department, the contractor may request the United States to enter into such litigation to protect the interest of the United States.

The Sponsor further agrees that it will be bound by the above equal opportunity clause with respect to its own employment practices when it participates in federally assisted construction work: Provided, That if the applicant so participating is a State or local government, the above equal opportunity clause is not applicable to any agency, instrumentality, or subdivision of such government which does not participate in work on or under the contract.

The Sponsor agrees that it will assist and cooperate actively with the Department and the Secretary of Labor in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the rules, regulations, and relevant orders of the Secretary of Labor; that it will furnish the Department and the Secretary of Labor such information as they may require for the supervision of such compliance; and that it will otherwise assist the Department in the discharge of its primary responsibility for securing compliance.

The Sponsor further agrees that it will refrain from entering into any contract or contract modification subject to Executive Order 11246 of September 24, 1965, with a a contractor debarred from, or who has not demonstrated eligibility for, Government contracts and federally assisted construction contracts pursuant to the Executive order and will carry out such sanctions and penalties for violation of the equal opportunity clause as may be imposed upon contractors and subcontractors by the Department or the Secretary of Labor pursuant to Part II, Subpart D of the Executive order. In addition, the applicant agrees that if it fails or refuses to comply with these undertakings, the Department may take any or all of the following actions: Cancel, terminate, or suspend in whole or in part this grant (contract, loan, insurance, guarantee); refrain from extending any further assistance to the applicant under the program with respect to which the failure or refusal occurred until satisfactory assurance of future compliance has been received from such applicant; and refer the case to the Department of Justice for appropriate legal proceedings.

c. Compliance with affirmative fair housing marketing requirements. The Sponsor agrees to comply with all fair housing and equal housing opportunity requirements, including affirmative marketing, imposed by Executive Order 11063 (27 FR 11527) and Title VIII of the Civil Rights Act of 1968 (Public Law 90-284, 82 Stat. 73) and all regulations issued by the Department of Housing and Urban Development thereunder.