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Office of Planning, Environment, & Realty (HEP)

Relocation Assistance And Payments Questions And Answers

(Revised 8/31/98)


QUESTION (1) - 49 CFR 24.2(d)(3). If it is "culturally" a part of the lifestyle for six children to share a bedroom, would it be acceptable to base the computation of the replacement housing payment on a dwelling that would require the six children to share a bedroom?

ANSWER - No. The comparable must reflect appropriate local housing codes or the requirements of 24.2(f). Displaced persons would have to insist on non-DSS replacement housing and then the displacing agency would have to request a waiver of the DSS requirements from the funding agency under 49 CFR 24.7.

QUESTION (2) - 49 CFR 24.2(g)(1)(I). Can an eligible displaced person be paid relocation benefits prior to completion of negotiations or acquisition of the property that they occupy?

ANSWER - Yes. Persons who move as a result of the initiation of negotiations are eligible dis-placed persons entitled to benefits and should be paid promptly. Payments to such persons are eligible for Federal funding or reimbursement at the time that residential occupants move to DSS dwellings adequate to accommodate them or non-residential occupants vacate the property.

QUESTION (3) - 49 CFR 24.101, 24.108, and Subpart E - Replacement Housing Payments.
If property is acquired through donation, exchange, or some method other than purchase, are the occupants entitled to relocation assistance and payments for vacating the property?

ANSWER - Yes. The method of conveyance of property to the agency has no effect on the entitlement to relocation benefits. The occupants are eligible as "displaced persons" if they meet the definition of a displaced person [24.2(g)].


QUESTION (1) - 49 CFR 24.204. Can the displacing agency reduce the relocation payment offer if, after 90-days have passed, the displaced person has not acquired replacement housing and the agency locates another comparable dwelling that is available for less than the comparable used for the offer?

ANSWER - Yes. However, the displacing agency should not lower an offer if the displaced person had, in good faith, made a commitment or is making a good faith effort to acquire a replacement dwelling based on the original offer. If the displaced person has made little or no effort to acquire a replacement dwelling, it would be permissible, after a reasonable period of time, to reduce the offer if a less-expensive, comparable dwelling becomes available. If an agency elects to lower a payment offer, it should document the files with the rationale and make every effort to avoid acting in a coercive manner.

QUESTION (2) - 49 CFR 24.203(c). Must the displacing agency restart the 90-day clock if the original comparable replacement dwelling has been sold?


  1. The 90-day time period will continue to run without interruption. However, if the original comparable dwelling is no longer available, the displacing agency must assure itself that equally comparable dwellings are still available in the same price range.

  2. If the displacing agency finds it necessary to initiate eviction actions, its records must contain sufficient documentation to confirm that the comparable replacement dwelling or one equally comparable, in cost and all other features, is available for occupancy.

QUESTION (3) - 49 CFR 24.5 and 24.203. Is an agency required to prepare a relocation brochure?

ANSWER - A relocation brochure is not required; however, each displaced person must be provided a general written description of the displacing agency's relocation program. Brochures are very effective for providing accurate general relocation information in a uniform manner. It is strongly recommended that each agency have brochures available to furnish to displaced persons at the initial contact and to the public, as appropriate. The lead agency has a relocation brochure available that may be copied for this purpose.

QUESTION (4) - 49 CFR 24.2(o). May an agency issue a notice of intent to acquire a parcel in order to establish a date of eligibility for relocation benefits prior to the initiation of negotiations?

ANSWER - Yes. Eligibility for benefits can be established prior to the initiation of negotiations by issuing a notice of intent to acquire to a person who will be displaced by a program or project.

QUESTION (5) - 49 CFR 24.207(e). What was the intent of the last sentence of this paragraph regarding multiple occupants of one displacement dwelling? (However, if two or more occupants maintained separate households within the same dwelling, such occupants have separate entitlements to relocation payments.)

ANSWER - Two or more occupants of a dwelling may maintain separate households within that dwelling. If they do, they have separate entitlement to relocation payments. The displacing agency is responsible for determining the number of households in a dwelling based on the use of the dwelling, the relationship of the occupants, and any other information that may be obtained. The payment computation for each household should be based on the part of the dwelling that the household occupies and the space that is shared with others. An attempt should be made to locate similar comparable DSS living facilities. The record should be sufficiently documented to support the decision reached.

QUESTION (6) - 49 CFR 24.203(b). Can an owner of a property to be acquired prevent the agency from contacting the tenants of the property?

ANSWER - An owner may not prevent authorized agency employees from notifying tenants of the benefits they may be eligible to receive under the Uniform Act. The agency should advise the owner that it is better to explain to the tenants the requirements and obligations for the eligibility for benefits and to advise them there is no rush to relocate. In rare circumstances when the owner is concerned the tenants will move and there will be loss of rental income, the agency may offer to make a payment to replace lost rent for vacancies occurring due to relocation for a reasonable period of time.



QUESTION (1) - 49 CFR 24.302. Is the fixed moving payment provided for in section 24.302 the only coverage for a seasonal residence?

ANSWER - No. The occupant of a seasonal residence could receive actual moving expenses in accordance with section 24.301. Persons owning or renting seasonal residences are generally not eligible for any relocation payments other than for moving expenses.


QUESTION (1) - 49 CFR 24.303(a)(3). Can the costs of pits, pads, and foundations necessary for the installation of machinery or equipment in the replacement business site be reimbursed as a moving cost?

ANSWER - The costs of pits, pads, and foundations can be reimbursed as an eligible moving cost if they are necessary for the reinstallation of equipment or machinery or the installation of substitute items that are necessary for the business operation, unless the value of the pits, pads, and foundations was clearly included in the just compensation paid for the real property. (Normally, pits, pads, and foundations only add value to a property for a particular business operation and would not generally enhance real property. They should not be included in the valuation of the real property unless the highest and best use of the property being acquired is for the business operation for which it is being used and the fair market value is determined on this basis.)

QUESTION (2) - 49 CFR 24.303(a)(3). Are the costs incurred for site preparation for installing underground tanks eligible moving expenses?

ANSWER - Underground tanks are generally considered realty and purchased as part of the real estate. However, if under State law, the tanks are considered to be personal property, site prep-aration costs necessary for the installation of the tanks could be considered an eligible moving expense. The site preparation would have to be necessary for reinstallation of the tanks (or substitute tanks), and the installed tanks would have to be required for the operation of the particular business being relocated.

QUESTION (3) - 49 CFR 24.303(a)(6). Are there any limitations on the costs which can be reimbursed for licenses, permits, or certifications required of the displaced person at the replacement location.

ANSWER - The costs must be actual, reasonable, and necessary. The licenses, permits, or certification requirements eligible for reimbursement as moving expenses are those that are required to operate the particular business being relocated. They do not include general occupancy licenses, occupancy permits, building permits, or one-time assessments that any business would have to pay for occupancy of a property.

Reimbursement of actual, reasonable, and necessary costs is limited to those amounts that are: (1) for the remaining useful life of the licenses, etc., at the site acquired or (2) the costs of new licenses, etc., required to operate the business at the replacement site. The costs participated in should be those charged by the licensing agency. It is the displacing agency's responsibility to determine that the stated costs are necessary and reasonable.

Reimbursement under Reestablishment, 49 CFR 24.304, is available for the cost of occupancy permits, building permits, and other fees related to the replacement business site not eligible as moving expenses up to the $10,000 maximum payment. These are costs that would be incurred by any business entity occupying the real estate and are not directly related to the business operation being displaced.

QUESTION (4) - 49 CFR 24.303(a)(13). How early can search costs be incurred by a displaced business and still be reimbursable ? Could they be incurred prior to authorization or award of a grant for the project or program?

ANSWER - While searching costs may be incurred by the displaced business at any time, the agency cannot reimburse the displaced business for any searching costs incurred before the displaced business qualifies as a displaced business as defined in section 24.2(g).

QUESTION (5) - 49 CFR 24.303(b)(2). Can the displacing agency withhold payment for a move solely because the displaced person does not provide advance written notice to the agency of the date of the proposed move?

ANSWER - Yes. However, the records of the displacing agency should provide documentation of the advice provided to the displaced person concerning the responsibility to provide notice and the necessity for the notice (so that the agency can monitor the move and make reasonable and timely inspection of the personal property at both the displacement and replacement sites). If the displaced business provides verifiable records, bills, and receipts documenting actual expenses incurred and identifies the personal property moved; withholding payment would be inappro-priate. A displaced person has the right to appeal any such decision made by the displacing agency.

QUESTION (6) - 49 CFR 24.303(c). Should a moving cost estimate prepared by an agency employee be based on the costs charged by a professional moving firm or on the actual costs a displaced person may incur? Is it permissible to negotiate with the owner of a business the amount to be paid to him/her for a self move?

ANSWER - The moving cost estimate for a non-residential self-move prepared by a qualified agency employee should be based on the cost that would be charged by a professional moving firm. If the estimate includes profit, overhead, or other additional costs that the business will not actually incur, it is permissible for the agency to negotiate a payment for an amount that would reflect the actual costs the business would incur in the move. This procedure does not preclude the owner from electing to make an actual cost, documented self-move.

QUESTION (7) - 49 CFR 24.301(d) and 24.303(a)(4). Is storage of personal property an entitlement of every displaced person? Who determines if an agency should pay for the storage of personal property, the terms of such storage, and the length of time for storage payment?

ANSWER - The agency determines if the storage of personal property is a reasonable and neces-sary moving expense for a displaced person. The determination should be based on the needs of the agency and the displaced person, the nature of the business, the plans for permanent reloca-tion, the amount of time available for the relocation process, and whether storage will facilitate relocation. It is the agency's responsibility to set the terms for storage, including prohibiting thestorage site's use as a temporary business operating site and the length of time. On the other hand, if storage is essential to a successful relocation, it may be extended, for good cause, to more than one year.


QUESTION (1) - 49 CFR 24.304. Is new construction at the replacement site eligible for reimbursement as a reestablishment expense?

ANSWER - The cost of constructing a new business building on the vacant replacement property is a capital expenditure and is generally ineligible for reimbursement as a reestablishment expense. In those rare instances when a business cannot relocate without construction of a replacement structure, a displacing agency may request a waiver of Part 24.304(b)(1) under the provisions of 49 CFR 24.7. An example of such an instance would be in a rural area where there are no suitable buildings available and the construction of a replacement structure will enable the business to remain a viable commercial operation. If a waiver is granted, the cost of constructing the new building will be considered an eligible reestablishment expense subject to the $10,000 statutory limit on such payment.

QUESTION (2)- 49 CFR 24.304. What reestablishment expense costs are eligible for reimbursement if a displaced business occupies a shell structure.

ANSWER -Basically all of the costs listed under 49 CFR 24.304(a) are eligible if considered actual, reasonable and necessary for the operation of the business. In markets where existing and new buildings are available for rental (and sometimes for purchase), the buildings or the various units available within the buildings often have only the basic amenities such as heat, light, and water, and sewer available. These buildings or units are shells. The cost of a building (shell) is not an eligible expense because the shell is considered a capital real estate improvement (a capital asset). However, this determination does not preclude the consideration by an acquiring agency of certain modifications to an existing replacement business building. Eligible improvements or modifications up to the amount of $10,000 may include the addition of necessary facilities such as bathrooms, room partitions, built-in display cases and similar items, if required by Federal, State or local codes, ordinances, or simply considered reasonable and necessary for the operation of the business.

QUESTION (3) - 49 CFR 24.303(a)(3) and 24.304(a)(1). Are costs incurred in complying with OSHA and other code requirements at the replacement location considered eligible costs in situations where the business was not subject to the requirement at the displacement property because of a "grandfather" provision?

ANSWER - Modifications to personal property mandated by Federal, State or local law, code, or ordinance which are necessary to reassemble or reinstall the personal property or adapt it to the replacement structure, the replacement site, or the utilities at the replacement site are eligible for reimbursement under subsection 24.303(a)(3). The modifications authorized by this subsection must be clearly and directly associated with the reinstallation of the personal property and cannot be for general repairs or upgrading of equipment because of the personal choice of the business owner. Finally, the expenditures for authorized modifications must be reasonable and necessary.

Costs for repairs, modifications, or improvements to the replacement real property due to the requirements of laws, codes, or ordinances can only be paid under 49 CFR 24.304(a)(1) and are limited to the $10,000 maximum payment under this subsection. Any costs in excess of $10,000 are ineligible.

QUESTION (4) - 49 CFR 24.304. If the nature, character, or type of business established after displacement is different from the business displaced by acquisition, would it be eligible for a reestablishment payment?

ANSWER - Yes. A change in a displaced business does not affect eligibility for actual, reasonable, and necessary reestablishment expenses incurred in reestablishing a business. In some instances, it is not economically feasible to relocate a particular business operation and a change in the nature, character, or type of business may be the most practical solution for the business operator. Expenditures of funds for reestablishing the business must be reviewed for acceptability. Costs of new or used equipment purchased to serve the changed business operation are not eligible for reimbursement as reestablishment expenses. Similarly, general repairs or improvements to the replacement property made to the structure because of the personal choice of the business operator are ineligible. The costs of utility upgrades and necessary and reasonable modifications to the real property to accommodate the changed business may be eligible when properly supported. All reestablishment payments are limited by the $10,000 statutory maximum.

QUESTION (5) - 49 CFR 24.304. Is a business operation that consists solely of leasing real estate to others at the displacement site eligible for the reestablishment payment?

ANSWER - Yes. The business of leasing real estate to others is considered to be a "small business" for the purposes of the regulations for the Uniform Act. The owner of the business is eligible for reimbursement of the actual, reasonable, and necessary expenses for the reestablishment of a rental property. The agency should provide the same advisory services to real estate leasing operations as performed for other businesses including providing information on suitable replacement properties. It is the agency's responsibility to determine if the expenses to be reimbursed under reestablishment are reasonable and necessary.


QUESTION (1) - 49 CFR 24.306(e). If the net income of a displaced business is very low in one or both years prior to displacement, can the payment be based upon a different period?

ANSWER - Yes. Average annual net earnings may be based upon a different time period of two consecutive years when the displacing agency determines it to be more equitable.

QUESTION (2) - 49 CFR 24.306(e). If a business experienced a loss in one of the two years, should the amount of the loss be offset against the net income from the other year, or should the income be considered as zero for the year in which the loss was incurred?

ANSWER - If a loss of net income occurs in one year and a gain in the other year, the income of the year in which the loss was incurred shall be computed as zero when determining the average net income for the 2-year period.

QUESTION (3) - 49 CFR 24.306(e). If a business has been in operation for only a short period of time (e.g., six months) prior to displacement, what method is used for determining the amount of the fixed payment?

ANSWER - The fixed payment would be based on the net earnings of the business at the dis-placement site for the actual period of operation projected to an annual rate. The existing net earnings income data would be extrapolated and used to project what the net earnings could have been if the business had been in business for a full two years. If the business is seasonal, this fact should be taken into account in the computations.


QUESTION (1) - 49 CFR 24.2(d). Can a replacement housing payment computation be based upon a comparable property which may have a minor decent, safe, and sanitary deficiency?

ANSWER - If the availability of comparable replacement properties is limited, the displacing agency may base a replacement housing payment on an available property having minor DSS deficiencies, provided the deficiencies can be easily corrected for a nominal amount. Use of non-DSS properties with minor deficiencies should be limited to situations where a windfall or excessive expenditure can be avoided and/or when housing of last resort is needed to relocate the displaced person into comparable housing. The payment computation must reflect the cost to correct the deficiencies. If such housing is used to meet the "make available" requirement, the housing must be available and DSS at the time of the move.

QUESTION (2) - 49 CFR 24.2(f)(6). How should the replacement housing payment be computed and paid when accommodations need to be provided for a displaced person with disabilities?

ANSWER - The regulation permits sufficient flexibility for each agency to develop procedures for accommodating the needs of a displaced person with disabilities. The replacement housing payment computation may: (1) be based on a dwelling designed for physically disabled persons, (2) include the estimated costs of any needed modifications, or (3) contain provisions for the adjustment to reflect the actual cost of modifications to the replacement housing payment computation.

Arrangements for modifications to the replacement dwelling purchased by the displaced person may be made by either the individual or by the agency, and the agency shall provide reimbursement for the actual reasonable costs paid for such modifications. The agency could also elect to obtain bids or to contract directly for needed modifications.

Rental replacement housing could be provided in the same manner, with the consent of the landlord, or the rental assistance payment could be increased to appropriately compensate the landlord for any necessary modifications or accommodations necessary for the replacement property to be considered DSS. If a financial hardship would be created for the displaced person, the agency could provide an advance replacement housing payment for the needed modifications.


QUESTION (1) If the replacement housing property is a part of a property that contains another dwelling unit and/or space used for non-residential purposes or is located on a tract which is significantly larger than typical for residential purposes, must there be an adjustment to the purchase price of the replacement property to reflect the cost of the replacement dwelling for the replacement housing payment computation?

ANSWER - When the replacement property contains another dwelling unit and/or space used for non-residential (commercial/industrial) purposes, an adjustment to the price of the property shall be made to reflect the cost of the replacement dwelling and a typical residential site.

When the replacement property does not contain another dwelling unit or space used for non-residential purposes, but is significantly larger than a typical residential site, an adjustment to the price of the property shall be made only if, in the displacing agency's judgement, a portion of the property constitutes an agricultural or other business use. The adjustment shall be made to reflect the cost of the replacement dwelling and a typical residential site.

In determining the need for an adjustment, the agency shall apply its policy uniformly to persons in like circumstances. The agency should be aware that the land in excess of a typical site may have a different unit value than land valued for residential use on a typical site.

QUESTION (2) - 49 CFR 24.2(p)(1). Is a displaced person who holds a life estate in the displacement property an owner or a tenant?

ANSWER - A displaced person who holds a life estate is considered to be an owner. A person who holds a life estate has a right to occupy a property for life. Many times, a life estate is retained by a person who has been granted such right by a grantor or who conveys the remainder interest to another person. The computed replacement housing payment may depend upon the distribution of the acquisition payment in accordance with state law. Each agency should develop procedures in accordance with applicable law. The replacement housing payment computation should be sufficient to enable the displaced person to relocate as an owner with an interest at least equivalent to the interest held prior to the acquisition of the property.

The payment computation will be based on the total amount of the acquisition payment for a dwelling comparable to the acquired dwelling. As an alternative, the agency may acquire a dwelling and provide a "life estate" to the displaced person. Any such agreement should clearly establish the responsibilities and rights of each party.

QUESTION (3) - 49 CFR 24.401(c)(4). When an owner-occupant retains the displacement dwelling and moves it to the remainder or to a previously owned tract of land, is the historical cost or the current fair market value of the replacement site used as the "acquisition cost" for the RHP computation?

ANSWER - The acquisition cost will be based on the current fair market value of the replacement site for residential use as determined by the agency. If an agency uses the buildable lot procedure in accordance with 24.403(a)(3), the value of the buildable remainder will have been added to the acquisition cost of the displacement dwelling for purposes of computing the replacement housing payment.

QUESTION (4) - 49 CFR 24.403(a)(2). Can an alternative procedure which would enable the displaced person to replace a major exterior attribute be utilized for determining the replacement housing payment in cases where the comparable replacement dwelling site lacks a major exterior attribute of the displacement dwelling?

ANSWER - No. Section 24.403(a)(2) requires that the value of the attribute be subtracted from the acquisition price of the displacement dwelling for purposes of computing the payment if the comparable replacement dwelling site lacks a major exterior attribute. The agency should always attempt to locate a comparable dwelling with the attribute before selecting a dwelling without the attribute.

QUESTION (5) - 49 CFR 24.401(c). How much money must an owner-occupant with a partial interest in the acquired property spend in order to receive the maximum computed supplemental payment?

ANSWER - The owner-occupant with a partial interest must spend his/her share of the acquisition payment plus the computed supplemental payment in order to receive the maximum payment.

QUESTION (6) - 49 CFR Appendix A, Subpart E, reference Section 24.404(b). How do you relocate a partial owner-occupant who cannot afford to finance a replacement dwelling? Can a direct loan under the provision of Section 24.404(c) be provided?

ANSWER - If an agency determines that the relocation of a partial owner-occupant should be as an owner, the agency may provide a direct loan, lien or other financial assistance under Section 24.404(c) if other financing is not available to the person, in addition to the computed replacement housing payment. A partial owner-occupant who cannot afford to purchase a comparable replacement housing may be relocated as a tenant and provided a rental assistance payment in accordance with Section 24.402.

QUESTION (7) - 49 CFR 24.403(c). Will the purchase and occupancy of a motor home or a boat meet the requirement for "Purchase (of) a replacement dwelling?"

ANSWER - A motor home or a boat capable of providing living accommodations may be considered a replacement dwelling if:

(A) The motor home or boat is purchased and occupied as the "primary" place of residence,

(B) It is located on a purchased or leased site and connected to all necessary utilities for functioning as a housing unit on the date of the displacing agency's inspection, and

(C) The dwelling, as sited, meets all local, State, and Federal requirements for a DSS dwelling. (It should be noted that the regulations of some local jurisdictions will not permit the consideration of these vehicles as DSS dwellings.)

A motor home or a boat designed to provide living accommodations may also meet the requirement of renting a replacement dwelling if it is occupied as the "primary" place of residence and qualifies under (B) and (C) above.


QUESTION (1) - 49 CFR 24.401(d)(3). If the interest rate charged for a new mortgage exceeds the prevailing interest rate because the displaced person is a poor credit risk or for other similar reasons, may the actual rate be utilized when determining the amount of the mortgage interest differential payment?

ANSWER - The interest rate for a new mortgage should generally not exceed the current range of prevailing mortgage interest rates of lending institutions in the area of the replacement dwelling. If the displaced person's unique circumstances require payment of a higher interest rate and the agency determines that the additional cost could prevent the displaced person from obtaining comparable housing, the required rate may be used. The file should contain justification for the rate used.

QUESTION (2) - 49 CFR 24.401(e). May the agency limit the reimbursement for all incidental expenses to those which would have been incurred incident to the purchase of a comparable replacement dwelling?

ANSWER - No. However, the incidental expenses of owner-occupants can be limited to the expenses that would have been necessary for purchase of a comparable replacement dwelling for owner's or mortgagee's evidence of title, state revenue or documentary stamps, and sales or transfer taxes. Participation in all incidental expenses should be limited to those that are actual, reasonable, and necessary and required by the mortgagee or necessary for the protection of the owner. For example, an owner who buys without a mortgage should be entitled to title insurance, termite and building inspections, surveys, and any other reasonable items that would protect his or her investment.

In accordance with 24.402(c)(2) and 24.404, tenants are eligible to receive reimbursement for incidental expenses related to the purchase of a replacement dwelling to the extent that the total payment does not exceed the amount of the computed rental assistance or housing of last resort payment.

QUESTION (3) - 49 CFR 24.401(e). Which of the incidental expenses for purchase of a replacement dwelling can be limited to what would be required to obtain a new mortgage in the same amount as the remaining balance of the mortgage on the acquired dwelling?

ANSWER - Mortgage guarantee insurance premiums, origination and assumption fees, purchaser's points, and any other like expenses that are based on the amount of the mortgageobtained can be limited. These are the same payments that would be limited for computation of increased mortgage interest costs. Computations would be based on the lesser of the remaining mortgage balance on the acquired dwelling or the mortgage obtained on the replacement dwelling.

QUESTION (4) - 49 CFR 24.401(e). Can a lump-sum payment for mortgage guarantee insurance be included as an incidental expense?

ANSWER - Yes. Required lump-sum payments for mortgage guarantee insurance may be included as part of the mortgage interest differential (MID) payment. If they are paid as an incidental expense to an owner-occupant, any payment made should be based upon the computed replacement mortgage for MID purposes or the new mortgage amount, whichever is less. Payments to tenants may be made if the computed rental assistance payment is sufficient to cover this expense.

QUESTION (5) - 49 CFR 24.402(c). What are the limitations on the payment of incidental expenses for a tenant who elects to purchase a replacement dwelling?

ANSWER - All incidental expenses actually incurred by a tenant for the purchase of a replacement dwelling (customarily paid by the buyer) in accordance with 24.401(e) can be included in the computation of down payment assistance to the extent they do not exceed the amount available for down payment assistance.

QUESTION (6) - 49 CFR 24.402(c)(2). Are loan origination fees incurred by a tenant in the purchase of a replacement dwelling eligible for reimbursement as incidental expenses?

ANSWER - Yes. Sections 24.401(e)(3) and (9) provides for payment of loan origination fees and other similar costs the agency determines to be incidental to the purchase. The total payment for a tenant may not exceed the computed rental assistance payment or $5,250, whichever is greater.

TENANTS and other 90-day occupants

QUESTION (1) - 49 CFR 24.2(d)(7) and Appendix A, Subpart A, reference Section 24.2(d)(7). Can the displaced occupant of a public housing unit be offered other public housing units as a comparable replacement housing?

ANSWER - Yes. A person displaced from a public housing project may be offered a comparable public housing unit as a replacement dwelling. The rental assistance payment would be based upon the rent of the available unit unless the person is no longer eligible for subsidized public housing. In that event, a comparable replacement dwelling from the private market would have to be made available.


QUESTION (1) - 49 CFR 24.404(c)(iv). May a direct loan as provided for in this section be used as a substitute for a replacement housing payment?

ANSWER - No. A direct loan would be provided in addition to any replacement housing payment computed for the displaced person. A direct loan may be provided under housing of last resort if financing is not otherwise available to the displaced person. It cannot be used as a substitute for a replacement housing payment.

QUESTION (2) - 49 CFR 24.404(c)(1). Are there other ways to assist displaced persons to occupy purchased replacement housing other than the ones listed in 24.404(c)?

ANSWER - Yes. The agency has many options for assisting people to become owners of replace-ment dwellings. A first mortgage or a lien can be placed on a property that would become due and payable if the displaced person ceased to occupy the property or conveyed or sold the property to someone else. A life estate, based on the displaced person's life, could be offered in a property owned or purchased by an agency. The displaced person would have the right to occupy the property until death when the full ownership of the property would revert to the agency for other uses or sale. The agency could also "buy down" the interest or the mortgage of a property with a financing agency to make the payments affordable for the displaced person. Or the agency could initiate mortgage financing for a displaced person and then sell the mortgage, possibly at a reduced rate, to a person or institution who would become the new mortgagee. Several agencies have also assisted displaced persons in establishing credit at credit unions that then financed the mortgages for them.

It is recommended that agencies use the provisions of Housing of Last Resort to maximize housing opportunities in a cost efficient manner.


QUESTION (1) - 49 CFR 24.503. If a displaced owner-occupant of a mobile home is a partial owner of the mobile home site, what payments would he or she be entitled to receive?

ANSWER - The displaced person would be treated as an owner in accordance with the guidance in Appendix A, Subpart E, Section 24.404(b). If the mobile home is acquired or cannot be relocated, the owner would be eligible for a replacement housing payment to purchase a mobile home. He/she would also receive a replacement housing payment based upon the difference between the asking price of a comparable mobile home site and the acquisition price of the site (as improved for a mobile home) from which he/she is displaced. If there are no mobile home sites available for purchase within his/her financial means as a partial owner, then he/she could receive a rental assistance payment sufficient to rent a comparable mobile home site.

QUESTION (2) - 49 CFR 24.504. Is a mobile home owner-occupant who leases or rents his/her site at the displacement location eligible for a down payment for a replacement site?

ANSWER - The owner of a mobile home, who rents the site from which he/she is displaced, may either rent a replacement site and receive a rental assistance payment in accordance with Section 24.402(b) or purchase a replacement site and receive down payment assistance in accordance with Section 24.402(c).

Updated: 9/5/2014
HEP Home Planning Environment Real Estate
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