Section 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.  

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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. 

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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. 

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

Section 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.

Section 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.

Section 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. 

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022) 

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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. 

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022) 

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 380.504  Housing Quality Standards

Landlords must maintain each Unit in compliance with the Housing Quality Standards.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 380.506  Eviction 

Landlords shall have the right to evict Tenants from Units for good cause, as permitted under State and local law.

Section 380.507  Reconciliations

Landlords shall make Reconciliations to their funding LAAs quarterly.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Added at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 380.612  Evictions

Developers shall have the right to evict Tenants from Units for good cause, as permitted under State and local law.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

Section 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.

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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. 

(Source:  Amended at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(Source:  Former Section 380.617 renumbered to Section 380.618; new Section 380.617 added at 46 Ill. Reg. 12608, effective July 7, 2022)

Section 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.

(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)

Section 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.

(Source:  Section 380.619 renumbered from Section 380.618 and amended at 46 Ill. Reg. 12608, effective July 7, 2022)