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EXHIBIT 1 <br />Eligible Uses and Activities <br />Funds can be used to make loans to eligible borrowers to provide affordable housing, principally for low and <br />moderate -income households, including, but not limited to: <br />1) acquisition and/or rehabilitation of eligible rental properties; <br />2) new construction of rental or limited equity cooperative housing by a CBDO is eligible provided the <br />construction activity is carried out as part of a neighborhood revitalization, community economic <br />development or energy conservation project. New housing construction carried out by an eligible CBDO <br />must be part of a larger effort to revitalize the neighborhood (i.e., a plan for the community's revitalization <br />efforts based on a comprehensive plan, not just for the sake of the CDBG project); <br />Ineligible Uses and Activities <br />Funds may not be used for the following activities: <br />1) the construction of new rental housing or for any program to subsidize or assist such housing, except <br />when carried out by a CBDO, provided the construction activity is carried out as part of a neighborhood <br />revitalization, community economic development or energy conservation project; <br />2) to provide income payments for rent or utilities, except in emergency situations for a period not longer <br />than three months; or, <br />3) to assist rental housing properties if less than 51 % of the units will be occupied by low and moderate - <br />income households. <br />Compliance with Federal and Local Regulations <br />All projects must comply with all applicable federal requirements contained in 24 CFR Part 570 Subpart K, <br />including, but not limited to, standards of financial management, environmental review, labor and wage <br />requirements, debarred contractors, lead -based paint and equal opportunity. Borrowers should note: <br />Contract Requirements: All work shall be completed by licensed contractors. All contracts must comply <br />with competitive bidding requirements. <br />Labor Standards: A project with eight or more residential units must comply with the Federal Labor <br />Standards, including the Davis -Bacon Act requirements, as promulgated by HUD, and set forth in 24 CFR <br />Part 570, Subpart K in the performance of the rehabilitation or construction work financed by the loan. <br />Contracts over $10,000 must comply with Equal Opportunity Affirmative Action requirements of Section 3 <br />of the Housing Urban Development Act of 1968. All efforts shall be made to provide equal opportunity for <br />employment without discrimination as to race, marital status, sex, color, age, religion, national origin or <br />ancestry, and to seek out qualified local tradespeople for contracting and subcontracting bids. <br />Lead -based Paint: Housing assisted with CDBG funds constitutes HUD -associated housing for the <br />purpose of the Lead -Based Paint Poisoning Prevention Act and the Lead Safe Housing Rule, and is <br />therefore subject to 24 CFR Part 35. Unless otherwise provided, borrowers are responsible for testing and <br />abatement. <br />Accessibility. All projects must comply with the federal Section 504 Disabled Accessibility regulations <br />contained in Sections 8.22 and 8.23 of Subpart C, 24 CFR Part 8. <br />For more information, please see 24 CFR Part 570. <br />VI. RENTAL REHABILITATION PROGRAM FUNDS <br />Source of Funds <br />The Rental Rehabilitation Program (RRP) grant was authorized by Congress on November 30, 1983 by Section <br />301 of the 1983 Housing and Urban -Rural Recovery Act. The City of Santa Ana received $363,900 in rental <br />rehabilitation grant funds. Assistance was provided to owners of small rental projects in the form of deferred <br />City of Santa Ana Community Development Agency <br />Request for Proposals for Affordable Housing Development <br />Page 5 <br />