Grant Administration: Section 10.6 Relocation Assistance Requirements under Section 104(d)

The relocation requirements of Section 104(d) differ from URA requirements. The grantee is required to provide certain relocation assistance to any lower-income person displaced as a direct result of (1) the demolition of any dwelling unit, or (2) the conversion of a low- and moderate-income dwelling unit to a use other than a low- and moderate-income dwelling in connection with an assisted activity. The rules implementing the Section 104(d) relocation requirements for the State CDBG program are found at 24 CFR 42 Subpart C.

Such 104(d) replacement housing payments are available only to low- or moderate-income households. In addition, Section 104(d) relocation assistance is not triggered for a project, but rather for a household within a specific unit. The benefit determination requires additional, multiple calculations to arrive at the relocation benefits paid. Attachment 10-26: Summary of Major Differences between 104(d) and URA Relocation Assistance to this chapter summarizes the major differences between URA and Section 104(d) relocation assistance.

To be eligible for Section 104(d) relocation assistance, a person must meet certain criteria. Under Section 104(d), a displaced person is a lower-income tenant who moves permanently, in connection with an assisted activity, as a direct result of conversion of a low- and moderate-income dwelling unit or demolition of any dwelling unit. 24 CFR 42.305

Amount of Assistance
Under Section 104(d), each displaced household is entitled to choose either assistance at URA levels (detailed earlier in the chapter) or the following relocation assistance:

  • Advisory services (same as under URA) – Includes notices, information booklets, explanation of assistance, referrals to comparable housing and counseling.
    – In general, both 104(d) and the URA require that a General Information Notice, and a Notice of Non-displacement or a Notice of Eligibility for Relocation Assistance be provided. (See Attachment 10-4:  General Information Notices for Residential Tenants Attachment 10-5: Notice of Eligibility , and Attachment 10-6: Notice of Non-Displacement .)
    – The Notice of Non-displacement informs residential occupants who will remain in the project area after completion of the assisted activity of their rights and of the terms and conditions of their remaining in the property.
    – The Notice of Eligibility for Relocation Assistance informs residential occupants who will be displaced of their rights and levels of assistance under 104(d). Note that the availability of Section 8 assistance to a displaced person will reduce the level of replacement housing payment provided. See details provided below.
  • Payment for moving and related expenses (the same as under URA). Payment for actual reasonable moving and related expenses or a moving expense and dislocation allowance based on a schedule that is available in Attachment 10-17: Fixed Residential Moving Cost Schedule. Also, see Attachment 10-18: Residential Claim for Moving and Related Expenses for the claim form to use for moving costs and related expenses.
  • Security Deposits (not required under URA) – The reasonable and necessary cost of any security deposit required to rent the replacement dwelling unit.
  • Credit checks (not required under URA) – Required to rent or purchase the replacement dwelling unit (also eligible under URA).
  • Interim living costs (same as for URA) – The person shall be reimbursed for actual reasonable out-of-pocket costs incurred in connection with temporary relocation, including moving expenses and increased housing costs if the person must relocate temporarily because continued occupancy of the dwelling unit constitutes a substantial danger to the health or safety of the person or the public.
  • Replacement Housing Assistance: The 104(d) replacement housing payment is intended to provide affordable housing for a 60-month period. There is no cap on the 104(d) replacement housing payment. As with URA, the 104(d) payment is calculated using the cost of the tenant’s actual, decent, safe and sanitary replacement dwelling (including utilities) or a comparable replacement dwelling.
  • The replacement housing payment makes up (for a 60-month period, not 42 months as in URA) the difference between:
    – The rent and utility costs for the actual replacement dwelling (or comparable), and
    – The tenant’s Total Tenant Payment, calculated as the greater of either:
    – Thirty percent of adjusted income;
    – ten percent of gross income;
    – the welfare rent (see 24 CFR 5.628(a)(3) ); and
    – minimum rent in accordance with 24 CFR 5.630.

NOTE: The amount of the rent at the displacement unit is NOT used in calculating the RHP under 104(d).
Persons eligible for assistance under Section 104(d) are also eligible for URA assistance. In order for such persons to make an informed decision, grantees must determine and inform the person of the amount of replacement housing assistance available under Section 104(d) housing assistance and available under the URA.

The grantee has the option to offer all or a portion of this 104(d) rental assistance through a Section 8 Housing Choice Voucher, if the grantee has access to a Voucher and provides referrals to comparable replacement dwelling units where the owner is willing to participate in the Section 8 Existing Housing Program.

If a person then refuses Section 8 assistance, the grantee has satisfied the Section 104(d) replacement housing assistance requirements. In such case, the displaced person may seek URA replacement housing assistance.

Cash rental assistance must be provided in installments, unless the tenant wishes to purchase a home. If the displaced tenant wishes to purchase a home, the payment must be provided in a lump sum so that the funds can be used for a down payment, including incidental expenses. The amount of cash rental assistance to be provided is based on a one-time calculation. The payment is not adjusted to reflect subsequent changes in a person’s income, rent/utility costs, or household size. (Note: This guidance is also applicable under the URA.) Use Attachment 10-27: Claim for Rental or Purchase Assistance Section 104(d) to calculate and document replacement housing payments made under Section 104(d) benefits.

Under Section 104(d), only housing cooperatives or mutual housing are eligible forms of ownership for down payment assistance. If someone eligible for Section 104(d) wants to purchase another form of homeownership with the replacement housing benefits, they must accept URA relocation benefits instead of Section 104(d).

Total Tenant Payment (TTP)
Under the URA, a displaced person’s gross monthly income and old rent are used to calculate the replacement housing payment. However, under Section 104(d), the Total Tenant Payment (TTP) is used to establish the amount of replacement housing assistance. Handbook 1378, Chapter 7, Paragraphs 7-8 and 7-10

Under Section 104(d), a displaced person is eligible for financial assistance sufficient to reduce the monthly rent and estimated average monthly utility costs for a replacement dwelling to the Total Tenant Payment (TTP).

To verify income in determining eligibility for assistance, a person must sign a release authorizing any financial institution or source of income to furnish the grantee with income information. In order of acceptability, the three methods of verifying a person’s income are:

  • Third party written or oral verification. Such written verification/documentation should not be transmitted through the displaced person to the grantee.
  • Review of documents, when third party verification is unavailable. Documents may include items such as pay stubs, government benefits statements like social security, and income tax returns provided they are updated to project income.
  • Notarized self-certification, unless the grantee determines notarization is unnecessary.

Caution: The method of verifying income for the purposes of determining eligibility for housing assistance (Chapter 2: National Objectives and Eligible Activities) varies from what is described above.

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