PART 239—HOMEOWNERS ASSISTANCE PROGRAM—APPLICATION PROCESSING Authority: 42 U.S.C. 3374, as amended by Section 1001, ARRA, Public Law 111-5. Source: 75 FR 69873, Nov. 16, 2010, unless otherwise noted. § 239.1 Purpose. This part: (a) Continues to authorize the Homeowners Assistance Program (HAP) under Section 3374 of title 42, United States Code (U.S.C.), to assist eligible military and civilian Federal employee homeowners when the real estate market is adversely affected directly related to the closure or reduction-in-scope of operations due to Base Realignment and Closure (BRAC). Additionally, in accordance with section 1001, American Recovery and Reinvestment Act of 2009 (ARRA), Public Law 111-5, this part temporarily expands authority provided in section 3374, of title 42 U.S.C., to provide assistance to: Wounded, Injured, or Ill members of the Armed Forces (30 percent or greater disability), wounded Department of Defense (DoD) and Coast Guard civilian homeowners reassigned in furtherance of medical treatment or rehabilitation or due to medical retirement in connection with their disability, surviving spouses of fallen warriors, Base Realignment and Closure (BRAC) 2005 impacted homeowners relocating during the mortgage crisis, and Service member homeowners undergoing Permanent Change of Station (PCS) moves during the mortgage crisis. This authority is referred to as “Expanded HAP.” (b) Establishes policy, authority, and responsibilities for managing Expanded HAP and defines eligibility for financial assistance. (c) In accordance with this part, the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) has overall responsibility and, through the Deputy Under Secretary of Defense for Installations and Environment (DUSD(I&E)), provides oversight for this program. The Army, acting as the DoD Executive Agent for administering the HAP, uses the Headquarters, U.S. Army Corps of Engineers (HQUSACE) to implement the program. § 239.2 Applicability and scope. This part applies to the Office of the Secretary of Defense, the Military Departments (including the U.S. Coast Guard), the Chairman of the Joints Chiefs of Staff, the Combatant Commands, the Inspector General of the Department of Defense, the Defense Agencies, DoD Field Activities, and all other organizational entities within the Department of Defense (hereafter referred to collectively as the “DoD Components”). This part for Expanded HAP is applicable until September 30, 2012, or as otherwise extended by law. § 239.3 Policy. It is DoD policy, in implementing section 3374 of title 42, United States Code, as amended by section 1001 of the ARRA (Pub. L. 111-5), that those eligible ( see § 239.4 Definitions. (a) Armed Forces. (b) Closing costs. (c) Deficiency judgment. (d) Deployment. (e) Eligible mortgage. http://www.irs.gov/publications/p523/ar02.html (f) Forward deployment. (g) Primary residence. (h) Prior Fair Market Value (PFMV). (i) Purchase. (j) Reasonable effort to sell. e.g., (k) Permanent Change of Station (PCS). § 239.5 Benefit elections. Section 3374 of title 42, U.S.C., as amended by section 1001 of the ARRA, Public Law 111-5, authorizes the Secretary of Defense, under specified conditions, to acquire title to, hold, manage, and dispose of, or, in lieu thereof, to reimburse for certain losses upon private sale of, or foreclosure against, any property improved with a one- or two-family dwelling owned by designated individuals. (a) General benefits. see (i) The applicable percentage (identified by applicant type in § 239.5(a)(4) of this part) of the Prior Fair Market Value (PFMV) of the primary residence, or (ii) The total amount of the eligible mortgage(s) that remains outstanding; however, the benefit payable (excluding allowable closing costs) shall not exceed $729,750. (2) If an applicant sells, has sold, or otherwise has transferred title of the primary residence, the benefit calculation shall be the amount of closing costs plus an amount not to exceed the difference between the applicable percentage of the PFMV and the sales price. (3) If an applicant is foreclosed upon, the benefit will pay all legally enforceable liabilities directly associated with the foreclosed mortgage ( e.g., (4) Applicable percentages. (ii) If an applicant is eligible under § 239.6(a)(1) or (2) of this part, and is unable to sell the primary residence after demonstrating reasonable efforts to sell, the applicable percentage shall be 90 percent of the PFMV. Closing costs incurred on the sale may be reimbursed. (iii) If an applicant is eligible under § 239.6(a)(3) or (4) of this part and sells the primary residence, the applicable percentage shall be 90 percent of the PFMV. In addition, closing costs incurred on the sale may be reimbursed. (iv) If an applicant is eligible under § 239.6(a)(3) or (4) of this part and is unable to sell the primary residence after demonstrating reasonable efforts to sell, the applicable percentage shall be 75 percent of the PFMV. As noted under paragraph (a)(1) of this section, however, the applicant may instead be eligible for payment of the eligible mortgage outstanding. (b) Rules applicable to all benefit calculations. (2) A short sale will be treated as a private sale. If an applicant remains personally liable for a deficiency between the outstanding mortgage and the sale price, the amount of this deficiency may be included in the benefit, provided that the total amount of the benefit does not exceed the difference between 90 percent of the PFMV and the sales price. (c) Payment of benefits. Private sale: (2) Government purchase: (i) Commission will be at the normal and customary rate for the area (normally six percent) on the price agreed upon by the applicant and the buyer and to whom the Government will then sell the home. While the commission payment is the responsibility of the applicant, the Government will make the commission payment for the applicant when the home is sold by the Government to the applicant's buyer contingent upon both the Government acquisition and Government sale contract transactions being completed and recorded. Commissions will be paid to the broker listing the property. The allocation of dollars to real estate agents will be the responsibility of the listing broker. (ii) After Government acquisition, the Government will then sell the property to the buyer found by the applicant. (iii) No other payment of fees or commissions will be made without the prior approval of HQUSACE. (3) Foreclosure: (d) Tax Implications. § 239.6 Eligibility. (a) Eligibility by Category. (1) Wounded, Injured, or Ill. (A) Who receive a disability rating of 30% or more for an unfitting condition (using the Department of Veterans Affairs Schedule for Ratings Disabilities), or who are eligible for Service member's Group Life Insurance Traumatic Injury Protection Program, or whose treating physician (in a grade of at least captain in the Navy or Coast Guard or colonel in Army, Marine Corps, or Air Force) certifies that the member is likely, by a preponderance of the evidence, to receive a disability rating of 30 percent or more for an unfitting condition (using the Department of Veterans Affairs Schedule for Ratings Disabilities) for wounds, injuries, or illness incurred in the line of duty while deployed, on or after September 11, 2001, and (B) Who are reassigned in furtherance of medical treatment or rehabilitation, or due to retirement in connection with such disability, and (C) Who need to market the primary residence for sale due to the wound, injury, or illness. (For example, the need to be closer to a hospital or a family member caregiver or the need to find work more accommodating to the disability.) (ii) Civilian employees of DoD or the United States Coast Guard (excluding temporary employees or contractors, but including employees of non-appropriated fund instrumentalities): (A) Who suffer a wound, injury, or illness (not due to own misconduct), on or after September 11, 2001, in the performance of duties while forward deployed in support of the Armed Forces, whose treating physician provides written documentation that the individual, by a preponderance of the evidence, meets the criteria for a disability rating of 30 percent or more. As described in paragraph (a)(1) of this section, this documentation will be certified by a physician in the grade of at least captain in the Navy or Coast Guard or colonel in Army, Marine Corps, or Air Force. (B) Who relocate from their primary residence in furtherance of medical treatment, rehabilitation, or due to medical retirement resulting from the wound, injury, or illness, and (C) Who need to market the primary residence for sale due to the wound, injury, or illness. (For example, the need to be closer to a hospital or a family member caregiver or the need to find work more accommodating to the disability.) (2) Surviving spouse. (i) Whose spouse dies as the result of a wound, injury, or illness incurred in the line of duty while deployed (or forward deployed for civilian employees) on or after September 11, 2001, and (ii) Who relocates from the member's or civilian employee's primary residence within two years of the death of spouse. (3) BRAC 2005 members and civilian employees. (i) Whose position is eliminated or transferred because of the realignment or closure; and (ii) Who accepts employment or is required to relocate because of a transfer beyond the normal commuting distance from the primary residence (50 miles). The new residence must be within 50 miles of the new duty station. (4) Permanently reassigned members of the Armed Forces. (i) Dated between February 1, 2006, and September 30, 2012 (subject to availability of funds), (ii) To a new duty station or home port outside a 50-mile radius of the member's former duty station or home port. (b) Eligibility based on economic impact, timing, price, orders, and submission of application. Minimum economic impact. (ii) Applicants qualifying as Wounded, Injured, or Ill or as surviving spouse do not need to show minimum economic impact. (2) Timing of purchase and sale. (ii) Permanently reassigned members of the Armed Forces must have purchased their primary residence before July 1, 2006. (iii) Wounded, injured, or ill members and employees and Surviving Spouses are eligible for compensation without respect to the date of purchase. (iv) BRAC 2005 Members and Civilian employees and permanently reassigned members must have sold their primary residence between July 1, 2006 and September 30, 2012. (3) Maximum home prior fair market value and eligible mortgage. (4) Date of assignment; report date; basis for relocation. Date of assignment, report date. (B) For initial implementation, permanently reassigned members of the Armed Forces must have received qualifying orders to relocate dated between February 1, 2006, and September 30, 2010. These dates may be extended to September 30, 2012, at the discretion of the DUSD(I&E) based on availability of funds. (ii) Basis for relocation: (A) Members who voluntarily retire prior to reaching their mandatory retirement date. (B) Members who are a new accession into the Armed Forces or who are otherwise entering active duty. (C) Members who are voluntarily separated or discharged. (D) Members whose separation or discharge is characterized as less than honorable. (E) Members who request and receive voluntary release from active duty (REFRAD). (F) Members who are REFRAD for misconduct or poor performance. (c) Applications will be processed according to eligibility category in the following order: Wounded, injured, and ill. (2) Surviving spouses. (3) BRAC 2005 members and civilian employees. (4) Permanently reassigned members of the Armed Forces. § 239.7 Responsibilities. (a) The DUSD(I&E), under the authority, direction, and control of the USD(AT&L), shall, in relation to the Expanded HAP: (1) Prescribe and monitor administrative and operational policies and procedures. (2) Determine applicable personnel benefits and policies, in coordination with the Under Secretary of Defense (Comptroller) and the Under Secretary of Defense for Personnel and Readiness. (3) Serve as senior appeals authority for appeals submitted by applicants. (b) The Under Secretary of Defense (Comptroller) shall, in relation to the Expanded HAP: (1) Implement policies and prescribe procedures for financial operations. (2) Review and approve financial plans and budgets. (3) Issue financing and obligation authorities. (4) Administer the DoD Homeowners Assistance Fund. (c) The Deputy Assistant Secretary of the Army for Installations and Housing (DASA(I&H)), subject to review by the DUSD(I&E), as the DoD Executive Agent for administering, managing, and executing the HAP, shall: (1) Establish detailed policies and procedures for execution of the program. (2) Maintain necessary records, prepare reports, and conduct audits. (3) Publish regulations and forms. (4) Disseminate information on the program. (5) Forward copies of completed responses to congressional inquiries and appeals to the DUSD(I&E) for information. (6) Serve as the initial approval authority for HAP appeals. The DASA(I&H) may approve appeals and shall forward recommendations for Expanded HAP denial to the DUSD(I&E) for decision. (d) The Heads of the DoD Components and the Commandant of the Coast Guard, by agreement of the Secretary of Homeland Security, shall: (1) Designate at least one representative at the headquarters level to work with DASA(I&H) and HQUSACE HAP offices. (2) Require each installation to establish a liaison with the nearest HAP field office to obtain guidance or assistance on the HAP. (3) Supply the HQUSACE HAP office a copy of any internal regulation, instruction, or guidance published relative to the Expanded HAP program. (4) Disseminate information on the Expanded HAP and, upon request, supply HAP field offices with data pertaining to the Expanded HAP. (e) HQUSACE. (1) Real Estate Community of Practice (CEMP-CR). (i) Supervision, interagency coordination, development of procedures, policy guidance, and processing of appeals forwarded from the districts and HQUSACE Major Subordinate Commands (MSC). (ii) Maintaining an Expanded HAP central office and Expanded HAP field offices. (iii) Processing appeals from the MSC where applicant agreement cannot be reached. Such appeals will be forwarded, in turn, to DASA(I&H) for consideration. (2) Districts. (i) Accepting applications (DD Form 1607) for HAP and Expanded HAP benefits. (ii) Determining the eligibility of each applicant for Expanded HAP assistance using the criterion established by the DUSD(I&E). (iii) Determining and advising each applicant on the most appropriate type of assistance. (iv) Determining amounts to be paid, consistent with DoD policy, and making payments or authorizing and arranging for acquisition or transfer of the applicant's property. (v) Maintaining, managing, and disposing of acquired properties or contracting for such services with private contractors. (vi) Processing all appeals, except where applicant agreement cannot be reached. Such appeal cases will be forwarded, in turn, to the MSC, CEMP-CR, and DASA(I&H) for consideration. (3) HQUSACE Major Subordinate Commands (MSC). § 239.8 Funding. (a) Revolving fund account. (b) Appropriation, receipts, and allocation. (c) Obligation of funds. § 239.9 Application processing procedures. (a) Acceptance of applications. See (1) Applications for benefits by members of the Armed Forces due to eligibility pursuant to § 239.6(a)(4) of this part because of permanent reassignment must be submitted directly to the U.S. Army Corps of Engineers field office identified in § 239.15 of this part by U.S. Mail or commercial delivery service, and must be postmarked or deposited with the commercial delivery service no later than September 30, 2012. Applications postmarked or deposited after September 30, 2012, will not be accepted. (2) Applications of eligible personnel for benefits due to eligibility pursuant to § 239.6(a)(3) of this part because of BRAC 2005 must be submitted directly to the U.S. Army Corps of Engineers field office identified in § 239.15 of this part by U.S. Mail or commercial delivery service, and must be postmarked or deposited with the commercial delivery service no later than September 30, 2012. Applications postmarked or deposited after September 30, 2012, will not be accepted. (b) Application Form (DD Form 1607). (c) Assignment of application numbers. Assignment of application numbers. (2) Method of assignment. (i) Agency code. (A) 1—Army (B) 2—Air Force (C) 3—Navy (D) 4—Marine Corps (E) 5—Defense Agencies (F) 6—Non-Defense Agencies (G) 7—U.S. Coast Guard (ii) District code. (A) Sacramento: L2 (B) Savannah: K6 (C) Fort Worth: M2 (iii) Applicant category code (A) 1 = Civilian (BRAC) (B) 2 = Military (BRAC) (C) 3 = Non-appropriated Fund Instrumentalities (D) 4 = Military Wounded (E) 5 = Civilian Wounded (F) 6 = Surviving Spouse (military deceased) (G) 7 = Surviving Spouse (civilian employee deceased) (H) 8 = Military PCS (iv) State: (v) Installation number: (A) For a BRAC 05 applicant moving from the closing Saint Louis, Missouri, DFAS office to Minneapolis, Minnesota, use the ZIP Code of the city from which he or she is moving, e.g., 63101, for St. Louis, Missouri. (B) For wounded warrior or surviving spouse who moved from primary residence, use present installation or home town. (C) For Service members who are eligible based on PCS criteria, use ZIP Code of installation from which they depart. (vi) Application Number: Example 1: 2 K6 2 NH0 3 8 0 30 0 0 1 Air Force-SAS Dist.-Mil BRAC-NH-Pease AFB-Applicant # Example 2: 1-K 6- 4- NY-1 3 6 0 2-0 0 0 2 Army-SAS Dist-Mil Wounded-NY-Ft Drum-Applicant # (d) Real Estate Values. (2) Districts are responsible for ensuring primary residence values are appropriate and applicants receive deserved benefit payments. Districts will use the CoreLogic AVM to determine the valuation of individual primary residences. [75 FR 69873, Nov. 16, 2010, as amended at 77 FR 39628, July 5, 2012] § 239.10 Management controls. (a) Management systems. (1) HAPMIS. (2) CEFMS. (i) Funds issued to field offices for execution accountability. (ii) Funds committed and obligated by applicant category, installation, state and county. (b) System of Records Notice (SORN). http://www.defenselink.mil/privacy/notices/army/A0405-10q_CE.shtml. http://www.army.mil/ciog6/privacy.html. Attn: § 239.11 Appeals. Applicant appeals will be processed at the district level and forwarded through HQUSACE for review. The HQUSACE may approve an appeal but must forward any recommendation for denial to the DASA(I&H) for review and consideration. DASA(I&H) may approve an appeal but must forward recommendations for denial to the DUSD(I&E) for decision. The DUSD(I&E) is the senior appeals authority for appeals submitted by applicants. § 239.12 Tax documentation. For disbursed funds, tax documents (if necessary) will be certified by HQUSACE Finance Center and distributed to applicants and the Internal Revenue Service (IRS) annually. § 239.13 Program performance reviews. HQUSACE will prepare monthly program performance reviews using the HAPMIS; HQUSACE Annual Management Command Plan and Management Control Checklist. In addition, program monitoring will also be conducted (through HAPMIS and CEFMS reports) at the Headquarters Department of the Army and at the DUSD(I&E) levels. § 239.14 On-site inspections. The HQUSACE and its major subordinate commands may conduct periodic on-site inspections of district offices and monitor program execution through HAPMIS and CEFMS reports. § 239.15. List of HAP Field Offices. HAP FIELD OFFICE U.S. Army Engineer District, Savannah, Corps of Engineers, Attn: CESAS-RE-HM, 100 West Oglethorpe Avenue, Savannah, Georgia 31401-3604, 1-800-861-8144, Internet Address: http://www.sas.usace.army.mil. HAP CENTRAL OFFICE Homeowners Assistance Program, HQ U.S. Army Corps of Engineers Real Estate Directorate, Military Division, 441 G Street NW., Washington, DC 20314-1000. [77 FR 39629, July 5, 2012]