(b) Planned use of $500-per-unit funds. These funds are to be used to pay for:

1. (1) Pre- and post-occupancy counseling and training;

2. (2) Establishment and initial operation of the HBA (for operation in the management phase, see § 904.305).

   In planning the use of these funds, the LHA shall recognize that for a number of years after the initial counseling and training there is likely to be some turnover and follow-up counseling and training needs. Therefore, the LHA shall limit the amounts for the counseling and training of the initial homebuyers and shall reserve a reasonable amount for future counseling and training needs during the management phase of the development.

(d) Budgeting of $500-per-unit funds.

1. (1) The Development Cost Budget submitted with the Development Program shall include an estimated amount for counseling and training program costs. However, such costs shall not be incurred until after HUD approval of the counseling and training program.
2. (2) Upon HUD approval of the counseling and training program, the LHA shall include the approved amount in its Contract Award Development Cost Budget. This amount shall constitute the maximum amount that may be included for such purposes in the project development cost; provided that, if the approved amount is less than $500 per dwelling unit, it may, if necessary, be amended with HUD approval, but not later than the Final Development Cost Budget and subject to the $500-per-unit limitation.

(e) Application for approval of counseling and training program.

1. (1) The LHA shall submit an application for approval of a counseling and training program and for approval of funds therefor. This application shall be submitted to HUD at the time of the submission of the development program or as soon thereafter as possible but no later than the submission of the working drawings and specifications.

2. (2) The application shall include a narrative statement outlining the counseling and training program, including any services and funds to be obtained from other sources, together with copies of any proposed contract and other pertinent documents. This statement shall include the following:

   1. (i) Indication that the training entity is completely knowledgeable of the Homeownership Opportunity Program and is aware of the needs and problems of prospective homebuyers;
   2. (ii) The method and/or instruments to be used to determine individual training and counseling needs;
   3. (iii) The scope of the proposed program, including a detailed breakdown of tasks to be performed, products to be produced, and a time schedule, including provision for progress payments for specific tasks;
   4. (iv) An outline of the proposed content of the counseling and training to be provided, and the local community resources to be utilized;
   5. (v) The methods of counseling and training to be utilized;
   6. (vi) The experience and qualifications of the organization and of personnel who will directly provide the counseling and training;

   7. (vii) The estimated cost, source of funds, and methods of payment for the tasks and products to be performed or produced, including estimates of costs for each of the following categories:

      (a) Counseling and training during development phase:

      Salaries Materials, supplies and expendable equipment Contract costs Other costs

      (b) Establishment and initial operation of HBA

      (c) Counseling and training during management phase