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7. PREDEVELOPMENT ANDOUTREACH/TRAINING GRANTSThe 1997 MAHRA legislation authorized $10 millionin annual funding for grants to help residentorganizations, nonprofits, and public agenciesacquire and preserve federally subsidizeddevelopments. Administered by OMHAR, thegrants provide critical predevelopment andtechnical assistance funding for preservationtransactions and related activities.There are two types of grants: IntermediaryTechnical Assistance Grants (ITAG) andOutreach and Training Grants (OTAG). Eligibleproperties include Mark-to-Market propertiesand other subsidized developments that are atrisk of mortgage prepayment, opt-out, or subsidycontract expiration/termination, or thatoffer a potential opportunity for nonprofitacquisition.Intermediary Technical Assistance Grants(ITAG)In recent years, ITAG grants have been administeredby three regional intermediaries undercontract to HUD/OMHAR. 28 Applications havebeen accepted on a rolling basis. There arethree specific types of ITAG grants:Resident Capacity (RC) Grants. RC grants arefor project-specific advocacy, technical assistance,and training activities. Eligible applicantsare resident groups, resident councils, and community-baseddevelopment organizations. In2001, the maximum grant was $20,000.Public Entity Grants (PEG). PEGs are for all eligibleRC or PD activities, either project-specificor community-wide. Eligible applicants includepublic agencies, community action agencies,legal services organizations, and fair-housingagencies. In 2001, the maximum grant amountwas $20,000.Outreach & Training Grants (OTAG)OTAG grants have been provided to local andstatewide organizing and technical assistanceorganizations on a multi-year basis. 29 Potentialpreservation purchasers will want to workclosely with OTAG grantees to identify at-riskproperties and establish contacts with residentgroups.Legislation passed in 2001 reauthorizes ITAGand OTAG funding at $10 million per year. Atotal of $11.3 million has been appropriated forthe 2002 fiscal year, including $1.3 million earmarkedfor outstanding obligations to existinggrantees. In the fall of 2001, HUD suspendedtechnical assistance grants pending a review ofalleged deficiencies in its program administration.Although the funds technically exist, unresolvedissues relating to these claims and otherconstraints imposed by the appropriations acthave cast doubt on HUD's ability to make newfunds available during the 2002 fiscal year.Predevelopment (PD) Grants. PD grants are forproject-specific transaction costs related to apreservation purchase. Eligible applicants areresident councils and community-based developmentorganizations that are seeking to purchasethe property and have a binding commitmentfrom the seller. In 2001, the maximumgrant was $70,000.chapter two: Federal Preservation Tools21