SECTION 202 LOCAL APPLICATION PACKAGE SUPPORTIVE

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SECTION 202LOCAL APPLICATION PACKAGESUPPORTIVE HOUSINGFOR THE ELDERLYRegion X Seattle Multifamily Hub909 1st Avenue, Suite 190Seattle, Washington 98104-1000Prepared October 2009

CONTENTSINTRODUCTION . 3Eligible Applicants . 5Tenants. 5Types Of Financing . 5Development Methods . 6Types of Housing . 6Supportive Services . 7Housing Consultants . 7SECTION II. THIS YEAR'S FUNDING . 8Allocation Areas . 8Number And Types Of Units . 9SECTION III. PROJECT REQUIREMENTS . 9Financial Obligations . 9Relocation . 10Management And Maintenance Services . 10Supportive Service Plans. 10Environmental Concerns – Specific To Region X . 11Sole Source Aquifers . 12Coastal Zone Management . 12Consolidated Plan. 13Single Point Of Contact (Spoc) . 13Logic Model . 13Energy Conservation –Recommended . 13SECTION IV. SUBMISSION REQUIREMENTS FOR A . 14SECTION 202 FUND RESERVATION . 14Content And Form Of Application Submission . 14Faxing Documents . 14SECTION V. HOW TO HAVE A WINNING APPLICATION . 15Suggestions To Improve The Application . 15Common Mistakes Made By Sponsors . 15AttachmentsI. Schedule of Development Cost LimitsII. Consolidated Plan ContactsIII. State Historic Preservation OfficesIV. Energy Conservation Resources2

INTRODUCTIONWe appreciate your interest in the Section 202 program. The Section 202 Capital Advance Programfunds the construction, substantial rehabilitation, or acquisition of housing for very low-income elderly persons.Ongoing operation of the housing is assisted by a project rental assistance contract pursuant to the Housing Actof 1959, as amended by Section 801 of the National Affordable Housing Act.The intent of this Local Application Package is to complement the SuperNOFA (Notice of FundingAvailability) for this program. The SuperNOFA is available on the Internet through the HUD web site .cfm.If you would like to be placed on the Region X Section 202 Program mailing list, please send an emailmessage to Kristine.Martin @hud.gov Please include your organization’s name, contact person, and contactinformation including address, phone number, fax number, and email address.Grants Available under the 2009 SuperNOFAIn 2009, most HUD grant programs are consolidated in one SuperNOFA. Application and submissionrequirements that apply to all programs are identified in the General Section. Program specific requirementsand submission dates are published in each Program NOFA. Please be sure you read BOTH the GeneralSection and the Program NOFA, as instructions may have changed considerably.Submission Procedures:Electronic submission continues to be mandatory unless the applicant receives a written waiver ofthis regulatory requirement. Procedures for obtaining a waiver are contained in “Section IV, Application andSubmission Information” of the General Section and “Section IV, Application and Receipt Instructions” of the202 NOFA.In order to apply electronically, you must be registered. Applicants are required to complete a five-stepregistration process in order to submit their applications electronically and previously registered applicants mustannually update their information in the Central Contractor Registration (CCR) for the registration to remainviable. HUD has developed brochures and guidance to assist applicants with the registration, CCR update, andapplication processes. The Step by Step: Your Guide to Registration Brochure will assist you in the processof registering for the first time and the process of renewing current registration. The Find/Apply Brochureprovides further assistance to find and apply for grants. HUD has also prepared a Desktop User's Guide forsubmitting Electronic Grant Applications. This Guide provides detailed step-by-step screen shots of theGrants.gov registration, and the Find/Apply process. These resources can be found .cfmDue to the mandatory on-line submission, each funding opportunity will be posted on Grants.gov.Applicants must download both the Application Instructions and the Application Package. Instructions on Howto Download an Application Package and Application Instructions can be found in the General Sectionpublished in the Federal Register on December 29, 2008 (pgs 79555-79571), Amendments to the GeneralSection published in the Federal Register on April 16, 2009, (pg 17686) and the 202 NOFA, “Section IV.Application and Receipt Instructions”.There have been substantial changes in the application and development process in recent years. Failureto meet HUD requirements will result in rejection of the application. Before preparing your application, youshould carefully review this document and the following regulations and HUD issuances.3

·General Section NOFA: Notice of HUD’s Fiscal Year (FY) 2009 Notice of Funding Availability(NOFA): Policy Requirements and General Section to the FY 2009 SuperNOFA for HUD’sDiscretionary Programs. Federal Register – Vol. 73, No. 249, December 29, 2008.·Amendment to Application Submission Requirements and Other Technical Corrections. FederalRegister – Vol. 74, No. 72. April 16, 2009.·Notice of Funding Availability (NOFA) for HUD’s Fiscal Year 2009 Section 202 SupportiveHousing for the Elderly. Funding Opportunity Number: FR-5300-N-21. (Known as “the 202NOFA”) Available online at c202e.cfm.·Section 202 Regulations, Title 24 Code of Federal Regulations, Part 891 Subparts A, B, D and F.Available online at ·HUD Handbook 4571.3, REV-1, "Section 202 Supportive Housing for the Elderly” (April 9, 1993),particularly Chapters 1 and 2. Available online at ·Other Section 202 Guidance used after fund reservation is awarded Notice H 96-102 (HUD), “Redesigned Section 202 Supportive Housing for the Elderly andSection 811 Supportive Housing for Persons with Disabilities Programs - FirmCommitment Processing to Final Closing.” November 26, 1996. As extended.Handbook 4571.5 - “Supportive Housing for the Elderly, Conditional Commitment toFinal Closing”, July 1992.PLEASE NOTE:The published Notice of Funding Availability (NOFA) document is the officialdocument that HUD uses to solicit applications. If there is a discrepancy between anymaterials published by HUD in its Federal Register publications and otherinformation provided in paper copy, electronic copy, or at www.grants.gov, the NOFAdocument prevails.If additional local information is required, please contact Ruth Curtis, Region X NOFACoordinator, at 971-222-2646 or by email at Ruth.Curtis@hud.gov4

SECTION I. THE SECTION 202 PROGRAMHUD's Section 202 program is designed to provide financing to assist private nonprofit organizations inthe development of housing to serve the very low-income elderly. It is combined with an operating assistancepayment program that subsidizes the difference between the tenants’ contributions toward rent (30 percent ofadjusted income) and cost of operating the project.It is a competitive program. Each year HUD accepts project applications from various nonprofitorganizations. Only a portion of the applications received are funded.Eligible ApplicantsTo be funded, an applicant must show: it is experienced in providing services to the elderly, there is a need for the project, there is support for the project, the proposed project meets specific design and site standards, and appropriate services will be provided.Only private nonprofit organizations or nonprofit consumer cooperatives, that meet the thresholdrequirements contained in the General Section and Section III.C.2 of the 202 NOFA, may apply for the Section202 program. Public bodies and instrumentalities of a public body are not eligible to participate in the program.TenantsTenants of the project must be very low-income households composed of one or more persons, one ofwhom is 62 years of age or older. "Very low-income" is considered to be 50 percent of the median householdincome for an area. No restrictions due to race, creed, color, national origin, or sex are allowed.Types Of Financing1. Capital AdvanceIf selected. HUD will provide funding in the form of a “Capital Advance” to cover the cost ofdevelopment based on development cost limits published periodically in the Federal Register. Repayment of theadvance (with interest) is not required as long as the housing remains available for occupancy by the very lowincome elderly for 40 years. The capital advance will be the lesser of:a. The audited total development cost; orb. The development cost limit reserved for the project which is based on the size of the project andits location (See Attachments I).A capital advance that involves a project to be rehabilitated is subject to additional limitations asaddressed in the 202 Handbook.Projects that incur actual development costs less than the amount of the initial fund reservation shall beentitled to retain 50 percent of the savings in a replacement reserve account or 75 percent of the savings if theproject contains energy efficient features.2. Project Rental AssistanceProject rental assistance is also supplied to cover the difference between the HUD-approved operatingcost per unit and 30 percent of the resident's adjusted income. The term of the Project Rental Assistance5

Contract (PRAC) is three years. HUD will reserve PRAC funds based on 75 percent of the current operatingcost standards. This takes into account the average tenant contribution toward rent. HUD anticipates that at theend of the contract term, renewals will be approved subject to the availability of funds.Development MethodsThe following development methods are allowed under the program:New construction,Substantial Rehabilitation, andAcquisition with or without rehabilitation.202 capital advance funds may also be used in combination with low income housing tax credits todevelop a “mixed-finance” project, which may or may not include additional units for the elderly over andabove the Section 202 units.The development of a mixed-use project in which the Section 202 units are mortgaged separately fromthe other uses of the structure is not considered a mixed finance project. Also, the use of other funding sourcessuch as HOME funds or CDBG funds does not make a project a mixed-finance project. Only the use of taxcredits makes a project a mixed-finance project.Types of HousingProjects under the Section 202 program must consist of rental housing structures with efficienciesand/or one-bedroom units. Each unit must contain a full kitchen and bathroom. The project must include apercentage of accessible units in accordance with state and local codes and HUD regulations (24 CFR891.120(b). A manager’s unit consisting of up to two-bedrooms may be included.The following types of housing are unacceptable:Nursing homes, infirmaries, intermediate care facilities, medical facilities, mobile homes, communitycenters, headquarters for organizations for the elderly, residential units without kitchens and/orbathrooms, projects licensed or to be licensed as assisted living facilities.Refinancing of sponsor-owned facilities without rehabilitation is not allowed. Housing that the applicantowns or leases that is occupied by elderly persons is also not eligible.Property RequirementsSponsors of 202 housing projects must have site control at the time of application submission. Acceptableevidence of site control is limited to the following:1. A deed or long-term leasehold in the sponsor’s name. Term of lease must be at least 50 years and berenewable for another 25 years, except for sites on Indian trust land, in which case, the term of the leasemust be at least 50 years with no requirement for extensions.2. A contract of sale for the site. The only condition on the sale can be your receipt and acceptance of thecapital advance. Conditions limiting the use of the site to low-income housing are not acceptable. Thecontract of sale cannot require closing earlier than the Section 202 closing, which should occur no morethan 18 months from when funding announcements are made.6

3. An option agreement to purchase or for a long-term leasehold which must remain in effect for sixmonths from the date on which the applications are due, and must be renewable. It must state a firmprice. The only condition on which the option may be terminated is if the project is not awarded a fundreservation.Additional conditions apply to sites covered by a mortgage under a HUD program or sites to beacquired from a public body. Please review the Program NOFA for specifics.Supportive ServicesSupportive services are essential to enable the elderly to enjoy a stable living environment. Sponsorsmust arrange for the provision and funding of these services appropriate to the assessed needs of the residents.Project rental assistance (not to exceed 15 per unit/per month) can also cover a portion of the supportiveservice expenses and the employment of a service coordinator in those projects serving the frail elderly.Housing ConsultantsThe use of professional housing consultants to help with the development of the project is highlyrecommended. The fees of a HUD-approved consultant will be included in the project replacement cost. See theGeneral Section of the NOFA, Federal Register published December 28, 2008, page 79553 (third column)regarding salary limitations for consultants.A good, experienced consultant will save the sponsor time and money. However, the quality ofconsultants varies widely. HUD cannot recommend consultants so be sure to investigate a potential consultantthoroughly. Suggested questions to ask are listed below:1. How many 202/811 Capital Advance Program projects have you personally served as the primeConsultant and taken a project from Fund Reservation through Final Closing? Is your experience withinthe last 3 years? What HUD offices have you worked with?2.Within the last 5 years, how many "firm commitment applications" were you able to deliver to HUDwithin 180 days from the date of the notification of selection letter? Were any time extensions given? Ifso, explain.3. Within the last 5 years, how many initial closings have you completed? Of these, how many werecompleted within 18 months from the date of the notification letter? Explain.4. Within the last 5 years, how many projects were you able to bring to final closing? Of those, how manywere completed within 6 months of construction completion? Explain.5. Do you attend HUD SuperNOFA Workshops? What was the most recent workshop you attended?6. Who in the firm will actually be working on the application? What is their experience?7

SECTION II. THIS YEAR'S FUNDINGAllocation AreasThe allocations for each local HUD office are divided into units designated for Metropolitan and Nonmetropolitan areas.OREGON ALLOCATIONNote: Includes Oregon, Idaho and three counties in WashingtonMETRO CountiesOregonIdahoWashingtonMultnomah, Clackamas, Columbia, Washington, Marion, Polk, Lane,Jackson, Yamhill, BentonAda, Boise, Canyon, OwyheeGem ,KootenaiBonneville, JeffersonNez PerceFranklinBannock, PowerClarkNON-METRO CountiesOregonAll counties not listed aboveIdahoAll counties not listed aboveWashingtonKlickitat, SkamaniaWASHINGTON ALLOCATIONNote: Clark, Klickitat and Skamania Counties are part of the Oregon AllocationMETRO CountiesWashingtonBenton, Franklin, King, Kitsap, Pierce, Snohomish, Spokane Thurston,Whatcom, Island, and YakimaNON-METRO CountiesWashingtonAll other countiesALASKA ALLOCATIONMETRO AreasAlaskaCBSA: Anchorage, AK HMFA , AnchorageSA: Matanuska-Susitna Borough, AK HMFA, Matanuska-Susitna, CBSA:Fairbanks, AK MSA, Fairbanks North StarNON-METRO CountiesAlaskaAleutians East, Aleutians West, Bethel, Bristol Bay, Denali,Dillingham, Haines, Juneau, Kenai Peninsula, Ketchikan Gateway, KodiakIsland, Lake and Peninsula, Nome, North Slope, Northwest Arctic, Prince ofWales-Outer Ket, Sitka, Skagway-Hoonah-Angoon, Southeast Fairbanks,Valdez-Cordova, Wade Hampton, Wrangell-Petersburg, Yakutat, YukonKoyukuk8

Number And Types Of UnitsThe total number of units allocated to the Region X areas are:OREGON/IDAHOAreaNumber of UnitsDollar AmountMetro42 5,311,176Non-Metro13 1,560,104WASHINGTONAreaNumber of UnitsDollar AmountMetro55 8,245,246Non-Metro10 1,439,496ALASKAAreaNumber of UnitsDollar AmountMetro20 4,362,984Non-Metro5 1,090,746The actual number of units funded will be subject to the availability of Section 202 Capital Advance andProject Rental Assistance funds unused in other areas.Any non-revenue producing unit proposed for a project must be included within the total units of anapplication. For example, if a project is selected for 27 units, it is expected that, if a non-revenue unit (i.e.,resident manager's unit) is included, the configuration would be 26 revenue units and 1 non-revenue unit.Additions of non-revenue units at a later stage of processing will not be accepted.An application for a project will be rejected if it exceeds the maximum number of units available for thelocal HUD office area or is for less than 5 units per site. If the proposed project will be a scattered-sitedevelopment, the five unit minimum requirement will apply to each site.SECTION III. PROJECT REQUIREMENTSFinancial ObligationsSelected applicants receive Capital Advance funding which covers most of the cost of the project;however, the Owner does have some financial obligations. The Sponsor must have the money or have access tomoney to meet those obligations. The Sponsor makes such a commitment by signing the Form HUD-92042,Sponsor’s Resolution for Commitment to Project in Exhibit 8(g) of the application found in Section IV.B.Sponsors must provide a minimum capital investment of one-half of one percent of the HUD-approvedcapital advance amount, not to exceed 10,000, with the following exception. If you, as Sponsor or Co-sponsor,have one or more Section 202 or one or more Section 811 project(s) under reservation, construction, ormanagement in two or more different HUD geographical regions (Hubs), the minimum capital investment shallbe one half of one percent of the HUD-approved capital advance amount, not to exceed 25,000. This amountwill be returned to the Owner if the project reaches final closing within a reasonable period after construction iscompleted. Funds for this minimum capital investment may not be borrowed, nor may letters of credit be used.9

Additional funds may be required as follows:1. Front-end money for expenses prior to the initial closing of the project. This will include such items asarchitect fees, survey fees, appraisal, etc. Most of these items will be reimbursed after initial closing.2. Incremental development and operational cost of project costs of amenities not eligible to be included inthe capital advances or the project rental assistance contract.3. Necessary off-site drives, road improvements, walkways, etc., which may not be included in the capitaladvance.4. Demolition of structures on the site.5. Unforeseen expenses incurred during construction or operation of the project.6. Supportive services.RelocationAll HUD-assisted programs are subject to the Uniform Relocation Assistance and Real PropertyAcquisition Policies Act of 1970, as amended, and the implementing government–wide regulation at 49 CFRpart 24, and 24 CFR 891.555(e). The URA’s protections and assistance apply to acquisitions of real propertyand displacements resulting from acquisition, rehabilitation, or demolition of real property for federal orfederally assisted programs or projects. Please see the General Section - Federal Register published December29, 2008, page 79552 and the 202 NOFA.Evidence of compliance with this advance notice requirement must be included in Exhibit 4(d)(iv) ofyour application. An appraisal is not required to meet this requirement; however, your files must include anexplanation, with reasonable evidence, of the basis for the estimate. PLEASE NOTE – A certification for thisrequirement is not sufficient. Evidence must be submitted to meet this requirement.When the acquired property is currently or has been occupied or leased by any person or business,relocation requirements are a consideration. The only exception would be a property listed for sale, occupied byowners, if they receive the required notice. Relocation requirements are very technical and complicated.Accordingly, if the site of a proposed project is occupied, the applicant should contact the HUD OfficeRelocation Specialist before the application is submitted. Relocation can be very expensive, particularly if it isnot planned and conducted in an efficient, timely manner.Management And Maintenance ServicesThe project’s owner is required to provide (or contract to have provided) all the management andmaintenance services typical in the area for the type of housing contemplated.Supportive Service PlansIn addition to housing, appropriate supportive services must be provided for Section 202 housingresidents, especially for the frail elderly. Applicants are required to include a Supportive Services Plandescribing the supportive services proposed for the anticipated occupants, including an accounting of the publicor private funds expected to fund the proposed services and an explanation of the manner in which the serviceswill be provided to the proposed residents (see Exhibit 5 in Section IV.B. of the 202 NOFA). Residents are notrequired to accept any supportive services as a condition of occupancy or admission.10

Environmental Concerns – Specific To Region XUnder 24 CFR Part 50, HUD has the responsibility for conducting the environmental reviews. HUD willcommence the environmental review of each project upon receipt of the completed application. However HUDcannot approve any site unless it first completes the environmental review and finds that the site meets itsenvironmental requirements within the time period allocated for application processing. To better understandthe type of information HUD needs for its preparation of the environmental review, the information requests thatHUD may make to applicants, and the criteria that HUD uses to determine the environmental acceptability of asite, please go to the following web site to view the HUD form 4128, including the Sample Field NotesChecklist, which HUD uses to record the environmental ms/files/4128.pdfThe following outlines information needed in order to complete the environmental review in Region X:Historic Preservation/Section 106 complianceThe applicant is required to send a letter to the State/Tribal Historic Preservation Officer (SHPO/THPO) toinitiate consultation with their office and request a review of your determinations and findings with respect tothe historical significance of your proposed project. A sample letter to the SHPO/THPO that you may adapt foryour use is available on HUD’s website at fm You mustinclude a copy of your letter to the SHPO/THPO in your application and copy of the response letter(s) receivedfrom the SHPO/THPO or a statement that you have not received a response letter(s) from the SHPO/THPO. SeeAttachment III for a list of State Historic Preservation Offices (SHPO).Washington State: Please use form EZ-1 for new construction and form EZ-2 and/or EZ-3 for rehab ofexisting facilities in lieu of the sample SHPO letter on the Section 202 Program NOFA webpage. Findthe forms here: alReview.htmOregon: Please contact SHPO to determine the appropriate form to use for your vation 106.shtmlIdaho and Alaska: Please use sample SHPO letter that can be found on the HUD Funds Available website at: c202e.cfmContacting Tribes for Historic and Cultural ResourcesAll states: In the Northwest, HUD must contact tribes for all ground disturbing activities. As such, HUD willcontact tribes once applications are received. To assist HUD in this process, please attach to theapplication the sample SHPO/THPO Letter that can be found on the Program NOFA webpage psec202e.cfmInclude in the attached letter the following information about the project:Description of project and area that it may affect (area of potential affect) (example: Theproposed project is located within the new Hope VI redevelopment project in the WhiteCenter area of Seattle)What HUD funds will be used for, what other funds are in the project.(Example: The HUD funds will be used for site purchase and construction costs of an 82unit apartment building.)Current description of project.Street address and legal address (Section/Township/Range).Pictures and a topozone map of the site.11

Endangered Species ActThe Program NOFA and General Section indicate compliance with Endangered Species laws is necessary. Twoseparate Federal Agencies are in charge of Endangered Species clearance: the U.S. Fish & Wildlife, and theNational Marine Fisheries Service. In Western Washington, these agencies require a Biological Assessment besubmitted. If your site is located in Western Washington and the application package does not contain aBiological Assessment, HUD cannot obtain the required clearance from those agencies and we cannot complywith the law.Western Washington: Projects should follow the Endangered Species Protocol found ndangeredspeciesprotocol.pdfAll Region X states: Projects should include a species list for their project and a discussion of efforts toreduce impacts, particularly with respect to storm water runoff.Sole Source AquifersAll Region X states: Please determine if your project will be located on a sole source aquifer or streamflow source area using the following s/qrg ssamap 7110006be3a9/ FILE/Troutdale%20SSA%20Support%20Doc.pdfIf your site is on one of these areas, please complete and submit the following checklist (includingback

202 capital advance funds may also be used in combination with low income housing tax credits to develop a “mixed-finance” project, which may or may not include additional units for the elderly over and above the Section 202 units. The development of a mixed-use project in which the Section 202 units are mortgaged separately fromFile Size: 716KB

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