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Administrative Plan 7/1/2025 Page 17-5 <br />Substantial improvement is one of the following activities undertaken at a time beginning from <br />the proposal submission date (for projects subject to competitive selection) or from the project <br />selection date (for projects excepted from competitive selection), or undertaken during the term <br />of the PBV HAP contract: <br /> Remodeling that alters the nature or type of housing units in a project; <br /> Reconstruction; or <br />A substantial improvement in the quality or kind of equipment and materials. The <br />replacement of equipment and/or materials rendered unsatisfactory because of normal wear <br />and tear by items of substantially the same kind does not constitute substantial improvement. <br />EXHIBIT 1