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6 <br /> (3) Public service grants which: <br /> (i) Are for eligible public services not exempt under <br /> Section 58.34(a)(9); are provided for a new or increased level of <br /> service not previously supported by Title I provided <br /> by the recipient in accordance with Section 105(a) of <br /> Title I and 24 CFR 570.201(e)(1) . <br /> (ii) Affect only the social or economic environment and <br /> will not result in the development of service <br /> facilities or physical improvements regardless of <br /> source of funds. <br /> (iii) Are part of community development and housing projects <br /> funded in part or in whole under Title I and consisting solely of <br /> activities categorically excluded under this Section or exempt <br /> under Section. 58.34. <br /> xx (4) Rehabilitation of buildings and improvements under Section <br /> 17, or under Title I as set forth in 24 CFR 570.202 and 571 .202 <br /> except renovation of closed school buildings. However, these <br /> activities are categorically excluded only when the following <br /> conditions are met. <br /> (i) In the case of residential buildings: <br /> (A) Unit density is not increased more than 20 percent; <br /> (B) The project does not involve changes in land use from <br /> residential to nonresidential or from nonresidential to residential, or <br /> from one class of residential to another (for example, from single <br /> family attached dwellings to high-rise multiple dwelling units); and <br /> (C) The estimated cost of rehabilitation is less than 75 percent <br /> of the total estimated cost of replacement after rehabilitation. <br /> (ii) In the case of commercial and industrial <br /> rehabilitation activities: <br /> (A) The facilities and improvements acquired for continued use are <br /> in place and will be retained in the same use that existed at the time <br /> of acquisition without change in size, capacity or character, or <br /> 13 <br />