• HUD Announces Nationwide Smoke-Free Policy in Public Housing

The most talked about HUD development this week has been Secretary Castro’s announcement on Wednesday, November 30th that HUD will require all public housing developments to be smoke-free environments. By early February, public housing agencies (PHAs) must implement smoke-free policies that ban listed prohibited tobacco products from public housing living units, indoor common areas, PHA administrative office buildings, and outdoor areas within 25 feet of these spaces. This rule will apply to all public housing, with the exception of Section 8 dwelling units in mixed-finance buildings.

HUD’s Final Rule can be accessed here.

  • HUD Soliciting Comments on HOTMA Public Housing Income Limit Provisions

This week, HUD also published a Federal Register notice that it is soliciting comments on the implementation of the public housing income provisions of the Housing Opportunities through Modernization Act (HOTMA). HOTMA mandates that once a family’s income exceeds 120 percent of the area median income for two consecutive years, the PHA must either terminate the tenancy or charge the family a higher monthly rent. HUD maintains the authority to adjust the 120 percent threshold if the HUD Secretary finds such adjustment necessary.

HUD requests that comments address:

  1.  whether HUD’s current proposed method of determining income limits (as stated in the notice) adequately considers local housing costs and makes appropriate adjustments for higher housing costs, and
  2. other factors HUD should consider when determining whether to make adjustments to the income limit (with specific examples of circumstances not currently captured in HUD’s proposed methodology).

Ballard Spahr’s Housing Group previously commented on HUD’s Advance Notice of Proposed Rulemaking on public housing income limits in March, before HOTMA’s passage.

  • HUD Interim Final Rule on HOME Program Commitment Requirement Changes

By statute, participating HOME Investment Partnership (HOME) jurisdictions must place grant funds under binding commitments within 24 months from the month in which the grant agreement was executed. On December 2, 2016, HUD published an Interim Final Rule changing the way the agency will determine compliance with the commitment requirement. The Rule revises HUD’s longstanding cumulative commitment methodology with a grant specific one that allows participating jurisdictions to select the year HOME grant funds will be committed to a specific project or activity. The Rule also eliminates the 5-year deadline for expenditures of HOME funds appropriated for FY 2015 and following years to better align with recent appropriations statutes and existing HUD deadlines for completing projects assisted with HOME funds.

This Rule affects HOME grants from Fiscal Year 2015 and beyond, and is scheduled to take effect on January 31, 2017. HUD is accepting comments to the interim rule until January 3, 2017 by mail or electronic submission through www.regulations.gov.

 

HUD has been quite active this month publishing a variety of new rules and housing notices. The following is a list of some of HUD’s most recent guidance.

For certain public housing authorities (PHAs) with less than 250 public housing dwelling units, this notice offers guidance on the flexible uses of capital and operating funds for large improvements and other eligible expenditures.

For certain metropolitan areas experiencing high housing choice voucher (HCV) concentrations, this final rule allows rents to be determined by zip codes instead of the 50th percentile formula for the entire metropolitan area. According to HUD, using zip codes to define the Small Area Fair Market Rent (FMR)  will allow the agency to provide a more accurate subsidy to reduce the number of voucher families residing in areas of high poverty concentration. The rule also implements the Housing Opportunity through Modernization Act of 2016 (HOTMA) provisions related to FMRs and regulatory changes to the HCV program payment standard adjustments.

This rule amends HUD regulations to include the requirements of the 2013 reauthorization of the Violence Against Women Act (VAWA), which extended VAWA protectections beyond public housing to tenant-based and project-based Section 8 programs as well.

See our recent blog post for more detailed information on these updated RAD civil rights and reolocation requirements.

This PIH notice discusses revisions to form HUD-52725 used to report executive compensation. For calendar year 2015 compensation data collection, PHAs must complete the HUD-52725 form online and submit it electronically by December 9, 2016.

On a case by case basis, HUD will allow for the amendment and restatement of a property’s LIHPRHA Use Agreement to allow the project owner to receive proceeds from the refinance of the property, unlimited annual distributions from surplus cash, and funds accumulated in a residual receipts account. This notice outlines the circumstances under which HUD will allow such amendment and restatement, and approve LIHPRHA preservation transactions.

Pursuant to this notice, HUD allocated $500 million in CDBG-DR funds to assist long-term recovery efforts in Louisiana, Texas, and West Virginia. The notice also outlines the grant award process, and describes eligible disaster recovery activities, alternative requirements, and applicable waivers available to potential grantees.

This rule extends HUD’s equal access protections to HUD’s Native American and Native Hawaiian program regulations to ensure that eligible persons and families have access to housing programs regardless of sexual orientation, gender identity, or marital status.

 

HUD has issued a Federal Register Notice offering initial implementation guidance for the Housing Opportunities through Modernization Act of 2016 (HOTMA) (Pub. L. 114-201). The notice highlighted both the HOTMA provisions that are self-implementing or otherwise already in effect, and outlined certain key HOTMA provisions that will require further action by HUD.

In addition to the five self-implementing HOTMA provisions noted in our previous blog post, the following HOTMA provisions are also currently in effect due to prior HUD rulemaking or notices:

  • Section 402: Inclusion of Public Housing Agencies (PHAs) and Local Development Authorities in Emergency Solutions Grants (ESG)
  • Section 501: Inclusion of Disaster Housing Assistance Program in Certain Fraud and Abuse Prevention Measures
  • Section 502: Energy Efficiency Requirements under the Self-Help Homeownership Opportunity Program
  • Section 701: Formula and Terms for Allocations to Prevent Homelessness for Individuals Living with HIV or AIDS

In addition to clarifying which HOTMA sections are immediately applicable, the notice also highlights guidance that PHAs and other housing providers can expect from HUD in the future. This guidance includes, but is not limited to, the following topics:

  • PHA discretion in applying different payment standards for family subsidy calculations when fair market rents have decreased
  • Improving coordination between PHAs and public child welfare agencies to carry out the Family Unification Program
  • Conditions and requirements for subawarding ESG funds to PHAs and local redevelopment authorities
  • Changes to the allocation formula for the Housing Opportunities for Persons with AIDS (HOPWA) program, and forthcoming HUD regulations on the reallocation of HOPWA funds to alternative grantees
  • Annual adjusted income caps for public housing tenancy, and regulations outlining subsidy calculations for over-income families remaining in their units
  • Funding Capital Fund Replacement Reserves, caps for capital improvements, plus accounting and reporting requirements for replacement reserve funds
  • Forthcoming Mortgagee Letter to establish specific percentages of owner-occupied units in FHA-insured condominiums

Part IV of the notice also discusses the type of implementation action HUD is considering for the HOTMA sections that require further rulemaking or guidance.  We will continue to monitor HOTMA’s implementation across various HUD programs.

On July 29, 2016, President Obama officially signed H.R. 3700- Housing Opportunities through Modernization Act of 2016 (“HOTMA”). Our previous blog post highlighted some of HOTMA’s most significant changes to the current housing choice voucher program. The Section 8 and public housing components of the bill will become effective upon the issuance of notice or other regulation from the U.S. Department of Housing and Urban Development.

On July 19, 2016, bill H.R. 3700, more commonly known as the Housing Opportunities through Modernization Act of 2016 (“HOTMA”), was presented to President Obama for signature after being unanimously approved by the U.S. Senate on July 14th. First introduced in October 2015, the bipartisan bill previously passed in the U.S. House of Representatives back in February of this year. Although HOTMA touches on a variety of housing issues such as veteran’s assistance, rural housing, and mortgage insurance, the bulk of the legislation deals with reforms to the Section 8 housing choice voucher (“HCV”) program and public housing. Some of HOTMA’s most notable proposed changes to the current HCV statute include:

  • Extending the length of project based voucher (“PBV”) initial contract or extension terms from 15 to 20 years;
  • Adjusting the total allowable number of PBV assisted units in a project to the greater of 25 units or 25% of all dwelling units;
  • Modifying procedures to determine tenant income and tenant rents;
  • Allowing greater flexibility in awarding and administering PBV contracts; and
  • Simplifying initial inspection procedures.

The full text of the bill can be found here. As of Monday July 25th, the bill has not yet been signed, but signature is expected shortly. Ballard Spahr will continue to monitor this legislation and related regulatory updates to come.