Housing Choice Vouchers (HCV)

Yesterday, the Trump administration released its proposed budget for the 2019 fiscal year. Overall, the budget proposes an $8.8 billion (18.3%) reduction in the HUD budget from the 2017 enacted level, a more drastic cut than the $6 billon HUD budget reduction the Administration proposed for fiscal year 2018. Significant proposals in the budget include:

  • Elimination of several programs including the Community Development Block Grant (CDBG), HOME Investment Partnership Program, Public Housing Capital Fund and Choice Neighborhoods
  • $17.5 billion in Section 8 annual contribution contract renewals (an $800+ million decrease from 2017 enacted level)
  • $10.866 billion in project-based rental assistance (a $50 million increase from the 2017 enacted level)
  • $110 million decrease in Housing Choice Voucher administrative fees
  • $100 million request for the Rental Assistance Demonstration (RAD) program to cover the incremental subsidy for public housing properties that would otherwise be unable to covert to Section 8 assistance
  • Proposed elimination of the unit cap for RAD conversions and September 30, 2020 deadline for RAD application submissions
  • In addition to the elimination of the Capital Fund, $1.7 billion in reductions to the Public Housing Operating Fund
  • $75 million request for the Family Self-Sufficiency program (same as 2017 enacted level)
  • $10 million request for the Jobs Plus Initiative (a $5 million decrease from the 2018 Senate recommendation)
  • Maintained funding levels for lead-based paint mitigation efforts
  • Unspecified funding request to evaluate and improve the EnVision Centers recently launched by Secretary Carson
  • $20 million increase to the Federal Housing Administration (FHA) operations (although a new fee would be imposed on FHA lenders)
  • Requirement that non-disabled persons receiving HUD assistance contribute more than 30% of their adjusted income to their housing costs

Other housing and community development components of this budget include an elimination of the Community Development Financial Institutions (CDFI) Fund grant and direct loan program, $1.8 billion request for veteran’s homelessness programs, and a funding increase for the U.S. Department of Agriculture (USDA) single family housing guaranteed loan program. A full copy of the budget proposal and related materials are available at be www.whitehouse.gov/omb/budget.

Remember that Congress is responsible for passing the budget; this is just a proposal. It remains to be seen if Congress will adopt the President’s proposal. We will continue to provide updates the budget throughout the appropriations process.

 

Comments on the following HUD and housing related guidance are due this month.

  • HOTMA implementation for Section 8 Voucher Programs – Due March 20, 2017

On January 18, 2017, HUD issued a proposed rule to implement certain sections of the Housing Opportunities through Modernization Act of 2016 (HOTMA) that affect the tenant-based Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) programs. Among other changes, the proposed rule amends the definition of public housing authority (PHA) owned housing, and institutes new provisions regarding housing quality inspection requirements for both the HCV and PBV programs. HUD is seeking public comment on a variety of questions surrounding the implementation requirements and future changes of both programs.

Comments may be submitted to HUD  electronically at www.regulations.gov (Docket No. FR-5976-N-03) or by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500.

  • Moving to Work (MTW) Demonstration Operations Notice – Due March 24, 2017

As noted in our previous blog post, HUD is soliciting comments to its Operations Notice for the expansion of the MTW Program. The full list of questions for which HUD seeks public comment is listed in Appendix C of the Notice. Comments can be submitted electronically at www.regulations.gov (Docket No. FR-5994-N-01)  or by mail to the same address noted above.

  • DOJ Proposed Rule amending Section 504 Regulations – Due March 20, 2017

On January 19, 2017, the U.S. Department of Justice (DOJ) issued a notice of proposed rulemaking to revise its regulations at 28 CFR Part 42 that implement Section 504 of the Rehabilitation Act of 1973. Section 504 prohibits discrimination based on disability in all programs and activities that receive federal financial assistance. Key revisions include amending the interpretation of the applicable definition of  “disability”;  updating accessibility standards for new construction and alteration of buildings and other facilities; and editing various provisions and terminology to promote consistency with judicial decisions and the Americans with Disabilities Act and related amendments.

Comments may be submitted to DOJ (1) electronically through www.regulations.gov (Docket No. OAG 154); (2) by regular mail to Disability Rights Section, Civil Rights Division, U.S. Department of Justice, P.O. Box 2885, Fairfax, VA 22031-0885; or (3) by overnight, courier, or hand delivery to Disability Rights Section, Civil Rights Division, U.S. Department of Justice, 1425 New York Avenue NW., Suite 4055, Washington, DC 20005.

The following lists additional housing news our readers may have missed recently —

  • Dr. Ben Carson Confirmed as HUD Secretary

On March 2, 2017, Dr. Ben Carson was sworn in as the 17th Secretary of the U.S. Department of Housing and Urban Development. According to  HUD’s press release, Secretary Carson intends to embark on a listening tour of various HUD field offices and communities throughout the country.

  • Affordable Housing Credit Improvement Act of 2017 introduced in U.S. Senate

In an effort to help reform the low-income housing tax credit, Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT) introduced the Affordable Housing Credit Improvement Act of 2017 (S. 548), along with several other Democratic and Republican co-sponsors on March 7th. The bill includes and expands upon similar legislation introduced by the Senators last year (S. 2962 and S. 3237). Visit the Affordable Housing Tax Credit Coalition’s S. 548 advocacy page for more in-depth summaries of the bill’s provisions and comparisons between the current bill and 2016 legislation. Interested persons can also track the bill’s progress at www.congress.gov.

  • Public Housing Authorities prevail in Operating Reserves Litigation

In late January, the United States Court of Federal Claims ruled in favor of approximately 350 public housing authorities on the merits of a motion for summary judgment against the U.S. Department of Housing and Urban Development (HUD). Led by housing industry groups, the complaint alleged that HUD breached its Annual Contributions Contract with the PHAs for fiscal year 2012 when the formula used for budget calculations and allocations did not property follow HUD regulations and thus reduced the operating fund subsidies the PHAs were eligible for in that year. A full copy of the Court’s decision can be accessed here.  Plaintiffs’ attorneys were advised to file a status report in February 2017 to advise how the Court should proceed with the case.

Earlier this month, the US Department of Housing and Urban Development (HUD) issued a number of final rules and notices as summarized below.

Final Rules

  • HUD Revises Lead-Based Paint Regulations

Effective on February 3, 2017, HUD’s final rule amends the agency’s Lead Safe Housing Rule currently at 24 CFR Part 35. Changes to the lead-based paint regulations include revising the definition of “elevated blood lead level” and establishing more rigorous testing procedures for assisted units housing children under age 6 with high blood lead levels.  Public housing authorities (PHAs) are required to comply with the updated lead-based paint policies and procedures by July 13, 2017.

  • HUD Final Rule on Broadband Infrastructure Requirement

On December 20, 2016, HUD issued a final rule requiring the installation of broadband infrastructure (i.e. cables, fiber optics, wireless infrastructure) whenever a multifamily rental housing property funded or supported by HUD undergoes new construction or substantial rehabilitation. While the rule applies to most HUD programs, compliance is not required if (i) broadband installation would result in fundamental alteration in the nature of the program or undue financial burden, (ii) installation is not feasible due to the location of the new construction or substantial rehabilitation, or (iii) installation is infeasible due to the structure of the housing being rehabilitated. Also exempted from the rule are multifamily rental housing properties only carrying a HUD-insured FHA mortgage or a HUD-guaranteed loan. HUD also issued a technical correction to the final rule on January 12th.

  • Federal Housing Administration (FHA) Strengthens Home Equity Conversion Mortgage Program (HECM)

HUD’s final rule codifies in full various changes to HECM program regulations and policies adopted pursuant to the Reverse Mortgage Stabilization Act of 2013 (Public Law 113-29), as well as additional guidance previously issued through assorted mortgagee letters under the Housing and Economic Recovery Act of 2008 (Public Law 110-89).  These changes become effective on September 19, 2017.

  • Freedom of Information Act  (FOIA) Amendment

Issued on January 12, 2017, this final rule implements the changes found in the FOIA Improvement Act of 2016 (Public Law 114- 185) as applied to HUD.

Notices

  • MTW Program Expansion Proposed Operations Notice

HUD is currently soliciting comments to its proposed Operations Notice for the Expansion of the Moving to Work (MTW) Demonstration program. The 2016 Appropriations Act (Public Law 114-113), authorized HUD to expand the MTW program by an additional 100 agencies over a seven year period.  As a first step of the expansion, HUD published this Operations Notice which proposes significant amendments to existing MTW program framework in an attempt to develop simplified approaches to administering housing assistance. Among other changes, the new MTW framework would grant certain general waivers to MTW agencies, and reduce data collection and reporting requirements. Comments are due by mail or electronically by March 24, 2017.

  • HUD Seeks Comments for MTW “Substantially Serving” Methodology

In another MTW related notice, HUD is currently seeking comments and recommendations for a revised methodology it will use to help measure the performance of MTW agencies. By statute, MTW agencies are required to assist substantially the same number of eligible low-income families as non-MTW agencies. HUD’s current methodology found in PIH Notice 2013-02 relies on historic public housing and housing choice voucher utilization rate data. New recommendations and comments to HUD’s proposed evaluation methods are due by February 21, 2017. Comments and recommendations may be delivered by mail or electronically to: Moving to Work Office, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4130, Washington, DC 20410–0001 or email at mtw-info@hud.gov.

This recent PIH notice establishes the verification procedures PHAs must take whenever  a potential or current resident request housing assistance as a result of being a VAWA self-petitioner.

  • Allocations and Other Guidance for CDBG Recovery Grantees

Effective as of January 23, 2017, this notice allocates Community Development Block Grant (CDBG) disaster recovery funds to multiple Southern states to assist with long-term recovery. The notice outlines specific state-by-state dollar allocations and amends the grant award and administration requirements previously published in Federal Register Notice 81 FR 83254.

On January 13, 2017, HUD announced the approval of the AFFH Assessment Tool to be used by PHAs. The notice also discusses changes made to the AFFH Assessment Tool based on public comments received. Notwithstanding this notice,  PHAs are not required to conduct or submit any assessments of fair housing until further written HUD guidance and data is provided.

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.

The U.S. Department of Housing and Urban Development (HUD) recently issued this letter to public housing authority (PHA) Executive Directors regarding the five self-implementing portions of the Housing Opportunities through Modernization Act (HOTMA) (Pub. L. 114-201) that was signed into law on July 29, 2016. According to this guidance, which is also expected to be transmitted through a Federal Register notice soon, the following HOTMA sections are effective immediately:

Section 102(d) – Reasonable Accommodation Payment Standards

Section 107 – Establishment of Fair Market Rent

Section 110 – Family Unification Program for Children Aging out of Foster Care

Section 113 – Preference for US Citizens or Nationals (applicable in Guam only)

Section 114 – Exception to Public Housing Agency Resident Board Membership Requirements (applicable to PHAs in specified jurisdictions)

As the letter points out, all remaining HOTMA sections impacting the housing choice voucher and public housing programs will only become effective upon HUD’s issuance of an applicable notice or regulation for those provisions. Until then, PHAs must continue operate under current housing regulations.

 

RoadEffective September 21, amendments to HUD’s Housing Choice Voucher (HCV) Program – the government’s largest program for assisting low-income, elderly, and disabled populations in the private housing market – will change the portability process. Portability enables a voucher holder to use the voucher assistance to move outside of the jurisdiction of the public housing authority (HA) that initially issued it. Unfortunately, the current portability regulations and guidance are often unwieldy for many HAs, and in some cases have led to disputes, delayed payments, and other unintended consquences.  HUD indicates that the amendments seek to better define the roles between HAs if the family moves into another PHA’s jurisdiction, improve billing arrangements in portability cases, and allow families to more easily lease and rent homes in their favored locations.  Hopefully, the new regulations will achieve HUD’s intended results.

The new regulatory provisions include the following changes:

  • Mandatory absorption (when HAs absorb the HCV into their own portfolio rather than bill the initial HA) requirements are removed; mandatory voucher suspension notifications are clarified.
  • HAs must notify local HUD offices within 10 days of any portability moves that were denied due to lack of funding.
  • Vouchers issued by the receiving HA to the family must be given expiration dates no less than 30 calendar days from the expiration of the initial HA voucher.
  • All parties involved in portability must be briefed on how portability works and the benefits of living in low-poverty areas.
  • Families are allowed to choose the receiving HA if they use portability.

Additional information, detailed regulations, and comments on HUD’s final rule is available.

RoadAs a follow up to our January 12, 2015 post, HUD published a proposed rule that seeks to alleviate administrative burdens and streamline requirements across the public housing, Section 8, and multifamily housing rental assistance programs. Many of HUD’s proposals stem from innovations implemented by Moving to Work (MTW) participants. The proposed rule makes these innovations available to non-MTW agencies and owners, which is particularly important in light of increasingly limited resources to serve low-income families.

Ballard Spahr’s comments to the proposed rule supports many of HUD’s proposals and suggests ways to further improve other proposals. We look forward to the next stage in the process and are hopeful the rule will lead to new ways of enhancing the delivery of services to the families living in the nation’s affordable housing stock.

RoadSection 243 of the FY2014 Appropriations Act for the United States Department of Housing and Urban Development authorized certain statutory changes to the United States Housing Act of 1937. HUD issued notices implementing these changes on May 19, 2014, and June 25, 2014. This proposed rule published in the Federal Register on January 6, 2015, begins the process of codifying the statutory changes which seek to alleviate administrative burdens and streamline requirements across HUD programs such as public housing,  Section 8, and multifamily housing rental assistance programs. The rule generally proposes the following:

Proposed Changes to Public Housing, Housing Choice Voucher, and Multifamily Program Regulations

  • Allows for easier verification of Social Security Numbers for children under 6 years old.
  • Re-defines “extremely low-income families” to a family whose income does not exceed the higher of 30% of area median income or the poverty level.
  • Re-defines “annual income” to either actual past income or projected income.
  • Permits exclusion of education fees in excess of tuition from the definition of income.
  • Streamlines the process for annual reexamination of annual income for families with 100% fixed income.

Proposed Changes to Public Housing and Housing Choice Voucher Program Regulations

  • Permits housing authorities to make utility reimbursements of $20 or less per quarter on a quarterly basis rather than a monthly basis.
  • Limits the Earned Income Disregard (EID) to 24 consecutive months from the date that a participant qualifies for the EID for programs other than HOPWA.  The rule would also afford PHAs discretion in phasing in rent increases during the second 12 month period, provided the participant has remained continually employed.
  • Permits housing authorities to accept a family’s declaration of assets under $5,000 without taking additional steps to verify the accuracy of the declaration.

Proposed Changes to Public Housing Program Regulations

  • Permits housing authorities to use flat rents for families that include members with and without citizenship or eligible immigration status.
  • Permits housing authorities to establish flat rents equal to no less than 80% of the applicable Fair Market Rents and to phase in the flat rents to the extent it would increase a family’s rent by more than 35% in any one year.
  • Permits tenants to provide self-certifications to demonstrate compliance with  community service requirements.
  • Streamlines grievance regulations with regard to informal settlements, grievance procedures for failure to request a hearing, and matters relating to transcripts, copies, and the conduct of the hearing.
  • Limits the number of vacant units eligible for operating subsidy to no more than 3% of the total units per project.

Proposed Changes to Housing Choice Voucher Program Regulations

  • Permits housing authorities to limit resident move-ins to assisted units certain days of the month, such as the first day of the month.
  • Permits housing authorities to conduct biennial inspections and rely on an inspection conducted in connection with another program.
  • Permits housing authorities to charge reasonable fees to an owner who indicates that a HQS violation has been fixed, but a reinspection indicates that the violation has not been fixed.
  • Permits housing authorities to approve a payment standard of no more than 120% of the Fair Market Rents without HUD approval if required as a reasonable accommodation for a family with a disabled member, provided the PHA conducts a rent reasonableness analysis.
  • Permits housing authorities to conform Housing Choice Voucher regulations to less prescriptive public housing regulations regarding interim examinations of income whenever a family member with income is added to an HCV family.
  • Permits utility allowances to be based on the size of the unit and either the type of the unit, as is currently required, or a streamlined version of “unit type”, limited to “attached” or “detached.”

Interested persons are invited to submit comments regarding the proposed rule. Comments are due on March 9, 2015 and must be submitted 1) by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500 or 2) by electronic submission at www.regulations.gov.  The January 6th notice identifies certain key areas for which HUD is most interested in receiving comments.

The NMTC is a great tool to finance temporary housing shelters and related facilities to combat chronic homelessness around the county.

Blanchet House of Hospitality – Portland, Oregon

In 2011, USBCDC, one of the largest New Markets Tax Credit investors, used the credit to finance a facility for Blanchet House of Hospitality, a social services nonprofit that provides three-meals-per-day, clothing and temporary shelter to the homeless and recovering addicts located in Portland, Oregon.  Blanchet House of Hospitality received commercial loans from U.S. Bank, investor equity from USBCDC, grants from the Portland Housing Bureau, and equity from a capital campaign to construct a $13,000,000 facility consisting of a commercial kitchen, dining facilities and transitional shelter and housing space for men with addictions, problems with unemployment or home and family problems.  To learn more about Blanchet House of Hospitality and to view photos of the finished product, please visit the Blanchet House website or this article.

Neighborhood Services Organization Bell Building – Detroit, Michigan

Neighborhood Services Organization of Detroit, Michigan used the New Markets Tax Credit and other sources of financing to renovate the historic Bell Building in Detroit in order to provide the NSO with an award-winning building that serves as its headquarters and 155 fully furnished, one-bedroom apartments for formerly chronically homeless adults.  The Bell Building also houses a health care clinic and facilities to provide mental health, addiction treatment, nutrition, financial literacy and other services for the needy and chronically homeless.  NSO estimates that the facility saves Detroit-area taxpayers more than $5,000,000 annually in costs of treatment for the chronically homeless.  The financing combined Low Income Housing Tax Credits, federal and state Historic and Brownfield tax credits, nearly $2,000,000 in NMTC allocation provided by CSH, and other sources of funds to contribute to the rehabilitation of the building.  Details about the Bell Building are avaialable on the NSO website.