HUD Issues Notice on FSS Escrow

On July 27, the Department of Housing and Urban Development issued Notice PIH-2022-20, which clarifies portions of the Family Self-Sufficiency (FSS) Program final rule. The final rule was published in May of this year and went into effect on June 17, 2022. The sections that are clarified in the notice cover the establishment of an escrow account for FSS participating families, the use of forfeited FSS escrow funds, and reporting requirements of financial data as related to FSS escrows.

The notice provides the following information summarized below:

Establishing an FSS Escrow Account

  • PHAs or owners are required to deposit FSS escrow funds of all families participating in an FSS program into a single interest-bearing depository account.
  • The escrow account may be part of the PHA or owner’s overall account or a separate account.
  • Funds deposited into either account must only be used for the purposes of escrow.
  • The total of the account funds must be supported by accounting records that show the balance applicable to each FSS participating family.

Forfeited FSS Escrow Funds

  • The final rule requires that all forfeited escrow funds be used by a PHA/owner to benefit any FSS participants in good standing with the program regardless of the original funding source.
  • The funds may only be used for activities such as transportation, child care, training, fees associated with employment or professional development, training for FSS Coordinators, and any other activities as determined by HUD.

Reporting Financial Data

  • PHAs that administer the Section 8 and/or Section 9 programs must submit annual financial data to HUD.
  • Data must be submitted electronically and be prepared in accordance with Generally Accepted Accounting Principles.
  • The FSS program provides an accounting brief that provides clarity for this process. The brief can be found here.

For more information, see the notice here.

CoC Program Competition Webinar

HUD will be hosting a Webinar on the FY 2022 Notice of Funding Opportunity (NOFO) for the Continuum of Care (CoC) Program Competition on August 11 from 2:30-4 PM ET. The webinar will highlight various parts of the CoC Competition process including: funding tiers, CoC application, and project application. Interested parties can join the webinar here. HUD posted the CoC NOFO on August 1. Applications are due September 30. The NOFO is available at grants.gov.

NHLP and PRRAC Document on Options to Increase HCV Payment Standards

The National Housing Law Project (NHLP) and the Poverty & Race Research Action Council (PRRAC) have written a document titled “New Options to Increase Housing Choice Voucher Payment Standards.” Typically, a PHA can set its payment standard at between 90% to 110% of the Fair Market Rent (FMR). This document provides information on instances where PHAs can set payment standards up to 120% (or use 50th percentile FMRs, which are set higher than normal FMRs).

The document provides the following summarized information on payment standards and FMRs (see the full document for details):

  • PHAs can establish payment standards higher than 110% when implementing a reasonable accommodation for a family that includes a person with a disability. The PHA may establish an exception payment standard up to 120%.
  • By request of a PHA, HUD may approve an exception payment start for a designated part of an FMR area (i.e., an exception area) where the total population of the HUD-approved exception area does not exceed 50% of the population of the area.
  • PHAs may request FMRs be calculated at the 50th percentile rent (normally FMRs are calculated at the 40th percentile rent–i.e., they are set so that about 40% of the available housing stock in a given geography is accessible to renters) to establish a higher success rate for their voucher program. The PHA will be able to set the payment standard at 90% to 110% of the 50th percentile rent.
  • In instances where the PHA previously had a 50th percentile FMR and now has a 40th percentile FMR, HUD may approve a payment standard amount based on the 50th percentile rent, if the PHA scored well on the SEMAP (Section Eight Management Assessment Program) deconcentration bonus indicator.
  • PHAs may be able to set payment standards up to 120% through the use of waivers in the Notice PIH 2022-09.
  • PHAs that voluntarily use Small Area FMRs can set a payment standard up to 120% of the Small Area FMR using Notice PIH 2022-09.
  • PHAs that mandatorily use Small Area FMRs can set a payment standard up to 120% of the Small Area FMR using Notice PIH 2022-09.
  • PHAs with Moving to Work (MTW) status can use their MTW flexibilities to set higher payment standards.

The document provides additional information and citations to the appropriate regulatory provisions and guidance documents.

The full document can be found here.

HUD Updates Two Energy-Saving Programs

On July 27th, HUD issued a press release with updates to programs affecting energy and utility usage, two of which may be of interest to PHAs: Community Solar Credits and the Small Rural Frozen Rolling Base program. Both can help PHAs support tenants by lowering the cost of energy.

Community Solar Power

Community Solar Power credits allow residents in a multifamily structure to opt to use power from community solar panels rather than having their own panels installed on their individual units. This model makes solar power more accessible and can lower tenants’ utility bills. HUD issued a national solar credit memo that applies to a number of rental assistance programs within Multifamily Housing. This memo is not the same information HUD recently provided to several states, which were implementing their own solar programs. This new national memo specifies the rental assistance programs eligible for community solar participation. Next, it defines how to determine the effect of community solar on utility allowances. And finally, it articulates how to incorporate or exclude solar credits in annual income calculations. The new community solar power memo can be found here.

Small Rural Frozen Rolling Base Utility Program

The Small Rural Frozen Rolling Base (SR-FRB) is the average amount of utility usage incorporated into the Public Housing Operating Fund formula. This program allows PHAs to capture average usage for their most recent three-year period and use this data in Operating Fund calculations for up to 20 years. Savings generated from using the SR-FRB in the formula and improving efficiency afterward may be used to support the public housing program. HUD has not released new guidance but rather has announced an “educational campaign” to encourage utilization of this program. Currently, HUD has provided PIH 2020-30, a list of eligible PHAs, and a list of properties that qualify for the Department of Energy’s Weatherization program. HUD states that the deadline to apply for the SR-FRB program is September 2022. Notice PIH 2020-30 can be found here. The list of eligible small and rural PHAs can be found here. Properties qualifying for the Department of Energy’s Weatherization program can be found here.

HUD’s press release including additional programs intended to lower electricity costs can be found here.

HCV CARES Act Funding Closeout for the HCV, Mainstream, and Mod. Rehab. Programs

On August 3, HUD published a notice titled “CARES Act Funding Reconciliation and Closeout – Housing Choice Voucher Program, Mainstream Vouchers, and Moderate Rehabilitation Program.” The notice describes the closeout procedures for funds received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act for the Housing Choice Voucher (HCV), the Mainstream, and the Moderate Rehabilitation (MR) programs. The period of availability for CARES Act funds ended on Dec. 31, 2021, but PHAs had 120 calendar days to “liquidate/disburse unliquidated obligations.” That 120 day period ended on April 30, 2022.

Housing agencies will receive a form SF-425 shortly and should follow instructions found in the appendix of the notice to fill out the form to report CARES Act related financial activity. The form is due Sept. 6, 2022 and should be emailed to HCVCARESActReconciliation@HUD.gov. Submitting this form will not remit amounts owed, which will be completed by the Housing Voucher Financial Management Division.

In certain scenarios, where there are unliquidated obligations that were disbursed after April 30, 2022, the PHA may issue a special request to HUD for an extension not later than Sept. 6, 2022.

Housing agencies should expect CARES Act closeout statements after they have submitted the required form.

The full notice may be found here.

FSS NOFO Released

HUD released its FY 2022 Family Self Sufficiency (FSS) Notice of Funding Opportunity on August 4. The FSS program provides grants to PHAs to support the salaries and training needs of FSS Program Coordinators who assist participating families receiving assistance through the Section 8 or Public Housing Program.

HUD’s FSS Final Rule was published on May 17 which made certain changes to program requirements related to program eligibility, escrow deposits, and supportive services. The rule also allows the Secretary to establish a funding formula and extends eligibility by allowing private owners of PBRA properties to voluntarily make an FSS program available to their tenants. 

Agencies will only be eligible for Renewal funding if the agency was funded under any of the FY 2021, FY 2020, and/or FY 2019 FSS NOFOs. PHAs that have not been funded for an FSS grant in any of the last 3 years and PBRA owners already implementing or wishing to implement an FSS program are eligible for funding after renewal funding is distributed. HUD expects to award 800 grants with an estimated total program funding of $113 million. Applications can be submitted through grants.gov.

Senate Holds Hearing on Rental Housing Affordability

This article was written by Richa Goel, NAHRO’s Legislative Affairs Intern.

As rents skyrocket across the country, many Americans are struggling to find safe, affordable housing. On August 2, the Senate Banking, Housing, and Urban Affairs Committee held a hearing to discuss the impact of today’s housing market on renters and communities.

Chairman Sen. Sherrod Brown (D-OH) opened by discussing the impact of housing shortages on renters:

“We’re 3.8 million homes short of what we need. Not a single state in the country has enough housing. For the lowest income renters, there are just 36 units affordable and available for every 100 renters who need them…this huge shortage of housing means renters have to make do with what they’ve got.”

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Treasury Announces New Steps to Increase Affordable Housing Supply and Lower Long-Term Housing Costs

On July 27, the Treasury Department released new guidance to increase the flexibility of how governments can use State and Local Fiscal Recovery Funds (SLFRF) to expand affordable housing in their areas. The new guidance:  

  1. “Increases flexibility to use SLFRF to fully finance long-term affordable housing loans” 
  1. “Expands presumptively eligible affordable housing uses to further maximize the availability of SLFRF funds for affordable housing” 
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Housing Bills Pass Committee Along Party Lines

This article was written by Richa Goel, NAHRO’s Legislative Affairs Intern.

The House Financial Services Committee held a markup on July 27 and July 28 that included multiple housing-related bills. Chairwoman Maxine Waters (D-CA) led the markup, overseeing amendments offered by committee members. Waters began the markup by offering a brief overview of the housing-related legislation:

“This markup includes a slate of bills to strengthen oversight of our country’s affordable housing and give communities the tools they need to address the homelessness crisis”

The “Studying Barriers to Housing Act” and “Housing Inspections Accountability Act of 2022” would increase transparency and oversight of affordable housing. The first bill would instruct the Government Accountability Office to produce a report about the barriers that make it difficult to address homelessness with Housing Choice Vouchers. The second bill would require HUD and the USDA to provide a joint report to Congress about failed inspections in public housing. Rep. John Rose (R-TN) proposed an amendment to require HUD and the EPA to also analyze the prevalence of superfund sites within one mile of public housing. Rose’s amendment did not pass. Both bills passed along party lines.

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Advancing Choice in the Housing Choice Voucher Program 

In May 2022, NYU researchers Ingrid Gould Ellen, Katherine O’Regan, and Katharine WH Harwood published “Advancing Choice in the Housing Choice Voucher Program: Source of Income Protections and Locational Outcomes”. This blog post summarizes the key findings from their paper, which explores how source of income (SOI) laws impact locational outcomes for housing choice voucher (HCV) holders.  

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