New Incentives for Multifamily Properties in Opportunity Zones Announced

On May 9, HUD announced new incentives for multifamily property owners applying for certain Federal Housing Administration (FHA) loans in Opportunity Zones. HUD will reduce FHA mortgage insurance application fees for multifamily market-rate transactions and for transactions that meet HUD’s definition of affordable or broadly affordable when the property is located in an Opportunity Zone. Established by the Tax Cuts and Jobs Act of 2017, Opportunity Zones are designated low-income census tracts that can provide incentives to encourage investment within their community. To date, 8,761 communities in all 50 states, Washington D.C., and five territories have been designated as Opportunity Zones. 

HUD is also improving the procedure for processing applications by designating HUD Senior Underwriters to process applications.

 

Proposed Rule Requires Verification of Eligible Immigration Status for HUD Assistance

Tomorrow, HUD will publish in the Federal Register a proposed rule titled “Housing and Community Development Act of 1980: Verification of Eligible Status.” This proposed rule purports to change how families with mixed immigration statuses receive prorated HUD assistance. Comments are due 60 days after publication.

Current Proration of HUD Assistance

Currently, families with a mixed status may apply for assistance by declaring that each member of the family is 1) a U.S. citizen or eligible non-citizen; or 2) decide not to contend eligible immigration status (and not submit verification documentation) for that member. Family members that declare themselves eligible must provide acceptable evidence of immigration status. Verification is provided through the Systematic Alien Verification for Entitlements (SAVE) system–administered by the Department of Homeland Security (DHS). The system saves the information of noncitizens. Assistance is then prorated such that only citizen-members (or eligible non-citizen-members) of families receive funding (excluding those who do not contend their eligible immigration status).

Proposed Changes

This proposed rule would make two changes to the current system. First, the proposed rule would require that all family members (except those over the age of 62) have their immigration status verified through SAVE (i.e., family members would no longer have the option to not contend their eligible immigration status). Under most covered programs, those who have not submitted evidence of eligible immigration status will be required to do so at their first regular reexamination.

Second, the proposed rule would specify that individuals that do not have a verified eligible immigration status may not serve as the head of household or spouse–i.e., the holder of the lease.

The pre-publication copy of the proposed rule can be found here.

The published in the Federal Register version can be found here (available 5/10/2019).

 

Guidance on Over-Income Implementation Process Released

On May 3rd, HUD released Notice PIH-2019-11 (HA) titled “Final Implementation of Public Housing Over-Income Limit Under the Housing Opportunity Through Modernization Act of 2016 (HOTMA).” The notice provides supplemental information on the implementation process for public housing income limits, which were codified through regulation last summer.

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HUD Publishes Notice on Treatment of ABLE Accounts

[5/6/2019 (12:58 PM ET) – The original version of this post linked to the wrong notice; the links have been corrected.]

In late April, HUD published a notice titled “Treatment of ABLE Accounts in HUD-Assisted Programs” (PIH 2019-09). The notice states that for the purpose of determining eligibility and continued occupancy, HUD and HUD program administrators  must disregard amounts in an individual’s Achieving Better Life Experience (ABLE) account. These accounts are established by states and allow for contributions to be made to the account to benefit the designated beneficiary for qualified disability expenses. According to the notice, “[t]he designated beneficiary must be a person with disabilities, whose disability began prior to [his, her, or their] 26th birthday and who meets the statutory eligibility requirements.”

The notice requires that the entire value of the ABLE account be excluded, including actual or imputed interest on the ABLE account balance. Additionally, distributions from the ABLE account are also not considered income.

Owners and PHAs should develop a policy and procedure for verifying ABLE accounts that obtains the following:

  • the name of the designated beneficiary; and
  • the State ABLE program administering the account to verify that the account qualifies as an ABLE account.

This notice applies to the public housing program; the housing choice voucher program; project-based section 8; Section 202/162 project assistance contract; Section 202 project rental assistance contract; Section 202 senior preservation rental assistance contracts; Section 811 project rental assistance contract; Section 811 project rental assistance; Section 236; and Section 221(d)(3) and Section 221(d)(5) below market interest rate.

The full notice can be found here.

HUD Releases Notice on Required Conversions

HUD recently released Notice PIH 2019-10 titled “Required Conversions.” Section 33 of the U.S. Housing Act requires PHAs to convert certain distressed public housing units to Section 8 tenant-based assistance if it would be more expensive to modernize and operate the distressed development for its remaining useful life than to provide tenant-based assistance to all residents; or if the PHA cannot assure the long-term viability of a distressed development. This Notice provides guidance on the requirement that PHAs annually review their inventories to determine whether any of their public housing developments (or parts of developments) meet the criteria for required conversion from public housing. This notice also provides guidance on developing a required conversion plan in such instances.

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HUD Posts New Sexual Harassment Training

The Department of Housing and Urban Development (HUD) has posted several new items related to sexual harassment training. The main sexual harassment training page on HUD Exchange can be found here. Resources include fact sheets, videos, and a training module.

Additional webinar training can be found below:

Webinar Title Date Time Registration Link
Preventing Harassment for PHA Residents & Voucher Program Participants Now until July 29, 2019 3:00-4:00 PM EDT Register to View Webcast
Preventing and Addressing Sexual and Other Discriminatory Harassment in Housing (for Private Housing Owners and Managers Participating in Voucher Programs) Now until July 29, 2019 3:00-4:00 PM EDT Register to View Webcast
Preventing and Addressing Sexual and Other Discriminatory Harassment in Housing (for PHA Employees) Now until July 29, 2019 3:00-4:00 PM EDT Register to View Webcast