The Senate Committee of Banking, Housing, and Urban Affairs voted unanimously to send HUD Secretary-Designate Ben Carson to the Senate floor for a confirmation vote this morning. No word yet on when the full Senate will vote, but check back to the NAHRO Blog for more information once it’s announced.

On January 19, HUD published in the HUD Portal website the “Streamlining Administrative Regulations for Multifamily Housing Programs and Implementing Family Income Reviews under the Fixing America’s Surface Transportation (FAST) Act” Interim Final Rule. Due to a backlog at the Office of Management and Budget (OMB), the Interim Final Rule has not yet been published in the Federal Register. There will be a 30-day comment period and a 90-day effective date once published in the Federal Register. NAHRO will be tracking the Federal Register closely to inform members when the Interim Final Rule is published.  

Under this interim final rule, families with fixed-incomes are only required to undertake a full recertification every 3 years. However, if less than 90 percent of the family’s unadjusted income comes from a fixed-income, PHAs and owners must still verify and adjust non-fixed income sources annually. PHAs are not required to do this if 90 percent or more of their income comes from a fixed-source. PHAs may determine a family’s fixed income by applying a verified cost of living adjustment (COLA) to the individual sources of fixed income. In the case of a family with at least 90 percent of the family’s unadjusted income from fixed income, a PHA or owner using streamlined income verification may, but is not required to, adjust the non-fixed income.

This interim final rule also explicitly allows owners to make utility reimbursements of $45 or less (per quarter) on a quarterly basis, in order to eliminate the burdensome process of processing and mailing monthly reimbursement checks.

This interim final rule also allows PHAs to accept a family’s declaration of assets if they have net assets equal to or less than $5,000 without third-party verification. However, PHAs will be required to use third-party verification of all family assets every 3 years.

HUD is encouraging as many agencies as possible to adopt triennial recertifications. HUD will also put out guidance before the effective date on the rule and specifically defining “fixed-income” and COLA adjustments.

This interim final rule has not yet been published in the Federal Register. However, once published, it will go into effect 90-days after being published – continue checking the NAHRO blog for updates on its publication date.

On December 20, HUD published in the Federal Register an extension of the public comment period on the methodology HUD proposes to use to implement a new income limit in public housing, as mandated by the Housing Opportunity Through Modernization Act of 2016 (HOTMA). Comments are now due January 29, 2017.  NAHRO and other industry organizations asked HUD for an extension of the comment period in light of the large amount of notices and guidance HUD has recently released. NAHRO’s letter can be found here (members only). More information on HUD’s proposed methodology using very-low income thresholds to determine income limits can be found here.

On December 7, HUD released Notice PIH 2016-23 (HA). The Notice, titled “Requirements for PHAs removing all public housing units and guidance on either the termination of the ACC or the continuation of the public housing program,” provides information and guidance regarding program activities that Public Housing Agencies (PHAs) must complete regarding the removal of the last of their public housing dwelling units from their public housing inventory. This includes public housing removed through Section 18 (demo/dispo), Section 22 (voluntary conversions to tenant-based rental assistance), Section 32 (resident homeownership programs), Section 33 (required conversion of distressed public housing to tenant-based rental assistance), Section 24 (HOPE VI and Choice Neighborhoods demolitions), eminent domain, RAD transactions, and any other HUD approved action that results in the removal of public housing units from the PHA inventory.

Regardless of the removal mechanism chosen, the process to remove public housing units and other public housing real and personal property from a PHA’s inventory by releasing it from either a Declaration of Trust (DOT) or a Declaration of Restrictive Covenant (DORC) and removing it from the Annual Contributions Contract (ACC) results in a status change in IMS/PIC to “Removed from Inventory.” Prior to removal, PHAs must operate and maintain all public housing, including dwelling and non-dwelling property, in accordance with all applicable public housing requirements (and must only use such property for public housing purposes).

The Notice provides guidance on the notification submission to HUD for removing PHA’s final public housing unit, funding considerations for closeout activities, and closeout activities.  The notice also provides guidance on post-closeout activities, including the PHA Board resolution, the termination of the public housing ACC, and PHA record-keeping and post ACC termination responsibilities.

On December 5, HUD released Notice PIH 2016-22 (HA) titled “Environmental Review Requirements for Public Housing Agencies.” The notice provides information and guidance regarding Public Housing Agencies’ (PHAs) compliance with the National Environmental Policy Act of 1969 (NEPA) and other related laws. NEPA requires federal agencies to consider the environmental impact of proposed actions early in the planning and decision-making process to avoid and mitigate negative impacts to human health and the environment.

The notice clarifies the applicability of environmental reviews to all PHA activities at project site(s) assisted or to be assisted by HUD and to the use of all HUD funds, including operating funds. The notice also reiterates the prohibition on using any funding without environmental clearance, and presents submission and processing requirements using a five-year submission period as long as there are no changes to the project scope or environmental conditions. The notice also discusses the when PHAs are required to perform environment reviews for administrative, management, and certain maintenance activities and for Housing Choice Voucher (HCV) activities.

HUD considers an environmental review for a specific project to be valid for up to five years, so long as there are no changes to the project scope or environmental conditions. PHAs must request an environmental review for each environmental project site every five years. The following items are the responsibility of PHAs:

A. Identify Responsible Entity;
B. Designate Environmental Project Sites;
C. Prepare the Project Description;
D. Submit Project and Environmental Information to HUD or the Responsible Entity (RE);
E. Facilitate Public and Resident Notice and Participation;
F. Wait for Authorization to Use Grant Funds;
G. Abide by Review Requirements;
H. Advise of Changes in Scope or Conditions; and
I. Maintain Appropriate Records.

If a PHA fails to comply with the above-referenced requirements or the requirements of the notice, then HUD can pursue a wide range of remedies at its administrative discretion. PHAs are also required to conform with civil rights and fair housing laws, in addition to affirmatively furthering fair housing. This includes:

• Mandatory training with the goal to curtail future non-compliance;
• Corrective action plan tailored to the violation;
• Suspension of HUD funds used to finance the violating activity;
• Recapture of HUD funds used to finance the violating activity;
• Debarment/suspension of principals and housing authorities that engage in the noncompliant activity; and
• All other remedies at law.

On November 30, HUD released Notice PIH 2016-20 titled “2 CFR 200.311(c)(1) Disposition Instructions for the Public Housing Agency (PHA) Retention of Certain Public Housing Real Property (that is no longer used or was never used for public housing dwelling purposes) Free from Public Housing Use Restrictions.” The Notice includes “disposition instructions” and applies when a PHA proposes to retain ownership of certain public housing real property in order to use it for purposes outside of the public housing program.

The Notice includes examples of public housing real property that are eligible for retention after disposition and describes compensation requirements. For PHAs undergoing disposition, PHAs are required to compensate HUD with HUD’s percentage of the original purchase (and costs of any improvements and modernization) of the public housing real property to the Fair Market Value (FMV). Because public housing real property has been generally funded exclusively with public housing funds, the percentage of participation costs are typically 100% of the FMV of the public housing real property.

The Notice also discusses potential exceptions to compensation requirements to HUD. PHAs can receive exceptions if the retention of the property includes the development of rental housing or home ownership that will be operated as affordable housing or if the retention of the property is for a use that benefits or supports the services of low-income families.  HUD will not accept a retention application unless all information is provided within Form HUD-52860 Addendum-G. HUD may require a use restriction or other arrangement of public record if HUD grants an exception to the requirement to compensate HUD at the release of the Declaration of Trust (DOT) or the Declaration of Restrictive Covenants (DORC). Typically, use restrictions are for not less than 30 years. If the PHA is unable to use the retained property for its intended use as reported in Form HUD-52860 Addemdun-G, the PHA is required to compensate HUD for the property.

The Notice states that a PHA is required to continue to meet all applicable ACC obligations and public housing regulatory requirements until HUD releases the DOT or DORC.

On November 29, HUD opened registration for the MTW Research Advisory Committee teleconference on Tuesday, December 13, from 1PM EST to 4PM EST. Once registered, the public is invited to call-in to the meeting at 1-800-230-1074. Please be advised that the operator will ask callers to provide their names and their organizational affiliations (if any) prior to placing callers into the conference line. Members of the public that register in advance may  provide a comment at the end of the call.

HUD published a Federal Register notice announcing a meeting of the MTW Research Advisory Committee on November 7. The call will continue discussions from HUD’s last in-person meeting of the Research Advisory Committee and will discuss policy framework and research methodology for the third MTW Statutory Objective – increasing housing choice.