On November 14, HUD Issued Notice PIH 2016-18 titled Guidance on Full Flexibility for Eligible Small PHAs. The notice provides guidance on the full flexibility of capital funds and operating funds for public housing agencies (PHAs) which own or operate less than 250 public housing units small PHAs and are not designated as a troubled PHA (eligible small PHAs).

Eligible small PHAs are allowed to use up to 100% of a Capital Fund Program (CFP) grant for Operating Fund Program (OFP) activities if the PHA does not have debt service payments, significant capital needs or emergency needs. Regulations require eligible small PHAs to plan and budget for significant CFP needs prior to using capital funds for operating fund expenditures. Eligible small PHAs seeking to exercise full flexibility must have an approved CFP 5-Year Action Plan that indicates the amount of each grant they intend to use for operating fund expenditures. In addition, eligible small PHAs seeking to exercise full flexibility must submit a capital fund budget for each year. Eligible small PHAs must complete a thorough assessment of their capital needs prior to completing the 5-Year Action Plan and accurately reflect those needs in the capital fund submission.

Eligible small PHAs may exercise full flexibility to use operating funds for eligible CFP activities included in an approved CFP 5-Year Action Plan and budget submitted to HUD. HUD anticipates shifting from paper submission of CFP 5-Year Action Plans and budgets to an automated submission through the upcoming Energy Performance and Information Center (EPIC). In order to account for capital expenditures funded with operating funds and operating reserves (including excess cash), PHAs must enter the project’s annual financial report into the Financial Assessment Subsystem (FASS).

Eligible small PHAs that elect to fully use their operating funds for capital fund expenditures must continue to follow statutory and regulatory requirements, including those related to the conduct of public hearings, Resident Advisory Board consultation, consideration of comments, board approval, and environmental reviews.

On November 10, HUD released PIH Notice 2016-17 (HA), titled Rental Assistance Demonstration (RAD) Notice Regarding Fair Housing and Civil Rights Requirements and Relocation Requirements Applicable to RAD First Component – Public Housing Conversions. The Notice impacts agencies participating in the First Component of RAD, and explains HUD’s front-end civil rights review process, strengthens tenant rights and protections in the areas of resident notification and increases relocation housing options. According to NAHRO conversations with HUD, the intent of the Notice is to bring transparency and clarity to the RAD conversion process while simultaneously strengthening tenants rights and protections.

The Notice makes certain changes to the RAD timeline which should increase usability of the program. HUD will now begin approving front-end Civil Rights reviews before financial reviews are submitted so that any potential Civil Rights concerns are addressed before funding is secured. The Notice also provides clarity as to the circumstances in which HUD will perform a deep-dive analysis of an agency’s front-end review or not. This information is included to clarify certain requirements set forth in PIH 2012-32 (HA) REV-2, issued June 15, 2015. More information on PIH 2012-32 (HA) REV-2 can be found here (members only).

Although the Notice is around 80 pages, much of it covers existing Civil Rights statutes for RAD participants who may not be familiar with Fair Housing requirements.

The Notice also stresses that “meeting HUD’s process and review requirements never constitutes compliance with such laws. The obligation to comply with applicable Fair Housing, other Civil Rights, and relocation laws remains with the PHA and project owner.”

HUD will host a webinar Q&A on the Notice on Thursday, November 17 from 2-4PM EST. Register here.

On November 10, HUD posted an  inventory of 2017 Operating Subsidy projects, which will be used to generate 2017 Operating Subsidy tools (forms 52723 and 52722). The inventory will be used to fund Public Housing projects at the beginning of the year, when HUD will fund PHAs based upon an estimate.

PHAs should review the 2017 Operating Subsidy inventory and contact their Field Offices if any projects need to be added or deleted by November 21, 2016. Projects not in the inventory will not receive funding.

On Tuesday, November 8 HUD published Notice: PIH-2016-16 (HA), Guidance on Reporting Public Housing Agency Executive Compensation Information for Calendar Year 2015. The Notice instructs PHA’s on how to submit to HUD calendar year 2015 compensation data collection. PHAs will be required to complete the HUD-52725 form online and submit it between November 14, 2016 and December 9, 2016.

HUD has announced an additional teleconference for the MTW Expansion Research Advisory Committee that will be held on Tuesday, December 13 from 1pm-4pm EST. 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.

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.

NAHRO’s past coverage of the MTW Expansion Research Advisory Committee can be found here (members only).

On November 4, NAHRO staff attended a Central Office Cost Center (COCC) Listening Session at HUD Headquarters in Washington, DC. The listening session provided PHAs an opportunity to learn about HUD’s initial thoughts on how they plan to refederalize Section 8 and Section 9 dollars placed into COCCs and how HUD plans to determine fee reasonableness for fees paid by AMPs into the COCC. The session also allowed participants to provide feedback, discussion, and ask questions. HUD’s listening session does not constitute rulemaking, and HUD may continue changing their approach depending upon feedback received from the listening sessions.

HUD’s decision to refederalize COCC dollars stemmed from a 2014 OIG report that questioned the underpinning and validity of asset management in public housing. Among other things, the report recommended that HUD “refederalize” fee revenues from the Operating and Capital Funds that COCCs have earned since they began implementing asset management and eliminate the asset management fee. HUD is planning to implement a rule by December, 2017.

Important takeaways from the listening session included:

• HUD plans to continue to allow COCCs to charge existing fees, including the asset management fee, with some modifications.
• HUD’s actions will not impact Section 8 and 9 fees entered into the COCC before the implementation of a final rule.
• HUD plans to allow non-section 8 or 9 funds placed into a COCC to remain de-federalized. Section 8 and 9 fee income would remain federalized, with identified and specific expanded uses. Section 8 and 9 fees earned by COCC fee income would become fungible between Section 8 and 9 approved expenses and allowed to be used for other “expanded uses.”
• HUD may create two COCCs, one for Section 8 and 9 funding that would remain federalized, and one for non-Section 8 and 9 funding that would be de-federalized.

HUD is still trying to determine how to define “expanded use” for the Section 8 and 9 COCC. HUD does not want to limit PHAs’ ability to use COCC dollars as revenue for the development of other low-income projects. HUD is looking for feedback from PHAs to better understand what they use their COCC dollars for to help define “expanded use”. Please Email coccsessions@hud.gov to inform HUD of how your PHA uses your COCC dollars. This will ensure that their definition of “expanded uses” is as flexible as possible.

Principal Deputy Assistant Secretary Lourdes Castro Ramirez spoke to the session attendees noting that HUD’s Office of Public and Indian Housing (PIH) may reopen conversations with OIG and the Office of Management and Budget (OMB) on the matter.

On October 26, NAHRO submitted comments (members only) to HUD in response to its Lead-Free Paint Proposed Rule, published in the Federal Register on September 1. The proposed rule would amend HUD’s lead-based paint regulations on reducing blood lead levels in children under age 6 who reside in federally-owned or -assisted housing that was built pre-1978, and would formally adopt the revised definition of “elevated blood lead levels” (EBLLs) in children under the age of 6 in accordance to the guidance of the Centers for Disease Control (CDC). For all HUD programs covered in the proposed rule, HUD also proposes a new protocol for responding to a case of a child under 6 that has an EBLL. NAHRO’s comment letter consisted of seven main sections. NAHRO’s comments included HUD’s proposed implementation timeline, the use of CDC’s moving trigger reference value, HUD’s proposed lead-abatement schedule, the need for adequate funding to successfully comply with the proposed rule, as well concerns about how the proposed rule will impact mixed-finance units, UPCS-V, Section 8 landlords, and legal implications.

Comments for the proposed rule are due October, 31.

On October 26, HUD will publish a proposed rule titled “Tenant-based Assistance: Enhanced Voucher” in the Federal Register. The rule codifies HUD’s existing policy regarding enhanced vouchers, specifically regarding the eligibility criteria for enhanced vouchers, rental payment standards and subsidy standards applicable to enhanced vouchers, the right of enhanced voucher holders to remain in their units, procedures for addressing over-housed families, and the calculation of the enhanced voucher housing assistance payment. Comments are due December 27, 2016.

Currently, HUD’s enhanced voucher policy is based on statutory requirements, and summarized in guidance provided in PIH notices. These notices include: PIH 2001-41 on Enhanced and Regular Housing Choice Vouchers for Housing Conversion Actions; PIH 2010-18 on PHA Determinations of Rent Reasonableness in the Housing Choice Voucher (HCV) Program —Comparable Unassisted Units; PIH 2011-46 on Determination of Rent Reasonableness in the Housing Choice Voucher Program; and PIH 2016-02 on Enhanced Voucher Requirements for Over-housed Families. The proposed rule codifies HUD’s existing policy.

HUD is specifically asking for comments on three specific issues. HUD is asking for comments on how to define the vacancy rate for a “low-vacancy” area. HUD asks commenters to consider: whether the low-vacancy area should be based on a constant vacancy percentage applied universally, or whether it should vary with differing factors, such as area population growth, demand for rental, or any other relevant factors; and whether the low-vacancy area definition should be unique to this enhanced voucher program, or should be constant across all HUD programs that use the concept of a low-vacancy area. HUD also requests comments on whether it is appropriate to allow families to be rescreened and potentially denied admission to the program so long as the screening is consistent with the PHA policy for regular admission. Lastly, HUD seeks comments on whether language in the proposed rule relating to a tenants right to remain should  be removed, qualified or modified in some way, or made final. Language in the proposed rule solely states that an owner may not terminate tenancy except as provided in existing regulations.

On October 20, NAHRO submitted comments on HUD’s PHA Assessment of Fair Housing Tool. This was in response to a 30 Day Solicitation of Comment on the Tool. NAHRO had previously submitted comments (members only) on the tool in May.

NAHRO’s comment letter was divided into three parts that focused on NAHRO’s broad concerns about the implementation of the tool, specific issues with the tool itself, and a list of recommendations to improve the tool.

NAHRO’s comment letter can be found here (members only).