HUD Re-Publishes CY 2017 Administrative Fee Rates

HUD has published the administrative fee rates for the Housing Choice Voucher (HCV) Program in the Federal Register in a notice titled “Notice of Annual Factors for Determining Public Housing Agency Administrative Fees for the Section 8 Housing Choice Voucher, Mainstream, and Moderate Rehabilitation Programs.” HUD had previously published these fee rates in February on the website of the Office of Housing Choice Vouchers. The rates remain the same as those published in February.

What has changed is that HUD has calculated a proration factor for administrative fees of 74% for January to March of this year. (This is not mentioned in the notice published in theĀ Federal Register, but PHAs should have received notices informing them of this from HUD.) HUD hopes to raise that number as the year progresses by supplementing it with unobligated funds. NAHRO continues to stress the importance of the administrative fee to the proper running of the HCV program to appropriators in Congress.

Finally, it is not too late to apply for a blended administrative fee or a higher administrative fee as the deadline for applying to both has been extended to Friday, June 23.

The full notice can be read here.

HUD Extends Deadline to Apply for Higher Administrative Fee Rates

Yesterday, HUD sent an email extending the deadline to apply for higher administrative fee rates to Friday, June 23, 2017 at 5 pm ET. Earlier, HUD had extended the deadline for applying for Blended Administrative Fee Rates to the same date. The application method remains the same as noted in Notice PIH 2017-07 titled “Guidance related to (1) Eligibility for Potential Shortfall Funding Under the Calendar Year (CY) 2017 Housing Assistance Payments (HAP) Renewal Set-Aside for the Housing Choice Voucher (HCV) Program and (2) CY 2017 Administrative Fees.”

Click below for additional details on how to apply.

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Deadline for Applying for Blended Administrative Fee Rates for the HCV Program Extended

Earlier today, HUD emailed information stating that the deadline for applying for a blended administrative fee rate for the Housing Choice Voucher Program has been extended to Friday, June 23, 2017 at 5 pm Eastern Time. As noted in Notice PIH 2017-07 titled “Guidance related to (1) Eligibility for Potential Shortfall Funding Under the Calendar Year (CY) 2017 Housing Assistance Payments (HAP) Renewal Set-Aside for the Housing Choice Voucher (HCV) Program and (2) CY 2017 Administrative Fees,” PHAs that serve multiple administrative fee areas may request a blended rate based on the locations of their assisted units. The blended rate will be used for CY 2017.

PHAs may submit the blended administrative fee request at PIHFinancialManagementDivision@hud.gov using the subject line “[PHA Number – i.e., PHA xxx], 2017 Request for Blended Rate Administrative Fees.” Alternatively, PHAs may submit a request to the following physical mailing address:

U.S. Department of Housing and Urban Development, Office of Housing Voucher Programs, Attn: Miguel Fontanez, Director, HV Financial Management Division, Room 4222, 451 7th Street, S.W., Washington, DC 20410.

Either submit electronically or by physical mail–not both.

HUD REAC Publishes UPCS-V Version 2.5

HUD REAC’s Oversight and Evaluation Division (OED) has published Version 2.5 of the UPCS-V protocol. The UPCS-V protocol is an inspections protocol that HUD is developing as a successor to the current Housing Quality Standards (HQS) inspections protocol currently in use for the Housing Choice Voucher Program. HUD is developing the protocol in a Demonstration program with nearly 250 PHAs participating.

OED has posted both the protocol itself and a document listing all the changes from version 2.0 of the UPCS-V protocol. At this time, it looks like the majority of changes are language related for clarity or grammar, with a few technical changes.

The UPCS-V 2.5 protocol can be found here.

The document listing changes from the UPCS-V 2.0 protocol to the UPCS-V 2.5 protocol can be found here.

HUD Calculates Renewal Funding Inflation Factors for HCV Program

Tomorrow, June 8, HUD will publish a notice in the Federal Register titled “Section 8 Housing Assistance Payments Program-Fiscal year (FY) 2017 Inflation Factors for Public Housing Agency (PHA) Renewal Funding.” The notice outlines the methodology for calculating Renewal Funding Inflation Factors (RFIFs). These factors are applied to leasing and cost data to determine current year Housing Choice Voucher (HCV) program eligibility (i.e., these factors determine how much additional money PHAs need to maintain the same number and quality of vouchers as the previous year). Tables showing RFIFs will be available from HUD here (when posted after this notice is published in the Federal Register). The pre-publication notice can be found here.

HUD calculates RFIFs with a three-step process. First, HUD forecasts a national inflation factor. Second, HUD calculates individual area inflation factors (using annual changes in the two-bedroom Fair Market Rent [FMR] for the area). Third, HUD scales the individual area inflation factors so that the weighted average equals the national average, but ensures that each area has an inflation factor of no less than one. This year, 2017, HUD has changed its methodology so that the first step uses forecasts to calculate per unit costs (PUCs) instead of relying on backward-looking historical data.

[6/8/17 Edit – The published notice can be found here.]

Click the link below to read a more detailed description of the methodology.

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HUD to Investigate Perception of Small Area FMRs

Tomorrow, HUD will publish a notice in the Federal Register titled “30-Day Notice of Proposed Information Collections: Small Area Fair Market Rent Demonstration Evaluation.” The notice announces an information collection to determine perception of the shift from regular Fair Market Rents (FMRs) to Small Area FMRs among voucher holders and landlords.

For voucher holders, HUD will investigate whether new and current voucher holders understood how shifting to Small Area FMRs changed their housing options, whether voucher holders who moved searched in new neighborhoods, and whether voucher holders moved at a different rate.[1]

For landlords, HUD will investigate whether landlords were aware of the shift to Small Area FMRs, whether this affected their willingness to rent to voucher holders, and the level at which they set their rents.[1]

To investigate, HUD will interview 70 tenants and 35 landlords. Both groups will be interviewed in the areas served by the PHAs in the Small Area FMR Demonstration. Incentive payments of $20 for tenants and $40 for landlords will be made.

HUD seeks comments on the following: 1) Is the information collection necessary and does it have practical utility; 2) the accuracy of the information collection burden; 3) ways to enhance the quality of the information collected; and 4) ways to minimize the burden of the information collected. Comments will be due 30 days after the notice is published. The pre-publication notice can be found here.

[6/2/17 Edit – The notice has been published in the Federal Register, and comments are due on July 3, 2017. The notice can be found here.]

[1] – NAHRO notes that this information would have been useful to know before HUD mandatorily directed PHAs to implement Small Area FMRs in certain areas.

HUD Sends Letter Confirming Operating Fund Proration

Earlier today, HUD sent a letter explaining Public Housing Operating Fund obligations for June. In June, HUD is increasing the proration for the Operating Fund from 85 percent to a 92.89 percent proration.

The proration represents a cumulative amount for the year. Since PHAs received payments based on a lesser yearly proration for the first few months of the year, June’s payment will be greater to compensate for the initial underfunding. The July payment will more accurately represent the new monthly amount under the new proration. The letter notes that there may be minor proration fluctuations and that “[t]he final proration will be established after final eligibility is determined for all projects.”

A change in proration is only one reason that a PHA’s payment in absolute terms (i.e., actual amount received) may have changed. Another reason for a change in the absolute amount is a decline in formula eligibility for some PHAs. Read more about this formula eligibility decline in our previous post “Operating Fund Proration Increases as Funding Decreases.”

Specific June Operating Fund obligation letters grouped by state can be found here.

HUD’s letter explaining June Operating Fund obligations can be found here.

HUD to Propose FMR Methodological Changes

Tomorrow, HUD will publish, in the Federal Register, a notice titled “Proposed Changes to the Methodology Used for Estimating Fair Market Rents.” The Housing Opportunity Through Modernization Act of 2016 (HOTMA) requires HUD to seek comment for material changes to FMR methodology. Responding to NAHRO’s prior comment letter, HUD has agreed to an expansive definition of what constitutes a material change. This notice follows through on HUD’s agreement to seek comment on changes. Comments will be due 30 days after tomorrow’s publication. [5/26/17 Edit – Comments are due June 26, 2017.]

HUD currently calculates FMRs by assigning each area a two-bedroom standard quality base rent from a five year American Community Survey (ACS) tabulation. The base rent is then updated with a recent mover adjustment factor from the latest one year ACS data. The recent mover factor is adjusted “to be ‘as of'” the year which the FMRs are being calculated by using local or regional Consumer-Price-Index-measured changes in gross rents for two years and then a nationally forecasted trend factor measuring estimated expected growth for another two years.

HUD proposes three changes to the FMR methodological method. The first two changes apply to all FMRs, while the third applies only to Small Area FMRs.

  1. HUD is proposing to only use an ACS estimate, if each ACS estimate is based on at least 100 survey responses. This is in addition, to the current criterion, where HUD only uses the estimate if the error of the estimate is less than half the size of the estimate. If the data does not meet both criteria, then HUD will use an average of the three most recent years of data.
  2. HUD is proposing a change to the “recent mover factor” where HUD uses “all-bedroom” recent mover rents, when the two-bedroom recent mover rents are not statistically reliable.
  3. HUD is proposing moving away from the “ratio” method used to tabulate Small Area FMRs to using gross rent estimates calculated by ZIP Code Tabulation Areas.

HUD will make documentation of the impact of these methodological changes and hypothetical FY 2017 FMRs available. (If they are not posted, they should be posted within the next 24 hours.) NAHRO will continue to examine these methodological changes and discuss it with our membership before coming to any conclusions about their effectiveness in creating more accurate FMRs.

When posted, hypothetical FY 2017 FMRs calculated using the new methodology and hypothetical FY 2017 Small Area FMRs calculated using the new methodology can be found here and here respectively.

The pre-publication notice can be found here.

[5/26/17 Edit – The published document can be found here.]

FY 2018 President’s Proposed Budget: Some HCV Thoughts

The following post is meant to offer a few thoughts on the treatment of the Housing Choice Voucher (HCV) Program in the FY 2018 President’s proposed budget. For a deeper analysis, please read NAHRO’s article, “FY 2018 President’s Budget Request: Section 8 Programs” (NAHRO members only). The proposed budget has the potential to affect the HCV Program in two important ways: by cutting funding and by making many policy changes.

Click on the link to read more.

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NAHRO attends meeting at HUD on the HCV Program

On May 10, NAHRO staff, along with other industry and advocacy groups, attended a meeting at HUD at which the current state of the Housing Choice Voucher (HCV) Program was discussed. HUD staff at the meeting had two main points for the attendees:

  1. With the passage of the FY 2017 budget, most PHAs will be receiving a similar amount or more in HAP than they received the year before (this is happening despite the 97.277 proration of HAP because of higher inflation factors);
  2. HUD highly recommends using their HCV forecasting tool.

Read more by clicking the link.

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