Author: Tushar Gurjal

HUD Publishes NSPIRE Administrative Procedures Notice

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On July 3, HUD published a notice titled “Implementation of National Standards for the Physical Inspection of Real Estate (NSPIRE) Administrative Procedures” (PIH 2023-16 / H 2023-07). The notice details the process and operational requirements for public housing and multifamily housing assistance programs. It discusses procedures for inspections; submitting evidence for deficiency correction; submitting technical reviews; administrative review; and certain other administrative requirements associated with the implementation of the NSPIRE inspection protocol.

The notice states that the NSPIRE final rule will be implemented in phases. The Department will begin inspections under the new protocol for public housing properties after July 1, 2023. It will prioritize properties that have not been inspected since normal operations resumed after the pandemic in June 2021; PHAs with a fiscal year end of March 30; and troubled PHAs. For housing choice voucher programs (including project-based voucher properties), the NSPIRE final rule will be effective Oct. 1, 2023. For multifamily housing programs, HUD will begin inspections under the new protocol on July 1, 2023 for those who participated in the NSPIRE demonstration, while those who did not will begin on Oct. 1, 2023.

NAHRO will provide our members with additional information about the contents of the notice in the coming days.

The full notice can be found here.

Guidance on SLRs for PBVs

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On June 29, HUD published a notice titled “Process for Requesting Subsidy Layering Reviews for Project-Based Vouchers” (PIH Notice 2023-15). When PHAs project-base vouchers in combination with other governmental assistance (i.e., other federal, state, or local funds), the project is required to undergo a subsidy layering review (SLR). This review ensures that projects do not receive excessive compensation. If a project-based voucher (PBV) property is not using other governmental assistance, then no SLR is required.

Depending on the specifics of the project, a PHA may request that HUD or its state Housing Credit Agency (HCA) perform the SLR. The notice details the procedures for a PHA to request which entity perform the SLR in certain instances. The HCA’s participation is voluntary and it may charge a reasonable fee. The PHA has discretion on whether to use its administrative fees for this HCA fee.

  • PHA requests that HUD perform the SLR – a PHA may request that HUD perform the SLR whether a project does or does not contain a low-income housing tax credit (LIHTC). The PHA must communicate, in writing, to the HUD field office that they would like HUD to perform the SLR. The request can be stated as “AB123 would like HUD HQ to perform the SLR.“
  • PHA requests that the participating HCA perform the SLR – 1) for projects without a LIHTC, the PHA will follow steps detailed in section 4 of the notice, but the memo to the field office will confirm that the PHA requests that the HCA perform the SLR, if the HCA is available for review; 2) for projects with a LIHTC, the PHA sends the request directly to the HCA, but the PHA must notify the field office that it has made the request.

In instances where there is no HCA, the PHA has requested that HUD perform the SLR, or in instances where the HCA will not perform the SLR, the field office public housing representative will submit the appropriate documentation to HUD headquarters for the SLR.

Section 4 of this notice contains a list of steps required for a PHA to request that HUD perform the SLR, including a list of the appropriate documentation.

A list of participating HCAs can be found here.

The full notice can be found here.

New EHV Termination Guidance

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On June 29, HUD published a notice titled “Emergency Housing Voucher (EHV): Guidance on Termination of Vouchers Upon Turnover After September 30, 2023 and EHV Shortfalls Due to Per-Unit Cost Increases of Overleasing” [Notice PIH 2023-14 (HA)]. The notice provides instructions to PHAs with emergency housing vouchers (EHVs) about how EHVs should be administered after Sept. 30, 2023.

Termination

After Sept. 30, 2023, EHVs that are active will no longer be allowed to be reissued to new families and will terminate after the family using the voucher has left the program. Emergency housing vouchers that have not been leased-up may still be leased after Sept. 30 up until they reach the number allocated to the PHA by HUD. After Sept. 30, housing agencies may issue additional vouchers taking into consideration their 180-day lease rate (e.g., if a PHA has leased 80 of its 100 EHVs and has a 180-day success rate of 50%, then it may issue enough vouchers to ensure that 40 households are searching for units).

Portability

Voucher holders with EHVs may still port their vouchers to other jurisdictions after Sept. 30, 2023. If the PHA the voucher holder is porting to has EHV capacity (i.e., it has not reached its cumulative EHV lease-up maximum), the receiving PHA may absorb the voucher. If the receiving PHA is at its EHV capacity, then the receiving PHA may bill the initial PHA or absorb the family into its regular HCV program.

EHV Shortfalls

The Department is making changes to when PHAs may request shortfall funding for EHVs. First, a PHA may request a per-unit cost adjustment when 1) “despite taking reasonable efforts to manage the EHV program effectively, [it] would otherwise be required to terminate participating families . . . due to insufficient Housing Assistance Payment (HAP) funds” and 2) for instances when cost increases were not unforeseen (e.g., using high payment standards) in order to improve success rates or allow a family to remain in their unit.

Housing agencies may also request shortfall funding to “prevent the termination of EHV families due to insufficient funds until the overleasing is corrected through attrition.” The Department may reduce administrative fees when there are “egregious cases of overleasing.”

The full notice can be found here.

HUD Publishes HCV Mobility NOFO

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On June 1, HUD published a notice of funding opportunity (NOFO) titled “Housing Mobility-Related Services.” The NOFO makes available $25 million for PHAs with voucher programs to use for mobility purposes. The Department expects to make 11 awards with a minimum award of $750,000 and a maximum award of $5 million. The application deadline is 11:59:59 pm ET on Aug. 30, 2023.

Eligible housing agencies are those with Housing Choice Voucher (HCV) annual contributions contracts (ACC) with HUD. Housing agencies may apply jointly, but the grant lead will be the lead PHA. Additionally, HUD will only consider one funding application per PHA.

Funds will be available for five years, and housing agencies must serve at least 300 families with at least one child aged 17 or younger. A PHA’s average annual caseload must be between 50 and 200 families.

As a part of their application, PHAs will have to submit a detailed housing mobility plan. The plan should discuss mobility related services (including financial assistance), administrative policies, and a cost proposal. The Department estimates that the average cost per family will be between $2,500 and $4,500. Program funds will only be disbursed to the lead PHA.

After the award, PHAs will have six months for a planning phase. This phase can be extended to a full year. After the planning phase, HUD will review the housing mobility plan and detail required changes.

Housing agencies must provide certain minimum mobility-related services and enact certain policies. Minimum services provided must include pre-move services; housing search assistance; direct outreach to opportunity area (defined as census tracts with a family poverty rate of 10% or lower) landlords; lease-up assistance; security deposit assistance only for rental units in opportunity areas; flexible family financial assistance; salaries and benefits for qualified staff; and program participant engagement in designing the mobility plan. Housing agencies must also adopt certain policies including high payment standards (110% of the Fair Market Rent [FMR], Small Area FMR, or an explanation of the rationale for not having high payment standards); minimum voucher search time of 90 days with a 30 day extension; permitting non-resident applicants to participating in the mobility program to port. There are certain optional mobility related services that PHAs may allow too.

Finally, PHAs may use up to 15% of the award for reasonable administrative costs.

The full mobility NOFO may be found here.

HUD Extends Period of Availability for ARP Act Adjustment Funding for the HCV and Mainstream Program

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On May 16, HUD published a notice titled “Extension of Period of Availability for American Rescue Plan (ARP) Act – Adjustment Funding for Calendar Year 2021 Housing Choice Voucher (HCV) Program and Mainstream Vouchers Renewal Funding.” Previously, under PIH Notice 2021-23, PHAs could request additional Housing Assistance Payments (HAP) funding as adjustments to calendar year (CY) 2021 HAP funding for the Housing Choice Voucher (HCV) and Mainstream programs. Among other things, the prior notice allowed PHAs to request additional HAP for increases in per unit costs (PUC), under the “extraordinary circumstances” category. The prior notice set the deadline for expenditure of funds awarded through this category on June 30, 2022. This notice extends the deadline to December 31, 2023 to report those funds.

Additionally, the notice provides guidance on appropriately reporting the funds in the Voucher Management System (VMS).

Funds that have not been expended by the new deadline will be reconciled and used in the Emergency Housing Voucher program (as they were initially taken from the appropriation for that program).

The full notice can be found here.

HUD Publishes Report on HCV Success Rates

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Earlier this year, HUD posted a report titled “Using Administrative Data to Estimate Success Rates and Search Durations for New Voucher Recipients.” The purpose of the study is to estimate national success rates and evaluate the quality of HUD’s administrative data.

The study finds that “61 percent of searches initiated in 2019 succeeded, using a 180-day search window.” Additionally, “[i]f that timeline [was] extended to 240 days, the estimated success rate [rose] to 63 percent.” The report also discusses how success rates and search durations vary by an area’s rural characterization, a PHA’s regional classification (e.g., located in the Northeast), and a PHA’s size.

The study looks at two metrics to evaluate the data quality. First, it looks at the share of entrances to the program which have a search voucher. The rationale behind examining this metric is that if a PHA is accurately recording data, then it will be recording both the issuance of the voucher and the admission to the program. Similarly, if a PHA is only recording the admission, then the PHA may not be recording unsuccessful searches (i.e., those searches with an issuance, but no admission). To ensure the use of quality data, the study excludes new admissions that are not preceded by a search voucher and only calculates success rates for PHAs with nearly complete issuance data.

The second metric that the study uses to evaluate data quality is the timeline for successful searches. If a PHA admits many participants only a few days after voucher issuance, then it is likely indicative that the PHA is retroactively adding the issuance date at admittance, which may mean failed searches are not tracked. To address this issue, the study does not estimate annual success rates for PHAs that have admitted more than 15 percent of new families within seven days of voucher issuance.

The success rates from this study should not be directly compared to how PHAs calculate success rates as the study examines search events, which might include multiple voucher issuances to a family. Housing agencies may calculate success rates based on each discrete issuance of a voucher.

The full report can be found here.

New Study on Choice Mobility Option in RAD Properties Published

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HUD recently published a study titled “Evaluation of the Rental Assistance Demonstration (RAD): Early Findings on Choice Mobility Implementation.” In projects that have converted from public housing to either project-based rental assistance (PBRA) or project-based vouchers (PBVs), the housing agency is required to allow residents to request a housing choice voucher (HCV) (i.e., a tenant-based voucher where the subsidy follows the family) after the resident has lived in the RAD property for 1 year (for PBV-based properties) or 2 years (for PBRA-based properties). If requested, the resident will be provided a voucher when one becomes available.

The study found the following:

  • There were only limited instances where residents requested HCVs;
  • While most agencies adopted limits to the number of HCVs requested at once, none of the agencies ever reached those limits;
  • Housing agency staff felt they effectively communicated the choice mobility option to their residents, while resident experiences varied between agencies;
  • Both housing agency staff and residents mentioned other barriers to exercising the choice mobility option:
    • Residents had trouble finding private-market housing;
    • Nearly all residents stated that paying security deposits, application fees, and first month’s rent presented barriers to using vouchers;
    • Housing agency staff noted high rents presented barriers, especially in tighter rental markets;
    • Resident credit was another barrier;
    • There were certain barriers caused by the pandemic; and
  • Housing agency staff did not believe that the choice mobility option affected unit turnover or impacted management costs.

One-half of the residents who moved noted dissatisfaction with their new neighborhood.

Residents moving from these RAD developments tended not to receive extensive mobility counseling, but the report notes that “[a]lthough PHAs receive administrative fees for PBVs and other HCVs . . . none of the staff at the PHAs interviewed reported using those fees to cover housing search assistance for residents exercising the choice mobility option. Staff at one PHA noted that the lack of direct funding for housing search support from HUD resulted in their search assistance efforts being limited and ad hoc . . . .”

The full study can be found here.

HUD-VASH Registration Notice Out ($94 million)

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HUD has published a notice titled “2023 Mid-Year Registration of Interest for HUD-VASH Vouchers” (PIH 2023-09), which announces $94.4 million in potential HUD-VASH funding for 11,000 new HUD-VASH vouchers. The vouchers will be awarded following a two-step process:

  • Eligible PHAs may register via a link on the HUD-VASH webpage (this will require signed letters of support from Veterans Administration Medical Centers); and
  • Based on a formula, registered PHAs will receive an invitation to apply for a specific number of HUD-VASH vouchers.

PHAs must be registered by midnight of their time zone on Wed., May 10, 2023.

Housing agencies must meet certain threshold criteria to register. These criteria include having signed letters of support from partnering VA facilities; a demonstrated capacity to administer the HUD-VASH program; and certain utilization standards for those agencies that already administer HUD-VASH.

There are certain minimum and maximum voucher awards. Any single PHA may receive a minimum of 4 vouchers and a maximum of 500 vouchers. Each Veterans Administration Medical Center (VAMC) will be capped at 1,000 vouchers.

There are certain other requirements for PHAs that wish to project-base their vouchers.

The full notice can be found here.

2023 Renewal Funding Inflation Factors (RFIFs) Published

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Earlier today, HUD published a notice titled “Section 8 Housing Assistance Payments Program-Fiscal Year (FY) 2023 Inflation Factors for Public Housing Agency (PHA) Renewal Funding.” These inflation factors are used by HUD to determine how much renewal Housing Assistance Payments (HAP) funding an agency will receive relative to the prior year. Each PHA receives its own factor, but the Department also calculates a national inflation factor, which the Department has calculated at 9.6% this year.

After discussing inflation factors with HUD staff, NAHRO encourages PHAs to take steps to utilize the substantial increase in funding that most Housing Choice Voucher (HCV) programs will receive. While the national factor is 9.6%, many PHAs will receive substantially higher factors, and are encouraged to take appropriate steps (e.g., increasing payment standards, adopting Small Area Fair Market Rents, etc.) to ensure that the funding is spent by the end of the calendar year.

The RFIFs can be found here.

The Area Definitions table can be found here.

(The above link was not functional as of 9:23 am ET on April 12, 2023, but should be functional soon.)

The full notice can be found here.

HUD Publishes Notice on HCV Landlord Penalties

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On March 31, HUD published a notice titled “Notice on Remedies PHAs have for Poor Performing Owners in the Housing Choice Voucher and Project-Based Voucher Programs” (PIH Notice 2023-06). The notice informs PHAs of the available punitive measures or remedies they have against landlords that do not comply with their Housing Assistance Payment (HAP) contracts. The notice also discusses the punitive measures that HUD has against PHAs that do not comply with the HAP contract.

The notice discusses remedies that PHAs have for landlord non-compliance with the HAP contract. Potential breaches may include the following: violating any obligation under the HAP contract, including maintaining the unit up to Housing Quality Standards (HQS); violating any obligation under Section 8 of the U.S. Housing Act of 1937; committing fraud, bribery, or other corrupt or criminal acts related to any federal housing program; failing to comply with regulations for mortgage insurance of loan programs in certain instances; engaging in drug-related criminal activity; or engaging in violent criminal activity. If an owner fails to maintain the unit according to HQS, the PHA must take “prompt and vigorous” action to enforce owner obligations. The notice details other inspection-related scenarios when PHAs must take certain enforcement actions.

The notice also discusses instances when PHAs are required to exclude owners from the Housing Choice Voucher (HCV) and Project-based Voucher (PBV) programs. Instances when a PHA must not approve an owner’s participation include the following: the owner is debarred from participation; HUD directs the PHA not to approve the owner because the federal government has instituted an administrative or judicial action; or if HUD directs the PHA not to approve the owner because the owner has violated a civil rights law.

There are several instances where a PHA may also use its discretionary authority to exclude owners from HCV and PBV programs. Housing agencies may adopt policies that will exclude owners from participating in the voucher program. The PHA may exclude the owner for the following: violating the HAP contract; committing fraud, bribery, or other corrupt or criminal acts in connection with federal housing programs; engaging in recent drug-related criminal or violent activity; frequent non-compliance with HQS; not evicting tenants that threaten peaceful enjoyment of unit, threaten the health and safety of residents, or are engaged in drug-related or violent criminal activity; frequently renting units that do not meet state or local codes; and not paying taxes, fines, or assessments.

Housing agencies should not penalize owners that consider the nature, severity, and recency of tenant offenses, including mitigating circumstances before evicting.

For PHAs that fail to comply with program requirements, HUD has the authority to take certain punitive actions. The Department may do the following: offset administrative fees; prohibit use of funds in the administrative fee reserve account; direct the PHA to use funds in the reserve account to improve program administration; reduce HAP amounts; reduce other HUD funding amounts; or declare the PHA in default. The Department may also initiate claims against owners in certain instances.

The notice states that the Department may take similar actions against PHAs that do not follow PBV program requirements.

The full notice can be found here.