In mid-Feb., HUD sent a letter to PHA executive directors. The letter informed PHAs of their individual inflation factors for the Housing Choice Voucher (HCV) program. While HUD had previously revealed that the national average inflation factor for 2023 would be 10.13%, the new letter provides PHAs with their individual inflation factors (which may differ substantially from the national factor). The inflation factor is used by HUD to calculate funding for voucher programs for the upcoming year (i.e., the inflation factor, as a whole number, is multiplied by the renewal funding to calculate the program’s total funding for the year).
In addition to being provided in the letter, the inflation factor has also been added for each individual PHA that has a voucher program in the Two-Year tool. The Two-Year tool is a spreadsheet created by HUD, pre-populated with individualized program data, that PHAs can use to help plan their voucher programs.
This year’s inflation factor is substantially larger than previous years. Housing agencies should plan for a larger yearly increase in funding than they may typically be used to.
The Department estimates that the overall funding proration levels for 2023 will be the following:
99% for Housing Assistance Payments (HAP); and
91% for administrative fees.
Housing agencies should anticipate an offset to ensure that there is enough funding for 100% of voucher renewal expenses. The Department calculates the national average inflation factor to be 10.13%, though individual agencies will have their own individual inflation factors. In absolute terms, there has been an increase in HAP and administrative funding, and HUD recommends that PHAs make adjustments to account for this increase.
Additionally, housing agencies should expect timely HAP and administrative fee disbursements for the HCV program and the mainstream voucher program through Feb. 2023. These payments have been obligated as follows:
Jan. and Feb. 2023 HAP obligations at 100% proration of estimated CY 2022 eligibility;
Jan. and Feb. 2023 administrative fee obligations at 89% of estimated CY 2023 eligibility; and
Jan. and Feb. mainstream voucher funding at the same levels for the respective accounts as listed above.
The deadline to submit CY 2022 costs and leasing adjustments in the Voucher Management System (VMS) is Jan. 27, 2023. All CY 2022 PIC reporting must be submitted by 4 pm on March 31, 2023.
The Department published a notice titled “Notice of Certain Operating Cost Adjustment Factors for 2023.” Operating cost adjustment factors (OCAFs) are annual factors used to adjust certain Section 8 rents. These OCAFs are calculated as “the sum of weighted component cost changes” for certain publicly available cost indices. Some indices reflect data collected at the state level, while some indices reflect data collected at the national level. The nine cost indicators used in calculating OCAFs are the following:
Goods, Supplies, and Equipment;
Property Taxes; and
Water, Sewer, and Trash.
The notice states a temporary methodological change. For 2023, due to high levels of inflation, HUD has calculated an inflation factor for each cost component for a time period exceeding a year and used the most recent data available. In the future, HUD will revert to using one-year time periods to calculate levels of inflation for each cost component. NAHRO applauds HUD for recognizing the high levels of inflation that owners are facing and making this change to ensure that cost factors capture the on-the-ground inflationary trends.
In addition to publishing the cost factors, this notice proposes certain permanent technical changes in how OCAFs are calculated in the future. First, in calculating 2024 OCAFs, HUD will begin to use data pulled from August of each year instead of May of each year in order to work with more up-to-date data. Second, HUD will make a change in calculating the insurance component data source inflation factor for the 2023 OCAFs. HUD has used the Bureau of Labor Statistics Consumer Price Index, Tenants and Household Insurance Index in the past, while moving forward for the 2023 OCAFs and beyond, HUD will use data from the Direct property and casualty insurers-Commercial multiple peril insurance series from the Bureau of Labor Statistics, Producer Price Index.
Comments on the methodological changes are due by Dec. 15, 2022.
The full notice with the actual OCAFs by state can be found here.
In a recently published notice (PIH 2022-31), HUD announced that it is increasing the funding available for new mainstream vouchers from $40 million to $48 million. The Department is not accepting new applications for the non-competitive allocation of these vouchers.
The short notice announcing the additional funding can be found here.
Earlier today, HUD published a press release announcing that it had selected PHAs for the fourth cohort of the Moving to Work (MTW) program. The MTW program allows PHAs that have received MTW status certain additional flexibilities in how they use their funds and greater freedom in how they operate. The program allows PHAs to innovate in how they provide housing.
The current expansion of the MTW program requires PHAs to commit to research on a particular policy topic. In addition to the regulatory and operational flexibility afforded by the program, PHAs selected in this cohort have committed to research asset building policies. Housing agencies in this cohort will have to pick, implement, and track one of the three following options for asset building policies:
Opt-Out Savings Account Option – PHAs must deposit a certain amount of funds per month into an escrow account on behalf of an assisted household.
Credit Building Option – PHAs must report public housing rent payments to credit bureaus.
PHA-Designed Asset Building Option – PHAs must design their own local asset building program.
Currently, HUD has selected 87 of the 100 agencies, including 16 in this cohort, to which it is statutorily mandated to award an MTW designation. According to HUD, “MTW agencies are now in 40 states and the District of Columbia.”
HUD’s press release on the MTW fourth cohort can be found here.
On Aug. 26, the U.S. Department of Housing and Urban Development (HUD or the Department) published a new notice detailing how new incremental general-purpose vouchers would be distributed and describing certain other operational provisions of the vouchers. The notice is titled “Allocation and Special Administrative Fee for New Incremental Housing Choice Vouchers” [PIH 2022-29 (HA)]. This $200 million in additional funding for vouchers was appropriated by the Consolidated Appropriations Act, 2022. The notices states that there will be 19,700 new Housing Choice Vouchers (HCVs) distributed to PHAs.
NAHRO thanks its members for educating decisionmakers in DC on the need and importance of new vouchers. In addition, in implementing the vouchers, NAHRO sent a letter to HUD urging the Department not to add additional terms or conditions to the vouchers, which may have made them harder to use. NAHRO is pleased that HUD has listened to NAHRO’s suggestion.
Housing agencies will receive a form SF-425 shortly and should follow instructions found in the appendix of the notice to fill out the form to report CARES Act related financial activity. The form is due Sept. 6, 2022 and should be emailed to HCVCARESActReconciliation@HUD.gov. Submitting this form will not remit amounts owed, which will be completed by the Housing Voucher Financial Management Division.
In certain scenarios, where there are unliquidated obligations that were disbursed after April 30, 2022, the PHA may issue a special request to HUD for an extension not later than Sept. 6, 2022.
Housing agencies should expect CARES Act closeout statements after they have submitted the required form.
On June 13th, HUD published a notice [Notice PIH 2022-18 (HA)] expanding the eligible uses of the administrative fee for the Housing Choice Voucher (HCV) program. The notice is titled “Use of Housing Choice Voucher (HCV) and Mainstream Voucher Administrative Fees for Other Expenses to Assist Families and Lease Units.” Earlier this year, NAHRO had written to HUD recommending that it expand the eligible uses of the HCV administrative fee in order to increase voucher utilization. NAHRO wrote that HUD should “[i]mmediately issue guidance in the form of a new PIH notice clarifying that administrative fees may be used for activities and expenses that help a PHA utilize vouchers . . . .” NAHRO is pleased that HUD recognized–after NAHRO’s urging–the importance of allowing administrative fees to be used for these additional purposes, which will have the end effect of helping more families find and lease homes.
The notice clarifies that administrative fees may be used for the following activities:
Administrative Activities: These activities include–but are not limited to the following:
Front-line, day-to-day operational activities:
income determinations and reexaminations;
disbursing HAP to landlords;
policy and operational planning and implementation;
HCV record-keeping and reporting;
Indirect overhead activities associated with operating the HCV program:
accounting and payroll;
central office cost center HCV program expenses;
Housing search assistance activities;
helping a family identify and visit potentially available units during their housing search;
helping a family find a unit that meets the household’s disability-related needs;
providing transportation and directions; and
assisting with the completion of rental applications;
Post-lease up activities related to search assistance:
post-move counseling and landlord/tenant mediation;
HCV owner recruitment and outreach activities:
costs associated with materials or webpages specifically geared to owners;
costs of landlord liaison staff;
Other Eligible Activities (PHAs must change their administrative plans to support these activities; Note: some of these activities have certain restrictions, please see Notice PIH 2022-18 (HA) for specifics on use):
Expenses for activities designed to help assist HCV families in leasing units:
Owner incentive and/or retention payments;
security deposit assistance;
utility deposit assistance/utility arrears;
application fees/non-refundable administrative or processing fees/refundable application deposit assistance/broker fees;
holding fees; and
renter’s insurance if required by the lease.
Additionally, administrative fee reserves or outside funding sources may also be used for the listed activities. Similarly, mainstream voucher administrative fees may also be used to assist mainstream voucher families to lease units, though mainstream administrative fees may only be used for mainstream vouchers. The notice also notes that for both regular and mainstream HAP funding may not be used to pay for any of these activities. Finally, the notice provides certain information on reporting the new authorized expenses.
Earlier today, HUD sent a letter detailing future funding opportunities for PHAs with Housing Choice Voucher (HCV) programs. The letter states that voucher funding is currently high (including an approximately 92% administrative fee proration). It also provides a table clearly delineating future voucher funding opportunities. The full letter can be found here (due to technical difficulties, the letter cannot be currently published, but will be soon).
The following is a reproduction of the information in the table. Additional information can be found in Notice PIH 2022-14. (* indicates that there are two deadlines for the funding category.)
HAP Set-Aside and Admin. Special Fee category deadlines
HAP Set-Aside – Prevention of Terminations Due to Insufficient Funding (Shortfall) – Provides funding for PHAs that would be required to terminate participating families from the program due to insufficient funds despite taking reasonable cost savings measures.
June 15, 2022
HAP Set-Aside – Unforeseen Circumstances – Aids PHAs who have experienced an occurrence, within or after the re-benchmarking period, that could not have been anticipated and was out of the PHA’s control.
HAP Set-Aside – Portability – Helps PHAs that experienced a significant increase in renewal costs due to portability for tenant based rental assistance under Section 8(r) of the Act.
HAP Set-Aside – Project Based Vouchers – Reimburses PHAs for HCV renewal funds that were not included in the CY2021 re-benchmarking because the PHA intentionally held the funds for an upcoming PBV to enter into a Housing Assistance Payment (AHAP).
HAP Set-Aside – Moving to Work (MTW) New Cohorts – Provides funding for PHAs that received their MTW designation in CY 2021 where funds were obligated, but not expended in CY 2021.
HAP Set-Aside – HUD-VA Supportive Housing (HUD-VASH)* – Supports PHAs administering HUD-VASH that can demonstrate a need for adjustment funding due to at least one of the following situations: (1) PUC Increase (2) Leasing Cost Increase.
HAP Set-Aside – Lower-than-average Leasing – Aids PHAs that are leasing at a lower-than-average percentage of their authorized vouchers, and have low amounts of budget authority in HCV program reserves. A list of eligible PHAs can be found here.
HAP Set-Aside – Non-Life Threatening (NLT) Inspection Withheld HAP – Reimburses PHAs for cases where the PHA paid the owner HAP that were withheld during CY 2021 in accordance with the requirements of the NLT initial inspection option.
Higher Administrative Fees – Increased Administrative Fees for PHAs that operate over a large geographic area, as defined as two or more counties.
July 8, 2022
Special Fees – HUD-VASH – Supports necessary additional administrative expenses incurred to increase lease-up success rates or decrease the time it takes for a veteran to locate and move into a unit. See Appendix C of the notice.
Special Fees – HUD-Family Unification Program (FUP) – Supports necessary additional administrative expenses incurred to achieve either of the following activities: 100% FUP/Foster Youth to Independence (FYI) voucher utilization; and Increase access to the program for FUP-eligible youth. See Appendix C of the notice.
September 30, 2022
HAP Set-Aside – Disaster* – Supports PHAs whose expenses have been impacted by disasters.
HAP Set-Aside – Unforeseen Circumstances* – Second and final deadline for additional funding for unforeseen circumstances.
HAP Set-Aside – HUD -VASH* – Second and final deadline for additional funding for HUD-VASH.
October 28, 2022
Special Fees – Disaster – In the event of a future allocation of disaster vouchers during CY 2022, PIH will provide eligibility and application guidance for disaster related vouchers’ special fees. See Appendix C of the notice.
Special Fees – Secretary’s Discretion – Provides additional administrative fee funding to cover administrative expenses incurred as the result of a situation outside of the specific categories described in PIH Notice 2022-14. See Appendix C of the notice.
December 30, 2022
HAP Set-Aside – Disaster* – Second and final deadline to request funding for Disaster assistance.
Mainstream Vouchers ($40 million; 4,200 vouchers) – An opportunity for PHAs to receive new Mainstream vouchers and extraordinary administrative fees to help PHAs lease their Mainstream vouchers. See PIH Notice 2022-07.
Stability Vouchers ($43 million; 4,000 vouchers) – Supports families experiencing or at-risk of homelessness, those fleeing or attempting to flee domestic violence, dating violence, sexual assault, and stalking and veterans and family members that include a veteran family member that meets one of the preceding criteria. Implements the funds provided in the 2021 appropriation.
FYI – Competitive ($15.3 million; 1,500 vouchers) – Provides assistance for FUP-eligible youth under the FYI program. (To be published at www.hud.gov/grants.)
July, FY 2022
HUD-VASH ($79 million; 8,500 vouchers) – Pairs HCV rental assistance with VA case management and supportive services for homeless Veterans. Awards based on geographic need and performance.
FYI – Non-Competitive ($15 million) – Provides assistance for Family Unification Program (FUP)-eligible youth under the Foster Youth to Independence (FYI) program.
New HCV Incremental Vouchers ($200 million; Up to 25,000 vouchers) – Provides rental assistance to families to support affordable housing and provide greater access to areas of opportunity through noncompetitive formula awards.
August, FY 2022
FUP ($5 million; 380 vouchers) – Provides rental assistance to families whose lack of adequate housing is a primary cause of the separation or imminent separation, of a child or children from their families. (To be published at www.hud.gov/grants.)
March, FY 2023
Mobility Related Services ($25 million; no additional vouchers) – Provides funding for mobility related services that are modeled after services provided with the Community Choice Demonstration. Preference will be given to PHAs with a higher concentration of HCV families with children residing in high-poverty areas. (To be published at www.hud.gov/grants.)