HUD Publishes 2023 OCAFs

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:

  • State-level data;
    • Electricity;
    • Fuel Oil;
    • Natural Gas;
  • National-level data;
    • Employee Benefits;
    • Employee Wages;
    • Goods, Supplies, and Equipment;
    • Insurance;
    • Property Taxes; and
    • Water, Sewer, and Trash.

Methodology Changes

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.

HUD Increases Funding Available for Mainstream Vouchers

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.

HUD Announces PHAs for MTW Asset Building Cohort

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:

  1. 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.
  2. Credit Building Option – PHAs must report public housing rent payments to credit bureaus.
  3. 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.

The Request for Applications for the MTW fourth cohort (Notice PIH 2022-11) can be found here.

NAHRO congratulates all of the selected PHAs that were selected in this cohort. The complete list can be found below.

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HUD Distributes $200 Million in New General-Purpose Vouchers

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.

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HCV CARES Act Funding Closeout for the HCV, Mainstream, and Mod. Rehab. Programs

On August 3, HUD published a notice titled “CARES Act Funding Reconciliation and Closeout – Housing Choice Voucher Program, Mainstream Vouchers, and Moderate Rehabilitation Program.” The notice describes the closeout procedures for funds received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act for the Housing Choice Voucher (HCV), the Mainstream, and the Moderate Rehabilitation (MR) programs. The period of availability for CARES Act funds ended on Dec. 31, 2021, but PHAs had 120 calendar days to “liquidate/disburse unliquidated obligations.” That 120 day period ended on April 30, 2022.

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.

The full notice may be found here.

After NAHRO’s Urging, HUD Expands Administrative Fee Eligible Uses

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:
      • applicant intake;
      • lease-up activities;
      • income determinations and reexaminations;
      • unit inspections;
      • disbursing HAP to landlords;
      • policy and operational planning and implementation;
      • financial management;
      • HCV record-keeping and reporting;
    • Indirect overhead activities associated with operating the HCV program:
      • PHA management;
      • human resources;
      • legal;
      • finance;
      • accounting and payroll;
      • information technology;
      • procurement;
      • quality control;
      • central office cost center HCV program expenses;
    • Housing search assistance activities;
      • pre-move counseling;
      • 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;
      • associated expenses;
  • 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.

The full notice may be found here.

HUD Publishes TPV Funding for FY 2021

Earlier today, a pre-publication version of a notice detailing HUD’s tenant-protection voucher (TPV) funding for Fiscal Year (FY) 2021 was published. The notice is titled “Announcement of Tenant Protection Voucher Funding Awards for Fiscal Year 2021 for the Housing Choice Voucher Program.” These vouchers were awarded for a variety of reasons. A special administrative fee of $200 was provided to PHAs in multifamily housing conversion actions. The Department awarded approximately $142 million to recipients for 14,423 vouchers.

The pre-publication notice can be found here.

Voucher Funding Opportunities

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
    • No Deadline
      • 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.
      • Blended Rate Administrative Fees – Increased Administrative Fees for PHAs serving multiple Administrative Fee areas.
      • 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.
  • Other Voucher Funding Opportunities (Date is target publication date of notice; unless noted otherwise, these will be published as PIH notices at www.hud.gov/program_offices/public_indian_housing/publications/notices.)
    • June, FY 2022
      • 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.)

HUD Publishes FY 2022 Renewal Funding Inflation Factors (RFIFs)

On May 26, HUD published a notice in the Federal Register announcing the renewal funding inflation factors (RFIFs) for fiscal year (FY) 2022. The notice is titled “Section 8 Housing Assistance Payments Program-Fiscal Year (FY) 2022 Inflation Factors for Public Housing Agency (PHA) Renewal Funding.” HUD uses the inflation factors to determine Housing Assistance Payment (HAP) renewal funding for the Housing Choice Voucher (HCV) program. The notice states that HUD “applies the calculated individual area inflation factors to eligible renewal funding for each PHA based on VMS [Voucher Management System] leasing and cost data for the prior calendar year” (i.e., HUD applies an inflation factor to a PHA’s past year leasing data in HUD’s systems to calculate its current year’s formula eligibility). The national inflation factor is 4.68%, but individual PHAs will have inflation factors that differ based on their local contexts.

The full notice can be read here.

HUD Publishes FY 2022 HCV Implementation Notice

On May 19th, HUD published the 2022 Housing Choice Voucher (HCV) Implementation notice (PIH Notice 2022-14). Titled “Implementation of the Federal Fiscal Year (FFY) 2022 Funding Provisions for the Housing Choice Voucher Program,” this notice details how HUD will allocate the money appropriated by Congress for the HCV program.

The notice notes how much money Congress has allocated for each voucher account for 2022; how the Housing Assistance Payment (HAP) renewal formula is calculated; and discusses the administrative fee rate. It also notes how to apply for administrative fee special fees, HAP set-aside funds, and certain other fees. The notice also discusses each voucher account, and where applicable, notes if another notice will discuss it further. The notice states that the mobility-related services account of $25 million will have a Notice of Funding Opportunity at a later date and that the new $200 million in funding for vouchers will be allocated by a noncompetitive notice with an operational notice following soon afterwards.

Perhaps the biggest change in this notice from prior years is that eligibility for tenant protection vouchers (TPVs) is changed. HUD will no longer provide replacement TPVs for vacant units that were occupied by a family within the previous 24 months. At this time, HUD will only provide replacement TPVs for occupied units. If there are any additional TPV funds at the end of 2022, then HUD may decide to provide TPVs for the vacant units that were occupied within the last 24 months.

Interestingly, the notice hints that the eligible uses of administrative fees may be clarified. It states that “HUD intends to issue additional guidance on the use of administrative fees for other expenses of PHAs administering the HCV program in a forthcoming notice.” NAHRO applauds this forthcoming clarification of administrative fee uses as the current eligible uses are overly circumscribed and not required by any statutory language.

NAHRO members will receive additional information on this notice.

The full notice can be found here.