Federal Funding

HUD Publishes HCV Mobility NOFO

~ Tushar Gurjal ~ Leave a comment

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-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.

HUD Extends AFFH Comment Deadline to April 24, 2023

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The U.S. Department of Housing and Urban Development will be extending the comment period on its proposed rule to affirmatively further fair housing. The new comment deadline is April 24, 2023. The Department states that the “extension will allow interested persons additional time to analyze the proposal and prepare their comments.”

A pre-publication copy of the extension can be found here.

New Subsidy Layering Review Notice Published

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In mid-March, HUD published a new notice titled “Administrative Guidelines: Subsidy Layering Review for Project-Based Vouchers” in the Federal Register. The new notice provides background information about what subsidy layering reviews (SLRs) are; it provides information about when SLRs are needed and applicable safe harbor standards; it discusses the potential role of Housing Credit Agencies; and provides other miscellaneous information, including an appendix with the required elements of an SLR application, which may also serve as a checklist.

HUD mandates that SLRs are performed when project-based vouchers (PBVs) are used in conjunction with other subsidies to ensure that projects are not overly subsidized. This mandate is not applicable to existing housing.

When a PHA begins a new construction or rehabilitation that requires PBVs, it is required to request that an SLR be completed in certain instances. The PHA is responsible for collecting the appropriate documentation.

There are certain safe harbor requirements in SLRs. When a project falls within the scope of these safe harbors, and HUD is conducting the SLR, the project may move forward without additional justification. If the project falls outside the safe harbors, then additional documentation and justifications are required. If a housing credit agency (i.e., a state housing finance agency; HCA) is performing the SLR, the safe harbor requirements may only be exceeded if costs outside the safe harbor still fall within the HCA’s published qualified allocation plan.

A PHA may not execute an Agreement to Enter Into a Housing Assistance Payments Contract (AHAP) until the SLR has been completed and approved by either HUD or the HCA, depending on the circumstance. The chart below reviews project scenarios and potential entities, if any, that may perform the SLR.

ScenarioSLR ReviewerNo additional government funding certification required?
New construction or rehabilitation with PBV funding and 2 or more forms of government assistance.HCA or HUD.*If by HCA, no certification required. If by HUD, then HUD certifies.
New construction or rehabilitation with PBV and Low-Income Housing Tax Credit (LIHTC) funding.HCA or HUD.If by HCA, no certification required. If by HUD, then HUD certifies.
PBV existing housing.No SLR required.No.
New construction or rehabilitation with only PBV assistance.No SLR required.No.
Mixed-finance projects, with or without LIHTC, with or without PBV assistance, with other forms of government assistance.HUDYes.
*PHAs may request that HUD perform the SLR if the project does not use LIHTCs.

The full notice can be found here.

New Foster Youth to Independence Notice (PIH 2023-04)

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In mid-March, HUD published a notice titled “Foster Youth to Independence Initiative” (PIH 2023-04). The notice does several things:

  • The notice supersedes the prior Foster Youth to Independence (FYI) notice (PIH 2021-26);
  • The notice details the process by which PHAs may apply for $30 million in funding from a combination of remaining funds from the 2023, 2022, 2021, and 2020 appropriations acts;
  • It details the process for FYI funding applications for future appropriations acts;
  • It describes a new Voucher Management System (VMS) field and details reporting requirements for FYI Tenant Protection Vouchers;
  • The notice makes certain changes to the utilization requirements for PHAs that currently have Family Unification Program (FUP) or FYI vouchers and creates exceptions for those utilization requirements;
    • If a PHA has 10 or fewer FUP or FYI vouchers (previously, this was 5 or fewer vouchers), it must have a 50% utilization rate for each category of mentioned voucher to request additional vouchers;
    • If a PHA has 11 or more vouchers, it must have a 90% utilization for each category of mentioned voucher to request additional vouchers;
      • This notice creates new exceptions for those that do not meet the utilization levels for their category:
        • Project-basing exception – PHAs project-basing FYI or FUP vouchers may have those vouchers that are to be project-based removed from the utilization calculation, though the resulting numbers must still meet the utilization criteria; and
        • Families Searching for a Unit exception – PHAs may submit a 2-page narrative stating why the PHA meets the utilization threshold, but this rate is not yet reflected in VMS data or PHAs may submit a certification that all available FYI or FUP vouchers have been issued, with actions being taken to assist the voucher holders, and that the PHA expects to meet the utilization requirement;
  • It clarifies that PHAs must comply with the Fostering Stable Housing Opportunities provisions that were passed into law and may provide an additional 24 months for youth to continue receiving voucher assistance if they meet certain requirements (e.g., participating in a self-sufficiency program or engaging in education, workforce development, or employment activities; for additional information see “Implementation of the Fostering Stable Housing Opportunities Amendments” in the Federal Register).

The full notice can be found here.

HUD Issues Second HCV Get Ready Letter – Plan for Higher Funding

~ Tushar Gurjal ~ Leave a comment

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 Two-Year Tool can be found here.

The Department has also created a one-pager with links to tools to help increase utilization that can be found here.

Finally, the Department has created a video that provides an overview of the HCV funding process (see below).

HUD Sends HCV Get Ready Letter to PHA Executive Directors

~ Tushar Gurjal ~ Leave a comment

On Jan. 5, HUD sent an HCV Get Ready Letter to PHA Executive Directors. The letter informs PHAs “of the status of HCV program funding, projections for calendar year (CY) 2023 renewal funding” and certain other items.

Funding Levels

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.

Reporting Deadlines

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 full 2023 HCV Get Ready Letter may be found here.