HCV Homeownership, a NAHRO Professional Development e-Learning, begins tomorrow and continues on Thursday. Register online at www.nahro.org/training-calendar.
HUD
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.
- 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.
- 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.
- 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.
President Officially Releases FY 18 Budget Proposal, Slashes Housing and CD Spending
The President’s FY 2018 budget request was officially released today.
The proposal, which largely mirrors the budget preview released in March makes steep cuts to housing and community development programs, slashing the overall HUD budget by $6 billion. The bulk of the cuts are to community development programs, which are largely eliminated. The budget also cuts the Public Housing Capital Fund by 68 percent, requesting a funding level of just $628 million for the upcoming fiscal year. The budget document also mentions that the Administration is working toward a “comprehensive package of rental assistance reforms” including “increased tenant rent contributions, the establishment of mandatory minimum rents, and the end of utility allowance reimbursements, among others.”
These proposed cuts, if implemented, would be devastating for communities. NAHRO strongly opposes the President’s budget proposal and will work to provide necessary and responsible funding for critical housing and community development programs. NAHRO will also fight for long-overdue program and regulatory reforms that can reduce costly administrative burdens. Listed below are the Administration’s proposed 2018 funding levels for programs central to the work of NAHRO’s membership.
- Public Housing Operating Fund: $3.9 billion, $500 million less than FY 2017
- Public Housing Capital Fund: $628 million, $1.31 billion less than FY 2017
- Choice Neighborhoods: $0, $137.5 million less than FY 2017
- Tenant-Based Rental Assistance: $19.318 billion, $974 million less than FY 2017
- Section 8 Housing Assistance Payment Renewals: $17.584 billion, $771 million less than FY 2017
- Ongoing Administrative Fees: $1.54 billion, $100 million less than FY 2017
- Family Self-Sufficiency: $75 million, level funding from FY 2017
- Section 8 Project-Based Rental Assistance: $10.751 billion, $65 million less than FY 2017
- Community Development Block Grant: $0, $3 billion less than FY 2017
- HOME Investment Partnerships Program: $0, $950 million less than FY 2017
- Housing Opportunities for Persons with AIDS: $330 million, $26 million less than FY 2017
- Homeless Assistance Grants: $2.25 billion, $133 million less than FY 2017
- National Housing Trust Fund: $0, approximately $219 million less than FY 2017
Members should note that the President’s request is the first step in the budget and appropriations process. The Administration’s budget request has over the years become a political document that reflects the fiscal goals and priorities of the Administration for the upcoming fiscal year. It does not carry the force of law. Congress, who controls the nation’s purse strings, can choose to accept the request wholesale, pick and choose parts of it, or reject it outright, which they frequently do.
Though the budget preview released in March was largely rejected by members of Congress, it is still important to communicate to your members of Congress the impact these types of cuts would have in your community.
This year’s budget comes months later than the traditional budget release date of the first Monday in February, placing a serious time constraint on Congress to approve as many appropriations bills as possible prior to leaving Washington for the August recess. Typically, by this time in the year, cabinet agency funding bills for 2018 would have already been approved. For example, the Senate passed the FY 2017 Transportation, Housing, and Urban Development (T-HUD) spending bill on May 19, 2016. Because of this shortened timeline, it is largely expected that a continuing resolution (CR) will be necessary to keep the government functioning beyond the end of the fiscal year on September 30.
Detailed coverage of the 2018 HUD budget request will follow later this week, which will give the membership more specific information and analysis that will assist you in educating and inform decision-makers and other interested parties.
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:
- 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);
- HUD highly recommends using their HCV forecasting tool.
Read more by clicking the link.
President Signs FY 2017 HUD Spending Bill
After seven months and three continuing resolutions, Congress on Thursday finally approved, and the President on Friday signed, an omnibus spending bill of all 11 remaining appropriations bills, including Transportation, Housing and Urban Development.
The $1.07 trillion deal provides funding for federal departments and agencies until the end of the fiscal year on September 30, 2017. The bill contains level funding or a slight increase to most housing and community development programs, with few exceptions.
The bill was passed on a bipartisan basis easily in both the House and the Senate. On Wednesday, the House approved the bill by 309 to 118 and on Thursday the Senate approved it by 79-18, sending the omnibus to the President for his signature. President Trump signed the bill this afternoon.
The final passage of the omnibus ends more than seven months of delays in finalizing spending for the current fiscal year. Initially opting to postpone making final spending decisions until after the election, Congress approved a short-term spending bill that ran out in mid-December, with the intention of wrapping up work on the fiscal year during the lame duck. However, the then President-elect signaled to Congress that he would like to have input on spending in the current fiscal year, so legislators passed a short-term bill until April 28. Congressional leadership, close to wrapping up negotiations, signaled last week that they needed an additional week of time, requiring the passage of yet another week-long continuing resolution.
The path to a deal was bumpy, but far less rocky than it could have been. Controversial policy riders and requests from the President to fund a border wall with Mexico and an increase defense spending were omitted, likely delaying a larger battle for later in the year. Critically, the parity between defense and non-defense spending was also maintained, a huge victory in a difficult political environment.
NAHRO Acting CEO John Bohm called upon Congress to begin work immediately on a responsible 2018 federal spending bill and expressed concern regarding the year-over-year need to approve continuing resolutions. “Despite promises to return to regular order with regard to the appropriations process,” Bohm said, “NAHRO members continue to struggle to meet local needs given the uncertainties and delays inherent in the approval of continuing resolutions. With the 2018 fiscal year to begin in a mere four months (including the annual August recess) there is at this point every assurance that we will be operating under yet another CR come October. We can do better than this to help those in need.”
Below is a summary of the FY 2017 housing and community development funding levels. The NAHRO Policy Staff has conducted a detailed analysis of the Public Housing, Section 8 and Community Development provisions and funding levels. NAHRO Members can read each of these deep-dive analysis documents on the NAHRO website:
Housing and Community Development Funding Levels
- Public Housing Programs
- Public Housing Capital Fund – $1.9415 billion, $41.5 million higher than FY 2016
- Competitive Lead-Based Paint Grants – $25 million, new program
- ROSS – $35 million, level funding
- Emergency Capital Needs – $21.5 million, $500,000 less than FY 2016
- Jobs Plus – $15 million, level funding
- PH Financial Physical Assessment – $10 million, $7 million higher than FY 2016
- Public Housing Operating Fund – $4.4 billion, $100 million less than FY 2016
- Choice Neighborhoods Initiative – $137.5 million, $12.5 million higher than FY 2016
- Family Self-Sufficiency – $75 million, level funding
- RAD – expanded to 225,000 units
- Public Housing Capital Fund – $1.9415 billion, $41.5 million higher than FY 2016
- Section 8 Programs
- Tenant-Based Rental Assistance – $20.292 billion
- Section 8 Housing Assistance Payment Renewals – $18.355 billion, $663 million higher than FY 2016
- Ongoing Administrative Fees – $1.64 billion, level funding
- Section 8 Project-Based Rental Assistance – $10.816 billion, $196 million higher than FY 2016
- Tenant-Based Rental Assistance – $20.292 billion
- Community Development Programs
- Community Development Block Grant – $3 billion, level funding
- HOME Investment Partnerships – $950 million, level funding
- Housing Opportunities for Persons with AIDS – $356 million, $21 million higher than FY 2016
- Homeless Assistance Grants – $2.383 billion, $133 million higher than FY 2016
Updated HAP Proration for FY 2017 Budget
NAHRO received word from HUD that its latest Housing Assistance Payment (HAP) proration forecast for the Housing Choice Voucher (HCV) Program FY 2017 budget is 97.277 percent. This number has been entered into HUD’s forecasting tool as the default proration for FY 2017. NAHRO was previously reporting a HAP proration of 97.5 percent for the FY 2017 budget.
[5/5/17 1:37 pm ET edit – We have learned from HUD that their current estimate of the administrative fee proration for the FY 2017 budget is 75.7 percent. NAHRO has been reporting a 75 percent proration.]
NAHRO members can find a more detailed analysis of the budget here.
HUD Releases Guidance for Shortfall and Administrative Fees for HCV Program
On April 26, HUD released a 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.” The notice provides guidance for eligibility for shortfall funding when available and information on administrative fees.
Shortfall Guidance – For PHAs that have been identified by their field offices or the Shortfall Prevention Team as at risk or potentially at risk for a shortfall, the following actions must be taken upon instruction by the Shortfall Prevention Team:
- Continue to work with the Field Office or Shortfall Prevention Team;
- Cease issuing vouchers as of the date notified of the potential shortfall (though certain exceptions apply);
- Rescind vouchers that were issued to applicant families and stop leasing rescinded vouchers as of the date the PHA is notified of the potential shortfall;
- Cease absorbing portable vouchers; and
- Stop issuing vouchers for households that have project-based vouchers, but want to voluntarily move with tenant-based assistance.
If shortfall funding is available, it will be made contingent on housing authorities have taken the steps listed above, when instructed by the Shortfall Prevention Team.
Administrative Fee Guidance – For CY 2017, HUD intends to make $10,000,000 available for PHAs that need additional funds to administer their Section 8 programs. The following fee categories are available:
- Homeownership Fees – HUD provides a $200 special fee for every homeownership closing reported in PIC for families participating in the Voucher Homeownership, Section 8 Family Self-Sufficiency, or Section 8 MTW Homeownership programs.
- Special Fees for Multifamily Housing Conversion Actions – For multifamily housing conversions, a special (one-time) fee of $200 will be provided for each unit occupied on the date of the eligibility event.
- Special Fees for Portability – Receiving PHAs, where portability vouchers comprise a significant portion (20 percent or more) of their vouchers under lease, are eligible for a special fee. While PHAs do not need to apply for these funds, PHAs should ensure that all PIC data has been updated and successfully submitted no later than 5 pm ET, May 22, 2017.
- Special Fees for Audit Costs Related to HCV Voluntary Transfers – To request fees under this category, please see notice PIH 2015-22 titled “Process for Public Housing Agency Voluntary Transfers and Consolidations of Housing Choice Vouchers, Mainstream 5 Year Vouchers, Project-Based Vouchers and Project-Based Certificates.”
- Other special fees under the Secretary’s discretion.
Blended Administrative Fees – PHAs that serve multiple administrative fee areas may request a blended rate based on the actual location of their assisted units. Requests for blended rates must be received by, close of business, 5 pm ET, May 22, 2017. PHAs can send electronic requests for blended rate fees by emailing PIHFinancialManagementDivision@hud.gov. The subject line should read “PHA Number (i.e., PHA xxx), 2017 Request for Blended Rate Administrative Fees.”
Higher Administrative Fees – A PHA that operates over a large geographic area (multiple counties) may request higher administrative fees. The PHA will have to submit actual costs at the end of the calendar year to enable HUD to determine if the approved increase was needed. To apply for higher administrative fees, a PHA must submit certain documentation to their assigned Financial Analyst by the close of business, 2 pm CT, May 22, 2017.
NAHRO will provide additional coverage of this notice to our members. The notice can be found here.
FY2017 Omnibus Spending Bill Agreement
On Monday, May 1st, an agreed to fiscal year 2017 omnibus appropriations bill was released. The spending deal would fund the Federal government through September 30, 2017. This omnibus must still be voted on in the House and Senate and then be signed by the President but there is optimism and agreement among the parties involved.
The omnibus provides the Department of Housing and Urban Development (HUD) with $38.8 billion for fiscal year 2017, which is a 1 percent increase over fiscal year 2016 levels. Below is a brief breakdown of a few of the HUD program areas. The NAHRO Policy Team will continue to analyze the omnibus and will provide a deep dive analysis once the omnibus becomes law.
Public Housing (PH)
The omnibus funds the PH Operating Fund at $4.4 billion, which is $100 million less than fiscal year 2016.
The PH Capital Fund is funded at $1.9415 billion, an increase of $41.5 million from fiscal year 2016. This capital funding includes set-asides of $35 million for Resident Opportunities and Self-Sufficiency (ROSS), $25 million for new Competitive Lead-Based Paint Hazard Grants, $21.5 million for Emergency Capital Needs, $15 million for Jobs Plus Pilot, and $10 million for PH Financial and Physical Assessment Activities.
Section 8
Tenant-Based Rental Assistance is funded in the omnibus at $20.292 billion, which is an increase of $663 million more than fiscal year 2016. This amount includes set-asides for Section 8 Housing Assistance Payment Renewals funded at $18.355 billion, Ongoing Administrative Fees at $1.640 billion, Special and Ongoing Administrative Fees at $10 million, Tenant Protection Vouchers at $110 million, and new Incremental Vouchers at $57 million. The Mobility Demonstration program is not funded in the FY2017 omnibus appropriation bill.
Community Development
The Community Development Block Grant (CDBG) and the HOME Investments Partnerships Program (HOME) have flat funding at $3 billion and $950 million respectively.
The Housing Opportunities for Persons with AIDS (HOPWA) is funded at $356 million, an increase of $21 million from FY2016 and the Homeless Assistance Grants are funded at $2.383 billion, an increase of $133 million over FY2016 levels.
Other Rental and Service Programs
The Family Self-Sufficiency (FSS) program is funded at the same level as FY2016, $75 million.
Section 8 Project-Based Rental Assistance increased $196 million from FY 2016 levels to $10.816 billion.
The Rental Assistance Demonstration (RAD) program did not receive any additional funding but the cap on the number of units eligible for the program was increased from 185,000 to 225,000 and the RAD program was extended from 2018 to 2020.
The Neighborhood Reinvestment Corporation (NeighborWorks) was funded at $140 million with $5 million to be used for a multi-family rental housing program.
The United States Interagency Council on Homelessness is funded at $3.6 million and is extended to October 1, 2018.
The NAHRO Blog: Legislative & Policy Updates from Washington, DC 