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

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

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.

2023 Renewal Funding Inflation Factors (RFIFs) Published

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

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 Publishes 2023 HCV Funding Notice

On April 4, HUD published a notice titled “Implementation of the Federal Fiscal Year (FFY) 2023 Funding Provisions for the Housing Choice Voucher Program.” This notice details the process by which HUD will implement and allocate funding from the 2023 appropriations bill for the Housing Choice Voucher (HCV) program. One change from prior implementing notices is that set-aside applications for additional funding must be accepted through DocuSign.

The notice describes several aspects of the HCV portion of the appropriations act, including how renewal funding is calculated (using the same renewal formula that has been in use for the last several years).

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HUD Extends AFFH Comment Deadline to April 24, 2023

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

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)

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 Publishes Housing Mobility Toolkit

The U.S. Department of Housing and Urban Development recently published a Housing Mobility Toolkit. The toolkit provides “examples and sample materials for Public Housing [Agencies] and their partners to adapt and implement a Housing Mobility Program in their community.” Mobility programs allow voucher program participants greater ability to move into areas of opportunity, if they choose. Research shows that moving to areas of opportunity can have positive impacts on physical health, mental health, and the lifetime earnings for children under the age of 13.

The Housing Mobility Toolkit includes a variety of documents:

  • Program Manual – this document describes best practices and emerging practices on how mobility services should be delivered;
  • Program Manual Attachments – these documents are referenced in the Program Manual; they are provided for PHAs and their partners to adapt and use;
  • Program Setup – this document helps PHA set up their mobility programs;
  • Program Setup Attachments – these documents are there to help PHAs set up their programs;
  • Housing Search Workshop Materials – sample materials for PHAs to create a Housing Search Workshop for participants in a mobility program;
  • Renter’s Workshop Materials – sample materials for creating a renter’s workshop for program participants who may have limited knowledge of being a renter;
  • Money Management Workshop Materials – these documents help PHAs set up a money management workshop for program participants who may have had trouble managing their finances in the past.

Webinar on the Toolkit

The Department will be hosting a webinar on the toolkit on April 26 at 1 pm ET. You can register for the webinar here. The webinar will be recorded and will eventually be posted here.

The full toolkit can be found here.

HUD Finalizes Disparate Impact Rule

The U.S. Department of Housing and Urban Development (HUD) has finalized a rule titled “Reinstatement of HUD’s Discriminatory Effects Standard.” The Department has posted a pre-publication copy of the final rule on its website. The rule will go into effect 30 days after it has been published in the Federal Register.

The current final rule would recodify a 2013 rule on disparate impact. The 2013 rule is titled “Implementation of the Fair Housing Act’s Discriminatory Effects Standard.” The 2013 rule was altered by a rule published in 2020 titled “HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard.” The 2020 rule would have made significant changes to, among other things, a three-part burden-shifting test that determined whether a particular practice had an “unjustified discriminatory effect.”

A federal court stayed the implementation and enforcement of the 2020 rule, so the 2013 rule remained in effect, and will continue to remain in effect with this final rule which “reinstates and maintains the 2013 rule.”

The pre-publication copy of the final rule can be found here.