Affordable Housing News

HUD suspends mandatory SAFMRs

Posted by NMA on Aug 15, 2017 9:00:12 AM

govt-columns.jpgIn a letter to PHAs dated August 11, HUD announced that it has suspended the mandatory use of small area fair market rents (SAFMRs) for a period of two years. The suspension applies to 23 of the 24 metropolitan areas which had been selected to use SAFMRs beginning on October 1, 2017. The requirement has been suspended for two years, until October 1, 2019.

According to the letter, HUD decided to suspend the requirement for three reasons:

  • Interim findings of the SAFMR demonstration, in operation since 2012, indicate the need for further analysis of benefits and costs
  • Responses to HUD’s request for comments on regulatory reform recommended a suspension of the requirement
  • HUD has not yet provided guidance and technical assistance

The letter further states that PHAs may request permission from HUD to implement SAFMRs on a voluntary basis. Some PHAs may have already prepared for implementation and may wish to proceed. HUD will expedite the approval process for PHAs impacted by the suspension of mandatory SAFMRs.

PHAs designated to use 50th-percentile FMRs, for which the three-year authorization period did not expire before January 17, 2017, will continue to use them until October 1, 2019. These PHAs will then transition to the use of SAFMRs.

HUD plans to provide implementation guidance and training on all aspects of the rule, including voluntary use of SAFMRs and options for PHAs operating in 50th-percentile FMR jurisdictions. Questions may be directed to HUD field offices or to SAFMR_Rule@hud.gov.

To receive more updates and analysis like this on the latest HUD news, subscribe to NMA’s PIH Alert and receive a daily email with breaking stories and other important information for PHAs and housing professionals.

Topics: flat rent, FMR, PIH Alert, Program News and Notices

HUD issues revised RAD notice

Posted by NMA on Jan 19, 2017 12:43:18 PM

RAD conversions

Last week via email, the Department of Housing and Urban Development (HUD) announced to the public the online publication of revised program instructions for the Rental Assistance Demonstration (RAD) in Notice PIH 2012-32/Notice H 2017-03, REV-3. The revised notice, which fills 242 pages, includes the following key revisions for the first component (from the email):

  • Allowing PHAs to increase RAD rents by relinquishing existing balances of replacement housing factor (RHF) funds or demolition and disposition transition funding (DDTF)
  • Eliminating the cap on the number of project-based voucher units at a project
  • Revising the requirements regarding information provided to residents and PHA responses to resident comments at properties undergoing conversion
  • Extending the prohibition on re-screening to current public housing households that will reside in non-RAD PBV or non-RAD PBRA units in projects that contain RAD PBV or RAD PBRA units to facilitate the right to return to the assisted property
  • Consolidating the selection priority categories for new applications into “high investment applications” and “all other applications” (subject to public comment)
  • Allowing PHAs to submit a simple letter of interest rather than an application when a waiting list has formed, where the letter of interest would serve to reserve a project or portfolio’s position on the waiting list subject to future submission of a RAD application (subject to public comment)
  • Making an entire contiguous HOPE VI project that was developed in phases eligible, as long as the earliest phase is greater than ten years old (subject to public comment)
  • Correcting rent phase-ins for residents who may experience a rent increase as a result of conversion
  • Clarifying that a PHA is permitted to receive cash acquisition proceeds in excess of any seller take-back financing and that such proceeds must be used for affordable housing purposes, which is a newly defined term
  • Allowing flexibility for requirements related to capital needs assessments, i.e., permitting certain exemptions when the assisted units are a small percentage of the total project
  • Requiring title reports to be submitted with the Financing Plan
  • Modifying the maximum allowable developer fee by excluding from the formula for larger transactions any acquisition payments made to the PHA, developer fee, and reserves
  • Establishing greater flexibility to underwrite to new loan products
  • Providing greater detail on the acceptable forms in which a public or non-profit can demonstrate ownership or control
  • Providing guidance on owners’ responsibilities to treat lead-based paint hazards in the context of a RAD conversion
  • Encouraging PHAs and their partners to grant current workers whose employment positions may be eliminated during conversion the right of first refusal for new employment openings for which they are qualified

Changes for the second component include:

  • Likewise eliminating the cap on the number of PBV units at a project
  • Permitting Mod Rehab conversions to PBRA to convert at comparable market rents, up to 110 percent of fair market rent (FMR)
  • For Mod Rehab SRO conversions, authorizing the use of the efficiency FMR for SRO units, rather than 75 percent of the efficiency FMR, which is the existing SRO standard
  • Allowing all conversions to PBRA to achieve rents between 110 percent and 120 percent of FMR, if justified by comparable market rents and only in certain circumstances where preservation criteria have been met
  • For conversions to PBRA, permitting the use of small area FMRs (SAFMRs) in the calculation of the contract rent cap, with HUD approval

To help navigate through these numerous changes, HUD has kindly provided two versions of the notice: one showing all of the changes in a redlined format, and a clean version of the document. Both are available here, on the RAD webpage. According to the email, HUD intends to hold live webinars on the notice and will provide more information in the following weeks. Click here to join the RADBlast! email list.

Got questions about RAD? Nan McKay & Associates currently offers three RAD certifications: RAD Project-Based Rental Assistance (PBRA) OverviewRAD Project-Based Voucher (PBV) Specialist, and our newly redesigned Multifamily Housing Specialist (MHS), which is the only training in the affordable housing industry that includes specific requirements for PHAs participating in the RAD program. If your PHA has elected to transform its public housing to project-based rental assistance (PBRA), this training is a must.  If you aren't sure which training is the right one for your agency, give us a call at (800) 783-3100 or email sales@nanmckay.com and our experienced staff will point you in the right direction.

Topics: FMR, Mod Rehab, PBRA, PBV, PIH notices, Program News and Notices, public housing conversion, RAD, lead-based paint

HUD publishes final rule on small area FMRs

Posted by NMA on Nov 17, 2016 2:55:39 PM

Yesterday the Department of Housing and Urban Development (HUD) published in the Federal Register a final rule on the use of small area fair market rents (SAFMRs) in the housing choice voucher (HCV) program.

The rule, which is intended to help reduce the number of assisted families that reside in areas of high poverty concentration, requires the use of SAFMRs in certain metropolitan areas if the area meets a specific set of criteria. It changes the geography used to calculate FMRs in certain areas from a metropolitan area-wide approach to the zip code level, expanding the options of families to live in lower poverty neighborhoods.

In a notice published today in conjunction with the rule, HUD lists the 24 areas required to implement SAFMRs, and discusses several key changes made from the rule proposed in June of this year. These changes include:

  • The addition of three payment standard reduction protections
  • Additional criteria for selecting SAFMR areas
  • The exemption of project-based vouchers (PBVs) except in certain conditions
  • Additional changes to reduce the administrative burden on PHAs and simplify the transition

HUD’s Office of Policy Development and Research (PD&R) established a website earlier this year containing tools and information on the use of SAFMRs in the HCV program. To accompany the final rule, HUD has posted links to several supplementary documents on this website, including today’s press release on the rule, the key aspects notice mentioned above, and second Federal Register notice on SAFMRs, also published this morning, which sets the values for the selection criteria used to determine areas subject to small area FMRs, and lists the areas meeting these requirements. The rule becomes effective on January 17, 2017.

Topics: final rule, FMR, PBV, Program News and Notices

HUD publishes HOTMA implementation guidance

Posted by NMA on Oct 25, 2016 12:05:11 PM

HOTMA

Yesterday in the Federal Register, the Department of Housing and Urban Development (HUD) published the initial implementation guidance for the Housing Opportunity through Modernization Act (HOTMA).

The guidance sets forth the statutory provisions effective immediately under HOTMA, and the actions that may or should be taken now in order to comply with those changes, in addition to identifying the provisions that are not effective until HUD subsequently issues a notice or regulation to implement them.

As specified in the guidance, among the HOTMA provisions that are effective upon enactment, or otherwise in effect, are the following:

  • Reasonable accommodation payment standards. HOTMA allows PHAs to establish a payment standard of up to 120 percent of fair market rent (FMR) without HUD approval as a reasonable accommodation for a person with a disability. Because the streamlining rule previously provided PHAs with this flexibility, no action is required to implement this provision.
  • Establishment of FMR. This provision changes how HUD publishes FMRs and the procedures for comment and requests for reevaluation. Additionally, HOTMA provides that in the housing choice voucher (HCV) program, no PHA is required as a result of a reduction in the FMR to reduce the payment standard of a family continuing to reside in a unit under HAP contract at the time the FMR was reduced. Should PHAs choose to use the higher payment standard for the family’s subsidy calculation, this must be specified in the administrative plan. HUD’s FMRs for 2017 already reflect the new procedures, and HUD will issue additional guidance with regards to payment standards in the future.
  • Family Unification Program (FUP) for children aging out of foster care. HOTMA revises the length of the term that an FUP-eligible youth may receive FUP assistance from 18 to 36 months, in addition to revising the eligibility requirements for FUP-eligible youth. Changes to the FUP program were effective upon implementation of HOTMA and PHAs were made aware of the new provision by means of a letter to FUP PHA executive directors on August 29, 2016. Further details can be found in today’s guidance.
  • Preference for United States citizens or nationals. This section applies to Guam only. The provisions were effective upon enactment of HOTMA and the details can be found within today’s guidance.
  • Exception to PHA resident board member requirement. Certain jurisdictions, as specified in the guidance, are excepted from the resident board member requirement. While effective upon implementation of HOTMA, this exception has already been effective for a number of years through various appropriations acts.
  • Inclusion of PHAs and local development authorities in Emergency Solutions grants. HOTMA authorized local governments receiving these grants to sub-award all or some of those funds to PHAs and local redevelopment authorities. The provision was effective upon implementation of HOTMA, although HUD does intend to issue further guidance on the matter.
  • Inclusion of Disaster Housing Assistance Program (DHAP) in certain fraud and abuse measures. This provision considers DHAP a HUD program for the purpose of income verifications. Like other provisions described in the notice, it has previously been in effect through appropriations acts for a number of years.
  • Energy efficiency requirements under the Self-Help Homeownership Program (SHOP). While this provision was effective upon enactment of HOTMA, changes will be reflected in the future SHOP notice of funding availability (NOFA), where more information will also be provided.
  • Formula and terms for allocations to prevent homelessness for individuals living with HIV or AIDS. This provision makes several changes to the Housing Opportunities for Persons with AIDS (HOPWA) program. They apply to FY 2017 funds and HUD’s Office of Community Planning and Development (CPD) will issue further guidance on how the changes will affect future funding.

As mentioned above, today’s guidance also specifies several other pieces of HOTMA that will require further rulemaking or guidance in order to become effective. In other words, PHAs may not apply these provisions until HUD issues a rule or a notice addressing them. Because they are not immediately effective, they are summarized in brief below, although further details can be found in today’s guidance:

  • Changes regarding initial inspections in HCV units
  • Changes on the enforcement of housing quality standards (HQS) in HCV units
  • Changes regarding the frequency of income reviews
  • Changes on income reviews in project-based housing, in addition to changes on project-based assistance in general
  • Limitations on public housing tenancy for over-income families
  • Limitations on eligibility for assistance based on assets
  • Changes regarding PHA-owned units
  • Revisions to requirements regarding the public housing capital and operating funds
  • Changes regarding the use of vouchers for manufactured housing
  • Modifications of FHA requirements for mortgage insurance for condominiums
  • Changes regarding the definition of geographic area in the Continuum of Care program
  • Changes regarding HOPWA allocations

Got questions about HOTMA? All of NMA's HCV classes have been updated for the new payment standard rules. Register at least 45 days in advance for most seminars and you’ll receive a 10 percent discount. (The discount does not apply to seminars hosted by housing authorities or associations.)

Topics: capital fund, disaster programs, energy efficiency, FMR, HOTMA, HQS, inspections, operating subsidy, over-income families, Program News and Notices, reasonable accommodation, rent calculation, streamlining, voucher reform legislation

Q&A: HOTMA implementation

Posted by NMA on Oct 3, 2016 2:01:08 PM

Q&A: HOTMA implementationQUESTION    We understand that HOTMA was signed into law by the president on July 29, 2016. Inasmuch as there are many substantive administrative changes to the HCV and public housing programs contained in this new law, we are wondering whether PHAs need to await the issuance of a HUD notice before they implement these changes (for example, increase in elderly/disabled deduction, asset limitations, reporting changes of 10 percent or more) or whether PHAs are obligated to immediately adopt these changes even before HUD issues new rules clarifying this new law? We have many recertifications in the pipeline and an answer to this question will obviously impact these pipeline cases.

ANSWER    Most provisions of the Housing Opportunity through Modernization Act of 2016 (HOTMA) will not take effect until HUD has completed the formal rulemaking process. This typically involves issuance of a proposed rule, review of public comments, and publication of a final rule. Changes would likely go into effect 30 days after publication of the final rule, so it may be a year or more before PHAs are permitted to implement the new law.

Five self-implementing provisions of HOTMA were discussed in a letter to executive directors dated September 26. While the remaining HOTMA changes will be implemented through the formal rulemaking process, these five sections became effective immediately upon enactment. Implementation requirements are described below.

Reasonable accommodation payment standards: Section 102(d) of HOTMA provides that PHAs may establish, without HUD approval, a payment standard of up to 120 percent of the fair market rent (FMR) as a reasonable accommodation for a person with a disability. Since this option was made available under the March 8 streamlining final rule, no further action is required.

Fair market rents: Two changes involving FMRs are included in Section 107 of HOTMA. The first change involves HUD’s methods for establishing and publishing FMRs. HUD will no longer publish “proposed” and “final” versions of the FMRs, but PHAs and other interested parties may comment on the FMRs and request HUD to reevaluate them in a jurisdiction before those rents become effective. FMRs for fiscal year 2017 were published on August 26 using the new method.

HOTMA also provides that no PHA in the housing choice voucher (HCV) program is required, as a result of a reduction in the FMR, to reduce the payment standard applied to a family continuing to reside in a unit under a housing assistance payment (HAP) contract at the time the FMR was reduced. PHAs must adopt policies in their administrative plans that further explain this provision. According to the letter:

Effective July 29, 2016, PHAs may choose, but are no longer required, to reduce the payment standard for a family that remains under HAP contract at the family’s second annual reexamination if, as the result of a decrease in the FMR, the payment standard would otherwise fall outside the basic range. HUD will issue additional guidance on this change in the future.

Family Unification Program (FUP) changes: HOTMA expanded FUP eligibility and increased time limits for eligible youth. The changes were effective upon enactment. HUD issued a letter to FUP executive directors on August 29 to ensure awareness of the changes.

Citizenship preference: This provision applies only to Guam and requires a preference for U.S. citizens and nationals over citizens of the Marshall Islands, Micronesia, and Palau. It was effective upon enactment of HOTMA.

Exception to resident board member requirement: HOTMA provides an exception to the requirement that the board must include at least one public housing resident for the Housing Authority of the County of Los Angeles and for any PHA in the states of Alaska, Iowa, and Mississippi. Since the provision has been in effect for a number of years through appropriations acts, no further action is required.

The letter contained the following guidance on HOTMA implementation:

All of the other sections in HOTMA that impact the HCV and public housing programs require that HUD first issue a notice or regulation for the provision to become effective. Until HUD issues the applicable notices or regulations, your PHA may not implement those additional sections. This information will also be transmitted in the near future via a Federal Register notice.

We realize that many PHAs are eager to implement the flexibilities and other statutory changes provided under HOTMA, so please be assured that HUD is working diligently to develop and provide the necessary implementation guidance in a timely manner. If you have any questions, please send them to HOTMAquestions@hud.gov.

Are you a PIH Alert subscriber? Every Friday, the PIH Alert includes one frequently asked question (FAQ) submitted by our readers. To submit your question, email Annie Stevenson at annie@nanmckay.com with the subject line "FAQ Friday." If you'd like to try a free 30-day trial subscription to the PIH Alert, email sales@nanmckay.com to get started.

Topics: appropriations, final rule, FMR, HOTMA, PIH Alert, Program News and Notices, proposed rule, Q&A, reasonable accommodation, recertification, rent calculation, seniors and elderly, streamlining, voucher reform legislation

Q&A: Flat rent annual review

Posted by NMA on Sep 6, 2016 12:32:53 PM

Flat rent annual reviewQUESTION    I’m confused about all of the flat rent changes over the past couple of years. I see that HUD has published FMRs for 2017 and I’m not sure what I’m supposed to do with them. Help, please!

ANSWER    You’re correct that HUD published the fair market rents (FMRs) for federal fiscal year (FFY) 2017 on August 26. The FMR data set includes a table of unadjusted rents. Small area fair market rents (SAFMRs) were posted on August 30. Your agency will need one or more of these data sets in order to comply with HUD’s current requirements for reviewing flat rents on an annual basis. The flat rent annual review must be completed within 90 days after the issuance of new FMRs.

The current requirements for determining public housing flat rents were published in the streamlining final rule (published March 8 in the Federal Register) and in Notice PIH 2015-13 (published September 8, 2015). The corresponding regulations are at 24 Code of Federal Regulations 960.253. PHAs are now required to set flat rents at no less than the lower of:

  • 80 percent of the applicable FMR
  • 80 percent of the SAFMR (published for metropolitan areas)
  • 80 percent of unadjusted rents (published for nonmetropolitan areas)

Alternatively, PHAs may apply for an exception waiver through HUD to allow a lower flat rent. For areas in which HUD has not published a SAFMR or unadjusted rent, flat rents must be set at no less than 80 percent of the applicable FMR.

Since FMRs are published annually, PHAs must now review flat rents each year to ensure compliance with the current rule. The following is an excerpt from Notice PIH 2015-13 which describes the requirements for the flat rent annual review:

In order to comply with the flat rent requirements annually, no later than 90 days after issuance of new FMRs or SAFMRs by HUD, the PHA must:

1. Compare the current flat rent amount to the applicable FMR and SAFMR/unadjusted rent:

a) If the flat rent is at least 80 percent of the lower of the FMR or SAFMR/unadjusted rent, the PHA is in compliance with the law, and no further steps are necessary;

b) If the flat rent is less than 80 percent of the lower of the FMR and SAFMR, the PHA must set flat rents at no less than 80 percent of the lower of the FMR or SAFMR/unadjusted rent, subject to the utilities adjustment in this notice, or the PHA may request an exception flat rent pursuant to the requirements of Section 4 of this notice;

2. Update the flat rent policies in the admissions and continued occupancy policies (ACOP) as necessary;

3. At all new admissions, permit the family to choose between the flat rent amount and the income-based rent; and

4. For families that are current public housing residents, offer the updated flat rent amount at the next annual rent option, and permit the family to choose between the flat rent amount and the income-based rent

Flat rent increases must be capped at 35 percent per year. PHAs are no longer permitted to phase in increases of 35 percent or less.

Are you a PIH Alert subscriber? Every Friday, the PIH Alert includes one frequently asked question (FAQ) submitted by our readers. To submit your question, email Annie Stevenson at annie@nanmckay.com with the subject line "FAQ Friday."

If you're attending The Housing Conference this month in San Antonio, you can also ask Annie your question in person! Don't miss her sessions on the fair housing final rule and new and upcoming affordable housing legislationRegister online or email sales@nanmckay.com for more information.

Topics: final rule, flat rent, FMR, PIH Alert, PIH notices, Program News and Notices, Q&A, streamlining

2017 SAFMRs now available on HUD's website

Posted by NMA on Aug 30, 2016 11:11:07 AM

HUD’s Office of Policy Development and Research (PD&R) has posted “hypothetical” small area fair market rents (SAFMRs) for federal fiscal year (FY) 2017. The data set of 2017 SAFMRs was posted this morning to PD&R’s SAFMR web page.

2017 FMRs were published in a Federal Register notice on August 26. That notice explained that while HUD will no longer publish proposed and final versions of FMRs, PHAs may comment on the FMRs and request reevaluation until September 26.

As further explained in the August 26 notice, PHAs may provide data-supported comments or requests for reevaluation of SAFMRs by using HUD’s special tabulations of the distribution of gross rents by bedroom unit size for ZIP code tabulation areas. HUD will post revised SAFMRs after confirming the calculations.

HUD published a proposed rule on the use of SAFMRs in the HCV program on June 16. The rule, which is intended to help reduce the number of assisted families that reside in areas of high poverty concentration, would require the use of SAFMRs in certain metropolitan areas if the area meets a specific set of criteria. SAFMRs may also be used in determining public housing flat rents in metropolitan areas.

Interested in learning more about SAFMRs? Make an appointment to talk with one of our rent calculation experts at The Housing ConferenceAnnie Stevenson and other industry experts are available for limited free one-hour Q&A sessions with registered conference attendees. Don’t delay, signups close this Friday! Register online or email sales@nanmckay.com for more information.

Topics: flat rent, FMR, Program News and Notices, proposed rule

Affordable housing news 8/19/16

Posted by NMA on Aug 19, 2016 3:10:05 PM

CBPP: Why HUD should move quickly to implement SAFMR expansion

CityLab: Can "gentefiers" evolve a neighborhood without displacing people?

Next City: Affordable housing gets 2016 presidential election bump

NHC: No time for nostalgia: Why both parties must focus on housing and opportunity

NLIHC: Housing advocates warn about impacts of a long-term continuing resolution

Rooflines: As affordability worsens, state and local governments act on their own

San Francisco Chronicle (via Planetizen): HUD rejects neighborhood housing preference

Washington Post: The moral dilemma of a housing lottery

Topics: appropriations, fair housing, FMR, Program News and Notices

Affordable housing news 8/12/16

Posted by NMA on Aug 12, 2016 4:20:23 PM

Harvard Joint Center for Housing Studies: Many full-time workers face housing affordability problems

MDRC: Jobs-Plus transforms public housing developments into places that help residents find work

NHC: The potential impact of the small-area fair market rents methodology

NLIHC: Rents of least expensive apartments rising faster than general market

Rooflines: How the major party platforms approach housing

Topics: FMR, Program News and Notices

Affordable housing news 7/15/16

Posted by NMA on Jul 15, 2016 2:42:14 PM

CBPP: Congress unanimously approves HOTMA

Harvard Joint Center for Housing Studies: Housing insecurity of low-income renters, and what can be done

NCSHA: Congress passes bipartisan housing assistance reform bill

NLIHC: Senate unanimously passes H.R. 3700

Rooflines: Proposed rule on small area FMRs would dramatically improve housing options for voucher holders

Topics: FMR, HOTMA, Program News and Notices, voucher reform legislation

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