On Friday in the Federal Register, HUD’s Office of Public and Indian Housing (PIH) published several technical corrections and clarifications to the Housing Choice Voucher (HCV) provisions of the Housing Opportunity Through Modernization Act (HOTMA) it had issued on January 18. These changes are in part based on public comments from the first notice. In brief, the corrections and clarifications are as follows:

• The original notice used the phrase ‘‘50 percent or more’’ to define a level of control that constitutes a controlling interest and would thus indicate PHA ownership. The threshold for control should be ‘‘more than 50 percent’’ rather than ‘‘50 percent or more.’’
• The original notice inadvertently excluded from the list of excepted units those units that have received assistance under Section 201 of the Housing and Community Development Amendments of 1978. Today’s notice adds the Flexible Subsidy program in both lists.
• The original document inadvertently referred to the ‘‘site of the original public housing development’’ instead of ‘‘site of the original development.’’ To avoid any indication that this requirement is only applicable to former public housing units as opposed to all the covered forms of HUD assistance, ‘‘public housing’’ is removed from this part.
• The original guidance states that ‘‘if the FSS family fails to successfully complete the FSS contract of participation or supportive services objective and consequently is no longer eligible for the supportive services, the family must vacate the unit…and the PHA shall cease paying housing assistance payments on behalf of the ineligible family.’’ To avoid misinterpretation that could imply that a PHA could, under HOTMA, establish a supportive services exception based exclusively on participation in FSS, rather than in combination with another supportive services option where participation is voluntary, and to avoid being misconstrued that this conflicts with current FSS requirements, which do not allow termination from the housing assistance program for failure to complete the FSS contract of participation, HUD has amended this language to eliminate the ambiguities.
• The definition of new construction units was previously inconsistent in the January 18 guidance, and has been updated to be both correct and consistent in sections referring to project-based voucher (PBV) assistance.
• HUD stated in the original document that in order to avail itself of the exemption of the competitive award of PBVs, the PHA must “be planning rehabilitation or construction on the project with a minimum of $25,000 per unit in hard costs.” However, because this would not be applicable in a situation where the PHA is replacing a public housing site or property, or a site with PHA-owned or controlled existing housing, several corrections to Section H of the notice have been made.
• Other typographical errors have also been corrected, as specified in today’s notice.

In a separate correction entry for the January 18 notice, PIH also noted that the original document had been published in the Proposed Rules section of the Federal Register, when it should have appeared in the Rules section. The effective date for the original notice—April 18, 2017—remains unchanged.

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.)

HUD has posted Notice PIH 2017-08, Violence Against Women Reauthorization Act of 2013 Guidance. The 52-page notice is dated May 19. While the guidance does not contain any major changes from the VAWA 2013 final rule, it includes a number of useful examples and scenarios to assist PHAs in implementation of the rule. The notice is applicable to the public housing and HCV programs, including the project-based voucher (PBV) and moderate rehabilitation programs.

Here are a few examples of guidance from the notice:

• A list of adverse screening factors which might be the direct result of domestic violence, dating violence, sexual assault, or stalking
• A detailed description of the certification and documentation process
• A summary of policy requirements and a 5-page appendix detailing necessary PHA policies and procedures
• Instructions for customizing the notice of occupancy rights
• A ten-page section on requirements for emergency transfer plans
• A clarification of the VAWA 2013 provision for establishing eligibility following bifurcation of a lease. This provision applies only to mixed families in which the victim has not contended eligible immigration status
• A six-page model owner notification. Use of an owner notification letter is optional, as PHAs may instead rely on VAWA information included in the HAP contract.

In a related development, HUD has released translated versions of the four forms and model notices published in December 2016 for VAWA 2013 implementation. Each of the forms has been translated into 11 languages (Armenian, Cambodian, Creole, Japanese, Korean, Lao, Mandarin, Russian, Spanish, Thai, and Vietnamese).

The translated documents include (links to English versions):

• HUD-5380, Notice of Occupancy Rights under the Violence Against Women Act
• HUD-5381, Model Emergency Transfer Plan for Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking
• HUD-5382, Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and Alternate Documentation (replaces form HUD-50066)
• HUD-5383, Emergency Transfer Request for Certain Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking

You’ll find links to all of the translated documents on this page at HUDCLIPS.

Yesterday HUD’s Office of Public and Indian Housing (PIH) issued Notice PIH 2017-07 to provide guidance on funding for the housing choice voucher (HCV) program for calendar year 2017. The notice discusses eligibility for potential shortfall funding as well as calculation of administrative fees.

The notice explains that HUD is currently operating under a continuing resolution (CR) which provides funding at 2016 levels. The CR will remain in effect until another CR is enacted, an appropriations bill is enacted, or April 28, 2017.

Based on possible funding scenarios if a full-year CR is enacted, or if an appropriations act is enacted at either the House or Senate proposed levels, a deeper HAP proration than previously experienced may occur.

Below are a few highlights from the 5-page notice:

• PHAs identified by the shortfall prevention team as having a potential shortfall must cease issuing vouchers to applicants and rescind vouchers issued to applicants who have not yet leased a dwelling unit. Affected agencies must also stop absorbing portable vouchers and must not issue tenant-based vouchers to families who wish to move out of project-based voucher (PBV) units.
• There is currently no full-year CR or full-year appropriation in place for HUD to provide shortfall funding to any agency. If shortfall funding is made available, a PHA’s eligibility for such funding will be contingent on the PHA having taken the actions described above.
• PIH intends to make available up to $10 million in administrative fee funding, subject to availability under a full-year CR or appropriation, for homeownership fees, special fees for multifamily housing conversion actions, audit costs for HCV voluntary transfers, and special fees for receiving PHAs where portability vouchers are a significant portion of vouchers under lease.
• Applications for blended rate fees (by PHAs serving multiple administrative fee areas) must be submitted by Monday, May 22, 2017. Requests for higher administrative fee rates for PHAs serving large geographical areas are also due by May 22.
• Requests for blended rate fees and higher administrative fees may be submitted via email or regular mail, but PHAs may not submit requests using both methods.

On Wednesday in the Federal Register, HUD's Office of Public and Indian Housing (PIH) published a notice implementing several of the provisions of the Housing Opportunity through Modernization Act (HOTMA) that impact the housing choice voucher (HCV) and project-based voucher (PBV) programs, in addition to requesting comments on both current and future implementing requirements. The HOTMA implementation notice is broken down topic-by-topic, followed by specific questions for comment in each corresponding section. The first sections of the notice address:

• Allowing PHAs to approve tenancy and commence HAP payments when a unit fails HQS, but only if it has non-life-threatening deficiencies.
• Authorizing occupancy prior to inspection if the unit passed under an alternate inspection within the previous 24 months.
• Amending the definition of units owned by the PHA so that the unit is PHA-owned only if unit is in a project that is: owned by the PHA, owned by an entity wholly controlled by the PHA, or owned by an LLC or limited partnership in which the PHA or entity wholly controlled by the PHA holds a controlling interest in the managing member or general partner.

The notice also addresses numerous statutory changes to the project-based voucher (PBV) program set forth under HOTMA, covering implementation requirements for the following:

• Changing the terminology in the statute from “structure” to “project.”
• Changing the PHA HCV program limitation on PBV vouchers from a 20 percent funding limitation to a 20 percent unit limitation calculation and allowing for additional project-basing of vouchers by raising the limit an additional 10 percent for homeless families, families with veterans, supportive housing for persons with disabilities or elderly persons, or in areas where vouchers are difficult to use.
• Changing the income-mixing cap on the number of PBV units in a project to be the greater of 25 units in a project or 25 percent of the units in a project (the project unit cap), and making changes to the categories of PBV units that are excepted from this project unit cap.
• Allowing the PHA to provide for an initial PBV contract of up to 20 years and to further extend that term for an additional 20 years.
• Allowing the PHA to establish a selection preference for families who qualify for voluntary services, including disability-specific services, offered in conjunction with assisted units, provided that the preference is consistent with the PHA plan.
• Allowing the PHA to attach assistance to structures in which the PHA has an ownership interest or control without following a competitive process.
• Allowing PHAs to project-base HUD–VASH and FUP vouchers in accordance with statutory and regulatory requirements of the PBV program without additional requirements for approval by HUD.

The implementing requirements set forth in today’s notice become effective April 18, 2017. Comments on the specific questions posed in the notice are due by March 20.

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.)

On January 20, White House Chief of Staff Reince Priebus issued a memo titled “Regulatory Freeze Pending Review.” The memo, which applies to government departments and agencies including HUD, announces a temporary “freeze” on submission of new regulations through the Office of the Federal Register (OFR). Freezes or holds on new rulemaking are customary for new presidential administrations and have occurred in the past.

Specific instructions from Friday’s memo include the following:

• New rules which have not yet been submitted to OFR must be held until reviewed and approved by a department or agency head designated on or after January 20.
• Rules which have been submitted to OFR but have not yet been published in the Federal Register must be withdrawn pending review and approval.
• Rules which have been published in the Federal Register but which have not yet taken effect must be postponed so that their effective dates are at least 60 days after January 20.
• The Director of the Office of Management and Budget may make exceptions to the freeze for urgent or emergency situations.

The freeze also applies to “guidance documents,” described as “any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking.”

Yesterday on the Moving to Work (MTW) demonstration webpage, HUD’s Office of Public and Indian Housing (PIH) announced that it will be soon be publishing two notices to implement the 2016 MTW expansion statute.

The first notice, to be published in the Federal Register on January 23, 2017, details the implementation and continued operations of MTW agencies selected through the expansion. It also requests comments on all areas of the notice, in addition to other particular areas of the notice where specified. The 91-page prepublication copy covers the following 12 topics:

• Purpose and applicability of the program
• Waivers, including general, conditional, and cohort-specific waivers
• The term of participation
• Funding, the MTW Block Grant, and Financial Reporting
• Program-wide and cohort-specific evaluation
• Program administration and oversight
• The Rental Assistance Demonstration (RAD) program
• Applying MTW flexibilities to special purpose vouchers
• Regionalization
• The applicability of other federal, state, and local requirements
• Sanctions, terminations, and default

The second notice, Notice PIH 2017-01, solicits applications for the first cohort of PHAs under the expansion and announces the selection criteria that will be used to admit eligible PHAs to the program. Although numbered as the first PIH notice of the year, note that the copy of the notice linked in the announcement does not yet contain a date and has not yet been posted to HUDClips. The 28-page notice provides:

• An overview of the MTW expansion
• The anticipated program structure
• The program terms and conditions
• A list of the eligibility requirements, including who is not eligible
• Requirements for submitting applications, including the application contents, organization, and detailed instructions
• An explanation of how PHAs will be evaluated, including application evaluation criteria and other information regarding the selection process
• Administrative and contact information

Notice PIH 2017-01 also contains three attachments: Attachment 1, Eligibility Checklist; Attachment 2, Commitment to Participate in First Cohort Policy Evaluation; and Attachment 3, Moving to Work Certifications of Compliance. For more information on both notices, you can visit the MTW expansion page at HUD’s website.

If your agency is interested in applying under the MTW expansion, NMA can help. We have extensive experience working with MTW agencies, including as partners during the application process, and we can guide you through questions such as the kinds of things MTW agencies can do, how you intend to measure performance, guidance and insight into what HUD is looking for from newly sanctioned agencies, and more. For more information, call (800) 783-3100 or email sales@nanmckay.com.

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) Overview, RAD 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.

Last week the Department of Housing and Urban Development (HUD) posted new guidance for the Rental Assistance Demonstration (RAD) in Notice PIH 2016-17. The new notice, which fills 80 pages, combines guidance on fair housing and civil rights requirements with resident relocation requirements and procedures. It supersedes Notice PIH 2014-17, HUD’s previous guidance on RAD relocations. Notice PIH 2012-32 (HA) REV-2, which contains RAD implementation instructions, remains in effect.

The new notice is applicable only to public housing conversions under the first component of RAD. It provides PHAs, project owners, and their RAD development partners with guidance regarding key fair housing and civil rights requirements, explains the situations in which HUD is requiring front-end fair housing and civil rights reviews, and provides information regarding the types of information that must be submitted to facilitate HUD’s reviews.

The notice announces a requirement for submission of a fair housing, civil rights, and relocation checklist by PHAs and project owners. The checklist is currently being revised and will be posted to the RAD website when available.

HUD also announced that it will host a webinar on the new notice.

The presentation is scheduled for this Thursday, November 17,

at 2 p.m. eastern time (11 a.m. Pacific). Click here to register.

According to an accompanying press release, the new notice streamlines and accelerates the RAD approval process by:

• Clearly outlining the requirements for fair housing and relocation reviews 
• Providing guidance on what documents to submit and when to submit them, and
• Offering tools such as a comprehensive checklist to help stakeholders prepare submissions

Today in the Federal Register, HUD  published a request for comments on the new notice. While the requirements of the notice are available and became effective upon posting, HUD has published today’s notice to solicit comments with respect to the clarity and comprehensibility of the requirements.  Comments are due by December 14. 

Got questions about RAD? During our year-end sale, you'll save 20% when you register for upcoming sessions of our RAD trainings, RAD Project-Based Rental Assistance (PBRA) Overview and RAD Project-Based Voucher (PBV) Specialist. 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.

In the spirit of customer appreciation, NMA is once again holding our much-anticipated year-end sale! Now through December 31, save 20 percent on January–March 2017 seminars. (The discount does not apply to seminars hosted by housing authorities or associations.)

You can view a list of the training opportunities that Nan McKay and Associates is offering from now through the end of March on this page at our website. All classes have been updated for the latest HUD rules and notices. Our Fair Housing and Reasonable Accommodation class, the most comprehensive training on fair housing regulations available, has been updated for the recent notices on LEP, sexual harassment, and nuisance ordinances. All of our HCV classes have been updated for the new payment standard rules from HOTMA and the recent Federal Register notice for the student rule.

Having trouble finding the class you want? We can bring the seminar to you. Email sales@nanmckay.com for more information about our affordable onsite training options.

QUESTION    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 legislation. Register online or email sales@nanmckay.com for more information.