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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

HUD publishes proposed rule on lead-based paint

Posted by NMA on Sep 1, 2016 12:29:41 PM

proposed lead-based paint rule

This morning in the Federal Register, HUD’s Office of Lead Hazard Control and Healthy Homes (OLHCHH) published a proposed rule titled “Requirements for Notification, Evaluation and Reduction of Lead-Based Paint Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance; Response to Elevated Blood Lead Levels.” The proposed rule would amend HUD’s current regulations on lead-based paint at 24 Code of Federal Regulations (CFR) Part 35.

As explained in an accompanying press release, the proposed rule would redefine “‘elevated blood lead levels’’ in children under the age of six to match the definition used by the Centers for Disease Control and Prevention (CDC).

“There is no amount of lead in a child’s blood that can be considered safe,” said HUD Secretary Castro. “We have an obligation to the families we serve to protect their children.  By aligning our standard with the one used by the Centers for Disease Control and Prevention, we can act more quickly and make certain the homes we support are as safe as possible. This proposed rule is the centerpiece of HUD’s intensified efforts to protect our next generation from debilitating lead poisoning.”

The proposed rule would apply to the voucher and public housing programs, to some HUD-assisted multifamily programs, and to some properties receiving non-HUD federal assistance. The deadline date for comments is October 31, 2016.

Keep up with proposed rules like this one with a subscription to NMA’s PIH Alert. You’ll receive a daily email filled with up-to-the-minute program changes, requirements, and assistance. Email sales@nanmckay.com for more information.

Topics: PIH Alert, Program News and Notices, proposed rule

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

HUD publishes proposed rule on admin fee formula

Posted by NMA on Jul 6, 2016 11:48:16 AM

HUD publishes proposed rule on admin fee formulaToday in the Federal Register, the Department of Housing and Urban Development (HUD) published a proposed rule titled “Housing Choice Voucher Program—New Administrative Fee Formula.” The notice follows a 2015 study suggesting changes to HUD’s method of calculating fees.

HUD’s current method of allocating HCV administrative fees is based on local fair market rents (FMRs). Under the proposed new admin fee formula, fees would be calculated based upon six cost variables:

  • Program size
  • Wage rates
  • Benefit load
  • Percent of households with earned income
  • New admission rate
  • Percent of families that live a significant distance from the PHA’s headquarters

According to today’s notice, the new admin fee formula is expected to provide a more accurate estimate of PHA-specific costs than the current method. HUD estimates that under the new formula, $122 million would be transferred between PHAs, primarily from large to small PHAs.

Comments on the proposed rule are due by October 4, 2016. More information is available on the administrative fee study website.

Interested in learning more about how to maximize your funding? NMA offers several related classes, including HCV Financial Management, with an upcoming session in Seattle, WA, and HCV Financial Accounting and Reporting, with an upcoming session in Richmond, VA. For more information, contact sales@nanmckay.com.

Topics: financial management, FMR, Program News and Notices, proposed rule

HUD to hold briefing on SAFMR proposed rule

Posted by NMA on Jun 22, 2016 1:54:37 PM

SAFMR proposed ruleHUD’s Office of Policy Development and Research (PD&R) today announced that it will be holding a briefing on the recent proposed rule on small area fair market rents (SAFMRs).

The briefing will be webcast Thursday, June 30, from 11 a.m. to 12:30 p.m. eastern time (8 a.m. to 9:30 a.m. Pacific time). HUD will walk through the proposed rule and answer questions. A link to the webcast will be available on the announcement page the day of the event. To register for the webcast, click here.

HUD published the SAFMR proposed rule last week in the Federal Register. Intended to help reduce the number of assisted families that reside in areas of high poverty concentration, the rule would require the use of SAFMRs in certain metropolitan areas if the area meets a specific set of criteria. Among the highlights are the following:

  • The rule would require the use of SAFMRs in administering the housing choice voucher (HCV) program for certain metropolitan areas, if the area meets a specific set of criteria.
  • Criteria for those areas in which SAFMRs would be set include metropolitan areas where at least 2,500 HCVs are under lease, at least 20 percent of the standard quality rental stock is in ZIP codes where the SAFMR is more than 100 percent of the metropolitan FMR, and the measure of the percentage of voucher holders living in concentrated low-income areas relative to all renters within these areas over the entire metropolitan area exceeds 155 percent.
  • PHAs not administering a voucher program in a metropolitan area subject to SAFMR application would be able to request HUD approval to use SAFMRs.
  • The rule would amend the existing regulations to no longer provide that FMRs be set at the 50th percentile, and instead transitioning metropolitan areas with FMRs set at the 50th percentile to either the 40th percentile rent at the expiration of a three-year period for the 50th percentile rent, or designation as an SAFMR in accordance with the proposed criteria.
  • PHAs with a jurisdiction within a 50th percentile FMR area that reverts to the standard 40th percentile would be able to request HUD approval of payment standard amounts based on the 50th percentile rent. PHAs would continue to meet the provisions of 24 CFR 503 annually in order to maintain payment standards based on 50th percentile rents.
  • The rule would provide that SAFMRs would also apply to project-based vouchers (PBVs) under certain conditions, if the PBVs are located in an area or jurisdiction in which HUD has designated or approved the application of SAFMRs. The application of SAFMRs in such cases would occur when a PHA notice of owner selection of existing regulations in 24 CFR 51(d) was made after the effective date of the SAFMR designation.
  • Finally, HUD intends to designate SAFMRs at the beginning of the federal fiscal year and make additional area designations every five years thereafter as new data becomes available.

Comments on the proposed rule are due August 15, 2016.

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

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