Affordable Housing News

Are your NMA Master Books up to date?

Posted by NMA on Nov 2, 2016 9:36:18 AM

NMA’s revision services team has been working hard to get the latest editions of our Master Books written, published, and shipped to you!

2016: COMING SOON! For 2016, the NMA Public Housing Master Book has been brought current with all recent regulatory requirements and guidance, including:

  • Sweeping changes brought about by the final rule on streamlining administration regulations, issued March 8, 2016, including modifications regarding verification, utility reimbursements, annual and interim reexaminations, and proration of assistance for mixed families, among other areas of program administration
  • Implementation guidance on the final rule as described in Notices PIH 2016-05 and PIH 2016-06
  • Updates regarding the use of arrest records in denials and terminations per Notice PIH 2015-19
  • Other minor modifications and clarifications to bring the content current with HUD regulations and guidance

2016: COMING SOON! For 2016, the NMA Housing Choice Voucher (HCV) Financial Management and Reporting Master Book has been brought current with all recent regulatory requirements and guidance, including:

  • Clarifications for HAP funding allocations based on the 2016 appropriations act, in addition to other updates as specified in Notice PIH 2016-04
  • Modifications to audit requirements to account for the redesignation of regulations to 2 CFR Part 200
  • Clarifications on the use of administrative fees per Notice PIH 2015-17
  • Revised reporting procedures for executive compensation as delineated in Notice PIH 2015-14
  • Changes to requirements regarding portability as set forth in the streamlining portability final rule
  • Modifications to account for the updated VMS user manual
  • The addition of several new exhibits to illustrate and explain financial concepts and processes
  • Insertion of additional citations and references to substantiate source material
  • Other modifications and clarifications to bring the content current with HUD regulations and guidance

Questions about your revision services subscriptions? Contact Laurie Durrett in our accounting department and she’ll be happy to assist you.

NMA revision services provide a yearly update to your NMA Master Books and model policies with explanations and guidance regarding the most current HUD rules and regulations. To stay updated on the latest program information, try a free 30-day trial subscription to the PIH Alert. Email sales@nanmckay.com to get started.

Topics: books and revision services, criminal records, fair housing, portability, Program News and Notices, recertification, rent calculation, streamlining, utilities

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

Congratulations to Sheron Stepney!

Posted by NMA on Aug 2, 2016 11:28:04 AM

HUD regulationsCongratulations to Sheron Stepney at the East St. Louis Housing Authority, the winner of our #ThrowbackThursday contest! She shared a fantastic #NMAthrowback from 2001 on our Facebook page and has won an NMA Master Book of her choice. Thanks to everyone who participated!

NMA’s Master Book series is a complete program guide providing you with detailed explanations on how to apply the latest rules and regulations for the public housing and housing choice voucher programs.

These books clarify tough HUD regulations and are a valuable asset to anyone working in the affordable housing industry. NMA's revision services team has been working hard to get the latest editions of our Master Books written, published, and shipped to you.

2016: COMING SOON! For 2016, the NMA HCV Executive Management Master Book has been brought current with all recent regulatory requirements and guidance, including:

  • Sweeping changes brought about by the final rule on streamlining administration regulations, issued March 8, 2016, including modifications regarding verification, utility reimbursements, annual and interim reexaminations, and inspection protocol, among other areas of program administration
  • Changes to account for the final rule on streamlining portability, issued August 20, 2015
  • The addition of a new section on required PHA policies and policy development, with a focus on the consolidated plan, the PHA plan, the assessment of fair housing (AFH), and the administrative plan
  • Updates regarding the use of arrest records in denials and terminations per Notice PIH 2015-19
  • Other minor modifications and clarifications to bring the content current with HUD regulations and guidance

2016: COMING SOON! For 2016, the NMA HCV Housing Quality Standards (HQS) Master Book has been brought current with all recent regulatory requirements and guidance, including:

  • Several changes regarding inspection requirements brought about by the final rule on streamlining administration regulations, issued March 8, 2016
  • Further clarifications on the streamlining rule as described in Notice PIH 2016-05, which provided implementation guidance on various aspects of the rule
  • Other clarifications and corrections to bring the content current with HUD regulations and guidance, including topics such as lead-based paint and inspection accuracy

Got questions about the final rules on streamlining administrative regulations and portability? Don’t miss Nan’s legislative update at the The Housing Conference next month, where she’ll discuss acts of Congress, regulation changes, and what’s ahead for 2017.

Topics: books and revision services, criminal records, fair housing, inspections, portability, Program News and Notices, recertification, streamlining, utilities

Senate passes HOTMA

Posted by NMA on Jul 15, 2016 12:20:35 PM

Senate passes HOTMA

Last night the Senate voted to approve the Housing Opportunity through Modernization Act of 2016 (HOTMA). The bill, which was passed by the House of Representatives in February, is expected to be signed into law next week. The bill has received widespread support from industry groups and advocacy organizations.

The new law contains a number of changes to program rules for the public housing and housing choice voucher (HCV) programs, homeless and veteran programs, and the Housing Opportunities for Persons with AIDS (HOPWA) program.

Here is a brief synopsis of major HOTMA changes. Remember that HUD must complete the formal rulemaking process before changes take effect.

Revisions to the calculation of annual and adjusted income

  • After the initial year of assistance, prior-year income use is mandatory. Adjustments will be available to reflect current income
  • Exclusion of imputed asset income, unless net assets exceed $50,000
  • Increase in the allowance for elderly and disabled families from $400 to $525
  • Deduction for medical expenses which exceed 10 percent of annual income (changed from 3 percent)
    • Hardship exemptions required

Changes impacting the public housing and HCV programs

  • Requirement to provide a preference or priority for financial assistance to U.S. citizens or nationals before any alien who is otherwise eligible for assistance
  • Revisions to inspection requirements for the HCV program, including authorization for permitting families to occupy a unit prior to inspection (where the unit has been inspected within the past 24 months and no life-threatening deficiencies were found)
  • Imposition of an asset cap of $100,000
  • Optional termination of tenancy for public housing residents whose annual income exceeds 120 percent of fair market rent for two years
  • Changes to rules governing interim reexaminations
    • Interim decreases required only if rent will decrease by 10 percent or more
    • Interim increases required if rent will increase by 10 percent or more

Other HOTMA changes

  • Options to increase the allowable percentage of project-based vouchers (PBVs) and to extend PBV contract terms
  • Requirements for HUD to provide PHAs with
    • Data on local utility consumption for use in determining utility allowances
    • Guidelines for minimum heating requirements in public housing

Click here for a Congressional summary of HOTMA or here for the full text.

Got questions about HOTMA? Don’t miss Nan’s legislative update at the The Housing Conference this September, where she’ll discuss acts of Congress, regulation changes, and what's ahead for 2017.

Topics: HOTMA, inspections, over-income families, PBV, Program News and Notices, recertification, rent calculation, seniors and elderly, utilities, veterans, voucher reform legislation

NMA's 2016 model policies shipped to subscribers!

Posted by NMA on May 26, 2016 10:55:58 AM

model policiesWe're pleased to announce that the 2016 editions of our model policies have shipped out! All revision service customers should receive these within a week or so.

2016: For 2016, the NMA Model Administrative Plan and Guide has been brought current with all recent regulatory requirements and guidance, including:

  • Sweeping changes brought about by the final rule on streamlining administrative regulations, issued March 8, 2016, including modifications regarding verification, utility reimbursements, the earned income disallowance, annual and interim reexaminations, inspection protocol, among other areas of program administration
  • Further clarifications on the streamlining rule as described in Notice PIH 2016-05, which provided implementation guidance on various aspects of the rule
  • Updates to policies on the use of arrest records per Notice PIH 2015-19
  • Clarifications regarding the definition of tuition, as specified in Notice PIH 2015-21
  • Other minor modifications and clarifications to bring the content current with HUD regulations and guidance

2016: For 2016, the NMA Model Admissions and Continued Occupancy Policy (ACOP) and Guide has been brought current with all recent regulatory requirements and guidance, including:

  • Sweeping changes brought about by the final rule on streamlining administrative regulations, including modifications regarding verification, utility reimbursements, the earned income disallowance, annual and interim reexaminations, calculating rents for mixed families, grievances, and the community service requirement, among others
  • Implementation guidance on the final rule as described in Notices PIH 2016-05 and PIH 2016-06
  • Further clarifications on the community service requirement found in Notice PIH 2015-12
  • Modifications to policies on phasing-in flat rents per Notice PIH 2015-13
  • Updates on the use of arrest records as described in Notice PIH 2015-19
  • Revision of the definition of tuition specified in Notice PIH 2015-21
  • Discussion in the model ACOP instruction guide on over-income families following the letter to executive directors issued September 3, 2015
  • Other minor changes and clarifications throughout to bring the content current with HUD regulations and guidance

2016: For 2016, the NMA Public Housing Assessment System (PHAS) Master Book has been brought current with all recent regulatory requirements and guidance, including:

  • Revisions regarding Notice PIH 2015-12 on the community service and self-sufficiency requirement (CSSR)
  • Modifications concerning the redesignation of 24 CFR Part 85 to 2 CFR Part 200
  • Updates to relevant references, including regulatory updates for the final rule on streamlining administrative regulations, issued March 8, 2016
  • Other corrections and modifications for clarity and ease of reading

2016: COMING SOON! For 2016, the NMA Housing Choice Voucher (HCV) Master Book has been brought current with all recent regulatory requirements and guidance, including:

  • Sweeping changes brought about by the final rule on streamlining administrative regulations, issued March 8, 2016, including modifications regarding verification, utility reimbursements, the earned income disallowance, annual and interim reexaminations, and inspection protocol, among other areas of program administration
  • Further clarifications on the streamlining rule as described in Notice PIH 2016-05, which provided implementation guidance on various aspects of the rule
  • Changes to account for the final rule on streamlining portability, issued August 20, 2015
  • Updates regarding the use of arrest records in denials and terminations per Notice PIH 2015-19
  • Revisions for Notice PIH 2016-02 on enhanced voucher requirements for over-housed families
  • Other minor modifications and clarifications to bring the content current with HUD regulations and guidance

Questions about your revision services subscriptions? Contact Laurie Durrett in our accounting department and she'll be happy to assist you.

NMA revision services provide a yearly update to your NMA Master Books and model policies with explanations and guidance regarding the most current HUD rules and regulations. To stay updated on the latest program information, try a free 30-day trial subscription to the PIH Alert. Email sales@nanmckay.com to get started.

Topics: books and revision services, community service, criminal records, EID, flat rent, HQS, inspections, over-income families, PIH Alert, portability, Program News and Notices, recertification, rent calculation, streamlining, utilities

Q&A: Underpaid subsidies due to PHA error

Posted by NMA on Feb 1, 2016 12:03:48 PM

Q&A: Underpaid subsidies due to PHA errorQUESTION    It’s recently come to my agency’s attention that some of our clients have been paying too much rent. This was due to a calculation glitch and applies to both public housing (PH) residents and participants in the housing choice voucher (HCV) program.

We’ve fixed the error, but what about subsidy underpayments for past months? The monthly underpayments are small amounts but the error existed for several years. Does the PHA have to repay these amounts to our clients? If the agency retains documents for three years, can we limit repayments to the three-year period?

ANSWER    While the HUD regulations do not address this issue, HUD has issued written guidance on the subject. The most recent guidance is in Notice PIH 2007-27, Disallowed Costs and Sanctions Resulting from On-Site Monitoring Reviews. Treatment of underpaid subsidies depends upon the program.

Here’s an excerpt from the section on underpaid subsidy due to PHA error in the HCV program:

PHAs will not be reimbursed for underpayment of subsidies. PHAs are required to reimburse families for overpayment of the total family share. Such reimbursements of the tenant portion of the rent can be made in current and future months through an increase in HAP to the landlord and a decrease in the family share until the family’s overpayment is fully compensated. A PHA may not use funds from its HAP account or HAP net restricted assets to directly reimburse families for overpayment of the total family share. If the family did not receive the full amount of utility reimbursement from the PHA, the PHA must reimburse the family.

Here’s the guidance for the PH program:

PHAs will not be reimbursed for underpayment of subsidies. PHAs are required to reimburse residents for overpayment of tenant rent in accordance with PHA policy.

Since the notice does not require a specific look-back period for reimbursement, it’s probably safe to limit repayment to the period for which the PHA has records. In the HCV program, records from interim and annual reexaminations must be retained for at least three years. In the PH program, record retention periods are determined by policy, and three years is a popular option.

We recommend reimbursing the family for the full period for which the PHA has records for that family, regardless of the agency’s record retention policy. For example, if the family was charged too much rent for seven years and the family’s file contains records for the last five years, reimbursement should be made for five years.

Is keeping up with reexams giving you a headache? NMA can help make the process painless. We'll handle your recertifications offsite, saving money for your agency while ensuring you’re still in compliance. It’s easy—the processing work simply happens in our offices instead of yours. Visit our website or email sales@nanmckay.com for more information.

Topics: outsourcing, PIH Alert, PIH notices, program management, Program News and Notices, Q&A, recertification, rent calculation

PIH issues guidance on new flat rent requirements

Posted by BEMuser on May 21, 2014 3:19:48 PM

Yesterday HUD's Office of Public and Indian Housing (PIH) issued Notice PIH 2014-12 to provide implementation guidance for the new flat rent requirements in the 2014 appropriations act, which stipulates that PHAs must set flat rents at no less than eighty percent of the applicable HUD-determined fair market rent (FMR).

The eagerly anticipated notice is intended to serve as interim guidance pending additional HUD rulemaking. The appropriations act requires HUD to begin the rulemaking process within six months of publication of this notice. The notice states that HUD will be very interested in feedback from PHAs and other stakeholders at this later rulemaking stage.

➤  Implementation Dates:

  • The notice requires PHAs to comply with the new requirements by June 1.
  • HUD will consider agencies to be compliant if they have initiated the PHA plan revision or public hearing process (as applicable, see below) by June 1.
  • The revised flat rents must be applied for new admissions and annual reexaminations within 90 days of their adoption, but no later than October 31.

➤  Utility Allowances: Because FMRs reflect the local cost of rent plus an allowance for utilities, PHAs may now be required to apply utility allowances to flat rents. As explained in the notice, this is necessary to avoid inequities between residents of projects with PHA-paid utilities and residents who must pay utility bills to outside providers. Families responsible for utilities would pay a higher gross rent than other families if utility allowances were not applied. PHAs must reduce the new flat rent amounts by the amount of a utility allowance based upon “reasonable utility costs of an energy-conservative household of modest circumstances.”

➤  Flat Rent Calculation and Phase-In: In order to comply with the new requirements, PHAs must first determine flat rents based on HUD’s rent reasonableness methodology, as required by the current regulation. PHAs must then compare these amounts to eighty percent of the applicable FMR and set flat rents at the higher of the two amounts.

➤  PHA Plan Revisions: While regulations permit PHAs to determine whether program changes will constitute a “significant amendment” to the PHA plan, yesterday’s notice states that HUD has determined that the current flat rent changes are a significant amendment. Implementation requirements depend upon whether a PHA is classified as “qualified” or “non-qualified.”

Qualified PHAs are defined as PHAs that:

  • Have a combined total of no more than 550 combined public housing units and housing choice vouchers, and
  • Are not designated as “troubled” under PHAS (and have not been so designated within the last 12 months), and
  • Do not have a failing SEMAP score within the last 12 months.

These agencies are exempted from the annual plan requirement under the provisions of the Housing and Economic Recovery Act of 2008 (HERA). However, the notice states that qualified PHAs must hold a public hearing regarding the flat rent changes.

Non-qualified PHAs must follow the required procedures for a significant amendment to their PHA plans. HUD has provided sample amendment language as Appendix A to the notice. HUD will approve amendments using the sample language without written notice to the PHA. Agencies that choose not to utilize the sample language must wait for HUD approval before implementing the new flat rents.

The notice further states that after initial implementation, subsequent annual changes to the HUD-determined FMR amounts do not trigger the significant amendment process.

Does your agency have a proven methodology for setting flat rents? GoSection8.com can help. Specializing in rent reasonableness, Go8 has served tenants, landlords, and public housing agencies across the United States since 2004. To learn more about how you can bring Go8 to your agency, email sales@nanmckay.com.

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

Topics: appropriations, flat rent, FMR, GoSection8, HERA, Partnerships, PIH Alert, PIH notices, Program News and Notices, recertification, rent calculation, rent reasonableness, utilities

Working with sequestration in the public housing program: Tip #18

Posted by NMA on May 10, 2013 9:26:51 AM

Cara Gillette

While public housing funding for May is now at an 82% proration level (up from 79% in April), sequestration is still in effect, and Congress shows no inclination to reverse it any time soon.

The business of owning and managing affordable housing in decent, safe, and sanitary condition and in good repair remains our mission. PHAs need to plan more strategically than ever before. So, as all businesses must ask in tough times: How can we maximize dollars and cut costs?

Tip #18: Watch the little things.

What about utility usage? Are lights turned off at night and on the weekends? What about cutting down slightly on office hours?

Look at cutting down on cutting down all those trees! Reduce the amount of paper your PHA uses. So many agencies have over-documentation of certain items in the file. For example, unless you're changing the lease contents, a new lease doesn't have to be signed every year — that's a lot of pages saved right there!

Make it a priority to find savings in the certification and recertification policies and procedures. Not only are you saving paper, you're saving time.

Next: Working with sequestration in the public housing program: Tip #19

NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, Ms. Gillette served at the San Diego Housing Commission, administering its public housing and Section 8 waiting lists, serving as hearing officer, managing public housing, and overseeing resident economic development programs. She has previously written for the NMA blog about blended occupancy projects.

If you find that you need staffing help during sequestration, NMA can assist your agency with recertifications (done remotely), quality control, outsourced hearing officer services (done remotely), HQS inspections, and more. Email sales@nanmckay.com for more information.

Topics: budget cuts, recertification, sequestration, Trainers and Consultants, utilities

Working with sequestration in the public housing program: Tip #16

Posted by NMA on May 8, 2013 1:57:22 PM

Cara Gillette

While public housing funding for May is now at an 82% proration level (up from 79% in April), sequestration is still in effect, and Congress shows no inclination to reverse it any time soon.

The business of owning and managing affordable housing in decent, safe, and sanitary condition and in good repair remains our mission. PHAs need to plan more strategically than ever before. So, as all businesses must ask in tough times: How can we maximize dollars and cut costs?

Tip #16: Look at time efficiencies for staff.

Look for savings in the certification and recertification policies and processes. Not only are you saving paper, you're saving time.

For example, Teri Robertson's Idea #1 in her HCV sequestration series was to revise PHA interim reexamination policy:

Some PHAs have eliminated PHA-initiated interims altogether so as to ease administrative burden. Others set a dollar threshold, but acknowledge that determining whether an interim needs to take place is often as time-consuming as actually conducting an interim.

Here’s a suggestion we’ve begun making to agencies when they contract with us to spend three days with them to facilitate a complete administrative plan or ACOP revision: consider adopting an interim policy that the family must report, and the PHA must conduct an interim, when the family begins receiving income from a new income source.

Consider outsourcing your quality control (QC) function for PIC errors. This can be time-consuming for PHA staff, and you need an accurate, objective assessment. (In the HCV program, a random, impartial sampling is imperative for SEMAP.) And you want to have trend analysis here: Is an employee's error rate improving? What kinds of errors are most prevalent?

Next: Working with sequestration in the public housing program: Tip #17

NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, Ms. Gillette served at the San Diego Housing Commission, administering its public housing and Section 8 waiting lists, serving as hearing officer, managing public housing, and overseeing resident economic development programs. She has previously written for the NMA blog about blended occupancy projects.

If you find that you need staffing help during sequestration, NMA can assist your agency with recertifications (done remotely), quality control, outsourced hearing officer services (done remotely), HQS inspections, and more. Email sales@nanmckay.com for more information.

Topics: budget cuts, quality control, recertification, SEMAP, sequestration, Trainers and Consultants

Working with sequestration in the HCV program: Part IV

Posted by NMA on Apr 22, 2013 10:12:34 AM

Teri RobertsonSequester or no sequester, housing authorities have a business to run. And a complicated business it is! The HCV and public housing programs have so many moving parts — and so many regulatory requirements — that it has to be one of the most demanding businesses to be in. Reduced funding simply makes a challenging job that much more challenging.

One of the challenges in working at a housing authority is finding the balance: How large should caseload sizes be to ensure efficiency without sacrificing effectiveness? How often should we purge our waiting list to offset the cost of the work with the benefit of having only people still interested in the program at the top of the waiting list? And, critical in these times, how do we maintain a healthy program size while dealing with reduced administrative fees?

Adjusting payment standards

Some PHAs have language in their administrative plan that states their payment standards will always be set at 100 percent of the HUD-published fair market rent (FMR). As we have the authority to establish payment standards from 90 percent to 110 percent of the published FMRs, our policy language really should allow us the flexibility to decide what percentage of the FMR our payment standards will be each year. The best policy language states that we will consider rent burdens, local rents, and the agency's funding when setting our payment standards.

When HUD publishes the proposed FMRs each April, we should first conduct an analysis to determine whether we wish to request that HUD revise our proposed FMRs because they are too high or too low (see 24 CFR 888.115). We should also determine how — or if — we will adjust our payment standards in response to the final FMRs. In order to do this, we'll project our anticipated HAP expenditures through the remainder of the calendar year.

First, determine whether you need to change your standards at all. If the current payment standards are within the 90 percent to 110 percent "basic range" of proposed FMRs, and the HAP expenditure projections reflect that leaving the payment standards at the current level will maintain a healthy spending rate for your agency, then there's no reason to change them.

If money is tight, conduct deeper analysis. Here are a few ways to gather facts that will help you make your determination:

Step #1: Run a rent burden report from your housing software.

By bedroom size, what percentage of families are paying more than 30 percent of their monthly adjusted income towards rent and utilities?

  • Exclude from your analysis those families who have selected units with more bedrooms than their voucher unit size.
  • What is acceptable to your PHA as far as the percentage of of families paying more than 30 percent of their monthly adjusted income? HUD has its own threshold of acceptability before approving any waivers to allow PHAs to establish their payment standards lower than within the basic range. Unless you request a waiver from HUD headquarters, your HUD field office will not approve lower payment standards if more than 40 percent of families in a given bedroom size are paying more than 30 percent of their monthly adjusted income towards rent and utilities.

Step #2: Are families having difficulty leasing units with your current payment standards? Before you say "yes," be certain that this is fact, not perception.

Require families to maintain a housing search log that lists the units they attempted to lease and the reason they ultimately did not rent them. Pull some of the logs that state the reason the family did not lease reasonable units was because the rent was too high. Make some calls to the owners and verify that the information on the logs is correct before you accept that rents are too high in your area to lower payment standards.

As payment standards represent the maximum subsidy we

will pay on behalf of a family, managing them within required

guidelines is critical to the financial well-being of our agency.

As we all know, reduced payment standards apply immediately to new admissions, movers, and those families for whom you enter into a new HAP contract. For other families, the reduced payment standard is not applied until the second annual reexamination after the payment standard reduction (unless the family's voucher size also changed).

If your agency will experience a shortfall, do remember that you can request a waiver of this "payment standard protection" to allow the new, lower payment standard to be applied at the first annual reexamination. A few other things to remember:

  • Your payment standards don't have to be set at the same percentage of the FMR. For example, you might have justification for establishing the one-bedroom payment standard at 92 percent of the FMR, while setting the two-bedroom payment standard at 90 percent of the FMR.
  • You don't have to wait until HUD posts either the proposed or the final FMRs to change your payment standards. They can be changed at any time (with public notice and opportunity to comment, and with board approval).
  • If your current payment standard is within the basic range of the proposed payment standards, you don't have to change your payment standards at all.

This concludes our four-part series on sequestration in the housing choice voucher program. NMA senior consultant Teri Robertson is nationally recognized as a leading expert in HCV/Section 8 and public housing. She has previously written for the NMA blog about HCV administrative fees and how to maximize your agency’s performance rating.

If you find that you need staffing help during sequestration, NMA can assist your agency with recertifications (done remotely), quality control, hearing officer staff, HQS inspections, and more. Email sales@nanmckay.com for more information.

Topics: budget cuts, FMR, recertification, rent reasonableness, sequestration, Trainers and Consultants, utilities

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