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.)

We’re pleased to announce the release of NMA's seminar calendar for the third quarter of 2017. You can view a list of the affordable housing training that Nan McKay and Associates is offering from now through September on this page at our website.

Start planning your summer training now and save! If you register at least 45 days in advance for most seminars, you’ll receive a 10 percent discount. (The discount does not apply to seminars hosted by housing authorities or associations.)

All Nan McKay 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.

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.)

We’re pleased to announce the release of NMA's seminar calendar for the second quarter of 2017. You can view a list of the affordable housing training that Nan McKay and Associates is offering from now through June on this page at our website.

Start planning your spring training now and save! If you register at least 45 days in advance for most seminars, you’ll receive a 10 percent discount. (The discount does not apply to seminars hosted by housing authorities or associations.)

All Nan McKay 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.

If you haven't taken it yet, we would like to invite you to participate in the annual NMA Customer Satisfaction Survey. It’s very short, and only takes a minute or two to complete.

Please take a moment to share your feedback and let us know how we can better serve your needs in the future.

Take the customer satisfaction survey now!

And in case you missed the announcement, our annual year-end sale is currently underway. Save 20% on all Q1 NMA-hosted classes, including upcoming sessions of popular classes like Public Housing Management (PHM), HCV and Public Housing Rent Calculation, HCV Housing Quality Standards (HQS), and HCV Specialist.

Visit our online seminar calendar to see more upcoming classes. All sessions January thorough March without an asterisk are 20% off before January 1, 2017! Contact sales@nanmckay.com for more information.

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.

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.

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.)

We’re pleased to announce the release of NMA's seminar calendar for the first quarter of 2017. You can view a list of the affordable housing training that Nan McKay and Associates is offering from now through March on this page at our website.

Start planning your winter training now and save! If you register at least 45 days in advance for most seminars, you’ll receive a 10 percent discount. (The discount does not apply to seminars hosted by housing authorities or associations.)

All Nan McKay 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    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.