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HUD publishes HOTMA implementation guidance

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

HOTMA

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

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

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

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

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

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

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

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

Q&A: HOTMA implementation

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

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

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

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

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

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

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

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

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

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

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

The letter contained the following guidance on HOTMA implementation:

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

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

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 [email protected] with the subject line "FAQ Friday." If you'd like to try a free 30-day trial subscription to the PIH Alert, email [email protected] 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

Affordable housing news 7/15/16

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

CBPP: Congress unanimously approves HOTMA

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

NCSHA: Congress passes bipartisan housing assistance reform bill

NLIHC: Senate unanimously passes H.R. 3700

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

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

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

Affordable housing news 6/24/16

Posted by NMA on Jun 24, 2016 3:31:47 PM

CBPP: As more low-income renters struggle, federal subsidies favor well-off homeowners

CCP: Stabilizing neighborhoods through effective rental registration programs

HUD: New MTW committee and timeline for expansion

The HUDdle: Expanding horizons with STEM education

The HUDdle: Fulfilling HUD's commitment to creating economic opportunities

NCSHA: HOTMA introduced in Senate

Next City: Harvard's national housing report has bad news for renters

NHC: Using opportunity mapping to improve affordable housing policy

NLIHC: Live podcast on the housing affordability crisis

Rooflines: To reduce recidivism rates, turn to housing policy

Urban Wire: National housing supply falls short of demand by 430,000 units

Topics: criminal records, HOTMA, MTW, Program News and Notices, residential rental inspection programs, Section 3, voucher reform legislation

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