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HUD notifies PHAs of increase in HCV admin fee proration

In a letter to executive directors last week, HUD announced an increase in the calendar year (CY) 2015 estimated fee proration factor from 79 percent to approximately 81 percent. The letter, from Principal Assistant Deputy Secretary Lourdes Castro-Ramirez, states that HUD has identified additional funds to support ongoing administrative fees.

According to the letter, administrative fee reconciliations through September 2015 will be provided to non-MTW PHAs by mid-November. Reconciliations through June 2015 already reflect the increase. For MTW PHAs, the final proration rate for the full CY will be applied when final reconciliations are completed.

HUD’s letter goes on to discuss the impact of the increased proration factor on portability fees. The CY 2015 administrative fee rates description document posted to the HCV home page has been revised as of October 2015. The revised portion of the guidance reads as follows:

To avoid the need to repeatedly change billing amounts due to prorations, PHAs were advised mid-year that initial and receiving PHAs could agree to use a proration of 79 percent, which increased from 75 percent, to calculate fees for portable vouchers. The portability fee rate would then be 79 percent of 80 percent of the Column B rate for every month in the year. HUD has subsequently identified additional, available funds to augment the administrative fee appropriation, and has notified PHAs that the proration for the year will likely be approximately 81 percent. As a result, PHA are advised that, effective with billings for October 1, 2015 and later, they should use a proration of 81 percent of 80 percent of the Column B rate to calculate fees for portable vouchers.

Administrative fee rate tables for CY 2015 are also available on the HCV home page.

Interested in learning more about how to maximize your funding? NMA offers several related classes, including HCV Financial Management, with upcoming sessions in Dallas, TX, and Cleveland, OH, and HCV Financial Accounting and Reporting, with upcoming sessions in Las Vegas, NV; Louisville, KY; and Seattle, WA. For more information, contact