New Provisions of the Fostering Stable Housing Opportunities (FSHO) Act Amendments
On January 24, HUD published a notice in the Federal Register implementing and providing guidance on the provisions of the Fostering Stable Housing Opportunities (FSHO) Act amendments. Changes were made to the assistance provided to eligible youth under the Family Unification Program (FUP), including those who received vouchers through the Foster Youth to Independence (FYI) initiative.
As part of this notice, two major changes were made to the PBV program, effective back to December 27, 2020:
- FUP Youth (FUPY) and FYI vouchers that the PHA project-bases are counted as part of the 10% exception authority to the 20% program cap.
- The excepted units requirement for the PBV program has been amended to include units that house eligible youth receiving FUPY/FYI assistance.
Additional Project-Based Units
PBV program regulations allow PHAs that already administer a tenant-based voucher program under an annual contributions contract (ACC) with HUD to take up to 20 percent of its authorized units and attach the funding to specific units rather than using it for tenant-based assistance. Under the Housing Opportunities Through Modernization Act (HOTMA), PHAs are allowed to project-base an additional 10 percent of its units above the 20 percent program limit if the units are set aside for certain populations.
The FSHO adds an additional category to the 10 percent exception for FUPY/FYI assistance if the units are under a HAP contract that was effective after December 27, 2020, and if the unit is occupied by an eligible youth receiving FUPY/FYI assistance.
FYI Tenant Protection Vouchers (TPVs) awarded under Notice PIH 2019–20 are not part of this exception, since PHAs are prohibited from project-basing FYI TPVs. Units added after December 27, 2020, through an amendment of a HAP contract that was effective after December 27, 2020, are eligible for this 10 percent exception authority. In contrast, units added after December 27, 2020, through an amendment of a HAP contract that was effective on or prior to December 27, 2020, are not eligible for this 10 percent exception authority.
In general, the cap on the number of PBV units in a project is the greater of 25 units or 25 percent of the number of dwelling units in the project. However, the PHA may exceed this limit when there are excepted units in the project. With the implementation of FSHO, there is now a new excepted unit category.
Under HOTMA, the definition of excepted unit differs depending on when the HAP contract was executed. Contracts executed prior to April 18, 2017, follow the old statutory PBV requirements for excepted units. Projects where the HAP contract was executed on or after April 18, 2017, follow the new requirements under HOTMA. As of April 18, 2017, units are not counted against the 25 percent or 25-unit per project cap if:
- The units are exclusively for elderly families
- The units are for households eligible for supportive services available to all families receiving PBV assistance in the project
If the project is located in a census tract with a poverty rate of 20 percent or less, as determined in the most recent American Community Survey Five-Year estimates, the project cap is the greater of 25 units or 40 percent (instead of 25 percent) of the units in the project (per FR Notice 7/14/17).
Under the FSHO amendments, units exclusively made available to youth receiving FUPY/FYI assistance may be excepted from the project cap for HAP contracts first effective after December 27, 2020.
For more information on excepted units under HOTMA, see Notice PIH 2017-21.