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HUD's Interim Final Rule Explained

Posted by NMA on Oct 18, 2021 10:50:35 AM

Oct 18, 2021

A Closer Look at HUD’s FR Notice to Curb Evictions Related to Nonpayment of Rent Across the US

On October 7, HUD published an Interim Final Rule titled Extension of Time and Required Disclosures for Notification of Nonpayment of Rent and provided supplemental guidance to implement the requirements included in the rule in Notice PIH 2021-29/H 2021-06.

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The new regulations established by the rule and the notice apply in situations where HUD determines that a national emergency requires additional time for families living in public housing and project based rental assistance (PBRA) units to secure Federal funding available to them. In such instances, for evictions related to nonpayment of rent, PHAs and owner/agents must give affected families at least 30-day-notice. Further, PHAs and owner/agents are required to provide certain information about the availability of federal emergency assistance as part of the notice. The new requirements do not apply to the Housing Choice Voucher (HCV) or project-based voucher (PBV) programs. The rule takes effect November 8, 2021 and remains in effect until HUD issues a subsequent notice rescinding it. Let’s take a look at how the new rule and notice apply to public housing and PBRA.

Public Housing

Under public housing regulations, the PHA must include provisions in the public housing lease governing terminations of tenancy and must define which circumstances are considered serious and repeated violations of the lease. This typically includes nonpayment of rent. Current public housing regulations require at least 14-day notice of termination in this case. The notification requirement may be combined with or run concurrently to any notice to vacate required by State or local law. As a result of the Interim Final Rule, PHAs must increase the notice period for nonpayment of rent from at least 14 days to at least 30 days. Further, Notice PIH 2021-29/H 2021-06 states the PHA needs to amend their admissions and continued occupancy policy (ACOP) as necessary to reflect this change. However, the new regulations do not require the PHA to incorporate the 30-day notification requirement into their public housing leases. Instead, the PHA must notify all public housing families, not just those facing eviction for nonpayment of rent, (either in writing or electronically) that the 30-day notification requirements are in effect.

The PHA is also required to include information in the notice for nonpayment of rent to support families in securing available funding. Notice PIH 2021-29/H 2021-06 requires that notification for nonpayment of rent must include, at a minimum, the language provided in the Appendix to the notice, updated to reflect the entity issuing the notification and with the appropriate link to the local ERA grantee. The PHA may, but is not required to, provide additional information and HUD encourages PHAs to work with families who are eligible for Emergency Rental Assistance (ERA).

PBRA

The new regulations and notice apply to Section 8 Project Based Rental Assistance (including New Construction, State Housing Agency Program, Substantial Rehabilitation, Section 202/8 Rural Housing Services Section 515/8, Loan Management Set-Aside (LMSA), Property Disposition Set Aside (PDSA), and Rental Assistance Demonstration (RAD)), Section 202/162 Project Assistance Contract (PAC), and Section 202 Project Rental Assistance Contract (PRAC).

Like in public housing, owners of PBRA properties are required to provide at least 30-day notification for nonpayment of rent and must include, at a minimum, the information contained in the Appendix to Notice PIH 2021-29/H 2021-06. The public housing requirement to notify all residents of the changes, however, is not applicable to PBRA. Since owners are required to use a HUD model lease in these programs, and model leases require that terminations of tenancy be carried out in accordance with HUD regulations, no changes to the lease are required.

For RAD PRA properties, Notice H-2019-09 requires that the owner/agent provide additional procedural rights related to termination notifications under RAD not required by the regulations or model lease for the standard PBRA program. In RAD, the owner/agent must include notice requirement in the House Rules that includes at least 14-day notice for nonpayment of rent. HUD provides a sample addendum in Attachment 1E of the RAD notice that includes this language. HUD did not address this requirement specifically in the new rule or notice and has not yet amended the requirements of the RAD notice. However, RAD PBRA projects are covered under the new rule and notice, thus the 30-day notice requirements do apply.

NMA has updated our Model ACOP plans with information on the interim final rule. To learn more about ordering our Model ACOP Plans or ACOP Consulting please reach out to sales@nanmckay.com

Here are links to Notice PIH 2021-29/H 2021-06 and the interim final rule.

 

Topics: Final Rule, Financial Management, PBRA, PHAS, Industry News, Multifamily, Emergency Rental Assistance

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