24 CFR Part 982, Subpart K - Rent and Housing Assistance Payment

On July 29, 2016, President Obama signed into law the Housing Opportunity Through Modernization Act of 2016 (HOTMA). Several of the statutory amendments made by HOTMA affect the Project-Based Voucher (PBV) program or the Housing Choice Voucher (HCV) program. HOTMA also gave HUD the authority to implement many of those changes by notice, and those statutory changes are not effective until HUD issues that notice. This document serves as the implementation notice for several of the provisions of HOTMA that impact the HCV and PBV programs, and seeks additional public input on both the implementing requirements in this document and future changes to these programs.

On November 16, 2016, HUD published a final rule implementing in HUD's regulations the requirements of the 2013 reauthorization of the Violence Against Women Act (VAWA). After publication, HUD discovered an incorrect compliance date in the preamble and an incorrect paragraph designation in the regulatory text. The compliance date, with respect to completing an emergency transfer plan and providing emergency transfers, and associated recordkeeping and reporting requirements, was incorrectly listed as May 15, 2017, in the preamble. The regulatory text provided the correct date of June 14, 2017. This document makes the necessary correction to the preamble to reflect the compliance date in the regulatory text of June 14, 2017 and the paragraph designations in the regulatory text.

This rule proposes to codify HUD's policy regarding enhanced vouchers, a type of tenant-based voucher provided for under section 8 of the U.S. Housing Act of 1937 in the following four scenarios, which are prescribed and limited by statute: The prepayment of certain mortgages, the voluntary termination of the insurance contract for the mortgage, the termination or the expiration of a project-based section 8 rental assistance contract, and the transaction under which a project that receives or has received assistance under the Flexible Subsidy Program is preserved as affordable housing. Specifically, this rule would codify existing policy concerning the eligibility criteria for enhanced vouchers, as well as provide rental payment standards and subsidy standards applicable to enhanced vouchers, the right of enhanced voucher holders to remain in their units, procedures for addressing over-housed families, and the calculation of the enhanced voucher housing assistance payment.

This rule proposes a new methodology for determining the amount of funding a public housing agency (PHA) will receive for administering the Housing Choice Voucher (HCV) program—one that uses factors that a recently completed study demonstrates are more reflective of how much it costs to administer the HCV program. Ongoing administrative fees under the HCV program are currently calculated based on the number of vouchers under lease and a percentage of the 1993 or 1994 local fair market rent, with an annual inflation adjustment. The new administrative fee formula proposed by this rule is based on a study conducted by Abt Associates for HUD that measured the actual costs of operating high-performing and efficient HCV programs and recommended a new administrative fee formula. In this rule, HUD proposes to adopt the recommended formula with modifications based largely on comments HUD received in response to a June 26, 2015 notice that solicited comment on the study. This rule proposes an ongoing administrative fee for a PHA that would be calculated based on six variables: Program size, wage rates, benefit load, percent of households with earned income, new admissions rate, and percent of assisted households that live a significant distance from the PHA's headquarters. The PHA's fee would be calculated each year based on these cost factors and a revised inflation factor would be applied to the calculated fee. This proposed rule also provides HUD with the flexibility to provide additional fees to PHAs to address program priorities such as special voucher programs ( e.g., the HUD-Veterans Affairs Supportive Housing program), serving homeless households, and expanding housing opportunities.

This rulemaking proposes the use of Small Area Fair Market Rents (Small Area FMRs) in the administration of the Housing Choice Voucher (HCV) program for certain metropolitan areas. HUD is proposing to use Small Area FMRs in place of the current 50th percentile rent to address high levels of voucher concentration. HUD believes that Small Area FMRs gives HCV tenants a more effective means to move into areas of higher opportunity and lower poverty areas by providing them with subsidy adequate to make such areas accessible and to thereby reduce the number of voucher families that reside in areas of high poverty concentration. HUD proposes to use several criteria for determining which metropolitan areas would best be served by application of Small Area FMRs in the administration of the HCV program. These criteria include a threshold number of vouchers within a metropolitan area, the concentration of current HCV tenants in low-income areas, and the percentage of renter occupied units within the metropolitan area with gross rents above the payment standard basic range. Public housing agencies (PHAs) operating in designated metropolitan areas would be required to use Small Area FMRs. PHAs not operating in the designated areas would have the option to use Small Area FMRs in administering their HCV programs. Other programs that use FMRs would continue to use area-wide FMRs. HUD's goal in pursuing this rulemaking is to provide HCV tenants with a greater ability to move into areas where jobs, transportation, and educational opportunities exist.

Through this document, HUD solicits comment on a demonstration designed to test a new method of assessing the physical condition of housing assisted by HUD vouchers (voucher-assisted housing). In the Joint Explanatory Statement accompanying the act appropriating funds for HUD in Fiscal Year (FY 2016), Congress directed HUD to implement a single inspection protocol for public housing and voucher units. This demonstration would commence the process for implementing a single inspection protocol.

The Department of Housing and Urban Development Appropriations Act, 2014 (2014 Appropriations Act), made several changes to the United States Housing Act of 1937 (1937 Act). Section 243 of the 2014 Appropriations Act authorized HUD to implement these changes through notice, followed by notice-and-comment rulemaking. Notices implementing the changes were published on May 19, 2014, and June 25, 2014. HUD issued a proposed rule on January 6, 2015, to codify these changes in regulation. In addition, the January 2015 rule proposed changes to streamline regulatory requirements pertaining to certain elements of the Housing Choice Voucher (HCV), Public Housing (PH), and various multifamily housing (MFH) rental assistance programs; to reduce the administrative burden on public housing agencies (PHAs) and MFH owners; and to align, where feasible, requirements across programs, including the Housing Opportunities for Persons with AIDS (HOPWA) and HOME Investment Partnerships (HOME), which are administered by HUD's Office of Community Planning and Development (CPD). HUD also issued an interim rule on September 8, 2015, implementing changes to flat rents in the Public Housing program made by the Department of Housing and Urban Development Appropriations Act, 2015 (2015 Appropriations Act). This final rule makes changes to the regulatory text as presented in the January 2015 proposed rule, including additional changes in response to public comment as well as further consideration by HUD of changes proposed in January 2015, and finalizes the regulatory changes contained in the September 2015 interim rule.

On December 19, 2014, the Office of Management and Budget (OMB) published a joint, Governmentwide interim rule with all Federal award-making agencies, entitled “Federal Awarding Agency Regulatory Implementation of Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.” In that rule, all Federal award-making agencies, including HUD, implemented the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. HUD also amended its administrative requirements for grants and cooperative agreements. This final rule conforms HUD's regulations to OMB's rule, revises cross references within affected HUD regulations, and makes other conforming changes and corrections.

This document corrects an inadvertent omission of regulatory text in HUD's final rule on Housing Choice Voucher Program: Streamlining the Portability Process, published on August 20, 2015.

This final rule amends HUD's regulations governing portability in the Housing Choice Voucher (HCV) program. Portability is a feature of the HCV program that allows an eligible family with a housing choice voucher to use that voucher to lease a unit anywhere in the United States where there is a public housing agency (PHA) operating an HCV program. The purpose of HUD's changes to the portability regulations is to enable PHAs to better serve families and expand housing opportunities by improving portability processes.

This proposed rule would amend HUD's regulations to fully implement the requirements of the Violence Against Women Act (VAWA) as reauthorized in 2013 under the Violence Against Women Reauthorization Act of 2013 (VAWA 2013). VAWA 2013 provides enhanced statutory protections for victims of domestic violence, dating violence, sexual assault, and stalking. VAWA 2013 also expands VAWA protections to HUD programs beyond HUD's public housing and Section 8 programs, which were covered by the reauthorization of VAWA in 2005 (VAWA 2005). In addition to proposing regulatory amendments to fully implement VAWA 2013, HUD is also publishing for public comment two documents concerning tenant protections required by VAWA 2013—a notice of occupancy rights and an emergency transfer plan. Although VAWA refers to women in its title, the statute makes clear that the protections are for all victims of domestic violence, dating violence, sexual assault, and stalking, regardless of sex, gender identity, sexual orientation, or age.

This final rule removes from regulations obsolete references to the Section 8 Tenant-Based Rental Assistance Certificate program (Certificate Program). In accordance with Executive Order 13563, “Improving Regulation and Regulatory Review,” HUD reviewed its regulations to identify regulations that are “outmoded, ineffective, insufficient or excessively burdensome.” Following its review, HUD determined that the Certificate Program regulations are obsolete and unnecessary because they govern a program that has been consolidated into another program, the Housing Choice Voucher (HCV) program. This rule also makes minor editorial corrections to the regulations.

Section 243 of the Department of Housing and Urban Development Appropriations Act, 2014 (2014 Appropriations Act), authorized HUD to implement certain statutory changes to the United States Housing Act of 1937 (1937 Act) made by the 2014 Appropriations Act through notice, followed by notice and comment rulemaking. Notices implementing the changes were published on May 19, 2014, and June 25, 2014. Consistent with statutory direction, this proposed rule commences the rulemaking process to codify in regulation the statutory changes made to the 1937 Act by the 2014 Appropriations Act and to solicit comment on HUD's implementation of these changes through the published notices. HUD intends to address the FY14 provision on consortia through separate rulemaking. In addition, this rulemaking also proposes changes to streamline regulatory requirements pertaining to certain elements of the Housing Choice Voucher (HCV), Public Housing (PH), and various multifamily housing (MFH) rental assistance programs; to reduce the administrative burden on public housing agencies (PHAs) and MFH owners; and to align, where feasible, requirements across programs. One of the proposed changes would also affect the HOME Investment Partnerships program, Continuum of Care program, and the Housing Opportunities for Persons With AIDS (HOPWA) program which are administered by HUD's Office of Community Planning and Development.

On June, 25, 2014, HUD published a document implementing statutory changes made by the Department of Housing and Urban Development Appropriations Act, 2014 to certain programs administered by HUD's Office of Housing and HUD's Office of Public and Indian Housing. In the discussion of implementation of the new definition of “extremely low-income” applicable to multifamily projects administered by HUD's Office of Housing, the document referred to “contract administrators” and it should have referenced “owners.” This document makes that correction.

HERA, enacted into law on July 30, 2008, made comprehensive and significant reforms to several HUD programs, including HUD's Public Housing, Section 8 Tenant-Based Voucher, and Project-Based Voucher programs. On November 24, 2008, HUD published a notice that provided information about the applicability of certain HERA provisions to these programs. The notice identified: (1) Those statutory provisions that are self-executing and required no action on the part of HUD for the program changes made by HERA to be implemented; and (2) those statutory provisions that require new regulations or regulatory changes by HUD for the HERA provisions to be implemented. The notice also offered the opportunity for public comment on the guidance provided. This proposed rule follows the November 24, 2008, notice for the purpose of establishing, in regulation, the reforms made to HERA as discussed in that notice, and to make other related regulatory changes. This proposed rule would make conforming changes to the regulations of the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher programs to reflect the self-executing provisions of HERA, and would also amend the regulations required to implement those statutory provisions of HERA that are not self-implementing. Additionally, this rule would make such other changes for the purposes of updating certain regulations to reflect current practices, and clarifying other regulations which, based on experience, HUD determined would benefit from clarification. While the conforming and clarifying changes are not implementing new policy, HUD nevertheless welcomes comment on the clarity and comprehensibility of the language proposed to be codified. This rule also takes into consideration the two public comments received in response to issuance of the November 2008 notice, and solicits additional public comment. HERA changes affecting the public housing program are being addressed by separate rulemaking.

This proposed rule would amend HUD's regulations governing portability in the Housing Choice Voucher (HCV) program. Portability is a feature of the HCV program that allows an eligible family with a housing choice voucher to use that voucher to lease a unit anywhere in the United States where there is a public housing agency (PHA) operating an HCV program. The purpose of HUD's proposed changes to the portability regulations is to clarify requirements already established in the existing regulations and improve the process involved with processing portability requests to enable PHAs to better serve families and expand housing opportunities. It is HUD's intent to increase administrative efficiencies by eliminating confusing and obscure regulatory language in areas that are known to be troublesome. This proposed rule attempts to balances the needs and interests of PHAs while increasing family choice.