Follow Nine Steps to Prevent Unnecessary HAP Delays
If your site has a housing assistance payments (HAP) contract, you may have gotten a late payment from HUD at one time or another. Late assistance payments can cause serious problems at your site. For example, if your site doesn’t have large reserves, it may not be able to make mortgage payments or cover other operating and maintenance costs.
Fortunately, you can prevent certain assistance payment delays by making sure that the HAP voucher you submit is accurate and timely. We’ll go over nine steps your staff should take when filling out the monthly HAP voucher. By preparing your HAP voucher in this manner, your site’s will have an increased likelihood of eliminating errors that will help your site get its assistance payment on time.
Under a HAP contract, HUD and site owners negotiate contract rent levels for a site’s units. Since residents pay 30 percent of their adjusted income in rent, HUD agrees to pay a subsidy (known as a HAP) equal to the difference between the contract rent and the resident’s portion of the rent.
To get your site’s assistance payments for a given month, you must submit a HAP voucher to HUD or your contract administrator one month in advance. How you submit the HAP voucher and how HUD pays you depend on the type of administrator handling your site. Generally, you fill out the HUD HAP voucher form electronically, using your TRACS-compliant software. After creating your HAP voucher, you’ll create two TRACS files—the HAP voucher itself, called the MAT 30, and the tenant data record, called the MAT 10.
The HAP voucher includes, among other things, the name of every head of household living in an assisted unit and the corresponding contract rent, utility allowance, and gross rent (which is the total of the contract rent plus the utility allowance) for each unit.
How HAP Vouchers Are Submitted, Paid
The method in which HAP vouchers are submitted and paid varies with the type of administrator that handles the site. For HUD-administered contracts, the owner submits a monthly voucher to HUD for verification, and HUD pays the owner based on the voucher. For contracts administered by a performance-based contract administrator (PBCA), the owner submits a monthly voucher to the PBCA, which verifies the voucher and forwards it to HUD for payment; or for traditionally administered contracts, HUD and the contract administrator (CA) develop a yearly budget, and HUD sends the CA set monthly payments based on this budget. The owner submits monthly HAP vouchers to the CA, and the CA pays the amount approved on the voucher. At the end of the year, HUD and the CA reconcile the payments HUD made to the CA with the amounts that the CA paid to the owner. They exchange funds to settle any difference.
HAP VOUCHER PREPARATION STEPS
Complete the following steps to be able to detect and correct errors on the HAP voucher before you submit it to TRACS. This way, you’ll eliminate errors that could delay your assistance payment.
Step #1: Collect Necessary Paperwork
Before you start, collect all of the paperwork containing the information you’ll need to check the monthly HAP voucher. You’ll avoid mistakes if you don’t have to interrupt the voucher-checking process to look for missing items. The necessary paperwork includes:
- Last month’s HAP voucher, which you’ll use for comparison purposes;
- All of the 50059s that have been processed since the date of the prior month’s HAP voucher (these show the household’s certification and recertification information and the household’s rent);
- Other paperwork that may affect the amount of the assistance payment you’re entitled to get for the month at issue (such as a resident’s intent to vacate a unit or HUD approval to pay special claims); and
- Documents related to manual adjustments (such as a change in the site’s unreported income).
Step #2: Verify that HAP Voucher Is Complete
After you’ve typed in the required information, print a draft of the HAP voucher and verify that it’s complete. Make sure you’ve printed all of the voucher’s pages. You should pay particular attention to the cover page, which contains information about the number of assisted units, vacant units, and market rent units at your site, and the adjustment pages, which list changes to the month’s assistance payment, to make sure the information is correct.
Step #3: Account for Rent Change
Make sure you’ve accounted for any rent or utility allowance changes in the HAP voucher. These are the adjustments you request from HUD to cover increasing housing or utility costs. If HUD approves such a rent or utility allowance change, you must update the rents and utility allowances of all of the assisted units. To make sure the voucher is right, look at every unit listed on the voucher and verify that the rent or utility change is shown.
Step #4: Account for Annual and Interim Recertification Changes
You must look at every Form 50059 you’ve processed since the last month’s HAP voucher and make sure any changes are accounted for in the current month’s voucher.
The 50059, prepared at certification or recertification, details the household’s occupancy and income data, and shows a household’s rent. Any household changes at certification or recertification may affect the rent the household pays and the amount of the assistance payment for that household’s unit.
Step #5: Compare HAP Vouchers
Compare the current month’s voucher with the prior month’s voucher to make sure you can explain any differences between the two. If the head of household names, rents, or assistance payment amounts differ between the two vouchers, you should have a 50059 on file explaining the change. If you don’t, you must investigate further to determine the cause of the discrepancy.
The discrepancy is often the result of a filing mistake. For example, a staff person may have processed the 50059 but forgot to put a hard copy in the folder of 50059s. When you prepare the HAP voucher for the upcoming month, the TRACS-compliant software will pick up any changes to household data from the 50059s you processed and automatically update the rent and assistance payment amounts in the voucher. You can catch such errors simply by comparing the two vouchers.
Step #6: Check Annual Effective Dates
Check that the effective date of each household’s recertification is later than the date of the HAP voucher you’re submitting. A household’s recertification is effective for one year. So, for example, if a household undergoes annual recertification in April 2019, the effective date of the recertification is April 2020. If you’re submitting a HAP voucher for April 2019, the effective date of the household’s recertification is fine because it occurs after April 2019. If a household’s recertification effective date occurs before April 2019, that would indicate that the recertification is late. If this happens, be sure to finish the household’s recertification as quickly as possible. HUD can terminate the assistance payment for the household if the recertification isn’t done on time.
Step #7: Check Date of First Reminder Notice
Make sure you sent an initial reminder notice to each household by checking that the date when each notice was sent. These are the notices you must send to each household 120 days before its scheduled annual recertification. The notice explains, among other things, that the annual recertification is coming up and asks the household members to come to the leasing office to process the necessary paperwork.
Step #8: Check Adjustment Pages
Because you’re billing HUD one month in advance (for example, on March 1, you must submit a HAP voucher for April), changes may occur that affect the amount of assistance payment you’re entitled to get. You must make sure those adjustments are reported on the HAP voucher. Examples of these adjustments are:
Move-ins. Say a household moves into a unit on Feb. 20. You didn’t get an assistance payment for this household for the last few days of February or for the month of March, because the HAP vouchers for February and March had already been submitted to HUD before the household moved in. On March 1, when you submit the April HAP voucher to HUD, you’ll need to make an adjustment so that you can collect the assistance payment for the new household’s February and March rent.
Terminations and move-outs. If a household’s occupancy is terminated or if a household moves out in the middle of the month, you’ll have to make an adjustment to the voucher to return a portion of the assistance payment to HUD. You can’t collect an assistance payment for the days the household isn’t occupying a unit.
Special claims. An adjustment to the voucher is required if HUD approves any special claims for repairs to damaged units or for vacancies. You can report the special claims on the voucher and get payment from HUD.
Other adjustments from accounting. Such adjustments might include unreported income, which you must return to HUD.
Step #9: Review TRACS Files
Now that you’ve gone through steps 1 to 8 to eliminate mistakes on the HAP voucher, you’re ready to submit the information to TRACS. After you’ve done this, your contract administrator will process the official HAP voucher and send it to HUD for reimbursement.
To prevent any errors that could delay your assistance payment after you’ve submitted your information to TRACS, print the TRACS Processing Report and the TRACS Submission Summary Report. The processing report will show error messages if there’s a problem with the TRACS files, such as an indication that your files were lost and your contract administrator didn’t get them. If error messages appear, you must investigate the matter and make necessary corrections. The summary report includes a listing of all of the households that had changes on your HAP voucher. Compare the TRACS Submission Summary Report to the 50059s filed for the month to make sure all of them have been included in the summary.