How to Implement an Admissions Preference for Homeless Applicants

Congress and HUD have established various types of preferences in an effort to provide housing to those most in need. HUD rules currently include four different kinds of preferences that apply to various programs [HUD Handbook 4350.3, par. 4-6(B)]. Of these four preferences, three of them apply only to certain applicants and are mandatory. These preferences are:

Statutory preferences. These are preferences required by the federal law governing Section 221(d)(4), 221(d)(3), and 221(d)(3) BMIR sites. If you own or manage one of these sites, you must give a preference to applicants who’ve been displaced by government action or by a presidentially declared disaster.

HUD preferences for Section 236 sites. HUD regulations still require owners and managers of Section 236 sites to grant a preference to applicants displaced by government action or by a presidentially declared disaster. In addition, Section 236 sites that offer rental assistance through the RAP program must rank applicants based on RAP assistance eligibility and estimated rent based upon income.

Preferences required by state or local law. Some state and local governments have admissions preferences that you must apply to assisted housing applicants. For example, both Maine and California require sites to give a preference to veterans, military personnel, and their families. And Louisiana requires a preference for working families. Other states require preferences for victims of domestic violence, even though HUD’s own version of this preference is optional.

The fourth type of preference is optional. For instance, you may choose to adopt preferences such as a working family preference or a preference for elderly or disabled applicants over other single applicants. Recently, HUD has focused its efforts on the problem of homelessness and is encouraging owners to adopt an admissions preference for homeless people. While homelessness has decreased over the past five years, most significantly among veterans and the chronically homeless, there were still over 570,000 individuals experiencing homelessness on a given night in 2014, according to the United States Interagency Council on Homelessness (USICH).

To help address this problem, HUD’s Deputy Assistant Secretary for Special Needs recently released toolkits for strategies to end veteran homelessness. And in July 2013, HUD published Notice H2013-21 that provides information on implementing owner-adopted admissions preferences for individuals or families experiencing homelessness.

If homelessness is pervasive in your area, adopting this type of preference could go far in lowering your vacancy rates with the help of a consistent referral source. A coordinated system of service providers that assist and place the homeless in your area could refer qualified individuals and families as well as completed applications to your office.

In addition, owners are given wide latitude in tailoring preferences both with regard to who is served and what percentage of units or vacancies are subject to the preference. For example, owners have the flexibility in choosing the preference rate such as filling every third vacancy with an applicant who is currently homeless. If homelessness is a problem in your area you might consider adopting a special admissions preference. If you decide to adopt one, review the following nine steps laid out by HUD in the notice.

Step 1: Inform All Applicants of Admissions Preferences

Applicants with preferences are selected from the waiting list and receive an opportunity for an available unit earlier than those who don’t have a preference. Preferences affect only the order of applicants on the waiting list. They don’t make anyone eligible who wasn’t otherwise eligible, and they don’t change an owner’s right to adopt and enforce tenant screening criteria [HUD Handbook 4350.3, par. 4-6(A)(1)].

If you adopt admission preferences for homeless individuals and families, you must inform all applicants about the preference and give all applicants (including those on your waiting list) the opportunity to show that they qualify for the preferences [HUD Handbook 4350.3, par. 4-6(A)(2)].

Step 2: Amend TSP and Affirmative Fair Housing Marketing Plan

All owner-adopted preferences must be included in the Tenant Selection Plan (TSP) and, if required, the Affirmative Fair Housing Marketing Plan for the associated site including any referral policy in the preference, if applicable.

It’s important to note that owner-adopted preferences must be approved by your local HUD office to confirm conformance with applicable regulatory and statutory requirements. You can remove your preferences at any time without HUD approval, but if you make any changes in preferences you must update your TSP to reflect those changes. Below, we’ve provided Model Language: Sample Tenant Selection Plan Amendment for a Homeless Admissions Preference that you can use and adapt.

Step 3: Decide on a ‘Homeless’ Definition

When you’re creating your admissions preferences, you can use HUD’s definition of “homeless” under the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009 (HEARTH Act) or a definition that better suits your site. 

Ultimately, your definition for homelessness cannot exclude any protected classes such as families with children. If you choose to adopt a narrower or broader definition of homeless than the one based on the HEARTH Act, you need to submit a written request to your local HUD Field Office specifying the type of preference with its full definition and how you’ll implement it. Below, we’ve provided sections of the HUD regulatory definitions as well as other possibilities in our Model Language: Use HUD’s Definition of Homeless or Other Possibilities.

Step 4: Work with Partnering Organizations

According to the notice, owners may create a preference or limited preference specifically for individuals or families who are referred by a partnering homeless service organization or consortium of organizations in the community. For example, these organizations may refer people transitioning out of a shelter or temporary housing program. When partnering with a referring agency, an owner may elect to place the preference on the entire site or accept a referral for a defined percentage of units.

No units may be set aside or held off-line, but owners can fill vacancies by alternating selections from the existing project waiting lists with referrals from their partnering organization of eligible applicants who meet the preference criteria.

For instance, in filling the next four vacancies, an owner may select three applicants for occupancy from the property waiting list followed by one applicant referred by the partnering organization. It’s important to note that although a partnering organization may refer applicants, owners must screen those applicants in the required manner as they would for any other applicants on the waiting list. In addition, the source of referrals cannot be limited to an agency, organization, or consortia that exclusively provide services restricted to people with specific disabilities or diagnoses. Referrals also cannot be limited to an agency, organization, or consortia that deny services to members of any federally protected class under fair housing laws such as race, color, religion, national origin, sex, disability, or familial status.

Step 5: Consider Using ‘Alternating Selection’

Even if you partner with a referring agency, you cannot set aside or hold off-line any units. Similarly, you can use the same “alternating selection” method even if you’re not partnering with a referral agency. If you use alternating selection, you must clearly define the selection method in your TSP.

Step 6: Identify and Notify All Preference-Qualified Applicants on Waiting List

When you adopt a new preference, you must notify all applicants on your current waiting list to determine whether any are eligible under the preference [24 CFE §5.655 (c)]. Below, we’ve provided a Model Letter: Notify Applicants on Current Waiting List of Owner-Adopted Preference, which you can use to fulfill this requirement.

The owner must specify on any public notice of a waiting list opening that current waiting list applicants may qualify for the preference. In addition, the notice must include any other information new applicants and current applicants on the waiting list will need to know about how to successfully apply and establish their preference status, including any partnering agencies with whom the owner may be working to receive referrals or determine preference eligibility.

Step 7: Set Preference Eligibility Requirements

According to HUD, if you’re working with a partnering agency, you can simply rely on that organization’s referral to verify that the individual or family qualifies for the preference.

For applicants who aren’t referrals, you need to decide what kind of documentation you want them to provide in proving that they qualify for the preference.

Step 8: Don’t Touch Site Designations

If the owner has a site designation of elderly or disabled on all or some HUD-assisted units, this designation remains in effect despite the adoption of the new preference. For example, if the site is 100 percent elderly, then the homeless preference wouldn’t supersede this designation.

Any qualified applicants benefiting from the homeless preference would need to meet both criteria—that is, be both homeless and elderly. If the site has 10 units properly designated for individuals with disabilities, then an owner couldn’t fill any of the 10 units with individuals who met the criteria for the homeless preference unless they also met the eligibility requirements of the units.

Step 9: Ensure Fair Housing Compliance

When you’re creating and implementing a homelessness admission preference, be mindful to ensure that you’re complying with all fair housing and civil rights laws.

You must ensure that the preference wouldn’t have the purpose or effect of excluding other eligible families from the program on the basis of race, color, national origin, religion, sex, disability, or familial status, or would create or perpetuate segregation.

For example, an owner adopting a homeless preference cannot deny access to families with children. The owner must also ensure that programs or activities are administered in the most integrated setting appropriate to the needs of qualified individuals with disabilities. According to HUD, the owner should analyze demographic data of the waiting list population and of the population in the community and compare this to the demographic characteristics of those who would qualify for the preference to ensure that the preference doesn’t create a disparate impact on a particular protected class from accessing the program.

In addition, the owner must fully document the site’s marketing practices in the Affirmative Fair Housing Marketing Plan if the owner chooses to market the preference. This HUD-approved plan can include referrals from shelters and other organizations that serve the homeless, but should be designed specifically for the community in which the site is located.