HUD Publishes 2018 HCV Implementation Notice

HUD recently published Notice PIH 2018-09, titled “Implementation of the Federal Fiscal Year (FFY) 2018 Funding Provisions for the Housing Choice Voucher Program.” This notice provides information about the Housing Choice Voucher (HCV) program implementation in 2018. The notice also provides a brief summary of FY18 HCV account totals, which are as follows:

·       HAP Renewal Funding – $19.6 billion;

·       Tenant Protection Vouchers (TPV) – $85 million;

·       Administrative Fees (both ongoing and additional) – $1.76 billion;

·       Mainstream Program – $505 million;

·       Tribal HUD-VASH renewals – $5 million;

·       HUD-VASH vouchers – $40 million; and

·       Family Unification Program – $20 million.

Calculation of CY18 HAP renewal funding. Renewal funding is calculated by establishing a baseline based on validated leasing and cost data in the Voucher Management System (VMS) for calendar year (CY) 2017. HUD then adjusts this baseline for the first-time renewals of certain TPVs and special purpose vouchers. Next, a renewal funding inflation factor–differing by location–is applied. Finally, if appropriated funds are less than this amount, a proration is applied. The appropriations act gives HUD the authority to perform an offset (reduce formula eligibility for those PHAs that have “excess reserves”), which HUD will use to ensure that the national HAP proration is 99.5 percent.

Set-aside of up to $75 million to adjust PHA allocations. The FY18 budget allows for additional HCV HAP for five categories (category 2 is divided into two subsections). The numbering of the categories does not reflect priority, but HUD reserves the right to prioritize or limit the first category. The notice also provides information on eligibility and submission requirements for each of the following categories.

·       Category 1 – Prevention of Terminations Due to Insufficient Funding;

·       Category 2a – Unforeseen Circumstances;

·       Category 2b – Portability Cost Increases;

·       Category 3 – Project-based Vouchers; and

·       Category 4 – HUD-VASH.

Tenant Protection Vouchers. The notice also provides information on applying for TPVs out of the allocated $85 million. The two types of TPVs are relocation TPVs and replacement TPVs. The former are provided when HUD-assisted housing is not permanently lost, while the latter are provided when a multifamily or public housing action reduces the number of HUD-assisted housing units. The notice provides additional information on the type of multifamily and public housing actions that result in TPVs. Additionally, there is $5 million for TPVs for certain at-risk households in low-vacancy areas.

Funding for administrative costs. The FY19 budget allocates $1.73 billion for ongoing administrative fees and $30 million for additional administrative fees. Ongoing administrative fee eligibility is calculated by the same formula that HUD has been using the past several years, and HUD has already calculated administrative fee rates. The notice also notes that the dates for applying for blended rate administrative fees or higher administrative fee rates has already passed. Special administrative fees are available for the following categories of activities:

·       Homeownership fees;

·       Multifamily housing conversion actions;

·       Portability;

·       Audit costs for declaring major HCV programs per Notice 2015-16, and for HCV voluntary transfers per PIH Notice 2015-22;

·       Disaster fee adjustments; and

·       One-time costs associated with Small Area Fair Market Rent (FMR) adoption (these funds will cover the costs of software upgrades up to $25,000).

Special-purpose vouchers. The $40 million available for HUD-VASH vouchers will be awarded based on geographic need and PHA administrative performance. HUD will issue additional guidance in the future. There will also be future guidance for the $5 million in the HUD-VASH tribal account. HUD has already issued a notice of funding availability (NOFA) for the Family Unification Program (FUP), which utilized both FY17 and FY18 funds. There is $20 million allocated for FUP vouchers in FY18.

The FY18 budget allocates $505 million for renewal funding and administrative fees for Mainstream units. The administrative expenses are to be funded under the same terms and be subject to the same pro rata administrative fee reductions that apply to all other PHAs administering HCV vouchers. Any funds remaining after funding renewals and administrative expenses will be for new voucher assistance. There’s currently a NOFA awarding FY17 assistance and a portion of FY18 assistance, which has a deadline of June 18, 2018.