What to Expect When CARES Act Waivers Expire

Through the course of the pandemic, HUD’s Office of Public and Indian Housing (PIH) issued waivers and alternative requirements for multiple housing programs. This was allowed through the CARES Act, which was signed into law on March 27, 2020. In addition to authorizing over $2 trillion in emergency assistance and health care response for individuals, families, and businesses affected by the COVID-19 pandemic, it included housing provisions. The CARES Act gave HUD broad authority, in the context of the pandemic, to waive statutes and regulations (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment) for the Public Housing and Housing Choice Voucher (HCV) programs.

In May 2021, HUD issued PIH Notice 2021-14, listing all the CARES Act waivers and their expiration dates. Most waivers in this notice are effective until Dec. 31, 2021. Even though we’re still in the midst of the pandemic and some areas of the country haven’t returned to normal, HUD sees these waivers as being tied to the CARES Act. With the operating fund and Section 8 monies that came with the CARES Act expiring on Dec. 31, HUD views that its broad waiver authority is expiring on Dec. 31, too.

With the impending expiration of these waivers, HUD recently published guidance to public housing agencies (PHAs) on the inevitable transition away from waivers and toward normal operations. According to HUD, the guidance “outline[s] planning considerations available to PHAs as they evaluate how to effectively and efficiently navigate the CARES Act Waivers expiration.”

We’ll take a look at the three program areas directly affecting the HCV program and review how the various waivers affected the existing requirements in place before the pandemic.

Verification Waivers

Due to the pandemic, HUD allowed PHAs to adopt waivers of the verification standards related to income, citizenship, and Social Security numbers. With so many PHAs operating remotely, HUD also provided a waiver that PHAs could adopt regarding the Enterprise Income Verification (EIV) monitoring requirements.

While HUD provided these waivers, PIH Notice 2021-14 required PHAs to adopt any specific waiver they wished to use. It’s important to note that this HUD guidance relating to verifications is applicable to the Public Housing, HCV, and Moderate Rehabilitation programs.

Income verifications. PHAs must determine whether an applicant family’s income exceeds the applicable income limit established by HUD in the jurisdiction where the family wishes to lease a unit. For the Public Housing program, it requires PHAs to obtain and document third-party verification, or document in the family’s file why third-party verification wasn’t available, for the family’s reported income, assets, expenses related to annual income deductions, and other factors that would affect the determination of adjusted income or income-based rent.

For the HCV program, it requires that the PHA must receive information verifying that an applicant is eligible within the 60-day period before the PHA issues a voucher to the applicant.

As a result of the CARES Act, HUD permitted PHAs to adopt waivers that allow PHAs to use self-certification as the highest form of income verification at admission, annual recertifications, and interim recertifications. Beginning April 2020, PHAs were permitted to waive the requirement to obtain third-party verifications during annual and interim reexaminations. As of Jan. 1, 2022, PHAs will no longer be able to use self-certification as the highest form of income verification.

Typically, a PHA must obtain third-party verification of all family assets upon admitting a family to the HCV or Public Housing program and then again at least every three years thereafter. If the “Year 3” period occurred between April 2020 and December 2021 for a PHA that adopted the waivers and implemented the alternative requirement to accept self-certification as the highest form of verification, the verification of assets would occur in Year 4, the following years, with the three-year clock resetting.

HUD suggests PHAs be diligent in communicating required information to families. PHAs can send special notices reminding families of their obligation to submit more than a self-certification if higher levels of verification exist. It may continue to be difficult for families to obtain information needed to support income and deductions, so PHAs can document instances where self-certification was used due to the unavailability of higher-level verifications.

EIV monitoring. PHAs were permitted to adopt a waiver to suspend mandatory monitoring requirements of the EIV reports during the period of availability. PHAs must resume standard monthly and quarterly monitoring of all mandatory EIV reports, including the Deceased Tenants Report, the Identity Verification Report, the Immigration Report, the Multiple Subsidy Report, the New Hires Report, and the Income Validation Tool (IVT) Report. All reports should be maintained for a period of at least three years or longer as required from the effective date of the action.

If an EIV report shows an income source that wasn’t reported by the tenant or a substantial difference in the reported income, the PHA must discuss the income discrepancy with the tenant and request that the tenant provide documentation to confirm or dispute the unreported or underreported income.

Social Security number/citizenship verification. Due to the pandemic, HUD allowed PHAs to adopt a waiver of the requirement to obtain and verify Social Security number (SSN) documentation and documentation showing eligible noncitizen status before admitting applicants to the HCV and Public Housing programs.

Typically, HUD requires that applicants disclose and PHAs verify the SSNs of each applicant. Applicant documentation may include a valid SSN card issued by the Social Security Administration; an original document issued by a federal or state government agency that contains the individual’s name, SSN, and other identifying information; or other evidence of the SSN as prescribed by HUD.

PHAs also must verify evidence of U.S. citizenship or eligible immigration status for noncitizens claiming eligibility for assistance. Each eligible household member must sign a declaration of their status and eligible noncitizens must also provide supporting documentation, which must be submitted by the time of the eligibility determination. Documentation verifying U.S. citizenship may also be requested. Since eligibility for assistance is limited to U.S. citizens and noncitizens who have eligible immigration status, families in which not all members are U.S. citizens or have eligible immigration status are only eligible to receive pro-rated housing assistance based on the percentage of family members who qualify for assistance.

Beginning Jan. 1, 2022, PHAs must obtain SSN and citizenship status verification documents to determine eligibility for the Public Housing or HCV program. For the HCV program, eligibility must be determined prior to voucher issuance. PHAs that adopted this waiver were required to implement alternative policies for individuals to provide the mandatory documentation within 90 days of admission. PHAs must continue to verify SSN and citizenship status to continue assistance for families admitted under this waiver.

HUD guidance says PHAs may consider establishing procedures to ensure that the SSN and eligible noncitizen status have been verified for all families who were admitted under the terms of this waiver, by reviewing the documentation in the file during the regular 2022 annual recertification cycle. And PHAs must establish a process for addressing any material discrepancies such as erroneous SSNs or date of birth that may arise later, and they’re obligated to take enforcement action in accordance with their policies and procedures.    

Inspection Waivers

During the pandemic, HUD recognized that conducting inspections may not be possible or, in some instances, safe. PHAs were able to adopt several waivers that delayed inspections for the HCV program (including the Project-Based Voucher program), Public Housing program, and the Moderate Rehabilitation program.

For the HCV program, HUD permitted PHAs to adopt waivers to postpone normally required Housing Quality Standards (HQS) inspections and provided alternative requirements, such as owner certification. In the Public Housing program, PHAs could adopt a waiver of inspections in calendar year (CY) 2020, while reinstituting inspections in CY 2021 and completing the inspection of each property by Dec. 31, 2021. PHAs that delayed inspections under these waivers must complete inspections as soon as reasonably possible but must resume regular inspections by the dates established by HUD.

HUD says PHAs have flexibilities in determining how to get back on schedule. Also, although most owners and participants are aware of the HQS requirements, reminders of the criteria as well as common issues found in the PHA’s jurisdiction may help to minimize the deficiencies noted during inspections.

Remote video inspections. PHAs may implement remote video inspections (RVIs) to complete inspections. HUD says that any PHA that has adopted RVIs, or those that wish to moving forward, may continue to do so after the waivers expire.

If a PHA has decided to incorporate technology into the inspection process, it must have determined prior to implementation if this is a significant amendment to the Annual Plan and evaluate whether the inspection process requires an update of the HCV Administrative Plan or the Public Housing Admissions and Continued Occupancy Policy (ACOP).

  • PHAs may conduct the following types of inspections using RVIs:
  • Initial inspections;
  • Biennial and triennial inspections;
  • Interim inspections; and
  • At other times as needed.

Key dates for HCV inspections. Notice PIH 2021-14 established the HQS waivers and time frames for returning to normal operations. Here are the deadlines for any PHA that adopted HQS waivers:

> No later than Dec. 31, 2021, PHAs must resume:

  • Initial Pre-Housing Assistance Payments (HAP) inspections;
  • Scheduled biennial (or triennial) inspections;
  • Regular procedures for interim inspections;
  • Inspections of units that have passed a prior alternative inspection; and
  • Initial HQS inspections for units that families wish to purchase under the HCV homeownership option.

For units that received owner certification in lieu of an HQS inspection, PHAs must complete an HQS inspection by the following dates:

> Beginning Jan. 1, 2022:

  • All HQS inspection requirements are applicable to the HCV and PBV programs.

> No later than June 30, 2022, PHAs must complete:

  • Delayed initial HAP contract inspections;
  • Delayed CY 2020 biennial HQS inspections;
  • Delayed PBV turnover inspections; and
  • Delayed inspections for PBV units added to a HAP contract.

> No later than Dec. 31, 2022:

  • PHAs must complete all delayed CY 2021 biennial inspections.

> No later than the one-year anniversary of the date of the owner’s certification:

  • PHAs must inspect units that were placed under HAP contract using the initial inspection alternative option.

Occupancy Policy Waivers

HUD issued waivers for both the Public Housing and HCV program designed to give PHAs an opportunity to let households remain in assisted units during the pandemic. Some of these waivers apply to the family and others apply to the unit. While HUD provided waivers to allow PHAs to limit some categories of terminations, PHAs were required to adopt any specific waiver they wished to use.

Family absence from the HCV unit. PHAs that adopted this waiver were provided discretion in allowing a family to be absent from a unit for more than 180 days and continue the HAP payment. The rationale was that families might be sheltering-in-place away from their unit during the pandemic.

PHAs that continued making HAP payments despite the family’s absence of more than 180 consecutive days must stop making HAP payments beyond Dec. 31, 2021. PHAs must terminate the HAP contract on Jan. 1, 2022, if the family is still absent from the unit.

Beginning Jan. 1, 2022, PHAs must resume terminating HAP payments for families that are absent from the unit for a period of more than 180 consecutive calendar days for any reason. Families being terminated from the program for being absent from the unit for more than 180 days are entitled to an informal hearing.

HUD recommends that PHAs proactively reach out to participants who have been absent from the unit more than 180 days or will reach the 180-day milestone by Dec. 31, 2021, to determine if the family intends on returning to the unit.

Automatic termination of the HAP contract for “zero HAP.” If you have a family who’s no longer receiving a subsidy for their voucher because their income has gone up high enough, PHAs weren’t necessarily required to terminate that HAP contract right away during the pandemic with this waiver in place.

But starting on Jan. 1, 2022, PHAs must revert to terminating those contracts that have zero HAP households 180 days after the last HAP payment is made. For HAP contracts covered by this waiver, the PHA must terminate the HAP contract when the extension granted by the PHA ends, which in no case may extend beyond Dec. 31, 2021.

HUD recommends that PHAs, for participants who will have been in a zero HAP status for more than 180 days, send a reminder letter to the participant and owner that the HAP contract will automatically terminate at the end of the PHA extension under this waiver, which must be no later than Dec. 31, 2021. The reminder should state that if the family had a decrease in income, they should report that decrease to the PHA as soon as possible, as this may remove them from zero-HAP status and avoid their termination from the HCV program.

HUD’s Waiver Wind-Down Guidance on Remaining Program Areas

HUD has issued additional guidance for the following program areas affected by CARES Act waivers. HUD didn’t publish additional guidance on waivers that were already expired or where HUD felt it unnecessary. According to HUD, there will be future guidance on both the Section Eight Management Assessment Program (SEMAP) and the Public Housing Assessment System (PHAS). The guidance can be found at www.hud.gov/program_offices/public_indian_housing/covid_19_resources/navigating_waiver_expiration.

  • Project-Based and Enhanced Voucher Provisions on Under-Occupied Units. This document provides information on waivers that enabled homeless families to enter into lease agreements for under-occupied PBV units. Information in it applies to PBVs, the Rental Assistance Demonstration (RAD) program, and Enhanced Voucher programs.
  • Capital Programs. This guidance provides information on waivers related to capital program operations during the pandemic and certain additional waivers. It applies to the Public Housing program.
  • Uniform Financial Reporting Standards. This guidance provides information on how PHAs submit their financial statements.
  • Community Service and Self-Sufficiency Requirements (CSSR). This document provides information about the requirement that Public Housing residents participate in community service or an economic self-sufficiency program and is applicable to Public Housing.