HUD PIH Notice § 2013-27

                              U.S. Department of Housing and Urban Development
                                 Office of Public and Indian Housing
________________________________________________________________________
Special Attention of: Section 8 Public
Housing Agencies; HUD Office of             Notice PIH 2013-27 (HA)
Public Housing Directors; Section 8
Financial Management Center ;               Issued: December 4, 2013
HUD Office of Multifamily Housing
Directors                                   Expires: Effective until amended,
                                                     superseded, or rescinded
                                            ___________________________________
                                            Cross References: Notice PIH 2001-41;
                                                      Notice PIH 2011-49 ; Notice H 2012-3

Subject: Voluntary Relinquishment of Enhanced Voucher Assistance or Regular
Housing Choice Voucher Assistance in Exchange for Project-Based Voucher Assistance
in Multifamily Housing Conversion Actions

    1. PURPOSE

         The purpose of this Notice is to provide procedures Public Housing Authorities
         (PHAs) must follow when the recipient of an enhanced voucher (or regular
         housing choice voucher - see paragraph 4 below) voluntarily agrees to relinquish
         such assistance in exchange for the provision of Project-Based Voucher (PBV)
         assistance.

    2. BACKGROUND

         Section 8(t) of the United States Housing Act of 1937 (the Act) authorizes
         enhanced voucher assistance as tenant-based assistance. Absent Congressional
         authorization, HUD does not have the authority on its own to convert enhanced
         voucher assistance to project-based assistance or to require recipients of enhanced
         voucher assistance to relinquish such assistance and accept PBV assistance.1
         However, many owners, PHAs and other interested parties have sought HUD’s
         assistance in utilizing tenant protection funding provided for enhanced voucher
         assistance as project-based voucher assistance. If a PHA decides to request that
         families relinquish enhanced voucher assistance in exchange for the provision of


1
  The Rental Assistance Demonstration (RAD) is authorized by the Consolidated and Further Continuing
Appropriations Act of 2012 (Public Law 112-55, approved November 18, 2011) and allows for the
conversion, in certain circumstances, of assistance provided under Section 8(o) of the Act to project-based
voucher assistance under Section 8(o)(13) of the Act. This Notice is not applicable to owners or projects
that are eligible and applying to convert assistance to a PBV contract under the RAD program. Owners
eligible for conversion of voucher assistance under the RAD program, must request conversion in
accordance with RAD program requirements. For more information on the RAD program, see PIH Notice
2012-32 and PIH Notice 2012-32 Rev. 1.
          project-based voucher assistance, procedures outlined in this Notice must be
          followed.

      3. ENHANCED VOUCHERS

          Section 8(t) of the U. S. Housing Act of 1937 (1937 Act) (42 U.S.C. 1437f(t))
          provides for enhanced voucher assistance for families living in certain
          multifamily projects upon the occurrence of an eligibility event. An eligibility
          event is a specified event related to a project that makes a family eligible to
          receive such a voucher. Under the statute, eligibility events are: owner decisions
          to opt out of or not renew certain Section 8 project-based contracts; owner
          prepayment of certain mortgages on the project; voluntary termination of
          mortgage insurance; or a transaction for preservation of a project that, under
          certain sections of the Multifamily Housing Reform and Affordability Act (42
          U.S.C. 1437f note) (MAHRA), results in the tenants of the project being eligible
          for enhanced vouchers. The Department collectively refers to eligibility events as
          Housing conversion actions.

          Enhanced voucher assistance differs from regular housing choice voucher
          assistance under section 8(o) of the 1937 Act (42 U.S.C. 1437f (o)) in two major
          respects. First, a family eligible to receive an enhanced voucher may elect to
          remain in the project with tenant-based assistance, and, if the family does so, a
          higher “enhanced” payment standard is used to determine the amount of rental
          subsidy HUD pays to the owner on behalf of assisted families when the gross rent
          exceeds the normally applicable PHA payment standard. Second, the family must
          continue to contribute towards rent at an amount that is at least equal to the
          amount the family was paying for rent at the time of the eligibility event. 2

      4. HOUSING CONVERSION ACTIONS AND REGULAR HOUSING
         CHOICE VOUCHERS

          In certain Housing conversion actions, eligible families receive regular housing
          choice voucher assistance rather than enhanced voucher assistance (see PIH
          Notice 2001-41 and Housing Notice 2012-3 for Housing conversion actions
          where regular housing choice vouchers are provided). In such cases, and where
          the owner and PHA are interested in project-basing such assistance, procedures
          outlined in this Notice apply with the exception of those provisions only relevant
          to enhanced voucher assistance (e.g. an enhanced voucher holders statutory right
          to remain).3



2
  See the Special Purpose Voucher and Moving to Work Questions and Answers for information on MTW
flexibilities as they relate to project-basing enhanced or tenant protection vouchers. The Q&A can be
found at the following link:
http://portal.hud.gov/hudportal/documents/huddoc?id=special_purpose_vouchers.pdf
3
    See Footnote above

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5. PROJECT-BASED VOUCHER PROGRAM

  The PBV program is administered by a PHA that already administers the tenant-
  based voucher program under an annual contributions contract (ACC) with HUD
  in accordance with program regulations at 24 CFR Part 983 and other program
  directives relative to the PBV program. A PHA has discretion whether or not to
  operate a PBV program.

  In general, a PHA may use amounts provided under its tenant-based ACC to enter
  into a housing assistance payment contract (HAP) to attach assistance to an
  existing, newly constructed, or rehabilitated structure, subject to certain
  limitations and requirements (including owner and site selection requirements).
  Not more than 20 percent of the funding available for tenant-based assistance
  under a PHA’s ACC may be attached to structures as PBV assistance.

  A PHA may enter into a HAP contract with an owner only if the contract is
  consistent with (i) the approved public housing agency plan for the agency; and
  (ii) the goal of deconcentrating poverty and expanding housing and economic
  opportunities.

  In general, not more than 25 percent of the dwelling units in any project may be
  assisted under a HAP contract for PBV assistance except in the case of assistance
  under a HAP contract for housing consisting of single family properties or for
  dwelling units that are specifically made available for households comprised of
  elderly and/or disabled families and families receiving supportive services.

  The PHA selects owner proposals in accordance with program requirements (see
  24 CFR Part 983) and enters into a HAP contract with an owner for units in
  existing housing or in newly constructed or rehabilitated housing. In the case of
  newly constructed or rehabilitated housing, the housing is developed under an
  Agreement to Enter into a Housing Assistance Payments (AHAP) contract
  between the owner and the PHA. Under the AHAP, the owner agrees to develop
  or rehabilitate the project pursuant to its terms and the PHA agrees to execute a
  HAP contract after the owner completes the construction or rehabilitation of the
  units, and the units are accepted by the PHA.

  During the term of the HAP contract, the PHA makes housing assistance
  payments to the owner for units leased and occupied by eligible families.

6. PBV ASSISTANCE AND HOUSING CONVERSION ACTIONS

  If a PHA decides to solicit or select proposals for PBV assistance in accordance
  with 24 CFR §983.51(b) and an owner submits a proposal for a project that
  recently underwent a Housing conversion action, neither the PHA nor the owner
  can force or require families to relinquish enhanced vouchers already received by
  eligible families or enhanced vouchers that have not yet been issued but will be

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        received by eligible families pursuant to the Housing conversion action. Families
        that are entitled to enhanced voucher assistance have a statutory right to such
        assistance and if a family elects to remain in a unit with their enhanced voucher,
        the unit is not eligible for PBV assistance. An owner cannot refuse to accept the
        family’s enhanced voucher if the family elects to remain in the property with
        enhanced voucher assistance.

        Units subsidized with certain governmental assistance, including Section 236
        rental assistance payments, are not eligible for PBV assistance (See 24 CFR
        §983.54). In addition, units in a project occupied by ineligible families are not
        eligible for selection under the PBV program (see §983.53(d)). Therefore, PHAs
        must ensure that the timing of the selection of such projects and attachment of
        PBV assistance does not violate these program regulations.

        PHAs that select projects for PBV assistance that have undergone or will undergo
        a Housing conversion action, must assure compliance with all PBV program
        requirements (see 24 CFR §983)4 including:

                 owner selection (24 CFR §983.51),
                 twenty-percent limitation on the amount of tenant-based budget authority
                  allocated to the PHA that may be project-based (24 CFR §983.6),
                 income mixing requirements (no more than 25% of the units in a multi-
                  family project may be project-based with certain exceptions for excepted
                  units) (24 CFR §983.56),
                 equal opportunity requirements (24 CFR §983.8)
                 site selection requirements (24 CFR §983.57),
                 environmental review requirements (24 CFR §983.58),
                 subsidy layering requirements (24 CFR §983.55).

        The PHA must assure that selection of the project is consistent with the PHA’s
        PHA Plan and Section 8 administrative plan, and the PHA must select families to
        receive PBV assistance from its waiting list in accordance with 24 CFR §983.251.

    7. FUNDING PROCESS FOR ENHANCED VOUCHER ASSISTANCE

        The procedures for processing tenant protection funding for enhanced voucher
        assistance in connection with Housing conversion actions are outlined in PIH
        Notice 2001-41. The funding process is not affected in any way by a PHA’s
        decision to select a project for PBV assistance that has undergone or will undergo
        a Housing conversion action.




4
 Flexibilities for MTW agencies as they relate to PBV program requirements exist in accordance with the
Standard MTW Agreement and each agency’s Annual MTW Plan.


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8. VOLUNTARY RELINQUISHMENT OF ENHANCED VOUCHERS FOR
   PROJECT-BASED VOUCHER ASSISTANCE

  If a PBV proposal has been selected for a project that has undergone a Housing
  conversion action and families have elected to remain in the project with
  enhanced voucher assistance or if a project will undergo a Housing conversion
  action prior to a PHA’s selection of the project for PBV assistance, such
  assistance may only be attached to units in the project occupied by assisted
  families if the following are satisfied:

      A. Family Briefing – PHAs must schedule a family briefing for all families
  potentially impacted by the proposed attachment of PBV assistance. A
  representative from the HUD Field Office of Public Housing must be invited and
  must attend the briefing either in person, or by teleconference. In selecting the
  proper venue for the briefing, PHA’s must give priority to methods that provide
  physical access to individuals with disabilities, i.e., holding the briefing in an
  accessible location, in accordance with the regulations implementing Section 504
  of the Rehabilitation Act of 1973 and Titles II and III of the Americans with
  Disabilities Act of 1990, as applicable. If accessibility is not achievable, PHAs
  must give priority to alternative methods of product delivery that allow persons
  with disabilities to access the family briefing in the most integrated setting
  appropriate. The briefing must include:

         i.      Information on families’ statutory right to an enhanced voucher;
         ii.     Information on the significant differences between PBV assistance
                 and enhanced voucher assistance including income limits and the
                 family’s total tenant payment (see paragraph 8.C);
         iii.    An opportunity for families to ask questions;
         iv.     Written material available for families concerning PBV assistance
                 and enhanced voucher assistance, including mobility options, rent
                 levels, rent payments, provision of supportive services, etc.;
         v.      Provision of a written consent form explaining that a family’s
                 decision to consent to relinquish its right to enhanced voucher
                 assistance is completely voluntary (see paragraph 8.B);
         vi.     Information on the anticipated date of the conversion action and
                 the execution of the PBV contract between the owner and the
                 PHA.

  PHAs must ensure that persons with disabilities have an equal opportunity to
  participate in the family briefing. PHAs must provide appropriate auxiliary aids
  where necessary to afford persons with disabilities an equal opportunity to
  participate in the family briefing (see 24 CFR §8.6). Additionally, the PHA must
  take reasonable steps to provide meaningful access to the family briefing for
  persons with Limited English Proficiency (LEP). This may include the provision
  of translated notices of the date, time and location of the family briefing and

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        qualified interpreters at the family briefing. The PHA should also make available
        any written materials that are provided at the family briefing in the appropriate
        languages for persons with LEP5. PHAs must keep records of their efforts to
        comply with these requirements.

        B. Written Consent 6– The family must be given at least 30 days from the date
           of the family briefing to make their decision. The consent form provided to
           each family at the briefing must explicitly acknowledge a family’s consent or
           non-consent. The consent form must indicate that it must be signed by the
           head of household and include the name and telephone number of a PHA
           employee that families can contact directly if they should have any questions
           or need additional information. If a family does not respond, informs the
           PHA that they wish to retain or receive enhanced voucher assistance, or
           affirmatively withholds consent, the PHA shall not include that unit under a
           PBV HAP contract. The consent form must be provided in an accessible
           format for persons with disabilities and must include a TDD/TTY number or
           other equally effective communication system for persons with disabilities to
           use if they wish to contact the PHA with any questions or request for
           additional information (see 24 CFR §8.6). Additionally, the consent form
           should be translated into the appropriate language for persons with Limited
           English Proficiency (LEP) and must include information on how persons with
           LEP can access language assistance if they wish to contact the PHA with any
           questions or requests for additional information.

        C. Income Requirements - In order to be eligible for the PBV program, families
           must be low-income in accordance with 24 CFR §982.201. The special
           income limits for certain moderate income families allowed pursuant to a
           preservation pre-payment do not apply to the PBV program. A moderate-
           income family (annual income above 80% of but not more than 95% of the
           median income for the area) who is elderly or disabled or is residing in a low-
           vacancy area (3 percent or less vacancy rate, as determined by the HUD local
           office economist) is income-eligible for an enhanced voucher, but is over-
           income for PBV assistance. Units occupied by such families shall not be
           included in a PBV contract.

    9. PAPERWORK REDUCTION ACT

        The information collection requirements contained in this Notice have been
        approved by the Office of Management and Budget (OMB) under the Paperwork
        Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control
        numbers 2577-0169 and 2577-0083. In accordance with the Paperwork Reduction

5
  see HUD’s Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition
Against National Origin Discrimination Affecting Limited English Proficient Persons, published in the
Federal Register on January 22, 2007 (72 FR 2732)
6
  While the tenant consent process described in paragraph 8.B. is a basic HUD standard, Congress could of
course establish conversion standards where a lesser standard is used or even no consultation is required.

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  Act, HUD may not conduct or sponsor, and a person is not required to respond to,
  a collection of information unless the collection displays a currently valid OMB
  control number.

10. FURTHER INFORMATION

  Inquiries about this notice should be directed to Diane Thompson-Bouknight in
  the Office of Public Housing and Voucher Programs, Housing Voucher
  Management and Operations Division, via email at diane.a.thompson@hud.gov.




                                      _______________/s/___________________
                                      Sandra B. Henriquez, Assistant Secretary for
                                        Public and Indian Housing




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