HUD PIH Notice § 2019-12

                                 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                                                     WASHINGTON, DC 20410-5000


OFFICE OF PUBLIC AND INDIAN HOUSING




______________________________________________________________________________
SPECIAL ATTENTION OF:                     NOTICE PIH 2019--12 (HA)
Office Directors of Public Housing;
Regional Directors; Public Housing        Issued: May 23, 2019
Agencies.

                                                                 Expires: This notice remains in effect until
                                                                 amended, superseded or rescinded


                                                                 Cross-references: PIH Notice 2001-41


Subject: Enhanced Voucher Minimum Rent Calculation for Families Whose Incomes
Subsequently Increase After Having Experienced a Significant Decrease in Income

1. Purpose. This notice revises the calculation for the enhanced voucher minimum rent for
    certain families whose incomes increase after the family experienced a significant decrease in
    income.
    This revised calculation supersedes the previous calculation set forth for these families in
    HUD Notice PIH 2001-41.
2. Background. Section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t))
    authorizes families to be offered enhanced vouchers upon the occurrence of one of four
    eligibility events impacting projects in HUD’s Office of Multifamily Housing’s portfolio.1
    Enhanced voucher assistance under Section 8(t) differs from regular tenant protection
    vouchers in two major respects if the family elects to remain at the project. First, a higher
    “enhanced” payment standard is used to determine the amount of the housing assistance
    payment when the gross rent of the unit exceeds the normally applicable public housing
    agency (PHA) payment standard. Second, the family must continue to contribute towards
    rent an amount that is at least the amount the family was paying for rent at the time of the
    eligibility event. This minimum rent contribution is known as the enhanced voucher



1
  The four categories of eligibility event are: (1) the prepayment of a mortgage that results in families residing in the
project being eligible under section 223(f) of the Low-Income Housing Preservation and Resident Homeownership
Act of 1990 (LIHPRHA), (2) the voluntary termination of the insurance contract that results in families residing in
the project being eligible under 223(f) of LIHPRHA, (3) the termination of a project-based section 8 rental
assistance contract that results in assisted families residing in the project being eligible under section 515(c) or
section 524(d) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA), and (4) a
transaction under which a project that receives or has received assistance under the Flexible Subsidy program is
preserved as affordable housing, which results in families being eligible under section 201(p) of the Housing and
Community Development Act of 1978 (HCDA).


                                         www.hud.gov            espanol.hud.gov
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    minimum rent. The enhanced voucher minimum rent is discussed in detail in HUD Notice
    PIH 2001-41, Part II.C.3
    If the enhanced voucher family’s rent suffers a significant decrease in income (a decrease of
    at least 15 percent from the family income on the date of the eligibility event2), Section 8(t)
    further provides that the enhanced voucher minimum rent changes from the dollar amount
    the family was paying for rent to the percentage of income the family was paying for rent at
    the time of the eligibility event. Specifically, for families who were previously unassisted on
    the eligibility event, the family’s revised enhanced voucher minimum rent is the greater of
    (A) the percentage of the monthly adjusted income the family paid for gross rent on the
    effective date of the eligibility event, or (B) 30 percent of the family’s current adjusted
    monthly income. For families who were previously assisted under a project-based or tenant-
    based contract on the eligibility event, the family’s revised enhanced voucher minimum rent
    is the greater of (A) the percentage of adjusted monthly income the family Total Tenant
    Payment (TTP) or the voucher family share on the effective date of the eligibility event, or
    (B) 30 percent of the family’s current adjusted monthly income.

    Under HUD Notice PIH 2001-41, if the enhanced voucher minimum rent changed because of
    the significant decrease in income, it remained that percentage of adjusted monthly income
    for as long as the family continued to receive enhanced voucher assistance. The enhanced
    voucher minimum rent from that point on was that specific percentage (e.g., 39 percent)
    applied to the family’s current adjusted monthly income, regardless of whether the family’s
    income subsequently increased or decreased.

3. Revised enhanced voucher minimum rent calculation for families whose incomes
    increase after experiencing a significant decrease in income. After the enhanced voucher
    minimum rent for the family is changed from the dollar amount to the percentage of income
    calculation, the enhanced voucher minimum rent will normally continue to remain that
    specific percentage of adjusted monthly income so long as the family receives enhanced
    voucher assistance.

    If the family’s income subsequently increases to an amount where the dollar value of the
    family’s enhanced voucher minimum rent established by the percentage of income
    calculation is more than the original enhanced voucher minimum rent, the family’s enhanced
    voucher minimum rent reverts to the original enhanced voucher minimum rent. The original
    enhanced voucher minimum rent is the maximum enhanced voucher minimum rent that is
    applied to the family.

    For example, assume an enhanced voucher family was paying $590 for rent at the eligibility
    event, which was 39 percent of the family’s adjusted monthly income. The family’s




2
 Section 102(e) of the Housing Opportunity Through Modernization Act of 2016 (HOTMA) changes the definition
of ‘‘income’’ to ‘‘annual adjusted income” for determining if the family’s income has decreased to a significant extent for
purposes of calculating the enhanced voucher minimum rent. HUD has not yet implemented this change, which will not
become effective until the beginning of the calendar year after that implementing notice or regulation is issued.
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    enhanced voucher minimum rent is $590. The family share of the rent is the higher of the
    family’s TTP3 or $590. See chart below.

                           At Commencement of Enhanced Voucher Assistance

     Family Adjusted Monthly Income                                                            $1,500

     Family Payment for Gross Rent at Eligibility Event                                        $590

     % of Adjusted Monthly Income Paid for Rent at Eligibility Event                           39%

     TTP (Assume 30% of Adjusted Monthly Income is TTP for this                                $450
     Family)
     Enhanced Voucher Minimum Rent                                                             $590

     Family Share (Higher of TTP or EV Minimum Rent)                                           $590

    After the family has received enhanced voucher assistance for a period of time, there is a
    subsequent significant decline in the family’s income. The PHA recalculates the family’s
    enhanced voucher minimum rent by taking the percentage of adjusted monthly income the
    family was paying for rent at the eligibility event, which was 39 percent, and applying it to
    the family’s current adjusted monthly income. The family share for the enhanced voucher
    family is now the higher of the family’s TTP or 39 percent of the family’s current adjusted
    monthly income. See chart below.


                                    Significant Decrease in Family Income

     Family Adjusted Monthly Income                                                      $1,000

     Family Payment for Gross Rent at Eligibility Event                                  $590

     % of Adjusted Monthly Income Paid for Rent at Eligibility Event                     39%

     TTP (Assume 30% of Adjusted Monthly Income is TTP for this                          $300
     Family)
     Enhanced Voucher Minimum Rent based on % of Adjusted                                $390
     Monthly Income Paid for Gross Rent at Eligibility Event or 30%,
     whichever is higher
     Family Share (Higher of TTP or EV Minimum Rent)                                     $390




3
  Total tenant payment is the highest of the following amounts, rounded to the nearest dollar: (1) 30 percent of the
family's monthly adjusted income; (2) 10 percent of the family's monthly income; (3) If the family is receiving
payments for welfare assistance from a public agency and a part of those payments, adjusted in accordance with the
family's actual housing costs, is specifically designated by such agency to meet the family's housing costs, the
portion of those payments which is so designated; or (4) the minimum rent, as determined in accordance with
§5.630. See 24 CFR 5.628.
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   At a later point in time from the decrease in income, the family now reports an increase in
   income. To calculate the enhanced voucher minimum rent, the PHA takes the lower of 39
   percent of the family’s adjusted monthly income (which include the increase in income) or
   $590 (the family’s original enhanced voucher minimum rent). In this example assume that
   39 percent of the family’s current adjusted monthly income equals $663, which is greater
   than the family’s original enhanced voucher minimum rent. Accordingly, the family’s
   enhanced voucher minimum rent reverts to $590, and the family share is the greater of the
   family TTP or $590. See chart below.


                             Subsequent Increase in Family Income

    Family Adjusted Monthly Income                                           $1,700

    Family Payment for Gross Rent at Eligibility Event                       $590

    % of Adjusted Monthly Income Paid for Rent at Eligibility Event          39%

    TTP (Assume 30% of Adjusted Monthly Income is TTP for this        $510
    Family)
    Enhanced Voucher Minimum Rent based on % of Adjusted Monthly $663
    Income Paid for Gross Rent at Eligibility Event or 30%, whichever
    is higher
    Original EV Minimum Rent                                          $590

    Enhanced Voucher Minimum Rent (Lower of Original EV                      $590
    Minimum Rent or EV Minimum Rent Based on % of Adjusted
    Monthly Income Paid for Gross Rent at Eligibility Event or 30%)
    Family Share (Higher of TTP or EV Minimum Rent)                          $590


4. Application of the change in the calculation. The PHA shall apply this change in the
   enhanced voucher minimum rent to the family’s housing assistance payment (HAP) and
   family share calculation on the earlier of either the effective date of (1) the family’s first
   regular reexamination following the issuance date of this notice, or (2) an interim
   reexamination as the result of increase in family income following the issuance date of this
   notice. The change to the family’s HAP and family share is applied prospectively from that
   point on, not retroactively.

   If the family’s TTP is higher than the family’s enhanced voucher minimum rent as presently
   calculated, this change has no impact on the subsidy calculation. However, if the family is or
   will be paying the enhanced voucher minimum rent as their family share, the PHA needs to
   compare the current enhanced voucher minimum rent to the family’s original enhanced
   voucher minimum rent to determine if an adjustment to the enhanced voucher minimum rent
   (and the HAP and family share calculation) is required.

5. Paperwork Reduction Act. The information collection requirements contained in this
   document are approved by the Office of Management and Budget (OMB) under the
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   Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The OMB control number is
   2577-0169. In accordance with the Paperwork Reduction 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.

6. Further Information. Any questions concerning this Notice should be directed to the
   Housing Voucher Management and Occupancy Division, Office of Public Housing and
   Voucher Programs, at (202) 708-0477 (this is not a toll-free number).




                                                    ____________/s/____________________
                                                       R. Hunter Kurtz, Principal Deputy
                                                        Assistant Secretary for Public and
                                                        Indian Housing