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HUD Update: HUD guidance on PHA 2019 Inflation Factors, HCV Funding Provisions, and Voluntary Streamlined Conversions

24 April 2019
 April 24, 2019
Category HUD News, News

HUD issued guidance related to Fiscal Year 2019 Inflation Factors for Public Housing Agency Renewal Funding; implementation of Fiscal Year 2019 Funding Provisions for the Housing Choice Voucher Program; and Streamlined Voluntary Conversions of Small Public Housing Agencies.

1.       Section 8 Housing Assistance Payments Program – FY19 Inflation Factors for PHA Renewal Funding

Recently, HUD published a Federal Register Notice establishing Renewal Funding Inflation Factors (RFIFs) to adjust FY19 renewal funding for the Housing Choice Voucher program of each PHA. The applicable date is April 17, 2019.

Renewal Funding Inflation Factors have been developed to account for the expected annual change in average PUC in the voucher program using historical program data, coupled with several economic indices used to capture key components of the economic climate.

The notice apportions the expected percent change in national Per Unit Cost (PUC) for the HCV program, 4.00 percent, to each PHA based on the change in Fair Market Rents for their operating area to produce FY19 RFIFs. HUD’s FY19 methodology is the same as that used in FY18.

To view the HUD Notice, 2019 RFIF table based on geographic area, and 2019 data, please click here.

2.       Implementation of the FY19 Funding Provisions for the Housing Choice Voucher Program

The FY19 Appropriations Act established allocation methodology for calculating housing assistance payment (HAP) renewal funds, new incremental vouchers, and administrative fees.

HUD’s recent implementation notice provides information on how HUD calculates renewal funding for each PHA’s HCV program, including HAP Renewal Funding, Tenant Protection Vouchers (TPV), Administrative Fees, Mainstream Program, Tribal HUD-VASH Renewals, Veterans Affairs Supportive Housing (VASH), the Family Unification Program (FUP), and the Mobility Demonstration.

HUD’s Notice encourages PHAs to pay particular attention to the set-aside funding provisions (listed in Section 5 and Appendix E). Notice PIH 2019-08 is available online here.

3.       Streamlined Voluntary Conversions of Last Remaining Projects of Small Public Housing Agencies

Recently, HUD published a Notice to waive certain requirements for small PHAs during voluntary conversion to Housing Choice Vouchers (HCVs). According to Notice PIH 2019-05, conversion to HCVs gives small PHAs (PHAs with 250 or fewer Section 9 public housing units) greater flexibility to respond to local needs, allows them to pursue private financing, and provides greater housing choice and mobility to assisted households.

The Notice states: “Despite best efforts, PHAs, particularly small PHAs, struggle to preserve their stock of deeply assisted housing. This Notice represents one of an array of tools that HUD is offering to PHAs to allow them to voluntarily reposition public housing units to more sustainable funding platforms in order to meet local objectives.”

In order to convert, PHAs conduct a conversion assessment and provide a timeline identifying PHA actions to convert to HCV assistance. The conversion assessment consists of a cost analysis, market value analysis, rental market analysis, and an impact analysis on the neighborhood. Recognizing that small PHAs typically have reduced staff and limited funding available to conduct a full conversion assessment, HUD is waiving the conversion assessment for small PHAs. This waiver does not affect other voluntary conversion requirements or procedures under the statute, regulations, directives, or guidance. Notice PIH 2019-05 is available online here.   

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