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HUD's Proposed Changes to the Section 8 Tenant-Based and Project-Based Voucher Programs

HUD has published the proposed rule “The Housing and Economic Recovery Act of 2008 (HERA): Changes to the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher Programs” (Docket No. FR-5242-P-01) in the Federal Register.

 

HUD has requested public comments on this rule.  

 

Summary of the Proposed Rule Changes

 

 

 

The Housing and Economic Recovery Act (HERA) of 2008 made comprehensive and significant reforms to several HUD programs, including HUD’s Public Housing, Section 8 Tenant-Based Housing Choice Voucher (HCV), and Project-Based Voucher (PBV) programs.

 

First, the proposed rule would codify the following statutory provisions from HERA into regulations which:

 

·         Amend the definition of annual income to exclude veterans’ disability benefits;
·         Establish reasonable rent at levels equal or less than comparable units receiving tax credits or non-tenant based federal assistance;
·         Remove “cooperative housing” from the PBV and HCV programs;
·         Clarify the owner proposal selection procedures for the PBV program;
·         Allow PHAs to enter into PBV HAP contracts with units in cooperative housing and in high-rise elevator projects;
·         Change PBV contract terms from 10 to 15 years;
·         Eliminate the need for a subsidy layering review for PBV HAP contracts for an existing structure or if the review has been conducted by applicable state or local agencies;
·         Clarify that the exception to the 25 percent cap on the number of PBV units in a project includes units for the elderly and/or persons with disabilities.
•   In addition, the exception categories in a multifamily housing project may be combined;
·         Eliminate environmental reviews for the PBV program for an existing structure, except to the extent that such a review is otherwise required by law or regulation;
·         Require owners of PBV properties to certify that there are no plans to perform rehab work on existing units within one year after the execution of the initial HAP contract; and
·         Permit PHAs to use the higher section 8 rent for certain tax credit units if the LIHTC rent is less than the amount that would be permitted under section 8
•   However, the requirements of rent reasonableness would still have to be met.
•   The rent to owner will not be reduced below the initial rent, unless certain limitations apply.
 

Second, the proposed rule would clarify and change existing HCV and PBV regulations (outside of the HERA requirements) as follows:

·         Add definitions to the regulations for: housing credit agency; project; project-based certificate program; and release of funds.

·         Revise the definitions of: excepted units (units in a multifamily building not counted against the 25 percent cap); existing housing; partially-assisted building; premises; and qualifying families (for purposes of exception to the 25 percent per building cap);

·         Require that existing PBV units must satisfy Housing Quality Standards (HQS) requirements within 60 days of the date of selection by a PHA and

·         Limit the total amount of work that must be performed to facilitate compliance with HQS to $1,000 per assisted unit;

·         Require HUD’s approval for an owner to terminate a PBV HAP contract when the rent for any contract unit is adjusted below the initial rent level;

·         Require property owners with PBV units not to lease those units to family members, unless a PHA provides a reasonable accommodation for a family members with a disability.

·         Eliminate the regulation that allows owners to refuse to renew a PBV lease upon lease expiration

·         Owners must have a “good cause” to refuse to renew the lease

·         Clarify that HAPs will continue until the tenant rent of a PBV unit equals the rent to the owner

•   After 180 days of no subsidy payments being made on behalf of the family, the unit will be removed  from the HAP contract; and

·         Clarify that rent reduction is mandatory in PBV units when the results of a subsidy layering review disclose the need for a rent reduction.

 

For a copy of the proposed rule, please visit: http://www.gpo.gov/fdsys/pkg/FR-2012-05-15/pdf/2012-11638.pdf

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