Streamlining Administrative Regulations for Public Housing, Housing Choice Voucher, Multifamily Housing, and Community Planning and Development Programs, 12353-12377 [2016-04901]
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Vol. 81
Tuesday,
No. 45
March 8, 2016
Part III
Department of Housing and Urban
Development
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24 CFR Parts 5, 880, 884, et al.
Streamlining Administrative Regulations for Public Housing, Housing Choice
Voucher, Multifamily Housing, and Community Planning and Development
Programs; Final Rule
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DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Parts 5, 880, 884, 886, 891, 903,
960, 966, 982, 983, 990
[Docket No. FR 5743–F–03]
RIN 2577–AC92
Streamlining Administrative
Regulations for Public Housing,
Housing Choice Voucher, Multifamily
Housing, and Community Planning and
Development Programs
AGENCY:
Office of the Deputy Secretary,
HUD.
ACTION:
Final rule.
The Department of Housing
and Urban Development Appropriations
Act, 2014 (2014 Appropriations Act),
made several changes to the United
States Housing Act of 1937 (1937 Act).
Section 243 of the 2014 Appropriations
Act authorized HUD to implement these
changes through notice, followed by
notice-and-comment rulemaking.
Notices implementing the changes were
published on May 19, 2014, and June
25, 2014. HUD issued a proposed rule
on January 6, 2015, to codify these
changes in regulation. In addition, the
January 2015 rule proposed changes to
streamline regulatory requirements
pertaining to certain elements of the
Housing Choice Voucher (HCV), Public
Housing (PH), and various multifamily
housing (MFH) rental assistance
programs; to reduce the administrative
burden on public housing agencies
(PHAs) and MFH owners; and to align,
where feasible, requirements across
programs, including the Housing
Opportunities for Persons with AIDS
(HOPWA) and HOME Investment
Partnerships (HOME), which are
administered by HUD’s Office of
Community Planning and Development
(CPD). HUD also issued an interim rule
on September 8, 2015, implementing
changes to flat rents in the Public
Housing program made by the
Department of Housing and Urban
Development Appropriations Act, 2015
(2015 Appropriations Act).
This final rule makes changes to the
regulatory text as presented in the
January 2015 proposed rule, including
additional changes in response to public
comment as well as further
consideration by HUD of changes
proposed in January 2015, and finalizes
the regulatory changes contained in the
September 2015 interim rule.
DATES: Effective Date: April 7, 2016.
FOR FURTHER INFORMATION CONTACT: For
questions regarding programs operated
by HUD’s Office of Community
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SUMMARY:
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Planning and Development, contact
Henrietta Owusu, Director, Program
Policy Division, Office of Affordable
Housing Programs, at 202–402–4998.
For the HCV program, contact Becky
Primeaux, Director, Housing Voucher
Management and Operations Division,
at 202–402–6050. For questions
regarding the Multifamily Housing
programs, contact Katherine Nzive,
Director, Program Administration
Office, Asset Management and Portfolio
Oversight, at 202–708–3000. For the
Public Housing program, contact Todd
Thomas, Program Analyst, Public
Housing Management and Occupancy
Division, at 678–732–2056. None of the
phone numbers included is toll-free.
Persons with hearing or speech
impairments may access these numbers
through TTY by calling the toll-free
Federal Relay Service at 800–877–8339.
Any of the above-listed contacts may
also be reached via postal mail at the
following address: Department of
Housing and Urban Development, 451
7th Street SW., Washington, DC 20410.
SUPPLEMENTARY INFORMATION:
I. Background
The 2014 Appropriations Act made
changes to certain provisions of the
1937 Act, such as allowing for biennial
physical inspections of certain assisted
properties and permitting alternative
inspection methods to be used in certain
circumstances, codifying in statute the
definition of ‘‘extremely low-income,’’
and capping utility allowances at the
lesser of the unit size on the voucher or
the size of the unit leased by the family.
These changes were implemented by
notice; 1 a proposed rule to codify the
changes in regulation was published on
January 6, 2015, at 80 FR 423.
In addition, HUD has solicited
recommendations in recent years on
how to streamline program operations to
reduce costs and enhance efficiency
while still maintaining HUD’s core
program oversight functions. The
January 2015 proposed rule included
programmatic changes to implement
many of these suggestions. A detailed
description of all proposed
amendments, including technical
corrections also proposed, and the
reasons for the amendments can be
found in the preamble to the January 6,
2015 proposed rule at 80 FR 424 to 428.
As further discussed below, portions
of this final rule affect the PH program,
1 Notice PIH 2014–12, published May 19, 2014,
implemented the changes to flat rents; 79 FR 35940,
‘‘HUD Implementation of Fiscal Year 2014
Appropriations Provisions on Public Housing
Agency Consortia, Biennial Inspections, Extremely
Low-Income Definition, and Utility Allowances’’
(June 25, 2014), implemented all other changes.
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the HCV program, the CPD programs
mentioned above,2 and the following
MFH programs: 3
• Project-Based Section 8 (New
Construction, State Agency-Financed,
Substantial Rehabilitation, Rural
Housing Services, Loan Management
Set-Aside, and Property Disposition SetAside).
• Section 8 Moderate Rehabilitation.
• Rent Supplement Program.
• Section 202 Supportive Housing for
the Elderly (including Project
Assistance Contract and Project Rental
Assistance Contract (PRAC)).
• Section 811 Supportive Housing for
Persons with Disabilities (including
PRAC and Project Rental Assistance).
• Section 236 Interest Reduction
Payments Program.
• Rental Assistance Payment (RAP)
Program.
• Sections 221(d)(3) and (d)(5)—FHA
Insurance Programs for New
Construction or Substantially
Rehabilitated Multifamily Rental
Housing.
Some of the new flexibilities will
require a PHA to make changes to the
PHA’s Admissions and Continued
Occupancy Policy, Administrative Plan,
or PHA plan in order for the PHA to
adopt the new authorities. HUD
encourages all PHAs adopting such
flexibilities to make all required
amendments as expeditiously as
possible.
The 2015 Appropriations Act
amended section 3 of the 1937 Act to
allow for additional flexibility to the
requirement that the flat rental amount
be set at no less than 80 percent of the
applicable FMR, as established under
8(c) of the 1937 Act. HUD may allow a
PHA to establish a flat rent based on an
FMR that is based on an area
geographically smaller than would
otherwise be used, if HUD determines
that the resulting FMR more accurately
reflects local market conditions. In
addition, a PHA may apply to HUD for
an exception allowing a flat rental
amount that is lower than the amount
otherwise determined under the two
2 The only provision in this final regulation that
applies directly to the CPD programs is the earned
income disregard. Other provisions that apply do so
indirectly, either because of references in programspecific regulations or due to particular eligible
activities that follow the requirements of the
Housing Choice Voucher program. The
parenthetical statements at the end of each subpart
of section II.A, exclude mention of CPD programs.
3 In the January 6, 2015 proposed rule, HUD
inadvertently included reference to FHA’s Section
235 Homeownership program, but as provided in a
final rule published on April 3, 2015, this program
is no longer active and the regulations were
removed by the April 3, 2015 final rule. See https://
www.gpo.gov/fdsys/pkg/FR-2015-04-03/pdf/201507597.pdf.
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allowable FMRs, if HUD determines that
the two FMRs do not reflect the market
value of the property and the lower flat
rental amount is based on a market
analysis of the applicable market. In
either case, the alternative flat rent must
not create a disincentive for families
seeking to become economically selfsufficient to continue to reside in public
housing.
On September 8, 2015, at 80 FR
53709, HUD published an interim rule
to amend HUD’s regulations
implementing the 2014 Appropriations
Act language on flat rents to allow PHAs
the opportunity to take advantage of the
2015 Appropriations Act authority that
provides PHAs with more flexibility in
setting flat rents. HUD advised that the
interim rule superseded the portion of
the January 2015 proposed rule year that
addressed the issue of setting flat rents
in public housing. Although HUD
issued the September 2015 rule as an
interim rule for effect, HUD sought
public comment for a period of 60 days.
By the end of the comment period on
November 9, 2015, HUD received seven
comments.
II. Changes Made at the Final Rule
Stage
In response to public comment and as
a result of further consideration of
certain issues by HUD, this final rule
makes the following revisions to the
January 2015 proposed rule. With
respect to changes made in response to
public comment, the issues raised by
the commenter and HUD’s basis for
responding to the comments are
addressed in Section IV of this
preamble. No changes are made to the
September 2015 interim rule on flat
rents.
A. HCV, MFH, and PH Program
Regulations
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1. Verification of Social Security
Numbers (§ 5.216)
The use of the phrase ‘‘date of
admission’’ appeared twice in the
proposed rule, first to identify the
endpoint of the 6-month period during
which a family member under the age
of 6 years who lacks a Social Security
Number (SSN) may have been added to
an applicant family, and then again to
identify the starting point for the 90-day
period allotted to such a family to
obtain an SSN for the newly added
child. Commenters stated that, in the
HCV program, the ‘‘date of admission’’
is typically the date of lease-up (i.e., the
effective date of the Housing Assistance
Payment (HAP) contract). Prior to leaseup, however, a PHA may have expended
considerable time and resources pulling
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a family from the waiting list, obtaining
the necessary verifications, procuring a
Housing Quality Standards (HQS)
inspection, and performing a rent
reasonableness determination. Lease-up
could ultimately occur more than 6
months from the date the child was
added the household, which would
result in the household being ineligible
for admission to the program. To obviate
such a scenario, HUD has, in this final
rule, adopted two separate ‘‘dates of
admission’’ for the HCV program for
purposes of this provision: The date of
voucher issuance and the date of leaseup. Specifically, the endpoint of the 6month period during which a family
member under the age of 6 years may be
added to the household is the date of
voucher issuance; the 90-day clock does
not start ticking until the date of leaseup. (This provision applies to the HCV/
Project-Based Voucher (PBV), Rent
Supplement, Section 8, Sections
221(d)(3) and (d)(5), Section 236, 202/
811, and PH programs.)
2. Definition of Extremely Low-Income
Families (§§ 5.603, 903.7, 960.102)
The definition of an extremely lowincome family in the final rule is
revised to include the phrase ‘‘a very
low-income family,’’ which is included
in the statutory definition and was
inadvertently omitted from the
proposed rule. (This provision applies
to the HCV/PBV, Section 8, and PH
programs. It does not apply to the Rent
Supplement, Section 235, Section 236,
Sections 221(d)(3) or (d)(5) programs.)
3. Use of Actual Past Income (§ 5.609)
For the reasons presented below, HUD
has decided against pursuing the
regulatory changes included in the
proposed rule.
4. Exclusion of Mandatory Education
Fees From Income (§ 5.609(b)(9))
There is no change from the proposed
rule. The final rule includes fees within
the definition of tuition. (This provision
applies to the HCV/PBV, Section 8, and
PH programs. It does not apply to the
Rent Supplement, Section 236, Sections
221(d)(3) or (d)(5) programs.)
5. Streamlined Annual Reexamination
for Fixed Incomes (§§ 5.657, 880.603,
884.218, 886.124, 886.324, 891.410,
891.610, 891.750, 960.257, 982.516)
Based on comments submitted, this
provision was revised substantially from
the proposed rule, which would have
provided for a streamlined annual
reexamination of family income for any
family whose income consists solely of
fixed sources. The final rule provides
for a streamlined income determination
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for any fixed source of income, even if
a person or a family with a fixed source
of income also has a non-fixed source of
income. The final rule requires that,
upon admission to a program, thirdparty verification of all income amounts
must be obtained for all family
members, and a full reexamination and
redetermination of income must
likewise be performed every 3 years. In
the interim, a streamlined income
determination may be performed for a
family member with a fixed source of
income by applying to a previously
determined or verified source of income
a cost of living adjustment (COLA) or
interest rate adjustment specific to each
source of fixed income. The COLA or
current interest rate applicable to each
source of fixed income must be obtained
either from a public source or from
tenant-provided, third-party generated
documentation. In the absence of such
verification for any source of fixed
income, third-party verification of
income amounts must be obtained.
While the final rule amends more
regulatory provisions than the proposed
rule, the policy has not changed.
Instead, there are cross-references to 24
CFR 5.657(d), pertaining to the
reexamination of family income and
composition in Section 8 project-based
assistance programs, inserted in various
MFH regulations herein to avoid
confusion and ensure the policy is
included in the regulations for all
programs this provision is intended to
affect. (This provision applies to the
HCV/PBV, Section 8 (other than
Moderate Rehabilitation), 202/811, and
PH programs. It does not apply to the
Rent Supplement, Section 236, Sections
221(d)(3) or (d)(5) programs.)
HUD recognizes that prior to the
issuance of this final rule, the Fixing
America’s Surface Transportation Act,
or FAST Act, was signed into law.4
Section 78001 of that Act modified the
1937 Act to allow PHAs and owners to
undergo full income recertification for
families with 90 percent or more of their
income from fixed-income sources every
three years instead of annually. HUD
believes that while the FAST Act
provisions and the provisions contained
in this rule are very similar, they offer
different benefits; therefore, HUD is
retaining the flexibilities in this final
rule and will issue implementation
regulations for the FAST Act separately.
6. Earned Income Disregard (EID)
(§§ 5.617, 960.255)
The proposed rule included a
requirement that families maintain
continual employment in order to
4 Public
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obtain EID benefits over a straight 24month period, and it allowed families
who received the full EID benefit and
then subsequently requalified for the
benefit to obtain it again (i.e., the
proposed rule eliminated the maximum
lifetime disallowance). The proposed
rule also included a carve-out for the
HOPWA program, which retained the
provision unchanged.
In the final rule, all HUD programs to
which the EID applies (including the
HOPWA program) are aligned, the
lifetime disallowance is retained, and
the requirement to maintain continual
employment is dropped. Ultimately, the
only change to the existing regulation
adopted in the final rule is that the
benefit now applies for a straight 24month period, with a clear start date
and end date, irrespective of whether a
family maintains continual employment
during the 24-month period. PHAs and
grantees are no longer obliged to track
employment starts and stops, but only
the start date, the 12-month date (on
which the amount of the disregard may
change from 100 percent to not less than
50 percent of earned income), and the
24-month (end) date.
For families enrolled and
participating in EID prior to the effective
date of this regulation, the previous
requirements will continue to apply.
(This provision applies to the HCV/PBV,
HOME, HOPWA, and PH programs. It
does not apply to the MFH programs.)
HUD intends to publish a notice
describing the changes and the
administrative requirements
prospectively. For current recipients of
the EID, HUD will reiterate that
regulations in effect immediately prior
to this rule will continue to apply until
the benefit period expires for these
families.
B. HCV and PH Program Regulations
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1. Family Declaration of Assets Under
$5,000 (§§ 960.259, 982.516)
Upon further consideration and in
light of comments received, HUD made
a modest change to this provision from
the proposed to the final rule. The
proposed rule would have authorized a
PHA to rely on a family’s declaration
starting with the first reexamination and
going forward indefinitely. In the final
rule, a PHA must obtain third-party
documentation of assets every 3 years.
The Office of Multifamily Housing
Programs in HUD’s Office of Housing
noted support for expansion of this
provision to its rental assistance
programs and is issuing an interim final
rule to do just that.
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2. Utility Reimbursements (§§ 960.253,
982.514)
The proposed rule provides a PHA
with the option of making utility
reimbursement payments ‘‘quarterly,’’
for reimbursements totaling $20 or less
per quarter. For the final rule, this
provision is modified somewhat. The
amount is raised to $45 or less per
quarter. If the PHA opts to make the
payments on a quarterly basis, the PHA
must institute a hardship policy for the
tenants if such payments would create
a financial hardship for them. Based on
a request for clarification, this provision
was modified slightly for this final rule
to make clear that reimbursements must
occur no less frequently than once every
calendar-year quarter. Additionally,
HUD is issuing an interim final rule to
expand this provision to MFH programs.
C. PH Program Regulations
1. Public Housing Rents for Mixed
Families (§ 5.520(d))
There is no change from the proposed
rule. The final rule requires PHAs to use
the established flat rent applicable to
the unit to calculate rents for mixed
families. The final rule also requires that
a mixed family’s payment be equivalent
to their total tenant payment (TTP)
when their TTP exceeds the flat rent.
2. Tenant Self-Certification for
Community Service Requirements
(§§ 960.605, 960.607)
Just as in the proposed rule, the final
rule permits PHAs to accept a tenant’s
signed self-certification of compliance
with the community service
requirement. However, to better ensure
compliance with the community service
requirement, HUD is requiring PHAs to
review a sample of self-certifications
and validate their accuracy with the
third-party verification procedures
currently in place. The PHA will also
need to notify tenants that any selfcertification may be subject to such
validation.
3. Public Housing Grievance Procedures
(§§ 966.4 and 966.52 Through 966.57)
Upon further consideration and in
light of comments received, HUD has
decided against pursuing regulatory
changes pertaining to the requirement
that a PHA prepare a summary of any
informal settlement. HUD has also
decided against pursuing changes
related to the ability of either party to
a grievance to request, at their own
expense, that a transcript of a grievance
hearing be prepared. Further, in light of
comments received, HUD has provided
a clarification regarding the Limited
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English Proficiency requirements
related to grievance procedures.
This final rule maintains the
elimination of the requirement that
PHAs consult resident organizations
before appointing a hearing officer.
However, in light of comments that
residents should have input into the
selection process, HUD is requiring that
PHAs include their policies regarding
the selection process in the tenant lease
form, which is subject to a 30-day
comment period. Finally, the final rule
also maintains the elimination of the
requirement that PHAs retain a redacted
copy of each hearing decision to be
made available to prospective
complainants, and in the place of that
requirement, requires PHAs to maintain
a log of hearing officer decisions as
described through HUD guidance.
4. Limited Vacancies (§ 990.150)
There is no change from the proposed
rule. The final rule clarifies that the
number of vacant units eligible for
operating subsidy must be not more
than 3 percent of the total units, on a
project-by-project basis.
D. HCV Program Regulations
1. Start of Assisted Tenancy (§ 982.309)
For the reasons presented below, HUD
has decided against pursuing the
regulatory changes included in the
proposed rule.
2. Biennial Inspections and the Use of
Alternative Inspection Methods
(§§ 982.405, 982.406, 983.103)
Upon further consideration, HUD
made a change to this provision to
clarify that if an alternative inspection
method employs sampling, the PHA
may rely upon that method only if HCV
units are included in the population of
units forming the basis of the sample. In
addition, in response to public
comments, HUD is requiring PHAs
wishing to rely upon inspection
methods other than those conducted
pursuant to the Low-Income Housing
Tax Credit (LIHTC) or HOME programs,
or inspections performed by HUD, to
submit to HUD the protocol for the
inspection method they wish to use
along with the PHA’s analysis showing
that the desired protocol meets or
exceeds HQS. A PHA must submit these
materials to HUD for approval and may
not rely upon such alternative
inspection methods until such approval
has been granted.
3. Housing Quality Standards (HQS)
Reinspection Fees (§ 982.405)
The Department made modest
changes to this provision based on
comments expressing concern about the
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broad nature of this authority and
requests for clarity about the treatment
of fees. The proposed rule would have
authorized a PHA to charge a reasonable
fee if a cited deficiency remained upon
reinspection. The final rule states that
the fee may be charged only if an owner
stated that a deficiency had been fixed
and the deficiency is found during
reinspection to persist or if a
reinspection conducted after the
expiration of the timeframe for repairs
reveals that the deficiency persists. With
respect to the fee, the final rule makes
clear that any fees collected may be
used only for activities related to the
provision of tenant-based assistance.
4. Exception Payment Standards for
Providing Reasonable Accommodations
(§§ 982.503, 982.505)
There is no change from the proposed
rule. The final rule allows a PHA to
approve a payment standard of not more
than 120 percent of the FMR without
HUD approval if required as a
reasonable accommodation for a family
that includes a person with a disability.
5. Family Income and Composition:
Regular and Interim Examinations
(§ 982.516(c)–(e))
There is no change from the proposed
rule. The final rule eliminates the
requirement that a voucher agency
conduct a reexamination of income
whenever a new family member is
added, aligning the voucher and PH
regulations.
6. Utility Payment Schedules (§ 982.517)
For the reasons presented below, HUD
has decided against pursuing the
regulatory changes included in the
proposed rule that would have
authorized a PHA to define ‘‘unit type’’
as simply ‘‘attached’’ or ‘‘detached.’’
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III. Discussion of Public Comments and
HUD’s Responses
The public comment period on the
proposed rule closed on March 9, 2015,
and 92 public comments were received
in response to HUD’s January 6, 2015,
proposed rule. Comments were
submitted by individual members of the
public, Fair Housing advocacy groups,
housing associations, and PHAs. The
following presents the significant issues
and questions related to the proposed
rule raised by the commenters, and
HUD’s responses to these issues and
questions.
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A. CPD, HCV, MFH, and PH Program
Regulations
1. Verification of Social Security
Numbers (§ 5.216)
Issue: Proposal Expansion.
Commenters had several suggestions for
HUD to expand the proposed relief,
including allowing relief if there is a
newly added family member over the
age of six. Others suggested that HUD
simply establish a maximum time
period during which a family may
receive a subsidy without providing a
missing SSN instead of allowing for two
extension periods or that HUD should
allow families to self-certify as to having
obtained SSNs. Commenters also stated
that the waiver should be allowed only
if any enforcement action is consistent
with the Administrative and Continued
Occupancy Policy (ACOP) and/or the
Administrative Plan and/or Tenant
Selection Plan (TSP).
HUD Response: Existing regulations
permit a participant household to add a
new household member under the age
of 6 years, even if that household
member lacks an SSN at the time of
admission. The participant household
then has 90 days to obtain and provide
documentation necessary to verify the
SSN of the new household member; the
processing entity may grant the
household an additional 90-day
extension. HUD’s intent in proposing
changes to the regulations governing
applicants is to align the requirements
for applicants with those that govern
participants, including with respect to
enforcement. The changes proposed
above either go beyond the current
requirements for participant households
or vary from those requirements. As
such, they are contrary to HUD’s intent,
and HUD declines to adopt them.
Issue: Expansion to Homeless
Programs. Commenters asked HUD to
expand the proposal by providing
waivers to allow PHAs to house
homeless individuals who are unable to
provide documentation of their SSN by
giving the families 90 days to provide
the information.
HUD Response: HUD agrees that
adopting similar flexibility with respect
to homeless individuals who lack SSNs
would facilitate HUD’s efforts to serve
homeless families. However, HUD is
unable to adopt this recommended
change at this time, because it is beyond
the scope of this rulemaking.
Issue: Timing of Waiver. Commenters
asked HUD to use the date of voucher
issuance instead of the date of
admission, as the date of admission
usually means the date of lease-up and
does not account for time for finding a
unit and inspections.
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HUD Response: HUD agrees with this
comment and has adopted it in this final
rule.
Issue: Objections. Some commenters
objected to the proposal, stating that it
would actually increase burden on
PHAs. Others asked HUD to modify its
systems to properly accept a delayed
certification when there is a new child
in the family or when a foster agency
refuses to provide the SSN. Commenters
also asked HUD to allow the use of other
forms of identification, such as
Individual Taxpayer Identification
Numbers.
HUD Response: Several of the
comments provided pertain only
indirectly to the changes proposed by
HUD and are therefore beyond the scope
of this rulemaking. With respect to the
assertion that this change may result in
additional tracking and monitoring,
HUD notes that, for processing entities
that typically request waivers in order to
house such families, the change reduces
burden. In addition, the change creates
benefits that offset any modest burden.
Specifically, they eliminate a barrier
that could otherwise prevent families
from being housed, requiring no greater
monitoring and tracking than is
performed for participant households.
2. Definition of Extremely Low-Income
(ELI) Families (§§ 5.603, 903.7, 960.102)
Issue: Low-Income Families.
Commenters stated that the proposed
change should not exclude households
from meeting ELI eligibility who are
between 30 percent and 50 percent of
area median income (AMI).
HUD Response: HUD agrees with the
comment and has added ‘‘very lowincome’’ language to the final rule.
Issue: Requested Changes.
Commenters stated that because the new
definition of ELI has delayed the release
of income limits, the proposal should
not be finalized. Similarly, it was
suggested that HUD remove income
targeting completely.
HUD Response: The final rule codifies
the definition of ELI in HUD’s 2014
Appropriations Act. The FY 2014
Appropriations Act defines ‘‘extremely
low-income family’’ to mean a very lowincome family whose income does not
exceed the higher of 30 percent of AMI
or the poverty level. It would be
contrary to the statutory change to delay
in proceeding with issuance of this final
rule.
Income targeting is a statutory
requirement of section 16 of the 1937
Act and cannot be removed through
rulemaking without statutory authority.
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3. Use of Actual Past Income (§ 5.609)
Issue: Objections to the Proposed
Change. Many commenters objected to
the proposal’s requirement that a PHA
use one definition of annual income
(either actual past income or projected
income) for all families in a program.
Also, many commenters objected to the
prohibition against using both the past
income provision and the provision
authorizing a streamlined annual
reexamination for fixed-income
families. Commenters stated that these
restrictions limit PHA discretion and
therefore fail to provide administrative
savings to PHAs.
Additionally, commenters stated that
the provision did nothing to alleviate
the burden associated with performing
interim income reexaminations. The
commenters stated that many families
experience fluctuations in income over
the course of a year, and that each time
this happens, a housing provider must
calculate income based on projected
income, rather than past income. The
commenters stated that furthermore, the
proposal required housing providers
that adopted a definition based on
actual past income to calculate expenses
for such things as child care and
medical care during the same 12-month
period, and it is difficult to have the
same timeframes for all sources of
income.
Other commenters stated that using
past income was not an accurate way to
set rent.
HUD Response: HUD agrees that the
proposal provided minimal, if any,
streamlining benefit, and required
impractical actions on the part of
housing providers in using the same
time frames for income and deductions.
Given the concerns raised about the
proposal, HUD has decided not to adopt
the use of actual past income in the final
rule.
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4. Exclusion of Mandatory Education
Fees From Income (§ 5.609(b)(9))
Issue: Requests for Clarification. Some
commenters supported the change, but
expressed doubt that this provided
streamlining relief and perhaps, instead,
added to a PHA’s burden, particularly in
determining the amount of fees charged
and then verifying those fees. Others
asked for additional guidance on what
fees would fall under this new policy.
HUD Response: HUD notes that this
provision is included in the rule, not as
administrative relief, but to codify in
regulation language included in recent
appropriations acts that has excluded
from income those amounts needed to
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pay mandatory student fees.5 Additional
guidance from HUD regarding what
constitutes such fees is forthcoming in
the form of a notice that relies on the
Department of Education definitions of
tuition and fees. For example, a
mandatory education fee would include
student service fees. That same notice
will provide guidance on how to verify
fee information. (Note: Such fees are
already excluded for purposes of the PH
program, pursuant to § 5.609(b)(9).)
5. Streamlined Annual Reexamination
for Fixed Incomes (§§ 5.657, 960.257,
982.516)
Issue: Clarifications and Minor
Changes. Commenters supported
streamlining reexaminations for families
with fixed income, but asked that HUD
make some small changes. In addition to
the many requests that HUD permit both
fixed-income streamlining and the use
of actual past income, commenters
asked that HUD allow for streamlined
reexaminations even when the family
does not have all of its income from
fixed-income sources or when some
family members have a variable income
and others have a fixed income.
Commenters also asked that either the
regulatory definition of ‘‘fixed’’ income
be made more flexible or HUD grant
PHAs flexibility to establish their own
definition.
HUD Response: As explained above,
HUD has dropped the provision that
would have authorized PHAs and
owners to define annual income as
‘‘actual past income.’’ At the same time,
in response to comments, HUD has
revised this streamlined annual
reexamination measure to provide PHAs
and owners with the option of
conducting a streamlined income
redetermination for any fixed-income
source, irrespective of whether an
individual or a family also has a nonfixed source of income. This means that
the regulation no longer requires a
family to have 100 percent of its income
from fixed sources, which resolves a
number of the concerns expressed by
commenters. The final rule also adopts
an expanded list of fixed sources of
income. With respect to income from
annuities or other retirement benefit
programs, insurance policies, disability
or death benefits, or other similar types
of periodic receipts, if a family member
receives income from any of these
sources and the income consists solely
of periodic payments at reasonably
predictable levels, then the income
5 See section 213 of the Transportation, Housing
and Urban Development, and Related Agencies
Appropriations Act, 2015 (Pub. L. 113–235,
approved Dec. 16, 2014).
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source may be considered to be ‘‘fixed.’’
HUD believes that these changes
respond to a number of the comments
received and will provide substantial
relief to PHAs and owners.
Issue: Objections and Significant
Changes. Some commenters stated that
the proposal did not provide any
streamlining benefit, and, to fully
streamline, HUD should eliminate or
modify the medical expense through
methods like a standard deduction or
self-certification of medical expenses.
Commenters expressed concern that
allowing streamlined recertification for
fixed income families would allow such
families to overlook sources of income.
Some stated that HUD should still
require annual income verifications,
because some families would have some
members with fixed income and others
with variable income.
HUD Response: While HUD is
amenable to adopting several of the
suggestions made by commenters, HUD
will not eliminate certain requirements,
such as the requirement to verify
medical expenses and otherwise
calculate adjustments to annual income
for fixed-income families. For ongoing
medical expenses, PHAs and owners
already have the option to determine
anticipated expenses by calculating
expenses paid by the family in the 12
months preceding recertification. For
past one-time, nonrecurring medical
expenses that have been paid in full,
PHAs and owners already have the
option of including these expenses at an
initial, interim, or annual recertification;
if such an expense has not been paid in
full but is instead being paid subject to
a payment plan, then the expense would
be counted as anticipated either at the
time it occurs, through an interim
recertification, or at an upcoming
annual recertification. Further, HUD
will not adopt the use of selfcertification of medical expenses and
other deductions, due to the risk of
improper payment. Along the same
lines, the final rule makes clear that a
full examination of family income must
be conducted upon admission to a
program. Also, for PHAs and owners
that choose to adopt the streamlined
income redetermination, a full
examination of family income must be
performed at least every 3 years.
6. Earned Income Disregard (§§ 5.617,
960.255)
Issue: Definition of ‘‘continually
employed’’ and effect on employment.
Several commenters requested that HUD
modify the proposal by clarifying the
requirement that the family remain
continually employed.
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In contrast to these commenters, other
commenters suggested that this change
should not be made, because residents
eligible for EID would not be able to be
continually employed for 24 months.
Others objected to allowing residents to
re-qualify for EID, either because it
would create an additional burden on
PHAs or because it could create an
incentive for individuals to leave jobs
when the EID expires. Some
commenters expressed concern that a
family losing the EID during the 24month period would be able to qualify
for a new EID period immediately,
allowing for an infinite time frame to
receive the EID. Commenters also
suggested that HUD allow PHAs the
option to allow the EID time clock to
run during periods of unemployment
but disregard any unemployment
benefits an individual receives.
HUD Response: HUD has determined
to drop the continuous employment
requirement from this rulemaking. For
all HUD programs that require an EID,
HUD is retaining the ability of these
residents to start and stop employment
and still retain the benefit of the EID.
However, these residents may only
receive the benefit for up to 24
consecutive months from the date of
initial increase in annual income. If an
individual becomes eligible to receive
the EID, the 24-month period will not
stop if the circumstance that triggered
the EID ceases; however, if the
individual experiences an event that
would again provide an EID benefit
during the 24-month period, then the
individual will be provided the rent
incentive. This change eliminates the
burdensome process of tracking EID
starts and stops over a 48-month time
period, but still provides some
flexibility to tenants to receive the EID
if they again obtain employment.
HUD will retain the one-time EID
eligibility. Specifically, after the
expiration of the 24-month period,
individuals will be ineligible to receive
subsequent EID benefits. HUD believes
that these changes maintain the balance
that HUD seeks to incentivize
employment among residents while
reducing the burden of administering
the benefit.
Issue: Exclusion in the second 12
months. Commenters asked that HUD
make the income exclusion 100 percent
for the first year and 50 percent for the
second 12 months.
HUD Response: HUD disagrees with
this suggestion. The statutory language
at section 3(d) of the 1937 Act requires
PHAs to disregard 100 percent of any
increase in income for the first 12
months. However, for the second 12
months, PHAs must disregard not less
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than 50 percent of any increase in
income. PHAs have discretion during
the second 12-month period to disregard
more than 50 percent of any increase in
income. Therefore, HUD will not adopt
this suggested change.
Issue: Limiting the availability of EID.
Commenters suggested that HUD align
the EID effective date with a family’s
annual reexamination date. Others
suggested that HUD should allow for
income to be calculated using actual
past earned income for everyone in lieu
of EID, or that EID should be available
only for individuals with disabilities.
Commenters also suggested that HUD
should allow PHAs to implement EID
on their own reporting cycle.
HUD Response: HUD’s intent in this
rulemaking, with respect to EID, is to
streamline the EID tracking process by
reducing the time during which a
program participant may be eligible to
receive the benefit of the EID. HUD
believes the changes in this rulemaking
also more closely align to the statute
that governs the EID. The changes
suggested above are inconsistent either
with the statute or with HUD’s intent in
this rulemaking. As a result, HUD will
not adopt the suggested changes.
Issue: Additional guidance. HUD was
asked for specific guidance for families
that have already started EID under the
previous regulations.
HUD Response: HUD agrees with this
comment and has revised the final
regulation to make clear that the
previous regulations apply to such
families.
Issue: HOPWA carve-out. Some
commenters stated that allowing
HOPWA to have an EID policy different
from other programs with tenant
populations that have disabilities is
unfair to the tenants in those nonHOPWA programs.
HUD Response: HUD agrees with this
recommendation and has eliminated the
HOPWA program carve-out in this final
rule. The final rule applies the EID
uniformly to all families eligible for the
benefit.
Issue: Elimination of EID. Some
commenters suggested HUD should
eliminate EID entirely, either because it
clashes with PH’s minimum rent
requirement or because the family selfsufficiency program is better. Others
stated that the EID should not be
extended to the Shelter Plus Care and
Moderate Rehabilitation/Single-Room
Occupancy (SRO) programs. Some
suggested that the EID time period
should be limited to only three months
to discourage individuals from quitting
jobs at the expiration of the EID time
period to avoid rent increases or that the
EID time period should be expanded to
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48 months to allow for more gradual
rent increases.
HUD Response: As noted in response
to an earlier comment, HUD’s intent in
this rulemaking, with respect to EID, is
to streamline the EID tracking process
by reducing the time during which a
program participant may be eligible to
receive the benefit of the EID. HUD
believes the changes in this rulemaking
more closely align to the statute that
governs the EID. The changes suggested
above are inconsistent either with the
statute or with HUD’s intent in this
rulemaking. As a result, HUD will not
adopt the suggested changes.
B. HCV and PH Program Regulations
1. Family Declaration of Assets Under
$5,000 (§§ 960.259, 982.516)
Issue: Increasing Threshold. Many
commenters asked that HUD increase
the maximum amount of assets that can
be self-certified to $10,000.
HUD Response: The final rule has not
adopted this suggestion. The $5,000
amount is consistent with other
policies. Existing regulations require
housing providers to calculate the
imputed income for assets over $5,000.
Also, the Internal Revenue Service
permits housing credit agencies and
owners to accept a certification from
families of assets under $5,000.
Commenters stated that there are few
residents with assets greater than
$5,000.
Issue: Expansion to Admission. Some
commenters asked that HUD modify the
proposal to allow families to use selfcertification at both admission and
reexamination.
HUD Response: The final rule clarifies
in the preamble that this provision
applies to families at reexamination. At
admission, all assets of a family will be
verified as is the current practice. Also,
the final rule requires a PHA to obtain
third-party documentation of all family
assets every three years.
Issue: Method of Certification.
Commenters asked that HUD allow
families to certify to total assets instead
of requiring declaration of each separate
asset.
HUD Response: A family’s declaration
of total assets may be included on a
single form with each asset listed. HUD
will issue further guidance about this
provision of the final rule.
Issue: Expansion to Multifamily.
Commenters asked that HUD allow this
provision to apply to multifamily
housing as well.
HUD Response: The Office of
Multifamily Housing Programs, which
operates various rental assistance
programs, is issuing an interim final
rule to accomplish this expansion.
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Issue: Larger Changes to the Proposal.
Some commenters asked that HUD
eliminate the consideration of assets
when determining income, as income
from assets usually has little, if any,
effect on the amount of rent paid by a
family. Other commenters state that selfcertification does not actually reduce
burden on PHAs and may actually
increase work for PHA staff.
HUD Response: Totally eliminating
consideration of assets when
determining income is outside the scope
of this rulemaking. HUD will keep the
suggestion in mind as it examines other
opportunities to streamline program
requirements.
Additionally, this provision is
optional for PHAs. A PHA may continue
to verify such assets at both admission
and annual reexaminations.
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2. Utility Reimbursements (§§ 960.253,
982.514)
Issue: Optional Nature of Provision.
Commenters asked that HUD make this
policy optional or allow PHAs to
determine the frequency with which
they make utility reimbursement
payments. For example, some
commenters requested that HUD permit
annual reimbursements.
HUD Response: The changes in this
rulemaking are optional, and PHAs that
do not believe this provision is
beneficial to their program
administration may continue to provide
utility reimbursements monthly.
Nothing in this rulemaking permits a
PHA not to provide a utility
reimbursement if such a reimbursement
is due. Nor does the rulemaking offer
PHAs the option of making such
payments less frequently than quarterly.
Issue: Frequency of Payments.
Commenters asked whether the
quarterly reimbursement period would
be based on the calendar year or when
the family moves in. Others asked for
clarification on whether the payments
are reimbursements or future payments.
HUD Response: The final rule has
been modified to clarify that the
quarterly periods are to be based on the
calendar year, not the move-in date.
However, HUD is not amending other
policies governing when utility
reimbursements are sent.
Issue: Hardship Exemption.
Commenters stated that HUD should not
allow any hardship exemption.
HUD Response: While the proposed
rule did not contain a hardship
exemption, HUD has decided for some
families, waiting for a quarterly
reimbursement amount may be
untenable. Therefore, the final rule now
requires that if PHAs make quarterly
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reimbursements, the PHA must have a
hardship policy in place for tenants.
Issue: Quarterly Reimbursement
Threshold Amount. Commenters
requested that HUD increase to $50 the
maximum amount of reimbursements
that may be sent quarterly.
HUD Response: HUD agrees that
raising the threshold for quarterly
reimbursements will increase the
number of families under this provision
and expand the streamlining efforts.
While not raising the amount to $50 per
quarter, HUD has raised the threshold to
$45 per quarter ($15 per month). Any
burden placed on families due to this
higher amount is now offset by the
requirement that PHAs opting to issue
quarterly utility reimbursements must
include a hardship exemption policy if
the quarterly payments impose a
financial hardship on families.
Issue: Alternative Reimbursement
Methods. Commenters asked that HUD
support options other than checks for
making utility reimbursement
payments.
Some commenters suggested that
quarterly reimbursements would not
help PHAs that use automatic deposits
onto a debit card.
HUD Response: HUD supports the use
of alternative utility reimbursement
methods, including debit cards. PHAs
that choose to use such alternative
methods should ensure that such
reimbursement methods do not generate
fees that must be paid by the tenant.
The use of quarterly reimbursement
may benefit PHAs that use automatic
deposits. If it does not, then HUD
expects that such PHAs will not
exercise this option.
Issue: Elimination of Low
Reimbursement Amounts. Commenters
asked that HUD eliminate utility
reimbursements that are less than $10
per month or eliminate reimbursements
entirely.
HUD Response: HUD does not agree
that utility reimbursements for amounts
less than $10 per month should be
eliminated. The elimination of such
reimbursements would violate sections
3 and 8 of the 1937 Act (42 U.S.C. 1437a
and 1437f), which require that families
pay no more than 30 percent of their
annual gross income in rent for their
assisted housing. HUD has determined
that such rental payments are for
housing and reasonable utilities costs.
Therefore, eliminating a utility
reimbursement of any amount would
result in some program participants
paying more than the maximum amount
of rent that the family should pay. HUD
will not adopt the suggested change.
Issue: Setting Rents by Income Bands.
Commenters stated that the
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reimbursement burden would be
completely eliminated if rents were
solely determined by income bands.
HUD Response: HUD does not have
the statutory authority to permit the use
of rents based on income bands in the
PH or HCV programs. Therefore, HUD
will not adopt this suggestion.
Issue: Direct Payments. Commenters
stated that owners should be able to
submit utility payments directly to
utility providers.
HUD Response: This rulemaking does
not eliminate the option available to
PHAs to make direct payments to utility
providers in lieu of making utility
reimbursement payments to tenants.
Issue: Prorated Reimbursements.
Commenters stated that owners should
be given the option to prorate the utility
allowance payment based on any
projected move out date; if a payment
has already been disbursed when a
tenant moves out, the owner should be
allowed to offset the difference by using
the security deposit, charging the
resident for the difference, or adjusting
the voucher payment amount.
HUD Response: This rulemaking
requires PHAs to make a prorated utility
reimbursement payment in the case of a
family that moves out in advance of the
next scheduled quarterly
reimbursement. Likewise, if a family
leaves the program with an outstanding
credit from the PHA for a utility
reimbursement, the PHA must reconcile
the credit with the family prior to the
expiration of the lease, in the case of
PH, or when the HAP contract
terminates or shortly thereafter, in the
case of the HCV program.
C. PH Program Regulations
1. Public Housing Rents for Mixed
Families (§ 5.520(d))
The comments received on this
proposal were all positive and did not
urge any changes. Therefore HUD is
adopting the proposal, unchanged in the
final rulemaking.
2. Tenant Self-Certification for
Community Service and SelfSufficiency Requirement (§§ 960.605,
960.607)
Issue: Review of Certifications.
Several commenters stated that HUD
should not require PHAs to obtain thirdparty verification when reviewing the
self-certifications or should limit the
times when a PHA should follow up
with a third party in the review of
certifications.
HUD Response: HUD agrees that it
would be unnecessarily burdensome on
PHAs to obtain additional third-party
verification when reviewing each self-
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certification. HUD is not, therefore,
mandating such a process when
reviewing tenant self-certifications.
PHAs must, however, review the selfcertifications to ensure that they are
complete and provide sufficient
information in order to follow up as
necessary. Further, HUD strongly
encourages PHAs to investigate
community service compliance when
there are questions of accuracy. Finally,
in a change from the proposed rule,
HUD is requiring PHAs to validate a
sample of self-certifications and notify
residents that their self-certifications
may be subject to such validation in
order to ensure that residents remain
compliant with the community service
and self-sufficiency requirement (CSSR).
Issue: Objections to Self-Certification.
Several commenters objected to the
proposal to allow self-certification,
stating that it would reduce compliance
with the CSSR.
HUD Response: While HUD
understands the concerns that some
residents may attempt to submit
fraudulent self-certifications, the
changes permit, but do not require,
PHAs to accept a tenant selfcertification of compliance with the
CSSR in lieu of obtaining independent
third-party verification. PHAs that are
concerned about the potential for
fraudulent self-certifications may
continue to require third-party
verification of compliance for each
eligible resident.
Issue: Elimination of Community
Service Requirement. Several
commenters suggested that it would be
better if HUD eliminated the community
service requirement for PH entirely.
HUD Response: The CSSR is
mandated by section 12(c) of the 1937
Act (42 U.S.C. 1437j(c)). HUD is
therefore unable to eliminate the CSSR.
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3. Public Housing Grievance Procedures
(§§ 966.4 and 966.52 Through 966.57)
Issue: Alignment. Commenters
suggested that all grievance procedures
should be aligned across PH, Section 8,
and MFH programs. This would allow
for only one administrative hearing for
any action. Other commenters suggested
applying the revised definition of
‘‘hearing officer’’ to the HCV program,
as well.
HUD Response: In general, this
streamlining rule aligns program
requirements where possible to simplify
administration of HUD programs. In the
case of the PH program, which in some
cases requires grievance procedures that
are beyond what is required under state/
local law, it would be impractical for
HUD to seek to fully align the PH
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program with other HUD rental
assistance programs.
Issue: Hearing Postponements. Many
commenters objected to language in
§ 966.56(c), which would limit the
timing of any hearing postponements to
five days. The commenters stated that
the provision places unnecessary time
restrictions, and timeframes should
remain at the discretion of PHAs on a
case-by-case basis.
HUD Response: HUD’s intent in this
provision is to clarify, through the use
of plain language, the flexibility
afforded to the hearing officer regarding
the length of time for which a hearing
may be postponed. The regulatory
language was changed from ‘‘not to
exceed,’’ to ‘‘no more than.’’ The change
is not substantive, does not reduce the
flexibility afforded to the PHA, and is
not disadvantageous to the complainant.
The final rule is unchanged from the
proposed rule.
Issue: Limited English Proficiency
(LEP) Requirements. Several
commenters expressed concern with the
newly included LEP requirements in
§ 955.56. The commenters asked
whether a PHA must provide materials
in multiple languages, and stated that
PHAs should be allowed to use common
sense when providing LEP materials to
complainants.
Other commenters asked that HUD
expand the LEP requirements beyond
written materials to include providing
translators at various conferences and
meetings and materials in other
languages for any notice related to a
proposed adverse action. Some
commenters stated that written
materials may be inappropriate, as some
residents may be illiterate in their
spoken language.
Some commenters also disagreed with
HUD’s placement of the LEP
requirements under a heading of
accommodations for persons with
disabilities, as limited English
proficiency is not a disability.
HUD Response: HUD’s intent in this
provision is to clarify in the regulations
the LEP requirements already in place
for the PH program. On January 22,
2007,6 HUD published final guidance in
the Federal Register. This rulemaking
does not introduce requirements that are
beyond what is included in HUD’s final
LEP guidance. The final rule has been
amended to clarify PHA obligations.
HUD agrees with the comments
regarding the placement of the language,
and has moved the requirement to
§ 966.56(g).
6 See https://www.gpo.gov/fdsys/pkg/FR-2007-0122/pdf/07-217.pdf.
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Issue: Due Process. Commenters
suggested methods to assure due
process rights for complainants,
including relying exclusively on local
courts or limiting the streamlined
process only for drug activity. Some
commenters stated that PHAs should be
required to set forth a basic schedule,
including witness lists and supporting
documents and limiting the types of
testimony a PHA may introduce without
allowing cross-examination of
witnesses. Commenters also asked that
HUD provide additional guidance on
how flexible a PHA may be with certain
procedures, in order to reduce the
exposure of PHAs to legal challenges.
HUD Response: HUD’s intent in this
rulemaking is to remove overly
prescriptive process requirements for
PH grievances, where those
requirements are not mandated by
statute. The changes proposed above
either attempt to maintain or add to
existing requirements. The changes are
not consistent with HUD’s intent in this
rulemaking; therefore, HUD will not
adopt these suggested changes.
Issue: Consultation with Residents in
Appointing Hearing Officers. Some
commenters expressed concern that the
proposal eliminates the requirement for
PHAs to consult with residents in
appointing hearing officers, stating that
it damages residents’ rights to impartial
hearings.
HUD Response: Requiring a process to
consult with residents over the selection
of a hearing officer when PHAs
ultimately have the final say about
whom to select would be an
unnecessarily burdensome process
requirement, and therefore contrary to
the intent of this rulemaking which is to
reduce burden. Further, PHAs still may,
but are no longer required to, consult
with residents about the hearing officer.
This suggestion would maintain the
current burdensome process and is
inconsistent with HUD’s intent in this
rulemaking. HUD will not adopt this
suggestion.
However, in light of these comments,
HUD agrees that tenant input into
hearing officer selection process can be
valuable. Therefore, HUD is requiring
that PHAs include their policies for
selection of hearing officers in the
dwelling lease, which is subject to a 30day comment period before any changes
can be made.
Issue: Informal Settlements.
Commenters asked that HUD continue
to require the summary of informal
settlements, stating that HUD could
provide a template in order to reduce
administrative burden.
HUD Response: HUD agrees that there
is value in the preparation of the
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summary, as it provides an opportunity
for both parties to prepare for any
forthcoming grievance hearing. As such,
HUD will not change the previous
requirement that a summary be
prepared. HUD will explore whether a
template summary would be useful at
reducing administrative burden for
PHAs.
Issue: Meeting Recordings and
Transcripts. Commenters stated that
HUD should still require PHAs to allow
residents to record a meeting and have
a transcript made, as elimination of this
requirement doesn’t ease the burden to
the PHA, but it eliminates a benefit for
future proceedings.
HUD Response: HUD agrees with this
comment and this final rule reinstates
language making clear that any party to
a grievance may arrange to obtain a
hearing transcript, at their own expense.
Issue: Retention of Hearing Officer
Decisions. Commenters expressed
concern that HUD was eliminating the
requirement that PHAs maintain copies
of decisions of hearing officers.
Commenters stated that the records are
important to maintaining transparency
for PHAs; the commenters stated that
electronic records would reduce
burdens for keeping the records.
HUD Response: HUD’s regulation at
24 CFR 966.56(b)(1) requires that
tenants be afforded a hearing based on
relevant facts related to the specific
grievance. HUD disagrees that prior
decisions are necessarily relevant to the
individual facts related to a specific
grievance hearing. Further, the retention
of such documents is time-consuming
and costly for PHAs. The suggested
change is inconsistent with HUD’s
intent in this rulemaking, which is to
reduce administrative burden and
program costs. Therefore, HUD will not
adopt the suggested change.
However, HUD agrees that basic
information related to past hearing
decisions could be useful for HUD
oversight and for ensuring transparency
in the process. Therefore, in lieu of the
requirement to maintain redacted
hearing decisions and making such
decisions available to the public, HUD
is requiring that PHAs maintain a
simple log, as described in forthcoming
HUD guidance, that provides basic
information on past hearing decisions.
Issue: Informal Hearings. Commenters
stated that HUD should reinstate
informal hearings prior to a formal
grievance in order to avoid more costly
formal hearings whenever possible.
HUD Response: This final rulemaking
did not eliminate the informal hearing
(i.e., informal settlement of grievance)
prior to a formal grievance hearing, as
initially proposed. Requirements related
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to the informal hearing are contained in
24 CFR 966.54.
4. Limited Vacancies (§ 990.150)
Issue: Consistency with local vacancy
rates. Commenters stated that PHAs
should be allowed to maintain vacancy
rates that are comparable with that of
the jurisdiction. Others asked HUD to
set the allowed vacancy rate at not less
than 5 percent, as permitted in the
LIHTC and Project-Based Rental
Assistance (PBRA) programs.
HUD Response: The limited vacancy
provision allows for funding for
vacancies of up to 3 percent. Five other
types of approved vacancies are
included in the existing regulation
related to particular project
circumstances such as modernization,
special uses, litigation, disasters, and
casualty losses as well as an appeal
provision for vacancies due to changing
market conditions.
Issue: Effect on small agencies. Some
commenters objected to new language
that the commenters stated would
reduce subsidies to PHAs and could
destabilize small agencies. Others stated
that the proposal does not allow for
consideration of market conditions or
specific local conditions for small
PHAs, which would hurt struggling
agencies.
HUD Response: The proposed
language retains the special
consideration for PHAs with 100 units
or less. HUD’s Public Housing Operating
Fund (Operating Fund) regulations
continue to allow for appeals for
changing market conditions and specific
local condition.
Issue: Basis for calculation.
Commenters asked that vacancies be
judged on a PHA-wide basis to permit
balance of high-demand areas with
others where there is a low demand,
because one or two vacancies could
cause a vacancy rate over 3 percent. The
commenters stated that PHAs should be
allowed to manage their portfolio as a
single program, similar to the way the
private sector would do so.
HUD Response: This clarification of
the limited vacancy rule retains the
approach that funding is both
determined and provided at a project
level. The foundation of the transition to
asset management, which was adopted
by both PHAs and HUD at the time of
promulgation of the new Operating
Fund rule, was for certain PHAs to
migrate away from PHA-level
management and funding for those that
converted to asset management. Instead,
funding, budgeting, accounting, and
management are all conducted at the
project level. HUD recognizes each
PHA’s discretion as a property and
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financial manager of real estate to group
buildings to optimize efficient property
management and financial viability. The
Operating Fund regulations and HUD
systems currently allow PHAs to group
buildings into a project(s) to best serve
the interests of the property and
residents.
Issue: Lag time. Commenters objected
to the change because occupancy
numbers being used are 12–18 months
in the past, requiring PHAs to operate
on non-applicable past information.
HUD Response: The Operating Fund
formula in 24 CFR part 990 is based on
use of historical performance data as a
basis to fund current year needs. The
clarification of the limited vacancy
language does not modify the tenure of
performance data used to calculate
Operating Subsidy eligibility.
Issue: Negotiated rulemaking. Some
commenters stated that HUD should
stand by agreements reached through
the negotiated rulemaking process that
established the current operating fund
formula.
HUD Response: The clarification of
the limited vacancies provision is
consistent with the negotiated
rulemaking process.
5. Flat Rents (§ 960.253)
Issue: Phase-in of rent increases less
than 35 percent. Commenters asked that
HUD reinstate an earlier policy that
would allow PHAs to use discretion in
implementing any higher flat rents. This
would have allowed PHAs to phase in
small flat rent increases—those below
35 percent—over a three-year period.
HUD Response: The initial discretion
for phasing in small increases was due
to the fact that the changes in the 2014
Appropriations Act set all flat rents at
80 percent of FMR, with no possibilities
for exceptions to that amount. HUD
received indications that this might be
softened in a future year, permitting
PHAs to set flat rents using more
localized market data. As a result, HUD
used its discretion to limit the impact of
flat rent changes on PHAs and tenants
by allowing the higher rents to be
phased in.
With the passage of the 2015
Appropriations Act, however, HUD
believes that PHAs have sufficient
flexibility to set flat rents that reflect the
true market value of their units, and
therefore the three-year phase-in for
small flat rent increases is unnecessary.
However, the statutory requirement to
phase in increases exceeding 35 percent
for families already paying flat rents
remains in the rule.
Issue: Deadline for compliance.
Commenters asked HUD to extend the
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January 1, 2016 deadline for flat rents to
take effect.
HUD Response: This comment
misinterprets the effective date of the
new flat rent requirements. HUD did not
establish a hard deadline of January 1,
2016 for new flat rents to take effect.
PHAs were already required to establish
flat rents at no less than 80 percent of
the applicable FMR as required by PIH
Notice 2014–12. That notice clarified
that PHAs were required to update flat
rents no later than 90 days after HUD
published new, final FMRs. The 90-day
effective date of new flat rents based on
new FMRs was also included in the
interim rule and the accompanying
guidance provided through notice PIH
2015–13. Once HUD publishes new
final FMRs in any given year, PHAs will
be required to update flat rents within
90 days of the publication of those
FMRs and must begin applying them
prospectively to new admissions and at
family annual recertifications. In years
where HUD takes longer than 12 months
between the publication of new FMRs,
PHAs are permitted to continue to
charge flat rents at the current FMR,
SAFMR, or approved exception flat rent
amount until HUD publishes new FMRs
and the 90-day effective date has taken
place.
Issue: Lowering rents when FMRs or
SAFMRs decrease. Commenters asked
HUD for additional clarity on the
requirements for when market rents
decrease, particularly whether PHAs
retain discretion to reduce flat rents
when FMRs decrease.
HUD Response: PHAs must set flat
rents at no less than 80 percent of the
FMR or SAFMR, or they may submit an
exception request establishing flat rents
based on a market analysis. There is no
such requirement limiting a PHA from
lowering a flat rent in years where the
FMR or SAFMR decreases. Therefore, in
years where an FMR or SAFMR
decreases, PHAs have the discretion to
lower flat rents, but they may not set flat
rents at less than 80 percent of the FMR
or SAFMR unless they submit a new
exception request.
Issue: Rent reasonableness guidance.
Commenters suggested that a possible
explanation for why flat rents have been
set incorrectly in the past is due to a
lack of guidance from HUD on proper
rent reasonableness assessments.
HUD Response: While that may be
true for some PHAs, HUD has heard
anecdotally that there were many
reasons why flat rents may not have
been set correctly. However, in an effort
to support PHAs when trying to
determine the market value of their
public housing, HUD will publish future
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guidance on rent reasonableness
assessments for public housing.
Issue: Updating rent levels when an
exception rent has been requested.
Commenters asked for additional
clarification on what the requirements
were related to adjusting flat rent levels
when the PHA is intending to submit a
request for exception rents.
HUD Response: In this initial year,
any PHAs that submit exception
requests prior to the expiration of the
90-day period after the publication of
new FMRs may continue to charge flat
rents at the current levels until the PHA
is notified of HUD’s decision on their
exception request. However, if a PHA
fails to submit an exception request
prior to the expiration of the 90 day
period after the publication of new
FMRs, that PHA may still submit an
exception request, but must update flat
rents to no less than 80 percent of the
FMR or SAFMR until such time that
HUD notifies the PHA of its decision on
the exception request.
Issue: Flat rents and self-sufficiency.
Commenters stated that PHAs should
have the discretion to set flat rents
lower than 80 percent of market rents in
order to encourage families to become
self-sufficient.
HUD Response: Flat rents themselves
are intended to encourage selfsufficiency. They are a maximum
amount of rent that a family could be
charged; once a family begins to pay flat
rent, any increases in income do not
have an effect on their rental payment.
Because families have the ability to
choose between paying an income-based
rent or a flat rent, families that choose
to pay flat rents are inevitably paying a
lower percentage of income than other
public housing households which is a
self-sufficiency incentive. Therefore,
HUD does not believe that any
additional discretion regarding flat rents
is necessary to encourage economic selfsufficiency.
Issue: Reduced exception rent
requests. Commenters asked that PHAs
only be required to submit exception
rent requests every three years instead
of annually.
HUD Response: HUD is bound by the
statutory framework, which stipulates
that exception requests must be
submitted if the applicable FMR or
SAFMR do not reflect the market value
of a property. As such, the statute
requires a comparison of the FMR or
SAFMR to a current market study in
order to determine whether the market
value of a property is less than the
current FMR or SAFMR. Therefore,
HUD does not have the authority to
permit PHAs to use market studies that
are not current for exception requests.
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Issue: LIHTC rents and public housing
flat rents. Commenters asked for
additional clarity on how the flat rents
regulation impacts the LIHTC rents.
HUD Response: PHAs that manage
public housing units that were
developed or modernized using LIHTC
must set maximum rents for such units
at the required maximum LIHTC rents,
even if this is lower than the minimum
flat rent amount for a particular unit.
Issue: Opposition. Several
commenters objected to the flat rent
policy entirely, stating that it would
increase rent burden, cause higher
turnover, and negatively impact tenant
employment.
HUD Response: Although HUD
recognizes that there are consequences
to changes in flat rents, HUD believes
that the changes included in the FY 15
Appropriations Act, which have been
included in this rulemaking, provide
sufficient flexibility to PHAs to set
accurate, market-based rents. Further,
tenants concerned about rent burden are
reminded that they are provided a
safeguard in this rulemaking from large
annual increases in rent, and they are
always able to elect to pay the incomebased rent which is set at 30 percent of
income.
D. HCV Program Regulations
1. Start of Assisted Tenancy (§ 982.309)
Issue: Objections. Many commenters
objected to this proposal, stating that
landlords seek to lease units as quickly
as possible, and this could delay tenants
from being able to move into their units.
In high-demand areas, this could reduce
the number of landlords willing to
participate in the voucher program,
limiting choice to voucher holders.
Many commenters also expressed
concern that this would have negative
consequences for families that need to
move immediately or alternatively
would cause tenants to have to move
out of a unit before being able to move
into a new one. Other commenters
stated that this would concentrate
administrative tasks into a single time of
the month for PHAs, actually increasing
their burden.
HUD Response: HUD has decided
against promulgating this change.
Several commenters favored the
proposed change, but input from groups
ranging from landlords to tenant
advocates suggested that the change
would have an adverse effect on the
ability of HCV-assisted tenants to access
housing. While the proposed change
would have been optional at the
discretion of the PHA, and HUD
estimates that PHAs would choose not
to adopt any measure that would make
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it more difficult for HCV-assisted
tenants to access housing, HUD
ultimately decided that it could move
forward with the change only if it also
required any PHA opting to implement
the provision to also put into place an
exception policy for certain families
(e.g., victims of domestic violence) or
situations (e.g., HAP terminations due to
HQS violations). Ultimately, requiring
the adoption of an exception policy
would counter any administrative relief
provided by implementing the proposed
change. Taking all of these factors into
consideration, HUD declines to include
this provision in this final rule.
2. Biennial Inspections and the Use of
Alternative Inspection Methods
(§§ 982.405, 983.103)
Issue: HUD Systems. Commenters
suggested ways that HUD could improve
its inspection procedures. Some
commenters suggested that the
electronic systems be updated for
biennial inspections, and others asked
for a centralized database for inspection
reports and data, which could then be
accessed by PHAs in order to obtain the
results of alternative inspection
methods. Some commenters stated that
HUD should review inspection
protocols with input from PHAs and
implement ‘‘best practices’’ across the
board. Commenters also asked for
consolidating inspection standards
between HUD programs and LIHTC.
HUD Response: While these
comments are helpful in that they
specify improvements to HUD systems
that would simplify the inspection
process, advise of the burden that
results from differences in inspection
protocols and standards, and point out
at least one way in which an expansion
of this provision could bring about
further streamlining, they are either
beyond the scope of this rulemaking or
would require statutory changes.
In addition, HUD’s information
technology investment decisions are
made enterprise-wide based on
available resources as appropriated by
Congress. HUD will explore ways to
move to electronic reporting systems
with available resources. In particular,
HUD is considering the creation of a
national-level affordable housing
database that could be utilized in the
way described.
Issue: Keep Proposal Optional. Some
commenters stated that PHAs may want
to inspect properties more frequently for
oversight purposes, and therefore asked
that biennial and alternative inspections
remain optional for PHAs.
HUD Response: As authorized by
Congress and proposed in this
rulemaking, the use of biennial
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inspections is at the discretion of the
PHA; PHAs will retain the discretion to
inspect annually any properties that
warrant more frequent attention. The
same is true of alternative inspection
methods—their use is entirely at the
discretion of the PHA, per the statute
and this rulemaking. Nothing in this
final rule requires a PHA to adopt
biennial inspections or alternative
inspection methods.
Issue: Remediation Protocols.
Commenters offered several suggestions
on how to remediate problems
identified by alternative inspections.
Some stated that HUD should allow
PHAs to rely upon the remediation
protocol of the alternative inspection
method; there would be no burden relief
if PHAs have to conduct HQS
inspections anyway for units that failed
the alternative inspection the first time.
Some commenters suggested that this
could be satisfied by providing HUD
with a certification from the inspecting
agency that the deficiencies have been
mitigated. Commenters stated that HUD
should allow PHAs to decide if they
will conduct a remedial HQS inspection
or rely on the owner to provide proof of
actions to remedy defects.
HUD Response: HUD is sympathetic
to the suggestion that any streamlining
benefit of this provision is offset by the
requirement that a PHA inspect a
property using HQS when the property
has already been inspected using an
alternative inspection method and such
method reveals the existence of
violations that would have resulted in a
‘‘fail’’ score under HQS. For an
alternative inspection method that
employs sampling, however, as is the
case with inspections of properties
subsidized with LIHTCs, any cited
deficiencies that would ultimately be
corrected may exist as well in units not
included in the sample, including units
occupied by HCV-assisted households.
HUD has an obligation to determine
whether such deficiencies exist in units
occupied by such households and, if
they do, to assure that the units are once
again brought into compliance with
HUD’s housing quality standards.
PHAs are only precluded from relying
on an alternative inspection method if a
property inspected pursuant to the
method fails an inspection. In all cases
where a property passes an inspection,
even if deficiencies are identified, a
PHA may rely upon the alternative
inspection method to demonstrate
compliance with HUD’s housing quality
standards. If a property fails an
inspection due to identified
deficiencies, it may be the case that
remedial actions taken pursuant to the
alternative inspection method fall short
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of what would be required under HUD’s
housing quality standards.
In any circumstance in which a PHA
is prohibited from relying on an
alternative inspection method, HUD
declines, for the reasons identified
above, to adopt alternative remediation
measures as a substitute for a PHA’s
determination that a unit occupied by
an HCV-assisted family meets the
requirements for occupancy and
funding under the HCV program.
Issue: Reinspection Sampling. In the
case of residents with tenant-based
vouchers living in mixed-finance
properties, commenters stated that HUD
should authorize biennial inspection of
a random sample of units consisting of
at least 20 percent of the contract units
in each building.
HUD Response: Congress specifically
authorized the use of alternative
inspections, including inspections
conducted pursuant to requirements
under the low-income housing tax
credit (LIHTC) program. The LIHTC
program employs sampling. A PHA may
adopt an alternative inspection method
that is specifically authorized by
Congress or approved by HUD and
employs sampling.
Issue: Alternative Inspection
Standards. Commenters suggested that
HUD require HUD’s Real Estate
Assessment Center (REAC) to approve
or disapprove a PHA’s certification that
an alternative inspection method meets
HUD standards prior to allowing the
PHA to employ the alternative
inspection method.
HUD Response: HUD has adopted this
suggestion in this final rulemaking.
Issue: Local Jurisdiction Inspections.
Commenters asked that HUD allow
PHAs to use inspections done for local
jurisdictions, even when the inspections
are done by local agencies.
HUD Response: The statute authorizes
PHAs to rely on inspections conducted
under a ‘‘Federal, state, or local housing
program.’’ HUD interprets a ‘‘local
housing program’’ to include a local
housing code. Subject to the conditions
established in this final rule, a PHA may
rely upon an inspection conducted
pursuant to a local housing code to meet
its obligation to inspect units occupied
by HCV-assisted tenants during the
course of a housing assistance payments
contract. In order to rely upon such an
inspection, a PHA must submit a copy
of the local housing code to HUD, along
with an analysis by the PHA showing
that the local housing code standard
meets or exceeds HQS. Once HUD has
reviewed these materials, and then only
if HUD approves use of the inspection
method, the PHA may rely upon it. The
PHA must certify annually to HUD that
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the local housing code has not changed;
if it has changed, then the PHA must
again obtain HUD approval to rely upon
the standard, submitting a copy of the
revised code and an analysis showing
that the revised standard meets or
exceeds HQS.
Issue: Objections. Some commenters
expressed dissatisfaction with the
proposal, particularly with alternative
inspections, and stated that HUD should
not continue with the proposal.
HUD Response: HUD is required by
law to implement biennial inspections
and inspections via alternative
inspection methods.
3. Housing Quality Standards (HQS)
Reinspection Fees (§ 982.405)
Issue: Burden on PHAs and
Deterrence to Landlords. Some
commenters objected to the proposal,
stating that landlords would be
reluctant to pay reinspection fees and
would therefore be deterred from
participating in the Section 8 program.
Others stated that charging fees to
landlords would be a burden to PHAs,
and therefore should remain optional
and up to the PHA to decide how to
implement.
HUD Response: The proposed change
made it optional for a PHA to charge a
reinspection fee, and this final rule
retains the optional nature of the
provision. If a PHA has a concern that
charging a fee may deter landlords from
participating in the program or may
result in additional work (i.e., securing
payment of a fee, once assessed), then
the PHA will want to take these factors
into consideration when determining
whether to impose a reinspection fee.
As long as a PHA complies with the
requirements of this regulation when
imposing a reinspection fee, nothing in
this regulation would constrain a PHA
from adopting local policies specific to
the administration of such a fee. For
example, a PHA could specify in its
Administrative Plan that an owner will
be charged a reinspection fee only after
a second reinspection reveals that the
defect persists. PHAs will need to
determine whether and how best to use
this reinspection fee authority, based
upon their local circumstances.
Issue: Use of Fees and When to
Charge. Some commenters suggested
that the collected fees be added to
administrative fee amounts available to
a PHA.
HUD Response: Fees will be included
in a PHA’s administrative fee reserve
and may be used only for activities
related to the provision of Section 8
tenant-based assistance.
Issue: Guidance. Several commenters
asked HUD to provide additional
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guidance on what constitutes a
‘‘reasonable’’ fee; such guidance will be
necessary to reduce PHA administrative
burden.
HUD Response: HUD will issue
guidance on what constitutes a
‘‘reasonable’’ fee.
Issue: When Charges May Be
Assessed. Commenters asked that HUD
clarify the proposal to avoid charges for
full HQS inspections instead of merely
for reinspections of previously
identified deficiencies. Others asked for
information on how the proposal would
relate to special inspections that are not
initial or regularly scheduled
inspections, or what would happen if a
landlord or tenant does not attend or
allow entrance for the inspection.
Commenters also asked that HUD
expand the proposal to allow for the
charging of fees even when a landlord
has not indicated deficiencies have been
corrected, when the allotted time for
repairs has expired but a pre-scheduled
reinspection reveals the repairs have not
been made.
HUD Response: The final rule makes
clear that a fee may be assessed under
two circumstances: First, if a landlord
affirms that a repair has been made and
a subsequent reinspection shows that it
has not and, second, when the allotted
period of time for making the repair has
lapsed and a reinspection shows that
the repair has not been made, whether
or not the landlord has affirmed that it
was.
Issue: Expansion of Proposal. Some
commenters also suggested that HUD
expand the proposal to allow for fees for
all reinspections. Others stated that
PHAs should be allowed to redirect
funds from abated rents to cover the
costs of inspections instead of charging
fees. Finally, commenters stated that
HUD should consider other incentives
for landlords, such as allowing tenants
to pay rent into repair escrow accounts.
HUD Response: HUD appreciates
these suggestions and observations but
has declined to adopt them as part of
this rulemaking.
4. Exception Payment Standards for
Providing Reasonable Accommodations
(§§ 982.503, 982.505)
Issue: Unit Special Features.
Commenters stated that HUD should
include a consideration of special
features of the unit when establishing a
reasonable rent between 110 percent
and 120 percent of area fair market rent
(FMR).
HUD Response: There was strong
support for retaining this provision
unchanged, and HUD has done so. A
PHA must take special features into
consideration when there is a
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reasonable accommodation request. In
accordance with 24 CFR part 8, a PHA
must provide a higher payment standard
if requested as a reasonable
accommodation for a family that
includes an individual with disabilities.
HUD’s regulation implementing section
504 of the Rehabilitation Act, at 24 CFR
part 8, is referenced in 24 CFR
982.505(d). In addition, under 24 CFR
8.28(a)(3), PHAs are already required,
when issuing a voucher to a family that
includes an individual with disabilities,
to assist the family in locating an
available, accessible dwelling unit. For
example, PHAs are required to provide
a current listing of available units
known to the PHA.
Issue: HAP Funding. Commenters
stated that PHAs will be challenged to
provide higher payment standards when
HAP funding is already constrained.
HUD Response: HUD acknowledges
the concerns about funding constraints.
PHAs are nonetheless required to assist
families that include an individual with
disabilities, including by providing a
higher payment standard as a reasonable
accommodation, if the family requests
such an accommodation and it is
necessary in order for the family to
obtain suitable housing.
5. Family Income and Composition:
Regular and Interim Examinations
(§ 982.516(c)–(e))
Issue: Timing of Interim
Examinations. Commenters supported
this proposal, but also asked that it
remain optional for PHAs. Some asked
for further clarification from HUD
regarding whether a PHA is required to
conduct an interim examination when a
family member is added, and at what
point such an examination might be
required. Several commenters also
pointed out that the new proposed
language did not align regulations
between the PH and Section 8 programs.
HUD Response: HUD agrees with
providing clarity to the proposed change
to 24 CFR 982.516. With the removal of
paragraph (e) (‘‘Family member
income’’), HUD is removing from part
982 the requirement that a PHA perform
an interim examination whenever a new
family member is added. The
corresponding regulation for the PH
program (24 CFR 960.257) contains no
such requirement. The removal of
paragraph (e) from § 982.516 provides
HUD with the opportunity to issue
uniform guidance on interims—in other
words, guidance that will apply to both
the PH and HCV programs. Having
reviewed data on the reasons for which
interims are requested and considering
a number of alternatives, including
establishing thresholds below which
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PHAs would not be required to conduct
interims, HUD determined that the
greatest potential for streamlining lies in
issuing uniform guidance. Other options
either created their own administrative
challenges and/or had the potential to
have a negative effect on program
participants. For example, authorizing
PHAs to limit interims to circumstances
in which a change in family income or
composition would result in a rent
increase of some threshold dollar
amount would require PHAs to
determine whether the threshold had
been met, which would in itself be a
burdensome exercise. At the same time,
a finding that the threshold had not
been met, resulting in no change to a
family’s rent, could place a burden on
tenants.
Issue: Discretion and Threshold
Amounts. Several commenters
requested that HUD continue to leave
policies regarding recertifications up to
the discretion of PHAs.
HUD Response: Nothing in this final
rule alters PHA discretion with respect
to interims.
6. Utility Payment Schedules (§ 982.517)
Issue: Objections to the Proposal.
Many commenters objected to the
proposal to consolidate the utility
payment schedules. Some commenters
stated that the definition of ‘‘attached’’
and ‘‘detached’’ are unclear, and HUD
should provide additional information.
Other commenters stated that
consolidating the schedules would
penalize tenants in certain types of units
because energy use is not always
comparable under such broad
categories. Some commenters suggested
that the proposal could raise fair
housing issues by impacting larger
families in multi-bedroom units. Others
stated that the proposed 60-day notice
was insufficient to protect tenants from
decreased utility allowances.
Some commenters stated that, in areas
served by more than one PHA, perhaps
with differing policies on how to define
unit types, the proposal would create
confusion for program applicants and
participants.
HUD Response: Considering the
totality of the comments submitted on
the proposal to authorize PHAs to
establish utility payment schedules that
limit ‘‘unit type’’ to either ‘‘attached’’ or
‘‘detached,’’ HUD has decided against
adopting this provision. HUD
acknowledges comments that the
proposal may have an unintended and
inequitable effect on certain households,
and believes this issue merits additional
analysis in order to determine the extent
to which these outcomes may occur and
to weigh those outcomes against the
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benefits of streamlining. In addition,
comments focused on jurisdictional
questions caused HUD to realize that the
proposal could create confusion—for
program applicants, especially—in the
event PHAs with overlapping
jurisdictions opted to adopt different
definitions of ‘‘unit type’’ (i.e., one
relying on the traditional method and
the other choosing to define unit type as
either ‘‘attached’’ or ‘‘detached’’).
Issue: Broader Utility Allowance
Changes. Commenters asked HUD to
consider broader changes to utility
allowances. Commenters suggested that
HUD completely eliminate utility
allowance schedules or allow flat utility
allowances based on average perbedroom size or household size. Others
suggested that HUD provide an annual
utility cost adjustment factor for each
locale instead of requiring PHAs to
calculate utility costs on their own.
Finally, some commenters suggested
that HUD establish a more equitable
utility subsidy approach, accounting for
other forms of assistance, such as utility
caps or utility credits.
HUD Response: Based on comments
received, HUD recognizes that having a
holistic look at utility allowance
calculations may be merited. Should
HUD initiate such a review, these
comments will be taken into
consideration. The suggestions are,
however, beyond the scope of this
rulemaking.
E. Other Comments
In addition to comments on specific
proposals, commenters also suggested
regulatory and other changes that HUD
could make for streamlining and other
burden-reducing benefits.
1. Enterprise Income Verification (EIV)/
Information Verification
Issue: EIV Reports. Some commenters
suggested that certain reports (e.g., New
Hires, New Move-In, Income
Discrepancy) should not be used as
frequently, if at all. The commenters
suggested that, to the extent such
reports provide useful information, the
information could be gathered at other
times or using other methods.
HUD Response: HUD appreciates the
comments regarding the use of the
various EIV reports. HUD understands
that the information generated through
some reports may reflect delayed
information. However, EIV has
significantly reduced improper
payments in HUD’s programs, and these
reports help PHAs and HUD to monitor
program participants and address
discrepancies in a timely manner.
Further, changes to EIV are beyond the
scope of this rulemaking.
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Issue: EIV Use and Expansion. Many
commenters suggested that HUD modify
the EIV system by adding additional
income sources, including past income,
in the system or allowing verification of
SSNs through EIV. Other commenters
suggested that HUD consider
alternatives to EIV, such as the Work
Number or cooperative agreements with
state agencies. Finally, commenters
asked for more frequent updates to EIV.
HUD Response: HUD appreciates the
comments about how to improve or
supplement EIV; however, these
suggestions are outside of the scope of
this rulemaking.
2. Income Determinations and Rent
Settings
Issue: Calculation of Income.
Commenters offered suggestions on
ways that they stated would be easier to
calculate tenant income and rent. Some
stated that HUD should base rents on
gross income, rather than adjusted
income. Others suggested that HUD
modify the process for deducting
medical expenses from income by using
past expenses or a standard deduction.
A standard childcare deduction was
also proposed. One commenter
suggested that HUD consider the
automation-based process for
certification and verification
incorporated by the Affordable Care Act.
Commenters also asked HUD to allow
for less frequent income reexaminations,
either on a biennial or a triennial basis.
This change could be authorized based
on family type (i.e., elderly, disabled) or
family income status (i.e., extremely
low-income, very low-income).
Some commenters requested an
increase in the minimum rent or that
HUD reinstate the ‘‘frozen rental
income’’ regulation provision to
encourage tenants to have earned
income. Others asked that HUD
consider limiting the inclusion of assets
by only including actual income from
assets or only including assets disposed
of for less than fair market value for
assets over a given threshold. Some
stated that HUD should count assets
disposed of since the two previous
annual reexaminations instead of the
previous two years.
Commenters stated that HUD should
not allow tenants to claim no income,
but instead should require that all
tenants maintain a minimum income.
Finally, commenters stated that PHAs
should not be required to conduct rent
reasonableness determinations when a
PHA is using a fair market rent
determined by HUD or when a proposed
rent has already been approved by HUD
or its administrator.
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HUD Response: HUD requested
comments from the public about other
opportunities to align requirements
across programs, and HUD appreciates
receiving these additional comments.
Some of the suggestions are outside the
scope of this rulemaking or would
require statutory change. However, HUD
will consider these suggestions for
future streamlining changes.
HUD has taken actions on other
suggestions. HUD’s FY 2016 budget
proposes three-year recertification of
income for fixed income families,
increasing the threshold for deduction
of medical and related care expenses,
and a Utilities Conservation Pilot that
would make it easier for PHAs to access
energy incentives from energy
investments. Also, HUD is conducting a
rent reform demonstration to compare
the current rent structure in subsidized
housing to an alternate structure in
terms of impact on household
employment, earnings, hardship,
homelessness, and on simplification
and cost of PHA administrative
processes.
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3. Fees and Payments
Issue: Funding and Improper
Payments. Many commenters provided
suggestions on how to improve and
streamline payments to owners and
PHAs. Several suggested increased
funding for administrative fees or
physical inspections. Other commenters
stated that HUD should permit voucher
HAP reserves to be used for
administrative purposes when the
administrative fee proration is below 90
percent.
Some commenters requested HUD
freeze the rolling utility base to allow
PHAs to recoup savings from energy
conservation methods. Others asked
HUD to allow expedited
implementation of lower payment
standards in the voucher programs.
Several commenters suggested that HUD
revise its process for determining
project expense levels, accounting for
the age of properties and using the
negotiated rulemaking inflation factor.
One commenter stated that HUD should
permit rent increases to owners in the
HCV program only on a contract
anniversary date.
Commenters also provided
suggestions on reforming improper
payment procedures. A commenter
asked that HUD not require owners to
provide proof of the costs involved in
recovering improper payments.
Commenters also suggested that HUD
not specify what makes repayment of
improper payments ‘‘affordable’’ to
residents, as the current definition is
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confusing and leads to extra work for
staff.
HUD Response: As is the case on
HUD’s response to the preceding issue,
many of the comments are outside the
scope of this rulemaking or would
require action by Congress, but HUD
will consider these for future
streamlining changes. With respect to
freezing the rolling base to allow PHAs
to recoup savings from energy
conservation methods, this is permitted
now when a PHA has entered into an
energy performance contract.
4. Miscellaneous Suggestions
Issue: Broader Streamlining and
Other Suggestions. Many commenters
had specific suggestions on how to align
requirements and processes across
programs. Some suggested that HUD use
the Public Housing Administrative
Reform Initiative to find some
additional streamlining suggestions.
Others stated that HUD should have just
a single entity review grantee
compliance with various program
requirements instead of allowing
multiple agencies to have oversight.
Some commenters asked HUD to
modify inspection protocols, including
by explicitly stating that a physical
reinspection of deficiencies is not
required. Others stated that HUD should
not use the Uniform Physical
Conditions Standards for HCV, but
should continue to use the HQS.
Commenters further asked that HUD
reconsider the requirement that failed
HQS items be reinspected prior to the
HAP contract effective date, instead
allowing families to move in while the
owner has 30 days to repair the failed
items.
Commenters also stated that HUD
should limit requirements under section
3 of the 1937 Act to only programs
under the Office of Housing. Others
asked that HUD institute a threshold of
activity below which Section 3
requirements would not apply.
Some commenters asked that
eligibility and reporting procedures be
standardized across housing programs
both in HUD and across other Federal
agencies. Others stated that HUD should
extend the zero-subsidy time limit for
voucher holders to align policies
between the voucher and PBRA
programs. Many commenters also stated
that HUD should allow PHAs the
discretion on whether or not to require
community service in PH, as it is not
required in other HUD programs.
A commenter stated that HUD should
incorporate policies from the
Multifamily Handbook into the PH and
voucher programs to provide additional
information on how a PHA should
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consider a tenant family’s circumstances
when they fail to recertify in a timely
manner.
Some commenters stated that HUD
should allow PHAs to be eligible for
Housing Trust Fund money for PH
rehabilitation. Others asked that HUD
clarify that PHAs with 250 or more units
of PH are still able to use operating
reserves for capital improvements.
Commenters also asked for clarity on
the HCV Tenancy Addendum and on
qualifying for the Capital Fund Activity
exclusion for environmental
assessments.
HUD Response: HUD will take these
suggestions into consideration as it
seeks to identify additional
opportunities to reduce the
administrative burden on PHAs and
owners and to align the requirements
across programs, where feasible. The
majority of these suggestions is beyond
the scope of this rulemaking, or would
require statutory change. However, for
others, HUD can address through
administrative guidance. With respect to
the suggestion that HUD thoroughly
review the final report of the Public
Housing Administrative Reform
Initiative, this report is among the
documents initially reviewed by HUD’s
streamlining working group, which
ultimately initiated this rulemaking.
Issue: Regulatory Relief in Property
Assessment. Several commenters asked
HUD to suspend PHA plan requirements
or for a moratorium on the Physical
Needs Assessment. Commenters asked
for waivers of asset management
regulations affecting funding, such as
cash transfers between properties, fee
caps, and Asset Management Project
(AMP) configurations. Commenters
further asked for broad waivers under
24 CFR part 5 and for the Public
Housing Assessment System and
Section Eight Management Assessment
Program to be advisory only for nonstatutory items. Finally, commenters
stated that HUD should ensure that
PHAs are fully trained before any
changes go into effect.
HUD Response: HUD remains
interested in identifying opportunities
to reduce the burden on PHAs, owners,
and grantees that administer rental
assistance. While the suggestions
provided here are outside the scope of
this rulemaking, they are helpful in
identifying for HUD areas on which to
focus attention. HUD will continue to
look for opportunities to streamline and
simplify the administration of its
programs, and to align the requirements
across programs, to the extent feasible
and reasonable, applying the same lens
to future proposals as it employed for
this rulemaking effort. Specifically, any
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proposal to relieve the administrative
burden on PHAs, owners, and grantees
will need to be balanced against
important tenant protections and HUD’s
obligation to provide program oversight.
With respect to guidance and training,
HUD is aware that PHAs, owners, and
grantees may have questions about how
best to implement several of the
provisions in this rule. HUD will
provide opportunities to address those
questions, through additional written
guidance, training, and other means that
enable HUD to respond to requests for
information.
Issue: Statutory Changes. Commenters
requested changes that they
acknowledged would require
congressional action. These proposals
include an earned income deduction for
all families, eliminating voucher
portability, expanding Moving to Work,
the Small Housing Authority Reform
Proposal, triennial recertification for
fixed-income families, increasing the
flat deduction for elderly families or
persons with disabilities, increasing the
medical expense deduction, or
eliminating eligibility differences among
programs.
HUD Response: For several of these
suggestions, HUD has previously sought
statutory change. In its FY14 budget
proposal, for example, HUD included
several statutory changes that were
ultimately enacted by Congress and
have now been implemented with the
publication of this final rule. HUD will
continue to look for opportunities to
streamline and simplify the
administration of its programs, and to
align the requirements across programs,
to the extent feasible and reasonable,
applying the same lens to future
proposals as it employed for this
rulemaking effort. Specifically, any
proposal to relieve the administrative
burden on PHAs and owners will need
to be balanced against important tenant
protections and HUD’s obligation to
provide program oversight.
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IV. Findings and Certifications
Executive Orders 12866 and 13563,
Regulatory Planning and Review
Under Executive Order 12866
(Regulatory Planning and Review), a
determination must be made whether a
regulatory action is significant and,
therefore, subject to review by the Office
of Management and Budget (OMB) in
accordance with the requirements of the
order. Executive Order 13563
(Improving Regulation and Regulatory
Review) directs executive agencies to
analyze regulations that are ‘‘outmoded,
ineffective, insufficient, or excessively
burdensome, and to modify, streamline,
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expand, or repeal them in accordance
with what has been learned.’’ Executive
Order 13563 also directs that where
relevant, feasible, and consistent with
regulatory objectives, and to the extent
permitted by law, agencies are to
identify and consider regulatory
approaches that reduce burdens and
maintain flexibility and freedom of
choice for the public. This rule was
determined to be a ‘‘significant
regulatory action’’ as defined in section
3(f) of Executive Order 12866 (although
not an economically significant
regulatory action, as provided under
section 3(f)(1) of the Executive Order).
As already discussed in this
preamble, the regulatory changes by this
streamlining rule are designed to reduce
administrative burdens on PHAs, enable
PHAs to better target assistance to
families, and reduce Federal costs.
Some of the changes in this rule are due
to statutory changes enacted in the FY
2014 Appropriations Act and have
specific estimates of financial savings
that may be expected (specifically the
change in the definition of ‘‘extremely
low-income’’ and the cap on the utility
allowance). Other changes (biennial
inspections, streamlining income
recertifications) may have estimates on
savings generated by Moving-to-Work
(MTW) agencies that already
implemented such flexibilities. Some
provisions of this rule, however, focus
solely on providing or revising
regulatory provisions that reduce
administrative burdens on PHAs, but
that are optional for PHAs to utilize.
Consequently HUD is unable to quantify
costs and benefits for this rule overall
because of the flexibility provided.
The rule provides PHAs with the
discretion as to whether they will
implement those regulations that
provide alternatives means of
implementing several required
administrative actions. HUD recognized
that there is a need for greater flexibility
for PHAs to operate programs that fit
their communities and to use savings
generated in time from these provisions
to better focus resources on their
operational priorities. However, savings
are difficult to estimate as the changes
are not mandatory. HUD’s FY2015
budget estimated Federal savings for
two of the provisions, changing the
definition of ‘‘extremely low-income’’
and placing a cap on the utility
allowance. HUD’s budget did not
contain savings estimates for other
provisions which would yield
efficiencies for PHAs, not HUD. For the
provision permitting biennial
inspections, savings data comes from
Moving-to-Work (MTW) agencies
experiences and reporting.
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In FY2015, HUD estimated that the
revised definition of extremely-low
income will reduce Federal costs by an
estimated $155 million. The change
increases access to HUD rental
assistance for working poor families, in
rural areas in particular. In such areas,
median incomes are often so low that
families with a fulltime worker have
incomes that exceed 30 percent of AMI,
even though the families remain below
the Federal poverty level. In the voucher
program in particular, where 75 percent
of vouchers issued each year must be
targeted to ELI families, this change will
enable more working poor families to
qualify for voucher assistance.
Additionally, HUD estimated in its
FY2015 budget that limiting the utility
allowance payment for tenant-based
vouchers to the family unit size for
which the voucher is issued,
irrespective of the size of the unit rented
by the family, will generate estimated
savings of $50 million.
Permitting biennial inspections for
HCV units will reduce the
administrative and financial burden on
PHAs and high-performing landlords
and enable PHAs to concentrate their
inspection resources on the more
marginal and higher-risk units. Of the
34 MTW agencies, 23 have adopted or
proposed to adopt biennial inspection
schedules. The Cambridge Housing
Authority estimated a net savings of
$122,234, or more than 3,737 hours of
staff time in 2014 compared to 2008.
The Housing Authority of the County of
San Mateo reduced the number of
inspections to approximately 2,086
annually from 4,172 and reported
savings of $52,150 in inspection costs.
HUD believes that PHAs adopting this
flexibility will experience similar
savings in time and costs.
Determining the complete amount of
financial and time savings for this rule
is difficult because, as noted, the
majority of the provisions are
discretionary for PHAs, and HUD
believes that each PHA will evaluate its
own circumstances in financing and
staffing and adopt those provisions that
are most cost-effective for them.
Executive Order 13132, Federalism
Executive Order 13132 (entitled
‘‘Federalism’’) prohibits an agency from
publishing any rule that has federalism
implications if the rule either imposes
substantial direct compliance costs on
state and local governments and is not
required by statute, or the rule preempts
state law, unless the agency meets the
consultation and funding requirements
of section 6 of the Executive Order. This
final rule does not have federalism
implications and does not impose
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This rule will not impose any federal
mandates on any state, local, or tribal
governments or the private sector within
the meaning of UMRA.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
(5 U.S.C. 601 et seq.) generally requires
an agency to conduct a regulatory
flexibility analysis of any rule subject to
notice and comment rulemaking
requirements, unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. This rule
reduces the administrative burden on
PHAs, MFH owners, and certain CPD
grantees in many aspects of
administering assisted housing. Such
PHAs, MFH owners, and CPD grantees,
regardless of size, will benefit from the
burden reduction proposed by this rule.
These revisions impose no significant
economic impact on a substantial
number of small entities. As discussed
above, many of the new provisions are
voluntary, and each PHA or MFH owner
will be able to adopt the streamlining
provisions that offer the greatest benefit
to them, further reducing any negative
effects on small entities. Therefore, the
undersigned certifies that this rule will
not have a significant impact on a
substantial number of small entities.
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substantial direct compliance costs on
state and local governments nor
preempt state law within the meaning of
the Executive Order.
Paperwork Reduction Act
Environmental Impact
A Finding of No Significant Impact
with respect to the environment was
made on the proposed rule in
accordance with HUD regulations in 24
CFR part 50 that implement section
102(2)(C) of the National Environmental
Policy Act of 1969 (42 U.S.C.
4332(2)(C)). The Finding remains
applicable to this final rule. The Finding
is available for public inspection during
regular business hours in the
Regulations Division, Office of General
Counsel, Department of Housing and
Urban Development, 451 7th Street SW.,
Room 10276, Washington, DC 20410–
0500. Due to security measures at the
HUD Headquarters building, please
schedule an appointment to review the
Finding by calling the Regulations
Division at 202–708–3055 (this is not a
toll-free number). Individuals with
speech or hearing impairments may
access this number via TTY by calling
the Federal Information Relay Service at
800–877–8339.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) establishes
requirements for federal agencies to
assess the effects of their regulatory
actions on state, local, and tribal
governments and the private sector.
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The information collection
requirements contained in this rule 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 2577–0220 and
0169. In accordance with the Paperwork
Reduction Act of 1995, an agency 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.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic
Assistance numbers applicable to the
programs that would be affected by this
rule are: 14.103, 14.123, 14.135, 14.149,
14.157, 14.181, 14.195, 14.235, 14.241,
14.326, 14.850, 14.871, and 14.872.
List of Subjects
24 CFR Part 5
Administrative practice and
procedure, Aged, Claims, Crime,
Government contracts, Grant
programs—housing and community
development, Individuals with
disabilities, Intergovernmental relations,
Loan programs—housing and
community development, Low and
moderate income housing, Mortgage
insurance, Penalties, Pets, Public
housing, Rent subsidies, Reporting and
recordkeeping requirements, Social
security, Unemployment compensation.
12369
Rent subsidies, Reporting and
recordkeeping requirements.
24 CFR Part 903
Administrative practice and
procedure, Public housing, Reporting
and recordkeeping requirements.
24 CFR Part 960
Aged, Grant programs—housing and
community development, Individuals
with disabilities, Pets, Public housing.
24 CFR Part 966
Grant programs—housing and
community development, Public
housing, Reporting and recordkeeping
requirements.
24 CFR Part 982
Grant programs—housing and
community development, Grant
programs—Indians, Indians, Public
housing, Rent subsidies, Reporting and
recordkeeping requirements.
24 CFR Part 983
Grant programs—housing and
community development, Rent
subsidies, Reporting and recordkeeping
requirements.
24 CFR Part 990
Accounting, Grant programs—housing
and community development, Public
housing, Reporting and recordkeeping
requirements.
Accordingly, for the reasons stated in
the preamble, HUD amends 24 CFR
parts 5, 880, 884, 886, 891, 903, 960,
966, 982, 983, and 990 as follows:
PART 5—GENERAL HUD PROGRAM
REQUIREMENTS; WAIVERS
1. The authority citation for part 5
continues to read as follows:
■
24 CFR Part 880
Grant programs—housing and
community development, Rent
subsidies, Reporting and recordkeeping
requirements.
Authority: 42 U.S.C. 1437a, 1437c, 1437d,
1437f, 1437n, 3535(d), Sec. 327, Pub. L. 109–
115, 119 Stat. 2936, and Sec. 607, Pub. L.
109–162, 119 Stat. 3051.
24 CFR Part 884
■
■
Grant programs—housing and
community development, Rent
subsidies, Reporting and recordkeeping
requirements, rural areas.
24 CFR Part 886
Grant programs—housing and
community development, Lead
poisoning, Rent subsidies, Reporting
and recordkeeping requirements.
24 CFR Part 891
Aged, Grant programs—housing and
community development, Individuals
with disabilities, Loan programs—
housing and community development,
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2. Amend § 5.216 as follows:
a. Designate the second paragraph
(g)(1)(ii) as paragraph (g)(1)(iii);
■ b. Revise paragraph (h)(1);
■ c. In paragraph (h)(2), remove the
phrase ‘‘paragraph (h)(1)’’ and add in its
place ‘‘paragraph (g)(1)’’; and
■ d. Add paragraph (h)(3).
The revision and addition read as
follows:
§ 5.216 Disclosure and verification of
Social Security and Employer Identification
Numbers.
*
*
*
*
*
(h) * * *
(1) Except as provided in paragraphs
(h)(2) and (3) of this section, if the
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processing entity determines that the
assistance applicant is otherwise
eligible to participate in a program, the
assistance applicant may retain its place
on the waiting list for the program but
cannot become a participant until it can
provide the documentation referred to
in paragraph (g)(1) of this section to
verify the SSN of each member of the
household.
*
*
*
*
*
(3) If a child under the age of 6 years
was added to the assistance applicant
household within the 6-month period
prior to the household’s date of
admission (or, for the HCV program, the
date of voucher issuance), the assistance
applicant may become a participant, so
long as the documentation required in
paragraph (g)(1) of this section is
provided to the processing entity within
90 calendar days from the date of
admission into the program (or, for the
HCV program, the effective date of the
Housing Assistance Payment contract).
The processing entity must grant an
extension of one additional 90-day
period if the processing entity
determines that, in its discretion, the
assistance applicant’s failure to comply
was due to circumstances that could not
reasonably have been foreseen and were
outside the control of the assistance
applicant. If the applicant family fails to
produce the documentation required in
paragraph (g)(1) of this section within
the required time period, the processing
entity must follow the provisions of
§ 5.218.
*
*
*
*
*
■ 3. Amend § 5.520 as follows:
■ a. Revise paragraph (c)(1) introductory
text;
■ b. In paragraph (c)(1)(v), remove the
comma;
■ c. Revise paragraph (c)(2) introductory
text;
■ d. In paragraphs (c)(2)(ii) introductory
text and (c)(2)(iii), remove the comma;
■ e. Revise paragraph (d); and
■ f. Add paragraph (e).
The revisions and addition read as
follows:
voucher program, the PHA must prorate
the family’s assistance as follows:
*
*
*
*
*
(d) Method of prorating assistance for
Public Housing covered programs. (1)
The PHA must prorate the family’s
assistance as follows:
(i) Step 1. Determine the total tenant
payment in accordance with section
5.628. (Annual income includes income
of all family members, including any
family member who has not established
eligible immigration status.)
(ii) Step 2. Subtract the total tenant
payment from the PHA-established flat
rent applicable to the unit. The result is
the maximum subsidy for which the
family could qualify if all members were
eligible (‘‘family maximum subsidy’’).
(iii) Step 3. Divide the family
maximum subsidy by the number of
persons in the family (all persons) to
determine the maximum subsidy per
each family member who has
citizenship or eligible immigration
status (‘‘eligible family member’’). The
subsidy per eligible family member is
the ‘‘member maximum subsidy.’’
(iv) Step 4. Multiply the member
maximum subsidy by the number of
family members who have citizenship
or eligible immigration status (‘‘eligible
family members’’).
(2) The product of steps 1 through 4
of paragraphs (d)(1)(i) through (iv) of
this section is the amount of subsidy for
which the family is eligible (‘‘eligible
subsidy’’). The family’s rent is the PHAestablished flat rent minus the amount
of the eligible subsidy.
(e) Method of prorating assistance
when the mixed family’s total tenant
payment (TTP) is greater than the public
housing flat rent. When the mixed
family’s TTP is greater than the flat rent,
the PHA must use the TTP as the mixed
family TTP. The PHA subtracts from the
mixed family TTP any established
utility allowance, and the sum becomes
the mixed family rent.
■ 4. In § 5.603(b), revise the definitions
of ‘‘Extremely low income family’’ and
‘‘Total tenant payment’’ to read as
follows:
§ 5.520
§ 5.603
Proration of assistance.
asabaliauskas on DSK3SPTVN1PROD with RULES
*
*
*
*
*
(c) * * *
(1) Section 8 assistance other than
assistance provided for a tenancy under
the Section 8 Housing Choice Voucher
Program. For Section 8 assistance other
than assistance for a tenancy under the
voucher program, the PHA must prorate
the family’s assistance as follows:
*
*
*
*
*
(2) Assistance for a Section 8 voucher
tenancy. For a tenancy under the
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Definitions.
*
*
*
*
*
(b) * * *
Extremely low-income family. A very
low-income family whose annual
income does not exceed the higher of:
(1) The poverty guidelines established
by the Department of Health and Human
Services applicable to the family of the
size involved (except in the case of
families living in Puerto Rico or any
other territory or possession of the
United States); or
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(2) Thirty (30) percent of the median
income for the area, as determined by
HUD, with adjustments for smaller and
larger families, except that HUD may
establish income ceilings higher or
lower than 30 percent of the area
median income for the area if HUD finds
that such variations are necessary
because of unusually high or low family
incomes.
*
*
*
*
*
Total tenant payment. See § 5.628.
*
*
*
*
*
§ 5.609
[Amended]
5. Amend § 5.609(b)(9) by adding the
phrase ‘‘and any other required fees and
charges’’ after ‘‘tuition’’ in the first
sentence.
■ 6. Amend § 5.617 as follows:
■ a. Revise paragraph (a);
■ b. In paragraph (b), add the definition
of ‘‘baseline income’’ in alphabetical
order; and
■ c. Revise paragraph (c) to read as
follows:
■
§ 5.617 Self-sufficiency incentives for
persons with disabilities—Disallowance of
increase in annual income.
(a) Applicable programs. The
disallowance of earned income
provided by this section is applicable
only to the following programs: HOME
Investment Partnerships Program (24
CFR part 92); Housing Opportunities for
Persons with AIDS (24 CFR part 574);
Supportive Housing Program (24 CFR
part 583); and the Housing Choice
Voucher Program (24 CFR part 982).
(b) * * *
Baseline income. The annual income
immediately prior to implementation of
the disallowance described in paragraph
(c)(1) of this section of a person with
disabilities (who is a member of a
qualified family).
*
*
*
*
*
(c) Disallowance of increase in annual
income—(1) Initial 12-month exclusion.
During the 12-month period beginning
on the date a member who is a person
with disabilities of a qualified family is
first employed or the family first
experiences an increase in annual
income attributable to employment, the
responsible entity must exclude from
annual income (as defined in the
regulations governing the applicable
program listed in paragraph (a) of this
section) of a qualified family any
increase in income of the family
member who is a person with
disabilities as a result of employment
over prior income of that family
member.
(2) Second 12-month exclusion and
phase-in. Upon the expiration of the 12-
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month period defined in paragraph
(c)(1) of this section and for the
subsequent 12-month period, the
responsible entity must exclude from
annual income of a qualified family at
least 50 percent of any increase in
income of such family member as a
result of employment over the family
member’s baseline income.
(3) Maximum 2-year disallowance.
The disallowance of increased income
of an individual family member who is
a person with disabilities as provided in
paragraph (c)(1) or (c)(2) of this section
is limited to a lifetime 24-month period.
The disallowance applies for a
maximum of 12 months for
disallowance under paragraph (c)(1) of
this section and a maximum of 12
months for disallowance under
paragraph (c)(2) of this section, during
the 24- month period starting from the
initial exclusion under paragraph (c)(1)
of this section.
(4) Effect of changes on currently
participating families. Families eligible
for and participating in the
disallowance of earned income under
this section prior to May 9, 2016 will
continue to be governed by this section
in effect as it existed immediately prior
to that date (see 24 CFR parts 0 to 199,
revised as of April 1, 2016).
*
*
*
*
*
■ 7. In § 5.657, add paragraph (d) to read
as follows:
§ 5.657 Section 8 project-based assistance
programs: Reexamination of family income
and composition.
asabaliauskas on DSK3SPTVN1PROD with RULES
*
*
*
*
*
(d) Streamlined income
determination. For any family member
with a fixed source of income, an owner
may elect to determine that family
member’s income, as required by
paragraph (b) of this section, by means
of a streamlined income determination.
A streamlined income determination
must be conducted by applying, for each
fixed-income source, the verified cost of
living adjustment (COLA) or current rate
of interest to the previously verified or
adjusted income amount.
(1) ‘‘Family member with a fixed
source of income’’ is defined as a family
member whose income includes
periodic payments at reasonably
predictable levels from one or more of
the following sources:
(i) Social Security, Supplemental
Security Income, Supplemental
Disability Insurance;
(ii) Federal, state, local, or private
pension plans;
(iii) Annuities or other retirement
benefit programs, insurance policies,
disability or death benefits, or other
similar types of periodic receipts; or
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(iv) Any other source of income
subject to adjustment by a verifiable
COLA or current rate of interest.
(2) An owner must use a COLA or
current rate of interest specific to the
fixed source of income in order to adjust
the income amount. The owner must
verify the appropriate COLA or current
rate of interest from a public source or
through tenant-provided, third party–
generated documentation. If no such
verification is available, then the owner
must obtain third-party verification of
income amounts in order to calculate
the change in income for the source.
(3) For any family member whose
income is determined pursuant to a
streamlined income determination, an
owner must obtain third-party
verification of all fixed-income amounts
every 3 years. Other income for each
family member must be determined
pursuant to paragraph (b) of this section.
12371
PART 886—SECTION 8 HOUSING
ASSISTANCE PAYMENTS
PROGRAM—SPECIAL ALLOCATIONS
12. The authority citation for part 886
continues to read as follows:
■
Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), and 13611–13619.
13. In § 886.124, add paragraph (d) to
read as follows:
■
§ 886.124 Reexamination of family income
and composition.
*
*
*
*
*
(d) Streamlined income
determination. An owner may elect to
follow the provisions of 24 CFR
5.657(d).
■ 14. In § 886.324, add paragraph (d) to
read as follows:
§ 886.324 Reexamination of family income
and composition.
PART 880—SECTION 8 HOUSING
ASSISTANCE PAYMENTS PROGRAM
FOR NEW CONSTRUCTION
*
*
*
*
(d) Streamlined income
determination. An owner may elect to
follow the provisions of 24 CFR
5.657(d).
■
8. The authority citation for part 880
continues to read as follows:
PART 891—SUPPORTIVE HOUSING
FOR THE ELDERLY AND PERSONS
WITH DISABILITIES
Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), 12701, and 13611–13619.
■
9. In § 880.603, add paragraph (c)(4) to
read as follows:
Authority: 12 U.S.C. 1701q; 42 U.S.C.
1437f, 3535(d), and 8013.
■
§ 880.603 Selection and admission of
assisted tenants.
*
*
*
*
*
(c) * * *
(4) Streamlined income
determination. An owner may elect to
follow the provisions of 24 CFR
5.657(d).
PART 884—SECTION 8 HOUSING
ASSISTANCE PAYMENTS PROGRAM,
NEW CONSTRUCTION SET-ASIDE FOR
SECTION 515 RURAL RENTAL
HOUSING PROJECTS
*
15. The authority citation for part 891
continues to read as follows:
16. In § 891.410, add paragraph (g)(4)
to read as follows:
■
§ 891.410
tenants.
Selection and admission of
*
*
*
*
*
(g) * * *
(4) Streamlined income
determination. An owner may elect to
follow the provisions of 24 CFR
5.657(d).
■ 17. In § 891.610, add paragraph (g)(4)
to read as follows:
§ 891.610
tenants.
Selection and admission of
*
11. In § 884.218, add paragraph (d) to
read as follows:
*
*
*
*
(g) * * *
(4) Streamlined income
determination. An owner may elect to
follow the provisions of 24 CFR
5.657(d).
■ 18. In § 891.750, add paragraph (c)(4)
to read as follows:
§ 884.218 Reexamination of family income
and composition.
§ 891.750
tenants.
10. The authority citation for part 884
continues to read as follows:
■
Authority: 42 U.S.C. 1437a, 1437c, 1437f,
3535(d), and 13611–13619.
■
*
*
*
*
*
(d) Streamlined income
determination. An owner may elect to
follow the provisions of 24 CFR
5.657(d).
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Selection and admission of
*
*
*
*
*
(c) * * *
(4) Streamlined income
determination. An owner may elect to
follow the provisions of 24 CFR
5.657(d).
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Federal Register / Vol. 81, No. 45 / Tuesday, March 8, 2016 / Rules and Regulations
f. Add a new paragraph (f).
The revisions and addition read as
follows:
■
PART 903—PUBLIC HOUSING
AGENCY PLANS
19. The authority citation for part 903
continues to read as follows:
■
Authority: 2 U.S.C. 1437c; 42 U.S.C.
1437c–1; Pub. L. 110–289; 42 U.S.C. 3535d.
20. In § 903.7, revise paragraph
(a)(1)(i) to read as follows:
■
§ 903.7 What information must a PHA
provide in the Annual Plan?
*
*
*
*
*
(a) * * *
(1) * * *
(i) Families meeting the definition of
extremely low-income families in 24
CFR 5.603.
*
*
*
*
*
PART 960—ADMISSION TO, AND
OCCUPANCY OF, PUBLIC HOUSING
21. The authority citation for part 960
continues to read as follows:
■
Authority: 42 U.S.C. 1437a, 1437c, 1437d,
1437n, 1437z–3, and 3535(d).
22. In § 960.102, revise paragraph (a)
to read as follows:
■
asabaliauskas on DSK3SPTVN1PROD with RULES
§ 960.102
Definitions.
(a) Definitions found elsewhere:
(1) General definitions. The following
terms are defined in 24 CFR part 5,
subpart A: 1937 Act, drug, drug-related
criminal activity, elderly person,
federally assisted housing, guest,
household, HUD, MSA, premises,
public housing, public housing agency
(PHA), Section 8, violent criminal
activity.
(2) Definitions under the 1937 Act.
The following terms are defined in 24
CFR part 5, subpart D: annual
contributions contract (ACC), applicant,
elderly family, family, person with
disabilities.
(3) Definitions and explanations
concerning income and rent. The
following terms are defined or
explained in 24 CFR part 5, subpart F
(§ 5.603): Annual income, economic
self-sufficiency program, extremely lowincome family, low-income family,
tenant rent, total tenant payment, utility
allowance.
*
*
*
*
*
■ 23. Amend § 960.253 as follows:
■ a. Revise paragraph (b);
■ b. In paragraph (c)(1), remove the
phrase ‘‘PHA’s rent policies’’ and add in
its place ‘‘PHA’s policies’’;
■ c. Remove the last sentence of
paragraph (c)(3) and add paragraph
(c)(4);
■ d. Revise paragraphs (d) and (e)(2);
■ e. Redesignate paragraph (f) as
paragraph (g); and
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Jkt 238001
§ 960.253
Choice of rent.
*
*
*
*
*
(b) Flat rent. The flat rent is
determined annually, based on the
market rental value of the unit as
determined by this paragraph (b).
(1) The PHA must establish a flat rent
for each public housing unit that is no
less than 80 percent of the applicable
Fair Market Rent (FMR) as determined
under 24 CFR part 888, subpart A; or
(2) HUD may permit a flat rent of no
less than 80 percent of an applicable
small area FMR (SAFMR) or unadjusted
rent, if applicable, as determined by
HUD, or any successor determination,
that more accurately reflects local
market conditions and is based on an
applicable market area that is
geographically smaller than the
applicable market area used in
paragraph (b)(1) of this section. If HUD
has not determined an applicable
SAFMR or unadjusted rent, the PHA
must rely on the applicable FMR under
paragraph (b)(1) or may apply for an
exception flat rent under paragraph
(b)(3).
(3) The PHA may request, and HUD
may approve, on a case-by-case basis, a
flat rent that is lower than the amounts
in paragraphs (b)(1) and (2) of this
section, subject to the following
requirements:
(i) The PHA must submit a market
analysis of the applicable market.
(ii) The PHA must demonstrate, based
on the market analysis, that the
proposed flat rent is a reasonable rent in
comparison to rent for other comparable
unassisted units, based on the location,
quality, size, unit type, and age of the
public housing unit and any amenities,
housing services, maintenance, and
utilities to be provided by the PHA in
accordance with the lease.
(iii) All requests for exception flat
rents under this paragraph (b)(3) must
be submitted to HUD.
(4) For units where utilities are
tenant-paid, the PHA must adjust the
flat rent downward by the amount of a
utility allowance for which the family
might otherwise be eligible under 24
CFR part 965, subpart E.
(5) The PHA must revise, if necessary,
the flat rent amount for a unit no later
than 90 days after HUD issues new
FMRs.
(6) If a new flat rent would cause a
family’s rent to increase by more than
35 percent, the family’s rent increase
must be phased in at 35 percent
annually until such time that the family
chooses to pay the income-based rent or
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the family is paying the flat rent
established pursuant to this paragraph.
(c) * * *
(4) The PHA may elect to establish
policies regarding the frequency of
utility reimbursement payments for
payments made to the family.
(i) The PHA will have the option of
making utility reimbursement payments
not less than once per calendar-year
quarter, for reimbursements totaling $45
or less per quarter. In the event a family
leaves the program in advance of its
next quarterly reimbursement, the PHA
must reimburse the family for a prorated
share of the applicable reimbursement.
PHAs exercising this option must have
a hardship policy in place for tenants.
(ii) If the PHA elects to pay the utility
supplier, the PHA must notify the
family of the amount of utility
reimbursement paid to the utility
supplier.
(d) Ceiling rent. A PHA using ceiling
rents authorized and established before
October 1, 1999, may continue to use
ceiling rents, provided such ceiling
rents are set at the level required for flat
rents under this section. PHAs must
follow the requirements for calculating
and adjusting flat rents in paragraph (b)
of this section when calculating and
adjusting ceiling rents.
(e) * * *
(2) The dollar amounts of tenant rent
for the family under each option,
following the procedures in paragraph
(f) of this section.
(f) Choice between flat and incomebased rents. Families must be offered
the choice between a flat rental amount
and a previously calculated incomebased rent according to the following:
(1) For a family that chooses the flat
rent option, the PHA must conduct a
reexamination of family income and
composition at least once every three
years.
(2) At initial occupancy, or in any
year in which a participating family is
paying the income-based rent, the PHA
must:
(i) Conduct a full examination of
family income and composition,
following the provisions in § 960.257;
(ii) Inform the family of the flat rental
amount and the income-based rental
amount determined by the examination
of family income and composition;
(iii) Inform the family of the PHA’s
policies on switching rent types in
circumstances of financial hardship;
and
(iv) Apply the family’s rent decision
at the next lease renewal.
(3) In any year in which a family
chooses the flat rent option but the PHA
chooses not to conduct a full
examination of family income and
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composition for the annual rent option
under the authority of paragraph (f)(1) of
this section, the PHA must:
(i) Use income information from the
examination of family income and
composition from the first annual rent
option;
(ii) Inform the family of the updated
flat rental amount and the rental amount
determined by the most recent
examination of family income and
composition;
(iii) Inform the family of the PHA’s
policies on switching rent types in
circumstances of financial hardship;
and
(iv) Apply the family’s rent decision
at the next lease renewal.
*
*
*
*
*
■ 24. Amend § 960.255 as follows:
■ a. In paragraph (a), add the definition
of ‘‘baseline income’’ in alphabetical
order; and
■ b. Revise paragraph (b) to read as
follows:
asabaliauskas on DSK3SPTVN1PROD with RULES
§ 960.255 Self-sufficiency incentives—
Disallowance of increase in annual income.
(a) * * *
Baseline income. The annual income
immediately prior to implementation of
the disallowance described in paragraph
(c)(1) of this section of a person who is
a member of a qualified family.
*
*
*
*
*
(b) Disallowance of earned income—
(1) Initial 12-month exclusion. During
the 12-month period beginning on the
date on which a member of a qualified
family is first employed or the family
first experiences an increase in annual
income attributable to employment, the
PHA must exclude from the annual
income (as defined in § 5.609 of this
title) of a qualified family any increase
in the income of the family member as
a result of employment over the baseline
income of that family member.
(2) Phase-in of rent increase. Upon the
expiration of the 12-month period
defined in paragraph (b)(1) of this
section and for the subsequent 12month period, the PHA must exclude
from the annual income of a qualified
family at least 50 percent of any
increase in income of such family
member as a result of employment over
the family member’s baseline income.
(3) Maximum 2-year disallowance.
The disallowance of increased income
of an individual family member as
provided in paragraph (b)(1) or (b)(2) of
this section is limited to a lifetime 24month period. It applies for a maximum
of 12 months for disallowance under
paragraph (b)(1) of this section and a
maximum of 12 months for
disallowance under paragraph (b)(2) of
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Jkt 238001
this section, during the 24-month period
starting from the initial exclusion under
paragraph (b)(1) of this section.
(4) Effect of changes on currently
participating families. Families eligible
for and participating in the
disallowance of earned income under
this section prior to May 9, 2016 will
continue to be governed by this section
in effect as it existed immediately prior
to that date.
*
*
*
*
*
■ 25. In § 960.257, revise the section
heading and paragraphs (a)(2) and (b) to
read as follows:
§ 960.257 Family income and composition:
Annual and interim reexaminations.
(a) * * *
(2) For families who choose flat rents,
the PHA must conduct a reexamination
of family composition at least annually,
and must conduct a reexamination of
family income at least once every three
years in accordance with the procedures
in § 960.253(f).
*
*
*
*
*
(b) Interim reexaminations. (1) A
family may request an interim
reexamination of family income or
composition because of any changes
since the last determination.
(2) The PHA must make the interim
reexamination within a reasonable time
after the family request. The PHA must
adopt policies prescribing when and
under what conditions the family must
report a change in family income or
composition.
(3) Streamlined income
determination. For any family member
with a fixed source of income, a PHA
may elect to determine that family
member’s income by means of a
streamlined income determination. A
streamlined income determination must
be conducted by applying, for each
fixed-income source, the verified cost of
living adjustment (COLA) or current rate
of interest to the previously verified or
adjusted income amount.
(i) ‘‘Family member with a fixed
source of income’’ is defined as a family
member whose income includes
periodic payments at reasonably
predictable levels from one or more of
the following sources:
(A) Social Security, Supplemental
Security Income, Supplemental
Disability Insurance;
(B) Federal, state, local, or private
pension plans;
(C) Annuities or other retirement
benefit programs, insurance policies,
disability or death benefits, or other
similar types of periodic receipts; or
(D) Any other source of income
subject to adjustment by a verifiable
COLA or current rate of interest.
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12373
(ii) A PHA must use a COLA or
current rate of interest specific to the
fixed source of income in order to adjust
the income amount. The PHA must
verify the appropriate COLA or current
rate of interest from a public source or
through tenant-provided, third party–
generated documentation. If no such
verification is available, then the PHA
must obtain third-party verification of
income amounts in order to calculate
the change in income for the source.
(iii) For any family member whose
income is determined pursuant to a
streamlined income determination, a
PHA must obtain third-party
verification of all income amounts every
3 years.
*
*
*
*
*
■ 26. In § 960.259, revise paragraph
(c)(1) introductory text, and add
paragraph (c)(2) to read as follows:
§ 960.259 Family information and
verification.
*
*
*
*
*
(c) * * *
(1) Except as provided in paragraph
(c)(2) of this section, the PHA must
obtain and document in the family file
third-party verification of the following
factors, or must document in the file
why third-party verification was not
available:
*
*
*
*
*
(2) For a family with net assets equal
to or less than $5,000, a PHA may
accept, for purposes of recertification of
income, a family’s declaration that it has
net assets equal to or less than $5,000,
without taking additional steps to verify
the accuracy of the declaration.
(i) The declaration must state the
amount of income the family expects to
receive from such assets; this amount
must be included in the family’s
income.
(ii) A PHA must obtain third-party
verification of all family assets every 3
years.
■ 27. In § 960.605, revise paragraphs
(c)(2) through (5) to read as follows:
§ 960.605 How PHA administers service
requirements.
*
*
*
*
*
(c) * * *
(2) The PHA must give the family a
written description of the service
requirement, and of the process for
claiming status as an exempt person and
for PHA verification of such status. The
PHA must also notify the family of its
determination identifying the family
members who are subject to the service
requirement, and the family members
who are exempt persons. The PHA must
also notify the family that it will be
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validating a sample of self-certifications
of completion of the service requirement
accepted by the PHA under
§ 960.607(a)(1)(ii).
(3) The PHA must review family
compliance with service requirements
and must verify such compliance
annually at least 30 days before the end
of the 12-month lease term. If qualifying
activities are administered by an
organization other than the PHA, the
PHA may obtain verification of family
compliance from such third parties or
may accept a signed certification from
the family member that he or she has
performed such qualifying activities.
(4) The PHA must retain reasonable
documentation of service requirement
performance or exemption in a
participant family’s files.
(5) The PHA must comply with nondiscrimination and equal opportunity
requirements listed at § 5.105(a) of this
title and affirmatively further fair
housing in all their activities in
accordance with the AFFH Certification
as described in § 903.7(o) of this
chapter.
■ 28. In § 960.607, revise paragraph (a)
to read as follows:
asabaliauskas on DSK3SPTVN1PROD with RULES
§ 960.607
Assuring resident compliance.
(a) Acceptable documentation
demonstrating compliance. (1) If
qualifying activities are administered by
an organization other than the PHA, a
family member who is required to fulfill
a service requirement must provide one
of the following:
(i) A signed certification to the PHA
by such other organization that the
family member has performed such
qualifying activities; or
(ii) A signed self-certification to the
PHA by the family member that he or
she has performed such qualifying
activities.
(2) The signed self-certification must
include the following:
(i) A statement that the tenant
contributed at least 8 hours per month
of community service not including
political activities within the
community in which the adult resides;
or participated in an economic selfsufficiency program (as that term is
defined in 24 CFR 5.603(b)) for at least
8 hours per month;
(ii) The name, address, and a contact
person at the community service
provider; or the name, address, and
contact person for the economic selfsufficiency program;
(iii) The date(s) during which the
tenant completed the community
service activity, or participated in the
economic self-sufficiency program;
(iv) A description of the activity
completed; and
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(v) A certification that the tenant’s
statement is true.
(3) If a PHA accepts self-certifications
under paragraph (a)(1)(ii) of this section,
the PHA must validate a sample of such
self-certifications using third-party
certification described in paragraph
(a)(1)(i) of this section.
*
*
*
*
*
PART 966—PUBLIC HOUSING LEASE
AND GRIEVANCE PROCEDURE
29. The authority citation for part 966
continues to read as follows:
■
Authority: 42 U.S.C. 1437d and 3535(d).
30. Revise § 966.4(n) to read as
follows:
■
§ 966.4
Lease requirements.
*
*
*
*
*
(n) Grievance procedures. (1) The
lease must provide that all disputes
concerning the obligations of the tenant
or the PHA must (except as provided in
§ 966.51(a)(2)) be resolved in accordance
with the PHA grievance procedures. The
grievance procedures must comply with
subpart B of this part.
(2) The lease must include a
description of the PHA’s policies for
selecting a hearing officer.
*
*
*
*
*
■ 31. Amend § 966.52 by adding a
sentence at the end of paragraph (a) and
adding paragraph (e), to read as follows:
§ 966.52
Requirements.
(a) * * * A PHA may establish an
expedited grievance procedure as
defined in § 966.53.
*
*
*
*
*
(e) The PHA must not only meet the
minimal procedural due process
requirements contained in this subpart
but also satisfy any additional
requirements required by local, state, or
federal law.
■ 32. In § 966.53, revise paragraphs (b),
(d), and (e) to read as follows:
§ 966.53
Definitions.
*
*
*
*
*
(b) Complainant shall mean any
tenant whose grievance is presented to
the PHA or at the project management
office.
*
*
*
*
*
(d) Expedited grievance means a
procedure established by the PHA for
any grievance concerning a termination
of tenancy or eviction that involves:
(1) Any criminal activity that
threatens the health, safety, or right to
peaceful enjoyment of the PHA’s public
housing premises by other residents or
employees of the PHA; or
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(2) Any drug-related or violent
criminal activity on or off such
premises.
(e) Hearing officer means an impartial
person or persons selected by the PHA,
other than the person who made or
approved the decision under review, or
a subordinate of that person. Such
individual or individuals do not need
legal training. PHAs must describe their
policies for selection of a hearing officer
in their lease forms as required by
§ 966.4, changes to which are subject to
a 30-day comment period as described
in § 966.3.
*
*
*
*
*
§ 966.54
[Amended]
33. Amend § 966.54 by removing the
phrase ‘‘under § 966.55’’.
■
§ 966.55
[Removed]
34. Remove § 966.55.
■ 35. Amend § 966.56 as follows:
■ a. Revise paragraph (a);
■ b. In paragraph (b)(2), remove the
comma;
■ c. Remove paragraphs (c) and (f);
■ d. Redesignate paragraphs (d), (e), (g),
and (h) as paragraphs (c), (d), (e) and (f),
respectively;
■ e. Revise redesignated paragraph (c);
and
■ f. Add paragraph (g).
The revisions and addition read as
follows:
■
§ 966.56 Procedures governing the
hearing.
(a) The hearing must be scheduled
promptly for a time and place
reasonably convenient to both the
complainant and the PHA and held
before a hearing officer. A written
notification specifying the time, place,
and the procedures governing the
hearing must be delivered to the
complainant and the appropriate
official.
*
*
*
*
*
(c) If the complainant or the PHA fails
to appear at a scheduled hearing, the
hearing officer may make a
determination to postpone the hearing
for no more than 5 business days or may
make a determination that the party has
waived his right to a hearing. Both the
complainant and the PHA must be
notified of the determination by the
hearing officer. A determination that the
complainant has waived the
complainant’s right to a hearing will not
constitute a waiver of any right the
complainant may have to contest the
PHA’s disposition of the grievance in an
appropriate judicial proceeding.
*
*
*
*
*
(g) Limited English Proficiency. PHAs
must comply with HUD’s ‘‘Final
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Guidance to Federal Financial
Assistance Recipients Regarding Title VI
Prohibition Against National Origin
Discrimination Affecting Limited
English Proficient Persons’’ issued on
January 22, 2007 and available at
https://portal.hud.gov/hudportal/
HUD?src=/program_offices/fair_
housing_equal_opp/promotingfh/lepfaq.
■ 36. Revise § 966.57 to read as follows:
§ 966.57
Decision of the hearing officer.
(a) The hearing officer must prepare a
written decision, including the reasons
for the PHA’s decision within a
reasonable time after the hearing. A
copy of the decision must be sent to the
complainant and the PHA. The PHA
must retain a copy of the decision in the
tenant’s folder. The PHA must maintain
a log of all hearing officer decisions and
make that log available upon request of
the hearing officer, a prospective
complainant, or a prospective
complainant’s representative.
(b) The decision of the hearing officer
will be binding on the PHA unless the
PHA Board of Commissioners
determines that:
(1) The grievance does not concern
PHA action or failure to act in
accordance with or involving the
complainant’s lease on PHA regulations,
which adversely affects the
complainant’s rights, duties, welfare or
status; or
(2) The decision of the hearing officer
is contrary to applicable Federal, State
or local law, HUD regulations or
requirements of the annual
contributions contract between HUD
and the PHA.
(c) A decision by the hearing officer
or Board of Commissioners in favor of
the PHA or which denies the relief
requested by the complainant in whole
or in part will not constitute a waiver of,
nor affect in any manner whatever, any
rights the complainant may have to a
trial de novo or judicial review in any
judicial proceedings, which may
thereafter be brought in the matter.
PART 982—SECTION 8 TENANTBASED ASSISTANCE: HOUSING
CHOICE VOUCHER PROGRAM
37. The authority citation for part 982
continues to read as follows:
asabaliauskas on DSK3SPTVN1PROD with RULES
■
Authority: 42 U.S.C. 1437f and 3535(d).
38. In § 982.402 add a sentence at the
end of paragraph (d)(2) to read as
follows:
■
§ 982.402
*
Subsidy standards.
*
*
(d) * * *
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*
*
18:33 Mar 07, 2016
(2) * * * However, utility allowances
must follow § 982.517(d).
39. Amend § 982.405 as follows:
a. In paragraph (a), remove the word
‘‘annually’’ and add in its place
‘‘biennially’’;
■ b. Revise paragraph (e); and
■ c. Add paragraphs (f) and (g).
The revision and addition read as
follows:
■
■
§ 982.405 PHA initial and periodic unit
inspection.
*
*
*
*
*
(e) The PHA may not charge the
family for an initial inspection or
reinspection of the unit.
(f) The PHA may not charge the owner
for the inspection of the unit prior to the
initial term of the lease or for a first
inspection during assisted occupancy of
the unit. The PHA may establish a
reasonable fee to owners for a
reinspection if an owner notifies the
PHA that a repair has been made or the
allotted time for repairs has elapsed and
a reinspection reveals that any
deficiency cited in the previous
inspection that the owner is responsible
for repairing pursuant to § 982.404(a)
was not corrected. The owner may not
pass this fee along to the family. Fees
collected under this paragraph will be
included in a PHA’s administrative fee
reserve and may be used only for
activities related to the provision of
Section 8 Tenant-Based Rental
Assistance.
(g) If a participant family or
government official reports a condition
that is life-threatening (i.e., the PHA
would require the owner to make the
repair within no more than 24 hours in
accordance with § 982.404(a)(3)), then
the PHA must inspect the housing unit
within 24 hours of when the PHA
received the notification. If the reported
condition is not life-threatening (i.e., the
PHA would require the owner to make
the repair within no more than 30
calendar days in accordance with
§ 982.404(a)(3)), then the PHA must
inspect the unit within 15 days of when
the PHA received the notification. In the
event of extraordinary circumstances,
such as if a unit is within a
Presidentially declared disaster area,
HUD may waive the 24-hour or the 15day inspection requirement until such
time as an inspection is feasible.
§ 982.406
[Redesignated as § 982.407]
40. Redesignate § 982.406 as
§ 982.407.
■
41. Add a new § 982.406 to read as
follows:
■
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§ 982.406
12375
Use of alternative inspections.
(a) In general. (1) A PHA may comply
with the inspection requirement in
§ 982.405(a) by relying on an alternative
inspection (i.e., an inspection
conducted for another housing
assistance program) only if the PHA is
able to obtain the results of the
alternative inspection.
(2) If an alternative inspection method
employs sampling, then a PHA may rely
on such alternative inspection method
to comply with the requirement in
§ 982.405(a) only if HCV units are
included in the population of units
forming the basis of the sample.
(3) Units in properties that are mixedfinance properties assisted with projectbased vouchers may be inspected at
least triennially pursuant to 24 CFR
983.103(g).
(b) Administrative plans. A PHA
relying on an alternative inspection to
fulfill the requirement in § 982.405(a)
must identify the alternative inspection
method being used in the PHA’s
administrative plan. Such a change may
be a significant amendment to the plan,
in which case the PHA must follow its
plan amendment and public notice
requirements, in addition to meeting the
requirements in § 982.406(c)(2), if
applicable, before using the alternative
inspection method.
(c) Eligible inspection methods. (1) A
PHA may rely upon inspections of
housing assisted under the HOME
Investment Partnerships (HOME)
program or housing financed using LowIncome Housing Tax Credits (LIHTCs),
or inspections performed by HUD, with
no action other than amending its
administrative plan.
(2) If a PHA wishes to rely on an
inspection method other than a method
listed in paragraph (c)(1) of this section,
then, prior to amending its
administrative plan, the PHA must
submit to the Real Estate Assessment
Center (REAC) a copy of the inspection
method it wishes to use, along with its
analysis of the inspection method that
shows that the method ‘‘provides the
same or greater protection to occupants
of dwelling units’’ as would HQS.
(i) A PHA may rely upon such
alternative inspection method only
upon receiving approval from REAC to
do so.
(ii) A PHA that uses an alternative
inspection method approved under this
paragraph must monitor changes to the
standards and requirements applicable
to such method. If any change is made
to the alternative inspection method,
then the PHA must submit to REAC a
copy of the revised standards and
requirements, along with a revised
comparison to HQS. If the PHA or REAC
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determines that the revision would
cause the alternative inspection to no
longer meet or exceed HQS, then the
PHA may no longer rely upon the
alternative inspection method to comply
with the inspection requirement at
§ 982.405(a).
(d) Results of alternative inspection.
(1) In order for a PHA to rely upon the
results of an alternative inspection to
comply with the requirement at
§ 982.405(a), a property inspected
pursuant to such method must meet the
standards or requirements regarding
housing quality or safety applicable to
properties assisted under the program
using the alternative inspection method.
To make the determination of whether
such standards or requirements are met,
the PHA must adhere to the following
procedures:
(i) If a property is inspected under an
alternative inspection method, and the
property receives a ‘‘pass’’ score, then
the PHA may rely on that inspection to
demonstrate compliance with the
inspection requirement at § 982.405(a).
(ii) If a property is inspected under an
alternative inspection method, and the
property receives a ‘‘fail’’ score, then the
PHA may not rely on that inspection to
demonstrate compliance with the
inspection requirement at § 982.405(a).
(iii) If a property is inspected under
an alternative inspection method that
does not employ a pass/fail
determination—for example, in the case
of a program where deficiencies are
simply identified—then the PHA must
review the list of deficiencies to
determine whether any cited deficiency
would have resulted in a ‘‘fail’’ score
under HQS. If no such deficiency exists,
then the PHA may rely on the
inspection to demonstrate compliance
with the inspection requirement at
§ 982.405(a); if such a deficiency does
exist, then the PHA may not rely on the
inspection to demonstrate such
compliance.
(2) Under any circumstance described
above in which a PHA is prohibited
from relying on an alternative
inspection method for a property, the
PHA must, within a reasonable period
of time, conduct an HQS inspection of
any units in the property occupied by
voucher program participants and
follow HQS procedures to remedy any
identified deficiencies.
(e) Records retention. As with all
other inspection reports, and as required
by § 982.158(f)(4), reports for
inspections conducted pursuant to an
alternative inspection method must be
obtained by the PHA. Such reports must
be available for HUD inspection for at
least three years from the date of the
latest inspection.
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42. Amend § 982.503 as follows:
a. Add paragraph (b)(1)(iii);
b. Remove the first word in paragraph
(b)(2) and in its place add ‘‘Except as
described in paragraph (b)(1)(iii) of this
section, the’’; and
■ c. Revise paragraph (c)(2).
The revision and addition read as
follows:
■
■
■
§ 982.503 Payment standard amount and
schedule.
*
*
*
*
*
(b) * * *
(1) * * *
(iii) The PHA may establish an
exception payment standard of not more
than 120 percent of the published FMR
if required as a reasonable
accommodation in accordance with 24
CFR part 8 for a family that includes a
person with a disability. Any unit
approved under an exception payment
standard must still meet the reasonable
rent requirements found at § 982.507.
*
*
*
*
*
(c) * * *
(2) Above 110 percent of FMR to 120
percent of published FMR. The HUD
Field Office may approve an exception
payment standard amount from above
110 percent of the published FMR to not
more than 120 percent of the published
FMR (upper range) if the HUD Field
Office determines that approval is
justified by either the median rent
method or the 40th or 50th percentile
rent method as described in paragraph
(c)(2)(ii) of this section (and that such
approval is also supported by an
appropriate program justification in
accordance with paragraph (c)(4) of this
section).
(i) Median rent method. In the median
rent method, HUD determines the
exception payment standard amount by
multiplying the FMR times a fraction of
which the numerator is the median
gross rent of the exception area and the
denominator is the median gross rent of
the entire FMR area. In this method,
HUD uses median gross rent data from
the most recent decennial United States
census, and the exception area may be
any geographic entity within the FMR
area (or any combination of such
entities) for which median gross rent
data is provided in decennial census
products.
(ii) 40th or 50th percentile rent
method. In this method, HUD
determines that the area exception
payment standard amount equals either
the 40th or 50th percentile of rents for
standard quality rental housing in the
exception area. HUD determines
whether the 40th or 50th percentile rent
applies in accordance with the
methodology described in § 888.113 of
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this title for determining FMRs. A PHA
must present statistically representative
rental housing survey data to justify
HUD approval.
*
*
*
*
*
■ 43. Revise § 982.505(d) to read as
follows:
§ 982.505 How to calculate housing
assistance payment.
*
*
*
*
*
(d) PHA approval of higher payment
standard for the family as a reasonable
accommodation. If the family includes
a person with disabilities and requires
a payment standard above the basic
range, as a reasonable accommodation
for such person, in accordance with part
8 of this title, the PHA may establish a
payment standard for the family of not
more than 120 percent of the FMR.
■ 44. In § 982.514, add paragraph (c) to
read as follows:
§ 982.514 Distribution of housing
assistance payment.
*
*
*
*
*
(c) The PHA may elect to establish
policies regarding the frequency of
utility reimbursement payments for
payments made to the family.
(1) The PHA will have the option of
making utility reimbursement payments
not less than once per calendar-year
quarter, for reimbursements totaling $45
or less per quarter. In the event a family
leaves the program in advance of its
next quarterly reimbursement, the PHA
would be required to reimburse the
family for a prorated share of the
applicable reimbursement. PHAs
exercising this option must have a
hardship policy in place for tenants.
(2) If the PHA elects to pay the utility
supplier directly, the PHA must notify
the family of the amount paid to the
utility supplier.
■ 45. Amend § 982.516 as follows:
■ a. Revise the section heading;
■ b. In paragraph (a), revise the
introductory text of paragraph (a)(2) and
add paragraph (a)(3);
■ c. Remove paragraph (e);
■ d. Redesignate paragraphs (b), (c), and
(d) as paragraphs (c), (d), and (e),
respectively;
■ e. Add a new paragraph (b);
■ f. In redesignated paragraph (c), revise
the paragraph heading; and
■ g. Revise redesignated paragraph
(e)(2).
The revisions and addition read as
follows:
§ 982.516 Family income and composition:
Annual and interim examinations.
(a) * * *
(2) Except as provided in paragraph
(a)(3) of this section, the PHA must
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obtain and document in the tenant file
third-party verification of the following
factors, or must document in the tenant
file why third-party verification was not
available:
*
*
*
*
*
(3) For a family with net assets equal
to or less than $5,000, a PHA may
accept a family’s declaration that it has
net assets equal to or less than $5,000,
without taking additional steps to verify
the accuracy of the declaration.
(i) The declaration must state the
amount of income the family expects to
receive from such assets; this amount
must be included in the family’s
income.
(ii) A PHA must obtain third-party
verification of all family assets every 3
years.
(b) Streamlined income
determination. For any family member
with a fixed source of income, a PHA
may elect to determine that family
member’s income by means of a
streamlined income determination. A
streamlined income determination must
be conducted by applying, for each
fixed-income source, the verified cost of
living adjustment (COLA) or current rate
of interest to the previously verified or
adjusted income amount.
(1) Family member with a fixed source
of income is defined as a family member
whose income includes periodic
payments at reasonably predictable
levels from one or more of the following
sources:
(i) Social Security, Supplemental
Security Income, Supplemental
Disability Insurance;
(ii) Federal, state, local, or private
pension plans;
(iii) Annuities or other retirement
benefit programs, insurance policies,
disability or death benefits, or other
similar types of periodic receipts; or
(iv) Any other source of income
subject to adjustment by a verifiable
COLA or current rate of interest.
(2) A PHA must use a COLA or
current rate of interest specific to the
fixed source of income in order to adjust
the income amount. The PHA must
verify the appropriate COLA or current
rate of interest from a public source or
through tenant-provided, third partygenerated documentation. If no such
verification is available, then the PHA
must obtain third-party verification of
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income amounts in order to calculate
the change in income for the source.
(3) For any family member whose
income is determined pursuant to a
streamlined income determination, a
PHA must obtain third-party
verification of all income amounts every
3 years.
(c) Interim reexaminations. * * *
*
*
*
*
*
(e) * * *
(2) At the effective date of a regular or
interim reexamination, the PHA must
make appropriate adjustments in the
housing assistance payment in
accordance with § 982.505.
*
*
*
*
*
■ 46. Amend § 982.517 as follows:
■ a. Capitalize the first word in
paragraph (b)(2)(i); and
■ b. Revise paragraph (d), to read as
follows:
§ 982.517
Utility allowance schedule.
*
*
*
*
*
(d) Use of utility allowance schedule.
The PHA must use the appropriate
utility allowance for the lesser of the
size of dwelling unit actually leased by
the family or the family unit size as
determined under the PHA subsidy
standards. In cases where the unit size
leased exceeds the family unit size as
determined under the PHA subsidy
standards as a result of a reasonable
accommodation, the PHA must use the
appropriate utility allowance for the
size of the dwelling unit actually leased
by the family.
*
*
*
*
*
PART 983—PROJECT-BASED
VOUCHER (PBV) PROGRAM
47. The authority citation for part 983
continues to read as follows:
■
Authority: 42 U.S.C. 1437f and 3535(d).
§ 983.2
[Amended]
48. In § 983.2 amend paragraph (c)(4)
by removing the citation ‘‘§ 982.406’’
and adding in its place ‘‘§ 982.407’’.
■ 49. Amend § 983.103 by revising
paragraph (d) and adding paragraph (g)
to read as follows:
■
§ 983.103
Inspecting units.
*
*
*
*
*
(d) Biennial inspections. (1) At least
biennially during the term of the HAP
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contract, the PHA must inspect a
random sample, consisting of at least 20
percent of the contract units in each
building, to determine if the contract
units and the premises are maintained
in accordance with the HQS. Turnover
inspections pursuant to paragraph (c) of
this section are not counted toward
meeting this inspection requirement.
(2) If more than 20 percent of the
sample of inspected contract units in a
building fail the initial inspection, then
the PHA must reinspect 100 percent of
the contract units in the building.
(3) A PHA may also use the
procedures applicable to HCV units in
24 CFR 982.406.
*
*
*
*
*
(g) Mixed-finance properties. In the
case of a property assisted with projectbased vouchers (authorized at 42 U.S.C.
1437f(o)(13)) that is subject to an
alternative inspection, the PHA may
rely upon inspections conducted at least
triennially to demonstrate compliance
with the inspection requirement of 24
CFR 982.405(a).
PART 990—THE PUBLIC HOUSING
OPERATING FUND PROGRAM
50. The authority citation for part 990
continues to read as follows:
■
Authority: 42 U.S.C. 1437g; 42 U.S.C.
3535(d).
51. In § 990.150, revise paragraph (a)
to read as follows:
■
§ 990.150
Limited vacancies.
(a) Operating subsidy for a limited
number of vacancies. HUD will pay
operating subsidy for a limited number
of vacant units under an ACC. The
limited number of vacant units must be
equal to or less than 3 percent of the
unit months on a project-by-project
basis based on the definition of a project
under § 990.265 (provided that the
number of eligible unit months does not
exceed 100 percent of the unit months
for a project).
*
*
*
*
*
Dated: February 29, 2016.
Nani Coloretti,
Deputy Secretary.
[FR Doc. 2016–04901 Filed 3–7–16; 8:45 am]
BILLING CODE 4210–67–P
E:\FR\FM\08MRR3.SGM
08MRR3
Agencies
[Federal Register Volume 81, Number 45 (Tuesday, March 8, 2016)]
[Rules and Regulations]
[Pages 12353-12377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04901]
[[Page 12353]]
Vol. 81
Tuesday,
No. 45
March 8, 2016
Part III
Department of Housing and Urban Development
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24 CFR Parts 5, 880, 884, et al.
Streamlining Administrative Regulations for Public Housing, Housing
Choice Voucher, Multifamily Housing, and Community Planning and
Development Programs; Final Rule
Federal Register / Vol. 81 , No. 45 / Tuesday, March 8, 2016 / Rules
and Regulations
[[Page 12354]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5, 880, 884, 886, 891, 903, 960, 966, 982, 983, 990
[Docket No. FR 5743-F-03]
RIN 2577-AC92
Streamlining Administrative Regulations for Public Housing,
Housing Choice Voucher, Multifamily Housing, and Community Planning and
Development Programs
AGENCY: Office of the Deputy Secretary, HUD.
ACTION: Final rule.
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SUMMARY: The Department of Housing and Urban Development Appropriations
Act, 2014 (2014 Appropriations Act), made several changes to the United
States Housing Act of 1937 (1937 Act). Section 243 of the 2014
Appropriations Act authorized HUD to implement these changes through
notice, followed by notice-and-comment rulemaking. Notices implementing
the changes were published on May 19, 2014, and June 25, 2014. HUD
issued a proposed rule on January 6, 2015, to codify these changes in
regulation. In addition, the January 2015 rule proposed changes to
streamline regulatory requirements pertaining to certain elements of
the Housing Choice Voucher (HCV), Public Housing (PH), and various
multifamily housing (MFH) rental assistance programs; to reduce the
administrative burden on public housing agencies (PHAs) and MFH owners;
and to align, where feasible, requirements across programs, including
the Housing Opportunities for Persons with AIDS (HOPWA) and HOME
Investment Partnerships (HOME), which are administered by HUD's Office
of Community Planning and Development (CPD). HUD also issued an interim
rule on September 8, 2015, implementing changes to flat rents in the
Public Housing program made by the Department of Housing and Urban
Development Appropriations Act, 2015 (2015 Appropriations Act).
This final rule makes changes to the regulatory text as presented
in the January 2015 proposed rule, including additional changes in
response to public comment as well as further consideration by HUD of
changes proposed in January 2015, and finalizes the regulatory changes
contained in the September 2015 interim rule.
DATES: Effective Date: April 7, 2016.
FOR FURTHER INFORMATION CONTACT: For questions regarding programs
operated by HUD's Office of Community Planning and Development, contact
Henrietta Owusu, Director, Program Policy Division, Office of
Affordable Housing Programs, at 202-402-4998. For the HCV program,
contact Becky Primeaux, Director, Housing Voucher Management and
Operations Division, at 202-402-6050. For questions regarding the
Multifamily Housing programs, contact Katherine Nzive, Director,
Program Administration Office, Asset Management and Portfolio
Oversight, at 202-708-3000. For the Public Housing program, contact
Todd Thomas, Program Analyst, Public Housing Management and Occupancy
Division, at 678-732-2056. None of the phone numbers included is toll-
free. Persons with hearing or speech impairments may access these
numbers through TTY by calling the toll-free Federal Relay Service at
800-877-8339. Any of the above-listed contacts may also be reached via
postal mail at the following address: Department of Housing and Urban
Development, 451 7th Street SW., Washington, DC 20410.
SUPPLEMENTARY INFORMATION:
I. Background
The 2014 Appropriations Act made changes to certain provisions of
the 1937 Act, such as allowing for biennial physical inspections of
certain assisted properties and permitting alternative inspection
methods to be used in certain circumstances, codifying in statute the
definition of ``extremely low-income,'' and capping utility allowances
at the lesser of the unit size on the voucher or the size of the unit
leased by the family. These changes were implemented by notice; \1\ a
proposed rule to codify the changes in regulation was published on
January 6, 2015, at 80 FR 423.
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\1\ Notice PIH 2014-12, published May 19, 2014, implemented the
changes to flat rents; 79 FR 35940, ``HUD Implementation of Fiscal
Year 2014 Appropriations Provisions on Public Housing Agency
Consortia, Biennial Inspections, Extremely Low-Income Definition,
and Utility Allowances'' (June 25, 2014), implemented all other
changes.
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In addition, HUD has solicited recommendations in recent years on
how to streamline program operations to reduce costs and enhance
efficiency while still maintaining HUD's core program oversight
functions. The January 2015 proposed rule included programmatic changes
to implement many of these suggestions. A detailed description of all
proposed amendments, including technical corrections also proposed, and
the reasons for the amendments can be found in the preamble to the
January 6, 2015 proposed rule at 80 FR 424 to 428.
As further discussed below, portions of this final rule affect the
PH program, the HCV program, the CPD programs mentioned above,\2\ and
the following MFH programs: \3\
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\2\ The only provision in this final regulation that applies
directly to the CPD programs is the earned income disregard. Other
provisions that apply do so indirectly, either because of references
in program-specific regulations or due to particular eligible
activities that follow the requirements of the Housing Choice
Voucher program. The parenthetical statements at the end of each
subpart of section II.A, exclude mention of CPD programs.
\3\ In the January 6, 2015 proposed rule, HUD inadvertently
included reference to FHA's Section 235 Homeownership program, but
as provided in a final rule published on April 3, 2015, this program
is no longer active and the regulations were removed by the April 3,
2015 final rule. See https://www.gpo.gov/fdsys/pkg/FR-2015-04-03/pdf/2015-07597.pdf.
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Project-Based Section 8 (New Construction, State Agency-
Financed, Substantial Rehabilitation, Rural Housing Services, Loan
Management Set-Aside, and Property Disposition Set-Aside).
Section 8 Moderate Rehabilitation.
Rent Supplement Program.
Section 202 Supportive Housing for the Elderly (including
Project Assistance Contract and Project Rental Assistance Contract
(PRAC)).
Section 811 Supportive Housing for Persons with
Disabilities (including PRAC and Project Rental Assistance).
Section 236 Interest Reduction Payments Program.
Rental Assistance Payment (RAP) Program.
Sections 221(d)(3) and (d)(5)--FHA Insurance Programs for
New Construction or Substantially Rehabilitated Multifamily Rental
Housing.
Some of the new flexibilities will require a PHA to make changes to
the PHA's Admissions and Continued Occupancy Policy, Administrative
Plan, or PHA plan in order for the PHA to adopt the new authorities.
HUD encourages all PHAs adopting such flexibilities to make all
required amendments as expeditiously as possible.
The 2015 Appropriations Act amended section 3 of the 1937 Act to
allow for additional flexibility to the requirement that the flat
rental amount be set at no less than 80 percent of the applicable FMR,
as established under 8(c) of the 1937 Act. HUD may allow a PHA to
establish a flat rent based on an FMR that is based on an area
geographically smaller than would otherwise be used, if HUD determines
that the resulting FMR more accurately reflects local market
conditions. In addition, a PHA may apply to HUD for an exception
allowing a flat rental amount that is lower than the amount otherwise
determined under the two
[[Page 12355]]
allowable FMRs, if HUD determines that the two FMRs do not reflect the
market value of the property and the lower flat rental amount is based
on a market analysis of the applicable market. In either case, the
alternative flat rent must not create a disincentive for families
seeking to become economically self-sufficient to continue to reside in
public housing.
On September 8, 2015, at 80 FR 53709, HUD published an interim rule
to amend HUD's regulations implementing the 2014 Appropriations Act
language on flat rents to allow PHAs the opportunity to take advantage
of the 2015 Appropriations Act authority that provides PHAs with more
flexibility in setting flat rents. HUD advised that the interim rule
superseded the portion of the January 2015 proposed rule year that
addressed the issue of setting flat rents in public housing. Although
HUD issued the September 2015 rule as an interim rule for effect, HUD
sought public comment for a period of 60 days. By the end of the
comment period on November 9, 2015, HUD received seven comments.
II. Changes Made at the Final Rule Stage
In response to public comment and as a result of further
consideration of certain issues by HUD, this final rule makes the
following revisions to the January 2015 proposed rule. With respect to
changes made in response to public comment, the issues raised by the
commenter and HUD's basis for responding to the comments are addressed
in Section IV of this preamble. No changes are made to the September
2015 interim rule on flat rents.
A. HCV, MFH, and PH Program Regulations
1. Verification of Social Security Numbers (Sec. 5.216)
The use of the phrase ``date of admission'' appeared twice in the
proposed rule, first to identify the endpoint of the 6-month period
during which a family member under the age of 6 years who lacks a
Social Security Number (SSN) may have been added to an applicant
family, and then again to identify the starting point for the 90-day
period allotted to such a family to obtain an SSN for the newly added
child. Commenters stated that, in the HCV program, the ``date of
admission'' is typically the date of lease-up (i.e., the effective date
of the Housing Assistance Payment (HAP) contract). Prior to lease-up,
however, a PHA may have expended considerable time and resources
pulling a family from the waiting list, obtaining the necessary
verifications, procuring a Housing Quality Standards (HQS) inspection,
and performing a rent reasonableness determination. Lease-up could
ultimately occur more than 6 months from the date the child was added
the household, which would result in the household being ineligible for
admission to the program. To obviate such a scenario, HUD has, in this
final rule, adopted two separate ``dates of admission'' for the HCV
program for purposes of this provision: The date of voucher issuance
and the date of lease-up. Specifically, the endpoint of the 6-month
period during which a family member under the age of 6 years may be
added to the household is the date of voucher issuance; the 90-day
clock does not start ticking until the date of lease-up. (This
provision applies to the HCV/Project-Based Voucher (PBV), Rent
Supplement, Section 8, Sections 221(d)(3) and (d)(5), Section 236, 202/
811, and PH programs.)
2. Definition of Extremely Low-Income Families (Sec. Sec. 5.603,
903.7, 960.102)
The definition of an extremely low-income family in the final rule
is revised to include the phrase ``a very low-income family,'' which is
included in the statutory definition and was inadvertently omitted from
the proposed rule. (This provision applies to the HCV/PBV, Section 8,
and PH programs. It does not apply to the Rent Supplement, Section 235,
Section 236, Sections 221(d)(3) or (d)(5) programs.)
3. Use of Actual Past Income (Sec. 5.609)
For the reasons presented below, HUD has decided against pursuing
the regulatory changes included in the proposed rule.
4. Exclusion of Mandatory Education Fees From Income (Sec.
5.609(b)(9))
There is no change from the proposed rule. The final rule includes
fees within the definition of tuition. (This provision applies to the
HCV/PBV, Section 8, and PH programs. It does not apply to the Rent
Supplement, Section 236, Sections 221(d)(3) or (d)(5) programs.)
5. Streamlined Annual Reexamination for Fixed Incomes (Sec. Sec.
5.657, 880.603, 884.218, 886.124, 886.324, 891.410, 891.610, 891.750,
960.257, 982.516)
Based on comments submitted, this provision was revised
substantially from the proposed rule, which would have provided for a
streamlined annual reexamination of family income for any family whose
income consists solely of fixed sources. The final rule provides for a
streamlined income determination for any fixed source of income, even
if a person or a family with a fixed source of income also has a non-
fixed source of income. The final rule requires that, upon admission to
a program, third-party verification of all income amounts must be
obtained for all family members, and a full reexamination and
redetermination of income must likewise be performed every 3 years. In
the interim, a streamlined income determination may be performed for a
family member with a fixed source of income by applying to a previously
determined or verified source of income a cost of living adjustment
(COLA) or interest rate adjustment specific to each source of fixed
income. The COLA or current interest rate applicable to each source of
fixed income must be obtained either from a public source or from
tenant-provided, third-party generated documentation. In the absence of
such verification for any source of fixed income, third-party
verification of income amounts must be obtained.
While the final rule amends more regulatory provisions than the
proposed rule, the policy has not changed. Instead, there are cross-
references to 24 CFR 5.657(d), pertaining to the reexamination of
family income and composition in Section 8 project-based assistance
programs, inserted in various MFH regulations herein to avoid confusion
and ensure the policy is included in the regulations for all programs
this provision is intended to affect. (This provision applies to the
HCV/PBV, Section 8 (other than Moderate Rehabilitation), 202/811, and
PH programs. It does not apply to the Rent Supplement, Section 236,
Sections 221(d)(3) or (d)(5) programs.)
HUD recognizes that prior to the issuance of this final rule, the
Fixing America's Surface Transportation Act, or FAST Act, was signed
into law.\4\ Section 78001 of that Act modified the 1937 Act to allow
PHAs and owners to undergo full income recertification for families
with 90 percent or more of their income from fixed-income sources every
three years instead of annually. HUD believes that while the FAST Act
provisions and the provisions contained in this rule are very similar,
they offer different benefits; therefore, HUD is retaining the
flexibilities in this final rule and will issue implementation
regulations for the FAST Act separately.
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\4\ Public Law 114-94, signed December 4, 2015.
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6. Earned Income Disregard (EID) (Sec. Sec. 5.617, 960.255)
The proposed rule included a requirement that families maintain
continual employment in order to
[[Page 12356]]
obtain EID benefits over a straight 24-month period, and it allowed
families who received the full EID benefit and then subsequently
requalified for the benefit to obtain it again (i.e., the proposed rule
eliminated the maximum lifetime disallowance). The proposed rule also
included a carve-out for the HOPWA program, which retained the
provision unchanged.
In the final rule, all HUD programs to which the EID applies
(including the HOPWA program) are aligned, the lifetime disallowance is
retained, and the requirement to maintain continual employment is
dropped. Ultimately, the only change to the existing regulation adopted
in the final rule is that the benefit now applies for a straight 24-
month period, with a clear start date and end date, irrespective of
whether a family maintains continual employment during the 24-month
period. PHAs and grantees are no longer obliged to track employment
starts and stops, but only the start date, the 12-month date (on which
the amount of the disregard may change from 100 percent to not less
than 50 percent of earned income), and the 24-month (end) date.
For families enrolled and participating in EID prior to the
effective date of this regulation, the previous requirements will
continue to apply. (This provision applies to the HCV/PBV, HOME, HOPWA,
and PH programs. It does not apply to the MFH programs.) HUD intends to
publish a notice describing the changes and the administrative
requirements prospectively. For current recipients of the EID, HUD will
reiterate that regulations in effect immediately prior to this rule
will continue to apply until the benefit period expires for these
families.
B. HCV and PH Program Regulations
1. Family Declaration of Assets Under $5,000 (Sec. Sec. 960.259,
982.516)
Upon further consideration and in light of comments received, HUD
made a modest change to this provision from the proposed to the final
rule. The proposed rule would have authorized a PHA to rely on a
family's declaration starting with the first reexamination and going
forward indefinitely. In the final rule, a PHA must obtain third-party
documentation of assets every 3 years. The Office of Multifamily
Housing Programs in HUD's Office of Housing noted support for expansion
of this provision to its rental assistance programs and is issuing an
interim final rule to do just that.
2. Utility Reimbursements (Sec. Sec. 960.253, 982.514)
The proposed rule provides a PHA with the option of making utility
reimbursement payments ``quarterly,'' for reimbursements totaling $20
or less per quarter. For the final rule, this provision is modified
somewhat. The amount is raised to $45 or less per quarter. If the PHA
opts to make the payments on a quarterly basis, the PHA must institute
a hardship policy for the tenants if such payments would create a
financial hardship for them. Based on a request for clarification, this
provision was modified slightly for this final rule to make clear that
reimbursements must occur no less frequently than once every calendar-
year quarter. Additionally, HUD is issuing an interim final rule to
expand this provision to MFH programs.
C. PH Program Regulations
1. Public Housing Rents for Mixed Families (Sec. 5.520(d))
There is no change from the proposed rule. The final rule requires
PHAs to use the established flat rent applicable to the unit to
calculate rents for mixed families. The final rule also requires that a
mixed family's payment be equivalent to their total tenant payment
(TTP) when their TTP exceeds the flat rent.
2. Tenant Self-Certification for Community Service Requirements
(Sec. Sec. 960.605, 960.607)
Just as in the proposed rule, the final rule permits PHAs to accept
a tenant's signed self-certification of compliance with the community
service requirement. However, to better ensure compliance with the
community service requirement, HUD is requiring PHAs to review a sample
of self-certifications and validate their accuracy with the third-party
verification procedures currently in place. The PHA will also need to
notify tenants that any self-certification may be subject to such
validation.
3. Public Housing Grievance Procedures (Sec. Sec. 966.4 and 966.52
Through 966.57)
Upon further consideration and in light of comments received, HUD
has decided against pursuing regulatory changes pertaining to the
requirement that a PHA prepare a summary of any informal settlement.
HUD has also decided against pursuing changes related to the ability of
either party to a grievance to request, at their own expense, that a
transcript of a grievance hearing be prepared. Further, in light of
comments received, HUD has provided a clarification regarding the
Limited English Proficiency requirements related to grievance
procedures.
This final rule maintains the elimination of the requirement that
PHAs consult resident organizations before appointing a hearing
officer. However, in light of comments that residents should have input
into the selection process, HUD is requiring that PHAs include their
policies regarding the selection process in the tenant lease form,
which is subject to a 30-day comment period. Finally, the final rule
also maintains the elimination of the requirement that PHAs retain a
redacted copy of each hearing decision to be made available to
prospective complainants, and in the place of that requirement,
requires PHAs to maintain a log of hearing officer decisions as
described through HUD guidance.
4. Limited Vacancies (Sec. 990.150)
There is no change from the proposed rule. The final rule clarifies
that the number of vacant units eligible for operating subsidy must be
not more than 3 percent of the total units, on a project-by-project
basis.
D. HCV Program Regulations
1. Start of Assisted Tenancy (Sec. 982.309)
For the reasons presented below, HUD has decided against pursuing
the regulatory changes included in the proposed rule.
2. Biennial Inspections and the Use of Alternative Inspection Methods
(Sec. Sec. 982.405, 982.406, 983.103)
Upon further consideration, HUD made a change to this provision to
clarify that if an alternative inspection method employs sampling, the
PHA may rely upon that method only if HCV units are included in the
population of units forming the basis of the sample. In addition, in
response to public comments, HUD is requiring PHAs wishing to rely upon
inspection methods other than those conducted pursuant to the Low-
Income Housing Tax Credit (LIHTC) or HOME programs, or inspections
performed by HUD, to submit to HUD the protocol for the inspection
method they wish to use along with the PHA's analysis showing that the
desired protocol meets or exceeds HQS. A PHA must submit these
materials to HUD for approval and may not rely upon such alternative
inspection methods until such approval has been granted.
3. Housing Quality Standards (HQS) Reinspection Fees (Sec. 982.405)
The Department made modest changes to this provision based on
comments expressing concern about the
[[Page 12357]]
broad nature of this authority and requests for clarity about the
treatment of fees. The proposed rule would have authorized a PHA to
charge a reasonable fee if a cited deficiency remained upon
reinspection. The final rule states that the fee may be charged only if
an owner stated that a deficiency had been fixed and the deficiency is
found during reinspection to persist or if a reinspection conducted
after the expiration of the timeframe for repairs reveals that the
deficiency persists. With respect to the fee, the final rule makes
clear that any fees collected may be used only for activities related
to the provision of tenant-based assistance.
4. Exception Payment Standards for Providing Reasonable Accommodations
(Sec. Sec. 982.503, 982.505)
There is no change from the proposed rule. The final rule allows a
PHA to approve a payment standard of not more than 120 percent of the
FMR without HUD approval if required as a reasonable accommodation for
a family that includes a person with a disability.
5. Family Income and Composition: Regular and Interim Examinations
(Sec. 982.516(c)-(e))
There is no change from the proposed rule. The final rule
eliminates the requirement that a voucher agency conduct a
reexamination of income whenever a new family member is added, aligning
the voucher and PH regulations.
6. Utility Payment Schedules (Sec. 982.517)
For the reasons presented below, HUD has decided against pursuing
the regulatory changes included in the proposed rule that would have
authorized a PHA to define ``unit type'' as simply ``attached'' or
``detached.''
III. Discussion of Public Comments and HUD's Responses
The public comment period on the proposed rule closed on March 9,
2015, and 92 public comments were received in response to HUD's January
6, 2015, proposed rule. Comments were submitted by individual members
of the public, Fair Housing advocacy groups, housing associations, and
PHAs. The following presents the significant issues and questions
related to the proposed rule raised by the commenters, and HUD's
responses to these issues and questions.
A. CPD, HCV, MFH, and PH Program Regulations
1. Verification of Social Security Numbers (Sec. 5.216)
Issue: Proposal Expansion. Commenters had several suggestions for
HUD to expand the proposed relief, including allowing relief if there
is a newly added family member over the age of six. Others suggested
that HUD simply establish a maximum time period during which a family
may receive a subsidy without providing a missing SSN instead of
allowing for two extension periods or that HUD should allow families to
self-certify as to having obtained SSNs. Commenters also stated that
the waiver should be allowed only if any enforcement action is
consistent with the Administrative and Continued Occupancy Policy
(ACOP) and/or the Administrative Plan and/or Tenant Selection Plan
(TSP).
HUD Response: Existing regulations permit a participant household
to add a new household member under the age of 6 years, even if that
household member lacks an SSN at the time of admission. The participant
household then has 90 days to obtain and provide documentation
necessary to verify the SSN of the new household member; the processing
entity may grant the household an additional 90-day extension. HUD's
intent in proposing changes to the regulations governing applicants is
to align the requirements for applicants with those that govern
participants, including with respect to enforcement. The changes
proposed above either go beyond the current requirements for
participant households or vary from those requirements. As such, they
are contrary to HUD's intent, and HUD declines to adopt them.
Issue: Expansion to Homeless Programs. Commenters asked HUD to
expand the proposal by providing waivers to allow PHAs to house
homeless individuals who are unable to provide documentation of their
SSN by giving the families 90 days to provide the information.
HUD Response: HUD agrees that adopting similar flexibility with
respect to homeless individuals who lack SSNs would facilitate HUD's
efforts to serve homeless families. However, HUD is unable to adopt
this recommended change at this time, because it is beyond the scope of
this rulemaking.
Issue: Timing of Waiver. Commenters asked HUD to use the date of
voucher issuance instead of the date of admission, as the date of
admission usually means the date of lease-up and does not account for
time for finding a unit and inspections.
HUD Response: HUD agrees with this comment and has adopted it in
this final rule.
Issue: Objections. Some commenters objected to the proposal,
stating that it would actually increase burden on PHAs. Others asked
HUD to modify its systems to properly accept a delayed certification
when there is a new child in the family or when a foster agency refuses
to provide the SSN. Commenters also asked HUD to allow the use of other
forms of identification, such as Individual Taxpayer Identification
Numbers.
HUD Response: Several of the comments provided pertain only
indirectly to the changes proposed by HUD and are therefore beyond the
scope of this rulemaking. With respect to the assertion that this
change may result in additional tracking and monitoring, HUD notes
that, for processing entities that typically request waivers in order
to house such families, the change reduces burden. In addition, the
change creates benefits that offset any modest burden. Specifically,
they eliminate a barrier that could otherwise prevent families from
being housed, requiring no greater monitoring and tracking than is
performed for participant households.
2. Definition of Extremely Low-Income (ELI) Families (Sec. Sec. 5.603,
903.7, 960.102)
Issue: Low-Income Families. Commenters stated that the proposed
change should not exclude households from meeting ELI eligibility who
are between 30 percent and 50 percent of area median income (AMI).
HUD Response: HUD agrees with the comment and has added ``very low-
income'' language to the final rule.
Issue: Requested Changes. Commenters stated that because the new
definition of ELI has delayed the release of income limits, the
proposal should not be finalized. Similarly, it was suggested that HUD
remove income targeting completely.
HUD Response: The final rule codifies the definition of ELI in
HUD's 2014 Appropriations Act. The FY 2014 Appropriations Act defines
``extremely low-income family'' to mean a very low-income family whose
income does not exceed the higher of 30 percent of AMI or the poverty
level. It would be contrary to the statutory change to delay in
proceeding with issuance of this final rule.
Income targeting is a statutory requirement of section 16 of the
1937 Act and cannot be removed through rulemaking without statutory
authority.
[[Page 12358]]
3. Use of Actual Past Income (Sec. 5.609)
Issue: Objections to the Proposed Change. Many commenters objected
to the proposal's requirement that a PHA use one definition of annual
income (either actual past income or projected income) for all families
in a program. Also, many commenters objected to the prohibition against
using both the past income provision and the provision authorizing a
streamlined annual reexamination for fixed-income families. Commenters
stated that these restrictions limit PHA discretion and therefore fail
to provide administrative savings to PHAs.
Additionally, commenters stated that the provision did nothing to
alleviate the burden associated with performing interim income
reexaminations. The commenters stated that many families experience
fluctuations in income over the course of a year, and that each time
this happens, a housing provider must calculate income based on
projected income, rather than past income. The commenters stated that
furthermore, the proposal required housing providers that adopted a
definition based on actual past income to calculate expenses for such
things as child care and medical care during the same 12-month period,
and it is difficult to have the same timeframes for all sources of
income.
Other commenters stated that using past income was not an accurate
way to set rent.
HUD Response: HUD agrees that the proposal provided minimal, if
any, streamlining benefit, and required impractical actions on the part
of housing providers in using the same time frames for income and
deductions. Given the concerns raised about the proposal, HUD has
decided not to adopt the use of actual past income in the final rule.
4. Exclusion of Mandatory Education Fees From Income (Sec.
5.609(b)(9))
Issue: Requests for Clarification. Some commenters supported the
change, but expressed doubt that this provided streamlining relief and
perhaps, instead, added to a PHA's burden, particularly in determining
the amount of fees charged and then verifying those fees. Others asked
for additional guidance on what fees would fall under this new policy.
HUD Response: HUD notes that this provision is included in the
rule, not as administrative relief, but to codify in regulation
language included in recent appropriations acts that has excluded from
income those amounts needed to pay mandatory student fees.\5\
Additional guidance from HUD regarding what constitutes such fees is
forthcoming in the form of a notice that relies on the Department of
Education definitions of tuition and fees. For example, a mandatory
education fee would include student service fees. That same notice will
provide guidance on how to verify fee information. (Note: Such fees are
already excluded for purposes of the PH program, pursuant to Sec.
5.609(b)(9).)
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\5\ See section 213 of the Transportation, Housing and Urban
Development, and Related Agencies Appropriations Act, 2015 (Pub. L.
113-235, approved Dec. 16, 2014).
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5. Streamlined Annual Reexamination for Fixed Incomes (Sec. Sec.
5.657, 960.257, 982.516)
Issue: Clarifications and Minor Changes. Commenters supported
streamlining reexaminations for families with fixed income, but asked
that HUD make some small changes. In addition to the many requests that
HUD permit both fixed-income streamlining and the use of actual past
income, commenters asked that HUD allow for streamlined reexaminations
even when the family does not have all of its income from fixed-income
sources or when some family members have a variable income and others
have a fixed income. Commenters also asked that either the regulatory
definition of ``fixed'' income be made more flexible or HUD grant PHAs
flexibility to establish their own definition.
HUD Response: As explained above, HUD has dropped the provision
that would have authorized PHAs and owners to define annual income as
``actual past income.'' At the same time, in response to comments, HUD
has revised this streamlined annual reexamination measure to provide
PHAs and owners with the option of conducting a streamlined income
redetermination for any fixed-income source, irrespective of whether an
individual or a family also has a non-fixed source of income. This
means that the regulation no longer requires a family to have 100
percent of its income from fixed sources, which resolves a number of
the concerns expressed by commenters. The final rule also adopts an
expanded list of fixed sources of income. With respect to income from
annuities or other retirement benefit programs, insurance policies,
disability or death benefits, or other similar types of periodic
receipts, if a family member receives income from any of these sources
and the income consists solely of periodic payments at reasonably
predictable levels, then the income source may be considered to be
``fixed.'' HUD believes that these changes respond to a number of the
comments received and will provide substantial relief to PHAs and
owners.
Issue: Objections and Significant Changes. Some commenters stated
that the proposal did not provide any streamlining benefit, and, to
fully streamline, HUD should eliminate or modify the medical expense
through methods like a standard deduction or self-certification of
medical expenses. Commenters expressed concern that allowing
streamlined recertification for fixed income families would allow such
families to overlook sources of income. Some stated that HUD should
still require annual income verifications, because some families would
have some members with fixed income and others with variable income.
HUD Response: While HUD is amenable to adopting several of the
suggestions made by commenters, HUD will not eliminate certain
requirements, such as the requirement to verify medical expenses and
otherwise calculate adjustments to annual income for fixed-income
families. For ongoing medical expenses, PHAs and owners already have
the option to determine anticipated expenses by calculating expenses
paid by the family in the 12 months preceding recertification. For past
one-time, nonrecurring medical expenses that have been paid in full,
PHAs and owners already have the option of including these expenses at
an initial, interim, or annual recertification; if such an expense has
not been paid in full but is instead being paid subject to a payment
plan, then the expense would be counted as anticipated either at the
time it occurs, through an interim recertification, or at an upcoming
annual recertification. Further, HUD will not adopt the use of self-
certification of medical expenses and other deductions, due to the risk
of improper payment. Along the same lines, the final rule makes clear
that a full examination of family income must be conducted upon
admission to a program. Also, for PHAs and owners that choose to adopt
the streamlined income redetermination, a full examination of family
income must be performed at least every 3 years.
6. Earned Income Disregard (Sec. Sec. 5.617, 960.255)
Issue: Definition of ``continually employed'' and effect on
employment. Several commenters requested that HUD modify the proposal
by clarifying the requirement that the family remain continually
employed.
[[Page 12359]]
In contrast to these commenters, other commenters suggested that
this change should not be made, because residents eligible for EID
would not be able to be continually employed for 24 months. Others
objected to allowing residents to re-qualify for EID, either because it
would create an additional burden on PHAs or because it could create an
incentive for individuals to leave jobs when the EID expires. Some
commenters expressed concern that a family losing the EID during the
24-month period would be able to qualify for a new EID period
immediately, allowing for an infinite time frame to receive the EID.
Commenters also suggested that HUD allow PHAs the option to allow the
EID time clock to run during periods of unemployment but disregard any
unemployment benefits an individual receives.
HUD Response: HUD has determined to drop the continuous employment
requirement from this rulemaking. For all HUD programs that require an
EID, HUD is retaining the ability of these residents to start and stop
employment and still retain the benefit of the EID. However, these
residents may only receive the benefit for up to 24 consecutive months
from the date of initial increase in annual income. If an individual
becomes eligible to receive the EID, the 24-month period will not stop
if the circumstance that triggered the EID ceases; however, if the
individual experiences an event that would again provide an EID benefit
during the 24-month period, then the individual will be provided the
rent incentive. This change eliminates the burdensome process of
tracking EID starts and stops over a 48-month time period, but still
provides some flexibility to tenants to receive the EID if they again
obtain employment.
HUD will retain the one-time EID eligibility. Specifically, after
the expiration of the 24-month period, individuals will be ineligible
to receive subsequent EID benefits. HUD believes that these changes
maintain the balance that HUD seeks to incentivize employment among
residents while reducing the burden of administering the benefit.
Issue: Exclusion in the second 12 months. Commenters asked that HUD
make the income exclusion 100 percent for the first year and 50 percent
for the second 12 months.
HUD Response: HUD disagrees with this suggestion. The statutory
language at section 3(d) of the 1937 Act requires PHAs to disregard 100
percent of any increase in income for the first 12 months. However, for
the second 12 months, PHAs must disregard not less than 50 percent of
any increase in income. PHAs have discretion during the second 12-month
period to disregard more than 50 percent of any increase in income.
Therefore, HUD will not adopt this suggested change.
Issue: Limiting the availability of EID. Commenters suggested that
HUD align the EID effective date with a family's annual reexamination
date. Others suggested that HUD should allow for income to be
calculated using actual past earned income for everyone in lieu of EID,
or that EID should be available only for individuals with disabilities.
Commenters also suggested that HUD should allow PHAs to implement EID
on their own reporting cycle.
HUD Response: HUD's intent in this rulemaking, with respect to EID,
is to streamline the EID tracking process by reducing the time during
which a program participant may be eligible to receive the benefit of
the EID. HUD believes the changes in this rulemaking also more closely
align to the statute that governs the EID. The changes suggested above
are inconsistent either with the statute or with HUD's intent in this
rulemaking. As a result, HUD will not adopt the suggested changes.
Issue: Additional guidance. HUD was asked for specific guidance for
families that have already started EID under the previous regulations.
HUD Response: HUD agrees with this comment and has revised the
final regulation to make clear that the previous regulations apply to
such families.
Issue: HOPWA carve-out. Some commenters stated that allowing HOPWA
to have an EID policy different from other programs with tenant
populations that have disabilities is unfair to the tenants in those
non-HOPWA programs.
HUD Response: HUD agrees with this recommendation and has
eliminated the HOPWA program carve-out in this final rule. The final
rule applies the EID uniformly to all families eligible for the
benefit.
Issue: Elimination of EID. Some commenters suggested HUD should
eliminate EID entirely, either because it clashes with PH's minimum
rent requirement or because the family self-sufficiency program is
better. Others stated that the EID should not be extended to the
Shelter Plus Care and Moderate Rehabilitation/Single-Room Occupancy
(SRO) programs. Some suggested that the EID time period should be
limited to only three months to discourage individuals from quitting
jobs at the expiration of the EID time period to avoid rent increases
or that the EID time period should be expanded to 48 months to allow
for more gradual rent increases.
HUD Response: As noted in response to an earlier comment, HUD's
intent in this rulemaking, with respect to EID, is to streamline the
EID tracking process by reducing the time during which a program
participant may be eligible to receive the benefit of the EID. HUD
believes the changes in this rulemaking more closely align to the
statute that governs the EID. The changes suggested above are
inconsistent either with the statute or with HUD's intent in this
rulemaking. As a result, HUD will not adopt the suggested changes.
B. HCV and PH Program Regulations
1. Family Declaration of Assets Under $5,000 (Sec. Sec. 960.259,
982.516)
Issue: Increasing Threshold. Many commenters asked that HUD
increase the maximum amount of assets that can be self-certified to
$10,000.
HUD Response: The final rule has not adopted this suggestion. The
$5,000 amount is consistent with other policies. Existing regulations
require housing providers to calculate the imputed income for assets
over $5,000. Also, the Internal Revenue Service permits housing credit
agencies and owners to accept a certification from families of assets
under $5,000. Commenters stated that there are few residents with
assets greater than $5,000.
Issue: Expansion to Admission. Some commenters asked that HUD
modify the proposal to allow families to use self-certification at both
admission and reexamination.
HUD Response: The final rule clarifies in the preamble that this
provision applies to families at reexamination. At admission, all
assets of a family will be verified as is the current practice. Also,
the final rule requires a PHA to obtain third-party documentation of
all family assets every three years.
Issue: Method of Certification. Commenters asked that HUD allow
families to certify to total assets instead of requiring declaration of
each separate asset.
HUD Response: A family's declaration of total assets may be
included on a single form with each asset listed. HUD will issue
further guidance about this provision of the final rule.
Issue: Expansion to Multifamily. Commenters asked that HUD allow
this provision to apply to multifamily housing as well.
HUD Response: The Office of Multifamily Housing Programs, which
operates various rental assistance programs, is issuing an interim
final rule to accomplish this expansion.
[[Page 12360]]
Issue: Larger Changes to the Proposal. Some commenters asked that
HUD eliminate the consideration of assets when determining income, as
income from assets usually has little, if any, effect on the amount of
rent paid by a family. Other commenters state that self-certification
does not actually reduce burden on PHAs and may actually increase work
for PHA staff.
HUD Response: Totally eliminating consideration of assets when
determining income is outside the scope of this rulemaking. HUD will
keep the suggestion in mind as it examines other opportunities to
streamline program requirements.
Additionally, this provision is optional for PHAs. A PHA may
continue to verify such assets at both admission and annual
reexaminations.
2. Utility Reimbursements (Sec. Sec. 960.253, 982.514)
Issue: Optional Nature of Provision. Commenters asked that HUD make
this policy optional or allow PHAs to determine the frequency with
which they make utility reimbursement payments. For example, some
commenters requested that HUD permit annual reimbursements.
HUD Response: The changes in this rulemaking are optional, and PHAs
that do not believe this provision is beneficial to their program
administration may continue to provide utility reimbursements monthly.
Nothing in this rulemaking permits a PHA not to provide a utility
reimbursement if such a reimbursement is due. Nor does the rulemaking
offer PHAs the option of making such payments less frequently than
quarterly.
Issue: Frequency of Payments. Commenters asked whether the
quarterly reimbursement period would be based on the calendar year or
when the family moves in. Others asked for clarification on whether the
payments are reimbursements or future payments.
HUD Response: The final rule has been modified to clarify that the
quarterly periods are to be based on the calendar year, not the move-in
date. However, HUD is not amending other policies governing when
utility reimbursements are sent.
Issue: Hardship Exemption. Commenters stated that HUD should not
allow any hardship exemption.
HUD Response: While the proposed rule did not contain a hardship
exemption, HUD has decided for some families, waiting for a quarterly
reimbursement amount may be untenable. Therefore, the final rule now
requires that if PHAs make quarterly reimbursements, the PHA must have
a hardship policy in place for tenants.
Issue: Quarterly Reimbursement Threshold Amount. Commenters
requested that HUD increase to $50 the maximum amount of reimbursements
that may be sent quarterly.
HUD Response: HUD agrees that raising the threshold for quarterly
reimbursements will increase the number of families under this
provision and expand the streamlining efforts. While not raising the
amount to $50 per quarter, HUD has raised the threshold to $45 per
quarter ($15 per month). Any burden placed on families due to this
higher amount is now offset by the requirement that PHAs opting to
issue quarterly utility reimbursements must include a hardship
exemption policy if the quarterly payments impose a financial hardship
on families.
Issue: Alternative Reimbursement Methods. Commenters asked that HUD
support options other than checks for making utility reimbursement
payments.
Some commenters suggested that quarterly reimbursements would not
help PHAs that use automatic deposits onto a debit card.
HUD Response: HUD supports the use of alternative utility
reimbursement methods, including debit cards. PHAs that choose to use
such alternative methods should ensure that such reimbursement methods
do not generate fees that must be paid by the tenant.
The use of quarterly reimbursement may benefit PHAs that use
automatic deposits. If it does not, then HUD expects that such PHAs
will not exercise this option.
Issue: Elimination of Low Reimbursement Amounts. Commenters asked
that HUD eliminate utility reimbursements that are less than $10 per
month or eliminate reimbursements entirely.
HUD Response: HUD does not agree that utility reimbursements for
amounts less than $10 per month should be eliminated. The elimination
of such reimbursements would violate sections 3 and 8 of the 1937 Act
(42 U.S.C. 1437a and 1437f), which require that families pay no more
than 30 percent of their annual gross income in rent for their assisted
housing. HUD has determined that such rental payments are for housing
and reasonable utilities costs. Therefore, eliminating a utility
reimbursement of any amount would result in some program participants
paying more than the maximum amount of rent that the family should pay.
HUD will not adopt the suggested change.
Issue: Setting Rents by Income Bands. Commenters stated that the
reimbursement burden would be completely eliminated if rents were
solely determined by income bands.
HUD Response: HUD does not have the statutory authority to permit
the use of rents based on income bands in the PH or HCV programs.
Therefore, HUD will not adopt this suggestion.
Issue: Direct Payments. Commenters stated that owners should be
able to submit utility payments directly to utility providers.
HUD Response: This rulemaking does not eliminate the option
available to PHAs to make direct payments to utility providers in lieu
of making utility reimbursement payments to tenants.
Issue: Prorated Reimbursements. Commenters stated that owners
should be given the option to prorate the utility allowance payment
based on any projected move out date; if a payment has already been
disbursed when a tenant moves out, the owner should be allowed to
offset the difference by using the security deposit, charging the
resident for the difference, or adjusting the voucher payment amount.
HUD Response: This rulemaking requires PHAs to make a prorated
utility reimbursement payment in the case of a family that moves out in
advance of the next scheduled quarterly reimbursement. Likewise, if a
family leaves the program with an outstanding credit from the PHA for a
utility reimbursement, the PHA must reconcile the credit with the
family prior to the expiration of the lease, in the case of PH, or when
the HAP contract terminates or shortly thereafter, in the case of the
HCV program.
C. PH Program Regulations
1. Public Housing Rents for Mixed Families (Sec. 5.520(d))
The comments received on this proposal were all positive and did
not urge any changes. Therefore HUD is adopting the proposal, unchanged
in the final rulemaking.
2. Tenant Self-Certification for Community Service and Self-Sufficiency
Requirement (Sec. Sec. 960.605, 960.607)
Issue: Review of Certifications. Several commenters stated that HUD
should not require PHAs to obtain third-party verification when
reviewing the self-certifications or should limit the times when a PHA
should follow up with a third party in the review of certifications.
HUD Response: HUD agrees that it would be unnecessarily burdensome
on PHAs to obtain additional third-party verification when reviewing
each self-
[[Page 12361]]
certification. HUD is not, therefore, mandating such a process when
reviewing tenant self-certifications. PHAs must, however, review the
self-certifications to ensure that they are complete and provide
sufficient information in order to follow up as necessary. Further, HUD
strongly encourages PHAs to investigate community service compliance
when there are questions of accuracy. Finally, in a change from the
proposed rule, HUD is requiring PHAs to validate a sample of self-
certifications and notify residents that their self-certifications may
be subject to such validation in order to ensure that residents remain
compliant with the community service and self-sufficiency requirement
(CSSR).
Issue: Objections to Self-Certification. Several commenters
objected to the proposal to allow self-certification, stating that it
would reduce compliance with the CSSR.
HUD Response: While HUD understands the concerns that some
residents may attempt to submit fraudulent self-certifications, the
changes permit, but do not require, PHAs to accept a tenant self-
certification of compliance with the CSSR in lieu of obtaining
independent third-party verification. PHAs that are concerned about the
potential for fraudulent self-certifications may continue to require
third-party verification of compliance for each eligible resident.
Issue: Elimination of Community Service Requirement. Several
commenters suggested that it would be better if HUD eliminated the
community service requirement for PH entirely.
HUD Response: The CSSR is mandated by section 12(c) of the 1937 Act
(42 U.S.C. 1437j(c)). HUD is therefore unable to eliminate the CSSR.
3. Public Housing Grievance Procedures (Sec. Sec. 966.4 and 966.52
Through 966.57)
Issue: Alignment. Commenters suggested that all grievance
procedures should be aligned across PH, Section 8, and MFH programs.
This would allow for only one administrative hearing for any action.
Other commenters suggested applying the revised definition of ``hearing
officer'' to the HCV program, as well.
HUD Response: In general, this streamlining rule aligns program
requirements where possible to simplify administration of HUD programs.
In the case of the PH program, which in some cases requires grievance
procedures that are beyond what is required under state/local law, it
would be impractical for HUD to seek to fully align the PH program with
other HUD rental assistance programs.
Issue: Hearing Postponements. Many commenters objected to language
in Sec. 966.56(c), which would limit the timing of any hearing
postponements to five days. The commenters stated that the provision
places unnecessary time restrictions, and timeframes should remain at
the discretion of PHAs on a case-by-case basis.
HUD Response: HUD's intent in this provision is to clarify, through
the use of plain language, the flexibility afforded to the hearing
officer regarding the length of time for which a hearing may be
postponed. The regulatory language was changed from ``not to exceed,''
to ``no more than.'' The change is not substantive, does not reduce the
flexibility afforded to the PHA, and is not disadvantageous to the
complainant. The final rule is unchanged from the proposed rule.
Issue: Limited English Proficiency (LEP) Requirements. Several
commenters expressed concern with the newly included LEP requirements
in Sec. 955.56. The commenters asked whether a PHA must provide
materials in multiple languages, and stated that PHAs should be allowed
to use common sense when providing LEP materials to complainants.
Other commenters asked that HUD expand the LEP requirements beyond
written materials to include providing translators at various
conferences and meetings and materials in other languages for any
notice related to a proposed adverse action. Some commenters stated
that written materials may be inappropriate, as some residents may be
illiterate in their spoken language.
Some commenters also disagreed with HUD's placement of the LEP
requirements under a heading of accommodations for persons with
disabilities, as limited English proficiency is not a disability.
HUD Response: HUD's intent in this provision is to clarify in the
regulations the LEP requirements already in place for the PH program.
On January 22, 2007,\6\ HUD published final guidance in the Federal
Register. This rulemaking does not introduce requirements that are
beyond what is included in HUD's final LEP guidance. The final rule has
been amended to clarify PHA obligations.
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\6\ See https://www.gpo.gov/fdsys/pkg/FR-2007-01-22/pdf/07-217.pdf.
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HUD agrees with the comments regarding the placement of the
language, and has moved the requirement to Sec. 966.56(g).
Issue: Due Process. Commenters suggested methods to assure due
process rights for complainants, including relying exclusively on local
courts or limiting the streamlined process only for drug activity. Some
commenters stated that PHAs should be required to set forth a basic
schedule, including witness lists and supporting documents and limiting
the types of testimony a PHA may introduce without allowing cross-
examination of witnesses. Commenters also asked that HUD provide
additional guidance on how flexible a PHA may be with certain
procedures, in order to reduce the exposure of PHAs to legal
challenges.
HUD Response: HUD's intent in this rulemaking is to remove overly
prescriptive process requirements for PH grievances, where those
requirements are not mandated by statute. The changes proposed above
either attempt to maintain or add to existing requirements. The changes
are not consistent with HUD's intent in this rulemaking; therefore, HUD
will not adopt these suggested changes.
Issue: Consultation with Residents in Appointing Hearing Officers.
Some commenters expressed concern that the proposal eliminates the
requirement for PHAs to consult with residents in appointing hearing
officers, stating that it damages residents' rights to impartial
hearings.
HUD Response: Requiring a process to consult with residents over
the selection of a hearing officer when PHAs ultimately have the final
say about whom to select would be an unnecessarily burdensome process
requirement, and therefore contrary to the intent of this rulemaking
which is to reduce burden. Further, PHAs still may, but are no longer
required to, consult with residents about the hearing officer. This
suggestion would maintain the current burdensome process and is
inconsistent with HUD's intent in this rulemaking. HUD will not adopt
this suggestion.
However, in light of these comments, HUD agrees that tenant input
into hearing officer selection process can be valuable. Therefore, HUD
is requiring that PHAs include their policies for selection of hearing
officers in the dwelling lease, which is subject to a 30-day comment
period before any changes can be made.
Issue: Informal Settlements. Commenters asked that HUD continue to
require the summary of informal settlements, stating that HUD could
provide a template in order to reduce administrative burden.
HUD Response: HUD agrees that there is value in the preparation of
the
[[Page 12362]]
summary, as it provides an opportunity for both parties to prepare for
any forthcoming grievance hearing. As such, HUD will not change the
previous requirement that a summary be prepared. HUD will explore
whether a template summary would be useful at reducing administrative
burden for PHAs.
Issue: Meeting Recordings and Transcripts. Commenters stated that
HUD should still require PHAs to allow residents to record a meeting
and have a transcript made, as elimination of this requirement doesn't
ease the burden to the PHA, but it eliminates a benefit for future
proceedings.
HUD Response: HUD agrees with this comment and this final rule
reinstates language making clear that any party to a grievance may
arrange to obtain a hearing transcript, at their own expense.
Issue: Retention of Hearing Officer Decisions. Commenters expressed
concern that HUD was eliminating the requirement that PHAs maintain
copies of decisions of hearing officers. Commenters stated that the
records are important to maintaining transparency for PHAs; the
commenters stated that electronic records would reduce burdens for
keeping the records.
HUD Response: HUD's regulation at 24 CFR 966.56(b)(1) requires that
tenants be afforded a hearing based on relevant facts related to the
specific grievance. HUD disagrees that prior decisions are necessarily
relevant to the individual facts related to a specific grievance
hearing. Further, the retention of such documents is time-consuming and
costly for PHAs. The suggested change is inconsistent with HUD's intent
in this rulemaking, which is to reduce administrative burden and
program costs. Therefore, HUD will not adopt the suggested change.
However, HUD agrees that basic information related to past hearing
decisions could be useful for HUD oversight and for ensuring
transparency in the process. Therefore, in lieu of the requirement to
maintain redacted hearing decisions and making such decisions available
to the public, HUD is requiring that PHAs maintain a simple log, as
described in forthcoming HUD guidance, that provides basic information
on past hearing decisions.
Issue: Informal Hearings. Commenters stated that HUD should
reinstate informal hearings prior to a formal grievance in order to
avoid more costly formal hearings whenever possible.
HUD Response: This final rulemaking did not eliminate the informal
hearing (i.e., informal settlement of grievance) prior to a formal
grievance hearing, as initially proposed. Requirements related to the
informal hearing are contained in 24 CFR 966.54.
4. Limited Vacancies (Sec. 990.150)
Issue: Consistency with local vacancy rates. Commenters stated that
PHAs should be allowed to maintain vacancy rates that are comparable
with that of the jurisdiction. Others asked HUD to set the allowed
vacancy rate at not less than 5 percent, as permitted in the LIHTC and
Project-Based Rental Assistance (PBRA) programs.
HUD Response: The limited vacancy provision allows for funding for
vacancies of up to 3 percent. Five other types of approved vacancies
are included in the existing regulation related to particular project
circumstances such as modernization, special uses, litigation,
disasters, and casualty losses as well as an appeal provision for
vacancies due to changing market conditions.
Issue: Effect on small agencies. Some commenters objected to new
language that the commenters stated would reduce subsidies to PHAs and
could destabilize small agencies. Others stated that the proposal does
not allow for consideration of market conditions or specific local
conditions for small PHAs, which would hurt struggling agencies.
HUD Response: The proposed language retains the special
consideration for PHAs with 100 units or less. HUD's Public Housing
Operating Fund (Operating Fund) regulations continue to allow for
appeals for changing market conditions and specific local condition.
Issue: Basis for calculation. Commenters asked that vacancies be
judged on a PHA-wide basis to permit balance of high-demand areas with
others where there is a low demand, because one or two vacancies could
cause a vacancy rate over 3 percent. The commenters stated that PHAs
should be allowed to manage their portfolio as a single program,
similar to the way the private sector would do so.
HUD Response: This clarification of the limited vacancy rule
retains the approach that funding is both determined and provided at a
project level. The foundation of the transition to asset management,
which was adopted by both PHAs and HUD at the time of promulgation of
the new Operating Fund rule, was for certain PHAs to migrate away from
PHA-level management and funding for those that converted to asset
management. Instead, funding, budgeting, accounting, and management are
all conducted at the project level. HUD recognizes each PHA's
discretion as a property and financial manager of real estate to group
buildings to optimize efficient property management and financial
viability. The Operating Fund regulations and HUD systems currently
allow PHAs to group buildings into a project(s) to best serve the
interests of the property and residents.
Issue: Lag time. Commenters objected to the change because
occupancy numbers being used are 12-18 months in the past, requiring
PHAs to operate on non-applicable past information.
HUD Response: The Operating Fund formula in 24 CFR part 990 is
based on use of historical performance data as a basis to fund current
year needs. The clarification of the limited vacancy language does not
modify the tenure of performance data used to calculate Operating
Subsidy eligibility.
Issue: Negotiated rulemaking. Some commenters stated that HUD
should stand by agreements reached through the negotiated rulemaking
process that established the current operating fund formula.
HUD Response: The clarification of the limited vacancies provision
is consistent with the negotiated rulemaking process.
5. Flat Rents (Sec. 960.253)
Issue: Phase-in of rent increases less than 35 percent. Commenters
asked that HUD reinstate an earlier policy that would allow PHAs to use
discretion in implementing any higher flat rents. This would have
allowed PHAs to phase in small flat rent increases--those below 35
percent--over a three-year period.
HUD Response: The initial discretion for phasing in small increases
was due to the fact that the changes in the 2014 Appropriations Act set
all flat rents at 80 percent of FMR, with no possibilities for
exceptions to that amount. HUD received indications that this might be
softened in a future year, permitting PHAs to set flat rents using more
localized market data. As a result, HUD used its discretion to limit
the impact of flat rent changes on PHAs and tenants by allowing the
higher rents to be phased in.
With the passage of the 2015 Appropriations Act, however, HUD
believes that PHAs have sufficient flexibility to set flat rents that
reflect the true market value of their units, and therefore the three-
year phase-in for small flat rent increases is unnecessary. However,
the statutory requirement to phase in increases exceeding 35 percent
for families already paying flat rents remains in the rule.
Issue: Deadline for compliance. Commenters asked HUD to extend the
[[Page 12363]]
January 1, 2016 deadline for flat rents to take effect.
HUD Response: This comment misinterprets the effective date of the
new flat rent requirements. HUD did not establish a hard deadline of
January 1, 2016 for new flat rents to take effect. PHAs were already
required to establish flat rents at no less than 80 percent of the
applicable FMR as required by PIH Notice 2014-12. That notice clarified
that PHAs were required to update flat rents no later than 90 days
after HUD published new, final FMRs. The 90-day effective date of new
flat rents based on new FMRs was also included in the interim rule and
the accompanying guidance provided through notice PIH 2015-13. Once HUD
publishes new final FMRs in any given year, PHAs will be required to
update flat rents within 90 days of the publication of those FMRs and
must begin applying them prospectively to new admissions and at family
annual recertifications. In years where HUD takes longer than 12 months
between the publication of new FMRs, PHAs are permitted to continue to
charge flat rents at the current FMR, SAFMR, or approved exception flat
rent amount until HUD publishes new FMRs and the 90-day effective date
has taken place.
Issue: Lowering rents when FMRs or SAFMRs decrease. Commenters
asked HUD for additional clarity on the requirements for when market
rents decrease, particularly whether PHAs retain discretion to reduce
flat rents when FMRs decrease.
HUD Response: PHAs must set flat rents at no less than 80 percent
of the FMR or SAFMR, or they may submit an exception request
establishing flat rents based on a market analysis. There is no such
requirement limiting a PHA from lowering a flat rent in years where the
FMR or SAFMR decreases. Therefore, in years where an FMR or SAFMR
decreases, PHAs have the discretion to lower flat rents, but they may
not set flat rents at less than 80 percent of the FMR or SAFMR unless
they submit a new exception request.
Issue: Rent reasonableness guidance. Commenters suggested that a
possible explanation for why flat rents have been set incorrectly in
the past is due to a lack of guidance from HUD on proper rent
reasonableness assessments.
HUD Response: While that may be true for some PHAs, HUD has heard
anecdotally that there were many reasons why flat rents may not have
been set correctly. However, in an effort to support PHAs when trying
to determine the market value of their public housing, HUD will publish
future guidance on rent reasonableness assessments for public housing.
Issue: Updating rent levels when an exception rent has been
requested. Commenters asked for additional clarification on what the
requirements were related to adjusting flat rent levels when the PHA is
intending to submit a request for exception rents.
HUD Response: In this initial year, any PHAs that submit exception
requests prior to the expiration of the 90-day period after the
publication of new FMRs may continue to charge flat rents at the
current levels until the PHA is notified of HUD's decision on their
exception request. However, if a PHA fails to submit an exception
request prior to the expiration of the 90 day period after the
publication of new FMRs, that PHA may still submit an exception
request, but must update flat rents to no less than 80 percent of the
FMR or SAFMR until such time that HUD notifies the PHA of its decision
on the exception request.
Issue: Flat rents and self-sufficiency. Commenters stated that PHAs
should have the discretion to set flat rents lower than 80 percent of
market rents in order to encourage families to become self-sufficient.
HUD Response: Flat rents themselves are intended to encourage self-
sufficiency. They are a maximum amount of rent that a family could be
charged; once a family begins to pay flat rent, any increases in income
do not have an effect on their rental payment. Because families have
the ability to choose between paying an income-based rent or a flat
rent, families that choose to pay flat rents are inevitably paying a
lower percentage of income than other public housing households which
is a self-sufficiency incentive. Therefore, HUD does not believe that
any additional discretion regarding flat rents is necessary to
encourage economic self-sufficiency.
Issue: Reduced exception rent requests. Commenters asked that PHAs
only be required to submit exception rent requests every three years
instead of annually.
HUD Response: HUD is bound by the statutory framework, which
stipulates that exception requests must be submitted if the applicable
FMR or SAFMR do not reflect the market value of a property. As such,
the statute requires a comparison of the FMR or SAFMR to a current
market study in order to determine whether the market value of a
property is less than the current FMR or SAFMR. Therefore, HUD does not
have the authority to permit PHAs to use market studies that are not
current for exception requests.
Issue: LIHTC rents and public housing flat rents. Commenters asked
for additional clarity on how the flat rents regulation impacts the
LIHTC rents.
HUD Response: PHAs that manage public housing units that were
developed or modernized using LIHTC must set maximum rents for such
units at the required maximum LIHTC rents, even if this is lower than
the minimum flat rent amount for a particular unit.
Issue: Opposition. Several commenters objected to the flat rent
policy entirely, stating that it would increase rent burden, cause
higher turnover, and negatively impact tenant employment.
HUD Response: Although HUD recognizes that there are consequences
to changes in flat rents, HUD believes that the changes included in the
FY 15 Appropriations Act, which have been included in this rulemaking,
provide sufficient flexibility to PHAs to set accurate, market-based
rents. Further, tenants concerned about rent burden are reminded that
they are provided a safeguard in this rulemaking from large annual
increases in rent, and they are always able to elect to pay the income-
based rent which is set at 30 percent of income.
D. HCV Program Regulations
1. Start of Assisted Tenancy (Sec. 982.309)
Issue: Objections. Many commenters objected to this proposal,
stating that landlords seek to lease units as quickly as possible, and
this could delay tenants from being able to move into their units. In
high-demand areas, this could reduce the number of landlords willing to
participate in the voucher program, limiting choice to voucher holders.
Many commenters also expressed concern that this would have negative
consequences for families that need to move immediately or
alternatively would cause tenants to have to move out of a unit before
being able to move into a new one. Other commenters stated that this
would concentrate administrative tasks into a single time of the month
for PHAs, actually increasing their burden.
HUD Response: HUD has decided against promulgating this change.
Several commenters favored the proposed change, but input from groups
ranging from landlords to tenant advocates suggested that the change
would have an adverse effect on the ability of HCV-assisted tenants to
access housing. While the proposed change would have been optional at
the discretion of the PHA, and HUD estimates that PHAs would choose not
to adopt any measure that would make
[[Page 12364]]
it more difficult for HCV-assisted tenants to access housing, HUD
ultimately decided that it could move forward with the change only if
it also required any PHA opting to implement the provision to also put
into place an exception policy for certain families (e.g., victims of
domestic violence) or situations (e.g., HAP terminations due to HQS
violations). Ultimately, requiring the adoption of an exception policy
would counter any administrative relief provided by implementing the
proposed change. Taking all of these factors into consideration, HUD
declines to include this provision in this final rule.
2. Biennial Inspections and the Use of Alternative Inspection Methods
(Sec. Sec. 982.405, 983.103)
Issue: HUD Systems. Commenters suggested ways that HUD could
improve its inspection procedures. Some commenters suggested that the
electronic systems be updated for biennial inspections, and others
asked for a centralized database for inspection reports and data, which
could then be accessed by PHAs in order to obtain the results of
alternative inspection methods. Some commenters stated that HUD should
review inspection protocols with input from PHAs and implement ``best
practices'' across the board. Commenters also asked for consolidating
inspection standards between HUD programs and LIHTC.
HUD Response: While these comments are helpful in that they specify
improvements to HUD systems that would simplify the inspection process,
advise of the burden that results from differences in inspection
protocols and standards, and point out at least one way in which an
expansion of this provision could bring about further streamlining,
they are either beyond the scope of this rulemaking or would require
statutory changes.
In addition, HUD's information technology investment decisions are
made enterprise-wide based on available resources as appropriated by
Congress. HUD will explore ways to move to electronic reporting systems
with available resources. In particular, HUD is considering the
creation of a national-level affordable housing database that could be
utilized in the way described.
Issue: Keep Proposal Optional. Some commenters stated that PHAs may
want to inspect properties more frequently for oversight purposes, and
therefore asked that biennial and alternative inspections remain
optional for PHAs.
HUD Response: As authorized by Congress and proposed in this
rulemaking, the use of biennial inspections is at the discretion of the
PHA; PHAs will retain the discretion to inspect annually any properties
that warrant more frequent attention. The same is true of alternative
inspection methods--their use is entirely at the discretion of the PHA,
per the statute and this rulemaking. Nothing in this final rule
requires a PHA to adopt biennial inspections or alternative inspection
methods.
Issue: Remediation Protocols. Commenters offered several
suggestions on how to remediate problems identified by alternative
inspections. Some stated that HUD should allow PHAs to rely upon the
remediation protocol of the alternative inspection method; there would
be no burden relief if PHAs have to conduct HQS inspections anyway for
units that failed the alternative inspection the first time. Some
commenters suggested that this could be satisfied by providing HUD with
a certification from the inspecting agency that the deficiencies have
been mitigated. Commenters stated that HUD should allow PHAs to decide
if they will conduct a remedial HQS inspection or rely on the owner to
provide proof of actions to remedy defects.
HUD Response: HUD is sympathetic to the suggestion that any
streamlining benefit of this provision is offset by the requirement
that a PHA inspect a property using HQS when the property has already
been inspected using an alternative inspection method and such method
reveals the existence of violations that would have resulted in a
``fail'' score under HQS. For an alternative inspection method that
employs sampling, however, as is the case with inspections of
properties subsidized with LIHTCs, any cited deficiencies that would
ultimately be corrected may exist as well in units not included in the
sample, including units occupied by HCV-assisted households. HUD has an
obligation to determine whether such deficiencies exist in units
occupied by such households and, if they do, to assure that the units
are once again brought into compliance with HUD's housing quality
standards.
PHAs are only precluded from relying on an alternative inspection
method if a property inspected pursuant to the method fails an
inspection. In all cases where a property passes an inspection, even if
deficiencies are identified, a PHA may rely upon the alternative
inspection method to demonstrate compliance with HUD's housing quality
standards. If a property fails an inspection due to identified
deficiencies, it may be the case that remedial actions taken pursuant
to the alternative inspection method fall short of what would be
required under HUD's housing quality standards.
In any circumstance in which a PHA is prohibited from relying on an
alternative inspection method, HUD declines, for the reasons identified
above, to adopt alternative remediation measures as a substitute for a
PHA's determination that a unit occupied by an HCV-assisted family
meets the requirements for occupancy and funding under the HCV program.
Issue: Reinspection Sampling. In the case of residents with tenant-
based vouchers living in mixed-finance properties, commenters stated
that HUD should authorize biennial inspection of a random sample of
units consisting of at least 20 percent of the contract units in each
building.
HUD Response: Congress specifically authorized the use of
alternative inspections, including inspections conducted pursuant to
requirements under the low-income housing tax credit (LIHTC) program.
The LIHTC program employs sampling. A PHA may adopt an alternative
inspection method that is specifically authorized by Congress or
approved by HUD and employs sampling.
Issue: Alternative Inspection Standards. Commenters suggested that
HUD require HUD's Real Estate Assessment Center (REAC) to approve or
disapprove a PHA's certification that an alternative inspection method
meets HUD standards prior to allowing the PHA to employ the alternative
inspection method.
HUD Response: HUD has adopted this suggestion in this final
rulemaking.
Issue: Local Jurisdiction Inspections. Commenters asked that HUD
allow PHAs to use inspections done for local jurisdictions, even when
the inspections are done by local agencies.
HUD Response: The statute authorizes PHAs to rely on inspections
conducted under a ``Federal, state, or local housing program.'' HUD
interprets a ``local housing program'' to include a local housing code.
Subject to the conditions established in this final rule, a PHA may
rely upon an inspection conducted pursuant to a local housing code to
meet its obligation to inspect units occupied by HCV-assisted tenants
during the course of a housing assistance payments contract. In order
to rely upon such an inspection, a PHA must submit a copy of the local
housing code to HUD, along with an analysis by the PHA showing that the
local housing code standard meets or exceeds HQS. Once HUD has reviewed
these materials, and then only if HUD approves use of the inspection
method, the PHA may rely upon it. The PHA must certify annually to HUD
that
[[Page 12365]]
the local housing code has not changed; if it has changed, then the PHA
must again obtain HUD approval to rely upon the standard, submitting a
copy of the revised code and an analysis showing that the revised
standard meets or exceeds HQS.
Issue: Objections. Some commenters expressed dissatisfaction with
the proposal, particularly with alternative inspections, and stated
that HUD should not continue with the proposal.
HUD Response: HUD is required by law to implement biennial
inspections and inspections via alternative inspection methods.
3. Housing Quality Standards (HQS) Reinspection Fees (Sec. 982.405)
Issue: Burden on PHAs and Deterrence to Landlords. Some commenters
objected to the proposal, stating that landlords would be reluctant to
pay reinspection fees and would therefore be deterred from
participating in the Section 8 program. Others stated that charging
fees to landlords would be a burden to PHAs, and therefore should
remain optional and up to the PHA to decide how to implement.
HUD Response: The proposed change made it optional for a PHA to
charge a reinspection fee, and this final rule retains the optional
nature of the provision. If a PHA has a concern that charging a fee may
deter landlords from participating in the program or may result in
additional work (i.e., securing payment of a fee, once assessed), then
the PHA will want to take these factors into consideration when
determining whether to impose a reinspection fee. As long as a PHA
complies with the requirements of this regulation when imposing a
reinspection fee, nothing in this regulation would constrain a PHA from
adopting local policies specific to the administration of such a fee.
For example, a PHA could specify in its Administrative Plan that an
owner will be charged a reinspection fee only after a second
reinspection reveals that the defect persists. PHAs will need to
determine whether and how best to use this reinspection fee authority,
based upon their local circumstances.
Issue: Use of Fees and When to Charge. Some commenters suggested
that the collected fees be added to administrative fee amounts
available to a PHA.
HUD Response: Fees will be included in a PHA's administrative fee
reserve and may be used only for activities related to the provision of
Section 8 tenant-based assistance.
Issue: Guidance. Several commenters asked HUD to provide additional
guidance on what constitutes a ``reasonable'' fee; such guidance will
be necessary to reduce PHA administrative burden.
HUD Response: HUD will issue guidance on what constitutes a
``reasonable'' fee.
Issue: When Charges May Be Assessed. Commenters asked that HUD
clarify the proposal to avoid charges for full HQS inspections instead
of merely for reinspections of previously identified deficiencies.
Others asked for information on how the proposal would relate to
special inspections that are not initial or regularly scheduled
inspections, or what would happen if a landlord or tenant does not
attend or allow entrance for the inspection. Commenters also asked that
HUD expand the proposal to allow for the charging of fees even when a
landlord has not indicated deficiencies have been corrected, when the
allotted time for repairs has expired but a pre-scheduled reinspection
reveals the repairs have not been made.
HUD Response: The final rule makes clear that a fee may be assessed
under two circumstances: First, if a landlord affirms that a repair has
been made and a subsequent reinspection shows that it has not and,
second, when the allotted period of time for making the repair has
lapsed and a reinspection shows that the repair has not been made,
whether or not the landlord has affirmed that it was.
Issue: Expansion of Proposal. Some commenters also suggested that
HUD expand the proposal to allow for fees for all reinspections. Others
stated that PHAs should be allowed to redirect funds from abated rents
to cover the costs of inspections instead of charging fees. Finally,
commenters stated that HUD should consider other incentives for
landlords, such as allowing tenants to pay rent into repair escrow
accounts.
HUD Response: HUD appreciates these suggestions and observations
but has declined to adopt them as part of this rulemaking.
4. Exception Payment Standards for Providing Reasonable Accommodations
(Sec. Sec. 982.503, 982.505)
Issue: Unit Special Features. Commenters stated that HUD should
include a consideration of special features of the unit when
establishing a reasonable rent between 110 percent and 120 percent of
area fair market rent (FMR).
HUD Response: There was strong support for retaining this provision
unchanged, and HUD has done so. A PHA must take special features into
consideration when there is a reasonable accommodation request. In
accordance with 24 CFR part 8, a PHA must provide a higher payment
standard if requested as a reasonable accommodation for a family that
includes an individual with disabilities. HUD's regulation implementing
section 504 of the Rehabilitation Act, at 24 CFR part 8, is referenced
in 24 CFR 982.505(d). In addition, under 24 CFR 8.28(a)(3), PHAs are
already required, when issuing a voucher to a family that includes an
individual with disabilities, to assist the family in locating an
available, accessible dwelling unit. For example, PHAs are required to
provide a current listing of available units known to the PHA.
Issue: HAP Funding. Commenters stated that PHAs will be challenged
to provide higher payment standards when HAP funding is already
constrained.
HUD Response: HUD acknowledges the concerns about funding
constraints. PHAs are nonetheless required to assist families that
include an individual with disabilities, including by providing a
higher payment standard as a reasonable accommodation, if the family
requests such an accommodation and it is necessary in order for the
family to obtain suitable housing.
5. Family Income and Composition: Regular and Interim Examinations
(Sec. 982.516(c)-(e))
Issue: Timing of Interim Examinations. Commenters supported this
proposal, but also asked that it remain optional for PHAs. Some asked
for further clarification from HUD regarding whether a PHA is required
to conduct an interim examination when a family member is added, and at
what point such an examination might be required. Several commenters
also pointed out that the new proposed language did not align
regulations between the PH and Section 8 programs.
HUD Response: HUD agrees with providing clarity to the proposed
change to 24 CFR 982.516. With the removal of paragraph (e) (``Family
member income''), HUD is removing from part 982 the requirement that a
PHA perform an interim examination whenever a new family member is
added. The corresponding regulation for the PH program (24 CFR 960.257)
contains no such requirement. The removal of paragraph (e) from Sec.
982.516 provides HUD with the opportunity to issue uniform guidance on
interims--in other words, guidance that will apply to both the PH and
HCV programs. Having reviewed data on the reasons for which interims
are requested and considering a number of alternatives, including
establishing thresholds below which
[[Page 12366]]
PHAs would not be required to conduct interims, HUD determined that the
greatest potential for streamlining lies in issuing uniform guidance.
Other options either created their own administrative challenges and/or
had the potential to have a negative effect on program participants.
For example, authorizing PHAs to limit interims to circumstances in
which a change in family income or composition would result in a rent
increase of some threshold dollar amount would require PHAs to
determine whether the threshold had been met, which would in itself be
a burdensome exercise. At the same time, a finding that the threshold
had not been met, resulting in no change to a family's rent, could
place a burden on tenants.
Issue: Discretion and Threshold Amounts. Several commenters
requested that HUD continue to leave policies regarding
recertifications up to the discretion of PHAs.
HUD Response: Nothing in this final rule alters PHA discretion with
respect to interims.
6. Utility Payment Schedules (Sec. 982.517)
Issue: Objections to the Proposal. Many commenters objected to the
proposal to consolidate the utility payment schedules. Some commenters
stated that the definition of ``attached'' and ``detached'' are
unclear, and HUD should provide additional information. Other
commenters stated that consolidating the schedules would penalize
tenants in certain types of units because energy use is not always
comparable under such broad categories. Some commenters suggested that
the proposal could raise fair housing issues by impacting larger
families in multi-bedroom units. Others stated that the proposed 60-day
notice was insufficient to protect tenants from decreased utility
allowances.
Some commenters stated that, in areas served by more than one PHA,
perhaps with differing policies on how to define unit types, the
proposal would create confusion for program applicants and
participants.
HUD Response: Considering the totality of the comments submitted on
the proposal to authorize PHAs to establish utility payment schedules
that limit ``unit type'' to either ``attached'' or ``detached,'' HUD
has decided against adopting this provision. HUD acknowledges comments
that the proposal may have an unintended and inequitable effect on
certain households, and believes this issue merits additional analysis
in order to determine the extent to which these outcomes may occur and
to weigh those outcomes against the benefits of streamlining. In
addition, comments focused on jurisdictional questions caused HUD to
realize that the proposal could create confusion--for program
applicants, especially--in the event PHAs with overlapping
jurisdictions opted to adopt different definitions of ``unit type''
(i.e., one relying on the traditional method and the other choosing to
define unit type as either ``attached'' or ``detached'').
Issue: Broader Utility Allowance Changes. Commenters asked HUD to
consider broader changes to utility allowances. Commenters suggested
that HUD completely eliminate utility allowance schedules or allow flat
utility allowances based on average per-bedroom size or household size.
Others suggested that HUD provide an annual utility cost adjustment
factor for each locale instead of requiring PHAs to calculate utility
costs on their own. Finally, some commenters suggested that HUD
establish a more equitable utility subsidy approach, accounting for
other forms of assistance, such as utility caps or utility credits.
HUD Response: Based on comments received, HUD recognizes that
having a holistic look at utility allowance calculations may be
merited. Should HUD initiate such a review, these comments will be
taken into consideration. The suggestions are, however, beyond the
scope of this rulemaking.
E. Other Comments
In addition to comments on specific proposals, commenters also
suggested regulatory and other changes that HUD could make for
streamlining and other burden-reducing benefits.
1. Enterprise Income Verification (EIV)/Information Verification
Issue: EIV Reports. Some commenters suggested that certain reports
(e.g., New Hires, New Move-In, Income Discrepancy) should not be used
as frequently, if at all. The commenters suggested that, to the extent
such reports provide useful information, the information could be
gathered at other times or using other methods.
HUD Response: HUD appreciates the comments regarding the use of the
various EIV reports. HUD understands that the information generated
through some reports may reflect delayed information. However, EIV has
significantly reduced improper payments in HUD's programs, and these
reports help PHAs and HUD to monitor program participants and address
discrepancies in a timely manner. Further, changes to EIV are beyond
the scope of this rulemaking.
Issue: EIV Use and Expansion. Many commenters suggested that HUD
modify the EIV system by adding additional income sources, including
past income, in the system or allowing verification of SSNs through
EIV. Other commenters suggested that HUD consider alternatives to EIV,
such as the Work Number or cooperative agreements with state agencies.
Finally, commenters asked for more frequent updates to EIV.
HUD Response: HUD appreciates the comments about how to improve or
supplement EIV; however, these suggestions are outside of the scope of
this rulemaking.
2. Income Determinations and Rent Settings
Issue: Calculation of Income. Commenters offered suggestions on
ways that they stated would be easier to calculate tenant income and
rent. Some stated that HUD should base rents on gross income, rather
than adjusted income. Others suggested that HUD modify the process for
deducting medical expenses from income by using past expenses or a
standard deduction. A standard childcare deduction was also proposed.
One commenter suggested that HUD consider the automation-based process
for certification and verification incorporated by the Affordable Care
Act.
Commenters also asked HUD to allow for less frequent income
reexaminations, either on a biennial or a triennial basis. This change
could be authorized based on family type (i.e., elderly, disabled) or
family income status (i.e., extremely low-income, very low-income).
Some commenters requested an increase in the minimum rent or that
HUD reinstate the ``frozen rental income'' regulation provision to
encourage tenants to have earned income. Others asked that HUD consider
limiting the inclusion of assets by only including actual income from
assets or only including assets disposed of for less than fair market
value for assets over a given threshold. Some stated that HUD should
count assets disposed of since the two previous annual reexaminations
instead of the previous two years.
Commenters stated that HUD should not allow tenants to claim no
income, but instead should require that all tenants maintain a minimum
income.
Finally, commenters stated that PHAs should not be required to
conduct rent reasonableness determinations when a PHA is using a fair
market rent determined by HUD or when a proposed rent has already been
approved by HUD or its administrator.
[[Page 12367]]
HUD Response: HUD requested comments from the public about other
opportunities to align requirements across programs, and HUD
appreciates receiving these additional comments. Some of the
suggestions are outside the scope of this rulemaking or would require
statutory change. However, HUD will consider these suggestions for
future streamlining changes.
HUD has taken actions on other suggestions. HUD's FY 2016 budget
proposes three-year recertification of income for fixed income
families, increasing the threshold for deduction of medical and related
care expenses, and a Utilities Conservation Pilot that would make it
easier for PHAs to access energy incentives from energy investments.
Also, HUD is conducting a rent reform demonstration to compare the
current rent structure in subsidized housing to an alternate structure
in terms of impact on household employment, earnings, hardship,
homelessness, and on simplification and cost of PHA administrative
processes.
3. Fees and Payments
Issue: Funding and Improper Payments. Many commenters provided
suggestions on how to improve and streamline payments to owners and
PHAs. Several suggested increased funding for administrative fees or
physical inspections. Other commenters stated that HUD should permit
voucher HAP reserves to be used for administrative purposes when the
administrative fee proration is below 90 percent.
Some commenters requested HUD freeze the rolling utility base to
allow PHAs to recoup savings from energy conservation methods. Others
asked HUD to allow expedited implementation of lower payment standards
in the voucher programs. Several commenters suggested that HUD revise
its process for determining project expense levels, accounting for the
age of properties and using the negotiated rulemaking inflation factor.
One commenter stated that HUD should permit rent increases to owners in
the HCV program only on a contract anniversary date.
Commenters also provided suggestions on reforming improper payment
procedures. A commenter asked that HUD not require owners to provide
proof of the costs involved in recovering improper payments. Commenters
also suggested that HUD not specify what makes repayment of improper
payments ``affordable'' to residents, as the current definition is
confusing and leads to extra work for staff.
HUD Response: As is the case on HUD's response to the preceding
issue, many of the comments are outside the scope of this rulemaking or
would require action by Congress, but HUD will consider these for
future streamlining changes. With respect to freezing the rolling base
to allow PHAs to recoup savings from energy conservation methods, this
is permitted now when a PHA has entered into an energy performance
contract.
4. Miscellaneous Suggestions
Issue: Broader Streamlining and Other Suggestions. Many commenters
had specific suggestions on how to align requirements and processes
across programs. Some suggested that HUD use the Public Housing
Administrative Reform Initiative to find some additional streamlining
suggestions. Others stated that HUD should have just a single entity
review grantee compliance with various program requirements instead of
allowing multiple agencies to have oversight.
Some commenters asked HUD to modify inspection protocols, including
by explicitly stating that a physical reinspection of deficiencies is
not required. Others stated that HUD should not use the Uniform
Physical Conditions Standards for HCV, but should continue to use the
HQS. Commenters further asked that HUD reconsider the requirement that
failed HQS items be reinspected prior to the HAP contract effective
date, instead allowing families to move in while the owner has 30 days
to repair the failed items.
Commenters also stated that HUD should limit requirements under
section 3 of the 1937 Act to only programs under the Office of Housing.
Others asked that HUD institute a threshold of activity below which
Section 3 requirements would not apply.
Some commenters asked that eligibility and reporting procedures be
standardized across housing programs both in HUD and across other
Federal agencies. Others stated that HUD should extend the zero-subsidy
time limit for voucher holders to align policies between the voucher
and PBRA programs. Many commenters also stated that HUD should allow
PHAs the discretion on whether or not to require community service in
PH, as it is not required in other HUD programs.
A commenter stated that HUD should incorporate policies from the
Multifamily Handbook into the PH and voucher programs to provide
additional information on how a PHA should consider a tenant family's
circumstances when they fail to recertify in a timely manner.
Some commenters stated that HUD should allow PHAs to be eligible
for Housing Trust Fund money for PH rehabilitation. Others asked that
HUD clarify that PHAs with 250 or more units of PH are still able to
use operating reserves for capital improvements.
Commenters also asked for clarity on the HCV Tenancy Addendum and
on qualifying for the Capital Fund Activity exclusion for environmental
assessments.
HUD Response: HUD will take these suggestions into consideration as
it seeks to identify additional opportunities to reduce the
administrative burden on PHAs and owners and to align the requirements
across programs, where feasible. The majority of these suggestions is
beyond the scope of this rulemaking, or would require statutory change.
However, for others, HUD can address through administrative guidance.
With respect to the suggestion that HUD thoroughly review the final
report of the Public Housing Administrative Reform Initiative, this
report is among the documents initially reviewed by HUD's streamlining
working group, which ultimately initiated this rulemaking.
Issue: Regulatory Relief in Property Assessment. Several commenters
asked HUD to suspend PHA plan requirements or for a moratorium on the
Physical Needs Assessment. Commenters asked for waivers of asset
management regulations affecting funding, such as cash transfers
between properties, fee caps, and Asset Management Project (AMP)
configurations. Commenters further asked for broad waivers under 24 CFR
part 5 and for the Public Housing Assessment System and Section Eight
Management Assessment Program to be advisory only for non-statutory
items. Finally, commenters stated that HUD should ensure that PHAs are
fully trained before any changes go into effect.
HUD Response: HUD remains interested in identifying opportunities
to reduce the burden on PHAs, owners, and grantees that administer
rental assistance. While the suggestions provided here are outside the
scope of this rulemaking, they are helpful in identifying for HUD areas
on which to focus attention. HUD will continue to look for
opportunities to streamline and simplify the administration of its
programs, and to align the requirements across programs, to the extent
feasible and reasonable, applying the same lens to future proposals as
it employed for this rulemaking effort. Specifically, any
[[Page 12368]]
proposal to relieve the administrative burden on PHAs, owners, and
grantees will need to be balanced against important tenant protections
and HUD's obligation to provide program oversight. With respect to
guidance and training, HUD is aware that PHAs, owners, and grantees may
have questions about how best to implement several of the provisions in
this rule. HUD will provide opportunities to address those questions,
through additional written guidance, training, and other means that
enable HUD to respond to requests for information.
Issue: Statutory Changes. Commenters requested changes that they
acknowledged would require congressional action. These proposals
include an earned income deduction for all families, eliminating
voucher portability, expanding Moving to Work, the Small Housing
Authority Reform Proposal, triennial recertification for fixed-income
families, increasing the flat deduction for elderly families or persons
with disabilities, increasing the medical expense deduction, or
eliminating eligibility differences among programs.
HUD Response: For several of these suggestions, HUD has previously
sought statutory change. In its FY14 budget proposal, for example, HUD
included several statutory changes that were ultimately enacted by
Congress and have now been implemented with the publication of this
final rule. HUD will continue to look for opportunities to streamline
and simplify the administration of its programs, and to align the
requirements across programs, to the extent feasible and reasonable,
applying the same lens to future proposals as it employed for this
rulemaking effort. Specifically, any proposal to relieve the
administrative burden on PHAs and owners will need to be balanced
against important tenant protections and HUD's obligation to provide
program oversight.
IV. Findings and Certifications
Executive Orders 12866 and 13563, Regulatory Planning and Review
Under Executive Order 12866 (Regulatory Planning and Review), a
determination must be made whether a regulatory action is significant
and, therefore, subject to review by the Office of Management and
Budget (OMB) in accordance with the requirements of the order.
Executive Order 13563 (Improving Regulation and Regulatory Review)
directs executive agencies to analyze regulations that are ``outmoded,
ineffective, insufficient, or excessively burdensome, and to modify,
streamline, expand, or repeal them in accordance with what has been
learned.'' Executive Order 13563 also directs that where relevant,
feasible, and consistent with regulatory objectives, and to the extent
permitted by law, agencies are to identify and consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public. This rule was determined to be a ``significant
regulatory action'' as defined in section 3(f) of Executive Order 12866
(although not an economically significant regulatory action, as
provided under section 3(f)(1) of the Executive Order).
As already discussed in this preamble, the regulatory changes by
this streamlining rule are designed to reduce administrative burdens on
PHAs, enable PHAs to better target assistance to families, and reduce
Federal costs. Some of the changes in this rule are due to statutory
changes enacted in the FY 2014 Appropriations Act and have specific
estimates of financial savings that may be expected (specifically the
change in the definition of ``extremely low-income'' and the cap on the
utility allowance). Other changes (biennial inspections, streamlining
income recertifications) may have estimates on savings generated by
Moving-to-Work (MTW) agencies that already implemented such
flexibilities. Some provisions of this rule, however, focus solely on
providing or revising regulatory provisions that reduce administrative
burdens on PHAs, but that are optional for PHAs to utilize.
Consequently HUD is unable to quantify costs and benefits for this rule
overall because of the flexibility provided.
The rule provides PHAs with the discretion as to whether they will
implement those regulations that provide alternatives means of
implementing several required administrative actions. HUD recognized
that there is a need for greater flexibility for PHAs to operate
programs that fit their communities and to use savings generated in
time from these provisions to better focus resources on their
operational priorities. However, savings are difficult to estimate as
the changes are not mandatory. HUD's FY2015 budget estimated Federal
savings for two of the provisions, changing the definition of
``extremely low-income'' and placing a cap on the utility allowance.
HUD's budget did not contain savings estimates for other provisions
which would yield efficiencies for PHAs, not HUD. For the provision
permitting biennial inspections, savings data comes from Moving-to-Work
(MTW) agencies experiences and reporting.
In FY2015, HUD estimated that the revised definition of extremely-
low income will reduce Federal costs by an estimated $155 million. The
change increases access to HUD rental assistance for working poor
families, in rural areas in particular. In such areas, median incomes
are often so low that families with a fulltime worker have incomes that
exceed 30 percent of AMI, even though the families remain below the
Federal poverty level. In the voucher program in particular, where 75
percent of vouchers issued each year must be targeted to ELI families,
this change will enable more working poor families to qualify for
voucher assistance.
Additionally, HUD estimated in its FY2015 budget that limiting the
utility allowance payment for tenant-based vouchers to the family unit
size for which the voucher is issued, irrespective of the size of the
unit rented by the family, will generate estimated savings of $50
million.
Permitting biennial inspections for HCV units will reduce the
administrative and financial burden on PHAs and high-performing
landlords and enable PHAs to concentrate their inspection resources on
the more marginal and higher-risk units. Of the 34 MTW agencies, 23
have adopted or proposed to adopt biennial inspection schedules. The
Cambridge Housing Authority estimated a net savings of $122,234, or
more than 3,737 hours of staff time in 2014 compared to 2008. The
Housing Authority of the County of San Mateo reduced the number of
inspections to approximately 2,086 annually from 4,172 and reported
savings of $52,150 in inspection costs. HUD believes that PHAs adopting
this flexibility will experience similar savings in time and costs.
Determining the complete amount of financial and time savings for
this rule is difficult because, as noted, the majority of the
provisions are discretionary for PHAs, and HUD believes that each PHA
will evaluate its own circumstances in financing and staffing and adopt
those provisions that are most cost-effective for them.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on state and local
governments and is not required by statute, or the rule preempts state
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This final rule does not have
federalism implications and does not impose
[[Page 12369]]
substantial direct compliance costs on state and local governments nor
preempt state law within the meaning of the Executive Order.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
This rule reduces the administrative burden on PHAs, MFH owners, and
certain CPD grantees in many aspects of administering assisted housing.
Such PHAs, MFH owners, and CPD grantees, regardless of size, will
benefit from the burden reduction proposed by this rule. These
revisions impose no significant economic impact on a substantial number
of small entities. As discussed above, many of the new provisions are
voluntary, and each PHA or MFH owner will be able to adopt the
streamlining provisions that offer the greatest benefit to them,
further reducing any negative effects on small entities. Therefore, the
undersigned certifies that this rule will not have a significant impact
on a substantial number of small entities.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
was made on the proposed rule in accordance with HUD regulations in 24
CFR part 50 that implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding
remains applicable to this final rule. The Finding is available for
public inspection during regular business hours in the Regulations
Division, Office of General Counsel, Department of Housing and Urban
Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500.
Due to security measures at the HUD Headquarters building, please
schedule an appointment to review the Finding by calling the
Regulations Division at 202-708-3055 (this is not a toll-free number).
Individuals with speech or hearing impairments may access this number
via TTY by calling the Federal Information Relay Service at 800-877-
8339.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
establishes requirements for federal agencies to assess the effects of
their regulatory actions on state, local, and tribal governments and
the private sector. This rule will not impose any federal mandates on
any state, local, or tribal governments or the private sector within
the meaning of UMRA.
Paperwork Reduction Act
The information collection requirements contained in this rule 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 2577-0220 and 0169. In accordance with the Paperwork
Reduction Act of 1995, an agency 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.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers applicable to
the programs that would be affected by this rule are: 14.103, 14.123,
14.135, 14.149, 14.157, 14.181, 14.195, 14.235, 14.241, 14.326, 14.850,
14.871, and 14.872.
List of Subjects
24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Crime,
Government contracts, Grant programs--housing and community
development, Individuals with disabilities, Intergovernmental
relations, Loan programs--housing and community development, Low and
moderate income housing, Mortgage insurance, Penalties, Pets, Public
housing, Rent subsidies, Reporting and recordkeeping requirements,
Social security, Unemployment compensation.
24 CFR Part 880
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 884
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements, rural areas.
24 CFR Part 886
Grant programs--housing and community development, Lead poisoning,
Rent subsidies, Reporting and recordkeeping requirements.
24 CFR Part 891
Aged, Grant programs--housing and community development,
Individuals with disabilities, Loan programs--housing and community
development, Rent subsidies, Reporting and recordkeeping requirements.
24 CFR Part 903
Administrative practice and procedure, Public housing, Reporting
and recordkeeping requirements.
24 CFR Part 960
Aged, Grant programs--housing and community development,
Individuals with disabilities, Pets, Public housing.
24 CFR Part 966
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
24 CFR Part 982
Grant programs--housing and community development, Grant programs--
Indians, Indians, Public housing, Rent subsidies, Reporting and
recordkeeping requirements.
24 CFR Part 983
Grant programs--housing and community development, Rent subsidies,
Reporting and recordkeeping requirements.
24 CFR Part 990
Accounting, Grant programs--housing and community development,
Public housing, Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, HUD amends 24
CFR parts 5, 880, 884, 886, 891, 903, 960, 966, 982, 983, and 990 as
follows:
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
0
1. The authority citation for part 5 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n,
3535(d), Sec. 327, Pub. L. 109-115, 119 Stat. 2936, and Sec. 607,
Pub. L. 109-162, 119 Stat. 3051.
0
2. Amend Sec. 5.216 as follows:
0
a. Designate the second paragraph (g)(1)(ii) as paragraph (g)(1)(iii);
0
b. Revise paragraph (h)(1);
0
c. In paragraph (h)(2), remove the phrase ``paragraph (h)(1)'' and add
in its place ``paragraph (g)(1)''; and
0
d. Add paragraph (h)(3).
The revision and addition read as follows:
Sec. 5.216 Disclosure and verification of Social Security and
Employer Identification Numbers.
* * * * *
(h) * * *
(1) Except as provided in paragraphs (h)(2) and (3) of this
section, if the
[[Page 12370]]
processing entity determines that the assistance applicant is otherwise
eligible to participate in a program, the assistance applicant may
retain its place on the waiting list for the program but cannot become
a participant until it can provide the documentation referred to in
paragraph (g)(1) of this section to verify the SSN of each member of
the household.
* * * * *
(3) If a child under the age of 6 years was added to the assistance
applicant household within the 6-month period prior to the household's
date of admission (or, for the HCV program, the date of voucher
issuance), the assistance applicant may become a participant, so long
as the documentation required in paragraph (g)(1) of this section is
provided to the processing entity within 90 calendar days from the date
of admission into the program (or, for the HCV program, the effective
date of the Housing Assistance Payment contract). The processing entity
must grant an extension of one additional 90-day period if the
processing entity determines that, in its discretion, the assistance
applicant's failure to comply was due to circumstances that could not
reasonably have been foreseen and were outside the control of the
assistance applicant. If the applicant family fails to produce the
documentation required in paragraph (g)(1) of this section within the
required time period, the processing entity must follow the provisions
of Sec. 5.218.
* * * * *
0
3. Amend Sec. 5.520 as follows:
0
a. Revise paragraph (c)(1) introductory text;
0
b. In paragraph (c)(1)(v), remove the comma;
0
c. Revise paragraph (c)(2) introductory text;
0
d. In paragraphs (c)(2)(ii) introductory text and (c)(2)(iii), remove
the comma;
0
e. Revise paragraph (d); and
0
f. Add paragraph (e).
The revisions and addition read as follows:
Sec. 5.520 Proration of assistance.
* * * * *
(c) * * *
(1) Section 8 assistance other than assistance provided for a
tenancy under the Section 8 Housing Choice Voucher Program. For Section
8 assistance other than assistance for a tenancy under the voucher
program, the PHA must prorate the family's assistance as follows:
* * * * *
(2) Assistance for a Section 8 voucher tenancy. For a tenancy under
the voucher program, the PHA must prorate the family's assistance as
follows:
* * * * *
(d) Method of prorating assistance for Public Housing covered
programs. (1) The PHA must prorate the family's assistance as follows:
(i) Step 1. Determine the total tenant payment in accordance with
section 5.628. (Annual income includes income of all family members,
including any family member who has not established eligible
immigration status.)
(ii) Step 2. Subtract the total tenant payment from the PHA-
established flat rent applicable to the unit. The result is the maximum
subsidy for which the family could qualify if all members were eligible
(``family maximum subsidy'').
(iii) Step 3. Divide the family maximum subsidy by the number of
persons in the family (all persons) to determine the maximum subsidy
per each family member who has citizenship or eligible immigration
status (``eligible family member''). The subsidy per eligible family
member is the ``member maximum subsidy.''
(iv) Step 4. Multiply the member maximum subsidy by the number of
family members who have citizenship or eligible immigration status
(``eligible family members'').
(2) The product of steps 1 through 4 of paragraphs (d)(1)(i)
through (iv) of this section is the amount of subsidy for which the
family is eligible (``eligible subsidy''). The family's rent is the
PHA-established flat rent minus the amount of the eligible subsidy.
(e) Method of prorating assistance when the mixed family's total
tenant payment (TTP) is greater than the public housing flat rent. When
the mixed family's TTP is greater than the flat rent, the PHA must use
the TTP as the mixed family TTP. The PHA subtracts from the mixed
family TTP any established utility allowance, and the sum becomes the
mixed family rent.
0
4. In Sec. 5.603(b), revise the definitions of ``Extremely low income
family'' and ``Total tenant payment'' to read as follows:
Sec. 5.603 Definitions.
* * * * *
(b) * * *
Extremely low-income family. A very low-income family whose annual
income does not exceed the higher of:
(1) The poverty guidelines established by the Department of Health
and Human Services applicable to the family of the size involved
(except in the case of families living in Puerto Rico or any other
territory or possession of the United States); or
(2) Thirty (30) percent of the median income for the area, as
determined by HUD, with adjustments for smaller and larger families,
except that HUD may establish income ceilings higher or lower than 30
percent of the area median income for the area if HUD finds that such
variations are necessary because of unusually high or low family
incomes.
* * * * *
Total tenant payment. See Sec. 5.628.
* * * * *
Sec. 5.609 [Amended]
0
5. Amend Sec. 5.609(b)(9) by adding the phrase ``and any other
required fees and charges'' after ``tuition'' in the first sentence.
0
6. Amend Sec. 5.617 as follows:
0
a. Revise paragraph (a);
0
b. In paragraph (b), add the definition of ``baseline income'' in
alphabetical order; and
0
c. Revise paragraph (c) to read as follows:
Sec. 5.617 Self-sufficiency incentives for persons with
disabilities--Disallowance of increase in annual income.
(a) Applicable programs. The disallowance of earned income provided
by this section is applicable only to the following programs: HOME
Investment Partnerships Program (24 CFR part 92); Housing Opportunities
for Persons with AIDS (24 CFR part 574); Supportive Housing Program (24
CFR part 583); and the Housing Choice Voucher Program (24 CFR part
982).
(b) * * *
Baseline income. The annual income immediately prior to
implementation of the disallowance described in paragraph (c)(1) of
this section of a person with disabilities (who is a member of a
qualified family).
* * * * *
(c) Disallowance of increase in annual income--(1) Initial 12-month
exclusion. During the 12-month period beginning on the date a member
who is a person with disabilities of a qualified family is first
employed or the family first experiences an increase in annual income
attributable to employment, the responsible entity must exclude from
annual income (as defined in the regulations governing the applicable
program listed in paragraph (a) of this section) of a qualified family
any increase in income of the family member who is a person with
disabilities as a result of employment over prior income of that family
member.
(2) Second 12-month exclusion and phase-in. Upon the expiration of
the 12-
[[Page 12371]]
month period defined in paragraph (c)(1) of this section and for the
subsequent 12-month period, the responsible entity must exclude from
annual income of a qualified family at least 50 percent of any increase
in income of such family member as a result of employment over the
family member's baseline income.
(3) Maximum 2-year disallowance. The disallowance of increased
income of an individual family member who is a person with disabilities
as provided in paragraph (c)(1) or (c)(2) of this section is limited to
a lifetime 24-month period. The disallowance applies for a maximum of
12 months for disallowance under paragraph (c)(1) of this section and a
maximum of 12 months for disallowance under paragraph (c)(2) of this
section, during the 24- month period starting from the initial
exclusion under paragraph (c)(1) of this section.
(4) Effect of changes on currently participating families. Families
eligible for and participating in the disallowance of earned income
under this section prior to May 9, 2016 will continue to be governed by
this section in effect as it existed immediately prior to that date
(see 24 CFR parts 0 to 199, revised as of April 1, 2016).
* * * * *
0
7. In Sec. 5.657, add paragraph (d) to read as follows:
Sec. 5.657 Section 8 project-based assistance programs: Reexamination
of family income and composition.
* * * * *
(d) Streamlined income determination. For any family member with a
fixed source of income, an owner may elect to determine that family
member's income, as required by paragraph (b) of this section, by means
of a streamlined income determination. A streamlined income
determination must be conducted by applying, for each fixed-income
source, the verified cost of living adjustment (COLA) or current rate
of interest to the previously verified or adjusted income amount.
(1) ``Family member with a fixed source of income'' is defined as a
family member whose income includes periodic payments at reasonably
predictable levels from one or more of the following sources:
(i) Social Security, Supplemental Security Income, Supplemental
Disability Insurance;
(ii) Federal, state, local, or private pension plans;
(iii) Annuities or other retirement benefit programs, insurance
policies, disability or death benefits, or other similar types of
periodic receipts; or
(iv) Any other source of income subject to adjustment by a
verifiable COLA or current rate of interest.
(2) An owner must use a COLA or current rate of interest specific
to the fixed source of income in order to adjust the income amount. The
owner must verify the appropriate COLA or current rate of interest from
a public source or through tenant-provided, third party-generated
documentation. If no such verification is available, then the owner
must obtain third-party verification of income amounts in order to
calculate the change in income for the source.
(3) For any family member whose income is determined pursuant to a
streamlined income determination, an owner must obtain third-party
verification of all fixed-income amounts every 3 years. Other income
for each family member must be determined pursuant to paragraph (b) of
this section.
PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW
CONSTRUCTION
0
8. The authority citation for part 880 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and
13611-13619.
0
9. In Sec. 880.603, add paragraph (c)(4) to read as follows:
Sec. 880.603 Selection and admission of assisted tenants.
* * * * *
(c) * * *
(4) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING
PROJECTS
0
10. The authority citation for part 884 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
0
11. In Sec. 884.218, add paragraph (d) to read as follows:
Sec. 884.218 Reexamination of family income and composition.
* * * * *
(d) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL
ALLOCATIONS
0
12. The authority citation for part 886 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.
0
13. In Sec. 886.124, add paragraph (d) to read as follows:
Sec. 886.124 Reexamination of family income and composition.
* * * * *
(d) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
0
14. In Sec. 886.324, add paragraph (d) to read as follows:
Sec. 886.324 Reexamination of family income and composition.
* * * * *
(d) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
PART 891--SUPPORTIVE HOUSING FOR THE ELDERLY AND PERSONS WITH
DISABILITIES
0
15. The authority citation for part 891 continues to read as follows:
Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437f, 3535(d), and 8013.
0
16. In Sec. 891.410, add paragraph (g)(4) to read as follows:
Sec. 891.410 Selection and admission of tenants.
* * * * *
(g) * * *
(4) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
0
17. In Sec. 891.610, add paragraph (g)(4) to read as follows:
Sec. 891.610 Selection and admission of tenants.
* * * * *
(g) * * *
(4) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
0
18. In Sec. 891.750, add paragraph (c)(4) to read as follows:
Sec. 891.750 Selection and admission of tenants.
* * * * *
(c) * * *
(4) Streamlined income determination. An owner may elect to follow
the provisions of 24 CFR 5.657(d).
[[Page 12372]]
PART 903--PUBLIC HOUSING AGENCY PLANS
0
19. The authority citation for part 903 continues to read as follows:
Authority: 2 U.S.C. 1437c; 42 U.S.C. 1437c-1; Pub. L. 110-289;
42 U.S.C. 3535d.
0
20. In Sec. 903.7, revise paragraph (a)(1)(i) to read as follows:
Sec. 903.7 What information must a PHA provide in the Annual Plan?
* * * * *
(a) * * *
(1) * * *
(i) Families meeting the definition of extremely low-income
families in 24 CFR 5.603.
* * * * *
PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING
0
21. The authority citation for part 960 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, 1437z-3, and
3535(d).
0
22. In Sec. 960.102, revise paragraph (a) to read as follows:
Sec. 960.102 Definitions.
(a) Definitions found elsewhere:
(1) General definitions. The following terms are defined in 24 CFR
part 5, subpart A: 1937 Act, drug, drug-related criminal activity,
elderly person, federally assisted housing, guest, household, HUD, MSA,
premises, public housing, public housing agency (PHA), Section 8,
violent criminal activity.
(2) Definitions under the 1937 Act. The following terms are defined
in 24 CFR part 5, subpart D: annual contributions contract (ACC),
applicant, elderly family, family, person with disabilities.
(3) Definitions and explanations concerning income and rent. The
following terms are defined or explained in 24 CFR part 5, subpart F
(Sec. 5.603): Annual income, economic self-sufficiency program,
extremely low-income family, low-income family, tenant rent, total
tenant payment, utility allowance.
* * * * *
0
23. Amend Sec. 960.253 as follows:
0
a. Revise paragraph (b);
0
b. In paragraph (c)(1), remove the phrase ``PHA's rent policies'' and
add in its place ``PHA's policies'';
0
c. Remove the last sentence of paragraph (c)(3) and add paragraph
(c)(4);
0
d. Revise paragraphs (d) and (e)(2);
0
e. Redesignate paragraph (f) as paragraph (g); and
0
f. Add a new paragraph (f).
The revisions and addition read as follows:
Sec. 960.253 Choice of rent.
* * * * *
(b) Flat rent. The flat rent is determined annually, based on the
market rental value of the unit as determined by this paragraph (b).
(1) The PHA must establish a flat rent for each public housing unit
that is no less than 80 percent of the applicable Fair Market Rent
(FMR) as determined under 24 CFR part 888, subpart A; or
(2) HUD may permit a flat rent of no less than 80 percent of an
applicable small area FMR (SAFMR) or unadjusted rent, if applicable, as
determined by HUD, or any successor determination, that more accurately
reflects local market conditions and is based on an applicable market
area that is geographically smaller than the applicable market area
used in paragraph (b)(1) of this section. If HUD has not determined an
applicable SAFMR or unadjusted rent, the PHA must rely on the
applicable FMR under paragraph (b)(1) or may apply for an exception
flat rent under paragraph (b)(3).
(3) The PHA may request, and HUD may approve, on a case-by-case
basis, a flat rent that is lower than the amounts in paragraphs (b)(1)
and (2) of this section, subject to the following requirements:
(i) The PHA must submit a market analysis of the applicable market.
(ii) The PHA must demonstrate, based on the market analysis, that
the proposed flat rent is a reasonable rent in comparison to rent for
other comparable unassisted units, based on the location, quality,
size, unit type, and age of the public housing unit and any amenities,
housing services, maintenance, and utilities to be provided by the PHA
in accordance with the lease.
(iii) All requests for exception flat rents under this paragraph
(b)(3) must be submitted to HUD.
(4) For units where utilities are tenant-paid, the PHA must adjust
the flat rent downward by the amount of a utility allowance for which
the family might otherwise be eligible under 24 CFR part 965, subpart
E.
(5) The PHA must revise, if necessary, the flat rent amount for a
unit no later than 90 days after HUD issues new FMRs.
(6) If a new flat rent would cause a family's rent to increase by
more than 35 percent, the family's rent increase must be phased in at
35 percent annually until such time that the family chooses to pay the
income-based rent or the family is paying the flat rent established
pursuant to this paragraph.
(c) * * *
(4) The PHA may elect to establish policies regarding the frequency
of utility reimbursement payments for payments made to the family.
(i) The PHA will have the option of making utility reimbursement
payments not less than once per calendar-year quarter, for
reimbursements totaling $45 or less per quarter. In the event a family
leaves the program in advance of its next quarterly reimbursement, the
PHA must reimburse the family for a prorated share of the applicable
reimbursement. PHAs exercising this option must have a hardship policy
in place for tenants.
(ii) If the PHA elects to pay the utility supplier, the PHA must
notify the family of the amount of utility reimbursement paid to the
utility supplier.
(d) Ceiling rent. A PHA using ceiling rents authorized and
established before October 1, 1999, may continue to use ceiling rents,
provided such ceiling rents are set at the level required for flat
rents under this section. PHAs must follow the requirements for
calculating and adjusting flat rents in paragraph (b) of this section
when calculating and adjusting ceiling rents.
(e) * * *
(2) The dollar amounts of tenant rent for the family under each
option, following the procedures in paragraph (f) of this section.
(f) Choice between flat and income-based rents. Families must be
offered the choice between a flat rental amount and a previously
calculated income-based rent according to the following:
(1) For a family that chooses the flat rent option, the PHA must
conduct a reexamination of family income and composition at least once
every three years.
(2) At initial occupancy, or in any year in which a participating
family is paying the income-based rent, the PHA must:
(i) Conduct a full examination of family income and composition,
following the provisions in Sec. 960.257;
(ii) Inform the family of the flat rental amount and the income-
based rental amount determined by the examination of family income and
composition;
(iii) Inform the family of the PHA's policies on switching rent
types in circumstances of financial hardship; and
(iv) Apply the family's rent decision at the next lease renewal.
(3) In any year in which a family chooses the flat rent option but
the PHA chooses not to conduct a full examination of family income and
[[Page 12373]]
composition for the annual rent option under the authority of paragraph
(f)(1) of this section, the PHA must:
(i) Use income information from the examination of family income
and composition from the first annual rent option;
(ii) Inform the family of the updated flat rental amount and the
rental amount determined by the most recent examination of family
income and composition;
(iii) Inform the family of the PHA's policies on switching rent
types in circumstances of financial hardship; and
(iv) Apply the family's rent decision at the next lease renewal.
* * * * *
0
24. Amend Sec. 960.255 as follows:
0
a. In paragraph (a), add the definition of ``baseline income'' in
alphabetical order; and
0
b. Revise paragraph (b) to read as follows:
Sec. 960.255 Self-sufficiency incentives--Disallowance of increase in
annual income.
(a) * * *
Baseline income. The annual income immediately prior to
implementation of the disallowance described in paragraph (c)(1) of
this section of a person who is a member of a qualified family.
* * * * *
(b) Disallowance of earned income--(1) Initial 12-month exclusion.
During the 12-month period beginning on the date on which a member of a
qualified family is first employed or the family first experiences an
increase in annual income attributable to employment, the PHA must
exclude from the annual income (as defined in Sec. 5.609 of this
title) of a qualified family any increase in the income of the family
member as a result of employment over the baseline income of that
family member.
(2) Phase-in of rent increase. Upon the expiration of the 12-month
period defined in paragraph (b)(1) of this section and for the
subsequent 12-month period, the PHA must exclude from the annual income
of a qualified family at least 50 percent of any increase in income of
such family member as a result of employment over the family member's
baseline income.
(3) Maximum 2-year disallowance. The disallowance of increased
income of an individual family member as provided in paragraph (b)(1)
or (b)(2) of this section is limited to a lifetime 24-month period. It
applies for a maximum of 12 months for disallowance under paragraph
(b)(1) of this section and a maximum of 12 months for disallowance
under paragraph (b)(2) of this section, during the 24-month period
starting from the initial exclusion under paragraph (b)(1) of this
section.
(4) Effect of changes on currently participating families. Families
eligible for and participating in the disallowance of earned income
under this section prior to May 9, 2016 will continue to be governed by
this section in effect as it existed immediately prior to that date.
* * * * *
0
25. In Sec. 960.257, revise the section heading and paragraphs (a)(2)
and (b) to read as follows:
Sec. 960.257 Family income and composition: Annual and interim
reexaminations.
(a) * * *
(2) For families who choose flat rents, the PHA must conduct a
reexamination of family composition at least annually, and must conduct
a reexamination of family income at least once every three years in
accordance with the procedures in Sec. 960.253(f).
* * * * *
(b) Interim reexaminations. (1) A family may request an interim
reexamination of family income or composition because of any changes
since the last determination.
(2) The PHA must make the interim reexamination within a reasonable
time after the family request. The PHA must adopt policies prescribing
when and under what conditions the family must report a change in
family income or composition.
(3) Streamlined income determination. For any family member with a
fixed source of income, a PHA may elect to determine that family
member's income by means of a streamlined income determination. A
streamlined income determination must be conducted by applying, for
each fixed-income source, the verified cost of living adjustment (COLA)
or current rate of interest to the previously verified or adjusted
income amount.
(i) ``Family member with a fixed source of income'' is defined as a
family member whose income includes periodic payments at reasonably
predictable levels from one or more of the following sources:
(A) Social Security, Supplemental Security Income, Supplemental
Disability Insurance;
(B) Federal, state, local, or private pension plans;
(C) Annuities or other retirement benefit programs, insurance
policies, disability or death benefits, or other similar types of
periodic receipts; or
(D) Any other source of income subject to adjustment by a
verifiable COLA or current rate of interest.
(ii) A PHA must use a COLA or current rate of interest specific to
the fixed source of income in order to adjust the income amount. The
PHA must verify the appropriate COLA or current rate of interest from a
public source or through tenant-provided, third party-generated
documentation. If no such verification is available, then the PHA must
obtain third-party verification of income amounts in order to calculate
the change in income for the source.
(iii) For any family member whose income is determined pursuant to
a streamlined income determination, a PHA must obtain third-party
verification of all income amounts every 3 years.
* * * * *
0
26. In Sec. 960.259, revise paragraph (c)(1) introductory text, and
add paragraph (c)(2) to read as follows:
Sec. 960.259 Family information and verification.
* * * * *
(c) * * *
(1) Except as provided in paragraph (c)(2) of this section, the PHA
must obtain and document in the family file third-party verification of
the following factors, or must document in the file why third-party
verification was not available:
* * * * *
(2) For a family with net assets equal to or less than $5,000, a
PHA may accept, for purposes of recertification of income, a family's
declaration that it has net assets equal to or less than $5,000,
without taking additional steps to verify the accuracy of the
declaration.
(i) The declaration must state the amount of income the family
expects to receive from such assets; this amount must be included in
the family's income.
(ii) A PHA must obtain third-party verification of all family
assets every 3 years.
0
27. In Sec. 960.605, revise paragraphs (c)(2) through (5) to read as
follows:
Sec. 960.605 How PHA administers service requirements.
* * * * *
(c) * * *
(2) The PHA must give the family a written description of the
service requirement, and of the process for claiming status as an
exempt person and for PHA verification of such status. The PHA must
also notify the family of its determination identifying the family
members who are subject to the service requirement, and the family
members who are exempt persons. The PHA must also notify the family
that it will be
[[Page 12374]]
validating a sample of self-certifications of completion of the service
requirement accepted by the PHA under Sec. 960.607(a)(1)(ii).
(3) The PHA must review family compliance with service requirements
and must verify such compliance annually at least 30 days before the
end of the 12-month lease term. If qualifying activities are
administered by an organization other than the PHA, the PHA may obtain
verification of family compliance from such third parties or may accept
a signed certification from the family member that he or she has
performed such qualifying activities.
(4) The PHA must retain reasonable documentation of service
requirement performance or exemption in a participant family's files.
(5) The PHA must comply with non-discrimination and equal
opportunity requirements listed at Sec. 5.105(a) of this title and
affirmatively further fair housing in all their activities in
accordance with the AFFH Certification as described in Sec. 903.7(o)
of this chapter.
0
28. In Sec. 960.607, revise paragraph (a) to read as follows:
Sec. 960.607 Assuring resident compliance.
(a) Acceptable documentation demonstrating compliance. (1) If
qualifying activities are administered by an organization other than
the PHA, a family member who is required to fulfill a service
requirement must provide one of the following:
(i) A signed certification to the PHA by such other organization
that the family member has performed such qualifying activities; or
(ii) A signed self-certification to the PHA by the family member
that he or she has performed such qualifying activities.
(2) The signed self-certification must include the following:
(i) A statement that the tenant contributed at least 8 hours per
month of community service not including political activities within
the community in which the adult resides; or participated in an
economic self-sufficiency program (as that term is defined in 24 CFR
5.603(b)) for at least 8 hours per month;
(ii) The name, address, and a contact person at the community
service provider; or the name, address, and contact person for the
economic self-sufficiency program;
(iii) The date(s) during which the tenant completed the community
service activity, or participated in the economic self-sufficiency
program;
(iv) A description of the activity completed; and
(v) A certification that the tenant's statement is true.
(3) If a PHA accepts self-certifications under paragraph (a)(1)(ii)
of this section, the PHA must validate a sample of such self-
certifications using third-party certification described in paragraph
(a)(1)(i) of this section.
* * * * *
PART 966--PUBLIC HOUSING LEASE AND GRIEVANCE PROCEDURE
0
29. The authority citation for part 966 continues to read as follows:
Authority: 42 U.S.C. 1437d and 3535(d).
0
30. Revise Sec. 966.4(n) to read as follows:
Sec. 966.4 Lease requirements.
* * * * *
(n) Grievance procedures. (1) The lease must provide that all
disputes concerning the obligations of the tenant or the PHA must
(except as provided in Sec. 966.51(a)(2)) be resolved in accordance
with the PHA grievance procedures. The grievance procedures must comply
with subpart B of this part.
(2) The lease must include a description of the PHA's policies for
selecting a hearing officer.
* * * * *
0
31. Amend Sec. 966.52 by adding a sentence at the end of paragraph (a)
and adding paragraph (e), to read as follows:
Sec. 966.52 Requirements.
(a) * * * A PHA may establish an expedited grievance procedure as
defined in Sec. 966.53.
* * * * *
(e) The PHA must not only meet the minimal procedural due process
requirements contained in this subpart but also satisfy any additional
requirements required by local, state, or federal law.
0
32. In Sec. 966.53, revise paragraphs (b), (d), and (e) to read as
follows:
Sec. 966.53 Definitions.
* * * * *
(b) Complainant shall mean any tenant whose grievance is presented
to the PHA or at the project management office.
* * * * *
(d) Expedited grievance means a procedure established by the PHA
for any grievance concerning a termination of tenancy or eviction that
involves:
(1) Any criminal activity that threatens the health, safety, or
right to peaceful enjoyment of the PHA's public housing premises by
other residents or employees of the PHA; or
(2) Any drug-related or violent criminal activity on or off such
premises.
(e) Hearing officer means an impartial person or persons selected
by the PHA, other than the person who made or approved the decision
under review, or a subordinate of that person. Such individual or
individuals do not need legal training. PHAs must describe their
policies for selection of a hearing officer in their lease forms as
required by Sec. 966.4, changes to which are subject to a 30-day
comment period as described in Sec. 966.3.
* * * * *
Sec. 966.54 [Amended]
0
33. Amend Sec. 966.54 by removing the phrase ``under Sec. 966.55''.
Sec. 966.55 [Removed]
0
34. Remove Sec. 966.55.
0
35. Amend Sec. 966.56 as follows:
0
a. Revise paragraph (a);
0
b. In paragraph (b)(2), remove the comma;
0
c. Remove paragraphs (c) and (f);
0
d. Redesignate paragraphs (d), (e), (g), and (h) as paragraphs (c),
(d), (e) and (f), respectively;
0
e. Revise redesignated paragraph (c); and
0
f. Add paragraph (g).
The revisions and addition read as follows:
Sec. 966.56 Procedures governing the hearing.
(a) The hearing must be scheduled promptly for a time and place
reasonably convenient to both the complainant and the PHA and held
before a hearing officer. A written notification specifying the time,
place, and the procedures governing the hearing must be delivered to
the complainant and the appropriate official.
* * * * *
(c) If the complainant or the PHA fails to appear at a scheduled
hearing, the hearing officer may make a determination to postpone the
hearing for no more than 5 business days or may make a determination
that the party has waived his right to a hearing. Both the complainant
and the PHA must be notified of the determination by the hearing
officer. A determination that the complainant has waived the
complainant's right to a hearing will not constitute a waiver of any
right the complainant may have to contest the PHA's disposition of the
grievance in an appropriate judicial proceeding.
* * * * *
(g) Limited English Proficiency. PHAs must comply with HUD's
``Final
[[Page 12375]]
Guidance to Federal Financial Assistance Recipients Regarding Title VI
Prohibition Against National Origin Discrimination Affecting Limited
English Proficient Persons'' issued on January 22, 2007 and available
at https://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/promotingfh/lep-faq.
0
36. Revise Sec. 966.57 to read as follows:
Sec. 966.57 Decision of the hearing officer.
(a) The hearing officer must prepare a written decision, including
the reasons for the PHA's decision within a reasonable time after the
hearing. A copy of the decision must be sent to the complainant and the
PHA. The PHA must retain a copy of the decision in the tenant's folder.
The PHA must maintain a log of all hearing officer decisions and make
that log available upon request of the hearing officer, a prospective
complainant, or a prospective complainant's representative.
(b) The decision of the hearing officer will be binding on the PHA
unless the PHA Board of Commissioners determines that:
(1) The grievance does not concern PHA action or failure to act in
accordance with or involving the complainant's lease on PHA
regulations, which adversely affects the complainant's rights, duties,
welfare or status; or
(2) The decision of the hearing officer is contrary to applicable
Federal, State or local law, HUD regulations or requirements of the
annual contributions contract between HUD and the PHA.
(c) A decision by the hearing officer or Board of Commissioners in
favor of the PHA or which denies the relief requested by the
complainant in whole or in part will not constitute a waiver of, nor
affect in any manner whatever, any rights the complainant may have to a
trial de novo or judicial review in any judicial proceedings, which may
thereafter be brought in the matter.
PART 982--SECTION 8 TENANT-BASED ASSISTANCE: HOUSING CHOICE VOUCHER
PROGRAM
0
37. The authority citation for part 982 continues to read as follows:
Authority: 42 U.S.C. 1437f and 3535(d).
0
38. In Sec. 982.402 add a sentence at the end of paragraph (d)(2) to
read as follows:
Sec. 982.402 Subsidy standards.
* * * * *
(d) * * *
(2) * * * However, utility allowances must follow Sec. 982.517(d).
0
39. Amend Sec. 982.405 as follows:
0
a. In paragraph (a), remove the word ``annually'' and add in its place
``biennially'';
0
b. Revise paragraph (e); and
0
c. Add paragraphs (f) and (g).
The revision and addition read as follows:
Sec. 982.405 PHA initial and periodic unit inspection.
* * * * *
(e) The PHA may not charge the family for an initial inspection or
reinspection of the unit.
(f) The PHA may not charge the owner for the inspection of the unit
prior to the initial term of the lease or for a first inspection during
assisted occupancy of the unit. The PHA may establish a reasonable fee
to owners for a reinspection if an owner notifies the PHA that a repair
has been made or the allotted time for repairs has elapsed and a
reinspection reveals that any deficiency cited in the previous
inspection that the owner is responsible for repairing pursuant to
Sec. 982.404(a) was not corrected. The owner may not pass this fee
along to the family. Fees collected under this paragraph will be
included in a PHA's administrative fee reserve and may be used only for
activities related to the provision of Section 8 Tenant-Based Rental
Assistance.
(g) If a participant family or government official reports a
condition that is life-threatening (i.e., the PHA would require the
owner to make the repair within no more than 24 hours in accordance
with Sec. 982.404(a)(3)), then the PHA must inspect the housing unit
within 24 hours of when the PHA received the notification. If the
reported condition is not life-threatening (i.e., the PHA would require
the owner to make the repair within no more than 30 calendar days in
accordance with Sec. 982.404(a)(3)), then the PHA must inspect the
unit within 15 days of when the PHA received the notification. In the
event of extraordinary circumstances, such as if a unit is within a
Presidentially declared disaster area, HUD may waive the 24-hour or the
15-day inspection requirement until such time as an inspection is
feasible.
Sec. 982.406 [Redesignated as Sec. 982.407]
0
40. Redesignate Sec. 982.406 as Sec. 982.407.
0
41. Add a new Sec. 982.406 to read as follows:
Sec. 982.406 Use of alternative inspections.
(a) In general. (1) A PHA may comply with the inspection
requirement in Sec. 982.405(a) by relying on an alternative inspection
(i.e., an inspection conducted for another housing assistance program)
only if the PHA is able to obtain the results of the alternative
inspection.
(2) If an alternative inspection method employs sampling, then a
PHA may rely on such alternative inspection method to comply with the
requirement in Sec. 982.405(a) only if HCV units are included in the
population of units forming the basis of the sample.
(3) Units in properties that are mixed-finance properties assisted
with project-based vouchers may be inspected at least triennially
pursuant to 24 CFR 983.103(g).
(b) Administrative plans. A PHA relying on an alternative
inspection to fulfill the requirement in Sec. 982.405(a) must identify
the alternative inspection method being used in the PHA's
administrative plan. Such a change may be a significant amendment to
the plan, in which case the PHA must follow its plan amendment and
public notice requirements, in addition to meeting the requirements in
Sec. 982.406(c)(2), if applicable, before using the alternative
inspection method.
(c) Eligible inspection methods. (1) A PHA may rely upon
inspections of housing assisted under the HOME Investment Partnerships
(HOME) program or housing financed using Low-Income Housing Tax Credits
(LIHTCs), or inspections performed by HUD, with no action other than
amending its administrative plan.
(2) If a PHA wishes to rely on an inspection method other than a
method listed in paragraph (c)(1) of this section, then, prior to
amending its administrative plan, the PHA must submit to the Real
Estate Assessment Center (REAC) a copy of the inspection method it
wishes to use, along with its analysis of the inspection method that
shows that the method ``provides the same or greater protection to
occupants of dwelling units'' as would HQS.
(i) A PHA may rely upon such alternative inspection method only
upon receiving approval from REAC to do so.
(ii) A PHA that uses an alternative inspection method approved
under this paragraph must monitor changes to the standards and
requirements applicable to such method. If any change is made to the
alternative inspection method, then the PHA must submit to REAC a copy
of the revised standards and requirements, along with a revised
comparison to HQS. If the PHA or REAC
[[Page 12376]]
determines that the revision would cause the alternative inspection to
no longer meet or exceed HQS, then the PHA may no longer rely upon the
alternative inspection method to comply with the inspection requirement
at Sec. 982.405(a).
(d) Results of alternative inspection. (1) In order for a PHA to
rely upon the results of an alternative inspection to comply with the
requirement at Sec. 982.405(a), a property inspected pursuant to such
method must meet the standards or requirements regarding housing
quality or safety applicable to properties assisted under the program
using the alternative inspection method. To make the determination of
whether such standards or requirements are met, the PHA must adhere to
the following procedures:
(i) If a property is inspected under an alternative inspection
method, and the property receives a ``pass'' score, then the PHA may
rely on that inspection to demonstrate compliance with the inspection
requirement at Sec. 982.405(a).
(ii) If a property is inspected under an alternative inspection
method, and the property receives a ``fail'' score, then the PHA may
not rely on that inspection to demonstrate compliance with the
inspection requirement at Sec. 982.405(a).
(iii) If a property is inspected under an alternative inspection
method that does not employ a pass/fail determination--for example, in
the case of a program where deficiencies are simply identified--then
the PHA must review the list of deficiencies to determine whether any
cited deficiency would have resulted in a ``fail'' score under HQS. If
no such deficiency exists, then the PHA may rely on the inspection to
demonstrate compliance with the inspection requirement at Sec.
982.405(a); if such a deficiency does exist, then the PHA may not rely
on the inspection to demonstrate such compliance.
(2) Under any circumstance described above in which a PHA is
prohibited from relying on an alternative inspection method for a
property, the PHA must, within a reasonable period of time, conduct an
HQS inspection of any units in the property occupied by voucher program
participants and follow HQS procedures to remedy any identified
deficiencies.
(e) Records retention. As with all other inspection reports, and as
required by Sec. 982.158(f)(4), reports for inspections conducted
pursuant to an alternative inspection method must be obtained by the
PHA. Such reports must be available for HUD inspection for at least
three years from the date of the latest inspection.
0
42. Amend Sec. 982.503 as follows:
0
a. Add paragraph (b)(1)(iii);
0
b. Remove the first word in paragraph (b)(2) and in its place add
``Except as described in paragraph (b)(1)(iii) of this section, the'';
and
0
c. Revise paragraph (c)(2).
The revision and addition read as follows:
Sec. 982.503 Payment standard amount and schedule.
* * * * *
(b) * * *
(1) * * *
(iii) The PHA may establish an exception payment standard of not
more than 120 percent of the published FMR if required as a reasonable
accommodation in accordance with 24 CFR part 8 for a family that
includes a person with a disability. Any unit approved under an
exception payment standard must still meet the reasonable rent
requirements found at Sec. 982.507.
* * * * *
(c) * * *
(2) Above 110 percent of FMR to 120 percent of published FMR. The
HUD Field Office may approve an exception payment standard amount from
above 110 percent of the published FMR to not more than 120 percent of
the published FMR (upper range) if the HUD Field Office determines that
approval is justified by either the median rent method or the 40th or
50th percentile rent method as described in paragraph (c)(2)(ii) of
this section (and that such approval is also supported by an
appropriate program justification in accordance with paragraph (c)(4)
of this section).
(i) Median rent method. In the median rent method, HUD determines
the exception payment standard amount by multiplying the FMR times a
fraction of which the numerator is the median gross rent of the
exception area and the denominator is the median gross rent of the
entire FMR area. In this method, HUD uses median gross rent data from
the most recent decennial United States census, and the exception area
may be any geographic entity within the FMR area (or any combination of
such entities) for which median gross rent data is provided in
decennial census products.
(ii) 40th or 50th percentile rent method. In this method, HUD
determines that the area exception payment standard amount equals
either the 40th or 50th percentile of rents for standard quality rental
housing in the exception area. HUD determines whether the 40th or 50th
percentile rent applies in accordance with the methodology described in
Sec. 888.113 of this title for determining FMRs. A PHA must present
statistically representative rental housing survey data to justify HUD
approval.
* * * * *
0
43. Revise Sec. 982.505(d) to read as follows:
Sec. 982.505 How to calculate housing assistance payment.
* * * * *
(d) PHA approval of higher payment standard for the family as a
reasonable accommodation. If the family includes a person with
disabilities and requires a payment standard above the basic range, as
a reasonable accommodation for such person, in accordance with part 8
of this title, the PHA may establish a payment standard for the family
of not more than 120 percent of the FMR.
0
44. In Sec. 982.514, add paragraph (c) to read as follows:
Sec. 982.514 Distribution of housing assistance payment.
* * * * *
(c) The PHA may elect to establish policies regarding the frequency
of utility reimbursement payments for payments made to the family.
(1) The PHA will have the option of making utility reimbursement
payments not less than once per calendar-year quarter, for
reimbursements totaling $45 or less per quarter. In the event a family
leaves the program in advance of its next quarterly reimbursement, the
PHA would be required to reimburse the family for a prorated share of
the applicable reimbursement. PHAs exercising this option must have a
hardship policy in place for tenants.
(2) If the PHA elects to pay the utility supplier directly, the PHA
must notify the family of the amount paid to the utility supplier.
0
45. Amend Sec. 982.516 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a), revise the introductory text of paragraph (a)(2)
and add paragraph (a)(3);
0
c. Remove paragraph (e);
0
d. Redesignate paragraphs (b), (c), and (d) as paragraphs (c), (d), and
(e), respectively;
0
e. Add a new paragraph (b);
0
f. In redesignated paragraph (c), revise the paragraph heading; and
0
g. Revise redesignated paragraph (e)(2).
The revisions and addition read as follows:
Sec. 982.516 Family income and composition: Annual and interim
examinations.
(a) * * *
(2) Except as provided in paragraph (a)(3) of this section, the PHA
must
[[Page 12377]]
obtain and document in the tenant file third-party verification of the
following factors, or must document in the tenant file why third-party
verification was not available:
* * * * *
(3) For a family with net assets equal to or less than $5,000, a
PHA may accept a family's declaration that it has net assets equal to
or less than $5,000, without taking additional steps to verify the
accuracy of the declaration.
(i) The declaration must state the amount of income the family
expects to receive from such assets; this amount must be included in
the family's income.
(ii) A PHA must obtain third-party verification of all family
assets every 3 years.
(b) Streamlined income determination. For any family member with a
fixed source of income, a PHA may elect to determine that family
member's income by means of a streamlined income determination. A
streamlined income determination must be conducted by applying, for
each fixed-income source, the verified cost of living adjustment (COLA)
or current rate of interest to the previously verified or adjusted
income amount.
(1) Family member with a fixed source of income is defined as a
family member whose income includes periodic payments at reasonably
predictable levels from one or more of the following sources:
(i) Social Security, Supplemental Security Income, Supplemental
Disability Insurance;
(ii) Federal, state, local, or private pension plans;
(iii) Annuities or other retirement benefit programs, insurance
policies, disability or death benefits, or other similar types of
periodic receipts; or
(iv) Any other source of income subject to adjustment by a
verifiable COLA or current rate of interest.
(2) A PHA must use a COLA or current rate of interest specific to
the fixed source of income in order to adjust the income amount. The
PHA must verify the appropriate COLA or current rate of interest from a
public source or through tenant-provided, third party-generated
documentation. If no such verification is available, then the PHA must
obtain third-party verification of income amounts in order to calculate
the change in income for the source.
(3) For any family member whose income is determined pursuant to a
streamlined income determination, a PHA must obtain third-party
verification of all income amounts every 3 years.
(c) Interim reexaminations. * * *
* * * * *
(e) * * *
(2) At the effective date of a regular or interim reexamination,
the PHA must make appropriate adjustments in the housing assistance
payment in accordance with Sec. 982.505.
* * * * *
0
46. Amend Sec. 982.517 as follows:
0
a. Capitalize the first word in paragraph (b)(2)(i); and
0
b. Revise paragraph (d), to read as follows:
Sec. 982.517 Utility allowance schedule.
* * * * *
(d) Use of utility allowance schedule. The PHA must use the
appropriate utility allowance for the lesser of the size of dwelling
unit actually leased by the family or the family unit size as
determined under the PHA subsidy standards. In cases where the unit
size leased exceeds the family unit size as determined under the PHA
subsidy standards as a result of a reasonable accommodation, the PHA
must use the appropriate utility allowance for the size of the dwelling
unit actually leased by the family.
* * * * *
PART 983--PROJECT-BASED VOUCHER (PBV) PROGRAM
0
47. The authority citation for part 983 continues to read as follows:
Authority: 42 U.S.C. 1437f and 3535(d).
Sec. 983.2 [Amended]
0
48. In Sec. 983.2 amend paragraph (c)(4) by removing the citation
``Sec. 982.406'' and adding in its place ``Sec. 982.407''.
0
49. Amend Sec. 983.103 by revising paragraph (d) and adding paragraph
(g) to read as follows:
Sec. 983.103 Inspecting units.
* * * * *
(d) Biennial inspections. (1) At least biennially during the term
of the HAP contract, the PHA must inspect a random sample, consisting
of at least 20 percent of the contract units in each building, to
determine if the contract units and the premises are maintained in
accordance with the HQS. Turnover inspections pursuant to paragraph (c)
of this section are not counted toward meeting this inspection
requirement.
(2) If more than 20 percent of the sample of inspected contract
units in a building fail the initial inspection, then the PHA must
reinspect 100 percent of the contract units in the building.
(3) A PHA may also use the procedures applicable to HCV units in 24
CFR 982.406.
* * * * *
(g) Mixed-finance properties. In the case of a property assisted
with project-based vouchers (authorized at 42 U.S.C. 1437f(o)(13)) that
is subject to an alternative inspection, the PHA may rely upon
inspections conducted at least triennially to demonstrate compliance
with the inspection requirement of 24 CFR 982.405(a).
PART 990--THE PUBLIC HOUSING OPERATING FUND PROGRAM
0
50. The authority citation for part 990 continues to read as follows:
Authority: 42 U.S.C. 1437g; 42 U.S.C. 3535(d).
0
51. In Sec. 990.150, revise paragraph (a) to read as follows:
Sec. 990.150 Limited vacancies.
(a) Operating subsidy for a limited number of vacancies. HUD will
pay operating subsidy for a limited number of vacant units under an
ACC. The limited number of vacant units must be equal to or less than 3
percent of the unit months on a project-by-project basis based on the
definition of a project under Sec. 990.265 (provided that the number
of eligible unit months does not exceed 100 percent of the unit months
for a project).
* * * * *
Dated: February 29, 2016.
Nani Coloretti,
Deputy Secretary.
[FR Doc. 2016-04901 Filed 3-7-16; 8:45 am]
BILLING CODE 4210-67-P